Code and Counsel

By Meenakshi Shivram

We’re thrilled to bring to you a bonus, month-end episode with the incredibly inspiring Meghana Srinivas. Meghana has built an impressive career around training, funding & start-ups. Apart from being the Founder & CEO at TrustIn, she is also the Karnataka state president of the WICCI Ethics Council. She is also a recipient of the prestigious Martha Farrell Award for excellence in women empowerment, and serves as an Advisory Board Member, Technical Expert and Jury Member for several organisations. 

Join us on this insightful conversation as she navigates us through the complexities of the legal-tech space, shares a glimpse into her journey building TrustIn and underscores the importance of having a compliance-bent of mind as a founder.

Meenakshi: As is customary, let’s begin with you telling us a little bit more about your journey to where you are today.

Meghana: I’m the Founder & CEO of TrustIn. It’s been about 4 years now that we’ve been building this. I’m a solo founder with a background in training and teaching. At TrustIn, we’re looking at POSH Compliance because we believe that everybody deserves to feel safe and empowered in the place where we spend most of our time, and therefore our life – in the workplace. Most of the work we do centers around sexual harassment, but we also handle other kinds of workplace misconduct like bullying, microaggressions, exclusions, etc. 

We started as a legaltech company, right in the aftermath of the #MeToo movement in Asia, especially India, in 2018 – I felt the time was right to launch a product. 

It was a simple case handling mechanism that could be used by the parties involved as well as the POSH committees. Most of the customers we serve are tech-enabled social enterprises & seed-stage startups. They started asking for having a program, sensitisation, training, de-biasing, etc. Because of that, we now offer the 3Ps – 

1) Product which has a complaint & case-handling mechanism that’s trauma-informed, an easy-to-use UI/UX and an anonymous chatbot that you can ask questions to like your own lawyer. 

2) Program which has various level of employee trainings to sensitise employees, managers, and POSH committees in different ways

3) Policy, where we create everything from gender neutral POSH policies, to safety policies to anti-discriminatory policies, based on the client’s contexts and needs.

Meenakshi: What are your thoughts on the current landscape in the legaltech sector vis-a-vis the more traditional legal industry?

Meghana: So I think it is interesting, Meenakshi, that there has been a lot of interest in legaltech. But perhaps, it’s not receiving as much funding as we thought it would. Justin Kan had started this big legaltech called Atrium & there was a lot of excitement around that, but it closed shop. When I was growing up, I saw a lot of legaltech startups receiving funding & I thought this was the boom- the thing that was going to revolutionise everything! When they shut shop, they found that this was a services-play…perhaps the product they envisioned could not make the strides that they wanted. I think we also have to understand that if we want to disrupt legal specifically (not GRC, ESG – that’s a different ballgame!)…it’s about misaligned incentives. So, traditionally, the way the legal system has worked has been on billable hours where you rent someone’s time, but tech turns that on it’s head: tech is never going to be a measure of money for time! That’s just not how it works, or exponentially how the numbers work out. So I think these two revenue models clashing might be a big reason why legal tech might struggle with where exactly it can make an impact.

But in our experience, it really has been important to have a legal tech play in combating workplace sexual harassment, because the chatbot is anonymous, 24×7, on-demand available. We have built chatbots not just for survivors for workplace sexual harassment, but for survivors of domestic violence as well. So having on-demand solutions is very important, and one-on-one support is very critical. It can mean the difference between life and death!

Meenakshi: You touched upon GRC a little bit…let’s spend some time exploring that. Why do you think it is necessary, for a small business or a startup, to have a robust Governance, Risk & Compliance framework – especially when resource-crunched?

Meghana: Big risks (company-ending risks) can happen to companies of any size & stage, but especially smaller businesses. You can almost think of it as a baby or a toddler is so-much more likely to sustain life-ending injuries because they are still developing. I used to work in venture capital before I started up, and I have seen so many businesses not having basic documentation, such as payroll, how they’re getting money from clients, shareholder’s agreement, co-founder’s agreements…! So while the business may be moving forward on good faith, when conflicts come up (and they inevitably will), these lapses could end the company: simply because the business did not take up the ten minutes to get a stamp paper & get it notarised. These are things I have personally seen.

I was reading this annual startup study, and it spoke about how the second biggest reason why startups fail – especially at growth stage – is because of co-founder conflicts. CAs, CSs can do this for you, but it really depends on the leadership. It’s the same thing for POSH as well, where there could have been a 100CR takeover or acquihire, but a suppressed POSH case comes up against a founder or key leader, and the acquiring company doesn’t want to touch this anymore.

Many times, the leadership themselves are not aware of these internal risks. And of course, external risks are huge! If clients & investors find out about any financial misconduct, it will be game over because it leads to a negative domino effect. It’s a vicious cycle where everybody wants to pull out! I also think that many bootstrapped startups, especially without basic contracts in place, face this counterparty risk. 

All these things may mean that no money comes in, and you’re forced to shut shop simply because you felt that getting a legal consultant and making client contracts was a waste of your time. 

Meenakshi: TrustIn is bootstrapped, yes?

Meghana: Yes – we are bootstrapped, so I can say all of this with a whole fingers-burnt, lessons-learnt sort of lens. I think the only good thing, having worked in a VC firm, is that I learnt to keep the basics in place from Day 1. Things can turn quickly, so you want to make sure you’re minimising all the risks you can. 

