Brian Liu remembers the day he decided to start his own company. It was 2000, just four years after graduating law school. He and friend Brian Lee had come up with an idea for a tech company to help small businesses with legal solutions. The only problem? The Nasdaq crashed during the pair’s first venture-capital meeting, signaling the looming dot-com bust.
“When we showed up to that VC meeting and basically got the door slammed in our face, we had to think long and hard about whether we wanted to go through with it,” Liu recalls. “In the end, after beers and some food, we decided to move forward.”
In that decision, LegalZoom was born.
Fast forward 20 years, LegalZoom is a wildly successful business you very likely may have used yourself. Liu left the company full-time in 2012 to pursue new opportunities, and in late 2018, he launched BizCounsel, connecting business owners and attorneys with an affordable, monthly subscription model.
It’s no coincidence that the two Brians would eventually reunite—BizCounsel is a portfolio company at BAM Ventures, which Lee co-founded in 2014 and where he serves as a managing director. As part of this new series, spotlighting BAM portfolio companies, we sat down with Liu to learn more about his entrepreneurial journey, what it’s like starting a business in tough times, and how his company is handling the COVID-19 crisis.
Let's start with the topic on everyone’s mind—the COVID-19 pandemic. Companies all over the world are feeling the impacts of this virus and the economic disruption that has come with it. As someone who has been in business for decades, could you share some of your experiences weathering tough times?
One thing I’ve learned is that businesses that start during down cycles have a distinct advantage. It forces you to think about monetization and optimization from the get-go, as opposed to just thinking about how to raise your next round. You develop good long-term habits by focusing on metrics.
We learned those things when starting LegalZoom right before the dot-com bust. We had thought we were going to raise millions easily because we already had people like Robert Shapiro on our board, and I had friends who were getting money thrown at them left and right. But it turned out to be much more difficult.
What made you keep going during such a historically hard time for venture funding and business in general?
First, we knew there was demand for our service. Second, our business model was commerce-driven, meaning we’d make money on every transaction. And third, we decided to do whatever it took to make it work. We recruited interns from UCLA and paid them in stock and even bartered for key services.
What were some of your most memorable moments in those early days?
For the first year, our goal was to double our revenue every month, and we did that for 10 straight months. Then, we made the goal to reach $1 million in revenue in March 2003. We decided that if we reached that goal, we would take every employee, plus a friend, to Cabo. The team pulled together, everyone worked hard, and we made it.
From that experience, I learned that you have to set lofty goals and get everyone excited to reach them. So many times, it's only the executives who care about financial goals. For everyone else, it's just more work. Give your employees a sense that you really appreciate their work and effort, and you'll be surprised how much easier your own job is.
Now that you are going through another tough time with the COVID-19 crisis, how is BizCounsel dealing with it?
Our prime message has been "Legal Help Made Easy" for small-business owners. Our clients have needed contracts drafted, wanted to learn how to save money on taxes, wanted us to take care of legal compliance, so they didn't have to worry about it.
Now, their needs are completely different, and we have to pivot hard on our service offering. No one cares about employment handbooks right now. Instead, it's now all about, "How can I collect payment?" and, "How can I delay payment?" We're also going to have to become experts at all of the government-assistance programs and help our clients take advantage of them.
What advice can you offer startup founders right now, as they navigate this crisis?
Cut your burn, think about an early monetization model if you don’t have one already, and give your employees a sense of urgency, purpose, and appreciation.
Let’s switch gears now to some lighter topics, and talk about the Los Angeles startup scene. What has changed in the 20 years since you started LegalZoom?
I remember going to startup parties and events back in the early 2000s in LA and seeing the same 20 or 30 people every day. It was really great because I got to know all of them. Now the scene is much larger.
Founders in LA like to apply technology to real things like dating, online shopping, shoes, legal services, and so on. Up in San Francisco, you see a lot of tech for tech’s sake.
On the investment side, things are much better than they were 20 years ago. You don’t have to go outside LA to get funding these days, at least not angel investment for startups.
We’d love to hear more about BizCounsel. Why did you decide to start another law-focused company after LegalZoom?
With LegalZoom, the service helps businesses get off the ground, which is great, but I realized there wasn’t much help for them in the wider world once they’d been in business for a few years.
For business owners who’ve been around a while, the fear of using a lawyer is tremendous: 87 percent of small-business owners don’t have a lawyer they can rely on, so they often research law questions on their own, and do things like fill out their own forms. And I don’t blame them. Your standard lawyer will cost you $350 per hour, and you never know how much they will bill you at the end of a project.
As a business owner yourself, have you ever dealt with that?
Yes, just recently. I have a real-estate business, I hired a lawyer, and just got a $6,700 invoice for the month. And I didn’t even know what the lawyer did! Once you get a shock bill at the end of the month, you never want to get a lawyer again, which is what we are trying to help with BizCounsel.
