Justin Maxwell, co-founder and chief design officer, Smith.ai
Tell us a bit about yourself and how you came to be the founder of a company in the legal industry. What was your inspiration?
“Designer” is somewhat of an overused term, but I’ve been a product designer in the tech industry since 1998. In that time, I’ve worked on everything from movie websites for Sony to user interfaces for Apple. The major shift in my career came in 2009, when Intuit, the maker of QuickBooks, acquired our Mint.com product and I began to understand the importance of small businesses and the tools that help them thrive. In 2015, while I was at Google, my now co-founder, Aaron Lee, told me, “It’s time for you to leave Google, because we’re starting a company.”
The timing was perfect. I was working with many professionals who needed a buffer between themselves and the clients (including me). For example, we had a vexatious litigant neighbor and I was working closely with Greg Klingsporn of Jorgenson, Siegel, McClure & Flegel, LLP to deal with it, and I’d just call him whenever something came up. Similarly, my co-founder, Aaron, was in the middle of a remodel, and constantly unable to reach his interior designer. We spent the next three months interviewing attorneys, financial planners, marketers, and others who put a high financial value on their time to understand the pain points around client qualification and intake, and the weaknesses of the existing “answering services” they were using. Being in tech, we knew we could bring something new to the table, and Smith.ai was born.
How did your team come together? Introduce yourself – what do you (each) bring to the table?
Aaron and my wife, Cynthia, worked together at NASA many years ago, and we’ve stayed friends since. This is a gross oversimplification since we both do 1,000 things: I am process-oriented and focus on brand and product cohesion and team operations; Aaron is ruthlessly efficient at all costs, keeps us building and moving forward, and making the right decisions, as the CEO and tech lead. Our Head of Marketing & Partnerships, Maddy Martin, was introduced to us by Aaron’s co-founder from a previous company. She’s the reason everyone knows about Smith.ai now, and the reason why we’ve increased our software integrations tenfold this year.
We have other amazing people on our team — too many to list — ranging from our receptionists to our engineers, most of whom have joined us through personal referrals.
What stage are you at? Are you in the money? How’s it going? Give us a sense of things – the good, the bad and the ugly.
Things are great. Teamwise, we have evolved from just the two of us and a freelance receptionist in 2015 to a staff now covering North America, growing faster than I can remember new names. To be honest, I wouldn’t describe what we are doing as “in the money,” as that would be shortsighted business. As we are focused on growth and the impact we can make, we are continually reinvesting as much as possible in processes and new technology for our customers. So essentially, sure, we’re doing something special and growing, but we aren’t buying Ferraris with that money. Instead, we are adding new products to our suite: Keypad, our cloud phone system, came to life because half of our customers were complaining about how frustrating their existing VOIP phone solutions were. And now, Smith.ai Chat, our AI + human-powered website chat, is solving a need that other website chat widgets weren’t: actual client qualification and booking. So in that sense, things are amazing, and I couldn’t be happier about where we are right now.
But since you want honesty, here we go! The ugly? Learning to scale a team near-exponentially has been quite a ride. While gaining more customers helps our product get better (e.g., training the AI to qualify legal clients), it’s also surfaced the need for more rigorous processes in everything from hiring receptionists to onboarding new clients. We’re in the clear now, but we did have a rough month in September 2017 when our new clients outpaced our ability to hire new receptionists.
And the bad? Sure. We’re in Silicon Valley, so we’ve witnessed some questionable ethics. So far we’ve seen two competitors literally steal images and text from our website, and we’ve seen a VC firm copy our pitch deck and spin up a company trying to replicate what we are doing (spoiler: they failed — you can’t replicate two years of customer trust and experience). Thanks to working at Apple and Mint, I learned to keep an eye on the copycats, but not let them get you down.
What problem(s) do you solve? Alternatively, what new or better opportunity do you create?
In our field, I’m wary of “opportunity creators” as it often is either a rebrand of an existing behavior, or a novel new behavior people won’t stick with. For example, there’s huge momentum around “conversational marketing,” which has basically translated to, “Instead of having a ‘contact us’ page, put our $50/month widget on your homepage” — and people still don’t get a response. That’s the niche we’ve jumped into both on- and off-line.
Offline, attorneys were faced with a few familiar scenarios. They might ignore calls and check voicemail a few times each day. By the time they called the potential client back — if they even reached them — the client might have found someone else. They might miss calls from the county clerk or opposing counsel. Or, they’d look at every incoming call, constantly be interrupted, and be inefficient with their time. At best, they might employ a “virtual receptionist” service, pay too much for per-minute pricing, and still not get much beyond call summaries.
Online, attorneys are still doing something similar. They might put a chat widget on their website. Those chats are then either unstaffed and the digital equivalent of voicemail, or staffed by people who are just reading off an FAQ at best, using chat tools designed for software sales, not small-business customer qualification.
Which gets to the problems we solve. We don’t just answer calls or chats. That’s table stakes. What we do is qualify clients for attorneys, manage communications (we make outbound calls, too), and provide the best technology to do it.
