stacey, Author at LiveOak

by Krishna Srinivasan, Chairman of the Board, DISCO and co-Founding Partner, LiveOak Venture Partners

In October 2013, we received a cold email – it had all the elements at first glance that begged to be ignored. The email came from a person named “CeCe” who talked about a founder called “Kiwi” and a company called “DISCO” in the legal tech space, which was also a category that did not have a history of great companies or large outcomes. But, boy, am I glad that we did not ignore that email!

LiveOak’s entrepreneur-first philosophy meant a commitment to look at all deals, even cold, inbound ones, and we quickly discovered that this showed a lot of promise. Kiwi was the youngest ever graduate from Harvard Law (graduated at 19), was the managing partner of his law firm, and, while practicing law, had hacked together a product that was generating early revenue. When we first met him, we were blown away by his domain knowledge and passion for transforming the future of law. Additional deeper diligence through some friendly litigators in our network indicated that this was an industry that was sorely in need of better products. During deeper discussions with Kiwi, we uncovered a fierce entrepreneurial spirit and a desire to learn and evolve into a world-class tech leader. Armed with the conviction around a domain-rich entrepreneur and large market opportunity, we decided to proceed forward as a founding investor. Ultimately, the company was formed (spun out of his law firm) at the same time as our initial investment.

Wow, aren’t we delighted that we embarked on this journey? Since being founded in December 2013, the company has grown from minimal revenue to now a successful IPO (NYSE: LAW) with a first trade market capitalization above $2.5B As stupendous this trajectory has been, it neither has been a straight line nor influenced by a single factor. I would attribute the success to a combination of domain strength, grit, collaboration, and good ol’ serendipity.

Domain Strength

Yes, Kiwi’s rich domain expertise was what attracted us to DISCO (N.B., the LiveOak playbook entails backing domain-rich, often first-time entrepreneurs and helping them grow into world-class tech entrepreneurs by helping with all aspects of company building). Kiwi’s obsession with using technology to help lawyers practice law has permeated into a company-wide focus on infusing deep legal knowledge into every piece of code shipped out. Every product was conceived after thinking about the problem from the shoes of a lawyer. As a result, DISCO has fused seemingly orthogonal disciplines of deep understanding of law with world-class engineering to create powerful user experiences that lawyers and other legal professionals love. Lots of entrepreneurs have deep knowledge of their respective fields, but Kiwi and the team exemplified the desire and capability to create magical products – an incredible distinguishing feature of the company. In an industry not known for user delight, the product has an impressive NPS of 63.

Like any other ambitious entrepreneur, Kiwi, even from the first pitch, articulated a multi-stage product roadmap for grabbing a market that was tens of billions of dollars. While that looked like a pipe dream then, today, the company is well on its way to grabbing that exact market he had outlined.

DISCO is very much a story of Kiwi parlaying his rich knowledge of law and thinking many moves ahead for their customers and creating products, services, and experiences to meet current and future needs. That domain-rich inventor’s spirit is what positions this company to define and lead legal tech!

Grit

Kiwi and the company have gotten here in no small measure due to their grit. As with most startups innovating in markets not yet proven, there was some doubt from prospective investors, employees, and so on. They questioned how difficult it may be to attract future investments in legal tech, to show strong traction in the market, whether the business model was right, and the impact of competition, even with the strength of DISCO’s product. Now seeing how far DISCO has come, their uncertainties have not come to fruition. These folks simply underestimated Kiwi and the team’s grit to bludgeon their way through these issues.

The financings of the company certainly involved significant effort. However, through them all, Kiwi never had a moment of self-doubt or reduced conviction on the scale of the company that he could build here. So, for all the entrepreneurs out there, don’t be disheartened if there are challenges in getting the financing dollars and terms you want, as there is not often a ton of term-sheet-love spewing out there.

There were challenges in hiring the optimal leaders for every function, given the preferences around possessing both legal domain knowledge and world-class enterprise software sensibilities. This unique combination is not often available due to the lack of standout winners in legal tech. In absence of optimal leaders, Kiwi has operated as a functional head for practically every department at some point of time. Waiting for the right leaders and gritting it out until the right one was available became the mantra. Today, more than half the executive team are lawyers, and several others have deep backgrounds in the legal industry as well as experience at hyper-growth software companies.

