Ready To Tack? The Case of Jurofoon

This case was written by Gert Poppe and Wynand Bodewes from Maastricht
University. It was made possible through the generous cooperation of Jurofoon. The
case is intended for class discussion rather than to illustrate either effective or
ineffective handling of management situations. The development of the case was
enabled by a grant from the European Community (ENT/EFORCE). Sole responsibility
for the content of the case resides with the authors.
Copyright 2011 Maastricht University, Maastricht, the Netherlands.

Ready to tack?
The case of Jurofoon

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Introduction
The date was Friday, September 17th 1999 and on a Friesland lake in Holland, Ojo Meijers was
enjoying a three-day sailing trip with Koert Adriaans. The trip was part of their summer holiday,
as a reward for the hard work they had been putting in to develop a new business plan for their
company, Jurofoon. With it they aimed to attract new investors in an effort to boost Jurofoons
growth.
Together with Matthijs Kleinlooh, the two had founded Jurofoon in 1998. The aim of the
company was to provide legal advice by phone to the public. In effect, they saw it as a First Aid
desk for legal issues: the natural place anyone with a legal problem or in need of legal advice
should contact first. Initially, they had wanted to grow the company slowly by steadily increasing
their marketing efforts and introducing a subscription service in addition to their phone service.
However, after a year in operation, Ojo, Koert and Matthijs were in desperate need of additional
financing to keep Jurofoon going.
That coming week, the Jurofoon owners would meet a consortium of companies interested in
investing in Jurofoon in exchange for an equity share. However, the consortium was only willing
to invest on condition that Jurofoon adapted its business model so that, in addition to giving legal
advice over the phone, it developed an internet-based knowledge portal. This would be available
to the public, companies and intermediaries such as accountants and book-keepers. Although
such a portal would provide additional revenue streams, it would also make Jurofoon an
attractive takeover candidate for any company providing business information (such as Elsevier,
a company based in the Netherlands that developed online information solutions mainly for
science and health professionals) or legal insurance (such as ARAG, a company based in the
Netherlands that offered a range of legal services). Such a takeover would allow the would-be
investors to divest and exit Jurofoon with a profit. The three founders were scheduled to present
their business plan for the new Jurofoon, incorporating such a portal, to the consortium next
Thursday.
But that was not their only problem. Just before the start of the sailing holiday, Matthijs had
phoned Ojo to tell him he would not be joining them on the trip. Even worse, he announced he
was thinking of quitting Jurofoon because he was looking for an environment where he could use
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his creative skills. The loss of Matthijs would be a severe blow to Jurofoon, as he was the only
one of the three entrepreneurs with a legal background.
Ready to tack?
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Hotline 0900-1411
Jurofoon was founded by three Maastricht university students; Matthijs Kleinlooh, Ojo Meijers
and Koert Adriaans (Exhibit 1 : Curriculum Vitae of the Entrepreneurs). Matthijs Kleinlooh first
came up with the idea of Jurofoon while studying law at Maastricht University in the
Netherlands. Noting how frequently his family and friends asked him for legal advice on a whole
range of different subject, he had the idea of starting a service for easily accessible legal support.
After giving it some thought, he realized that for him, easily accessible meant over the
phone. The name Jurofoon was the immediate result of this decision.
Three main issues had to be solved before the company could begin operations; revenue,
expertise and marketing. How would Jurofoon be paid for its services? Would it be possible to
help people over the phone without hiring very expensive legal professionals (i.e. lawyers)? And
how to publicize Jurofoon so as to reach as wide an audience as possible?
The solution to the first issue was linked with a very specific development in the Dutch telecom
market. Due to the liberalization of the Dutch telecom market in 20041 several new players were
entering the market resulting in the emergence of several new initiatives and products. One was
the development of so-called 0900 numbers for sex-lines. When someone called one of these
0900 numbers, he/she would pay more per minute than when they called a regular line. Of the
total amount paid 15.6% went to the telecom provider, the rest to the operator of the sex-line. At
that time, it was highly unusual for regular businesses (meaning a business other than a sex-line
operation) to make use of this system to finance their company, but Matthijs immediately saw
that using it would be a way to earn revenue in return for Jurofoons services. Subsequently,
Jurofoons phone number became 0900-1411.
In order to tackle the other two difficulties, he asked for help from two friends, Ojo Meijers and
Koert Adriaans. The three had been members of the same fraternity at university and set up a
foundation QP Evenementen that in 1996 organized the Fiesta del Toro in the center of
Maastricht. It was a great success and attracted a number of popular music bands. The money
collected was donated to the local Ronald McDonald House, a guesthouse where the parents of

