Serial entrepreneur Anthony Rose is best known for running the BBC iPlayer from 2007 to 2010. His success with the iPlayer earned him the moniker of “The man who saved the BBC”. Just as he disrupted television with the iPlayer nearly a decade ago, today Anthony is looking to disrupt expensive law firms with his company SeedLegals, a legal tech platform that allows startups and investors to complete their legal work at the fraction of the cost.
We spoke to Anthony about his early entrepreneurial journey, how he achieved product-market fit, how early cash strapped founders can persuade the right talent to join them, his secrets to the perfect pitch deck, the lessons he’s learnt from the mistakes he’s made, his observations of how Covid19 hit fundraising and how he sees AI disrupt the legal industry.
Q. Is it true you convinced the Government of South Africa to allow you to drive over the speed limit when you were in university?
A. That is true. When I was in university in South Africa I bought an Alfa Romeo and wanted to make it go faster. I created a speed measuring device with magnets on the wheels and a tape recorder to record the real revolutions. I had all this data back before data was considered data and I wondered if I would be allowed to cross the speed limit. Back then South Africa was embargoed and had fuel restrictions so I wrote to the Energy Department saying the cars in the country could save 10% of fuel and the country would save millions in foreign currency. I thought nothing would come off it but a couple of months later I received a letter signed by the Energy Minister that allowed me to go over the speed limit. There were two conditions one was not in a built-up space and the second was I had to give them some prior notice. When you’re an entrepreneur, you’ve got to take initiative.
Q. You have more than a dozen patents to your name. Does it help to have a patent when you’re trying to raise funds? Does it weigh in as an input for the investors?
A. Most of the patents are from when I was the CTO of Kazaa, a peer to peer music file-sharing application. In TV shows like Dragons Den or Shark Tank the investors will ask, ”have you got patents?’” And the founders go ”Yeah, I’ve got worldwide patents’’. This is almost always a lie because there’s no such thing as worldwide patents. It would cost you hundreds of thousands of dollars and would take years so there’s no way people can have it.
In some narrow areas, patents have value. But otherwise, if an investor asks you if you’ve got patents, you might turn it around and say it will cost us thousands of dollars, it will take years and defocus you. We should focus on building our products and spending money on acquiring customers and getting to scale.
Q. What role do you see AI play in the legal profession as we look into the future?
A. AI is imperfect. If someone sends you a hundred-page contract can the AI tell you what the terms are? Legal language is often quite flowery and it’s hard to tell, so can you rely on the AI or do you have to read it yourself? So there’s a fair amount of reticence because it’s imperfect. But that’s only one use case and there are many use cases.
When the FBI read 65,000 emails of Hillary Clinton in 24 hours, I’m guessing it wasn’t humans reading them. It was some AI discovery system that parsed them for various keywords. So AI can still be helpful across a range of other uses.
At SeedLegals I often joke that we don’t use AI, we use HI – human intelligence. Instead of people creating hundreds of pages of legal documents, the founders or investors can select and agree to the key deal terms in plain English and then the platform builds all the documents. Then we work out a bit about your company and a bit about them. Tell me how much you’re looking to raise and I’ll recommend all the deal terms. That might be the next step and in a limited way.
Q. What were the early days of SeedLegals like? How did you achieve product-market fit?
A. When founders are looking to create a new venture there’s always a key problem that they need to solve. Often they don’t realize that people want it. Between my business partner and I, we knew from being founders ourselves that people would want what we were building. I knew I could put together a tech team and we were pretty confident we could build it. The challenge was would the market allow us to build SeedLegals, would lawyers use our product?
We needed a brilliant MVP that we didn’t have. So we started doing it manually until we could automate. That’s sometimes known as ‘fake it till you make it’. Imagine a swan gliding beautifully across the river, but underneath is frantic paddling. That was the early days of SeedLegals. We created the front end website but the platform was nowhere near ready to machine generate the documents. We would collect the information and then our Chief Legal Officer or Legal Team would use Microsoft Word to create the documents taking us huge amounts of time in a non-scalable way.
But by doing it this way we could see quickly what deal terms people wanted, what features we should add to the platform and what we needed to automate.
Q. How do you attract talent and persuade people to join you in the early stages?
A. In the early days you don’t have much money to pay people and the idea is usually slightly crazy, otherwise, someone would have done it before you.
Persuading people to join you at this early stage is a careful mix of being bullish and visionary, but without drinking too much of your own Kool-Aid. Some people get so caught up in what they’re doing, that they tend to believe they are the Messiah and nothing will go wrong. This can easily end badly.
You can’t be too obnoxious because no one will work with you but on the other hand, unless you can stand out and lead people to a vision you’re going to have a difficult time getting team members to want to join and investors wanting to be part of it.
It’s about being believable, being optimistic without being dishonest and delivering results that match your aspirations because otherwise, people start to leave because you’re not taking them to the promised land.
Q. How do you go about hiring the first leaders of your startup, say in the sales function?
A. Founders are for better or worse the first salespeople, they’re often the first tech developers and they’re the first product people of a startup. The goal is to put themselves out of business and find other people who are going to do a better job than them.
When we started SeedLegals I would spend all day on customer calls and then at some point my business partner said that it was time not only to hire other people to sell the product but hire somebody that will set their goals and manage them.
In one of my previous startups, our chairman said that his goal is not to be good at anything other than hiring people who know what they are doing in their domain. He doesn’t need to know about any of the company’s business areas.
