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Establishing, maintaining and growing a small or medium business or a start-up comes with its fair share of challenges. Several macro-environmental factors contribute to the possibility of failure, as a significant amount of startups fail due to various reasons. Of these factors, the legal aspect is usually underestimated and overlooked which is startling, as it plays a significant role in determining the success or failure, and the number of times a business has to pivot.
Research has shown that unsupportive business environments hinder the growth of businesses through unfriendly regulations, vague laws, and a generally unpleasant legal system.
Generally, even in supportive business environments, entrepreneurs and small or medium business owners are still caught unawares by the ever-changing regulations that affect the industry in which their business is focused. While some are plagued with the unavailability of information, or availability of vague information with regards to their sector, others are overwhelmed with numerous amount of information they are not able to understand or sort through to identify the ones applicable to their business.
To understand and overcome these legal and regulatory obstacles, companies hire the services of legal practitioners and consultancy firms which usually increases the cost structure of the business while the small-scale business owner seeks advise from lawyer acquaintance or uses Google to gather information.
The business model canvas below depicts the logical framework of a legal SaaS platform that provides curated and up-to-date data of every law and regulation that relates to the specific nature of the users business within a desired region.
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While not promising to successfully reduce the probability of failure, as there are other elements involved, the platform aims to eliminate, to a certain extent, the risk of complications and barriers that may arise due to legal and regulatory factors.
There is a surge in the rise of start-ups that are revolutionizing the legal industry, a sphere which, prior to now, was regarded as the least innovation prone industry due to the rigidity of its nature. The new wave of legal technology has swept the market, disrupting different aspects of law with services and software that target practice and case management to case prediction and risk and compliance with reg-tech companies increasing the future demand for regulatory technology to reach $118.7 billion by 2020 (Bellmaker, 2016).
Figure 1: The legal technology Market Map (CB Insights Research, 2018)
Although the most publicized categories that start-ups and businesses are venturing into are Reg-Tech, Lawyer search, lawyer research, legal education and e-discovery, artificial intelligence, albeit controversial, has started making an appearance on the legal technology scene. While only 7.5 percent of law firms have started utilizing Artificial Intelligence (AI) technology and another 29 percent are starting to explore their options (2018 Legal Industry Outlook, 2018), businesses and start-ups have adopted the use of AI in developing legal solutions such as Blue J Legal, which uses artificial intelligence to simulate the judgment of a court in a different situation helping you prepare for uncertainties (LawSites, 2018).
Legal Terrain is a potent hybrid of the risk and compliance sector and the analytics and search sector of the legal industry. Legal Terrain is a cloud-based data repository platform where can have access to every legal regulation, law, policy, relating to their business that can be a barrier at different stages of the entrepreneurial process. Small and medium business owners can utilize this service as well, particularly in the aspect of expanding their business presence beyond their present jurisdiction. As opposed to hiring a consultancy firm to conduct research and render advisory services with regards to the legal topography of the new environment and the impact it will have on the business, a simple search on the platform is all it takes for them to be well informed.
Legal Terrain will have one mass market customer segment; internet users, as this is a web-based search service. To be more specific, we will take on both the B2B and B2C client relationship form. The main target will be individuals who are entrepreneurs or business inclined but have little to no existing knowledge about the legal requirements, restrictions or laws relating to the business idea they have come up with or are currently working on in a particular region and want to garner concise information on their own without having to hire a consultancy firm or communicate with a legal practitioner.
The service is also targeted at investors and business angels, both individuals, and organizations, who are interested in investing funds into start-ups at several stages. Although, the general aim of investing is to assist these businesses to acquire funds which will eventually lead to substantial returns or equity, investors need to be well-informed about the barriers and restrictions that these businesses may encounter in the different macroeconomic environments, legal being of the most important, as this helps them evaluate the long-term viability of the business and make their decisions to invest more carefully. The platform can be put to great use during pitching competitions.
Small and Medium Scale Enterprises (SMEs), looking to scale their existing businesses to new regions are also a target focus for the platform as they may need to be well-informed about import and export regulations. Eliminating the use of legal consultancy services, the research and development unit can utilize this platform in-house, empowering them to make appropriate decisions based on up-to-the-minute data.
Legal Terrain plans to begin its operations in Dublin, as the startup culture is high and on the continuous rises. The development of the business will see it extending its database and resources to other European nations, countries with high global entrepreneurship index and to countries where businesses target when adopting the market development scaling strategy.
