Uncapped with Jack Altman
· Jack Altman, Max Junestrand
[00:00:00] S0: I think some of this is pre-AI, a lot of it is. But I also think there’s a thing where if you started in Europe, you’ve already learned how to sell to ten countries. You know that there’s differences in the way the cultures work and the way they purchase software and what the rules and regulations are. I’m curious if you thought about that when you invested, that actually, maybe coming to the US will be easier one day. And I’m curious about your experience on that. [00:00:00] S1: Y Combinator weren’t particularly excited about backing a company in Sweden. I remember the first interview with Gustaf—he’s a Swedish partner at YC—and he goes, “So you’re going to move to the States, right?” And I go, “Yes, of course.” That’s the cue to say yes so that you get the invite to go to YC. [00:00:00] S0: Now I’m going to Sweden. “You guys are opening in Sweden, YC, right?”
· Jack Altman, Max Junestrand
[00:00:00] S0: Now I’m going to Sweden. “You guys are opening in Sweden, YC, right?” [00:00:00] S1: I came to YC and I left three days later because I had so much business going on in Sweden and I couldn’t do work between 1:00 AM and 10:00 AM. That was just impossible. But the Swedish legal market is smaller than Kirkland & Ellis. So of course you have to expand. Naturally we went to Finland and then we went to Denmark. Then I was like, I think we got the hang of it. The most important thing was that the first customer we got, Mannheimer Swartling—the big firm in Sweden—their managing partner has such a good relationship with the other firms in other non-competitive countries that he would just introduce me. I would fly down and say the same thing I told him: “AI is going to change the world, you’re going to need a partner, I’m here, let’s work.” That sort of made it all start. But then the move to the UK and the US was when we really started ripping. [00:00:00] S0: How different was coming to the US versus going to Finland?
· Jack Altman, Max Junestrand
[00:00:00] S0: How different was coming to the US versus going to Finland? [00:00:00] S1: I had a rule. There’s actually a few Swedish companies that tried to go to the US but did so unsuccessfully. Like Klarna, they tried many times before they actually made it work. My rule was, if we can serve two of the biggest clients in the US from Stockholm, then we’re ready, and then we’ll open an office here. So Cleary Gottlieb—amazing Wall Street firm—and Goodwin Procter, we served them both. We won their business in competitive pilots, and we could serve them from Sweden. We did a lot of flights back and forth. But after they signed, we said, “Okay, amazing. Now we’re ready. Let’s open an office here.”
· Chetan Puttagunta, Jack Altman
[00:00:00] S2: One thing about the market structure of legal, that we knew about at Benchmark ahead of investing, is that legal has this unique market feature. It’s a services industry. In services industries technology adoption is slow at first and then rapid later. If you look at any marketplace idea in a services area, the marketplaces are usually supply constrained, and then the minute supply unlocks, all of the supply comes online into the market and you become demand constrained. If you study marketplaces, especially marketplaces around services, this is something you fundamentally learn. It’s one of the rules of marketplaces. In legal, the market structure is such that the initial adoption will be very slow and hard, but once it unlocks, it really unlocks. There’s some exponential viral coefficient that happens there. That’s one part about the legal industry that’s really interesting. How it overlays into software in legal is that if you look at the most successful legal software companies, they were all started in Europe, pre-AI too, by the way. I had a hypothesis that part of the reason why you get that way is that you’re used to selling multi-geography and multi-rule systems from day zero. For example, Legora sold to a Swedish firm, a Spanish firm, and a Finnish firm. Yes, there are laws at the European Union level. [00:00:00] S0: But from the beginning, this needs to work for many people.
· Jack Altman, Chetan Puttagunta, Max Junestrand
[00:00:00] S0: But from the beginning, this needs to work for many people. [00:00:00] S2: That’s right. If you start in the US, what you end up designing is… There’s the federal legal system, there’s a state legal system, and then there’s regional. But it’s not as bifurcated as literally different countries. [00:00:00] S1: And different languages. [00:00:00] S2: And different languages. So you build all this stuff on day zero that you don’t if you start in San Francisco. One of the interesting things that Max showed us in the prototype in the first meeting is that he had multi-language support already built and he had multi-legal-framework support already built. [00:00:00] S1: I remember. I demoed Sweden and Spain. [00:00:00] S2: That’s right. That was remarkably impressive because it was a company with five people thinking on a global scale, because they were forced to. They couldn’t just serve the Stockholm legal market. Those two things meant that from the moment they launched the product and got a bunch of people to sign, immediately it was like, “Let’s go get the two big firms in every geography. Because we have to.” [00:00:00] S0: And it was global from day one. [00:00:00] S1: Now, I think Legora has become a technology hub in Europe. People from Germany, from the Netherlands, from Spain, from Italy, they’re all moving to Stockholm, even in the winter, to come work with us. [00:00:00] S2: Talk about the culture part of it, which I think stands out a lot. It’s hard to describe to people what it’s like to visit the Legora office.
· Chetan Puttagunta, Jack Altman
[00:00:00] S2: Talk about the culture part of it, which I think stands out a lot. It’s hard to describe to people what it’s like to visit the Legora office. [00:00:00] S0: When you came back from a Legora visit recently, you were like, “Oh my God, they are so good. Something’s going on there that I haven’t seen before.” It sounded different. I don’t know if it’s Legora-specific or if it’s something that happens in Sweden that can’t happen in America, but you were affected by it. [00:00:00] S2: It’s true. Initially, even in the group of five or ten or fifteen, however big the company was in September of 2024, there was a common thread amongst everybody. They were deeply technical, deeply intense, and had a desire to win. And they were thinking globally from day zero. Because they were in Stockholm, they also decided to recruit all over Europe from day zero to bring people to the Stockholm office. What ended up happening is that you ended up becoming a magnet for anybody that wants to build at the forefront of AI with a level of intensity and determination, this idea of wanting to win. [00:00:00] S0: So what did it feel like to you on your recent trip? There’s a few hundred people there. What did that feel like? [00:00:00] S2: The level of engagement and buy-in to the company mission was truly unique. I think the company has done a great job with this idea of building for the company. I really do think building an AI company is a real test in ego. You literally can’t have an ego because you have to have this idea that AI is just going to do this.