Outlaw’s Co-Founder and CEO Evan Schneyer started his first tech company, Wanderfly, nearly a decade ago. It later sold to TripAdvisor, and the experience left him inspired and determined to build a platform that would help users through the contract process. That’s when he and co-founder Dan Dalzotto created Outlaw, an end-to-end contract management platform. Sitting down with Tony Zayasand Andy Halko from Insivia on theSaaS Founder Show, Evan shares his learnings from both companies; how to recognize an opportunity and turn it into a viable product; how his definition of success has changed over time; the importance of putting together a great team; and making contracts fun.
Here are the key takeaways:
- How does one define success and how can that change over time?
- Developing a purpose that serves both the company and its customers
- The inspiration for Outlaw and the process of turning an idea into a product
- Lessons learned from selling Wanderfly and advice for other founders
- What to look for when putting together a team and the positive effect a great team has on the company and product
- Outlaw’s mission of a customer-driven roadmap and making contracts fun
The following interview has been condensed and edited for clarity:
Andy: How do you define success now for yourself and moving into the future, now that you’ve had a couple different experiences in your evolution as a founder?
Evan: Outlaw is true to form for me in terms of being a product- and problem-oriented thing. Dan and I came together several years ago with this frustration around contracts and just wanting to make this whole experience better for everyone. Initially success is “Can we actually build what we’re envisioning? Can we get it to market? Can we start getting customers?” At this point, it’s kind of a boring answer, but it’s making a real business and becoming viable.
Now that we have real customers that we’re serving—they’re happy, we’re growing, we have a sales pipeline—it’s that “boring” answer of success being a successful business, as in operating at a profit, which is supposed to be a fundamental goal of any business.
Andy: How have you developed purpose and that thing you get people rallied behind to be excited to grow the company?
Evan: It evolves over time as our market and customers change. It still starts with the same essence, which is again deep frustration with the way contracts work.
I should mention, I’m a second time tech start-up co-founder and my dad is a retired general counsel. I’ve been around contracts a lot in my career and even before that, and it’s always struck me as it’s a perfect scenario for software to really help, and yet it’s not.
The job of doing a contract is very structured—there’s workflow, there’s lots of people involved, there’s permissions, there’s redlining. We’ve mapped out the whole process, and the tools that people use traditionally for that job are just not the right ones. They’re too general. The original purpose of building the right tool for the job evolved–initially the purpose is building the actual tool, then the purpose is getting that tool into the hands of people and see if we did it right. I’d say now that we have what I would characterize as product-market fit with a real customers based in the mid-market tier, which is not huge businesses necessarily, but businesses with 50-500 employees and up, who need to touch contracts in some way, shape or form, who have contract process and a sales team of 20 people and they have an in-house counsel of a few people and C level—there are a bunch of people who have this need and the pleasure of serving these people who get value out of it and pay us for the software and continuing and renewing and growing, that is so validating. It’s a delight, honestly. Our whole team–sales, marketing and product–revels in that purpose together.
Andy: Contracts from the consumer side are the thing I avoid. Any time I have to deal with them I have to get an attorney involved, it’s like the worst day of my life to have to look over this document.
Evan: Exactly. One of the very first manifestations of the product vision was an overview layer, kind of like a cover sheet, to basically explain the thing in plain English and improve that recipient experience. Not to replace the contract but to package it up nicely so the sender can maintain a good relationship with you.
It is a very valuable feature and we put it on all of our contracts because it helps to get a deal done. But it wasn’t until very recently that we started seeing requests for that feature. Or clients who had been using Outlaw for a year-and-a-half heard us talking about it on product video and decided, “That would be helpful.” Our CS team is funneling those feature requests our way and we’re like, “Yes! Overviews! Someone is using the original essence of why we built this thing!”
Andy: I was going to say, can you have a slider bar for me that’s like, summarize it at a 3rd grade level, a 1st grade level, you know, that way I can slide it all the way down to “Contract Good.”
Evan: You’re going back to even a pre-alpha prototype level. We had this crazy idea, almost like Google maps with zoom-in levels of detail. It was way too much work.
