Andrew Taylor and Kyle Torrington are the first to admit that it took them too long to pivot their business. “We believe in the lean start-up methodology,” says Andrew. “And if you believe in it, you need to live it.”
In fact, it took just six months for the co-founders to change their business model and rebrand the company from LexNove to Legal Legends. In the world of lean start-ups though, six months is too long.
Implementing lean start-up methods
“When we first launched, we completed the Ignitor Accelerator Programme,” says Kyle. “It was an invaluable experience, and it introduced us to lean start-up methodology and how to implement lean start-up principles in your business. It’s not just about the launch, it’s about the years that follow. It’s a set of principles that keep your business relevant and sustainable, but it also requires you to fail fast and adjust your model continuously in a ‘build-measure-learn’ feedback loop. The problem was that even though we understood and believed in the theory, executing pivots in a business is easier said than done.”
“We’d even recognised friction points and underlying assumptions we had around our business and target market that were proving incorrect,” agrees Andrew, “and it still took us a few months to act.”
Why? What prevented two smart entrepreneurs who understood their business, target market and what they needed to do, from acting immediately? It’s a dilemma that business owners will find all too familiar, and it starts with the original idea, and is compounded by industry experts falling in love with your innovative solutions — even though you’re struggling to monetise the business. Here’s how they pivoted their business and achieved 50% month on month growth as a result.
1. Recognise The gap between vision and reality
“The idea behind LexNove was to make legal services more accessible and affordable for SMEs,” explains Kyle. As lawyers, they were exposed to the reasons why legal services were daunting, and often unaffordable for start-ups and SMEs, and they believed there was a way to address those gaps.
They started by researching what was available globally, and discovered that in the US and UK, similar online reverse bidding sites existed that connected SMEs in need of legal services with law firms who bid for the business. In theory, this would create a more competitive environment and more affordable prices for SMEs. It would also take the uncertainty out of legal billings, which traditionally charged by the hour, and give a project a flat rate.
“There was nothing like it in South Africa, but the idea had already been tested and proven in other markets,” says Andrew. The co-founders contracted outside developers, resigned in late 2014, and launched LexNove in June 2015.
Be innovative, on-point and address a real market need
Experts and the media lauded it as the future of legal services. But it was proving very difficult to monetise.
“Our beachhead market was SMEs. We’d identified a disconnect between entrepreneurs and traditional legal services, but what we’d failed to really consider was the fact that start-ups and SMEs are very careful with their cash. If the choice is between legal services and survival, understandably they’ll choose survival,” says Kyle.
“Ask almost any established business owner what they wish they’d done differently in their start-up days though, and they almost always say they wish they’d had the right contracts, agreements and intellectual property protection in place. It’s far more expensive to fix later. But when you’re in that space, other costs take precedence.”
Developing a strong user base
Nevertheless, Kyle and Andrew managed to build a strong user base on the site — they’d contacted firms via LinkedIn and their networks to get the law firms on their site, and used Facebook and online advertising to bring users to the site. They categorised and collated bids and chased the legal firms to ensure they bid on contracts. But, getting users to convert was difficult, and it was only at this stage that LexNove received its percentage of the business. Up until that point, everything they did was free.
It was turning out to be a lot of effort for very small rewards. “Another problem was that deals that did convert introduced a business to a legal firm, and they did future business directly with each other — there was big platform leakage as the SME didn’t come back to the site. The legal world is a high-touch, high-trust environment — people want to know and trust their lawyers, and so even though we had provided a ‘matching’ service, once the match was made we were no longer the ‘go to’ legal provider for the SME,” explains Kyle.
“We thought people would keep coming back to the site. The reality was quite different.”
Most importantly, the site was failing to do what Andrew and Kyle had intended in the first place — it wasn’t bringing down legal fees. Because the site used outside legal practitioners and couldn’t control or even influence their fee setting, the price point remained aligned with more traditional firms instead of reducing to levels start-ups could afford.
2. Choose a new direction
It’s not always easy to let go of an idea that you’ve nurtured and worked on for so long, particularly when you’re lauded for it. But if you can’t monetise your idea, then it’s not a viable business. Andrew and Kyle could have continued to plug away. Perhaps if they’d waited long enough, the local market would have caught up to US and European standards, where the business model did work.
Instead, they took a step back, critically reviewed the business, and started implementing the methods they’d learnt around the principles of the lean start-up methodology.
First, they needed to understand why their target market wasn’t responding to the service they were offering. They were addressing a real need, so what was the problem?
“The idea of online legal services in South Africa was new, but ecommerce isn’t,” says Kyle. “The problem is that users were expecting instant gratification. Instead, it took 48 hours to process bids. SME owners arrived on the site, and there were no prices, so you were still unsure what you’d get quoted. We realised that uncertainty around prices is a problem for a target market that isn’t well versed in legal services.”
