The below is a full (unedited), machine-generated transcript of a Youtube session / podcasting episode I recorded with Richard Mabey, the co-founder and CEO of Juro in Q3 2020. You can view the video/listen to the podcast on Youtube, Apple Podcast, Stitcher or wherever you get your podcasts.
Erasmus Elsner 0:07
What’s up everybody, and welcome to another episode of Santo road. In this week’s episode, I’m joined by London-based legal tech pioneer, Richard Mabey who’s the co-founder of Juro. Juro is an end-to-end contract management SaaS solution, which is used by lawyers and in-house teams at companies such as Deliveroo, Skyscanner and Nested. The company is bringing the word document and red lines to the cloud, automating a number of tedious and previously manual processes. In the course of it, the company has raised more than $8 million so far. Most recently, they announced a $5 million Series A led by Union Square Ventures (USV). Richard is such a really well-spoken former Freshfields lawyer-turned-tech entrepreneur. The Financial Times recently recognized him as one of the top 10 legal business people. And just as a small disclaimer, with a couple of technical issues recording this episode, including two outages because of storms at Richard’s place, and then my micronaut fully working for the first part of the episode. So I had to do a voiceover. We tried our best, but you can tell for yourself. And let’s jump right in.
Erasmus Elsner: What’s up everybody and welcome to another episode of Sandhill road. My guest today is Richard maybe who’s the co founder of juro, which is a London based legal tech startup. Welcome Richard. You ready? Take us up top. I am and thank you so much for having me on. So before getting into Jiro, let’s talk a little bit about your magic circle times. And once upon a time I completed a UK LLB myself, I never ended up completing a training contract, which is the vocational part after the LLB. But from what I remember from those days, getting a training contract is statistically speaking, almost impossible, especially at a magic circle firm like Freshfields. And I think we’re talking about an acceptance rate of one to 2% here. So talk to us about how you pulled that off and how you landed the training contract with Freshfields.
Richard Mabey 2:40
Yeah, sure. So I think like Richard, when he graduated as my mother’s favorite version of Richard, right, because I, I went after doing a law conversion course to Freshfields. And so as you say, I kind of got this training contract. And, you know, I was I was pretty chaotic. I didn’t think I really sort of organized the whole thing very well. But someone introduced me to Freshfields mentioned, I might apply and look kind of interesting, I applied and I somehow kind of got the job. I was with Freshfields for almost four years. So both the two year training contract, which is the kind of standard process for training you up as a corporate lawyer. And then some time after that, both in London and in New York in their MMA teams. So doing contracts back then, but then in just a bit of a different way. My career has kind of taken attack much to the horror of my mother. But certainly it’s been an interesting journey.
Erasmus Elsner 3:35
So after your training contract, you stayed on with Freshfields for another three years, working in their M&A department. And having worked in a corporate law, m&a practice group myself, I know that this is a rather process driven environment where entrepreneurship is not really a priority. But did you already at that point in time think that you would eventually end up starting your own business? Or when did you really catch the enterpreneurship? bug? Yeah, I
Richard Mabey 4:03
Guess I mean, for all kinds of founders in legal tech have been through that legal journey. It’s kind of an unusual profile for an entrepreneur, right. So as lawyers, generally we’re risk averse by nature, and all of a sudden, we find ourselves in this super high risk environment of running a company from scratch. So I think probably I was interested in it before I decided to become a lawyer. So I think if you’d asked me age 15, all I would want to do, I would say start a company and somewhere along the way, I was, you know, distracted by a different path. I think that the The great thing about doing that training is it’s great training. So we’re very, very lucky and fortunate to have a great firm who’s investing in training you up in various ways and amazing experiences that that you have and I think for me the most formative was being on secondment say this is where a law firm kind of places you with one of their clients. So in an in house League, Build Team. And that’s really where I learned about the the pain points and the problems that I’ve gone on to solve. So not planned, but was a nice way of of identifying what to start as opposed to just starting something because it was interesting.
Erasmus Elsner 5:15
So in 2014, you went for an MBA insert, and afterwards joined Legal Zoom, as I think their second employee in their UK offices in London, and Legal Zoom was already quite far along in the journey at that time, they had raised the 45 million series A in 2007. And they had a Kleiner led $66 million series be completed in 2011. And I think at the time when you joined, they had just secured a massive $200 million private equity Permeria-led growth round. So Legal Zoom was by no means a small shop at the time when you joined. But given the really conservative path that you’d taken until that point, it was definitely less proven than going back to two big wall and magic circle. So how did your mom feel about that?
