Last fall I had the pleasure of interviewing Adam Camras, Lawgical co-founder and CEO on the topic of podcasting — more here. Adam leads the popular Legal Talk Network, one of Lawgical’s brands, all headquartered in Denver, with an office in Los Angeles and a handful of remote team members throughout the United States. Lawgical provides online marketing, software and media for the legal industry. Adam is an experienced entrepreneur with a wealth of knowledge. Recently we did another Q&A, this time Adam shares his wisdom on whether to raise capital or bootstrap.
Mary Juetten: When did you start and why?
Adam Camras: We launched Lawgical in 2004. We had discovered it was very difficult for law firms to find trusted and reputable litigation-support professionals, so we saw an opportunity to bridge that gap.
Before that, we were working on another startup — a legal tech company that we began developing in 1999. It was a time when entrepreneurs were spending hundreds of thousands of dollars on business plans and blueprints for a website, even before a single line of code was written. We tried outsourcing development to India, Thailand and various U.S. firms before finally launching the company in 2001 — right when the dotcom bubble burst. It was like nothing we’ve seen in business. Companies with massive headcounts, that had raised many millions of dollars, some that even had gone public, were closing their doors.
Juetten: Why did you decide to bootstrap your business instead of raising outside capital?
Camras: It was out of necessity. The early 2000s was a tough time to raise money, especially for a niche legal-technology business. Also, my upbringing influenced my approach to money.
Juetten: How so?
Camras: My parents were old-school: My mother was a first-generation U.S. citizen who started working and saving as a young teenager, and my father was and still is a very conservative financial advisor. They ingrained in me that you have to make money and you should spend only what you have. It’s a valuable way to think about running a business.
Juetten: What problem is Lawgical solving?
Camras: We have a handful of main portfolio companies, so the problem is a little different for each one. The overarching goal for all of our clients, however, is to provide trust and efficiency while reducing friction. For example, at Legal Talk Network we are making it easy for lawyers and law students to stay up-to-date on the latest legal news, technology, and tools to improve their practice.
Our other companies are in the litigations-support world — with any luck, you and other Forbes readers will never need to use them!
- ServeNow helps law firms, and especially high-volume litigants, find local, trusted process servers, who deliver court notices such as summons, subpoenas and other court documents.
- ServeManager, a software platform that helps process servers efficiently manage their businesses and communicate with their clients (law firms). ServeManager provides the trust and transparency law firms demand for the reassurance that their process servers are doing what they say they’re doing. ServeManager stores GPS records, photos and a time stamp of the service, and allows process servers to e-sign their affidavits (proof of service) right from the field.
- CourtFiling.net piggybacks on the 125,000-plus serves a month that run through ServeManager, where the affidavit needs to be electronically filed. This reduces duplicate data entry and the margin for error, as well as provides a user-friendly experience for anyone who needs to electronically file court documents.
We also have other legal-related brands, but we invest the majority of our resources in the above.
Juetten: Who are your customers?
Camras: This differs for each company, but most of the users of our sites are lawyers and legal-support professionals. That said, they may not be the ones spending money with us (for example, lawyers don’t have to pay to use ServeNow or listen to podcasts on Legal Talk). So, our content targets our customers’ customers.
For example, ServeNow is a network of trusted, local process servers, who pay to be part of the network and get exposure for their firms. However, we spend most of our marketing resources on educating the lawyers and legal support professionals as to why it’s important to hire a trusted, experienced process server and how using ServeNow makes this easy. Even though we generate our revenue from the process servers, if we do a good job of conveying the benefits to their customers, they will find us.
Juetten: How do you find your customers, or in your case, your customer’s customers?
Camras: We’ve put a lot of energy into helping them find us. Nobody wants to be sold to anymore; they want to buy from people and companies they trust. So, we do everything you would expect from traditional marketing: print, mailers, digital and inbound marketing. We’ve always invested heavily in educational content.
Juetten: Who is on your team?
Camras: We have an incredible group of 26 really smart, hard-working, fun and loyal people, as well as my co-founder, our CTO Trent Carlyle. We plan to add to the team over the next few months. There are also usually some four-legged team members hanging around our offices.
Juetten: What were three benefits to bootstrapping?
Camras: Top three benefits:
- It forced us to focus on generating revenue as quickly as possible and spend only when it was critical to our company goals.
- We could spend only what we made, so we not only survived but actually grew during the downturns and the recession of 2007–08. We saw lots of other companies have their funding pulled and close without notice.
- We get to make our own decisions without needing approval from investors or board members. This has allowed us to do things they most likely would not have supported, such as buying the real estate where our office is housed, making acquisitions, and investing in or donating to non-revenue-generating philanthropic initiatives. Investors may have seen these activities as distractions and tried to prevent us from investing, experimenting or pursuing opportunities we thought were the right thing to do ... or just fun and interesting.
Juetten: I’ve been to your office and it’s awesome – smart investment in an up and coming neighborhood. What are three downsides to bootstrapping?
Camras: Three downsides:
- Slow growth. You can scale so much faster when you have a budget right out of the gate. We had to wait until revenues came in to hire all the employees we needed.
- Focus. We had big eyes as young entrepreneurs and pursued things that were a mistake. An active investor would likely have caught this.
- Access, alignment and exposure. Raising capital from sophisticated and experienced investors can open up a lot of doors and expose you to people or organizations aligned in your growth and success. I’ve also noticed funded companies tend to get a lot more free press.
Juetten: If you were starting a new company today, would you self-fund (bootstrap) or look for outside capital?
Camras: That is a great question. Assuming there is relatively easy access to capital, as there is at the time of this interview, we would most likely bootstrap to quickly prove the model or concept. Then, once we had confidence in the viability, we would raise money to accelerate the growth.
Juetten: Any other tips for early-stage founders?
Camras: Many! We’ve made a lot of mistakes and learned a lot along the way, so I’ll try to narrow the list down to just a few.
- Be very diligent in your recruiting to get the best people for the role and your culture. Don’t be tempted to hire out of desperation or when applicants are not a long-term fit.
- Offer a quitting bonus. Yes, a quitting bonus! It’s one of the best policies we’ve implemented. It lets the team know you have a safe environment, where open communication is encouraged and expected. It’s a culture killer to have people at your company who don’t want to be there, so the bonus can accelerate their transition out of the company and save the damage of having an unhappy team member. To qualify for the bonus, we ask for at least a 30-day notice. You may not want them to stay that long, but it gives you time to find a replacement. This is especially important for young companies, in which every role is vital.
- Get on a plane. Your clients and partners want to work with people they know and trust. In a world where everyone else wants to send a text, email or Slack post, real relationships are cultivated in person. This may seem like a pain or a poor use of time, but so many opportunities have come from going and seeing prospects, clients and partners in person.
- Enjoy what you are doing. I’m convinced you can make money doing just about anything if you’re truly invested — so why not do something you enjoy?
Juetten: What’s the long-term vision for Lawgical?
Camras: To make the fulfillment of litigation support as easy as ordering an Uber and to continue to create content that lawyers and legal professionals want to listen to. We’ll get there by always looking for ways to improve our culture and by creating opportunities to add more value for our users and clients. One recent introduction is establishing OKRs (objectives and key results) to improve goal-setting, communication, and team alignment. (For more information on OKRs, check out Measure What Matters by John Doerr).
I love Measure What Matters and OKRs! I had never heard of the quitting bonus, it would have saved me some heartache and expense a few years back. Thank you, Adam, for your insights, very valuable for those startups or small businesses trying to launch or grow their businesses. If you have a take on why to raise funds instead of bootstrapping, reach to me on Twitter @maryjuetten. #onwards.