“Cofounder Relationship: A Fundamental Determinant of Success”
Interview with Redox Cofounder Luke Bonney and James Lloyd.
There’s no question that healthcare is one of the most complicated and flawed industries in the world. Adding in a global pandemic certainly hasn’t helped. However, tech startup Redox has tried to add a little more efficiency to the entire industry. It’s truly a mission-driven company that is striving to play a role in improving patient care.
Redox co-founders Luke Bonney and James Lloyd sat down with midstage startup coach Roland Siebelink to talk about the company’s mission and a variety of other topics related to their startup journey.
- How cofounder relationships are similar to marriage.
- The importance of trust for companies that operate remotely.
- The challenge of finding employees who are motivated by purpose and passion.
- Why Redox has parted ways with high-performing employees.
- How finding the right coach became an inflection point for Redox.
Roland Siebelink: Hello and welcome to Silicon Valley Momentum. The podcast in which we interview amazing co-founders from the coolest tech companies around the world. Today, our guests are Luke Bonney and James Lloyd, the CEO and CTO of Redox Engine. Welcome, gentlemen.
Luke Bonney: Hey Roland. Thanks for having us.
James Lloyd: Hey, Roland.
Roland Siebelink: Very good. Luke, let’s start with you. How do you compare a co-founder relationship with being married? Not acknowledging, of course, that the third co-founder Niko couldn’t make it today. We all send our regards to Niko before you answer the question.
Luke Bonney: Yeah. And Niko would probably make this podcast more fun. We are both missing him now and later as we listen to the podcast. I think it’s a strong analogy. To me, the interesting question comes from how does this relationship or relationship with your spouse or a relationship with a co-founder enable success and growth in whatever endeavor we’re working on?
And that’s where I think that there’s a lot of really strong overlap. I think this has been something that I’ve done both in my relationship with Kelsey, my wife, as well as relationships with James and Niko, is to just accept that the health of our relationship is a fundamental determinant in the success of - in this example - of Redox. And when you understand and accept that, you understand and accept that we should constantly be investing in it.
Really early on, before we even started with you Roland - and working with you has been fantastic - we were working with a woman, Sarah Young, who has her own coaching practice. And the core job there was, she was basically facilitating group therapy sessions with the three of us. She would meet with us individually and then once a month we’d come together. And that was huge because it allowed us to talk about difficult things in a safe environment where there might’ve been things we weren’t trusting between each other or tough topics that we were scared to breach. And I think figuring that out early on has been a huge asset to the company because it’s allowed us to be much more effective in how we communicate.
Roland Siebelink: Absolutely. James, concretely, what does that mean? There must be some areas that you fight over. The corporate equivalent of who does the washing up.
James Lloyd: Absolutely. I think it’s really beneficial in any relationship to appreciate and find someone whose strengths fill in your weaknesses and have a mutual appreciation of that. If in any relationship you have someone who duplicates your strengths, then you’re both going to have the same weaknesses. But the natural filling in for the gaps of each other is I think a really important part of that co-founder relationship.
I will say that it was also really important for us to actually know each other before starting the company. All three of us had a many-year existing friendship and relationship prior to starting the company. And I think that was critical to knowing that it was going to be a healthy working relationship.
Roland Siebelink: You mentioned Niko as the third co-founder. What’s been your experience in having three co-founders compared to other companies you may know that have two co-founders. Maybe let’s continue with Luke.
Luke Bonney: I think it’s awesome. And it’s becauseI really do feel that the three of us bring unique strengths and any combination of the two of us have, in some ways, some pretty obvious weaknesses.
James Lloyd: I would also just add that having three people or specifically having an odd number of people from a practical standpoint is useful in not having ties. If there’s ever a decision that needs to be made and made quickly or made completely, it always resolves to some sort of a jury.
Roland Siebelink: What do you think, James, about the state of productivity software? Bearing in mind, of course, that Redox uniquely is a fully remote company where you probably have more dependency on tools than if you were all in one office.
James Lloyd: I think it’s really interesting that the space around connecting up all these disparate tools is really becoming quite necessary. As a distributed team, we use things like video calls pretty much constantly. We rely on a lot of other tools that we use to provide us dashboards about how the team is doing, even into some management type aspects of how the team is running because we have less of the manage by walking around type activity available to us.
I think the tools that are available to entrepreneurs and to software companies, there are a lot of really great, targeted applications. And now the challenge is figuring out how to get them all to talk to each other.
Roland Siebelink: Excellent. Luke, what’s been your experience in running a distributed company? And what are the key tools that you couldn’t live without?
Luke Bonney: The experience has been - the sum total has been absolutely fantastic. James describes it really well. What we’re able to do is decouple people’s employment with where they’ve decided to live and where they decided to have their lives. And when you do that, what you really experience is - when we say we want to get the best people who are aligned with our mission, who have the passion, the drive, and the experience that we’re looking for, we can do that at a national level. And I think we see that in our ability to recruit fantastic people to join Redox.