“Even if the uncertainty had been cleared up, there was a secondary problem,” adds Andrew. “What an SME owner is willing to pay for certain legal services versus what law firms charge is miles apart. Services were just seen as too expensive.”
“Our key driver was still to make the law affordable for SMEs,” says Kyle. “We want to capture the 90% of the SME market that can’t afford traditional legal services by revolutionising the way law is done, while still offering quality legal services. LexNove wasn’t achieving this goal. We needed a new solution.”
This understanding, coupled with the challenges they were facing, led to one key question: What did they need from their target market? The answer was clear — they needed to capture and hold the full value of each client using their service, and they needed to offer that service at a price point SMEs could afford.
3. Shift the business model
The co-founders started by addressing their name. “We’d read somewhere that two syllable names were easier to remember, which was where LexNove (based on LexNova, which means new law), came from. But we’d fallen into an old trap. We chose a Latin name for a business that was supposed to be democratising legal services,” says Andrew.
“We needed a new name that was memorable, made sense, and told our customers exactly what we do.”
Legal Legends was born from a skunkworks project inside LexNove. Andrew and Kyle kept LexNove operational, and let existing customers and partners know they were trying out a new product on the side. A skunkworks project is developed primarily for the sake of radical innovation, so it allowed the co-founders to test their theories and the lessons they had learnt with LexNove without immediately shifting their business model.
Today, the tagline on the site reads, ‘Fixed priced legendary legal services for entrepreneurs’, immediately followed by a ‘shop now’ button that takes you to a fixed-price menu.
How to achieve your start-up goals
So, how did Andrew and Kyle achieve their goal? True to lean start-up principles, they did it with a lot of hard work, testing, measuring, adjusting and implementing. Working with outside developers meant long lead times, so Kyle learnt to code. They also paid careful attention to how their customers responded to their offerings. Once the business had pivoted as a result of lessons learnt from LexNove, it began to experience 50% monthly growth.
“Our goal was to achieve the creation of intelligent automated contracts, which are automatically curated based on user preferences,” says Kyle. “Our biggest challenge was how to bring our prices down and find an annuity income model.” The answer was automation and instalment payment plans.
In its new format, Legal Legends is actually a far more unique offering than LexNove was, but it’s also a familiar ecommerce platform that South Africans are more familiar with, and therefore more comfortable using. “We realised we were asking people to spend R10 000 on a reverse bidding site, with no credibility or track record,” explains Andrew.
“The new site has a menu with prices. There are no hidden costs or surprises. We started with 50 of our most common services, and listed them as products, the way you would see books listed on Amazon, or products on Takealot. We then advertised our products through online and other means. A user can purchase a product in under one minute, and then they fill out a digitised questionnaire. This information gives us the details we need to customise the agreement they have bought.”
Once Andrew and Kyle had a clear understanding of their value proposition, the rest fell into place. In the legal world, costs are directly related to time. Lawyers charge by the hour, so to reduce costs, you need to reduce the time you spend on a service or contract. “We also understood that we needed to communicate a price point and what you get for it upfront — this was essential,” says Andrew.
4. Find a model that scales
To then deliver a quality product, the co-founders used the 8020 principle. “We determined 80% of a contract or agreement can be automated, and only 20% needs to be customised,” says Kyle. “We then designed questionnaires that would give us the information we needed to create the contracts, and developed customised software to automate the process.”
Legal Legends now uses in-house lawyers, contracting out to other lawyers when necessary. Through the questionnaires and automated process, the time taken to deliver a fully customised contract is made dramatically more efficient, and pricing is much lower. In many cases, customers are paying less than a third of traditional legal costs.
“We keep iterating by adhering to the ‘build-measure-learn’ feedback loop. Automation and the questionnaires take a lot of time upfront, but once they’re up, 90% of the work is done for each client who follows. It allows us to do the work in-house, charge less, and to earn annuity income, while maintaining the standard of service and expertise we’ve become known for.”
The result is far more repeat business, and a much higher level of comfort for first-time users arriving on the site.
Make it easier for businesses to work with you
A ‘build-measure-learn’ feedback loop has also meant that Kyle and Andrew are continuously looking for additional ways to make it even easier for SMEs to do business with them. One such solution is the introduction of interest-free instalment debits.
“The first instalment significantly de-risks our exposure and reduces our risk, but giving our clients the opportunity to pay for the service in regular debit orders also helps them carry a cost that they might otherwise forgo. We are now capturing the market we wanted in the first place,” says Kyle.
“We remain accessible, but we’ve automated as much as possible without sacrificing on quality, and offer skype meetings over meetings in person. We’re now the custodians of the relationships we build with users of the site, but have found ways to significantly reduce the amount of unnecessary time spent with each client, which has resulted in a completely new cost structure,” says Andrew.
