Sharing Economy Series: 5 lessons on making your marketplace survive its first year

My company — my baby — just turned one. As Priori Legal celebrates our first year of business, I’ve been spending a lot of time considering what’s worked, what hasn’t and where we’re headed in the months to come.

Like most marketplace businesses, we wrestle with the inherent challenges of seeding and growing a marketplace with two user bases, as well as navigating an industry adverse to change (law).

Hopefully, my experiences can be instructive to others considering founding a two-sided marketplace, disrupting a “sleeping giant,” or (not for the faint of heart) both.

Lesson #1: Get out there and test it out.

In our early days, we spent a lot of time collecting feedback from lawyers and clients about how our marketplace could best serve each audience, and more importantly, what would keep them coming back after the initial introduction. And while we learned important lessons through this feedback, in hindsight, we could have started to test some of those theories before we even had a fully operational website.

The best (unheeded) advice I received from the founder of a marketplace was this: Making it actually work for five clients is more valuable than interviewing 50. Testing with an extremely lean (or nonexistent) product is more cost and time efficient.

Also, you might just discover that what people SAY they want, and how they actually use your product could be quite different.

Lesson #2: For high-value marketplaces, staying relevant is key.

Marketplaces, especially professional services marketplaces, struggle to stay relevant after the first interaction.

By way of comparison, look at businesses like Uber. Uber doesn’t fear being disintermediated by users and drivers forming relationships outside of their service, because the point is on-demand service. As a user, I couldn’t care less which Uber driver I get, as long as they come quickly and get me to my destination reliably. The same, more or less, holds true for AirBnB because I’m not looking for the same thing on a repeat basis.

For us, though, clients and lawyers form long-term relationships, and we need to continue to provide value on an ongoing basis so we don’t become an irrelevant middleman.

In our business, we create value by streamlining invoicing, billing and collections, which saves time, headaches and additional costs on both sides of the marketplace. And we also maintain a diverse pool of high-quality lawyers so that businesses know that while they may have found an excellent corporate lawyer with us, they can also turn to us to handle intellectual property, FCPA compliance, premises liability issues and so on.

The key takeaway for us has been to really explore what drives value and make sure we continue to provide it frequently.

Lesson #3: Don’t be afraid of unpopular decisions.

Priori’s bet on the legal market is that quality legal services will win over commodified legal services. That has meant two types of really tough decisions:

(1) We have to reject a lot of lawyers (currently, only 20 percent of lawyers who apply meet our strict quality standards), and by doing that, we run the risk they might be none too pleased with us. No new brand likes to be in the position of rejecting potential users. Ultimately, though, quality control is one of our main drivers of value for businesses. By carefully curating our lawyer network, we save small businesses days of time they might otherwise have spent asking for referrals and interviewing lawyers.

(2) Our road to scale is longer than others with a more inclusive approach. Our lawyer vetting process is intensive, and our team often spends hours vetting each lawyer: evaluating their application, background checking them, interviewing them face-to-face, and checking references. Certainly, there are ways to grow our network faster, but Priori’s brand is all about quality over quantity.

There have been times that I’ve doubted whether we have taken the right tack, but a year in, our moments of unpopularity have paid off with very loyal clients as vociferous brand advocates.

Lesson #4: If you are attacking a sleeping giant, remember incremental change is one step in the right direction.

As I’ve learned in the past year, if an industry hasn’t embraced technology with open arms, there are probably entrenched, powerful players and/or many disorganized players who will take time (and some proof of success) to sway.

But no industry is immune to consumer demand, and in legal, consumers are demanding a more transparent marketplace, a move away from the billable hour, easier access to lawyers and faster legal services.

To disrupt a sleeping giant, you need to move strategically, addressing problems in the here and now, rather than throwing the baby out with the bathwater.

At Priori, we believe that hourly billing for legal services is on its last legs, but if we insisted that all lawyers abandon it wholesale, we would lose out on the opportunity to work with many excellent lawyers. Instead, we encourage the use of fixed and other alternative fees and provide tools and analytics that encourage their adoption to move the needle slowly.

Lesson #5: Last but not least: OMG. Have fun!

A new company — especially one that is entering a challenging field — has to be a labor of love. There will be down moments (or weeks), but if you can’t find joy in the everyday, you won’t succeed. When I look around my office and see my 9 employees working tirelessly to change the market for legal services, it makes me smile. And, it’s not so bad when we have a happy hour either.

At every stage of running a business, there are infinite lessons and skills to learn. (Right now, I’m working on not micromanaging). But, my view from year one is success is a slow, iterative and deeply gratifying process. Good luck!

Basha Frost Rubin is CEO and cofounder of Priori Legal.