A Product Market Fit Show | Startup Podcast for Founders
00:13:33 · Nick Fleisher
[00:13:33] S0: Twofold. One, when I was at McKinsey, a lot of my work was with law firms. And I just think they're a really tough market to not to sell into, but to expand into. And what I mean by that is it's easy to get into a law firm through the head of innovation. But to actually get usage at scale in a law firm is really hard because you're going to every partner in every practice area as if it's its own business. And I was just like, I don't want to do that. I think second, like on the in-house side, it's a massive market, right? Like it's just objectively a bigger market in terms of count of lawyers and amount of work to be done. And two, legal is our starting point. We plan to expand on the in-house side. If you imagine like everything in a company that's important goes through legal at some point, right? Whether it's a sales deal, procurement, hiring someone, firing someone. We are now this like context layer that tracks all of those decisions as they go through legal, which is very valuable for other departments and other parts of the org. And so like it's a great in or wedge into broader corporate and enterprise work. And so for us, it was just a more attractive space in market. I think the one other thing I'll add there is like a lot of our team comes from this role, which has been born over the last call it five or 10 years called legal ops, which is in corporate legal teams when you reach a certain size, you usually hire someone that's like your head of legal operations. Think of it as like rev ops, but for legal. These are the people who historically implemented those contract management tools and like did all that work setting that up. It's a very strong community and market and they are like unbelievable stewards and champions of new technology, but they are really fed up generally with contract management systems. That just felt like a great opportunity to like really get close with that community and build something that actually works for the legal ops role.
00:15:19 · Pablo Srugo, Nick Fleisher
[00:15:19] S1: So the bigger play is almost thinking of legal as the ultimate source of truth in a company, because anything that's above a certain bar of importance is going to make its way there. And only if it makes its way through there, does it become reality. Everything else is just kind of an idea that hasn't been really executed yet. [00:15:35] S0: Yeah, I think long term, like the biggest value we have is, you know, whether it's through our UX or through API or MCP, like accessing this context layer that we build on top of your legal department. [00:15:46] S1: You know, I mentioned before, like we had a wordsmith here on the show. A lot of what you're talking about, you know, they sell it in-house as well. They're trying to be like that front door. Is that a direct competitor to you or are you thinking about things in a pretty different way?
00:15:46 · Pablo Srugo, Nick Fleisher
[00:15:46] S1: You know, I mentioned before, like we had a wordsmith here on the show. A lot of what you're talking about, you know, they sell it in-house as well. They're trying to be like that front door. Is that a direct competitor to you or are you thinking about things in a pretty different way? [00:15:58] S0: Yeah, it's a great question. I think there's parts of our product and you could say the same about many other tools in the market that overlap, right? Like some of the work in answering questions on Slack and taking in work from there are definitely overlapping. But there's a couple areas where we look a lot more like your traditional contract lifecycle management tool with real AI on top, right? Like building out a robust repository of contracts and documents for the legal team, managing complex approval workflows within the legal department. This idea of collecting context from different systems, right? Like we don't think of ourselves as like just a Slack bot or a team spot to take in work. Like for us, it's about gathering context from ServiceNow, from Salesforce, from SAP, from all these different business systems to help you answer the legal questions. And so I would say like we've come at it from slightly different angles and we see people using them on like, you know, more basic quick Slack Q&A and us as like this, the whole work management and context management layer for your legal department.
00:15:58 · Nick Fleisher, Pablo Srugo
[00:15:58] S0: Yeah, it's a great question. I think there's parts of our product and you could say the same about many other tools in the market that overlap, right? Like some of the work in answering questions on Slack and taking in work from there are definitely overlapping. But there's a couple areas where we look a lot more like your traditional contract lifecycle management tool with real AI on top, right? Like building out a robust repository of contracts and documents for the legal team, managing complex approval workflows within the legal department. This idea of collecting context from different systems, right? Like we don't think of ourselves as like just a Slack bot or a team spot to take in work. Like for us, it's about gathering context from ServiceNow, from Salesforce, from SAP, from all these different business systems to help you answer the legal questions. And so I would say like we've come at it from slightly different angles and we see people using them on like, you know, more basic quick Slack Q&A and us as like this, the whole work management and context management layer for your legal department. [00:16:58] S1: So tell me, like you're talking about that summer where you're doing this kind of in parallel. When do you take the leap and what leads you to take that leap to kind of drop McKinsey and go full time on this?
00:17:07 · Nick Fleisher, Pablo Srugo
[00:17:07] S0: I think it's at the point where you have enough customers or design partners using the thing or starting to show interest that like you're too busy. And that's kind of how I thought about it, which was like, I don't have the time anymore. We have five or six people that are companies that are starting to use it and I don't have the time to service them and be building this on the side anymore. Like it's time to quit. McKinsey has this amazing policy where you can get like a certain amount of time, essentially paid time off when you're leaving to go find a new job. And so I use that as my time to be able to build with Jared and like it's an amazing policy and setup, especially if you want to be a founder. We quit and basically the same day raised our pre-seat from Sequoia. The reason we were able to do that so fast is we kind of took these videos like we didn't have a deck. We just went in, we demoed. We took these videos that we had from all these conversations with our clients because we had been recording all of them. And we were like, here's why we need to raise money. Like we are too busy. Here's the product. Here's our why we're busy because of these customers we need to raise. And so once we had that pre-seed check, how much was the pre-seed? We didn't publicly announce our pre-seed, but our combined pre-seed and seed was 10 million. The pre-seed was a portion of that. [00:18:19] S1: Did you know someone at Sequoia before? Yeah.
00:18:19 · Pablo Srugo, Nick Fleisher
[00:18:19] S1: Did you know someone at Sequoia before? Yeah. [00:18:21] S0: So I had been, while I was at McKinsey, I knew I wanted to get back into startups. I didn't know how, what that would form that would take, right? Like I was building stuff on the side, but I wasn't sure if I would be a founder or I would join something super early. And so I had been networking through someone at Sequoia to introduce to a bunch of their portfolio companies. And I had interviewed and talked to many different Sequoia portfolio companies. One of them was a cyber startup very early in Israel that I had become quite close with and was very close to joining. And their kind of final move was like, go meet our partner at Sequoia, this guy Bogomil, for a drink. He'll convince you to work with us. And it ended up being that like we spent two hours like talking about legal and all of the issues in the market. And then I was like, oh, I want to show you what I've been working on on the side. And that then spiraled into a bigger meeting where we actually raised the pre-seed. So it was initially a job application for another company turned into meeting a partner there.