“We wanted to be an Airbnb or Uber that connected the market with service providers. The high-touch, high-trust nature of law was an issue, and our solution didn’t reduce the price point of these services, which was the main focus of the business. To do that we needed to capture the full value of each client, and radically adjust how we do law. An automated free legal health check we’ve designed is a great tool to convert clients, and if we do convert them, we start with information in hand that reduces the time taken to develop the contracts or agreements they need.
“Plus, we can scale the business without increasing overheads — we’ve increased our own capacity and decreased time taken per transaction. That’s the definition of scale.”
Here’s How Bosses From Hell Helped 6 Entrepreneurs Grow
From control freaks to being unco-operative, founders share what they learned from their worst boss.
In business, sometimes the most valuable lessons come from the worst teachers. We asked six entrepreneurs: What’s the greatest thing you learned from a bad boss?
1. Bring everyone in
“A former boss was very hierarchical and discouraged collaboration. Everyone reported directly to her, and interdepartmental meetings were practically prohibited. It meant that only our boss had the full picture – we missed a lot of opportunity for alignment and cooperation. Today at our company, it’s a priority to hold regular team meetings and foster a strong culture of collaboration. It’s crucial that our team members weave collective sharing into the fabric of their day-to-day interactions.” – Melissa Biggs Bradley, founder and CEO, Indagare
2. Be vulnerable
“Don’t be afraid to show your emotions! I worked for a partner at McKinsey who was an incredible person but an awful manager because he kept his feelings bottled up. After a client presentation went awry, our team didn’t know where we stood with our manager. It was tense, awkward and demotivating. Showing vulnerability and letting others know when you’re genuinely upset can help everyone externalise their emotions, build trust and reassure employees that they aren’t alone. It sends a clearer message than stone-faced silence.” – Leo Wang, founder and CEO, Buffy
Related: 5 Factors That Make A Great Boss
3. Lend a hand
“I worked for someone who would never help out the junior staff with their work, even if he was finished with his own – he’d simply pack up and leave early. I now make an extra effort to ask my staff if they can use a hand when my own workload is light. It’s created a culture that feels more like a tight-knit team and less like a hierarchy.” – Adam Tichauer, founder and CEO, Camp No Counselors
4. Move as a group
“When I was a nurse manager, I had a boss with no experience in healthcare. She wanted to change our process for keeping patients from getting blood clots. I knew it was a mistake, but she insisted. Ultimately, the change failed. It taught me the importance of empowering staff to speak up. At Extend Fertility, we collect feedback from customers via surveys. Results are shared with our staff, and together we develop action plans to address negative experiences. It’s the employees who interact with patients on a daily basis who have the best solutions.” – Ilaina Edison, CEO, Extend Fertility
5. Trust your team
“I once worked for a woman who joined our team after I had been working there for a while. Every time I stood up, she’d ask me where I was going, whether it was to the bathroom or to the printer. She had a fear of not having control over my time and work. As a young adult, this behaviour really demoralised me, especially since I had excelled at the job for years prior. My leadership style is less neurotic. Once my team members have my trust, I’m pretty hands-off.” – Denise Lee, founder and CEO, Alala
6. Respect others’ time
“Early in my career, I had a project manager who’d wait until the very last minute to review work, then convey lots of new information and requests. This happened at the end of the day or, worse, after hours, when I was home. It was demoralising, inefficient and disrespectful. In my career, I’m conscious about reviewing work in a timely and complete way so my team can successfully incorporate my feedback without generating a last-minute crisis – or lingering resentment.” – Kirsten R. Murray, principal architect and owner, Olson Kundig
This article was originally posted here on Entrepreneur.com.
11 Things Very Successful People Do That 99% Of People Don’t
Consistency is a big part of succeeding. The top 1% of performers in the world know this is the secret to their success.
Becoming wealthy and leaving an impact on the world is not an easy feat. If it were, everyone would go around doing it. At that point, it would not be much of an accomplishment at all.
Rather, being extremely successful requires an extreme amount of work. Especially when there is nobody looking. The best people have developed habits that help them reach their goals. These routines are not necessarily challenging to form, but they take consistent effort over extended periods of time. Creating these tendencies in your own life will propel your success.
Here are 11 things, that 99% of people (myself included) do not do, but really should.
Brian Tan Of FutureLab.my – Bridging The Knowledge Gap Through Social Learning
Brian Tan a young Malaysian Entrepreneur whom has built the largest social learning platform in South-East Asia.
“The meaning of life is to find your gift. The purpose of life is to give it away” – Pablo Picasso
As a keen observer of the behaviour of successful entrepreneurs I have learnt that:
“You do not attract what you want but you attract what you are”
Brian Tan truly believes in what FutureLab stands for and therefore has attracted the belief of key partners such as Cradle whom has invested in his ground-breaking project.
