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Joe Public United Shareholders On The Art Of Zigging When Others Zag

Pepe Marais and Gareth Leck’s paths first crossed when Gareth saved Pepe’s life. A few years later they were introduced by a friend who thought they’d make excellent business partners. Today they’re South Africa’s largest independent agency, with a turnover of R700 million, and gross profits in excess of R200 million.

Nadine Todd




Vital Stats

  • Players: Gareth Leck and Pepe Marais
  • Main shareholders: Pepe Marais, Gareth Leck, Laurent Marty and Xolisa Dyeshana
  • Company: Joe Public United, an integrated brand and communications agency
  • Launched: 1998
  • Turnover: R700 million
  • Gross Profit: R218 million
  • Visit: 

It was a July morning like any other. Little did Pepe Marais and Gareth Leck know they were about to get a call that would shake the company to its foundations, and result in 35 people being retrenched overnight.

In 2006, eight years after launching their business, and five years after selling it, Pepe and Gareth’s biggest client fired them. The account brought in 40% of their revenue, and the company needed to retrench 50% of its employees as a result.

It was the single worst day of Pepe and Gareth’s careers. They no longer owned Joe Public, but it was theirs in name and brand.

Three years later, the business almost went bankrupt — but it was theirs again. How were these two drastic events related, and why did losing their biggest client allow Gareth and Pepe to not only buy back their business, but find their purpose and change the course of the company as well?

The art of zigging when others zag

To understand how losing their biggest client could actually be the best thing that happened to Joe Public, we need to rewind to 2001, when three business partners at the cusp of their thirties decided to sell their start-up to a multinational.

Joe Public was launched in 1998 as a rebellious, young agency that wanted to do things differently from the rest of the advertising world. Pepe and Noel Cottrell were creatives, and Gareth was a young hotshot account manager. Together, they believed they covered all the angles to run a new, disruptive business.

Related: 10 Books Tim Ferriss Thinks Every Entrepreneur Should Read

“I’d had this idea for a business, which I wanted to call Fresh Advertising, after a night of red wine and brainstorming,” recalls Pepe. “My dad had a café, and I liked the idea of doing ‘fresh’ ideas and an office with a fridge door as the front door. Our third partner at the time, Noel, took the idea further, and we developed the concept into a café-style menu. We were the creatives, and we needed a business guy to make it work. Noel knew Gareth, and so we approached him to join us.”

Gareth loved the idea — he was in his mid-20s, and didn’t have anything to lose. There was another power at play as well. During their initial meeting, Gareth learnt Pepe was a boat man, and recounted a story of how he’d rescued a drowning paddleskier and placed him on a raft of piping until the NSRI could pick him up. A chill came over Pepe as he realised Gareth was talking about him. He’d been knocked unconscious paddleskiing during the first storm of the season in April 1995, and to that day hadn’t known how he’d come to be lying on the piping. They saw the business and the partnership as fate and dived in, head first.

The sleepless nights of starting a business

It was nothing like they’d imagined — particularly for Gareth. “It’s a massive jump from account management to running a business,” he says. “VAT, PAYE, salaries, traffic control, production. Suddenly these were all my problem. I was getting up at 3am so that I could get to the office and do cost estimates before going to see clients. I didn’t sleep for a year. When I did manage to get into bed, I woke up in the middle of the night wanting to throw up because we didn’t have cash in the bank and I had no idea how we were going to pay salaries.”

The partners had hit on something special though: They were selling Rare, Medium and Well-Done ideas, not time, and because they were delivering quality work ‘done well’, they were turning a decent profit. The first few months were extremely tight while they built up a client base, but by their second year they’d netted R1,5 million in profit.

“We were a small, dynamic team. We could take a concept to market within two weeks, so we were fast, and we were also very good. In 2000 we won five Loeries with a staff of five people,” says Pepe.

“We offered quality,” agrees Gareth. “We were quick and slick, and well-priced by the time you reached the end product. The menu concept also offered clients real transparency in an industry known for smoke and mirrors.”

The idea was based on the fact that as youngsters who hadn’t yet made a name for themselves, they needed to be disruptive and innovative out the gate, with a solid business model that would make great returns. “We wanted to zig while others zagged,” says Pepe.

When a buyer comes knocking

All that zigging and zagging had the desired effect, and business soon picked up, but it also had another, unintended consequence — a potential buyer came knocking. “We’d already realised there was a scalability issue with our business model,” says Gareth. “How could we replicate it without people as creative and driven as ourselves? You hit a ceiling when growth requires people of the same calibre as yourself. Anyone in our business will tell you that you can’t have a company full of creative directors. It doesn’t work.”