The Overview feature is optional. A lot of customers have their contracts and just want to use that. But it is still central in that original vision–end-to-end, making the whole thing better for everyone, from sender to people generating it to people getting internal approvals on drafts to send out. And especially the recipient. One of the major differentiators is our user experience is really seamless overall and even enjoyable to use, which is not a word you associate with contracts. But it’s really essential in focusing on the recipient and their experience. Considering them a first-class citizen in respect to the overall contract lifecycle is not something we see anyone else doing, because they are not the paying customer. The paying customer is the sender. But we can serve our senders better if we help them give their recipients and their counterparties a good experience.
Andy: You’ve hinted at your origin story a couple of times. Can you talk about that period of time of the epiphany?
Evan: The idea came several years before starting it. I always had that general sense of, “There’s a better way of doing this.” And every time I did contracts with Wanderfly, my first start-up, from 2009 to 2012, I always had that frustration, but we were a travel business and it was so far from what we were doing I wasn’t going to jump in and try to solve that then. We were fortunate to find an exit in that first experience and we were ultimately acquired by Tripadvisor.
That process was just a bigger more glorified version of the same thing. It was a lot of talking, you get to that verbal agreement stage—with more stakeholders, obviously—but you agree on price and agree on high-level terms, and sign a term sheet–the term sheet is kind of like the overview layer I was talking about, and for an acquisition it’s still a couple of pages but it’s readable, it’s in English, everyone gets what’s going on. And going from the term sheet to the final definitive agreement for the transaction was 150 pages or something. That took another 7 or 8 weeks and I was just so frustrated by that experience, by the time we signed that I was like, “This is the next thing. This is the next thing I’m going to do.”
So I had that idea from exiting my first start-up to start this next one. And then it was a few years later when I met Dan, and he had a lot of similar frustrations with the process of contracts. We had already started working together on freelance work and projects so we knew we could work together well. Also, he’s a designer, I’m a coder, so that’s a pretty good pairing for a co-founding team. We started kicking around this idea and we went pretty deep in, not a formal UX research but we really mapped out the whole process that I was talking about. We thought about how contracts work. From his perspective as a frequent recipient to mine as a sender or admin on various types of deals. We have a lot of friends and family in the agency world with lots of knowledge about how regular business contract cycles work. And we mapped out a whole thing at an upstate pre-founding retreat.
Andy: I’m curious, we talk to a number of founders, and a big part of this audience is start-ups and people looking to start-up, so the exit process–everyone looks at it like it’s the pie in the sky. Tell me what is the misnomer or what don’t people really understand about that process? What’s the biggest thing you can takeaway?
Evan: One takeaway is that you’ve got to be really clear and hopefully get it in the contract of what the plan is. Not just what’s the transaction, but what’s the business plan after that? And that runs the gamut. There are talent acquisitions where from the start it’s, “We don’t care about your brand or product, we just want the team.” There’s the other end of the spectrum–I’d say Youtube is a great example where it’s like, “This is an amazing thing, we don’t just want to own it but we’re going to build it and grow it and keep everything totally intact.” And then there’s everything in between. Because of the complexity of this transaction, even financials aside–that can change. And not with anyone’s intention. Two people can be aligned at one moment and then you get the term sheet and then you’re way deep into it and things change or someone else has more power at a certain point so it can really really morph without any malice on either side. It can just change a lot. It goes back to that purpose.
This is one of those pieces of advice that’s impossible to follow—certainly on a founder side. I’d say be really clear and pointed about that purpose and know why you’re selling your company. It’s impossible to follow because when someone comes knocking on your door and wants to buy your company, the party music starts blaring in your head and it’s hard to hear over that sometimes.
Know what you’re doing, know what you want to achieve out of it, and be really clear and forward about that. And hopefully that’s exactly what the buyer wants too. And even if it is, that might not be where you land in 6 months post-transaction, but at least you have better odds.
Tony: Backing up a little bit…You went through the process a number of different ways with the contracts and realized this was an opportunity. How did you turn that into a minimal viable product and then go from there? What did that look like in the early stages?
