California lawyer Stephen Kane, founder of ArbiClaims, is a frequent presenter at CodeX events. He remotely demo’d ArbiClaims, a web-based system that helps users resolve small claim disputes. On Oct. 8, 2015, Kane participated in the “Building the Legal Startup” event on campus. On Feb. 4, at Legaltech New York, he will present at the 10:30 a.m. “Legal Distruption Lightning Round One,” along with Jake Hller (Casetext), Dan Rubins (Legal Robot) and Gabriel Sukman (ClearstoneIP.) Round 2 will be held at 12:15.The experiences, he says, “have been extremely helpful with introductions and as a networking platform. If nothing else, it’s inspiring to know I’m not alone. It really feels like something special is happening.”
STEPHEN KANE: ArbiClaims
ArbiClaims Launch date: April 2015.
Title: Founder, President & CEO
Home base: Downtown Los Angeles
Day job: Attorney, small business and startups—I have my own clients to pay the bills as I build ArbiClaims.
Education: Stanford University, B.A., Economics and Political Science, 2000. Stanford Law School, 2006, J.D.
Launch date of ArbiClaims: April 2015.
Is this your first startup? No. I’ve tried my hand at a few other startups. Two were in college: (1) a student group community and resources site. (2) A volunteer recruitment site. Neither are still on the market. We never made any money with the student group site; we made about $3,000 with the volunteer recruitment site. In 2013-2014, I was part of the early sales team at Lex Machina, an IP analytics platform, which was recently sold to LexisNexis.
What does your current startup do? ArbiClaims is an online small claims court alternative. We use court-enforceable, binding arbitration to resolve disputes under $10,000. We provide top-tier lawyer arbitrators who conduct 10-to-30 minute webcam hearings, after reviewing and considering user-submitted evidence.
What problem does it solve? The high percentage of unaddressed claims. I grew tired of getting calls from people I couldn’t help because it would cost them too much money to pay me to resolve their small dispute. I’d recommend small claims court, but they jumped on that like a root canal. So I’ve seen my fair share of people doing nothing.
We help users by saving them time and hassle versus actually appearing in small claims court. Not to mention the intimation factor some people experience. We’re obsessed with quality—compared to the crowded courts, where litigants are lucky to get five to 10 minutes of a judge’s attention, with no evidence review ahead of time.
Audience: We help both lawyers and non-lawyers. Our initial non-lawyer target market is small businesses; next on our agenda will be individual users. We also help company counsel dealing with small disputes.
What motivated you to pursue this startup: Litigation sucks—and it’s boring. While I’ve handled plenty of disputes in my day, I hate it. It’s a petty, divisive system and I want to change it.
Do you have funding yet? No. We have strong investor interest and will do a seed round at some point in the near future. But I’m not in any rush to do that—and I want to bring in the right investors. We’re in good position to bootrstap because I made some money from the Lex Machina acquisition by LexisNexis (can’t disclose the sale amount). Plus, our product build out costs are low and we’re expecting some healthy cash flow as we ramp.
Your biggest challenge re: the startup: Focus. So many dispute resolution inefficiencies, so little time. I have to remind myself to stay disciplined.
What do you need for success: Feedback and participation. Users are the most important focus right now—I want to know what they need, what they think of the ArbiClaims experience and what motivates them to decide to use (or not use) our platform. I also want to invite the legal community to participate in building something great, that we can all be proud of—we’ll be announcing more ways for the community at large to get involved over time.
What’s next? Heads down building and refining the product. Getting more users. Getting customers. Continuing to build the team.
What have you learned that you wish you had know five years ago: Nobody ever really knows exactly what they’re doing. But we inspire each other when we keep at it anyway. Trial and error until we find what works. And that’s how we make progress.
Who influenced you more than anyone else? How? My friends who’ve started great companies. For example, my college roommate Alex Gorbanksy co-founded Frontier Strategy Group in his mid-20s. I saw it go from fledgling idea to global success. They hustled and iterated—starting with international research reports, which got them press coverage and credibility, to cold calling Fortune 500 companies who soon became customers—to finally figuring out a sustainable business model for supporting corporate executives in emerging economies. Seeing that sort of thing unfold is inspiring.
What two people are your most important mentors and why? This question makes me realize I need more mentors—I don’t have a good answer to this question. I’ve had mentors throughout my life but I need business mentors. Anyone want to help a guy out?
Are you afraid of failure? Yes. Are you gonna do this anyway. Hell yes. Cause if we succeed we change the world. And if we fail who cares.
What book changed your life: “We’re Right, They’re Wrong: A Handbook for Spirited Progressives,” by James Carville.
A Handbook for Spirited Progressives,” by James Carville. I read it in high school and it made quite an impression—turned from a Alex P. Keaton Repulican (“Family Ties” anyone?) into a progressive Democrat. Taught me the importance of message over money in politics and marketing (insight worth having for any entreprenuer). And gave me a primer re fighting for and defending things that matter.
Advice for other entrepreneurs: Value your own ideas and vision as much as any expert or investor. Believe in you. Don’t worry about the noise. Keep pushing.
Where do you want to be in five years? 10 years? Next week? Five years: Leading ArbiClaims or on a beach. 10 years: Leading or on a beach. Next week: Legaltech New York.
Favorite vacation destination: Joshua Tree National Park. I want to buy land out there (it’s pretty cheap for a pile of dirt and maybe I can put a yurt or something on it). Having land in Joshua Tree would give me refuge from the storm. It would embolden me to take even more risk without fear.
Favorite musician or group: Beatles. Hands down.
Favorite quote: “If you conquer yourself, then you conquer the world.” —Paulo Coelho
Your mantra: You gotta experiment.
Who would you want to be sitting next to you if you got stuck in a 737 for 3 hours: My childhood hero and a great businessman/human: Magic Johnson.
Compiled by Monica Bay, CodeX Fellow.