Justin Kan | Hustle Con 2018

Every day I'm hustling, hustling, hustling— Hustlin', hustlin', hustlin'. Every day I'm hustlin'... How are you? HustleCon! It's me Justin here to tell you, teach you something. I mean, I'm gonna teach you one thing at least and we'll see what that is. All right. Cool. So that was, you know, you've probably— I won't belabor you on background. I started a lot of companies. The one that worked was Twitch. I also invested in a lot of companies, kind of seen all sorts of every side of the market. And that really informed this new business that I started called Atrium. So I came here. I want to tell you about Atrium and I want to tell you about some of the growth hacks that I used to get us going because it's been about exactly a year now. In June. We celebrated Atrium's first birthday June 12th, I think. So you can wish me a happy birthday. All right. So why did I start Atrium? Well, at first, I was very brain damaged from Twitch. And when you start a consumer startup, as many of you probably will find out, people don't really want to pay you. They don't want to pay you very much. But so when I was thinking about what should I do next, what startup should I start? I really, really wanted to do something where you get paid. And so there was one constant in our entire Twitch journey, which was we always, no matter how we were doing as a business, the amount we paid our attorneys always went up. And that's sadly true. And so I was like, that seems like a very interesting business to do. At the same time, I was a partner at YC. I felt like I'd stopped learning, I'd stopped leveling up, and I wanted to build something into a big industry where I felt like I could continue to scale. 'Cause we grew Twitch, it was about 170 people when Amazon acquired it. I wanna build a big business, something bigger than that, and I felt like the legal market was something that would support that. And then lastly, I'd been an experienced client. As I like to say, I was an involuntary power user of corporate legal services. And so I was like, well, I know what people want and I feel like I can deliver it. And what did they want? Well, here are the problems I faced with legal really quickly. Pricing seemed like playing Russian roulette when I would open those legal bills. Sometimes there was highly variable response time. When I was working on a very important thing where, you know, it was like an M&A or a fundraising round, the quality of service was super high. But oftentimes when we wanted to do something else that wasn't as important, it was, you know, we'd be waiting for a long time for a response. The quality itself was very variable. Oftentimes there were mistakes because there's a lot done by hand, and then there's very little transparency into the process. Like, I didn't know what the steps were for anything I wanted to do, like a fundraising round. What are the steps from getting— you know, legal's not the end state. I wanted to get money in the bank, or I wanted to sell my company. I always wanted to do something, and legal's just a blocker. And when there was no transparency into what was happening, I was very frustrated. So we decided to solve that with a couple different things, strategies, moving everything to fixed pricing so we have an incentive to make things more efficient over time, increasing role specialization so that we can increase response times and kind of right-size all the legal work. We're building all this technology to do stuff behind the scenes to actually lower costs. And then we're starting with startups, that's you guys in the room, because that's what I know. Startups, they might start small, but eventually if they become the next Airbnb or Uber, they'll end up spending a lot on legal. And so to get to the good stuff, here are the kind of growth hacks. When I started the company, there were a couple things that I did to really kickstart the process and grow it pretty quickly. So to date, Atrium has done over $500 million in primary financings for clients. Clients. We have over 240 clients here in Silicon Valley and around the country. And, you know, I think we've done a pretty good job. We scaled from a team of 4 people to 80 people in this last year. So done some things okay, but where there's still a lot to do. You know, all I see is problems, and there's a long road ahead of you. One thing I should say is no matter who you are, it never gets easier. A lot of nervous laughter, but that's actually true. So if you feel stressed out, if you feel like you're struggling with your startup, it might be early days, but you should just know that I'm feeling the same pain somewhere in the world, probably in San Francisco. I'm probably banging my head against the table on something that's not scaling exactly right. I thought it would be easier, actually, this time. So that was my mistake. Alright, on to the growth hacks. So the first one was when we started off I was like, will anyone hire a startup law firm? And in fact lots of people were like, nobody will ever trust their sensitive legal work to a new startup that's unproven. And so what we did was we ended up hiring top talent and trying to leverage their credibility. So first thing I did was I realized we couldn't start Atrium without an expert senior attorney who had a ton of experience. And I ended up, you know, because I'm not, I've been on the client side but I've never been on the legal service provider side. So we ended up spending, I spent a lot of time, months and months and months talking to different partners, seeing who was interested in kind of innovating in this space, people who had been successful in their careers at other firms. And eventually I decided to co-found Atrium with my current co-founder, Augie Reiko, who is a partner at Oric. On the emerging companies VC practice. And so Augie had a great book of business. He was known as someone who was very interested in kind of innovating, but also like really founder-friendly and like great at building client development. And so we got along super well. We ended up meeting because he actually represented my brother's company, Cruise Automation, through their sale to GM for $1 billion the year before. And so we got to, we sat down a lot, got to know each other, and really put a lot of