Today we're going to talk about AI and we're joined by an entrepreneur right in the middle of one of Sweden's fastest tech journeys right now. In record time, they've gone from idea to product to challenging one of our most traditional sectors. In this conversation, we talk about what it actually takes to build this kind of speed. How do you pitch your company and how do you lead when growth comes faster than the organization can keep up? A warm welcome to Masterclass and to a conversation with Max Junestrand. So, let's get started.
I think you're perhaps typically someone who has a hard time sitting still.
A little bit, actually. But I played a lot of computer games when I was growing up, and that's how you learned to sit still for a very long time and be focused.
But you really haven't been sitting still this week. We were just talking, you've just come back from Slash in Finland. You were in Germany.
Yes. And on Sunday I'm flying to New York for the day, and then to London, and then home, and then it's the next thing.
Do your weeks look like this?
Yes, we travel about four days a week, roughly, and it was very strange. I was at... there was no way to get between Berlin and Slash for our thing, and one of our investors was going to be at this event, and they have a lot of money.
And they said, 'It's okay, you can come in your... like your PJ's.'
I was just like, 'Am I supposed to come in my pajamas? That's not possible.' And they were like, 'No, we'll pick you up in our private jet.' And I was just like, what is happening? It was completely insane.
It would have been really fun if you had shown up there with like a...
Pajamas. Yes, but that was what I was thinking. So you start to learn how these people put it all together.
Yes, something like that.
Mm. But okay. So this is what the weeks look like, and it's been like this for you for maybe the last two years. Legora's journey has gone fast.
Yes, but I think it has been... every quarter has been a bit of a new company, and every quarter we've never done an annual plan.
We've never had an annual budget.
Absolutely not. We plan quarterly, and then we say, 'Wouldn't it be incredible if we could double this quarter?'
Good. I just wanted to double-check that.
We have a very capable finance department that handles everything very correctly, and we sell to lawyers.
Which also means that we are good at compliance, data management, security, and so on.
But in the early days, it was more like running around Stockholm with my little briefcase and doing demos.
And I still keep that up. I probably work, yes, about 30% in commercial or customer relationships, but then the size has grown, of course, which means more travel. And we just signed the biggest firm in Australia.
It was really fun. Yes. And it was a super tough A/B test. They tested several products and so on, and we came out on top. And as part of that, we were supposed to do onboarding in person in Australia. Okay, so it was just a matter of sitting down and going there. It was fantastic. It was really fun.
Mm. Show up in your pajamas.
But okay. Because I'm thinking anyway, now we're jumping right into Legora and that you absolutely don't do annual cycles, but it has gone very, very fast. Legora's entire journey. And so, you are young. It wasn't that long ago that you graduated, I was going to say, but it feels like a while ago since you graduated and you've managed to do a lot between when you graduated and... you live like 100 years in seven years, perhaps.
But I'm thinking, for those who don't know you, Max, how would you introduce yourself?
I'm a guy who grew up in the archipelago. Lived on Dalarö. My first job was as a boat mechanic. Then I became a sailing school teacher, and that was the best summer job. Then you could come back with a nice tan and a life vest back to school. Perfect. Then I started studying at Sigtuna, because I thought it was fun to have a more cultural school experience.
What did you study in high school?
I studied natural sciences, but you could take extra courses in art and music, and I played a lot of piano. But I never wanted to play classical piano, so I played rock piano.
No, no, no. There's a lot I don't do anymore that I did then. But you had a sailboat and it was really cozy. Then my dad was an entrepreneur, he started two companies during the dot-com era. Both went to zero. They took on too much venture capital.
And then he bought a boat marina, which is why I grew up in the archipelago. I started studying at KTH, studied computer science. It was fun, but after half a year it didn't feel like a full-time gig. So then I started working full-time as a programmer, and that was fun, but after a while that didn't feel so exciting either, so I started studying at Handels. And really, during those two or three years, I doubled up, I finished KTH and Handels, I worked full-time on the side, so I tried a lot of things. And I finished Handels, but I actually didn't finish KTH. So when I talk to my girlfriend's parents, I've graduated, but when I talk to investors, I'm a dropout, which is perfect. And I think I'm very curious, but above all, I like to win, I like to compete.
I think my description at the beginning is accurate, that you probably can't really sit still either.
