Valla's smart legal platform identifies workplace issues: Danae Shell, Founder and CEO of Valla

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0:33Hello and welcome back to Escading Europe Show represented by Deal. I'm Seb Johnson. Today I'm joined by Danae Schell, founder and CEO of Valor, a very cool legal AI startup. How are you doing today?

0:43Danae Shell:Very well. Nice to see you, Seb. I'm a fan of the podcast. Love it. Love to hear it. Well, look, for those who don't know, can you give a bit of an introduction to kind of who you are and what you're building? Yeah, of course. So I'm Danae. I'm the founder and CEO of Valor. We are a consumer legal tech company. We don't sell to the lawyers directly. we sell to the consumers, starting with employment law. And so we are, I guess, a vertical AI company in legal. My background is I was a software engineer. I come from Tennessee originally, and moved to the UK to do my master's and have been basically disrupting professional services for my whole tech career.

1:19Danae Shell:I started as a developer building platforms for wealth managers, and then moved into the accountancy space, and now have turned my eyes to legal. And it is an amazing space to be building right now with the advent of AI. Why, I guess, why this area of professional services? Why the legal sector and why, I guess, the more consumer side or individual side as opposed to the law firm itself? Yeah, it's a multifaceted reason. So the first reason is because I saw a problem. So as an ex-engineer who then turned into a marketer, I really understood an empty market. and what was really interesting to me as a woman in tech, as I was moving through my career, as I got more senior, more people came to me with their problems at work.

2:04Danae Shell:Like, you know, how do I do this? Often I was the only woman in the leadership team and I kept seeing this pattern repeating of, you know, people had a problem at work, they didn't really have any options and so they just left. And especially as an American, I thought, well, we have rights, why can't we use our rights? And so I started digging into that and realized, actually, this is almost an empty market when it comes to consumer legal services, because the delivery model of the kind of, I call it like a full fat law firm, that professional service delivery model has just moved further and further up market over time.

2:37Danae Shell:And it means that law firms can't make money out of helping consumers with consumer sized problems. And that was very interesting to me as a technologist who really understood how to unbundle professional services. And I guess, what is the core product that you've built to kind of play in that space then, where everyone's moving further up market and you've noticed this gap? What kind of technology have you built to service that bit of the market? So we launched just before ChatGPT kind of came out and generative AI became available. And so there's really like a Vala 1.0 and a Vala 2.0. 1.0, the general hypothesis was, if you think about accounting software or something like that, it was accounting software for running your own legal case.

3:22Danae Shell:So it was a platform with templates, with self-management tools in order to be able to educate yourself. The technology took care of some of the work for you and you were able to kind of run a case much more efficiently. And so like a classic pre-Gen AI unbundling. We were in the market for about eight or nine months and then when Gen AI became available we immediately saw what it was going to be able to do for legal services. And so we basically, we had this, it was excellent timing. We had this list of jobs to be done. We knew where our scaling problems were, mainly around getting human services into that in a scalable way, into that workflow.

4:00Danae Shell:And so we just started working through that workflow. So now on top of like a freemium case management platform where you can still do, you know, basic evidence management, document management, et cetera, we also offer human services on top that are massively cheaper because they're augmented by AI. So probably our flagship product is our case assessment. So you can go pay£149, say, I think something's going wrong at work and I'd like to get a legal opinion on it, have a one hour call with a lawyer and get a report within about half an hour of hanging up from the call. And that is end to end, at least 4x faster than when we did the full fat kind of manual version.

4:40Danae Shell:And we've used Gen AI to bring down the time to deliver that over time and over time kind of just keep it keeps getting better and better that's amazing and yeah i love startups building the space of this where there's real impact you know it's not just about reducing headcount or saving time reducing costs it's like actually this is this opens the market up and you create a new market of people who can now access the type of legal services that they wouldn't have been able to afford otherwise how many people have you helped over 15 000 at this point and that's growing pretty rapidly now we've really we've really nailed like our top of funnel acquisition now we've taken a lot of the stuff that was making sense and we're really productionizing it this year so this will be the year where we grow somewhere between seven to ten x that's amazing and can you talk a bit about i guess you mentioned the funnel but like what is the go-to-market for a product like this is quite unusual i guess trying to find people at the exact time that they need a service like this yeah it's um content is the short answer the longer answer is for one this is a massive market of people who don't even know they're in the market.

5:42Danae Shell:There are, in the UK alone, there are nearly 12 and a half million labor violations every year. And maybe only about 115 to 120 ,000 get to the kind of legal pre-action stage just within employment. And most of the people who have a legal problem wouldn't even use the word legal to describe that problem. My background when I was a marketer was in content marketing. And so what we're very good at is taking the people who don't even realize that they have a legal problem and then taking them through a journey via social media, especially TikTok and YouTube. Those are our best channels. And kind of bringing them into the funnel at that point and then helping them kind of discover, oh gosh, like maybe this isn't cool.

6:23Danae Shell:And actually I have options. And one of those options might be to do nothing, but we can work them through like a voyage of discovery and then a voyage of assessing their options. And then because there's no one else in the market. We've had to build a lot of different products to kind of, you know, accommodate people at all these different stages with all these different options. But that's much easier to do now because of generative AI. And so do you, are you trying to play every role in that? Or is it, does it get to a point where you say, okay, now we're going to hand you off to one of the big, you know, more established law firms.

6:55And, you know, maybe this got to the point where actually you need a team or, or how does that look like? Are you trying to, I guess, what's the range and what products are you building to solve the various problems and stages people might be going through?

7:05Danae Shell:It's largely down not by the complexity of the case. That's not the real dividing line. It's the perceived value of the case. Because if you think about, there's actually not many big players in consumer legal disputes, whether it's employment or tenancy or even small claims, because most of the law firms have either moved to the most obvious highest value cases, or they've just kind of disappeared. So we do partner with some for cases where it makes sense for them to go to a law firm, probably because they don't have the capacity to manage it themselves or do some of the management themselves.

7:42Danae Shell:But I would say 90 % of the market is completely wide open for us to build our own products and services and for the law firms to really not be touched at all, even before we think about what does it look like to integrate with them or collaborate with them more. That's really interesting. You mentioned that you want to grow up to 10x this year. Is that just by focusing on employment, or are you also starting to think, okay, maybe we'll be looking to some of those other use cases? We will look at tenancy next, but there's a ton of growth still in employment. It's an absolutely greenfield market.

8:14Danae Shell:So yeah, there's tons of growth still within employment, but we want to move as quickly as we can into some other areas as well. That's amazing. And I also want to touch on the round that you raised last year. I think it's£2 million seed from Ada Ventures. I think it was the summertime. What was that process of fundraising like? How did you find that? Yeah, super interesting. When I first started building Vala and looking to capitalize the business, I've grown up in European startups. I really understand the venture world. And I came from fintech, you know, which was super hot at the time and stayed hot for a decade.

8:45Danae Shell:And it was fascinating to enter the VC market at that time with a consumer legal proposition, pre-generative AI. It's safe to say that not many people had a lot of faith that that was going to be a big bet. And actually, I spoke to Ada four years before they ended up investing. Wow. Because they kept an eye on me through all of it and built confidence over time. And as legal and generative AI as the opportunity was becoming clearer and clearer, they recognized that because we were already in market, we had such a step ahead of anybody else. And that was really the reason why they said, OK, yeah, now's the time.

9:25Danae Shell:Let's do it. And that round came together really quickly as a result of that. It's really interesting. So many of the great AI companies that I've spoken to, even in the industry, even if you look at the hugest ones like Eleven Labs or Clio, So many of these companies were building essentially AI products or high context products before ChatGPT was released. And then as soon as ChatGPT was released, they were the best position to then leverage that with the context that they had built to then build these amazing products on top of that. Which it sounds like that's what you've done as well. Yeah, absolutely.

9:56Danae Shell:We understood the market really clearly. We understood the players in the market. We were already established as a brand enough that we could immediately test these products in a real world context. We had all the rails in place for that. And so we were able to iterate and learn so fast because everything was set up for us. And we were small enough still to just pivot. Like we turned into an R &D lab for Gen AI tools overnight. And we were able to kind of, you know, move really fast because of that as well. And so when you look forward, you know, you raised this round last summer. It's now what, like eight or nine months later.

10:29What do you need to do to, I guess, unlock that next bit of capital? up.

10:34Danae Shell:I think the key thing is that we really need to show the growth drivers at the top of the funnel, which is what we're focused on at the moment, kind of pre-Series A. And that's going really well. It's kind of, you know, it's exciting. I've done this seed to Series A stage a few times now in startups. And there's a real magic moment when it goes from an idea machine to like a real business where, you know, you pull a lever and you kind of know what's going to happen and it does happen. And it's just so exciting. And I think it's a real privilege as in a startup, there's no guarantee that that's going to work, that the levers actually start working.

11:09Danae Shell:But we're in that kind of magical moment where the levers are working. And as a result of that, everything is on fire. So I think that's the key thing is really validating that those levers are working in the growth engine and also really showing the path to just like taking this entire 90 % of this market. Like it's so exciting and actually, you know, painting a really clear picture of here's what the map looks like. Here's how it's going to work. And it's, yeah, it's a really exciting time to be here. And what are some of the most challenging parts about your job at the moment? Oh my goodness.

11:47Danae Shell:The pace, like the pace in general, like I'm always impatient as a startup. founder but now i i think my cto and i talk about this a lot the um the gap between what we know is possible and what we're doing right now it even as we catch up we use generative ai internally we have we have gen ai building prod software already for us based on asana tickets you know we are we are already you know like really deeply using the tech but even then we just see the potential, it's just it keeps getting bigger and bigger. And so actually feeling like what we're doing is enough is one thing and always knowing that the gap is getting bigger and that we can keep doing more.

12:30Danae Shell:And, you know, feeling like that, not just on the internal build, but go to market and everything. I can't cram enough kind of learning into us fast enough, but we're iterating on literally kind of like four to five day cycle at the moment. So and that's the pace I think we have to keep maintaining and just um you know improve on from there it's um it's so exciting but it's also you know it's a it's a supercharged version of a supercharged you know startup environment that we had pre-gen AI yeah I mean I find it crazy myself like trying to stay on top of all the model releases the new tools whether it's you know Claudebot or like videos you know it's crazy to try and keep on top of it all because there's so many new updates and releases How do you adapt or change to a new model being released?

13:21Gemini was recently kind of crowned as the best model out there to be using. How do you adapt to that? Do you have to change anything internally, externally? What happens?

13:30Danae Shell:So externally, it's really interesting. So we don't, the users of Vala never see, whether it's the lawyer or the consumer, they never see a chat interface. We deeply integrate Gen.AI into existing workflows and new workflows. It's truly verticalized in that sense. So when something works well, it works well. And we don't have to keep kind of refining and refining. We just need to kind of maintain and monitor until we kind of pick up that workflow again and say, can we make it even more efficient? So that's okay. I think where we're seeing the real kind of dizzying pace shifts and like, should we check this out?

14:08Danae Shell:How soon can we check it out? That's on the internal side, especially because we're aware of, you know, it's so wild planning for a Series A in the year of our Lord, 2026, trying to figure out headcount. And I was just talking to my exec team about what kind of assumptions are we making about our organizational model? And did the model that came out literally yesterday, did that completely blow that assumption wide open? Those are the real things that we're spending more time on. In terms of the actual product itself, it's so fascinating. large language models if all of the development stopped today and we never got anything better it would already revolutionize almost every area of work so we can kind of bank those gains but it's the internal gains that you know it's really exciting it's really hard to predict you're right i mean yeah how do you how do you balance that i guess with you know trying to invest in headcount grow the team, grow as quickly as you can, versus actually sometimes it's probably harder to upskill and to teach your own employees and to embed AI.

15:16How do you balance that? I mean, because I speak to lots of founders who are maybe much bigger, who have like 100, 200 employees, and they've got into the habit of, you know, when you need a new role, you go to market, you hire somebody who are now trying to adopt this AI first culture of integrating it into every single person is using it in every single day. How do you balance the two in trying to upskill your team up to your employees versus you know moving for speed yeah we because we're

15:43Danae Shell:smaller we have about 12 people in the team and you know we will get bigger as we raise an a but i think we will be one of the first generation that just the headcount doesn't look the same as a result of you know we're right in that cusp and so we have it's much easier to train a small team and to really move to AI first and everything. And that's what we've done. And then it just directly impacts on not just who we hire, but when we hire and what we hire. So for example, do we need, when we think about product lines, when we think about experimenting with go-to-market features or things like that, those traditional squad structures, they just kind of fall apart.

16:25Danae Shell:you you need more domain expertise you want more user research and user insight expertise you need people who can ask the right questions and know when they're getting the right kinds of answers rather than people who can just do stuff yeah interesting um i i want to go back to your your growth and your social strategy uh you mentioned it because a huge a huge lever for you to kind of grow. It looks like you're doing a lot of that yourself. You're very in front of the camera, recording TikToks. What's that like as a CEO, founder? It's got an unusual role. It's not something that most people, especially 20 years ago, could have ever imagined that would be a large element of the job.

17:10How do you find it personally?

17:12Danae Shell:It's fascinating. I often think if there was another CEO running this company, I'm sure their go-to-market would have been different. This is, you know, startups, they grow up around their founders. And this is very fitted to me and my strengths as a content marketer, my strengths as a communicator. And, you know, if you think about the work that I did at an accounting, I was essentially doing the same work of taking something incredibly complex, and that was causing a lot of frustration and anxiety, and turning it into something that people can understand, and then helping guiding them through it.

17:46Danae Shell:And so we're really leaning on that strength. And that's working so well for us at that top of funnel in a space that, you know, not many other people can play there. And what's really interesting is thinking about, okay, right now, I sit in front of a camera for an hour, we're maybe getting like, in terms of content production, maybe one and a half to 2x value out of that hour. But a lot of the work that we're doing in the first half of this year is how do we turn that into 10x of value for every hour I sit in front of the camera before we then start saying, well, is it me that needs to sit in front of the camera?

18:18Danae Shell:Or saying, actually, how do we get more mass market with this? How do we move more into PR, broadcast, and get more eyeballs for every hour in front of the camera? So yeah, there's a lot of scalability in it. And it's fascinating because I think it is like very bespoke to the CEO. But content marketing for me, it's always been my secret weapon. and it's working very well for us at Vala. And how well able are you to see people coming through the funnel? Are you able to track directly to a single TikTok and say, okay, wow, we hit that person at the right time and they kind of converted all the way down the funnel to a paid product?

18:56Danae Shell:This is kind of, it's like a blessing and a nightmare because to track it, TikTok is notoriously awful to get people out of. And so a lot of what we were doing that was working, we knew it was working because literally it would go from direct message in TikTok to email address. And then people would just bypass our entire website, go to our email support, and then purchase from there. And so it was absolutely breaking our analytics. That's so interesting. And so in some of it, we've just decided to lean into some of that and just say, okay, we'll fix the tracking later. But we know it's a growth engine that's working.

19:35Danae Shell:So we're just going to keep working on that but then we're we're now finding ways to um to create the journeys that takes us through like a more traditional acquisition funnel so that we can like track and optimize along the different steps and webinars are working really well for us as a um a reason to kind of enter the valley universe and then go from there and so yeah we're um we're finding new ways to kind of really productionize it but it's fascinating how much people just want to just send you a message yeah super interesting so um i think it's so interesting that you're building and like you know we're seeing a lot of legal startups come up and they're very different you know they're very much like enterprise law firms and it's still kind of fits into that very professional professional services world and it's really interesting to see you kind of break down the barriers go direct to consumer and leverage the tools the ai tools but also the social media and the tiktok to kind of bring your product to the forefront of people's minds um but we're out of time thank you so much for joining me.

20:33I think it's really exciting. I love speaking to founders and entrepreneurs who are building things that have real impact. And it's not just, yeah, it's not just about, I don't know, building billion dollar companies by justifying headcount reduction. It's like solving real problems for real people. So I'm a big fan of what you're building and best of luck with it.

20:50Danae Shell:Thank you very much. Yeah, there's definitely billions in consumer law. And we're super excited about that. Yeah, I wish there were more entrepreneurs solving problems for real people, you know, targeting and creating new markets with AI. You know, it's not just about going after the existing markets, but how do we create new tools for people who wouldn't have access to these products, which is exactly what you're in it. I think it's amazing. Thank you. Yeah, that's the real excitement.