Richard Mabey 6:08
I mean, I suppose, you know, what I left Freshfields and went to do an MBA that was sort of acceptable to her it was kind of respectable and European Business School at INSEAD. I think this is where for her the alarm bells started ringing. She had started hearing you know, startups. You know, what, what’s happened to my son’s career? I think, you know, what she didn’t realize is actually by that stage Legal Zoom had amazing traction already. So as you say, the funding was there, and the traction was there in the US, they were coming at that point, the best known brand for legal in the entirety of the US. I think I mean, how it came about was I came out of this MBA slightly kind of lost, wondering whether to start the company that’s now become jury will get a job. And in Frankly, I was in so much debt from having gone to business school, which is not super cheap, but I just needed a job. And so I outreach on LinkedIn, and I spent a lot of my time on LinkedIn, it’s been a very useful platform to the CEO or the UK CEO, Legal Zoom, I said, Look, can I just come and work for you for a bit, and, you know, enough kind of persistence sometimes gets you those, those gigs. So I spent, you know, just under a year, I think, I think working with that team, but it was an amazing way to learn a little bit about, uh, you know, the career that I’ve kind of gone on to pursue in legal technology.
Erasmus Elsner 7:27
So let’s talk about getting the band together. In particular, how did you meet your co-founder, Pawel Kovacevich, who is now the Chief Product officer at Juro? Judging from your LinkedIn bios, I would assume that you met during your MBA, but when did it really crystallized, that you two would start a business together?
Richard Mabey 7:49
So I mean, it’s very interesting, what I say I mean, Pavel is, you know, 50%, of the of the jury story, right. And when we went to Tanzania together, we were in the same class, as you say, that we were kind of both a little bit random. I mean, I was a lawyer, which was pretty unusual. And he was a software engineer. And, you know, everyone else had come from McKinsey, and, you know, investment banks, and we’re far more kind of capable, alas, than some financial modeling and things like this. And we were sort of sitting in the back furiously taking notes and learning stuff. And then you know, that the gap came with, with Legal Zoom. But then when I sort of came out of that and picked it back up, I mean, very quickly, we, we got together on it, and we raised a small, small check from seed cam, which I think maybe we’ll talk about. And that was the catalyst to say, Well, actually, like, it makes sense. For us to go full at this. And this was much as before years ago.
Erasmus Elsner 8:43
Let’s talk about the MVP, what did the first version of the product look like?
Richard Mabey 8:49
I look pretty bad. So I think like we, you know, there’s different ways of doing this. And some people have highly sophisticated MVP strategy, right? I think for us, we were very opportunistic and customer LED. So we were able quite quickly to get one pilot customer before we had actually really built anything. And that customer had enough pain. And enough of what we were doing, they agreed to a small limited trial. And to give insights, we needed to build something and that was literally going into their office, having workshops with their team and learning, learning, learning, and just iterating on a basic version of the product. So we went actually to market very, very early, I mean pre product going to Market.
Erasmus Elsner 9:37
But the great advantage of that is like we had no opportunity to come up with the solution ourselves. We were always at the level of speaking to the customers and the prospects about their pain points very deeply and that that really enabled us to build something was like pretty good and pretty quickly. As of today JoyCons many late stage technology companies among its clients, including companies To Skyscanner nested. One of the big customer success stories that you feature on your website is that of delivery, where with the help of juro, the company managed to automate the generation and approval of more than 1400 legal documents. But talk to us a little bit about the first customers. How did you find them? What was the feature set that you sold them on? And how much did they pay you?