The difficult step in any startup is when it hits between 20 and 50 people and some of the earliest joiners now find that a new level of management sits between them and the founders who they would work with daily beforehand. These people might get unhappy. They may feel that the business now is no more about vision, prototyping and minimum viable products (MVP) but goals and monthly recurring revenue (MRR).
Q. More than 16% of early-stage rounds in the UK are now on SeedLegals that must have given you an inside glimpse of how Covid19 has affected funding. What have you observed?
A. We didn’t see a huge decrease in the number of rounds, but we saw a decrease in the amounts raised. I’ve always thought that as an entrepreneur, procrastination is not an option. Particularly when you’re not cash flow positive or profitable. What I saw was that the smartest founders with the most Covid proof businesses didn’t stop fundraising. They pivoted or they adapted and that meant the smartest investors who wanted to be part of the deals of the best businesses had no option, but to stay in the game as well.
Things didn’t decrease nearly as much as people thought they might in fundraising because of this positive vortex. Many companies couldn’t fundraise, many companies were going to be out of business. If you’re a gym, life is going to be tough there’s no doubt about it. But because there are enough companies in SaaS, delivery and AI that are either unaffected or positively affected, the fundraising didn’t dip as much.
Q. How do you integrate customer feedback into your company?
A. I’m obsessed with creating a completely customer-driven culture. When customers
Once upon a time, you could build stuff and then there would be some team that talked to customers and the people in your office would never come across a customer. Now everyone in the business is constantly interacting either in read mode or in write mode with customers and that means that if someone has a problem or we see something that’s inefficient, you don’t need someone to write a ticket to then put it somewhere else.
The problem is that it works well if you have achieved a product-market fit and people are using your product. The downside is you may be over polishing what you’ve got rather than making new things. If I look at my to-do lists for our company next quarter and the quarter beyond. Should we be saying, forget doing anything on our current products, let’s build the next big thing, or should we be focused on perfecting our existing product?
Q. What kind of marketing engines have worked well for you?
A. I’m a big fan of content marketing. You can spend money on social media or events but the challenge early on for companies buying customers is paid advertising is useless unless your customer acquisition cost is less than your lifetime value for the customer.
In our case, we’ve built a platform that automates the things that people do. If the platform can do in a second what a human takes three days to do I can use the time to create content that I can give away for free and my team can create content that then becomes a magnet.
Our marketing team tells me some of our articles rank higher than the government’s articles on tax and other things. People looking for these things see our platform and then see that we deliver a solution, and founders often overlook this.
Content is fantastic, firstly because Google finds it and people can find it too. It establishes your company as a thought leader and finally, it helps your team think through content that consumers would want because otherwise, you’re just creating something for investors or yourselves.
In a sense, it’s also a great way of discovering product-market fit. If you’re describing a problem in an 800-word article that no one can figure out, then you shouldn’t spend the next six months building it. I love the concept of writing articles, that answer what people want, and then having a platform that delivers the service behind it..
Q. You have a pitch deck clinic where you help founders perfect their pitch decks, what are some of the observations you’ve made during this?
A. The first thing I noticed is that founders put way too much effort in their pitch deck explaining what they do rather than why people want it. This is the number one problem. Always start with looking at it from the customer side and say ‘why would I use this?’. Investors are often thinking from a customer perspective as well because if they can’t understand with a customer hat on then they’re going to think no one else will understand what you do and they’re not going to invest in you.
The next thing that I see is that companies try to impress the investor by doing too many things. You’ve got a slightly different balance of two conflicting things that you want to do. Number one, you want to build quickly and inexpensively before you run out of money and you want to deliver that quickly and then start building on that. But for an investor, you also need to convince them that you’re going to be a unicorn, that it’s going to be bigger than whatever it is that you’ve got a vision of.
When I look at pitch decks, I’m trying to see the balance between these two. Sometimes people get confused. They show that they’re going to build a lot of stuff, a B2B, a B2C a data centre all this stuff, and they think they’re impressing the investor. But with my investor hat on I’m thinking ‘’you’re burning a lot of money and I’m getting diluted more.”
What I like to see as a proxy for an investor, looking at people’s slide decks is how they’re going to build something that’s going to be a real business soon and then separately I would like to see the vision that shows how they’re going to change the world, be a unicorn and so on.
One other thing is the right level of ambition. You need to show the outcome that your investors are looking for. Otherwise, you’re talking to the wrong investor and that means being suitably ambitious.
Q. What’s the importance of making mistakes and learning from them? Can you walk us through a mistake that you made and the lessons that you took away from that?
A. Making mistakes is not desirable, what you want to do is to find the right risk-reward balance. As soon as you want to be ambitious, you are going to have to take a risk. If you’re too risk-averse, you’re not cut out in life to be a founder and you should work as an employee for a very safe organization.
Founders are about taking the right calculated risks and if something has the potential to not work out you want to discover sooner and inexpensively rather than later.
For example, if we have an idea for a new product at SeedLegals can we get our UX team to mock it up? Can we get on a call with a couple of customers and understand if people want this new product or not as opposed to building it.
A mistake I made a couple of startups ago was that I built too much stuff before achieving product-market fit. In retrospect, I would have wanted to do things differently for two reasons.
Firstly because if you don’t spend as much money, you have more money in the bank and you don’t need to raise as much afterwards to sustain the team. Secondly, when you build things, you now find it harder to ditch them. If your team has spent six months building something and it’s not working out it’s tough to kill the project so it’s much better to kill things earlier on.
Q. If our listeners want to reach out to you, what’s the best way to do it?
A. The easiest way is to hit me up on LinkedIn or head over to seedlegals.com.