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.”
The Law Of Attracting Your Success
Once you discover your who, you automatically discover your why, which in turn allows you to lead with your heart rather than your head. Discover that energy source, and the world is your oyster.
From the teachings of Buddha to the concept of karma, the Law of Attraction has been expressed in many ways by both ancient and contemporary thinkers. In its most simplistic interpretation, the Law of Attraction states that ‘like attracts like’.
Your ability to Magnetiize exists whether you are aware of it or not, whether you are positive or negative. You make daily decisions to choose whether you want to attract success or failure (however you define them), whether you want to live a more conscious, elegant and curious life or whether you want to keep your head down and stick to the old rules.
We are constantly Magnetiizing in every aspect of our lives, whether we’re running a business, interacting with friends or simply walking into a room. Changing how you do it can be a scary prospect, but it will move you from a stagnant space to one in which you can develop with meaning.
When you are in a space of positive magnetism, the momentum builds and your access to energy is incredible — it feels like electricity running through your body, with your ideas in focus and creativity flowing.
Magnetiize in 3 Steps
To Magnetiize is to take control of your own future and, in so doing, transform from a state of panic to a state of calm; from chasing ambition to seeking meaning.
- The first step is a process I call Micro Inspection: How to confront the obstacles in your mind and start making decisions that are led by your heart.
- Then comes Mega Exploration: Examining the qualities of future-forward and conscious businesses.
- Finally, you need to bring it all together into your own reality, with the Macro Perspective: Understanding new technology and trends, and embracing the future.
This holistic approach allows you to Magnetiize into your life the right type of people, appropriate access to opportunities, and the money and power you need for sustainable success. To truly achieve, you must combine Micro Inspection, Mega Exploration and Macro Perspective.
When you learn how to Magnetiize, you attract a tribe of people who you can work (and socialise) with in harmony. Your tribe should consist of elders, advisers and friends who complement your skills and personality and bring out the best version of you — the best ‘I’ behind your ‘I’. You’ll find that the tribe changes, for the better, the type of decisions you make and the discussions you have.
And as a result, your ability to Magnetiize will rub off on those around you, encouraging them also to step out of their comfort zone and to participate in shaping the future.
Magnetize is circulated through all good book sellers and at www.johnsanei.com
Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage
Have a plan in place for your money, no matter how much you earn.
Seven-figure pay cheques are enough to buy a lifetime of financial security, right? Well, not exactly. Despite making millions, seemingly wealthy celebrities often have a tough time keeping their heads above the financial waters.
Johnny Depp spending $3 million to fire Hunter S. Thompson’s ashes out of a cannon, or Nicholas Cage shelling out $150,000 for a pet octopus, are both prime examples of how lavish lifestyles can quickly lead to debt. The two A-listers are part of a long list of actors, musicians, athletes, etc. – including Floyd Mayweather, 50 Cent and Curt Schilling – who have all experienced financial troubles.
While there’s nothing wrong with celebrities enjoying their earnings, a little budgeting can go a long way. Just take a look at Tori Spelling. After failing to pay a balance of more than $35,000, the actress was taken to court by American Express. Another example is 80s movie star Corey Haim. He became so desperate for cash after filing for bankruptcy he tried to sell his own tooth on eBay for $150, which didn’t get any buyers.
Avoid falling into any of these situations by keeping a close eye on your spending. Regardless of how much you make, the following few budgeting tips promise to help you practice safe and responsible money management.
Put a plan in place
Nearly everyone lose sleep over their finances. Get a good night’s rest by figuring out where your money should be going long before it’s in your bank account. Spending without a plan, even if it’s only splurging on a one-time event, can have unintended consequences.
One example of this is former NFL star Vince Young – after dropping $300,000 on his own birthday party he was forced to file for Chapter 11 bankruptcy. Another example is Mike Tyson, who went into debt after overspending on Bengal tigers, 110 cars and a $2-million bathtub.
That doesn’t mean you can never treat yourself, but make sure you’re not spending money faster than you can earn it. Set up a series of “fun funds” each month to splurge on nonessentials. Depending on what else you have going on that month, each fund should be adjusted accordingly.
If, for example, you’re heading out to a friend’s wedding, there may be a little less left over for eating out. Stay up to date on your spending by downloading a budgeting app. The easier it is to see where you are for that month, the better chance you have of staying under budget.
Carry around some cash
Credit cards are becoming the most common payment method among consumers. The average American currently carries around three credit cards at any given time. While they may be more convenient, credit cards can easily lure consumers into a false sense of security.
After all, a simple swipe or tap is often all it takes to complete a purchase. However, it’s important to take time to research any costly items thoroughly and ensure you won’t regret them like Nicholas Cage. He learned this lesson the hard way when he blew $276,000 on a dinosaur skull that he was forced to return after it was discovered to be an illegal import.
Curb some of your impulse spending during a night out by bringing enough cash for the occasion. In addition to avoiding spending money you don’t have, you’ll also sidestep costly ATM fees at establishments that only accept cash.
Whether it means stopping by your bank on the first of every month or getting cash back at the grocery store, do whatever it takes to have a little bit of cash on hand. As you cut back on credit card purchases, your chances of falling into debt should begin to dwindle.
Lean on an expert
When it comes to your finances, take a lesson from the likes of Oprah, Tyga and Hugh Jackman, who invest in financial and life coaches. Many celebrities, including Oprah, attribute their success to their coaches helping put them on the right path. Even celebrities are human and can find it difficult to stick to budgeting goals.
Personalised features of a comprehensive coaching programme, such as daily check-in texts and bi-weekly budget reviews, promise to provide you with the encouragement needed to remain accountable even as the going gets tough.