Table 1: Top Ten Countries in the Global Entrepreneurship Index (?cs, Szerb and Lloyd, 2018)
Table 2: Entrepreneurial Abilities Sub-Index and Pillar Values for the First 25 Countries, 2018 (?cs, Szerb and Lloyd, 2018)
Adopting the direct distribution method, the main channel through which will reach out target segment is the online platform. The customers will be able to type in the nature or category of the business and the desired location of the establishment. Using these keywords, the system will be able to generate, in an easy to understand format, the applicable laws, regulations, barriers, and workaround that is applicable to the business in that region. E-mails will also be utilized in communicating with the different customer segments, keeping them up to date with new updates and innovation.
Relationships with the customer will be in the form of self-service. The user interface of the platform will be clean and easily navigable and the results generated will be displayed in an understandable format thus facilitating a 'do it yourself' relationship. Customers will also have access to a 24/7 chat help desk to assist with any enquiries or help needed.
In arriving at the value propositions, the customer's jobs, pains, and gains were critically researched on and examined. Some of them include;
Awareness of legislation, rules, and regulations relating to their business in the specified jurisdiction.
Get suggested workarounds to help circumvent the barriers
They want to establish, operate, scale and invest in businesses without experiencing unexpected legal or regulatory hurdles along the way that can lead to setbacks.
These were juxtaposed against the service, the pain-killers and the gain creators, which are;
A web platform that generates all rules, regulations and possible legal barriers pertaining to type/nature of a business established in a specified jurisdiction
Predictive analytics that foretells possible changes in the regulation landscape based on trends and precedence
Updates on regulatory changes in the specified region, that affects the users business
Eliminates the possibility of being caught unawares by legal regulations by providing curated regulations and possible legal barriers the business will likely encounter in an easily understandable format.
Provides suggestions on how to circumvent these barriers and how to follow these regulations
By using this service, customers get the opportunity to plan ahead and anticipate regulatory changes in their business environment.
It puts the funds that would have been paid to a lawyer or consultancy firm to better use.
Produces quality curated and simplified regulatory and legal data that customers find beneficial
From these, the value proposition was created which is :
Our web platform service helps individuals and SMEs who want to establish, operate, scale and invest in businesses without experiencing unexpected legal or regulatory hurdles by eliminating the legal uncertainty that comes with establishing and running a business and enhancing the chances of a smoother establishment process.
Our key regular activities will involve Research, Development and Data Mining, which involves the continual expansion of the data repository to contain all necessary information customers will require and to continually improve on the ones on ground, as regulations constantly evolve. In a bid to gather customer insight and improve service offerings, we will gather feedback from customers as well as utilize site analytics tools and surveys. Maintenance of the server and the web platform will be routinely carried out to ensure the efficient running of the platform. Marketing is a necessary activity that has to be carried out, as it will enhance the growth of the business
To successfully create value for our target customers, the key resources required are human resources, the employees who will mainly be data scientists, front end, back end, and full stack developers, and systems administrator. The registration of our proprietary, software as well as the purchase of servers, will also be required to successfully operate the business
Establishing the right alliances with the right people can determine how far a business will go. Some of the cogent partners the business will require are, highly skilled and competent technologically inclined individuals, our cloud service and payment gateway providers.
Primarily, the cost structure for Legal Terrain will include fixed costs such as salary, rent for an office space and license fees for our proprietary software. Funds will also be invested in acquiring and maintaining the SaaS infrastructure. The cost of research, branding, and marketing will also be put into consideration
A lot of SaaS platforms adopt the freemium pricing model, which seems to work for the giants like Google or mail chimp, but there are certain factors in place, such as them having millions of users and not having a niche SaaS market segment, that makes this model advantageous for them.
Legal Terrain is going to adopt the Free trial pricing Strategy. The platform and all its features will be made available at no cost for two weeks. In this time frame, the ploy is to get the users to a point where they get deeply involved with the service and would not be able to do without it. When this is achieved, and the trial expires, the users pay a monthly fee to get continuous and eternal access to the service again. We estimate a conversion rate of between 35-50% after users are done with the trial period. Individuals will pay a monthly sum of 19.99 while SME's will pay a monthly sum of 45.99.
The business model canvas depicts how the nine components seamlessly interact to capture and provide the value of legal terrain to its various customer segments.
Entreprenurship Individual. (2019, Nov 19). Retrieved from https://studymoose.com/entreprenurship-individual-essay
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