Richard Mabey 10:25
Yeah, so it’s a super interesting question. I think, um, I mean, for me, the the experience of this, these pain points that I had was on secondment to an in house legal team. So I really know that knew that that was the kind of team who was facing the repeated pain around contract process. And in law firms, they have lots of pain points around them, but they’re slightly different. They don’t deal with so many contracts of the same type, for example. So when, when we went out to market, we went with the insight that we really knew there was a pain point, because we’d seen it. And the question that the hypothesis we wanted to validate was, was this a unique case? Or actually, is this a wide enough? widespread pain point? And, and so we, we looked at it, we segmented the market, and just super careful about it and said, Well, I think we should get tech companies, I think they’re more likely to be early adopters. And we went for one thing, which was, I think we should find companies who process high volumes of contracts. And so the kind of model that we we landed on is our initial target was was marketplace, it’s like what we think of as marketplaces, you know, processing. You know, if you look at our customers, like deliver Roo, Babylon health is neither kind of classic marketplace customers. And the thing they all have in common is they press loads and loads of the same kinds of contracts. So this was our grand hypothesis, we have this perfectly executed strategy where we were going to go and outreach to the X number of General Counsel, and we’re going to get, you know, 5% response, and we’re going to turn like 1% into paying customers and none of it worked out at all. So there was the kind of zero response from our slightly pathetic crafted desperate outreach email. And then we got, I think, and I hear this story a lot with founders is you kind of pursue a strategy. And and you kind of get lucky. And if you didn’t pursue the strategy, you may not have got lucky. And, you know, one day I got sent a message on LinkedIn, from the General Counsel of a major tech company. And he said, you know, Jonah, come for a meeting. So obviously, as a founder, I was like, you know, of course, who the moment we’ve been waiting for, and of course, he wants to buy my software. And I got there, and they sat down, and he said, Look, you know, since you’ve been messing around on this technology project, but it looks like you’re a trained lawyer, like, you know, are you interested in a job here? So it was kind of deflating, but you know, in the meeting, I sort of open up my laptop, and I started showing the wireframes of what we built. And I identified one really valuable insight. And what he said to me was, the number one pain point right now for my legal team is processing high volumes of low value contracts, which is the kind of exact pain area we’re gonna focus on. And we got him to be to a free trial, in that meeting, so on the same day, and that started this process of really true learning. So short answer luck.
Erasmus Elsner 13:13
So let’s talk about the core feature set of Juro. Oftentimes, successful software as a service companies are built around a unique insight of a customer need, and how the SaaS solution can really address this need. What was this unique insight in the case of Juro?
Richard Mabey 13:31
Yeah, it’s a good question. I think these things evolve a little bit over time. So I think back then, what we really identified was that the process of agreeing contracts in Microsoft Word emails, red lines, you’ve probably seen it from your past career. Delta view, yeah, change Pro, I think is this sort of like desktop software where you’d continually spend time comparing versions. We thought that that was uncooperative. So I’m collaborative as between an in house legal counsel, who is really the business partner here. And then on the other hand, the commercial internal client, so probably a sales team, maybe an HR team. And of course, we’re now in a world where there’s much more collaborative document formats, Google Docs notion coda table, there’s quite a lot. But lawyers generally will work like 99% of the time in Microsoft Word. And, you know what, what we realized after a while was, if we can make this process more collaborative, we can solve problems for their stakeholders, we can help people close contracts faster. And we can also help the legal team become more of an enabler. In terms of the actual features that we had, it was a pretty simple flow at that point. So it was a questioner and natural language questionnaire, something a little bit like a type form, if you’ve used type form, and it would ask you a natural quest natural language questions like who is this nondisclosure agreement with or who is this master services agreement with what’s the term of the con track, what’s the, you know, the liability cap, whatever it was.
Erasmus Elsner 15:04
And then it was just magically generate this document the core feature set that you were building in the beginning what made it really a painkiller instead of just a vitamin?
Richard Mabey 15:13
It starts with understanding what the pain is in it for years and was still learning during the day, we’re going to be talking about customer pain. Yeah, probably every day. I think when we think of the level of solution, right, right, like what made it a pain killer, it basically enabled the team not just to have a kind of enable less less legal involvement, the emotion of having a self self serve product that could be it could be used by anyone in the business, most software will say like, we save people time, and make gonna make your life better, or whatever it is, we wanted to prove out was like ROI that went to revenue. If you’re able to streamline the contracting process, especially commercial contracting process, we have some customers who process more than 1000 contracts a month. So you’re saving on a one, two to three days of that sales cycle.
Erasmus Elsner 15:56
Let’s focus on one case study, you have a number of interesting case studies on your website including Deliveroo, where you help to reduce a process that will otherwise take six months, or just a couple of days, maybe talk about your favorite customer success story and how it came together.