But there was a second option. A multi-national was offering to buy the business, and part of the deal was that they would roll out the menu option to their subsidiaries and offices around the world.

“Noel was spearheading the deal — he really wanted to move to the US, and the deal gave him the opportunity to join the international network’s New York office,” says Gareth. “From our side, the idea of spreading our model, having an international office, and of course making money from the business all sounded great.”

Why selling was the worst decision they ever made

In a nutshell, they were young, the offer was appealing — and it was the worst decision they ever made.

“We sold completely prematurely and got shafted,” says Pepe. “But more than that, we ended up in a corporate environment that was the exact opposite of everything we’d built our business on.”

The local multinational sold to a larger US-based holding company, and before they knew it, they were just another subsidiary of an international giant. Everything became about the bottom line, and Pepe and Gareth soon found they were compromising great work in the pursuit of greater margins.

And then the worst — and as it turned out, best — thing happened. Their single biggest client fired them.


A blessing in disguise

Pepe had made the decision to fire a senior executive. “We couldn’t work with him. He was toxic to our business. We fired him on good intention, with a full view of how his attitude was harming our business and staff morale,” he explains.

The problem was that the executive in question was very close to the company’s biggest client. So close in fact that once he was fired he was offered the position of marketing director at their company. His first order of business? To fire Joe Public.

“We were devastated. We hadn’t fully comprehended the danger that such a big client posed — and how drastically our business would be affected if we lost them,” says Gareth.

But there was another unexpected consequence of the loss — the value of the business depreciated. “We realised that for the first time in five years, we had an opportunity to buy our business back. We immediately started negotiating with the holding company. The problem was that they wanted an astronominical amount for the business, which was nowhere near what we’d been paid for it. We didn’t have that kind of money. We fought for three years, and eventually resigned. We just said to them, ‘Take it all. We don’t want this.’ That’s when they came back with a reasonable number that we could manage.”

Buying the business back

On the 26th of January 2009, the business partners bought their company back. The day is memorialised in their offices by a plaque that reads ‘Never, ever sell your soul, Joe Public Independence’.

Related: To Be Successful Stay Far Away From These 7 Types of Toxic People

On their way back to the office, they received a call: A media mistake had been made that would cost the company R800 000. Gareth and Pepe had put all of their eggs in one basket. They’d leveraged themselves to the hilt to be able to buy back their business. They’d also kept profits and cash flow low since 2006.

“We didn’t have R1 million in our bank account. We’d basically been breaking even for the last three years,” says Gareth. “Our revenue was R13 million, but that left very little positive cash flow after salaries and expenses were paid each month, and we had no cash reserves. It had been part of our strategy to keep our PE ratio low so that we would be able to buy back the business. We were doing well, winning Loeries and keeping momentum behind the brand, but we weren’t chasing profits. We’d never envisioned such a disaster was possible.”

Failure is not an option, even in the face of bankruptcy

By March, the business was on the brink of bankruptcy. To add to Joe Public’s precarious position, a client who had been spending R380 000 per month put a halt on all marketing spend — also overnight.

“I remember thinking to myself, if this all went pear-shaped, my family and I wouldn’t even have a roof over our heads,” says Gareth. Although more careful than Pepe by nature, the business partners realised they needed to find a solution. Failure was not an option. “We went out and got business,” says Pepe.

“We brought in six new accounts that year. One of those accounts was Anglo American. It was a small job that no one wanted because of its size. We went all out to get it. We understood the value that having a blue-chip client on our books would bring to the business. We also continued doing work for free for the client who had halted all spending. They were in the process of listing, and we believed they’d come back to us once they had, and we were right. We just needed to show them value and loyalty.”

Step by step, Pepe and Gareth brought their business back from the brink. From 2009 to 2010 the company’s revenue grew from R13 million to R20 million, and the partners started building a solid cash reserve. Today, their reserves can carry the business for six months.

Finding a purpose

In 2007, Pepe began a journey of self-discovery. His focus was not only on the business and its needs, but on himself as an entrepreneur and leader. Gareth began his own personal journey two years later.

“We haven’t only worked on the business but ourselves,” says Gareth. “All business owners need coaching, mentorship and counselling,” agrees Pepe. “We’ve both done a lot of personal work and we still do. We hit blocks and work through them. Personal development and self-reflection are incredibly important to the business’s overall success.”

Through this journey of self-reflection and development, Pepe and Gareth found their purpose, both for themselves and the business. By the time they were able to buy the company back in 2009, they had a clear vision of where they wanted the company to go, and how they wanted to change course, and it all started with not putting the bottom line first.

