Sramana Mitra: Let’s go back to when you were going to decide that you were going to do Lawline as a business. You got to a quarter-million dollars in revenue. Double click down into that zero to quarter million dollars in revenue phase.
What was the business model? Whom were you selling to? How were you acquiring customers? Talk to me about the specifics of that part of the journey.
David Schnurman: Our business is continuing legal education. It’s mandatory for about 80% of attorneys to take courses every year to maintain their license. It’s that same thing for about 30 other professions in the world – from teachers to accountants to social workers.
For the most part, it’s a deadline-driven business. I was lucky in terms of the timing because when I started doing it full-time in September, there was a big deadline for Virginia that October.
The business was initially started with a $2,500 loan from my dad. The second source of funds was credit cards. The first thing that we did was buy a lot of direct mail campaigns to Virginia attorneys. We had created about 15 to 20 courses. We were letting them know that we had courses for their deadline.
That October we did $10,000 in revenue. It was just myself. I thought that $10,000 was amazing. I remember going to one of the most expensive restaurants with my wife to celebrate and said to her, “It can’t get much better than this.”
Of course, we were just getting started. We just repeated that model. In every state that had that deadline, we bought direct mail marketing. We would buy a list and then we would start doing emails and before you knew it, we were growing in New York, Illinois, California, and Virginia.
By the end of the second year, we scaled pretty quickly from $250,000 to $1,000,000 in revenue by the next year.
Sramana Mitra: Talk about the business model.
David Schnurman: At that time, we were selling courses or bundles. Now, we sell subscriptions. You are buying a class online and we would accredit it. We would stream it or they would download the course to their phones or laptops.
Sramana Mitra: What was the price point at which you were selling the courses? What is the price point of the subscription?
David Schnurman: At that time, we weren’t selling subscriptions. We were selling bundles. We were selling the courses for $50 each. The bundle which was 10 courses together was about $300 to $400 each.
Sramana Mitra: What year was this?
David Schnurman: This was 2007 and 2008.
Sramana Mitra: During this time, you are selling courses and you are going to each city that has an exam deadline and marketing around that. What happens next?
David Schnurman: Eventually, you realize that you cannot do it by yourself, so you start trying to scale your business and you start making your team of initial hires. You try to get sales and marketing people and try to build it out there.
I didn’t know what I was doing. I was trying to hire nice people and of course, it became the traditional model where I was the hub and all the spokes were coming to me. Everything was geared towards me. It was a big learning experience. This went on for five years.
Sramana Mitra: How long did you do it by yourself?
David Schnurman: I was never by myself. I always had an intern at least in the beginning. I even had someone in my law school do it with me and then he wanted to be a partner and that ended it. I think I hired my full-time person right away. I had a team of five.
Looking back then, it was like the wild wild west. That’s how the journey was. I was younger. I’ve learned over the years who I am and what I am good at. I am a typical visionary, big picture person versus holding people accountable and being on top of them.
I can do it, but it just doesn’t give me energy. I can’t do it for the long run. One of the things that I realized in my journey is that strength is not necessarily something that you are good at. A strength is something that gives you energy. A weakness on the other hand is something that takes away your energy. I never realized that for so long and even then I didn’t.
We had a stage where we had the same five people for a while. I had a couple of key hires in the beginning. My best employees were interns that turned into full time. I was just lucky with one of my hires. He was an MBA student at NYU. We just hit it off and he decided to come on full time. He was instrumental for five or six years in helping us grow and scale to millions of dollars in revenue.
There was another person when I hit two million in revenue. He was a salesperson at a gym. He was such a great salesperson. When I went to buy a membership as a corporate sales, I asked him to consult for us to help build the sales team.
I thought that he did such a good job that I asked him to come on full time and before I knew it, I hired him to be the COO of the company. It wasn’t the right fit over the long term, but that was the first step in the direction of trying to get out of the day-to-day role and build it up. That was probably around 2008 or 2009.
This segment is a part in the series : Bootstrapping to $10 Million