Better yet, a financial coach can take your individual goals into account. Say you decide to start a family or need to make a cross-country move. Instead of wondering what that might mean for your budget, you can work with a financial coach to modify your spending habits and investments long before a change comes to fruition.
Budgeting goes beyond class. No matter how much you make, responsible money management has shown itself to be a necessity. Avoid following in the footsteps of celebrities who face serious financial trouble by keeping a close eye on where your money is going.
As we’ve seen all too often, failing to do so can mean losing millions. Simple steps – including creating a spending plan, occasionally relying on cash and reaching out to an expert – can help you achieve financial security sooner rather than later.
And if you plan carefully enough, you might just end up with the funds you need for that pet octopus.
This article was originally posted here on Entrepreneur.com.
The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk
The most successful people on the planet are also the people likeliest to devote an hour a day to reading and learning.
You just walked in the door from an exhausting day at work. You’re hungry and spent, just wanting to catch your breath for a minute. You grab something to eat and then veg out in front of the TV. Next thing you know, you’ve just binge-watched five episodes of “Jessica Jones.”
While that’s OK occasionally – we all need ways to decompress and shut down – this isn’t a healthy habit. That’s why the most successful people in the world spend their free time learning.
It’s not exactly breaking news. During his five-year study of more than 200 self-made millionaires, Thomas Corley found that they don’t watch TV. Instead, an impressive 86 percent claimed they read – but not just for fun. What’s more, 63 percent indicated they listened to audiobooks during their morning commute.
Productivity expert Choncé Maddox writes, “It’s no secret that successful people read. The average millionaire is said to read two or more books per month.”
As such, she suggests everyone “read blogs, news sites, fiction and non-fiction during downtime so you can soak in more knowledge.” If you’re frequently on the go, listen to audiobooks or podcasts.
Maybe you’re thinking: Who has the time to sit down and actually read? Between work and family, it’s almost impossible to find free time. As an entrepreneur and a father, I can relate – but only to an extent. After all, if Barack Obama could fit in time to read while in the White House, what excuse do you have? He even credits books to surviving his presidency.
President Obama is far from the only leader to credit his success to reading. Bill Gates, Warren Buffett, Oprah Winfrey, Elon Musk, Mark Cuban and Jack Ma are all voracious readers. As Gates told The New York Times, reading “is one of the chief ways that I learn, and has been since I was a kid.”
Breaking down the five-hour rule
The five-hour rule was coined by Michael Simmons, founder of Empact. The concept is wonderfully simple: No matter how busy successful people are, they always “set aside at least an hour a day (or five hours a week) over their entire career for activities that can be classified as deliberate practice or learning.”
Simmons traces this phenomenon back to Ben Franklin. “Throughout Ben Franklin’s adult life, he consistently invested roughly an hour a day in deliberate learning. I call this Franklin’s five-hour rule: One hour a day on every weekday,” Simmons wrote.
For Franklin, his learning time consisted of waking up early to read and write. He established personal goals and tracked his results. In the spirit of today’s book clubs, he created a club for “like-minded aspiring artisans and tradesmen who hoped to improve themselves while they improved their community.” He also experimented with his new information and asked reflective questions every morning and evening.
The three buckets of the five-hour rule
Today’s successful leaders have embraced Franklin’s five-hour rule by breaking the rule into three buckets.
Self-made millionaires including Mark Cuban and Dan Gilbert, owner of the Cleveland Cavaliers, read between one and three hours daily. Elon Musk learned how to build rockets, which lead to SpaceX, by reading.
Besides expanding your knowledge, Jack Ma, co-founder of Alibaba, says that “reading can give you a good head start; this is often what your peers cannot obtain. Compared to others, readers are more likely to know other industries’ strategies and tactics.”
Even if you can’t commit to an hour or more of reading every day, start with 20 to 30 minutes. I always have a book with me so when I’m waiting for a meeting to start or in the waiting room of a doctor’s office, I can read instead of waste time on my smartphone. You could also try audiobooks during your daily commute or when exercising.
So how do they find the time to read daily? They adhere to the five-hour rule.
Other times, the five-hour rule includes reflecting and thinking. This could be just staring at the wall or jotting down your thoughts. Jack Dorsey and LinkedIn CEO Jeff Weiner are well-known thinkers, while entrepreneur Sara Blakely is a longtime journaler.
Focusing on the past gives you a chance to learn from mistakes you’ve made, as well as assess what you did correctly. As a result, you’ll be better suited to achieve your goals and improve your life. The University of Texas also found that mental rest and reflection improves learning.
Need help getting started? Schedule reflection time in your planner. I’ve found blocking out 15 to 20 minutes after lunch is ideal because I’m coming out of that post-lunch slump. But start small: Allocate five or 10 minutes per day, and then work your way up so you’re not overwhelmed.
Know the questions you want to ask. Stick with just two or three questions focused on that specific day. For example, if you attended a conference, ask, “What were the key takeaways?” and “How can I apply this to my business?”
The third and final bucket is rapid experimentation. Ben Franklin and Thomas Edison became leading inventors and thinkers because of their experiments. We have Gmail because Google allowed employees to experiment with new ideas.
The reason experiments are so useful is because you have facts, not assumptions. Experiments show you what’s working. You can learn from your mistakes and obtain feedback from others. Best of all, experimentation isn’t that time-consuming. Most of the time, you’re testing through the same activities you’d perform without testing.
Jack Ma even recommends applying the knowledge you’ve learned to a real-life scenario. For example, after reading a book about collaboration and teamwork, you could take on new volunteer work to put that knowledge to use.
When you make learning a habit, you’ll be more successful and productive in life. By investing in a reading habit, you can ensure you’re growing yourself – and your company – every day.
This article was originally posted here on Entrepreneur.com.
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