And then we also see it in amazing retention and inclusion scores. To James’ point, we set up Culture Amp - I do think we have the benefit of being a very mission-driven organization. What we see is that people really love to be a part of Redox. And I think so much of being a distributed company means that you need to extend trust to anybody who is joining the organization. Because you’re not walking down the hallways and saying, “Are you at work doing your job?” We have to be more focused on outcomes and leading and managing to outcomes than activities and tasks. It really levels us up from that standpoint.
Roland Siebelink: I can definitely confirm that I’ve seen Redox be able to recruit far faster and far higher quality people than the typical scale-up. Everyone goes through a phase of, “Now we need to hire a hundred people for the next year.” And all the people I’ve worked with, all the companies, I think you folks have had the best execution of that plan that I’ve seen because you have so much fewer constraints, right?
Luke Bonney: Yeah. When we look at our three year, top-line talent strategy, it is to be recognized as the best distributed company to work for. That’s how much we believe in it.
Roland Siebelink: Let’s move a little bit into the healthcare space. Can you talk a little bit about the healthcare space and what are the problems with the integration of patient data, in particular? James, do you want to start with that?
James Lloyd: Yeah, absolutely. For a non-healthcare audience that may be familiar with some other business topics, the best analogy I can make to the healthcare space is what you may encounter if you’re trying to have an application talk to a hundred different instances of Salesforce. Where you have a bunch of custom fields, a bunch of custom values, everybody is implemented and then iterated on a core framework, but they’ve all diverged from their starting point.
A lot of what is complicated about the healthcare space is that you have a single human being, a patient, that’s represented in all of these different systems. And to actually try to reconcile them and provide a consistent level of service across the different settings, it can be really challenging. A lot of the buzz in healthcare is around interoperability and historically the healthcare industry has worked how enterprise worked in the late 90s, early 2000s, where everything just worked together because you got it all from Microsoft. And it all just played nicely.
And now we’re in healthcare going into this world that’s very similar to the rest of enterprise. You may use Gmail. You may use slack. You may use different tools for different jobs. But now you have to stitch them all together. In healthcare, there’s been an emergence of very targeted, very specific applications. Folks are doing great at social determinants of health or helping get patients to the doctor with medical transportation. A lot of areas that are very niche and they still need this communication layer to get them all to talk to each other. That’s where we said in the world with healthcare is to help make that communication happen.
Roland Siebelink: Luke, how many healthcare startups do you have on your platform at this stage?
Luke Bonney: Billions. We have thousands of thousands of developers actively on the platform, hundreds of applications, and we support startups all the way through to the enterprise. And really, the core of what we think about is how do we accelerate the adoption of technology in healthcare. Integration and this core communication platform is what we see as problem number one. It’s really about how do we pull friction out of technology adoption in healthcare. And when we think about our ultimate impact, it’s reducing the total cost of care and improving health outcomes and supporting the role of technology in that.
Roland Siebelink: Okay. Great. Let’s move a little bit more into the Redox story. We’ve been recording for awhile, but there’s maybe some listeners that don’t really understand what Redox does. Luke, would you mind summarizing it in less than a minute?
Luke Bonney: Oh, I was going to tell our founding story. Can I have two minutes?
Roland Siebelink: Yes, of course, please. We love stories. So any story you can add is great.
Luke Bonney: I think it’s interesting because you heard bits and pieces of it in the discussion we’ve had so far. The three of us who started the company, we all got to know each other and moved to Madison, Wisconsin to all be part of Epic, which is the industry leading - what’s called the HR company - electronic healthcare company, which is the SAP or the Oracles for healthcare. System of record for major health systems. And that’s where we met. The three of us had different roles.
In early 2013, James and Niko each left to pursue their own entrepreneurial paths, build their own crazy companies. And along the way started what is now the largest co-working space in the city of Wisconsin, about 400 people. I got involved when we realized that about 40% of the folks in that space had some close relationship to healthcare.
The first project that the three of us actually worked on was this incubator idea that we called 100 Health. And 100 Health, our tagline was we’re going to start a hundred digital health companies in Madison over the next five years. There’s really two core ideas. One is healthcare had just digitized version 1.0 via Obamacare and a significant federal subsidy to drive the adoption of the HRs. And two, a lot of this innovation we thought was going to happen in areas of deep expertise. And Madison had an opportunity to be one of those ecosystems.
We didn’t successfully start a hundred companies. We did end up supporting seven different digital health companies. And each of those was seven companies. They each had their own application, cloud-based technology seeking to scale. And Redox was born when we realized that each of those seven companies, they’re all gonna run into the exact same problem. It was going to be a huge problem in their ability to scale and driving the adoption of their technology, which is they were each going to have to support and manage their own point-to-point, backend data integration with their customers, their customers being large healthcare organizations.
