Building A Minimum Viable Legal Tech Product

I am regularly engaged by aspiring founders who are trying to navigate the pre-?minimum viable product (MVP) stage of their startups and often asked if having a working product is necessary to validate your market proposition.?

In my opinion, it is not. Equally, I don’t believe you need to raise significant capital, assemble a full development team, or have a product at all to validate and refine your idea.?

In this article, I am going to dive into the essentials of business validation - laying out a framework to reach MVP.?

The core of MVP lies in its name - minimum. It's not about an all-encompassing, feature-rich product right from the start. Instead, it is about strategically validating your concept and focusing on what truly matters.?

4 Key Areas On The Road To MVP?

From my experience, startups often underinvest in defining these foundational components:?

1. Well-Defined Problem Statement: Clearly articulate the problem your solution aims to solve.?
2. Market Differentiation Research: Thoroughly understand your competition and what sets your solution apart.?
3. Minimum Validation: Validate your problem statement and differentiation?
4. MVP Definition: Define what your MVP entails—what it will and won't do to effectively address the identified problem.?

Writing A Problem Statement?

The legal tech landscape is incredibly competitive. You are competing with every other legal tech solution for the time, attention and budget from lawyers and law firms. Your problem will need to be of strategic significance and make a meaningful impact to those you are selling to. ?

A problem statement is like a hypothesis. Before you build a product (solution), you want to first start by outlining the problem in question. Ask yourself things like:?

• What is the problem we are trying to solve??

• Who, specifically, are the clients we are solving this problem for??

• Why is the problem significant to them??

• What happens if the client does not solve this problem??

There are a number of risks to not documenting a problem statement:?

Misaligned Solutions: you risk being broad, unfocused, or solving the wrong problem altogether. When progressing to MVP, a product will be built that either doesn't fully meet the needs of a specific, intended user base and / or has a broad set of features and functionality that won't get used which in turn waste precious and expensive development resource not only in the initial build but also ongoing maintenance.?

Miscalculated Impact: if you fail to deeply understand the quantum of pain within a problem then it can be challenging to communicate the strategic importance of a solution. This in turn makes it difficult to create the urgency and necessity of your product to prospective clients, investors and users. And when the time comes, it will also impact what you can charge.?

Team Miss-Alignment: even a marginally disjointed team who all have a slightly different vision of what will be built can slow you down. Your clients, investors, team and users will feel it too.?

The good news is - the process of documenting a problem statement, assessing impact and getting the team on the same page is relatively simple and cost effective.?

Market Research

Watching The Apprentice is a guilty pleasure for my wife and I. One unfortunate candidate gets caught out every task and often ends up fired as a result. Sometimes it a genuine mistake, based on a lack of experience. Other times (more often than not) it's just business basics.?

It occurred to me that none of the teams on any of the tasks conduct any market research. Teams typically pile into designing their product, producing marketing material, setting their pricing etc and the failings always follow. Probably because it doesn't make for good TV, or not doing it makes the mistakes above more likely.?

But I often see the same is true in the real world. The allure of building your idea into a product can often overshadow the less interesting but none the less important market research. But what is market research? There are three areas that typically startups under invest in.?

Ignoring The Competition: It's crucial to know who your competitors are, what they offer, who they serve, and where the gaps are. The competition also includes the status quo and any other solution that can get the users to the same result. A lack of understanding here can lead you to reinvent the wheel in what is an already crowded marketplace?

Understanding Your Target Audience: every legal tech solution seeks to disrupt or enhance existing processes. But without a deep understanding of the current workflows, pain points, and the stakeholders' resistance to change, it's impossible to know if you can disrupt the status quo. This is perhaps the most pivotal risk as there's a real danger of assuming a problem's prevalence or its impact on potential customers. ?

Underestimating The Importance Of USPs: What sets your solution apart? Failing to define and communicate your Unique Selling Propositions (USPs) will leave potential users and investors questioning why they should care. Lawyers are driven by precision and are some of the most time-poor individuals on the planet. An inability to articulate your differentiators succinctly is not going to be received well.?

Once you have documented your problem statement and completed your market research, you may find that you don’t have a business. And that's ok – far better to have this realization now than to invest significant sums of money to build something no one is going to pay for.?

However, if following these steps you have identified a gap in the market – it can now be more tempting than ever to rush into building an MVP.?

You have invested time, effort and energy to get to this point but there is still one more critical phase before development. Validation.?

Validation

Validation is not speaking to a small subset of your peers, friends, business acquaintances. As humans we have a pre-disposition to want to please others so the feedback you get from your close acquaintances who tell you "what a great idea” is not enough.? But what you really need is unbiased, third-party validation from your ICP (as defined in your market research).?Why is this non-negotiable??

Ensure You Have Identified A Real Problem: It’s easy to fall in love with the idea, but is it really addressing a genuine need? Validation means going beyond assumptions, diving deep into the challenges faced by legal professionals, and ensuring that the problem you aim to solve is both real and significant.?

Refining Your Solution: Validation doesn’t stop at understanding the problem. It’s about continuously refining your solution through feedback, ensuring it not only addresses the problem but does so in a way that is practical, desirable, and sufficiently superior to existing alternatives. There is a difference between interested and willing to pay.?

Market Fit And Differentiation: Legal tech is a competitive market; your solution must not only solve a problem but also stand out. You need to validate your unique value proposition, understand your competitive edge, and ensure your solution is truly differentiated in the market.?

So, how many conversations should you have to validate your problem statement? How do you test and refine a prototype based on real user feedback? There is no one size fits all as every problem is different in its construct and complexity. However, in every case - lean into this stage. Your future self and business will thank you for it. ?

I hope this serves as a useful guide for aspiring legal tech founders. If you need any clarification on the above or are struggling to work through any of these steps - feel free to send me a DM or book a meeting directly from my profile.?

I’m Alex, founder of Legal Tech Collective . We help:? ?

??→ ?? Smart people with great ideas build companies that transform the legal industry?

??→ ?? Companies to validate product ideas, acquire their first clients, and grow through the first millions in revenue?

?? → ?? Scale-ups to expand into new markets and verticals?

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