Creating a good formula

“When we started, our whole focus was on the quality of the product,” says Gareth. “We had a good business model and we were creative and driven. A good product led to a good brand, which resulted in revenue. It was a good formula.”

“The year we made our first million, we weren’t focused on the bottom line,” adds Pepe. “We were focused on delivering the best product and service possible, and the natural result was a big, fat bottom line.”

After they sold, the partners soon found themselves in a very different situation. “When you become too focused on the bottom line, you reach a point where you start compromising your product in order to save on costs,” explains Pepe.

“The problem is that you can’t put bottom line at the top. Revenue is a lag factor. If you become too focused on it, you lose sight of the rest of the business. You can’t measure the health of a business on the bottom line.”

Pepe and Gareth are the first to admit that they’d completely lost their way. Losing their biggest client, gaining the opportunity to buy their business back — only to almost lose it again — and finding a way to power through the setbacks gave them a chance to do things differently. They grabbed that chance with both hands.

Making mistakes to create a better business

“You need to make mistakes to get the lesson,” says Pepe. “We needed to re-forge the business based on the right culture.

“We needed to bring the power of purpose into the business. We feel it on a deep level, and it’s now the framework of everything we do. We exist to exponentially grow our clients, our people, and our country — in that order. If we focus on clients, we will grow our people, and we will have a good organisation that can positively impact and help the people of South Africa. We call it growth to the power of ‘n.’”

Revenue growth has naturally followed, but the deeper sense of purpose is helping Pepe and Gareth make a much more meaningful impact. Joe Public registered One School at a Time, a non-profit organisation in 2008. Through the organisation, they have taken their chosen school in Soweto from one of the poorest performing township schools in Gauteng to in the top three. They raise R1,2 million a year for the project, of which R250 000 comes directly from Joe Public.

Related: What You Put In Is What You Get Out – Create Your Own Success

This same drive and dedication is given to clients. “Purpose is just strategy. We do strategy for businesses,” says Pepe. In 2005, Laurent Marty and Xolisa Dyeshana joined the business as shareholders. Today, Xolisa is Joe Public’s chief creative officer and Laurent its chief strategist.

Pepe, who is technically a creative, now also does purpose workshops with the executive teams of their clients. “We bring a creative edge to board-level strategies. Our purpose is to help our clients grow, and that starts at the top. McKinsey has released a report stating that high calibre work in the marketing space will give you a seven times higher return than other work. In other words, high calibre creative counts, and should be part of your strategy. And nothing inspires better work than purpose. It’s our role to help our clients achieve just that.”

Over time, Joe Public has found its mission, which aligns with the business’s purpose. “We now need to develop the metrics that prove the purpose. Every business should be able to quantify the ROI it gives to its clients.”

The ability to course-correct

From 2009, Joe Public refocused on product over the bottom line. Meteoric growth followed. The problem with growth is that you need people to manage teams and business units — and those people were coming from traditional corporate environments, and they were bringing pre-conditioned ‘bottom line’ focus with them.

“Within three years we were back where we’d been, struggling with the wrong culture,” says Pepe. The trouble is that you don’t always spot a problem until it’s too late — particularly when your numbers are good. “The business results were excellent,” says Gareth. “We had found a way to win pitches, the company was growing, revenues and profits were great — but the culture was getting lost. We learnt that you can lose your way culturally and not financially.”

Except that culture feeds the bottom line. Lose it, and the business will eventually start to plummet. “We needed to radically adjust what we were doing,” says Pepe. “We hadn’t hit a problem yet, and our numbers were great, but we realised we were heading towards the top of our bell curve.

Changes for success, starting with culture

“We had already determined that the business must succeed if we want to do more — for our clients, our staff, and in education. Success is fundamental to achieving our purpose. If we didn’t want to go the way of so many companies that reach great heights, only to miss all the warning signs and plummet, we needed to make some serious changes, starting with culture.”

For Pepe and Gareth, a beautiful creative space filled with happy people is the foundation of a company that can do great things. “It’s all about triple profits,” explains Pepe. “Serve your clients and keep them happy, keep your staff happy, and your profits will be happy. A healthy business lets you do all these things. It’s the oxygen to deliver on all the rest. With strong revenue streams you can achieve so much more.”

There are industry jokes that Joe Public is like a cult. Pepe and Gareth are happy to agree. “We’ve built the ‘cult’ into culture,” says Pepe. To achieve a strong, client-focused culture, the partners needed to make some tough choices, and even exit some people who were not aligned to their purpose of serving clients through great work.