How does BizCounsel work?
The main thing we are trying to do is to establish a relationship between the small-business owner and the lawyer. By doing that, we are trying to change the public perception of lawyers so they become business partners rather than a necessity of last resort.
We are changing the business model by providing a monthly subscription service for business owners that gives them access to a lawyer for advice only. When there is real work to be done, we ask our lawyers to quote flat fees as much as possible. Pricing transparency is key; knowing how much you will pay up front builds trust.
On the lawyer side, they get a portion of our subscription fees and agree to be on hand to answer questions from business owners. They make money when the client sticks around and asks for help doing specific tasks.
How are you finding lawyers responding to this model?
Some lawyers are really excited about it and see the value, while others are stuck in their old ways, which is fine.
What is the “old way” of practicing law?
Most lawyers spend only 20 percent of their days practicing law. Most of their time is doing admin work and marketing for their services. With BizCounsel, we are trying to re-engineer workflow by using technology and helping them with marketing, schedule-setting, and drafting agreements, so they can spend a greater percentage of their time doing actual legal work.
What are some of your hiring best practices?
I always try to hire people with skills different than mine, and I’m never afraid to hire people better than me.
Most importantly, founders want a diversity of skills and backgrounds. If everyone is only thinking one way and that one way doesn’t resolve a problem, you are stuck. I always advise founders to hire people from different backgrounds.
How can businesses successfully scale as they grow?
Hire great operations people. The best operations people I’ve worked with have some sort of military background. Those people, I find, are all about organization, structure, and discipline.
I consider myself a perfectionist, but one thing I’ve been surprised at is that the military isn’t about perfection. People who come from that background aren’t afraid to just go for it. They are also very camaraderie-focused and help tremendously in creating a culture where people feel that they have a purpose more than money and where people believe in what they are doing.
What are some of the benefits and/or challenges of being a second-time founder?
I find that you remember the good times and forget about the tough times. The second time around, I forgot how long some things took. You start wondering how you can cut corners and do things faster, but then realize that it can be very hard to cut certain corners and that things will just take longer than you expect.
Every startup wants to grow, obviously. What happens when entrepreneurs realize their companies have outgrown them—and it may be time to get out of their own way?
Oh, that’s a tough one. As a founder, you often hear things like, “It’s time to let the professionals run the company.” But I think it depends on every CEO. It depends what your goals are, and then it's good to look at what you are really good at. Ask yourself what you want to do and if you are still having fun doing what you’re doing.
When an organization gets so big that it isn’t fun anymore and you are just managing, oftentimes people don’t have as much fun. It comes down to bringing in operations people and getting them to buy into the culture. At the end of the day, you have to ask yourself if you’re ready to commit to another layer of management—or if now might be the right time to exit.
Founder + CEO, Alchemy 43
“Starting a company is basically synonymous with uncertainty. You never know what's around the next corner. It's the reason I love it so much and it's also the reason that it's so difficult. This moment looks like that, but exponentially bigger. So many things outside our sphere of control.
So it presents a new type of challenge for a CEO—instead of running a company, we now pivot to minimizing fallout. Making sure our company survives this and that our employees have a job to return to has become the primary focus of my days. It's actually interesting work. It's challenging in a novel way. In order to stay in the right mindset for this type of work, it's been very important to me to stay connected to people, friends, and family, as well as colleagues. Also, daily exercise and mental breaks in the evenings, which seem to involve a lot of baking.”
Co-Founder and CTO, PathSpot
“Right now, life is uneasy. As entrepreneurs, we're used to life being ‘hard.’ We're always hustling to close the next sale, push the next product milestone, recruit the next member of our team, or raise the next funding round. When we want better results, we can always put in more hours, go the extra mile, or push a little harder. When things are hard, just work harder and they get easier. But suddenly, that mantra feels flipped. Budgets are frozen, conferences are cancelled, and businesses are closed. There are new (temporary) roadblocks that we can't simply run through—there is a sense of ‘prepare and wait’ sweeping the startup landscape.
PathSpot is a system that validates hand-washing frequency and effectiveness, with a company mission of reducing the transmission of illness. Before COVID-19, a large part of our routine was education—generating awareness of our product and explaining why handwashing was the most effective way to reduce illness. Now, the problem has entirely changed. Handwashing is more searched and more discussed than it ever has been before. We're suddenly adapting to the new challenges of reduced and frozen budgets in our target market, and how to support a highly in-person, face-to-face industry with a hardware product, while fully remote and socially distancing. As we face new problems, our team is working around the clock to support our quickly growing customers with their hand-hygiene needs, and utilizing our data to try to prepare the restaurant community and public to have the tools necessary for handwashing tracking and efficacy, as consumers and employees are more aware, educated, and focused on transmission of illness.”