Collaboration

The DISCO success story has also been a textbook example of collaboration between a venture capitalist and an entrepreneur, one that began the day we signed the term sheet. We had finally agreed on all the terms, but that was only after a relatively intense set of discussions where I felt that Kiwi came across as a nitpicky litigator who was focused on corner case scenarios rather than a typical pragmatic tech entrepreneur. I told him to go forward, we needed to be convinced that our relationship could be more collaborative rather than one that felt like a legal scrimmage. Kiwi countered that he would drive over to the office to “make his case.” Now that was a rare icy November day, and he was in Houston, 200 miles away! But that would not deter him from driving to Austin! His action to make this future relationship successful was itself enough of a powerful signal that we signed the deal the moment he strode into our office – that cast the die for a trusting, collaborative style throughout our relationship.

Indeed, we have had many spirited debates – should we stay as a pure-play software business or be full-stack with an AI-based review platform? What is the optimal organizational design to sustain our stunning land and expand model? Should we stay mostly channel vs. make a big push on the direct business? How should we position ourselves (as a vertical software player or as a horizontal software for legal category)? Are we ready to go public – the list goes on and on and on. Every one of these questions had enormous underlying ambiguity and given the magnitude of the consequences, of course, had some fierce opinions on both our sides. Unequivocally, in all these situations, the process was intensely collaborative, intellectually honest, and with the sole emphasis on what was best for DISCO.
It was hard to predict on that icy night in November, I simply could not have hoped for a more collaborative partner than Kiwi on this incredible journey.

Serendipity

The origins of our first investment in the company were serendipitous. We at LiveOak were fortunate that we could spot this “diamond” in the volume of cold emails we received.

Many of the unicorn-esque hires on the leadership team required deep legal and enterprise tech expertise and happened as a result of happenstance. We were so fortunate to find Michael Lafair (a lawyer-turned-CFO). We were also lucky to find Andrew Shimek, a rare lawyer-turned Head of Sales who embodied both legal and enterprise sales traits, and Keith Zoellner, our Head of Engineering with expertise building world-class products and legal domain. Many other people and key board members, such as Jim Offerdahl, Colette Pierce Burnette, and Scott Hill, were connections that were made at the right place, right time.

Finally, it was of course, serendipitous that Kiwi and my favorite soul food cuisine was Sichuan food! Ma-Po Tofu from Mala’s Bistro in Houston or A+A Sichuan in Austin was added motivation to meet, eat and strategize often!

After all, good fortune favors the brave and those with grit!

In closing…

The future is even brighter, and the opportunity is seemingly unbounded, and we believe that the company is indeed poised to be one of the largest and most innovative software leaders for decades to come. This is the first software IPO out of Austin in a while, and it’s extra special given it was birthed in Texas and seed invested at inception by a Texas VC firm.

The success of DISCO and its IPO will be even more impactful for Austin and Texas at large as outsized successes are bound to beget many, many more in the future. Also, with Kiwi and a management team that is committed to building a long-term standalone company, DISCO is bound to have a powerful accelerating effect on the Texas ecosystem. DISCO Cares is a company initiative that is helping drive programs that support vulnerable populations across Texas. There are a number of DISCO-alum startups already sprouting, in Austin and Houston.

Having started this journey as the only other board member besides Kiwi at the time of inception, I am honored to now serve as Chairman of the Board as a part of this milestone IPO event. I look forward to helping Kiwi drive and shape DISCO’s next phase of growth for years to come and to contributing to DISCO’s legacy-shaping initiatives, from their community impact to the spawning of more promising entrepreneurs in the decades to come. In particular, we look forward to partnering with many more entrepreneurs who might learn from and imbibe many of this successful young lawyer’s characteristics around domain strength, grit, and collaboration while building their respective successful ventures!

Our journey with DISCO began with a cold e-mail from Kiwi Camara, which led to our initial investment, and today reached a milestone IPO with a first trade market cap of $2.5B. Our Founding Partner and DISCO Chairman, Krishna Srinivasan, shares an intimate look at this remarkable success story.