How nQ Zebraworks CEO Bill Bice grew nQ Zebraworks to $2.6M revenue and 500 customers in 2024.

hey folks my guest today is bill bice he's the ceo at nq zebraworks which is tackling the challenges created by work from anywhere in legal organizations he started his first software company at 18 and has since been on the founding team or a seat investor in over 27 startups bill you ready to take us to the top absolutely all right very cool so jump into this nqzw.com so are you selling directly to legal firms we are okay and i assume did would you build this for yourself well no it's it's coming back to my roots that first company you mentioned i started when i was 18 was was in the legal tech vertical and i've kind of circled back around and come back into into that market and it's it's actually pretty exciting time to be in uh to be in this niche so we're having we're having a lot of fun going after it what are some of the issues that legal firms have when there is no central office and everyone's remote yeah sort of the issue that everybody's tackling but but law firms and legal organizations uh you know government agencies corporate uh law departments you know it's a pretty conservative bunch and the pandemic has been this outside force that has suddenly caused change to occur and so and i really don't look at it as a as a change agent it's more like an accelerator right it took things that were already happening and now instead of taking a year it's all you know 10 years it's all been compressed into one year so all these issues of of flexibility and hybrid work have sort of been forced on law firms where they really didn't have to deal with deal with them before and it's it's an environment where security is really important and being able to extend your infrastructure and and support work from anywhere is is is tough for them to do so that's that's what we've been going after interesting and when did you launch the business officially well so this this came out of a merger so the in cube portion was launched in 2003 i started zebraworks in 2019 and to get back into the legal market and so we we merged the two together last year and what helped me understand what firms are paying on average per month to use your technology well it's pretty cost effective so it's in the you know ten dollar per month per user kind of range and these these are typically pretty large firms with with large you know large user bases so instead of looking at it on a seat basis though what's sort of the average firm like so you basically have the average number of seats they're paying to start with are we talking like a thousand bucks a month or like 10 grand a month well all the above so we work with the largest firms in the in the world down to down to mid-sized firms so it could be uh 50 users at you know a firm you know firm down the street from you or it could be a firm that has you know several thousand users i know it's hard to do but if i did sort of force you into an average what would you say your sweet spot is what's the middle uh the middle is probably um you know hundred to two hundred thousand dollar uh annual recurring revenue projects okay okay fair enough hundred fifty thousand bucks a year and that's you know if a lot of the legal firms paying you 150 grand a year how many seats are they probably using uh that's in the several you know several hundred seats several hundred so how many law firms have several hundred folks that they could pay for sheets like what do you think the total total amount of legal forms you can sell to is well it is a nichi market so we talk a lot about the amla 1000 in the in the us which are sort of those firms that uh that gets you down to to about 200 attorneys roughly and most firms have about twice the staff of the number of attorneys that you see okay interesting so you launched this in 2019 you're obviously scaling nicely have you done this all bootstrap or did you raise capital uh no so part of part of the merger was uh was a capital infusion that uh let us let us go out and and grow like we want to i don't know that i understand the whole merger thing right so when did the merger happen and why did you merger well so we we did that in 2020 so we were out looking to raise the series a for four zebra work so we built our very first product and it was time to to go to market and the rat we ended up taking was was merging with a well-established legal tech company in queue and as part of that uh funding was was part of the deal so it was kind of a there's kind of a twofer but let's let's put more mass behind it and and bring the funding to the table at the same time i want to try and simplify this but we don't have tons of time right so you're saying nq at the time i was doing more revenue than zebra correct absolutely yes we're now leading though as ceo as the resulting organization right correct and so i mean from like a cap table perspective do they just own like 80 and you only own 20 or like how did you work for some of those economics well it was it was a little bit of a reverse merger in the sense that part of the attractiveness in doing it was the management team that we had had created with zebraworks so what we did when we put zebraworks together is we brought the original team of that that first company started when it was 18 was called pro law software and the genesis of zebraworks was to bring that management team back together you know we spent a ton of time in the legal market we know you know we know this area inside and out so it was that expertise that we were really bringing to to the table and we built a cloud platform we tied that to the existing on-premise technology that we have from ncu and you know it's kind of a joke in in the legal market that the way you be successful in this market is do things today that everybody else was doing 10 years ago so right now we're moving to the cloud and so that's that's sort of the logic of the combination yeah okay that makes sense to me but what what i mean i know you can't share a lot of this but like the cap table today is it basically like anyone that invested in nq sort of sits as one sort of spv on your cap table and then you have a portion and then you have an employee option pool for the rest of your people at zebra yeah it's even simpler than that because because nq had been uh bought by a company called retcon that is a publicly held company in australia so you have sort of one piece that comes from the rec on side and then the other piece from from zebraworks that publicly traded company owns a bit of your equity exactly i see i see and very interesting okay and how much what was the cash injection component of the merger how much so the the original goal when we were going to do the series a was was to do a five million dollar raise and although we didn't announce it we've we inherited the deal was was exceeding what we were looking for in in funding that's great what were you targeting valuation wise when you were going out for the 5 million uh so we were early stage so that was one of the attractive elements of this is that it was really good for everybody that was involved so our goal when when we were just raising the series a was was to get something in the eight to ten million dollar uh pre yep okay eight to ten pre which should put you out with like 12 to you know 15 posts something like that selling 30 of the business exactly and what you're saying is through this new deal you basically were able to get actually more than that plus a great new partner and plus a customer base that you can move from on-prem to cloud at zebra increase rpoo upsell the cloud cloud instance yeah we instantly went from from six people to 60 overnight with a really experienced team that you know lives in this market and so our ability to scale you know just put us in a different league you know day one fascinating okay now how many customers today total uh we've got about 500. wow 500 law firms and then add up all the seats how many attorneys across those 500 firms that's a great question i haven't actually added it up oh i thought you would be like tracking that number every day that's the exciting number well it is and and i know it better for the newer things so so we're also doing the transition from the traditional enterprise sale to subscription model so you know that of course that's a difficult thing for any software company to go through but it you know dramatically increases the value of the company to uh to do that so it i i don't have the same standard sas metrics because we're we're right in the middle of making that transition yeah what is the split so how many customers are on-prem customers only and how many are zebra cloud customers only well so the cloud products are brand new so you know that's that's not a that's not a ton of firms that we have sold only new but frankly really what firms want is that sort of bridge to the cloud you know the small firms have have migrated and you can find small firms that are 100 cloud but the rest of the market is is this sort of hybrid model between on-prem and and cloud and so if i asked you like what is your monthly recurring revenue today would you include...