GRC…it’s understandable. Unless it’s on fire or it’s generating revenue, you don’t have the time to focus on it. But if you don’t focus on it, it could be the fire that you cannot put out.

Meenakshi: Well-said! As an entrepreneur, can you shed some light on what are your top 3 tips for a startup to maximise growth?

Meghana: I always say that 90% of startups die before the fifth year, so we’re not out of the woods yet (laughs). But I also have a lot of founder friends, and I’ve seen how they’ve built their businesses. I think these would be my top 3 tips:

  1. Figure out where your Build capital is going to come from. We were lucky enough to get the Government of Karnataka’s Elevate grant of 25Lacs which basically sustained us through the pandemic. And of course, I put in some of my personal funds in the beginning as well. But I think a lot of founders underestimate how long it takes to build something, especially a product! And even if you’re building a program, you just have to assume that for the first year, you’re not going to get client revenue coming in any sustainable way.
  2. Think about the growth of the market size. Many times people talk about having a large market size to build a company, but maybe that’s not always possible. For instance, GRC, ESG, POSH have all taken off in India only recently, especially after the 2018 #MeToo movement. But you have to think of it as an Uber or a Dunzo: when you start out, you may be creating or expanding the category and that’s fine as long as you figure out where your money is going to come from. Building assuming that VC is going to be your primary source – especially now, since last year with the downturn – it may not be sustainable.
  3. Painkiller-versus-Vitamin. For better or worse for us, POSH is a painkiller. Earlier, it used to be a vitamin but it became such a pain when a lot of things were surfacing during the #MeToo movement & that trend has continued. If you want your FCRA renewed as a social enterprise, you need to have a rigorous POSH system in place. Similarly, you need it even for VC due diligence. The law & the financial constraints around the law have made sure it is a painkiller and no longer a vitamin. So, if you are not building legal-tech specifically, or if your GRC is seen more as a good-to-have instead of a must-have, then your value proposition signalling has to be very strong. Why should they buy you or pay you and not anybody else? Why should they buy you or pay you tomorrow, and not next year? That’s the only way to survive, especially in the Asian market.

Meenakshi: Many folks I’m speaking to off-late are echoing the same sentiment on the reliance on VC funds – Cash flows can be unstable, especially in the beginning years of a startup. How important is working capital management in this regard?

Meghana: I think it really depends on the kind of business and the type of customer that you’re building for. I learnt a few things from my dad who is a first-gen entrepreneur – a civil engineer. For them, working capital optimization is life or death. You have to sink so much money into building something big, and then you get the payout. So from Day 01 at TrustIn – and we’re a very small team here – every ten rupees counts. That’s what it means to be a bootstrapped company. Working capital optimisation is critical, but we’re lucky because we have a product that brings in a monthly subscription. We know that unless we do a bad job and have a client churn, and as long as we’re changing our programs and reinventing the policies, we will get a certain outlay. We have about 60 clients pan-india right now, and a few ad-hoc ones as well: approximating to about 100 clients a year. There are some lean months, usually in the beginning of the year, so we make sure to have enough cash in the bank for that. The second half of the year is like the night before the exam when everyone remembers that POSH training needs to be done, so that’s when we get a lot more money. 

Lack of working capital optimization is another big reason why companies are unable to stay afloat, especially bootstrapped. You have to plan your financial runway at the beginning of the year. A lot of founders, especially those without a business degree, might not even be thinking about financial strategy at all. It’s really heartbreaking because you might be the right person to build it, you might have all the technical expertise, but you might not have invested in a good lawyer, CS, CA or a fractional CFO. So as an entrepreneur, it’s crucial to take a good, hard look at the legal and financial pieces before they get on fire. 

Meenakshi: For my last question, are there any recent innovations within the space that have caught your attention?

Meghana: I think, especially in India right now, GRC, ESG & DPG (digital public goods) are a very exciting development. Obviously there’s been a big push due to the success of UPI & ONDC. Even for TrustIn, I’ve been exploring what it would take to build an international grievance redressal platform. We were also inspired when we saw different grievance redressal platforms around the world. For instance, in US there was a mechanism for reporting sexual assault on US college campuses, in Vietnam there are ways to anonymously report traffic police and others for corruption, in UK had an anonymous reporting for medical misconduct. Clearly there is a pressing need for this, so DPG is what we are thinking about. 

Another thing I’m seeing in this space, and this is across domains, actually – is the addition of a third P to Profit & People…Planet. Especially if you’re a B2C play, or even if you are a B2B play, a lot of clients are asking about business values. I think that’s a great development as well! Especially in India, as the digital penetration keeps increasing exponentially, we have a lot of questions about how data is the new oil, and how do we handle and monetise it. And we do have the new data protection bill, but the question remains on how we can all move globally closer to a GDPR level. The default should always be an opt-out, not an opt-in. We need to move towards building a customer-centric, consent-centric platform. 

Last but not least, AI is really penetrating legal tech & technology in general. There are pros and cons, of course. On one side, it is decentralising decision making and closing gaps, but on the other side it is amplifying existing biases and discriminations in the system. So if you’re building for legal tech or GRC, you may have to create your own datasets keeping this in mind.