What do you see as your greatest opportunity (including ideal exit)?
Our greatest opportunity right now is disrupting business messaging for small businesses, which includes law firms. Our AI, our U.S.-based live receptionists, and our years of experience qualifying customers gives us a unique edge that no off-the-shelf chat widget, bot, or outsourced chat staff can replicate.
What’s your greatest challenge (in case someone reading can help you with it)?
Continually scaling our company to meet user demand from both technological and people perspectives. Identifying and automating mundane tasks via AI to make our receptionists more efficient and to make it easier for them to find flow in their jobs.
Who inspires you – and why? Feel free to share your favorite inspirational quote or anecdote.
I’m never good with the “who inspires you” question. My family, friends, and coworkers. I try to surround myself with people I admire, and married the one I admire most. But here’s a quote we live by at Smith.ai:
“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.” ― André Gide
Or, as Aaron reminds the team frequently, “People don’t read.”
What was your greatest failure – what did you learn from it and how have you applied it?
As mentioned back in #3 — not planning for growth adequately. Rewind to September 2017. We knew (ahead of time) that we were going to be praised on a popular podcast, knew this would likely generate new customers, but didn’t adjust our hiring to anticipate it. Instead, we found ourselves with dozens of new businesses needing rapid onboarding, an overloaded onboarding team, an overloaded support team, and an overloaded receptionist team. We tried to hire fast by lowering our standards, thinking we could train this cohort to be as great as our existing receptionists, and learned the hard way. Very few of those hires are still with us. As Ron Clark writes in Move Your Bus, it’s very difficult to turn a low performer into a high performer overnight. From this experience, we created more rigorous standards around hiring and a more automated screening process, and we added processes to address marketing pushes and elasticity for peaks or outages.
What was your greatest success – how did you leverage it?
I’m sorry if this sounds cliche: Our greatest success was getting our first customer referral, and we’ve been leveraging it since. No amount of advertising, sponsorship, or trickery makes up for one business owner recommending you to another simply because they love what you do. We’ve had customers approach us asking if they can be official Smith.ai ambassadors, a role we didn’t even think of — they did. So we continue to bend over backwards to keep our great clients happy with our products and services, and we leverage their goodwill in recommending us to their friends and peers.
Did you ever think of quitting? Assuming you didn’t actually quit, what did you learn from that time – and how have you applied it?
No. Our team works very well together, we’re constantly learning from one another, we’re directly affecting the success of our customers, and we’re getting paid to do it.
Have you found the legal industry to be receptive to innovation? How ready for change do you think the legal industry is?
Clearly the legal industry is very receptive to innovation. In the past decade, all customer-focused tech has been focused on web sales and ecommerce. Those markets are now saturated, and the existing solutions aren’t right for the legal industry. We’ve seen businesses like Lexicata, Clio, TrialPay, and others thrive because of their focus on the needs of legal. We see the same for client qualification — the status quo has been “outsource answering the phone.” New technology brings lower costs and more efficiency, so we’ve seen tremendous interest from customers.
As we covered in our “Are you Lawyering or Laboring?” infographic, the average attorney only spends 1.9 hours per day on billable hours. That’s crazy. If we — or any innovation — can increase that time by reducing unnecessary tasks, interruptions, etc., the overall efficiency of the firm improves.
Furthermore, the stakes have changed. It’s common knowledge that in small business, when people pick a solution, they stick with it for years. But now that data is more portable, we are seeing clients jump from one CRM to another when their existing one isn’t meeting their needs. We even see tools that import the data from the old platform for their users to make it seamless.
What do you see as being the greatest opportunity for the legal industry in the next decade?
Of course we’re biased, but the answer is AI. AI is the new layer of obfuscating things you don’t want to do, hiding tasks and work under a layer of technology. For example, 10 years ago you still had to mail physical copies of documents. Now, digital notarization and online uploading mean you can do much of this from your phone (ok, you still have the occasional fax). Someone, somewhere might still be getting a physical printout of your document, but you don’t have to be the one mailing it to them. AI brings the same benefit. There are tasks that need to be done — conflict checks, SOPs, immigration status checks, case lookups, etc., and we can do that with automated processes and AI instead of relying on a person in real time. What this allows is amplifying the benefit and expertise of the attorneys and practices, allowing them to scale up and serve far more clients because their time is spent on their core work.
Where do you plan to be in the same period? Any thoughts on exit?
If you focus on building a product, serving your customers’ needs, and growing a sustainable business, you don’t need to worry about exit. Being in Silicon Valley, exits can be a funny thing. You see exits often as a way to slap advertising on an acquired user base, or synergistic exits where the acquisition benefits a larger system (e.g., Intuit acquiring us at Mint.com and using our categorization technology for their entire platform). We see lots of partnership opportunities — many of which have been illuminated by the integration requests of our customers. When people focus on the exit, the customers usually end up losing. As for where we plan to be in the same period? Bill Gates said it best: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”