1 Before the liberalization of the telecom market, KPN was the only provider of telecom services
in the Netherlands.

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children who were patients in a nearby hospital could stay for the night at a reduced price, or by
making a donation.
At that time, Ojo Meijers was in the final year of his MSc in medicine but had decided that he did
not want a career in medicine. Koert Adriaans, who had already graduated with an MSc in
International Business, was working as a Sales and Marketing Manager for the European
Aviation Agency at Maastricht Aachen Airport. They had made a good team when they
organized the Fiesta del Toro, recalled Matthijs, so why shouldnt the three of them make a
success of Jurofoon? After several meetings to discuss the idea, the three decided to start working
together to set up the company.
JuroStart
The three entrepreneurs discussed the expertise question at length. In order to keep the Jurofoon
service cheap, it was essential to employ cheap people. If they needed to hire lawyers or
experienced legal experts, then the whole concept of Jurofoon would not be viable. Here, the
medical background of Ojo proved to be unexpectedly relevant. From his knowledge about the
way doctors and medical specialists conducted an anamnesis test on patients, he suggested
making protocols for the most frequently occurring legal questions private people might ask
(Exhibit 1). Based on these protocols a sort of Frequently Asked Questions - they could
generate scripts that anyone within Jurofoon answering the phone could use. Following the
scripts would ensure that a large percentage of the people calling Juroffon would receive good
advice. Anyone with a rudimentary knowledge of law like Matthijs, then in his third year of
study, would be able to become a Jurofoon employee. The company would only need one legal
expert in the back office to deal with questions their call-center could not answer. The three
decided that the only way to find out whether their idea would really work was to try it out.
It happened that Ojo had very good contacts within Maastricht university management. He
contacted Harry Fekkers, at that time director of UMHolding
2
and head of the Bureau of
Knowledge Transfer of Maastricht University. Feckers had already launched a lot of initiatives to
foster entrepreneurship and was convinced by Ojo to support a trial run for Jurofoon. He
provided a loan of 20,000 euros, a loft in an old university building to be used as an office, a
regular telephone number free of charge (at that time not yet a 0900 number) and free access to

2
UMHolding is the Holding company of Maastricht University. It participates in start-ups originating from
this university.

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the University Library. The three entrepreneurs designed and printed a flyer that was distributed
to shoppers in the cities of Maastricht and Heerlen. Then they waited for the first phone call. The
very first day they began promoting the Jurofoon service, the phone started to ring.

After a few weeks of further promotion and answering the telephone, the three concluded that the
idea worked. Of the phone calls received, 92% percent could be answered immediately by
Matthijs, with the same questions frequently asked by different callers (Exhibit 2). Clearly, most
callers could be helped without extensive or in-depth legal knowledge and in fact, listening
carefully to the callers problem and taking out the emotion usually proved to be much more
important than the legal advice itself, or the referral to a professional lawyer given at the end of
the call. From this experience they learned that, with a good briefing and specific training, they
should be able to operate Jurofoon without paying for expensive law professionals. It also
became clear that Jurofoon needed to build a referrals-database to refer customers to (regional)
law professionals or law practices, in case a more complex issue came up that could not be
properly dealt with over the phone. They also realized they would have to build routines that
could be used to standardize most of the legal counseling that the Jurofoon call-centre workers
provided. This task would require substantial effort and hence, money.
JuroMarketing
Although distributing flyers was good enough for a regional try-out, to be a viable business
Jurofoon needed to generate and maintain sufficient market recognition to provide a continuous
stream of telephone calls. Only a small percentage of people hearing about Jurofoon would have
a legal problem at that exact moment, so most potential customers would probably have forgotten
all about it when the day came that they actually needed legal help. The question, therefore, was
how to keep the brand and Jurofoon service at the forefront of the publics mind?
The answer came from Henk Cehas seed capital fund, G2. Ceha had had started a company
called Business Compass in 1991 after graduating in economics from Maastricht University. The
firm was an information provider to SME companies and since at that time the internet was
relatively undeveloped as an information source, Business Compass quickly became successful
as the first place SMEs contacted with a business question. In fact, Jurofoon aimed to fulfill a
similar function for private people with legal questions. Ceha eventually sold Business Compass
to ING bank and used the capital to co-found G2, a seed capital fund, with Rob Adriaans. Harry
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Fekkers, who had given Business Compass its first loan a few years ago, thought Ceha might be
the right person to offer Jurofoon advice at this stage, so he arranged an introduction.
At the end of 1998 the three founders met Henk Ceha to discuss how they could convince a bank
to grant Jurofoon a loan. They calculated that they needed 350 k to finance a marketing
campaign, but since banks and other investors were generally not keen to invest in marketing
projects they needed to pitch a very convincing story. Jos Boesten, owner of Cocktail
Communications, a local marketing and communications office knew Ceha who suggested to
Ojo, Koert and Mattijs that they should all meet to see what they could come up with.
The five established a good working relationship and eventually decided that Cocktail
Communications should develop a marketing strategy for Jurofoon, together with a logo and
company style, an advertisement for the Yellow Pages, the script for eight radio commercials
plus a finished radio commercial, and free postcards for distribution in markets, cafs and so on
(Exhibit 3). Cocktail Communications also offered to make a pitch to the ING bankers on behalf
of Jurofoon. In return, Jurofoon promised that, if the loan was granted, Cocktail Communications
should develop and implement the marketing campaign for Jurofoon.
This turned out to be a very fruitful deal. ING granted them the loan and in Cocktail
Communications, they found a very committed partner. The loan, together with the 230,000
euros the three entrepreneurs invested in Jurofoon (Ojo 103,000 ; Koert 103,000 and Matthijs
24,000 ) gave them 600,000 to kick-off their marketing campaign to boost the companys
growth.
The marketing campaign was a success. Jurofoon obtained a 3 year contract with KPN, the owner
of the Dutch Yellow Pages that ensured a Jurofoon advertisement would appear on every sixth
page of its telephone guide. On March 2nd 1999, Jurofoon launched its first radio commercial on
Dutch national radio and immediately afterwards, calls to 0900-1411 started to flood in. Between
March and September, Jurofoon received a total number of 10,124 calls, 3,422 of them
attributable to the radio commercials.
However, a few problems also began to emerge. The radio campaign was successful but also
expensive; they would very soon run out of money. This was mainly because although the radio
commercials successfully generated calls to Jurofoon, the number of calls rapidly declined during
the weeks following the broadcast of a commercial. The conclusion was that they must keep
broadcasting their adverts and even intensify their efforts. But where would they find the money
to pay for continued advertising?
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JuroDirect BV
The Jurofoon entrepreneurs discussed the issue with Henk Ceha, who promised to help them find
additional investors. Three weeks ago he presented them the results of his efforts. He had found a
consortium prepared to invest 520,000 in Jurofoon, in exchange for a share in the company.
The ING bank was also willing to provide an additional loan of 880,000 on condition that the
consortium went ahead with its investment (Exhibit 5 : an overview of the companies in the
consortium).

Over the next few weeks, the three founders met representatives of these companies to discuss
the planned development of Jurofoon and presented Juro2000, their plan for the immediate future
(Exhibit 6). The consortium was impressed and became convinced of the companys potential.
However, they were also convinced that Jurofoon would have to expand its services beyond
primary legal advice and diversify to generate additional sources of revenue. The dependence on
a call-centre based business model required a constant stream of radio- (and other) commercials
and made Jurofoon a very capital intensive business, and therefore a risky investment. On these
points, the three entrepreneurs were inclined to agree with the consortium.
Unfortunately, the meetings revealed that the two sides had different ideas on how to diversify
Jurofoons services. The Jurofoon entrepreneurs had concluded that they needed to develop a
subscription-based service that would provide extended legal assistance in addition to the direc,
telephone-based services. A yearly subscription fee would give customers access to, for example,
custom-made contracts, custom-made legal letters and information about specialized law
practices. The subscription service would not only give Jurofoon an additional source of revenue
but perhaps, even more important, a stable stream of subscribers who would pay annually and in
advance. Subscription-based services were popular as they increased the predictability of
revenue, and reduced the amount of working capital needed for a company to operate and grow.
The consortium saw the benefit of this service and revenue model, but nevertheless insisted that it
was not ambitious enough. In the Juro2000 plan, the three entrepreneurs had proposed the
gradual development of another initiative: JuroNet
3
. But whereas Jurofoon planned to introduce
JuroNet gradually, the consortium was convinced that this was the primary way to go. The
consortium saw the development of JuroNet as a completely new strategic direction for Jurofoon
and felt resources should be put into developing the expert system that was to be the core of

