A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · Dan Mishin, S1, Pablo Srugo
[00:00:00] S0: I don't think you can hack referrals. I think you can incrementally improve referrals by making it easier. But at the end of the day, if you're not building something that the world needs, then no hacking tools are going to help you. I believe in value led customer acquisition and not just ads. We're overloaded with information, we see ads everywhere. Value ad customer acquisition, in my opinion, is the gold standard. Getting clients is so much harder than building technology. The easier it is to build technology, the harder it is to get clients. I really encourage everyone to think about user psychology as the first step. [00:00:35] S1: That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is Product Market Fit. [00:00:48] S2: Do you think the Product Market Fit show, has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests, thank you. Dan, welcome to the show, dude. [00:01:03] S0: Hey, good to see you, man.
00:01:03 · Dan Mishin, Pablo Srugo
[00:01:03] S0: Hey, good to see you, man. [00:01:05] S2: You launched Manifest OS, you recently raised $60 million in a Series A, and you're building a very different company. We're going to talk about that, but we always start on the Product Market Fit Show with the Product Market Fit moment. So tell me, when did you feel things were really working? When did you feel you kind of found initial Product Market Fit?
00:01:22 · Dan Mishin
[00:01:22] S0: I knew that there was a pain point before I started the company, and the pain point was so acute. So what Manifest OS does is, just to contextualize this, Manifest OS powers individual lawyers with their AI native practices. So we help incredible, experienced attorneys launch their AI native legal practices from scratch and scale them to become market leaders. So the idea of legal services being too slow, too expensive, too unpredictable, too much of a black box. That was kind of like, I knew that there was a pain point. There is a difference between creating software to solve a problem that most people don't know exists or better executing and better solving a pain point that is already there. There is already a market, there is already a budget, there is already spend. People already use those services and when you sort of focus on building businesses around existing pain points and replacing existing players. Then the product market fit question becomes a little bit less acute. Because you're not like, "Hey, I'm going to build software that people didn't know they need." You know what I mean? The PMF was never a question. The bigger question was, can we get supply? Can we get demand at a price that makes sense? Does customer acquisition cost make sense? Those are the pieces that we needed to figure out.
00:02:32 · Pablo Srugo
[00:02:32] S2: I agree, but like you said, no business has no risk, right? And it reminds me of a lot of the lending businesses that came up five years ago, where it was like, we're giving people money. People want money. So when I say you're going to get a loan, everybody puts their hands up. I have no worry about that. I'm worried about, are my metrics are going to make sense, et cetera. That's going to mean the business works. So the same question then would be to you like, what was the biggest risk that you saw in this working, and when did you see that kind of start to turn around?
00:03:01 · Dan Mishin, Pablo Srugo
[00:03:01] S0: That's a good question. I think acquiring lawyers was my biggest concern and fear going into this company. Before I started ManifestOS, I spent two months as a paralegal at a law firm. Observing how people actually practice law and how they do the work day to day. And as I was talking with actual lawyers who were practicing law, the conviction got greater and greater and greater that there was a pain point. They actually had a real pain point. It's in the details, it's in the weeds, it's in the nuances, but you build that conviction by actually observing their work and it just became obvious to me that there was a real pain point. And I remember how this one lawyer, the first lawyer that ever partnered with us and helped us, sort of was the first client actually. That first lawyer started working with us, and within a month they referred a second lawyer. And I was like, "Oh wow, OK, this is actually working, we're solving a real pain point and adding value to them." So now they wanted to refer us to their friends. [00:03:56] S2: I love that, the referral piece is a big one. Everybody wants referrals, and a lot of the question is, "How do you drive more referrals? How do you drive more referrals?" And it really comes down fundamentally to the wow moment and making that wow moment happen fast, happen big, and delivering that through the product. Frankly, what do you refer? You refer products that you love, not the ones that pay $20 to do so.
00:04:17 · Dan Mishin, Pablo Srugo
[00:04:17] S0: And exactly, and I remember Steve Jobs' phrase was, "We're never going to talk about quality in Apple ads because any company that talks about their quality in their ads generally means that they don't really have good quality." Japanese companies never talk about the quality of their products because they're just freaking high quality. That's all it is, so I don't think you can hack referrals. I think you can incrementally improve referrals by making it easier. But at the end of the day, if you're not building something that the world needs, then no hacking tools are going to help you. So in our case, we are solving acute pain points for lawyers. If you're an attorney and you've been practicing for twelve years, you kind of have two options. You're either pursuing a partner track at a large law firm, chasing billable hours and check this out. The average attorney at an Am Law 100, has to bill for two thousand one hundred hours a year. Which means that you literally have to bill for every waking hour that you have per year. You cannot take vacations, and you cannot have any unbilled time during the year. Because a typical human works forty hour weeks, and that's like two thousand eighty hours a year, and a typical law firm partner has to bill for two thousand one hundred hours per year. So I'm like, OK, that's unsustainable. That's a crazy track. [00:05:29] S2: Because that's your billable. Then you got to eat, go to the bathroom, and then do non billable work on top of that.