Richard Mabey 16:12
Yeah, I mean, there are quite a few now on our website, where we really enjoy working as well as scale. You know, if you’ve met, you take a business growing as fast as delivery in a marketplace segment, you’re gonna see 1000s of contracts, right? As our product evolved, the fundamental thing we started solving was not just let’s make contracts more collaborative, it was the data layer behind contract, I think about like a Microsoft Word document a pile of text, basically. And somewhere in the text of these colons right, like the renewal date, or through the contracts with or key liabilities. But the format is just that text. And that makes it really, really hard. You can start doing really interesting things, especially with API’s, oh, my favorite cases have been where people have mass generated documents using our API, go back to your question on sort of, in a painkiller versus bettmann. In that case, like this is a project which might might have taken six months of human time. It’s not just one two contracts a month, it’s real scale. Yeah, suddenly, there’s more connected cases.
Erasmus Elsner 17:03
Tell us a little bit about early pricing, which is always a big topic, especially when you’re starting out, you don’t know whether you should charge more than it’s actually worth at the initial stage of the product. You don’t want to charge too little, because then afterwards, you have to grandfather, the underpriced customers talk to us about the initial pricing and how you came up with this pricing.
Richard Mabey 17:26
Don’t over optimize, right, I think this is like my one learning is, as MBAs, this is like a danger zone, you want to run all the scenarios, you want to get that perfect pricing model. And the reality we quickly learn is you just don’t know. And it’s really hard to measure with a small sample state. So you know, in year one, we had a handful of customers out of customers wanting us to work to give you a concrete example, like we have this challenge of price by user or we price by the number of contracts, and what is the unit of value here? Like how do we deliver value? Is it just like someone has a user license and they don’t log in? Or is it a contract? So increasingly, we’ve moved to a power contract model. And then we have like a lot of flexibility, the enterprise because you’re doing larger deals as we sometimes do. Now, you just you kind of want to make it easy for the prospect. I have rigidity at the early stage when like the reality is you want to we want to reduce friction for the prospects and just have something sensible that work. I think now we’re just getting to that stage where you’ve got like credit data, and we refine and optimize. And that’s after like four years. So when I think we did well, just to move very quickly,
Erasmus Elsner 18:31
I’m convinced we didn’t get it right, it at least gave us something and we were able to move ahead and talking about prospects and your customer group you’re selling to, to one of the most difficult groups to sell a SaaS solution to lawyers, and lawyers. They’re set in their own way. They like to use word because they know how it works. They don’t want to work with Google Spreadsheets because they can read lines take they can do the footnotes, the way they there used to talk to us a little bit how being a cloud native solution how that is perceived and received by by lawyers generally, and how you remove this friction.
Richard Mabey 19:07
You got to start with a vision of where you want to go. The vision we have is that one day, lawyers will not be operating in a technology invented in the early 1970s. But we’ll be working in a more collaborative document format. And you know, we’ve had some competitors who’ve decided they’re just going to build on docx, builder Microsoft Word beat up those their sales cycles. I think for us, we’ve always had ambition of driving people out of work. We’ve got 100,000 contracts that’s been processed in a unique editor that is not Google Docs and not Microsoft Word, not anything else. So we in our product will allow people to work in the way they want to work generate a contract in this like collaborative, mobile responsive, machine readable editor and guest to external counsel like they’re working in Word anyway. So they can export it to work. They can then bring it back in from Word, right. So it’s that flexibility, which is the balance of driving a behavior which you really want to be the case and also allowing people to work in some cases in the way Which they used to work.
Erasmus Elsner 20:01
Let’s talk a little bit about the tech stack. I think you started out with a MEAN stack, Mongo Express Angular and Node. And I think you mentioned somewhere that you moved then to React, GraphQL, Apollo stack recently. Talk to us a little bit about the stack. What’s the challenges?
Richard Mabey 20:18
Erasmus Elsner 21:13
And let’s talk a little bit about your funding journey. You went through the EU seed camp accelerator back in 2016. Did you apply to any other accelerators? in particular? The big one Y Combinator?