No, maybe not. But I'm good at focusing, and I'm good at knowing what I should do and what I shouldn't do, and allocating my time correctly.
We've scaled Legora now from... you met us very early on.
Yes. No, this is... I actually usually bring this up as an example sometimes, that I think I had a chance to invest there in the beginning if I had been a bit more on it.
No, but we wanted you to invest. You said no. So for all listeners, Evelina had the chance to invest half a million kronor in Legora, which today would have been valued at...
Oh damn, my lie detector is going off, I would have felt much more comfortable with 600 million kronor.
Yes. No, but it's a painful realization. But I think it has to be a damn expensive lesson. And yes, so more about me. I finished school, it was super fun. I was quite involved in the student union. Tried to, even if you're competitive, you can still have a somewhat balanced life. And after all that, working a lot, studying a lot, I went on an exchange to the USA. I took completely different courses. So I took salsa, poetry, ballet.
Really fun. I finished the salsa. I actually dropped out of the ballet.
It was a bit too boring, you had to stand and stretch your toes for half a year.
But what was the interest in that? Was it the cultural interest?
No, but I think it's fun to dance. I've never done it. I thought this is perfect. I've never had the chance to take a dance class before.
And then I took difficult math courses on the side, so it was a good balance. And I came home from that, and then I had actually planned to finish the last semester at Handels in Madrid. I was going to go on an exchange, but then we had kicked off Leja, as we were called then.
Yes, exactly, and you were called that before.
Judillica, but no one could pronounce it, not even I could.
It was a bit difficult. And then it was Leja, and then you changed to Legora. What was the biggest reason for changing to Legora?
Or threatened with being sued.
No, from Lea, which is another legal tech.
Oh. So there wasn't much to do about it.
So we asked, we knew many capable lawyers, so we asked some capable IP lawyers who said, 'No, you probably won't win that.'
And then we asked ChatGPT for some good names, and...
Mm. But I saw that your dad was also involved in...
Yes, but it was actually him who... Yes. We had some naming agency and it was a lot of work and nonsense around that, and I was quite pragmatic, so I thought, let's just ask GPT to come up with things. And I talked a lot with my dad. He's probably my idol in a way, and it's great. We're great, and when I walk home from Mästersamsgatan to Artillerigatan, I call him.
It's a short call. You have like... no, but it's like 15 minutes. It's quite reasonable. And then we started talking about these names, and maybe he didn't have anything to do that evening, so he started coming up with names in ChatGPT.
Okay.
And then he came up with five or six suggestions, and then we took...
Does it have any meaning?
I think Agora, someone can correct me if I'm wrong, I think Agora means like a marketplace in Latin or a gathering place or coming together in some way.
But it doesn't have anything to do with legal.
No, but with your platform, you can probably think so, because it's collaborative. It's starting to be. It's starting to be. It's been a lot.
It was a while since you saw it. But I mean, at first it was a lot of like ChatGPT for lawyers.
Right. And then it evolved so we could do other things. Now you can do due diligence when you analyze a bunch of agreements at the same time. We can draft, we do some things in Microsoft Word and so on. But now we're actually working on a completely new part of our business model, which is how law firms should adapt to working from software and to have an alternative business model to the billable hour.
Because lawyers make money by billing hours, and it's a bit like oil and water with AI. If you do a task ten times faster, it's not so good for your firm's revenue if you charge per hour.
Yes, but in that way you can get in more clients, perhaps.
Exactly. But if you think about transactions, there's a fixed number of transactions that happen every year.
Yes. If you don't go outside the current market. Absolutely. But it's tough, and we've actually developed the platform in such a way that lawyers can now productify their knowledge.
So if you know how to analyze a data room, let's write down that recipe and that workflow, and then we can run it on repeat, and the clients can use it directly in your platform.
Alright. So we're actually building a white-labeled AI shell for every firm that we work with, so you can collaborate easily and have a dialogue there.
Mm. How exciting. Yes, it's very exciting product development.
Yes, but it's a bit of a challenge what we've done in that case. And welcome back, Ola Bergqvist from Fortnox.
Thank you very much. Great to be here. In the last episode, we talked about how it's very common, that many people get stuck in this thinking phase. You have a good idea but you don't really know how to move forward. I've been looking at the Fortnox phone and the questions we get in, and what many people ask is what form of company should I choose? How do you usually reason about that at Fortnox?
Yes, well, at Fortnox there is the possibility to both start the company from scratch or you get a pre-registered company where we help with all contact with the Companies Registration Office and all documentation and so on. And in those cases, we always recommend a limited company, and we do that because we see that, firstly, you have better control over your private finances and the company's finances. They don't get mixed up, and then you also have a bit less personal risk in having a limited company instead of a sole proprietorship, for example. Then it's also the case that a limited company might sound a bit stronger to customers and partners.
Mm. And perhaps it also facilitates when you want to grow potentially further down the line, I'm thinking.
Absolutely. That can be a big advantage of a limited company.
Mm. But and speaking of growing, you usually say that you're with them through the whole process and the whole company journey from the start to the registration and then further in the company's journey. Does that description hold true?
Yes, it does. And a fact is that almost 20% of all companies started in Sweden in a year are started through Fortnox.
And we are super happy about that.
Yes, that's an impressive number. And I'm a big fan of AI and automation. And when we talk about growing further and the company journey, I know you do a lot in that regard, and we'll hear more about that in the next episode where we'll meet you again.
Yes, that will be super fun.
Okay, now we've started to get into Legora here, and I thought that in this episode we should start from these three segments that we usually have.
The first segment we've actually already started to get into, but I thought we should dive deep into it, and it's the AI development and how it affects both building companies right now but also roles. I'm thinking you who are challenging a very traditional industry surely see what's happening, what the effects are of a platform like yours.
So we'll start there. I'm thinking, where would you say we are in the AI development? Is it a bubble? Are we just at the beginning?
Well, it's clear that very many of the companies will go to zero. I mean...
So you're thinking AI companies then?
Yes, absolutely. I mean application companies, like.
So when we talk about AI companies now, we're looking at...
Okay, you can maybe separate it so that you have the chip makers, then you have the model makers, and then you have, of course, infrastructure companies, and then you have the application builders.
Yes, who are at the top of the stack, at the top of the pyramid, and that's where we are.
What we can build is determined a bit by how good the underlying models are.
And we can't influence that very much, but what we can influence is how do we use those models to create new things?
And my impression of the ecosystem today is that the models are very sophisticated, they are actually really good, but there's still a lot left to build to reach that level. So it's almost like model capability, product capability, and then the users.
So the users have a pretty big leap left to make. You talked a bit about working in a perhaps more traditional industry. How can they utilize the products that exist today for maximum effect?
There's a very big educational leap and like... so it's not a complete product-market fit if you think about it, it has started to happen but we haven't completely seen everything. I'm absolutely not convinced we've seen all the value creation. And if you have some kind of curve over early adopters, the mid-segment, and the laggards, then it's the early adopters now who have started to get maximum effect. But then you have a very big chunk here in the middle who use our tools for unsophisticated things.
And but very quickly, when they see their colleagues doing really cool things, they're like, 'Wow, I have to learn that too.' And I've seen more and more that AI becomes an important part of your career progression. If you as a junior associate want to show yourself more savvy than your colleagues for a promotion, being good at these tools is a skill.
Like. But what I also wanted to say is that for us to utilize the models to their max, there's a lot of scaffolding and software around it to build, and it takes time. It's not like you just snap your fingers and then you have a product.
No, no, and especially when you're also moving in those types of environments where there's sensitive data and the data might be...
Yes, but we've gotten past that, I would say now. We spent half of our initial funding on getting all these security certificates, and we've kept them now that we've grown. But there's nothing today that replaces the need to work very closely with users, understand their problems, and then solve those problems in an elegant way, and not build a faster horse, but actually build a car, or build a rocket, perhaps a better analogy for us.
But you mentioned there will be some kind of shakeout. Is it because it's easy to get in today if you're an AI company targeting businesses, a B2B company. Do you experience that it's easier to land some kind of contract and that you're then perhaps competing with more, and then the shakeout you're talking about?
Let's start with the second question, because many companies are started that maybe don't solve real problems. It's like, you have AI, so test and throw it on a lot of things and see what sticks, and a lot won't stick, but a little and a lot won't stick. And if I look at the legal industry, where I have the best knowledge perhaps, there are many who are perhaps trying to solve too narrow problems.
And the problem with that is that the platforms, like what we're building, we will just eat that up because the cost of building software is getting lower. And as a firm, you're not going to buy 30 tools.
And as a user, you don't want 30 tools.
Absolutely not. I know how many apps you use on your phone. I use like four.
Yes. And then there are a bunch of other things that you use like once a year when you need to download a map in X land.
Yes, exactly. But I think that means that the platforms will gather a lot of the value that is created. And that's also why we've had a quite horizontal approach within our industry.
We work very full-service when we work with a new law firm, we work with the litigation team, with the corporate team, with IP, with restructuring, with tax, and it's the same platform. But then we customize the workflows per department.
So you mean that these niche legal tech companies will have a tough future?
I think so. I wouldn't want to be a super-niche legal tech today. And you have to get to a pretty large size quite quickly for it to matter. If I just look at us, we actually launched in October 2024, that's when we launched the first product and actually started scaling commercially.
So since then we've doubled every quarter, and we've scaled the team from like 40 to... more than doubled, and we've scaled the team from like 302 people to now 220.
Mm. Mm. And I think before the summer we will have doubled again. It's a very compounding effect, and you know how it works in vertical software that one winner or one player will take 90% of the value.
And then the next five will split the rest.
And those power laws exist in AI just as they do.
But it feels like you have a war chest now in that regard, if you want to put it that way. You took in, was it...
Two... I think we have 240 million dollars in the bank.
That's good. Do you get a good interest rate?
Absolutely. Can you get a piggy bank?
It was actually a... no, it was the first time, and it was the investors who paid. We... it was a month, I think, very early on, when we had more revenue from interest than from revenue, but it was just a... it was a management firm.
Yes, exactly. Then you started to scale. Okay.
But to answer the first question as well, is it easier today to get in with your startup in Enterprise? Absolutely. There are AI budgets there. It's not just that... yes, there are AI budgets there. People are willing to pilot more. But it's also that there are many more problems that you can solve today. If you look at like 2020, then SaaS was very mature. To go and find a new problem that people are willing to pay a lot for was difficult. I know many investors in San Francisco who were ready to throw in the towel, they didn't want to invest anymore. SaaS is boring now and crypto was like a weird thing. Still weird. So they were like, no, we're done, we'll do something else. But then came LLMs, then it becomes fun again. Then you can rethink and it's much easier to find a niche or a problem that is unsolved with new tech versus incumbents, big companies.
So I mean, that's one of the reasons we got to exist. There are legal tech companies that when we get much, much bigger... Do you see concretely now that you're starting to eat up these small challengers? I call them small, but who come in and challenge. If you say, if you're a CIO, a chief innovation officer or information officer at a firm with 4,000 employees.
We work with large firms. And you're thinking about how can I make life easier for my lawyers? Consolidating the tech stack is a very easy and good way. Both for you to make it easier for them but also to save money.
Mm. So there are many early products. You probably know Kira.
Mm. Absolutely. Maybe you use that at Manheimer.
And it was a system that was built in 2020 or 2019. Built on the previous generation's machine learning.
It must have existed earlier. I think...
Yes, but it probably started in 2017 or something, but it came to Sweden at some point then. And it was a specialized tool for due diligence where you were supposed to find change of control clauses, for example.
And it was so narrow, and you had these models that were fine-tuned for just that case. And then we come with our LLMs and just say, yes, everything you can do in that system, you can now do, or it's possible.
Then it's a pretty easy 'yes' for us to say, 'Yes, we'll pay two million for that tool, let's strike it out and put it in Legora.'
Yes, and that's happening everywhere.
Yes. Okay. But you also mention that you're growing the organization.
That must also bring challenges.
Absolutely. But it's also very fun. I think almost the moments I've been most moved or touched by what we do is when we have monthly town halls and I stand there in front and I'm going to present, and there are so many people that we don't even have room in the big kitchen in our 220-person office.
Okay. And what do you say at these monthly town halls?
We are a very aggressive company that wants to be the biggest and wants to win in our category. And we... in a way, we all start with a little current state.
Current state is usually a lot of 'we're at war' on these deals and what can we do to win them?
And for us, it's a total zero-sum game in our industry.
So either we win them or a competitor wins them.
