Matt created Tali, a timekeeping solution for lawyers powered by voice technology like Amazon Alexa, and Google Assistant. Like many first start-ups, they encountered many mistakes while trying to build. He created Tali in the effort to help lawyers more effectively keep track of their time instead of using pen and paper. Ultimately, due to a lack of traction and a misfit product market they had to wind things down.
Hi Matt! What’s your background, and what are you currently working on
Hey there – My name I Matt Volm. I’m currently 33 years old, a dad to two young boys, and the former CEO and Co-Founder of a now-defunct VC-backed technology startup called Tali.
Tali was a timekeeping solution for lawyers powered by voice technology like Amazon Alexa and Google Assistant. With Tali, you could record your time via voice (“hey Alexa, tell Tali to log 12 minutes to the Hanson divorce matter”), and Tali would take what you said and turn it into a time entry form that you could sync to your existing billing system. Tali was a SaaS product, so users could purchase a monthly subscription ($12/user per month) or an annual subscription ($120/user per year). We raised nearly $1.0M of venture capital to fund the business and ran the company for nearly 2.5 years, but ultimately wound things down due to lack of product-market fit.
What motivated you to start Tali
I grew up in a small town in Wisconsin and was the first person in my family to go to college. I focused on accounting and finance, and my first job out of school was as a CPA. I only lasted a few years as a CPA, and then moved into corporate finance, which I did for a few years as well before going to graduate school, attending Berkeley Haas School of Business and getting my MBA. After my MBA, I did management consulting for a few years, but ultimately went back into corporate finance, which is what I was doing before starting Tali.
As you can see, my career path has been rather meandering and includes a variety of experiences. I always thought that starting a company would be fun, but had no clue how it was actually done. Tali was my first startup, so before starting the company I had no idea how entrepreneurs came up with ideas for their startups. I thought you had to be an engineer, ultimately solving some very difficult problems with a complicated piece of technology. Turns out, I was wrong.
The idea for Tali all started one night in my dining room. My wife is an attorney, so needs to track every six-minute increments of her day in order to appropriately bill her time. She tracks all of her time using pen and paper, and will then spend a few hours each week at our dining room table manually entering this data into her electronic time and billing system. I saw her doing this one evening as I was setting a timer with our newly purchased Amazon Echo, so I randomly threw out the idea “hey, wouldn’t it be great if you could just tell Alexa to track your time for you, and she would turn it into a time entry form?”
My wife thought it was a decent idea, so I went out and spoke to as many other attorneys as I could. I learned that they had the same problem around timekeeping, and thought a voice application through Amazon Alexa would be a novel way to solve their problems. After this initial customer discovery, I thought the idea had some weight, so went to form a team around it.
Our strategy at Tali was to get a paid product into market as quickly as we possibly could. We wanted to do this for two reasons:
Technology risk — we wanted to prove that our solution could work end to end, meaning you could log your billable time with Amazon Alexa and get that time entry into your billing or invoicing system, all without manually filling out a time entry form and
Market risk — we wanted to prove that people would be willing to pay for this type of solution
Which were your marketing strategies to grow your business?
We tried everything – inside sales, Google AdWords, Facebook Ads, reseller arrangements, etc. etc. – but nothing ended up working. Near the end of Tali, sales were slow and only growing about 10%-15% per month. We reached about $3,000 of monthly recurring revenue (MRR) but nothing we did on the sales and marketing side seemed to move the needle.
This was mostly driven by our target customer, which was a solo or small firm attorney. Because of this, account sizes were typically small (less than 10 users) and our price was also low ($10 – 12 per user per month), meaning our average revenue per account was $100 or less. This meant we couldn’t afford to spend a lot of money to land these smaller accounts in a profitable way, and we never ended up figuring out an efficient way to spend our sales and marketing dollars in a way that generated favorable unit economics (e.g. customer acquisition cost when compared to customer lifetime value).
Which were the causes of Tali failure?
We had some hiccups early on, every startup does, but we continued to grind away throughout 2018, and what a grind it was.
During 2018, we focused heavily on improving the product. Everything we did had a positive impact on user experience and engagement, but nothing really moved the needle. Our average daily active users (DAU) crept up, but was never greater than 10% of our total paid user base. We were able to get a lot more people activated because of the on boarding improvements AW and Hoi made, but our free trial to paid conversion rate (those users that started with a free 30-day trial and then converted to a paid subscriber) never rose above 3.0%.
We were growing our paid user base each month, but growth was slow (only 10% — ۱۵%) and driven mostly by direct sales efforts (which meant unsustainable unit economics). We even reduced the price from $30/user/month to $12/user/month to see if this would help drive sales, but it didn’t. We ended 2018 with around 250 paid users, more than we had at the end of 2017, but because of our price reduction, our MRR remained flat at roughly $3k.
By December 2018 I knew we were in trouble. At this point, I had raised nearly $1.0M and we had 2.5 months of runway left.
I went to our current investors to ask for another follow on, and they all said no.
I tried to find angel investors that would write some smaller checks, and they all said no.
I even tried to find some later-stage investors that would write a larger check, but they all said no too.
We weren’t going to grow our way out of this problem, and we weren’t going get additional capital either, which left us with two options — put things in cruise control or zombie mode, or shut things down.
I think the most difficult part in this process was simply admitting the fact that shutting things down was an option. As an entrepreneur, you need to solve your way out of a lot of problems and the odds are always stacked against you. So how do you know if this is just another one of those things you need to plow through, or if it’s different? Here’s what I did.
Which were your biggest mistakes and challenges you had to overcome?
We were first-time founders, so everything was brand new to us. We had never raised venture capital before, built a product from scratch, or tested sales and marketing techniques, along with a whole lot more. While this was a significant challenge we had to overcome, it also helped us throughout our journey – we had no preconceived notion of how things were supposed to be done, no bias from our past experiences.
Which were your expenses? Did you achieve some revenue? In the end, how much money did you lose?
We ran Tali for nearly 2.5 years and spent about $750k during that time (most of our spend was spent on salaries/labor, marketing, and travel) We did have a revenue generating product, but were only generating ~$3.0k of MRR at the time we wound things down.
If you had to start over, what would you do differently?
I would have run more experiments in verticals outside of legal, such as accounting and consulting, which also have a pain point around timekeeping. This could have given us the option to pivot and focus on a different industry with potentially more growth potential and initial traction.
I would have focused less on voice technology as the core of our product. Ultimately, our product was not able to meet the expectations of our users because the voice technology we were leveraging just wasn’t where we needed it to be so we could be successful. If we would have coupled voice technology where it made sense with an improved visual and on-screen UI/UX I think we would’ve been successful.۰ افزودن به مورد علاقه