Co-CEO, Harper Wilde
“Life is a series of dichotomies. On one hand, I feel very lucky that those closest to me are safe and healthy. On the other hand, I have a deep sadness for the turmoil and loss that permeates daily life. I have confidence in the incredible team at Harper Wilde and our ability to rise to this unprecedented occasion, while also having concern about the unknown unknowns, which seem to have multiplied over the past few weeks.
Being a founder has, in some ways, prepared me for this emotional rollercoaster, where high highs and low lows are often felt in the same hour or even in the same moment. I'm trying right now to make space to acknowledge all of these contradicting thoughts and then push them aside to focus on what's right in front of me.”
Founder and CEO, Elliot
“Life as an entrepreneur, and human being, has never looked or felt more real. Due to today's circumstances, life's forced us all to take a hard look at reality and revisit what's important. While life's challenging, I'm grateful to have a team that's proven to be able to operate under duress, make decisions, and find solutions to complex problems. Moreover, appreciative in having investors that believe in our ability to persevere. For me, my life looks simpler and in many ways more genuine, given I'm using COVID-19 as an opportunity to strengthen key relationships and just get back to the basics. In short, life looks different, but sometimes different is good.”
Co-Founder + CEO, Mented Cosmetics
“Right now, my life looks a lot calmer than it did a month ago. Prior to quarantine, I commuted from Philly to New York every day, traveled pretty frequently for work, and spent most of my free time exploring new restaurants in Philly, where my husband and I moved less than a year ago. These days, I mostly travel up and down my stairs and occasionally to my terrace.
Being forced to slow down so significantly has given me a lot of time to focus on what's most important to me. I've rediscovered how much I love to learn (I've been learning three to four songs a week on piano), gossip (I've been having nightly FaceTime calls with my girls), and go for long walks. I've also been amazed at how resilient our team has been. We've launched a new product, hosted a fantastic Instagram Live, tested multiple new promotions—and they haven't skipped a beat. As weird of a time as it's been, I'm grateful for all of the little lessons that have come with it.”
Co-Founder, Great Jones
“It's a powerful time to be in the business of home cooking. We're very fortunate to be experiencing a continued surge in demand for Great Jones products, and we've expanded our services and content to give further support to home cooks. We've extended the hours for Potline—our free text service for real-time recipe advice—and we've leveraged our partnerships to host a daily cooking tutorial on Instagram. Recent participants include Dominique Ansel and Erin McDowell.
On a personal note, Maddy and I are leading daily standups with our team, as well as enjoying bi-weekly digital happy hours, where we can connect and check in on each other emotionally.”
“As an early-stage, high-risk consumer startup, chaos has been the norm for us. Without the ability to adapt quickly or even pivot, we would've shut down a long time ago. That being said, our terminal values, the core of what we're trying to change in the world, haven't budged at all. I think that's critical. You have to clearly delineate your terminal and instrumental values—the things you should be stubborn about and the things you should be radically open-minded about.”
Co-Founder and CEO
“The biggest change for us, operationally, was transitioning to a remote-working culture. In March, as COVID started unfolding in the U.S., we had to sit down and dedicate time to creating a system in which my team would keep the open communication and creativity flowing, even when we are not sitting next to each other. Setting those parameters since the get-go was extremely effective, because in a world with so much uncertainty, my team knew exactly what to expect and how we would operate during
“We obviously didn’t anticipate in March that we would not be back in the office for so long. However, the structure that we set up has naturally evolved over time. One thing that has been noticeable is how important it is to have a team with high EQ, or emotional intelligence. I’m extremely happy with the way my team has adapted to the new normal—and open communication has been key during this process.”
“Like many other early-stage companies, Kanga has moved to a fully remote work model. We’ve adapted in two major ways: The first is operational and the second is psychological. Operationally, we are now focused on asynchronous work. Daily, we do remote standups posted in Slack at the start of the workday, spend our Monday planning, and check in on Thursday, but the majority of the work is done whenever employees are most effective.
“I've noticed some of our developers commit late at night, others work frequently on weekends, but ultimately team members work in a manner that is most efficient to them. I made a conscious decision to move everyone to New York for our first year in business, which not only fostered a sense of belonging but also immense trust. This trust is essential, so team members know everyone is working hard and will get tasks done, so the company can succeed.
“Maintaining that sense of belonging is the reason for that second change. The pandemic has been incredibly stressful for everyone, and it's important for every employee to know their team members are there to support them. Having a constant temperature check on team psychology is necessary. We spend a lot of extra time on how we are feeling, and everyone on the team has a one-on-one catch-up about work and life with every teammate, every other week. Also, we have a special channel in Slack where we post how we're feeling every one or two weeks. This personal status report is called the ‘PPPM,’ which stands for ‘Progress People Problems Me.’ Finally, we do a virtual team happy hour every Friday afternoon where we play online versions of board games that promote team bonding, such as Spyfall, Code Names, or Mafia.”