Remove toxic employees as fast as you can

“It’s never a nice part of business,” says Gareth. “We’re nice people, and in some cases we took far too long to act. We moved in on people in the organisation who weren’t a good cultural fit. It was damaging to our team and to them to remain here. A happy, healthy workplace is a team effort. You’re not doing anyone favours by keeping toxic individuals in your workspace. It’s been a tough lesson to learn, but we’re much faster to act when we realise we have the wrong people in the business now than we were before.”

Today, Pepe and Gareth follow a simple formula. “One of our clients once told us that all they wanted to do was serve the best possible product to customers, with the best service, at the right price to give value,” says Gareth. “It really resonated with us, reaffirming everything we believe as well. We all have a tendency to complicate business, when what we should be doing is serving our clients — and the best way to do that, is to do great work.”

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.


Lessons Learnt

How Robert Brown Achieved Next Level Growth And Long-Term Success

It’s not often that an individual manages to bootstrap a business, substantially grow it over two decades, and then successfully negotiate an acquisition by an overseas company. DRS CEO Robert Brown managed exactly this — so successfully, in fact, that he is now also the CEO of Nasdaq-listed company, Cognosec.

Nadine Todd




Vital Stats

  • Player: Robert Brown
  • Position: CEO and founder
  • Company: DRS (Dynamic Recovery Services)
  • Est: 1997
  • About: DRS is an ICT company that specialises in information security, IT risk management and IT governance services and solutions. The company was launched more than two decades ago with just R2 000, but today counts many listed companies amongst its clients. It was acquired a few years ago by Swedish company Cognosec AB. In January 2016, Robert Brown was appointed as CEO of Cognosec.
  • Visit:

When it comes to bootstrapping a business how important is cashflow? What role does it play?

Cashflow is everything. If you want to be successful, you need to know exactly what’s going on in your business’s bank account.

  • How much is coming in?
  • How much is going out?
  • Who owes you money?
  • Who do you owe?
  • When will they pay?
  • When do you need to pay?

These questions are all crucial. Many people see money coming into a bank account and assume that the business is profitable. Of course, this is not the case. Only when more is coming in than is going out is the business actually profitable. Unfortunately, if you want to know what is really going on in your business, you need to pay attention to the paperwork. Many entrepreneurs hate paperwork and are pretty bad at it, but it can’t be ignored.

You have to sweat the details. You can bring on a bookkeeper or accountant, but that doesn’t absolve you from all financial responsibility. As the founder or CEO, you should have detailed knowledge of the company’s financial situation at all times.

Related: 8 Valuable And Inspirational Web Series You Should Check Out

Where does budgeting feature in this?

Budgeting is very important. You need to create a detailed budget. However, the budget is useless if it doesn’t reflect reality. Don’t exaggerate income and minimise expenses. Entrepreneurs are naturally optimistic people, but this is one instance in which a serious dose of reality is very useful. In fact, don’t just be realistic — assume that a disaster will hit. Create a ‘worst case’ scenario.

As the saying goes: Hope for the best, but prepare for the worst.

What would you identify as one of the DRS’ key inflection points?

Probably when the company passed that 50-employee threshold. In my experience, once a business grows beyond 50 people, things change fundamentally. Systems and processes that worked well until then, suddenly start breaking down.

So, once your business reaches that size, I think you need to be willing to reevaluate the basic structure of the organisation. Chances are, some big things will need to change. When the business is growing quickly, it’s easy to blow past this point without giving it much thought, but you’ll end up paying for it down the line. Once again, sweat the details. The earlier you start implementing the necessary systems and processes, the less painful the experience will be.

How did you manage the growth of DRS? How did you know that the time was right to enter that next cycle of growth?

In my opinion, you should find the work, and then find the people needed to do that work. In other words, you don’t want to be over capacity. If you do this, you run the risk of spending more than you’re making. Instead, go out there, find work, and then expand.

Don’t expand and then hope that you’ll be able to find work to keep everyone busy. Also, landing a couple of good long-term contracts can give you the breathing room needed to grow.

If you know that some steady money will be coming in over the next couple of years, you have more freedom to grow.

Related: Which Of These 7 Personality Traits Do You Share With The World’s Richest People?

How do you minimise risk when growing a company? How do you set it up for long-term success?

Never have one product and never have one customer. Too many companies become over reliant on a single product or a single large client. That’s incredibly risky. Instead, you want multiple revenue streams. You want to sell multiple products to lots of clients.

There are plenty of examples in history of companies that built an empire on a single piece of technology, and when that technology became obsolete, these companies disappeared. Similarly, young companies sometimes land a huge contract that becomes the engine for massive growth. When that contract suddenly disappears, the company folds. If you want to create a company that thrives in the long term, don’t put all your eggs in one basket.