thought, pre-work into building this business together. Then after that, Augi kind of broke the dam and we were able to hire a bunch of talented attorneys from top firms here in Silicon Valley. And so when we went to founders, we were able to say, hey, we can offer the same levels of service that you can expect from other firms. And I think that was a huge piece of the puzzle because we were legitimately able to say, hey, if you are going to go with this other firm, we can do the same amount of work, but we promise we're going to fix the pricing and we're going to do it— we're going to improve our quality of service, we're going to improve our response time, we're going to lower your cost because we have built this technology that's going to streamline the delivery of service. And it worked. That was not obvious to me that it would work at first, but it did, which is really good. So what was the second thing we did? We decided to try to help founders with additional value outside of just the legal services. So in the very beginning, like literally a year ago, we were sitting around and we were like, how are we going to get any clients? And the way— I started off the whole thing by just posting on a forum for founders. Actually, it was on the internal YC forum. And I said, "Hey, if you are thinking about going through a fundraising process soon for like a Series A financing, Series B financing, something like that, I would love to get customer feedback from you. I just want to learn about how you're thinking about that process and do some customer development for my new company." In exchange, what I'll do is I will help you on your pitch. I'll give you some pitch feedback because I've raised about $80 million in fundraising from venture capitalists and angel investors and seed investors so far, and I think I have a lot of firm beliefs on how you improve the narrative and your pitch narrative, and I could probably help you out, so let's do a trade. And so I did that with one of my friends actually who has this company called MessageBird. Which helps people send, you know, it's basically like an SMS and phone API. And sat down with him, he had a great business, his business was growing super fast, they were on track to do, I think, $80 million in revenue that year. And I sat down with him and he was like, "I can't get any traction with investors, you know, what's going wrong?" And so helped him out with his narrative and 2 weeks later, he had a term sheet, ended up raising $60 million. So it wasn't quite as simple as that, but I did really help improve his process. And so then at that point when he had the term sheet, I was like, hey, we have this law firm. If you'd like to, maybe you could consider using it. And he excitedly was like, yeah, sure, I'd love to give you guys, give Atrium a try. And that's how we kicked it off. So we eventually did a bunch of experiments over the summer helping people out, and we decided to professionalize it. We said, "Hey, we can batch process this by running a free boot camp every quarter." I think it's ended up being every couple months. And so that's what we do. We called it Atrium Scale, and we help founders raise money and figure out what their fundraising strategy is. Because it's effectively a lead gen event for our, you know, our Atrium services. So that's worked pretty well. In fact, we've had over, I think, 60 founders go through our bootcamp over the last 6 months, and I think about a quarter of them ended up raising Series A or Series B. Okay, so growth hack number 3, Atrium's Series A, our own Series A fundraising. So when we went out to start this business, we thought, Maybe I can jumpstart it by having all of our investors, or our future investors, 'cause there weren't any investors yet. Maybe I can jumpstart it by having all of them basically become our channel partners. And so the way we created our round was we ended up raising money from one lead who set the terms, that was General Catalyst. And then we ended up basically, well, I guess we used our credibility and hustle to get in the room, and we ended up talking to about 100 investors total, and I just pitched. I was like pitching nonstop, like day after day, and got everyone to participate with just like a little amount, you know, $100,000 or $500,000. I was just trying to raise like as kind of like a small amount from everybody in Silicon Valley. And the reason I wanted to do that was twofold. Number one, I didn't want people to block us. Just like I was worried founders would be nervous that there was about having a new firm, I thought investors would be super nervous, right? 'Cause investors, you know, what's the point of like, why innovate here? Like, the founder's kind of the one that's bearing the pain. He should just like suck it up and maybe use their existing firm that I've heard about, right? I was worried about that. So I went out and I tried to pitch everyone in Silicon Valley. And then the second reason that I thought that would be useful is that we would be able to ask them to refer us to their portfolios. And really make those investors believe that they could help us grow and they'd have like a direct influence in helping us be more successful. And so we ended up doing that. And here's some of the results. I think I already talked about that one. Atrium Scale has grown pretty well. We've been able to grow that from this large base of startups here in Silicon Valley. We ended up raising a round from almost everybody in Silicon Valley. We had participation from all of these different top-tier investors. And they've done a great job of referring us to this portfolio of over 240 clients who have tried Atrium today. And in fact, there's 25% of those guys come from our investors. All right. So last up, how I can help further. You can email us at Atrium if you need any sort of legal help. And Atrium Scale, I encourage you all to apply if you're thinking about raising venture fund— fundraising in the future. It's been pretty effective so far. And I think there's one last thing. We have a special discount for any of the founders in the room today. You just look for someone in an atrium in an orange t-shirt and go find them to claim it. So that's all I've got for you today. Thank you very much, and I'll talk to you later. Bye.