Co-Founder and CEO
“During the crisis, NestEgg has had an important role in our customers’ lives, to help them operate in the new normal. We helped renters stay in their homes during financial hardship, and we added reliability to our rental owners’ income during an unpredictable time. These stresses will leave an echo long after the event itself is behind us, and our customers will feel renewed urgency around managing their properties efficiently online. We're focused on that need by pivoting our roadmap around optimizing NOI and cash flow for rental owners.
“Today, we are seeing 100% rent collection success rate versus the wider industry benchmark of 70-80% and we added $1.4M in rent business in the last 30 days alone. We recognized that landlords and tenants tend to have very different personal financial situations, but today's paradigm for renting forces them to commit to a single shared process that often only works for one party. As a landlord, you want rent from your tenants on the 1st, because that's when all your loans and other expenses are due, but many tenants get paid weekly or rely on disability checks that are sent mid-month, so coming up with the first big rent payment at the beginning of the month is difficult for them to budget to and sets them up for failure. The landlord-tenant relationship becomes very transactional and adversarial.
“We totally restructured this by decoupling when the landlord gets paid from when tenant's pay. NestEgg pays rental owners up front on the 1st, and residents have flexible 30 day terms to pay us anytime throughout the month. They can split rent with roommates, pay across multiple payment methods, and even make installments. Especially now, it’s a win-win.”
Co-Founder and CEO
“The health, economic, environmental, and social crises we have faced in 2020 have led to an unprecedented amount of stress, anxiety, insomnia, physical pain, and other health challenges. WTHN's mission is to help our clients thrive with both mental and physical well-being. Given our unique offerings of time-tested, science-backed healing therapies—acupuncture, cupping, acupressure, herbal medicine, and more—we are focusing on the best ways to support our community members and their health during this time.
“In late May, acupuncture was designated an essential health service by the State of New York, enabling us to re-open our New York City acupuncture studio, and we have done so with the safety of our team and clients as our highest priority and a heightened sense of urgency around our mission to provide safe, natural, and effective healing. (More on how that experience can be found here and our rigorous sanitization protocols here.) Given the changes in our client base—primarily the large numbers that have left New York either permanently or temporarily since COVID began—we are focusing on rebuilding the base and finding innovative ways to connect with new clients, including partnerships with other businesses/brands as well as referrals from other healthcare providers. There is an increased sense of urgency around the power of preventative medicine and people are thinking about how to stay healthy more than ever before.
"We have doubled down on our digital efforts, including launching virtual healing sessions that are 1x1 telehealth consultations with an acupuncturist for guided acupressure, stretching, herbal consultations, breathwork, and more—so we will continue offering that option to our clients that may need to stay home longer.”
Co-Founder and CEO
“At Sleek, we are reinventing the way people wait in lines. Much long before COVID-19 broke out, we were already envisioning a future where you could step into a venue— and not only instantly know of the wait times, but also choose to have your phone hold your spot in the line.
“As the world grapples with COVID-19, we initially paused to see how our customers' needs evolved in this new normal. Given safety is a topmost priority for businesses to stay open, not having to wait in lines is now a necessity versus a nice-to-have. And lines have come to exponentially grow by six times given the social distancing.
“We re-adjusted our focus from the live-events market and are assisting essential businesses with our core technology to keep the community safe, from grocery stores to food trucks, and now have added tens of thousands of new businesses as customers. You can check out our COVID-focused product offering here.”
Founder and CEO
“Even under normal circumstances, building a new business requires a somewhat contradictory combination of focus and flexibility. That’s especially true now with uncertainty in every aspect of life and business. There are a few key elements that help us operate and succeed in this new ‘normal.’
“Fluid communications are essential. We accomplish this with frequent huddles that keep everyone in sync. When we were thrust into a remote work mode in March, we immediately put in place all-hands stand-ups every morning to align around the priorities of the day, twice weekly virtual happy hours to stay connected and have fun, plus the usual sprint planning and demo days. I can honestly say we have more effective and focused communication now than ever before.
“The ability to compartmentalize and focus on the task at hand is also essential, and this applies to both filtering out the chaos of the world and also successful multitasking. I think the team finds our work a reprieve from the stressors of the world—I know I do. Usually it’s the other way around, right?
“And last but not least, it’s essential to have a high degree of comfort with ambiguity, which we screen for as part of our hiring process. We’re blessed with a seasoned, mature team—we take the curves and ups and downs together, with logic and without emotion.”