Evan: The way I like to break down that answer is, “What constitutes a big deal?” Whether financially or in the life of a company. The answer to what’s a big deal for us is dramatically changing and evolving and growing every couple of months. When we started, we spent a good year or so on it ourselves, prototyping, putting it in the hands of friends. It was still a big deal in those stages—it’s a big deal to have a product at all; it’s a big deal to use it ourselves for our first couple of contracts; and it’s a big deal, when you’re starting from nothing, to have anyone using what you made successfully and paying you for it, even if they’re only paying you $20/month for single users or very tiny businesses. There’s still an opportunity space for that market, but very quickly we were gravitating to much bigger companies. It’s a different problem because the really small companies, they didn’t even have contracts. Their problem is they’re not usually the sender, they’re usually the recipient. If they are the sender, it’s once every 2 months that they happen to be in control of sending a service contract to a new customer, but most of the time it’s inbound–someone sends them a Docusign link and they just sign it and cross their fingers. We couldn’t even really solve that problem for them, so we started going up-market, and as we progressed up-market, serving bigger customers, the answer to what’s a big deal for us changed dramatically by orders of magnitude. Initially it was, ”Oh my god, someone signed on for a year to pay $240 for this thing!” And then a few months later it was 10 times that, and a few more months later it was 10 times that.
I think we’ve found our real sweet spot now, which is mid-market. Even that can be a moving target because there are so many businesses out there who are in that not-huge companies but solid, real companies range: $10-50 million in annual revenue, 50-500 employees. They have their act together and they use contracts every day. There are so many businesses like that. For them, paying an annual rate of $10-25k for a system that meets their needs is easily, any way you slice it–whether it’s about cost savings or improving deal flow and upside or being a repository for the 2,000 or so contracts they’ve signed over the last 20 years of being in business–any way you slice it, it’s easily justifiable. There’s a huge addressable market of that segment. So now it’s no longer a big deal when we get an inbound lead or an outbound lead from one of those businesses. Now the next order of magnitude, the $50k annual deals, edging into Enterprise, that’s a big deal.
It changes through the years. We try to make a practice of taking snapshots of that, asking ourselves every couple of months “What’s a big deal?” It’s not always about a sale or a customer, but what is a big event from our perspective as founders. It’s cool to see the answer to that getting bigger and bigger.
Andy: It’s a fun evolution. I think your industry’s gotta have some decent competitors. How do you handle that? I’m asking this almost from an emotional rather than a tactical standpoint, you gotta hit these barriers of like, ugh, am I really going in the right direction or is this harder than I think it is? How do you, as a founder, go through those cycles and keep yourself motivated and get yourself past some of those things that are scary in some ways?
Evan: I think, Dan and I, we have a great marketing and sales and customer success team who all funnel the information about how others are describing themselves, making sure we’re competitive in those regards, but at a gut level, I would actually say I don’t really think about the competition. I think about the customer. I think about the prospects we are talking about and, going back to that product-driven purpose, whether we’re meeting their needs. Lots of people are pretty self-aware and sophisticated about their needs. These are real businesses now. They’ve got legal operations people and in-house counsel and VPs of Ops and Sales and stuff, whose jobs rely on these processes. They come to us and say, “We need something that does this this this and this.” And we turn around and say, “We do all those things, and a couple things we do a different way.” And they say, “We’re comparing you to these others,” and that’s when the competition gets in, but it’s a very problem/solution mindset.
Follow what works. When you see someone come in the door and they say, “I need this,” and you sell them that, and they’re happy. Then they ask for something else, or you get three more requests for an adjacent feature that would solve a different flow or a different use case, we say, “Well, we’re 100% on these guys but we weren’t able to fully cater to this other one or these prospects or we’re losing deals because we don’t have this thing that someone else has, so let’s build that thing.” Because we’re so product-centric, myself and Dan, it’s not just easy but it’s actually fun to check those boxes. And then, as far as the competition goes, because it’s so product-forward and we’re so hellbent on really solving this problem fully for customers, that shows in our reviews. We have a lot of really incredibly happy customers which gives us great rankings on software review sites, which is where our best prospects are coming from and comparing us to the competition. It goes back to purpose. Being really deadest on solving that problem, but also having the humility to know when you get it wrong.
In our first year, year-and-a-half, Dan and I were really kind of bullish on that overview feature. Then we realized, even though we think this is valuable, it’s confusing people. Just because we built it doesn’t mean it’s the right thing to showcase. Make it optional and take it out of the demo and don’t even mention it until a year later when someone is already using the rest of it successfully.
I think I briefly referred to having no ego about it. Dan and I are adamant about that, both just personally between the two of us and I think we’ve really–I don’t want to say enforced–but influenced the team about that. You gotta take feedback. You can’t learn if you think you’re always right.