Richard Mabey 21:23
Yeah, so we didn’t do yc It was very early for us rice with free product. So we had like a PowerPoint deck. I just endlessly email people via email in rush, Missoni seed camp and fantastic investor. And I said, you know, can we go on seed camp, she said, like, join the back of the queue. She said, you know, apply and go through, we actually applied and I think we were rejected the first time, they were just like, you got nothing. Then we went in the second time, and we’d started getting a lot of attraction. And he was he was really, you know, rushmere and Tom Wilson is the chance, right? So they read us this jacket, 25. Okay. And after a while, we’ll take another 50k enough to go and build like, not as not as minimum viable product, viable product and living and living off of ramen and having a very small team, right. But it was very transformative. And I think she can see Ken was a part of this, because he kind of he kind of got us a little bit on the map. Right, right. So I remember I remember getting like the week after loving love inbound from the sea. And press was written and in a seed camp have fantastic relationships, especially with Europe, European investors, but also with us investors. And on top of that, I mean, back then they were kind of had this accelerator model. I mean, now I think they’re focused a little bit more on seed investing. But we were in their office for like three months and like endlessly asking questions. It was a really, really positive experience for us.
Erasmus Elsner 22:41
So let’s talk about your seed round in January 2017, you raised a relatively small $750,000 seed round led by Christoph yarns at point nine capital. I’m not too deeply into the Berlin market. But I heard from sources in Berlin, that point nine is really the seed player to pitch I would guess, given that you’re mainly UK based, you wouldn’t reach out to the UK firms first. But how did this come together?
Richard Mabey 23:10
It’s a super interesting one. I mean, let me start at that round. We’re raising a small Angel round. So we raised this initial check and we realized we need more capital and meet my name. Michael Pennington is just kind of getting a little bit a little bit into Angela realizing that there’s very active and well known investor now. And and by, by then we had a client and we had an attraction and he was willing to write us a significant check at that point, critical moment as we then we then brought in like a whole series of other angels. So Paul Forster is still very active as a board observer right now as the founder of dd.com. More even more than that we brought in customers and we had like, the head of sales from deliverer invested, right, like a customer use the product, love the product, and how and how point nine came about was super random. Also, Rodrigo Martinez sent me a direct message on Twitter. You can read my Twitter handle or the Twitter handle the company, which was like something about like contracts and stuff, literally sent me a message. This looks interesting. Let’s chat. In my, in my view, the truly great investors will look for something special, special, maybe traction, and maybe they can just see something that other people can’t see. It doesn’t really matter how you meet them, what they what matters is what do you got? Like, what story you can tell it? So it was all kind of a combination of luck and I guess I guess some planning.
Erasmus Elsner 24:25
Interesting. So this really speaks towards this hypothesis. I had this point nine being really this class, a seed fund that’s proactively sourcing seed opportunities. You then went on to raise a $2 million Seed extension in April 2018. What milestones Did you hit or did you have to hit in order to raise the seed extension?
Richard Mabey 24:47
Well, this will this was this was kind of easy for us to prove. So I mean, my point nine Christofi answer sort of written book right on that so we just got out his SaaS nap. And then we looked at the milestones, right? Yeah. 9.9 has been made. And you know Rodriguez has been involved in the company for at least three years. Right point nine nine was a fantastic seed fund helped us define what those milestones are somewhat revenue based on worm somewhat validating hypotheses, you know, we, you know, we will be well had had to achieve a level of initial scale.
Erasmus Elsner 25:16
In January of this year, the Series A was announced on TechCrunch, which you raised, again, not from a UK firm, but instead from a top tier, I would say the best East Coast venture for Union Square Ventures (USV), I think, John Butterick, who led this round, and he was previously a Davis Polk lawyer. And he mentioned in the TechCrunch article that this entire round was signed and completed on JIRA itself, which obviously speaks to the product, talk to us a little bit how that round came together.
