Creating an Internet StartupPosted by Chris Garrett / January 30, 2012
Interview with Invaulta founder Craig Spink
Chris: Hello and welcome to the Innovators Series on KND TV. I’m Chris Garrett and today I’m joined by Craig Spink who’s a professional musician, solicitor and startup software developer. Thanks for joining us, Craig.
You are curently rolling out a large online software product called Invaulta. Can you tell us about that?
Craig: Invaulta is a cloud-based document management system for lawyers, accountants and financial planners. Essentially it stores individual’s legal documents, financial documents and their personal documents. It allows for client’s to access their documents online and it also allows for the client to share those documents with their other professional advisors like accountants, bankers, any of their professional advisors who need access to tax returns, financial statements, trust deeds, wills and powers of attorney.
It is a tool for your whole life and we’re calling our product Life Files Online because it is about the files that make up your life, being your legal, financial and personal documents.
So all the professional firms need is an Internet connection. So, even for the small general practitioner, maybe a sole practitioner out in the suburbs who don’t have server infrastructure, having the Internet allows them to get started and use our application.
Chris: Sounds fantastic and there was obviously space in the market of that sort of thing? I don’t know of anything else like Invaulta.
Craig: Yes. My background is as an estate lawyer so the number of times a new client would come to me to have their estate planning done and I’d say, “Could I have a copy of your family trust deed?” And, it may take four weeks, six weeks for the client to ring the accountant and then for the accountant to send it over to me.
Craig: This way if the accountant has those documents in Invaulta, the client can make them available at the very first meeting.
And, it would allow me as the estate-planning lawyer to access the trust deed at the same meeting and we can get on with the work and finish it quicker. So basically it eliminates the delay and it also takes it away from the client. They don’t need to do anything. It allows the professional advisor to really manage their client’s affairs.
Chris: This is a large software product. Did you start out with a prototype? What advantage did you get from that?
Craig: I certainly think having a prototype first allowed me to take it to some law firms and say, “Here’s my concept. Here’s a rough version of how it’s going to work.” And, then use that feedback to determine if it’s a viable business model and a viable product that is worth investing in.
Chris: Could you reuse any of that prototype?
Craig: Not really but I think from ultimately in what is a fairly complex piece of software for a software developer, I think to understand. If you’re just talking about things and saying, “It needs to do this. It needs to do this. It needs to do this.” It’s useful for to then have the prototype where you can go, click here and it goes there, and it goes there and actually put it in some context.
Chris: Yeah, very useful for explaining complex ideas and structures.
Craig: And, I have no doubt that we’ve finished with a better product now because in the scoping stage, I was able to show something that had been built as a prototype and give it that context rather than here’s an idea out here and how we want this software to work and you’ve got to actually conceptualize it in your own head.
Chris: Yeah and was it enough to get seed funding from your prototype?
Craig: Yep, it also helped in the investment stage being able to show something tangible to investors. Again, it’s as much about them understanding the concept. They got it, but being able to show them something definitely helps being able to raise funds.
Chris: So you went down the venture capital path rather than trying to fund it organically?
Craig: Yes. In my situation, I’d invested quite a bit of my own money and it was then time to find others to help fund it just to kick it along a bit quicker.
Chris: Do you have any advice for businesses starting out in this process, for chasing capital?
Craig: It’s hard work.
You’ve got to be very determined and you’ve got to be prepared for the knockbacks, and you’ve got to be prepared that you’ll invest a lot of time in some people who show a lot of interest. And then you’ve got to be prepared when they don’t invest to say, “Well okay, it’s not for them. That’s okay. I’m moving on,” and you’ve just got to manage that disappointment in the rollercoaster of it.
Chris: I imagine it’s easy to chase smaller amounts from a few sources than one large investment.
Craig: That’s right, absolutely. But I think what it does need is generally the first one or two when you’re chasing that money. Everyone sits on the fence until the first one says, “Yeah, I believe in this concept enough to put money in.”
And once you’ve found the first one or two, particularly if you can find one or two that deliver a chunk. It gives the others some confidence to then say, “Well, if others are prepared to put their money up then I will, too.”
Chris: And, did they want any creative control?
Craig: None of my investors do. They’re purely other business people that have said, “I like the concept. I like the idea. I like what you’re trying to achieve, we’ll invest, you run with it.
Chris: Fantastic. That’s the best scenario, really? Yeah because you’ve got a clear picture of where you want to go.
Chris: So developing software, I know all too well is a pretty difficult beast to wrangle. Especially a six-month project where there are a lot of moving parts. How do you control that process?
Craig: I think being available is the most important thing and being hands-on with it. Certainly as I talk to different developers before I decided on KND, there were I guess you could do a full spec and then hand it over and let the developers do their thing. Or you can be very involved in an iterative development where you do scope it but you’ve just got to be engaged. So in my situation, I quit my job at the CBD firm I was at and started my own legal practice. So I had the flexibility and time that if I was unsure; if I was concerned about something; if I didn’t understand then I had complete control to say, “Hey guys, we need a meeting.”
