A Product Market Fit Show | Startup Podcast for Founders
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.
00:05:29 · Pablo Srugo, Dan Mishin
[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. [00:05:35] S0: Correct, so you end up either working four thousand hours to actually bill for two thousand one hundred hours. Or I'm missing something. I'm not making any accusations. [00:05:45] S2: Yeah, the math doesn't matter otherwise. So it's tough. [00:05:48] S0: So that's option one. Option two is you start your own business as an attorney and if you start your own business, you spend sixty percent of your time doing non billable work. You're chasing clients, you're doing business development, you're running around to conferences, you're recording TikTok podcasts and the truth is, a person goes to law school, accumulates $300,000 of student loans, and then they end up doing work that doesn't require a law license. Just to sort of become a glorified salesperson. So that is not a great path either because people don't become lawyers to be salespeople. They want to help people with their legal needs. That's why they become lawyers. So the pain points that lawyers experience are very acute, and the PMF was so strong because the pain point itself was so strong. [00:06:34] S2: Now that we know that moment, when things were starting to work and you were starting to get referrals. Let's go back to the beginning. When did you start Manifest OS and what were you doing? Not necessarily your whole background, but the few years before you started and before you had the idea of what was going on?
00:06:34 · Pablo Srugo, Dan Mishin
[00:06:34] S2: Now that we know that moment, when things were starting to work and you were starting to get referrals. Let's go back to the beginning. When did you start Manifest OS and what were you doing? Not necessarily your whole background, but the few years before you started and before you had the idea of what was going on? [00:06:47] S0: So I was building a company in real estate tech, which was my company number three at that point. [00:06:53] S2: What year is this? [00:06:54] S0: Well, I started the company in 2017. Late 2017, early 2018, it was two years ago. I was building that company. The company was growing fairly well. We were over $50 million in ARR, two hundred employees, a fairly large business. Profitable, we raised $60 million of venture capital from pretty good names, like SoftBank was an investor and I found myself in this weird situation. Where I'm not seeing purpose in all of this. I'm building a business. On paper, it's growing well. I still have some invested stock. But there is a lack of sense of purpose. Because that business for me was just, you know, we were helping real estate owners increase their earnings from their buildings and as much as I could relate to that pain point. I didn't want to spend my thirties, my most active years, on solving that pain point. So I started thinking about transitioning myself out of the business. [00:07:49] S2: And now you're what, '21, 2020? When you start having these thoughts?
00:07:49 · Pablo Srugo, Dan Mishin
[00:07:49] S2: And now you're what, '21, 2020? When you start having these thoughts? [00:07:53] S0: I can't remember the exact year, but like, and it was also. There was no one aha eureka moment. It was slowly building up. [00:00:00] S2: But more or less just to give a sense of kind of timeline. [00:08:02] S0: I transitioned into Manifest OS in 2024. [00:08:03] S2: OK, so somewhere a couple of years before that. [00:08:07] S0: And I started working with my team, and basically building the leadership team to sort of plan for the transition. And ultimately, my chief of staff, who was then COO, became the CEO. I trained him, we communicated with investors proactively for many, many months. We gave everyone a heads up. We managed this transition, which was actually an interesting experience. I've never done that before, and the new CEO took over in August 2023. And I started basically thinking more deeply about this idea of building Manifest OS. [00:08:36] S2: Did you have this idea as you were transitioning or you just knew you wanted out of what you were doing and would figure out what the new thing would be? [00:08:44] S0: I knew that I wanted to build something in legal. I wasn't spending much time thinking about what that would be. I knew that legal is this interesting industry, where it's an industry that matters for the world because legal services are fundamental to our society. It's not, you know, delivering burritos five minutes faster. It's actually make or break situations in human lives. I don't mean to sound overly dramatic, but it's actually true.