I met a founder who just raised a $27M Series A. He said the first 5 years were a grind, nothing worked. Then AI came along—and he grew 12x in 1 year: In 2016, Scott started a legal tech startup called Rally Legal. And it was a slow burn. V1: Legal templates for founders. Failed. V2: Legal templates for lawyers. The first few customers were excited...but then came the valley of despair. V3: “Shopify for law firms.” Helped law firms sell services directly on their site. Incredible uptake...Terrible retention. V4: Client portal for law firms’ clients. Fell flat on its face. From 2016 to 2022, Scott and his team launched HUNDREDS of landing pages. They pushed new experiments every 2-4 weeks. They developed a system to analyze each feature based on CAC, usage, and retention. While everyone was blitzscaling in 2021, raising large rounds and hiring as many people as possible, they stayed disciplined. They had a small team of 5-10. They refused to scale until the product met their targets. Then in 2022, ChatGPT came along… and it clicked. ChatGPT for lawyers. Scott and his team put out V1 in weeks. They changed their name to Spellbook. They went from having 100 law firms as customers to over 2,000 in 1.5 years. Eight months ago, they raised $10M. This January, they raised another $27M. Was luck involved? Sure. But founders who’ve done the work know that’s never the full story. Like Scott said “It wasn't like we just struck it lucky. There was a whole bunch of learnings that we made along the way that made us build this one.” It's a classic overnight success. It just took 6 years. // Listen to the full episode on The Product Market Fit Show #startups #venturecapital #founders Scott Stevenson Spellbook
Noted that they were pivoting within the same industry. I believe, because they were focused at one single industry, over time, the experience accumulated helped them timely grab the opportunity? Kudos to them for not giving up. #resilience
I just don’t get why they had to raise when they’ve been bootstrapped for 5 years. Looking forward to giving it a listen
lol we’re still using their version 1. Not for the templates but we use them to store all of our legal docs. Please don’t shut it down!
Scott Stevenson Daniel Di Maria have no quit! They deserve all the success they have earned.
No one looking on the sidelines, actually realizes what the overnight success costs to the founder. This is a good post, Pablo Srugo!
Great episode! I could relate so much to this story. If you replaced legal with support and nurses, I'd be listening to myself. Thanks to you both it has given me a lot to contemplate.
On his sixteenth birthday the boy gets a horse as a present. All of the people in the village say, “Oh, how wonderful!” The Zen master says, “We’ll see.” One day, the boy is riding and gets thrown off the horse and hurts his leg. He’s no longer able to walk, so all of the villagers say, “How terrible!” The Zen master says, “We’ll see.” Some time passes and the village goes to war. All of the other young men get sent off to fight, but this boy can’t fight because his leg is messed up. All of the villagers say, “How wonderful!” The Zen master says, “We’ll see.”
I don’t know why a vc would invest in an app that’s ai is predicated and relies on chat gpt. It’s the anthesis of a unique proposition and provides no competitive advantage. My guess is they don’t realize how easily it can be cloned and replicated on its entirety
The path from v1 to v100 takes time.
Partner at Mistral | Seed VC
9moScott built a system to find product-market fit. He goes through that system and much more in the full episode: