[updated November 3, 2019: Clearspire]
Around 992 legal tech company’s sites vanished since 2015. About 328 may be in trouble as well but the good news is that the world founded 2.4 new startups every day in that same time span.
In April we announced embarking on a dark quest: to figure out how many legal tech companies were still alive? The concern was that there were more companies vaporizing than were materializing. We started in 2015 and have collected over 11000 links to companies, projects and, communities worldwide. We ran them all thru a custom build ‘Linkwasher’ which followed a cycle of cleaning, deduplicating and testing on repeat.
If you are wondering what there is to clean about URLs? Plenty. For example, many sites upgraded to a secure sockets layer (SSL) and redirect to an HTTPS-protected domain. Others changed their top-level domain or pivoted to a different name. Asian sites often offer an English version that wreaked havoc on our “washing machine”. While in the USA, some use Cloudflare geo-blocking to prevent non-US visitors from accessing their site. We’ve spoken to them, and they have their reasons. The fact is that the legal industry is in a constant state of flux which is on full display in these links.
So how did we determine the health of a venture? If they are still available on a domain. Those who have a glass-half-empty mentality may argue that many sites are zombies waiting to expire. We took a more optimistic approach and surveyed the machines that run the internet. Server responses can vary wildly. Some servers respond rudely or didn’t want to respond at all. Others are lazy and take their time. Maybe man and machine aren’t that different after all. Eventually, we got answers, and we threw the responses into four big buckets.
Surprisingly, the majority of sites provided a server response of 200 which we considered excellent. The second-largest group was reachable with some redirection and responded with a 300 message. The smallest group responded with something within the 500 range, which indicates trouble with the site itself but the domain should still be there. Finally, the third-largest group came back with nothing, 404 or a GoDaddy domain for sale ad.
In the above analysis, we excluded the Fintech and Wealthtech sites and just worked with the Law, LegalTech, CivicTech, Tax and RiskTech categories. There are more revealing details when you divide these up into companies we registered as bootstrap and haven’t raised capital versus those who did. At a glance, the largest failures raised their cash with an initial coin offering. Remember those ICO fields of dreams? Yet, regularly funded companies also folded and I applaud those like Dealwip and Tali coming forward to share their stories. Note that both of these ventures are still in our ‘Excellent’ column but will inevitably move into our ‘smaller’ ones to the right.
Both stories remind me of the Atlantis of legal tech startups Clearspire: a well funded and much-praised company that disappeared. Clearspire was mentioned as recently as this October even thou they shuttered 5 years ago. This proves the challenge of finding the truth. Both we and machines do our best to represent the world but the reality is always more colorful.
Here’s the good news: we may have lost well over a thousand legal tech ventures in the last five years, but the world also founded 4298 companies with $22.7 Billion in venture capital. If we perform a simple glass-half-full calculation, this comes down to 2.4 new startups each day aiming to impact the legal industry. To reiterate, this includes RiskTech and CivicTech companies as well as Tax and Law. Better yet, according to the Status – Live dashboard, this rate slightly increased to around a 2.7 daily average in the last year. Other metrics like seed funding are trending up as well.
So dead or alive, all companies collectively made an impact on the legal industry. Even in their brief existence, they showed us all the different paths that can lead to a fair society. Therefore, we have to erect a museum where we can honor and learn from them.
..working on it…
Leave a Reply
You must belogged in to post a comment.