We understood exactly how to do that. But I think one of the real innovations and insights was this idea of, “Well, what if we thought about the solution through the lens of the developer?” What would the ideal developer solution set be via developer first platform with a single end point, like an assistant data model. And then we realized that if we conceptualize this, we conceptualize Redox as this platform, that ultimately each time anybody connected to it - whether it be an application or whether it was a healthcare organization where integrating with - became a reusable node. The addition of that node would add value to anybody else who was already on the platform. We really had something interesting and special.
Today, that’s really how we think about Redox. It’s fundamentally a platform designed for developers to reduce friction in the overall adoption cycle of technology. Integration is the first problem we solve. And we have, as I said, thousands of developers and applications connected to hundreds of different health organizations across the country. We represent north of 25% of hospitals at this point and growing triple digits year over year.
Roland Siebelink: That’s amazing. The numbers speak for themselves. And yet, in working with you folks, I’ve also seen that it’s not just numbers that drive you, right? It’s also that deeper purpose. You already mentioned it. We’re all patients and how do we make healthcare more efficient?
James, can you maybe recall a time when you had to choose between numbers and a purpose and how you made a decision as a team to prioritize the purpose or not?
James Lloyd: Yeah. The first example that comes to mind is probably - we actually have a program to support nonprofits and folks who would potentially want to be a Redox customer but may not be able to afford it. We call that program Redox Gives. We really wanted to be able to actually use what we do really well, which is our product and our company to help out people in a pretty unique way.
Roland Siebelink: Luke, does it also affect some hiring or people development decisions to have the purpose in mind at Redox?
Luke Bonney: Oh yeah. Absolutely. One of the ways that I think about this is there’s different types of motivation and people who are motivated by our purpose and see how they can contribute to that purpose. I think it’s just a totally different level of willingness and passion when it comes to being a part of the team. We think about that through our values. And it’s a core part of what we look at when we are hiring folks. We call it a Redoxian assessment, looking for different traits.
But if you were to ask Andy - he leads our people ops team - a great Redox candidate is somebody who’s super talented, who’s looking to join a mission-driven organization and have a major impact. That’s core to who we bring onto the team.
Roland Siebelink: You’ve had situations where somebody was good at every single checkbox but not at the mission driven. And you had to let them go or not hire them?
Luke Bonney: Yeah. One of the easiest ways we think about it is - you can think of Kevin, who is our head of sales, says this I think in a very succinct and powerful way: “Everybody should get evaluated on what they do and how they do it.” and you don’t just get evaluated on one; you get evaluated on both. And we’ve had a couple of examples where we had a high performer who absolutely we ended up letting go. It’s painful and it’s tough, but it’s a huge relief.
Roland Siebelink: That’s a common learning with many startup founders that it’s two, three months of pain to prepare for the decision, and then you’re like, “Oh, I wish I had done this six months earlier.” Thomas Edison said - I think we can apply this to startups - “Genius is 1% inspiration, 99% perspiration. Inside the amazing Redox story, there must’ve been some roadblocks or some challenges every now and then. James, can you recall one or two challenges that were really arduous? And how did you overcome them?
James Lloyd: Only one or two. I often tell people that my job changes every six months because of this constant treadmill of new and exciting problems to solve. We’ve been fortunate that we’ve had a lot of what I would call the good problems. As a CTO, I work a lot with our product and engineering teams. And a few years ago, we were a 10-person engineering team, supporting a very critical piece of infrastructure for things that people rely on for getting care and growing at about 10X every year. It was a constant struggle and sometimes continues to be to stay in front of the growth while also delivering on the new features and the new innovation that our industry is relying on us. That’s probably a constant thing that we’re thinking about and talking about is delivering on reliability and stability while also staying ahead from an innovation standpoint.
Roland: Luke, when you recall one of the potential train wrecks that I’m sure Redox has experienced - as any of the other startup does - how did you pull a company through a train wreck like that?
Luke Bonney: I think it’s through tough times that you actually find out who we are as an organization and who really cares about the organization. The first example of this is within the first year of Redox’s existence, when we were in the process of raising our Series A, we had a huge contract that we thought was going to get signed by a large health system down in Houston. And most of our fundraising was built on the story that we were going to get validated through the signing of this contract.
And the contract made it through all the red lines. It was literally sitting on the ICO’s desk, who was our champion. The day that they were supposed to sign the contract, we sent it along. And then 12 hours goes by, 18 hours goes by. We come to find out that the CIO had literally walked into the CEO’s office that day to get this contract signed and had been fired. There was six weeks worth of cash left in the bank. I think there were nine people at the company at that point. We had just spent two and a half months going through diligence with 406, who was going to lead our Series A. And my expectation was Redox, as we knew it, was going to cease to exist.