Richard Mabey 25:49
I think certainly like the connections we had in media, angels, get you on the ride, right, solve your problem, you’ve got to you’ve got to really, really, really regroup something and if you’re raising as part of sales and hiring me amazing set of experiences he’s had he’s had, you know, backing off a quarter series A seeing when to where they are now, there’s not there’s not as the level of the human being is right, who you happen to be working with on the fund we wanted to work with, we may raise I think end to end in about 12 weeks. Talk to us a little bit how you got this first initial introduction to USB and which other firms you were considering in this fundraising process. Production came from full force. So one of our one of our angels, he say his company indeed.com is backed by us, re they raised one round of funding. And and you know, Paul’s an incredible entrepreneur, he’s bootstrapped a company to being the world’s largest web site is suddenly like, great, great introduction, you know, USB making, probably like 1020 a year and a 10,000 pitch deck. So it’s still like a baffle whether you get down this round, the traction stops speaking more for itself, right? There’s no sort of hypothetical, is this going to be a success? If you’re growing 4.5? And you’re at 10 million in ARR, there’s a certain level of something that will help
Erasmus Elsner 27:02
Yeah, for sure. So so you’re six months now into your series, a, obviously an extremely challenging times, talk to us a little bit about how you think about scaling this and getting to the next milestone, change after you raise it, guess what we think was growth capitalized.
Richard Mabey 27:17
So this isn’t really experiment capital. Now, how can you apply that to growth is getting a grip really quickly? On unit economics, we’re looking at lifetime value and monitoring. Loosely, you know, one big thing that’s usually in our face content marketing. So So, you know, we started writing writing three and a half years ago, so we’ve written you know, hundreds and probably millions of words, what we believe to be valuable content. And so they’re most you know, most of all, our demand has been, Gannett be very, very little money on on marketing now. So now, as you scale up in the great growth is, all of a sudden I had by AdWords, you’ve really, really got to get a grip on how you’re going to make this work in a way that isn’t just a spray and pray strategy that’s really, really hard, especially with a with a small unit economics is like rotten Santa. And that’s something which we haven’t, you know, have a good handle on now. And I think it means that x rays, we have an incredible plan that we know we can fly further capital for growth, and not just because because, again, it gets you in TechCrunch.
Erasmus Elsner 28:13
I would be remiss if I would not ask you as a last question, how you’ve weathered this COVID-19 storm, there’s really the spectrum of companies who are suffering from COVID headwinds, and then others who are having COVID tailwind, so we’re really thriving in this environment. Intuitively, I would place you into the category of companies who are benefiting given that it allows you to collaborate on the cloud and remotely a number of late stage companies that you’re selling to, obviously, are also reducing costs, which may work to the contrary, but but how does it look at the moment?
Richard Mabey 28:47
Yeah, I think we’ve been very lucky, right? I mean, with online collaboration software, you know, we definitely saw this influx of demand in the early part of pandemic to me, so we certainly took on few, much more traditional businesses literally just launched a freemium version. So you can go and get a free accounting right now. And we did that to enable businesses who are coming to us and saying, look, businesses can’t run, and they could have couple of couple of licenses in JIRA, and then they could go and get some contracts and pray today. So we suddenly ran a project from that perspective, increase that site size by 30%. You know, I think four more months, you know, there’s an awful lot of incredibly talented people who are in very unfortunate being made redundant or UK we have a furlough system now, we have been hiring intensively and we continue to do so the negatives have been like really sad stories, right? Because we you know, like, you know, like the one thing we’re allergic to is the SaaS businesses churn. And there’s two types of churn. There’s or forced churn and unforced churn was just China’s done a bad job and we have really doubled down on giving customers the best possible experience. We have a fantastic director of customer service a little bit and we have had this as lungfuls churn which is going out of business. So, going into chapter 11 minutes, administration, etc. But I think this is a natural part of the course we work with a lot of businesses on the travel and hospitality sectors, which have been hugely hit. It’s a good validation that you’re seeing a company company in financial distress, we’re saying, Well, actually, you know, using using juro is giving us significantly different than return on investment. So our costs aren’t, aren’t reduced by cutting out an expensive juror, they’re actually increased. All in all, we’ve been very, very lucky. And obviously, having raised earlier in the year, we’re in a fortunate position to be able to go and continue, continue hiring.
Erasmus Elsner 30:31
Thank you, Richard, for giving us so many insights into the details of your founder journey. And for everyone out there. Where can people find out more about you and what you’re up to face to head is zero. So nice and easy and radio.com, you can go and subscribe to our content and our Facebook page interested in learning more about my journey. I write a lot, a lot on LinkedIn. It’s wonderful. Thank you, Richard, for being with us today and weathering this literal storm of yours. So we had to stop the recording a number of times, then I had some problem with my setup, but we plowed through to power cuts, but neither of my two children had interrupted so I view this as a success. Wonderful. Thank you Richard. Basically speaking thanks.