3
More information about JuroNet is given below.

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JuroNet, at the expense of the subscription service. They believed that the system would be able
to operate in multiple knowledge domains (not only legal affairs but possibly also medical or
engineering knowledge). That would allow the company to sell this software platform to other
companies that aimed to provide (non-legal) advice and information over the internet.
The consortium proposed founding a new company, JuroDirect BV, as the parent company of
both Jurofoon BV and JuroNet BV. The latter would be the company that developed and
exploited the expert system and the JuroNet portal. An advantage of this arrangement, from the
investors viewpoint, was that this legal structure would give them an exit option. JuroNet BV
would be much easier to sell than Jurofoon BV, as the earnings potential of the latter would be
much more dependent on its staff.
JuroNet
JuroNet would be an internet-based full service provider of legal advice. Through this portal
the public, companies and financial intermediaries (such as accountants) would be able to obtain
fast, easy and relatively cheap custom-made legal advice, custom-made contracts, custom-made
legal letters, information about organizations dealing with specific legal problems, brochures on
specific legal problems, lists of lawyers or legal advisors for specific legal problems, a list of
solicitors and so on Additional advantages for JuroNet users would be discounted fees for
lawyers, solicitors and other legal advisors, discounts on legal insurance and free access to
Jurofoon
JuroNet would be a unique legal portal. From their pcs and laptops, users would always be able
to find a solution to their problem, either from the internet service or through contracted JuroNet
partners who provided their services at a reduced rate to subscribers. JuroNet BV would generate
revenue from the JuroNet portal through pay-per-use (per advice, per time-unit) rates, micro-
feeds, subscription fees for unlimited use during a certain period (or combinations of both) and
revenue sharing with JuroNet partners
The JuroNet software platform would contain a completely integrated CRM-system for client
administration, direct debit and marketing data. The complete workflow would be automated and
include printed output (letters and invoices). The system would interact directly and
automatically with users, without the need for law students and/or professionals to provide
customized legal advice. The big advantage from a financial point of view would be that since
JuroNet only dealt with content creation and content management (and maintenance) of the
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system, any increase in the number of users would not increase the cost/hour. The consortium felt
that JuroNet would be more easily scalable than Jurofoon.
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Wild is the wind
Koert Your phone is ringing Shall I take it? Ojo asked when he heard Koerts mobile ring.
No, Ill answer if you can take over the steering wheel replied Koert.
He went down to the cabin to answer his phone and returned after ten minutes.
Guess what? he said.
I dont know Who was it?
It was Matthijs on the phone. He just got a called from RADAR
RADAR?
Yes, that TV programme broadcast every Monday.
Doesnt ring a bell.
Well, the programme looks at all kinds of consumer problems. During the broadcast they
confront companies with complaints from viewers and were on next
We? You mean Jurofoon?
Yes. The programme director called Matthijs and told him that they have been monitoring the
advice our people have been giving customers over the past few weeks and next Monday, will
present the results during the programme. And they will say that our legal service is crap that
most of our advice is wrong
Oh my This is really bad news
You can say that again. Matthijs thinks he may know whos behind all this. He said that
RADARs legal advisors on consumer problems also act for De Consumentenbond
4
. He
suggested they may regard Jurofoon as a threat to the legal support service that De

4
De Consumentenbond is a Dutch membership-based non-profit organization that helps private people
make consumer choices, and provides help with consumer-related problems.

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Consumentendbond provides to its own members, and that this is their way of dealing with the
threat.
Sound plausible. We must do something.
Yes of course but what?
Ojo was worried. Jurofoon now had an additional problem on its plate. They already had to
review their business plan for the consortium meeting next week. Before they could do that they
had to decide whether or not they wanted to accept and be involved in the JuroNet system. But if
they decided not to go for JuroNet, the consortium would not invest in Jurofoon. In that case,
they would urgently need to find alternative funding to pay for their marketing. And find it fast.
Even more urgently, they had to find a way to convince Matthijs to stay on board, or find a quick
way to replace his vital input in Jurofoon. And now they also had to deal with this RADAR crisis.
All this stress was not what Ojo had envisaged when he became an entrepreneur. He was
extremely worried. What should they do? And what to do first?
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Ready To Tack? The Case of Jurofoon

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This case was written by Gert Poppe and Wynand Bodewes from Maastricht

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