Chris: Ccould you see this working with offshore developers? A lot of businesses tend to look to offshore business. It’s a hell of a lot cheaper.
Craig: Yeah and I think the discreet parts could be done and I certainly think for future variations and future additions, it may be something as a small add-on in terms of cost we’d consider going offshore. But I think for a substantive piece of software that’s going to take six to nine months to build … I heard too many horror stories where it was sent offshore and three months later you see the first round of code and it functions completely differently to how you’d expect.
So having someone in Brisbane you can go and see them. You can sit down and view what they’ve been doing.
Chris: Scribble on the whiteboard …
Craig: I think again that process for me has led to a better product in the end.
Chris: We get a lot of people who will go offshore for their prototype and then come to us to do the final product.
But they’re usually quite broken by the end of that stage, they’re very wary. We have to sort of nurse them back to health before we can move on.
Chris: You consulted with Bloe on you’re branding and positioning, and I’ve got to say, looks pretty impressive. How much has a strong brand helped you in the role out of Invaulta?
Craig: Certainly when you’re dealing with professional firms, lawyers and accountants, a strong brand helps give credibility to the business. It’s no question if you turn up with a dodgy backyard logo and no business cards, that it’s more difficult to break in and be taken seriously, particularly by the professional firms. They expect a level of substance before they’ll deal with you and I think having a strong brand certainly has allowed me to do that.
We’ve had covers put together for our proposal documents and templates and had them professionally printed. So when we’re handing out packages of what our product does with contracts, etc. It’s all a consistent branding message in the material that we’re providing to our potential customers.
Chris: It speaks volume, doesn’t it? Even though the real nuts and bolts are in the code, the wow factor sells it.
Craig: Yeah, absolutely.
Chris: And in your sales process a lot of people have the notion that if they build something that people will just naturally gravitate to it and they’ll be the next Facebook, and they’ll be buying Ferraris in a week. You’ve had no illusions of that and you’re actually, to my mind, selling this in an old-school way for cloud-based software. You’re just knocking on doors and talking to people face-to-face. How is that going and why have you chosen that path?
Craig: I think initially to get some market share and some clients onboard, I have approached people who I know so saying, “Okay, I’ve been a lawyer for 10 years. I know a lot of lawyers. Let’s start with the people I know, start with the warm contacts.” Get a few of them onboard. Let’s refine our product by getting a few friendly’s onboard and then we’ll worry about the more aggressive marketing strategies once we’ve got our first dozen to twenty odd firms onboard.
Chris: has that been a soft launch where you can iron out bugs and get some feedback?
Craig: Yep, the friendly clients who go into it knowing it’s a new product, not expecting it to work a hundred percent all the time in the early stage will give you honest feedback without harpooning you. They are very important in the process as well.
The challenge I guess on the flipside of that because it is people you know, they do make a lot of suggestions how they would improve it. So say then at the backend where you’ve got to go, “Okay, what am I going to accept? What am I going to take onboard? What am I just going to dismiss because it’ll just preoccupy too much time and distract from getting the main product finished?”
So you’ve just got to take it easy and sit back and consider all the suggestions as well and it can be a flipside to it.
Chris: I think it becomes more easier once you have more volume and more traffic through there, more users because then you’ve got a wisdom of the masses. And, you can sort of say, “Alright, if we get 20 people asking for this feature then we’ll build it in because there’s value in it.”
Chris: Do you think Invaulta will ever be sold completely online?
Craig: It could. Depending on which new markets we decide to get into. Certainly for lawyers and accountants, very traditional, very old school they would never sign up. Well, maybe never is too strong a word but I can’t see them looking at a website one day and going, “Wow, a cool idea. I’m just going to subscribe and pay my money,” without having done proper due diligence on it.
Chris: Which brings me to my last question, we’ve noticed a sizable shift in the legal and accounting industries where that Gen X and Y are beginning to take on management and partnership roles. They’re are digitizing documentation, automating processes and putting a lot things online. They have a lot more trust in the web. Where do you see the legal industry heading in that area.
Craig: I certainly think they are embracing it more. Our first customer was sixty-two years of age, so we do have a profession where there are some of the older generation who are embracing technology and can say, “Well, let’s use the technology that we’ve got out now at our fingertips to better improve our processes, reduce costs, minimize our risk that.” I think if you know in a clear and succinct way you can explain those core things then you can win over the lawyers and the accountants who would more traditionally not look at that. I certainly think with the appropriate education, some of the fear of the cloud can be allayed.
Chris: Do you see Invaulta moving to the mobile web in the near future?
Craig: I’d like to think so, yes. As time and money permits, definitely.
Chris: Yeah, great. Fantastic. Thanks for joining us, Craig.
Craig: Thanks, Chris.
Chris: You’re really leading the way with this sort of thing and it’s great to see software like this pushing the boundaries with the legal industry and more, I would say, serious industries where documentation is highly secure and sensitive. It’s just fantastic to see.
So we’re looking forward to seeing you grow from strength to strength.
This has been The Innovators Series on KND TV.
You can catch all the notes on www.knd.com.au and we hope this has been valuable for you.