DRS became a Cognosec AB subsidiary a few years ago. What made you decide to sell?

If you want your company to grow and prosper beyond you, the founder, you need to be willing to accept change. The last thing you want is to remain central to the success of the company decades after the launch. You need to think about your exit, even if you don’t plan on leaving the company in the near future.

Even if you don’t intend to exit at all, you still don’t want to be responsible for every decision.

That’s not how you create a large and healthy organisation. Start putting the people and structures in place that will allow you to exit as soon as you can. For me, Cognosec AB made a lot of sense. It was a company that I believed would increase the options available to DRS and its people. By joining an international organisation, we really went to the next level.

Related: 15 Great TED Talks For Sparking Creativity (Infographic)

What is the key to long-term success?

It’s the people. A lot of business leaders say this, of course, but that just proves how true it is. Without great people, you cannot build a great business. You might enjoy some short-term success, but the business won’t last for decades. When your business grows, especially if it’s growing quickly, it’s all too easy to hire the wrong people or to lose control of the culture. When you do this, the business suffers.

One of our greatest achievements as a company, and what I believe has been key to our success, has been our ability to help individuals grow and prosper. We have many long-time employees who have worked themselves up from incredibly junior positions into leadership roles. That’s given us a depth of knowledge and a feeling of family that have been instrumental in our success.

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Lessons Learnt

5 Lessons From The Legal Legends On Pivoting

Sometimes an innovative idea can get everyone excited, but it still fails to monetise. When that happens, you can choose to keep plugging away at your business, or you can pivot. When their first business model wasn’t delivering, Kyle Torrington and Andrew Taylor chose to find a different solution to achieve the same goal. Here’s how they did it, and why they’ve seen 50% month-on-month growth ever since.

Nadine Todd




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.

Related: Why You Should Scrap Writing That Business Plan And Become a Lean Start-Up

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?

Related: The 7 Culture Pillars That Will Skyrocket Your Start-up To Success

“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.

Related: Game-Changing Lessons From Lean Start-Up Founder Steve Blank

“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.”

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Lessons Learnt

Entrepreneur Magazine Interviews Matt Brown For His 100th Podcast Show

For the 100th edition of The Matt Brown Show, Entrepreneur magazine’s editor, Nadine Todd, sat down with Matt Brown to discuss his journey and lessons learnt along the way.





Welcome to the 100th edition of the Matt Brown Show. If you’ve been listening since the beginning, that’s 100 episodes of incredible entrepreneurs, deeply personal lessons and epic failures and success… and today you get to learn about Matt. He’s in the hot seat for his 100th episode.

I’m Nadine Todd, the editor of Entrepreneur Magazine, and I got to pick his brains, find out about his own failures, find out about the lessons he’s learnt and take a good hard look at the Matt Brown Show and everything he’s learnt, with you, across the last two years.

Let’s talk about entrepreneurs – entrepreneurship sounds glamorous


A few years ago, the most famous names in the world were Hollywood stars. Today they’re Jeff Bezos, Steve Jobs, Elon Musk and Mark Zuckerberg.

The most valuable companies in the world are founder-led. Entrepreneurs are the new rock stars. The problem is that building a company is hard work. It’s lonely.

The road to success is achieved by failing and failing a lot, and too often, we don’t want to talk about those failures.

We know that ourselves in the magazine – It’s hard to get people to discuss the really terrible parts of their journey. It’s hard to get them to look down the abyss and remember that they had to get through that to be where they are today.

Lessons, insights and secrets uncovered along the way

Matt’s show is phenomenal at getting those insights out. I know that I’ve loved listening to his episodes and knowing that, even though I’ve interviewed a lot of those entrepreneurs myself, he’s getting different angle from them, he’s getting them to remember some incredible nugget that they’ve buried deep.

These stories are personal, business is personal, and everything we do and can learn from each other helps push us forward to greater heights.

Related: Insights Of A Highly Successful Venture Coinist

This realisation was at the heart of Matt’s decision to launch a podcast in early 2016. He wanted to focus on entrepreneurs, millionaires, billionaires, and industry experts. He wanted to know what lessons and insights they could share with other entrepreneurs in South Africa.

What secrets had they learnt along their journeys that they were willing to give to you so that you could also take them and make something incredible of your businesses?

I first heard about Matt from one of the entrepreneurs he interviewed, which is pretty much exactly how his profile and the show have grown – through fans spreading the world about this great new podcast that focuses on giving entrepreneurs the information they need, when they need it, through a medium that’s accessible and relevant.

Listen to Nadine Todd, Editor of Entrepreneur Magazine, grill Matt about his podcast, how it all happened and where to next:

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