To our shareholders,
2023 will likely be the most challenging year for us since founding the company. We spent the first quarter moving swiftly to adapt to new realities, as we saw the turbulent global economy further impact our business.
We reacted quickly and last quarter represented a turning point in our drive towards building a company that is more efficient and resourceful; one that can do more with less. We reduced our workforce, built software to automate our internal processes, and continued to drive product innovation. We delivered a better than expected first quarter, with revenue exceeding $2.5 million, up 10% year-over-year while decreasing our burn rate by over 60%, compared to the beginning of the year.
While we continue to see softness in certain client behavior due to macroeconomic headwinds, which was most pronounced in our top client industry—technology— I believe we as a company, are in a good place to leverage this down cycle to strengthen within, for a stronger takeoff when the macro swings back up.
This journey will take time and our quarterly results may be volatile, given labor marketplaces are still in its early days, however we find these conditions motivating and will continue to execute our three part strategy below:
Financial discipline and operational efficiency
The goal of building an efficient business is to make us a resilient company that can build better products faster, while improving our financials to execute our long term vision in difficult environments. Steps we have taken to streamline our operations include a workforce reduction, pausing most marketing campaigns, and reducing vendor-related expenses.
We reduced our workforce by 37% and the measures we took are expected to drive over $2.4 million in annualized net cost savings.
Turn our sales approach to where we win in this environment
We spent the first quarter analyzing our data and identifying where our product and sales teams are performing best to refine our sales strategy and focus on the most productive areas of opportunity in this environment.
This lead to us diversifying our pipeline beyond tech, and building relationships with more traditional public companies including a major airline, one of the largest utility companies, and a big four bank. This shift in strategy allows us to tap in to new markets and serve a wider range of customers, while providing stability in uncertain times.
Lawtrades AI
Today, Lawtrades gives companies a frictionless all-in-one solution to source, onboard, manage and pay their freelance talent, while simplifying budget tracking, tax, legal and workforce classification and compliance processes.
I believe AI will dramatically improve every part of our platform.
While there has been a race for novelty with AI, Lawtrades has always prioritized investing in technology that drives impact and real business results for our customers.
Our work in AI will be initially focused in two key areas: The first is recruiting and recommending talent — from candidate sourcing to selection in the interview process, Lawtrades AI will be able to understand a candidates professional and personal networks and connections to predict recruitment outcomes.
The second is significantly speeding up legal work. By giving our talent network access to Lawtrades AI, we believe our users will out-produce traditional lawyers by a factor of one thousand to ten thousand. From instant contract reviews to auto-suggested replacement language, companies leveraging Lawtrades AI, should be able to reduce their legal costs by 70-80% in the near future.
Conclusion