Andy: I’ve seen a lot of start-ups fail because of that. The founder has that ego and they don’t want to change and they aren’t willing to be wrong so they go into the marketplace with this strong idea and try to force their clients to that idea rather than shaping to what their clients’ needs are.
Evan: That mentality is really baked into our product development process. Our roadmap is entirely customer-driven at this point. It’s just people asking for things and us seeing patterns and what they need and then putting it in front of them and saying, “Is this what you meant? No? Ok, let’s tweak it a little further.” “Is this what you meant? Ok good.”
Even on the sales front–we just had a new account exec start and she was a little bummed about one of the early demos not going totally smoothly. You have to have that in order to learn. As long as you acknowledge it, figure out what could have been better and where you can learn for the next one, that’s a win. That’s how you improve. You can’t go in expecting perfection right out of the gate.
Andy: Really love the customer-driven roadmap and having that mindset, for sure.
Evan: That’s a challenging one. It’s a balance. There certainly are [customers] so much in their own world they wouldn’t think to ask for a solution that would dramatically move the needle.
It’s really interesting the order of things we built. We way overshot the minimum viable and built this really advanced, fully proprietary contract system, and that was much harder and much more work and not exactly customer-driven initially in terms of the core technology. Then as we started interacting with customers we found we really needed to build that bridge so they can get those quick wins. They need to move these documents from here to here with these peoples approvals and we can say, “Yes, we can do that for you.” And we start doing that and then say, “By the way, there’s this other thing here you might want to check out at some point.” And then in a year they’re completely off that process and everything is automated and magic.
Tony: Great upward trajectory. What would you say you look for, when you bring new people in, in new talent? What are the traits that are most important to you?
Evan: That kind of varies depending on skillset and area, but I would say without exception we need them to be good, decent people, so that’s usually the culture fit piece. We’re still at a pretty early stage and everyone knows each other and is really really invested, and it doesn’t work to have people who don’t want to work together. I would say high EQ is a big component of that, not having any ego. Obviously there are days when there are little frictions between people here and there, and we’re hitting a certain size now where not everyone can know and be close to everyone else, especially now with full-remote. For a couple of months, there were new hires we worked with who we had never met. But I think genuine decency and being in it for the right reasons, being in it to be a part of something and really create value. If you’re on the sales side it’s more deliver and exchange value with customers, but not in it for some of the start-up culture stuff–not in it to have a big team under you; not in it for the amount of VC money you can raise; not in it for the ego reasons, basically. There’s the qualifications for the job and then there’s the attitude. You want both of those to be excellent. You want the best people and with the best attitude, but on start-up compensation packages. When you’re operating within constraints, you’re frequently faced with one or the other. You have someone who’s great at the job but doesn’t entirely have the right attitude, or has a great attitude, but isn’t entirely the best person for the job yet. I would 100% of the time choose the latter. The attitude just matters more. The skills are learnable. If someone’s got the drive and is able to work together well and is in it and is here for the right reasons–they can be flexible, they can move roles, they can acquire skills, they can take feedback—it’s still not necessarily easy, but it’s a better fit for us.
Andy: Is there any summary, if you were to talk to yourself 10 years ago, one piece of advice for you or something you’ve learned that’s been really impactful?
Evan: I kinda did that because this is my second start-up. Somewhere in those early years I put together a spreadsheet–I had a whole bunch of things that went really well, like the team and the product vision, and things I really proactively wanted to change. We were in consumer travel in the first one, which is a challenging space because you’re building software and then giving it away for free. So probably the top thing I said I want to do this differently is I know whatever I build I’m going to be 100% focused all the time and put in everything I’ve got into it. And so if I’m going to do that and my co-founder is going to do that, let’s just sell the software. If we’re going to create this amazing product, it’s much more direct to build great software and sell it than it is to build great software and get tons of people to use it for free so this other group can advertise to them. If you map out the value exchange and the business model, I was like, I want to build great software and sell it directly and have a direct relationship with my customers so when it’s not doing everything they want they tell me what’s wrong. It goes back to that original purpose and goal we were talking about. It’s kind of boring from a business perspective but our goal is to make product and sell product. We want to sell more of the product to get to the point where our business is viable.
Andy: I don’t think it’s boring to want to solve a problem and do it really well. That’s what great founders are—problem solvers. Nothing boring about that.