Brians’ gift is to solve big problems. In unison with his two other co-founders he is giving this gift away in the Form of FutureLab, a company obsessed with learning and more specifically bridging the gap between education and careers.
Brian wants to play a role in making humanity better by applying his knack for solving unique problems and firmly believes that quality and ongoing education is a powerful catalyst for positive change. FutureLab is a social learning platform featuring diverse applications that not only connects mentees to mentors but also empowers several companies to track their employees utilising Futurelabs’ technology as they navigate through development and talent development programs.
Slowly but surely FutureLab is becoming much needed feedback loop between university and industry and brings exposure to people who have not had it before. Brian believes that a lot of people have not fullfiled their potential due to low standards of education in general.
I fully realised that I was engaging a modern entrepreneur as he described his company culture as:
‘Geeky, awesome & badass.’
He elaborated on that by explaining that his team do not follow trends, that they authentically like what they like, and do what they love in their unique way. When you act according to the Leadership principle of Authenticity you avoid having regrets as you did not apply unnecessary energy to attempt to become someone that you are simply not.
This unique company is founded upon three core values which flows through all the activities that they engage in:
- Giving back to society
- Continuous Learning
- Creating your own reality.
The FutureLab team does not only pay lip service to these values but instead actualise them as a matter of regular practice. Brian gives his team ‘homework’ in terms of things that they need to learn and the CEO of FutureLab himself is engaged in a lifetime commitment to learning. Regular ‘Stand up meetings’ are held were team members give feedback and hold each other accountable.
Brian is a Biochemist by trade whom constantly seeks opportunity to learn more about business and has completed several business programs to learn how to build a company which included spending 3 weeks at Stanford University studying entrepreneurship and meeting teams from Google, Apple, Facebook and Pinterest as part of a government initiative for the top 25 Malaysian start-ups. This young entrepreneur believes that his passion for teamwork has helped him a great deal to transform from being a biochemist to being an entrepreneur. He finds joy in ‘pushing a team forward’, as he puts it and loves seeing his team members grow in self-confidence and belief in the vision of the company that he co-founded. He has a keen knack for finding potential and then helping his team members to unleash their inherent talents.
What follows is Brians’ clear description of how Futerelab obtained cradle funding and how they managed to secure the top universities in Malaysia as clients, in his own words:
“We wanted to prove that FutureLab was solving an actual problem before applying for Cradle funding so what we did was to invite mentors from specific industries (at this early ideation stage of FutureLab it was our own personal networks).
“We started with mentors from Management consulting and posted a google form up on Low Yat and Facebook to see whether anyone wanted to speak to them. Within a couple of days, we had 20 people signup to meet our mentors. At this point, we decided to close the google form since we didnt know what kind of people would show up. We set the meet up at a local coffee shop and only spent RM 50 on buying coffee for the 5 mentors from Accenture, BCG, PWC, Ethos Consulting and Deliotte. We split the mentees into mini groups and they cycled from one mentor to the next, the last stop for each mentee group was with me telling them what we are trying to build, how much we are thinking of charging and how would the system work. We got really good feedback from the participants and the mentors.
Me being a scientist by training, I like to see whether results are repeatable so we organised 6 of these meet-ups over the whole year inviting mentors from different industries, lawyers, accountants, entrepreneurs, doctors and we even tested on online mentoring session using google hangouts. At this point, we were convinced that FutureLab should exist. This is when we applied to Cradle for Funding along with all the evidence we collected on why FutureLab should exist.
When FutureLab was first launched, we already had 40 mentors and 60 mentees that were waiting to use the platform that we were building. Mentees really enjoyed speaking to our mentors and vice versa for mentors, our growth has been mostly from word of mouth from mentors and mentees eventually universities started being aware of our mentoring community and started asking us to get more involved with their students. Our mentors are big advocates for our platform and they are based in large companies around the world. So they play a big role in opening doors for us.
Yet another key business learning he has acquired is to always guard against complacency and this knowledge is encapsulated by the following quote that he shared:
“What got you here cannot get you there”
Meaning that the same behaviours and habits that got you to this point will not be enough to move you forward, you have to keep on evolving to remain relevant and successful.
Brian is passionate about FutureLab and business in general and reminds us that:“When you are passionate work is the fun part of the day”. His advice to other entrepreneurs is to truly find a project that you are passionate about and truly believe in. He is most certainly passionate about the future of his projects and wants to build an eco-system that generates high volumes of cash that will empower his company to invest in start-up projects.
In general he wants to invest in entrepreneurs that are solving ‘big problems’ and wants FutureLab to become an innovation company. He poses this challenging question to those thinking on starting their entrepreneurial journey:
‘Are you merely attempting to do what others are already doing or are you really solving a problem?”
He finds that many entrepreneurs overthink and then do little. The more you do and if done at a rapid pace the more you learn to become adaptable and will find that there are many ways to solve a problem.
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