From founding Twitch and investing as a Y Combinator partner, I’ve seen all sides of the startup industry. In a little over one year of existence, my new legal startup Atrium has grown to over 250 clients. Between Twitter, events, and other places, a lot of people have asked me what we’ve done to grow so quickly in less than a year and a half.
In this article, I summarize a talk I gave at Hustlecon earlier this year where I share three ways that we built growth into the fabric of the company so that it was primed to take off from day one.
A big lesson I learned from Twitch: in B2C, it’s hard to get people to pay us. This time, I knew I wanted to choose an industry where people would be willing to pay. Through my time as a founder, I had spotted a funny pattern: no matter how our business was doing, the amount we paid to attorneys only went up.
Having been what I call an “involuntary power-user” of legal, I also knew what problems I wanted to fix:
- Unpredictable pricing
- Variable response times
- An opaque process
For a startup, spending on legal services is never the goal. Founders want to do something, like get money in the bank or sell the company, and legal is just a blocker. With Atrium, we’ve implemented fixed pricing, transparent role specialization, and automated technology to solve this.
Our 3 Growth Hacks
In our first year of operations, Atrium completed over $500 million in primary financings. To support those 250 clients, we scaled from a team of 4 to 80 employees.
Growth Hack #1: Hire top talent and leverage their credibility
We were a startup in an industry where some players have been around for over 100 years. I asked every founder I knew, “Would you ever hire a startup law firm?” and kept hearing, “No.” Not very encouraging, but it makes sense: Who in their right mind would trust sensitive legal work to an unproven startup? We needed credibility.
I spent a long time looking for a proven, senior attorney. I eventually met Augie Rakow because he represented my brother’s company, Cruise Automation, through their billion-dollar sale to GM. Augie was a partner at Orrick on their Emerging Markets practice. He had a great book of business and was known for being both innovative and founder-friendly.
After I brought on Augie to be my co-founder, the dam broke. We started hiring other talented attorneys from top firms. That team gave us the legitimacy to promise the same level of service as other firms, while using fixed pricing and improving both quality and response time. With the right partners and team, we leveraged dozens of years of proven experience. We were no longer starting from scratch.
And it’s not just Atrium. Good people want to work with good people. It’s why Google keeps attracting top talent and why Yahoo’s brain-drain spiraled them into a fraction of what they once were.
Growth Hack #2: Add additional value to clients (through fundraising)
In the very beginning, getting clients was a mystery. We decided to try helping potential clients any way possible–even outside legal. I posted a message like this on the internal YC forum:
- “If you’re thinking about fundraising, I’d love to get your help with customer development for my new legal startup. In exchange, I’m happy to help with your fundraising pitch.”
I’ve raised about $80M in venture money so far and have firm beliefs on what makes fundraising successful. I knew I could be helpful.
Our first taker was a YC friend who had founded MessageBird. His business was growing rapidly—doing $80M in revenue that year—but couldn’t get traction with investors. Two weeks after I helped him improve his narrative, MessageBird raised $60M. When he received his first term sheet, I asked if he’d like to give Atrium a try. He said yes and we had our first client.
We tried a bunch of experiments like that over the summer, where:
- We’d get input from startups on their fundraising challenges.
- We helped them raise money.
- When they successfully raised, we had the opportunity to land a new client.
Eventually, we professionalized it, batching clients into Atrium Scale, a free bootcamp that we run quarterly. Over 60 founders have gone through the process over the last 6 months, and a quarter of them successfully raised a Series A or B.
Another example of finding a way to learn more about your customers is Zappos. In the early days, they sent flowers to customers and spent 10+ hours on off-topic customer service calls. Their customer service is their best marketing asset. If you run a business, your job is to help customers. You have a specific way you plan on providing them value, but if you can find another, do it.
Growth Hack #3 – Atrium’s Series A
Most companies raise a Series A from one or two, maybe three investors. We raised ours from over 90, for two main reasons:
- I didn’t want investors to block us. Just as I was worried that founders would be nervous working with a new type of law firm, I thought some investors would be wary of their portfolio companies working with an unproven law firm. By broadening the reach of our investment and getting many of the Valley’s top VC firms to believe in our mission, we helped ensure against investor skepticism.
- I wanted investors to help us grow. They have access to a lot of companies. Since they can refer us to their portfolio companies, they have a direct ability to influence our success.
We ended up raising our Series A from many top-tier investors, who participated in varying amounts: $100k here, $500k there. We jumpstarted the business by making every investor into a channel partner. And it’s paid off.
This strategy is typically known as a “party round”, and it certainly has its cons. You have to be very mindful of pro-rata rights and other considerations. It’s not for everyone, but made sense for us since startups are our initial target customer.
Conclusion: Address your biggest blockers from day one
These three strategies kicked off a flywheel for us. The investor and startup community has given us great feedback. We’re growing quickly and hiring top-quality attorneys and paralegals as fast as possible.
So what does it mean for you? In short, think about your biggest obstacles to growth, and how you can build the solution into your company from the beginning. Credibility, significant value-add, and investor support were our three biggest blockers. We did more than overcome them: we turned them into growth assets to help us accelerate customer acquisition.