I remember calling up Liam at 406 and basically saying, “Hey, this contract is no more and I’m really sorry about it. Here’s what happened.” And he said, “Tough things happen. We are investing in Redox not because of one contract but because we believe in you and the team and the vision. Come to find out, everybody at the company, they weren’t going anywhere either. Really core to the ethos of Redox is this “We’re in it for the long run. We’re in it because we believe in what we’re doing.”
And sometimes you need to go through some really tough stuff to remember that. And we’ve definitely had our fair share of train wrecks. But we continued onward. We’ve always strived to be transparent, to tell the truth, to help people make their own decisions, and then move forward.
Roland Siebelink: Very good, very inspiring. You’ve also, as a company, started to adopt the scaling up methodology from the beginning of last year and we’ve started to work together. How has your experience been with, one, adopting the framework such as scaling up, and second, working with a facilitator coach such as myself in how Redox has been working?
Luke Bonney: James said it earlier, but there’s this feeling that I feel strongly as well, which is your job as a co-founder and a first-time executive at a startup and a quickly-scaling company feels like you’re doing a new job every six months. And most of the time, that’s really invigorating. And some of the time, that’s really exhausting.
And the question that is constantly going through my head, and I think a lot of folks head is, “Am I focusing on the right questions? Are we innovating where we need to innovate? And stealing and borrowing and learning where there are things that we don’t need to innovate?” Because innovation is hard and it’s risky. And I remember we were having a conversation - I think it was the three of us as co-founders - saying, “There’s gotta be a better way to think about the framework of running a scaling company.”
And we started doing research and we basically came across scaling up as a methodology in Verne Harnish’s book. And I remember reading it for the first time just being like, “Oh my God, this helps answer so many questions where we don’t have to build it ourselves for the first time as if it doesn’t exist.” And then we found out that there were coaches like you, Roland, who use this methodology. I can just say there’s moments in a company’s history where you see inflection points. Our realization that we needed a framework and then our ability to say, “Yes, we’re going to adopt this and adapt it,” and then finding you as a coach will be one of those for Redox.
It was the realization that we can’t spend our time inventing everything. It was a realization that we need to find somebody who is an expert who can come in and help drive our personal growth and development but also will help the overall adoption of this framework at the executive team level. It’s been hugely valuable.
Roland Siebelink: James, how’s your experience been in having a framework that you stick to but also having coaching and your development as a startup founders, startup executive?
James Lloyd: The way I think about it is it’s really been the canvas that we get to paint on. And I think prior to having a structure, we were trying to invent our own structure. We were trying to figure out where we were going to paint and paint at the same time. And we were putting a lot of our energy into creating our own framework instead of focusing on the problems that we actually really needed to solve. I think it’s really accelerated both our progress as well as just our general communication and vocabulary and understanding what decisions we need to make and how to communicate that across the whole company.
Roland: Awesome. Luke, any last words of advice for other founders around coaching, facilitation, frameworks to adopt?
Luke Bonney: I wholeheartedly agree with everything that James has said. Experimenting with many up front but then really testing for who is somebody who you can trust and meaningfully communicate your deep, dark secrets. I think that is really, really important. I think if you can find that person who can also work with your co-founders. But I would say having outside coaching and direct support - if we were to do it again, I would have it from the very beginning.
Roland Siebelink: Good. What does Redox need most from people listening to this podcast and where should they learn more about Redox? Where could they follow you or maybe even reach out?
Luke Bonney: If you or anybody you know is building awesome technology in healthcare, reach out. We’d love to figure out how we can help you. We have a ton of experience in what it takes to successfully scale great technology in healthcare. I’d say, that’s number one.
If you want to follow us, we have an amazing blog. Niko’s Not here, but he’s kicked off an amazing podcast with some really fantastic guests. Those would be the two areas that I am actively checking out as a participant and fellow Redoxer that I think anybody could get a lot of value out of.
Roland Siebelink: James, I think Redox is also actively hiring across the country. Where can people get in touch if they’re interested in working for a distributed company in healthcare like Redox?
James Lloyd: Yeah, absolutely. We have a careers page on our website. It’s just redoxengine.com and there’s a careers page there that you can check out. Every team in our company is hiring something, so there’s probably something for everybody who’s there to check it out. By all means, feel free to connect with me or Luke if you want to chat more and learn more about the company as well. You can find us on LinkedIn or I’m on Twitter too, so you can find us there.
Roland Siebelink: Thank you. And we’ll put all those links in the show notes so that people can see this all in writing. Thank you so much for joining me for this podcast, both Luke and James. Luke, CEO, James CTO of redox. Good luck with the further Redox journey.
Luke Bonney: Thank you, Roland.
James Lloyd: Thanks, Roland
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.