Start-up: Legal Forms
Lagos-based start-up, Legal Forms, is an online legal services company, looking to assist Nigerian entrepreneurs and small-business owners – typically with registering a business. Some of their paid services include company registration, trademarking and patenting. However, they do offer all the Corporate Affairs Commission (CAC) forms – that one needs to register a company – for free. In addition, the platform also matches Nigerian lawyers with clients, for which it takes a 12.5% referral fee.
Legal Forms was launched on 1 March 2016 by founder Sadiq Okocha, who started the company because of frustrations with the registration processes in his country. How we made it in Africa spoke to him about his business.
1. How did you finance your start-up?
In most tech start-ups, I imagine the majority of costs are in product development and marketing. Fortunately, I’m a coder so I developed the site on my own. I think it’s essential that all tech start-up founders know at least a bit of coding, otherwise you’d be at the mercy of your developers, which can be a huge burden if it’s outsourced.
I realised that at least a basic understanding of coding was essential after my previous hobby: Traffix, a crowd-sourced traffic reports for Lagos. I’d wait for weeks at a time for developers to make a small, but essential tweak. As for marketing, my expenses are minimal and limited to a few Facebook campaigns. I’m currently running a bunch of tiny little experiments in order to find which marketing activities have the greatest return on investment.
2. If you were given US$1m to invest in your company now, where would it go?
I would use $100,000 for experiments and set aside the remaining $900,000. I’d compare conversion rates for Google AdWords, Facebook ads, and sponsored tweets. I’d carefully examine how these activities affect product sales, lawyer sign-ups, and engagement in the legal question and answer section. Based on the results of my experiments, I’d invest the remaining money into the key activities.
I feel as though having access to too much money at the start makes you unimaginative. You’d resort to solving your problems by throwing money at them, instead of using your own ingenuity.
3. What risks does your business face?
I think it’s always risky to start a business in a financial downturn. So there is certainly an economic risk right now. Besides that, most social media marketing dashboards (think Facebook and Twitter) bill in dollars. This is a problem right now with the current naira-dollar exchange rates. For those unfamiliar with the situation in Nigeria, for some time there has been a shortage of dollars in the country. Therefore, dollars are even more expensive. So, one must be very mindful of costs and understand that $10 worth of marketing might end up costing you the equivalent of $15.
4. So far, what has proven to be the most successful form of marketing?
Word-of-mouth has been very helpful for us. In Africa especially, I think most consumers are still a bit hesitant to give out their banking card details online. However, when your friend recommends a service to you, or even when you read about a service online, it helps to remove some of the mystique.
5. Describe your most exciting entrepreneurial moment.
Hmmm. I’m going to cheat and say I’ve had two most exciting moments. The first one would be launch day of course. It’s rewarding to see your idea become a reality.
The second would be the launch of the Legal Forms’ referral service. It’s exciting to have a platform business, where you coordinate buyers and sellers. There’s twice as much excitement for us and twice as many people to delight with awesome service. If we continue to do our jobs well, we’re hoping this leads to a whole lot of recommendations from clients and customers alike.
6. What has been the biggest mistake you have made in your start-up, and what have you learnt from it?
I don’t even know where to start. Every day I’m making mistakes, but my biggest mistake was probably taking the time to write a detailed business plan.
When you’re writing a business plan, you spend all these hours planning your business, instead of building your business. You do a tonne of market research and it feels really good when you quote these large numbers. You have this ideal, rosy picture of how it’s all going to go. You think you’ve got an answer to every single threat. Then something goes wrong, as it always does, and just like that your business plan is obsolete!
If I could start again, I would abandon the traditional business plan, and use the lean canvas model instead. The lean canvas is a one page business plan that forces you to focus on the essentials: Key partners, key activities, value proposition, customer relationships, channels, customer segments, key resources, cost structure, and revenue streams.
The lean canvas is easy to update and it “understands” the experimental and iterative nature of start-ups better than the traditional business plan.