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The only contract solution built at an AI Research Institute

The only contract solution built at an AI Research Institute

The only contract solution built at an AI Research InstituteGaurav Oberoi
Chief Executive Officer, Founder

Lexion was born at the Allen Institute for AI (AI2). I was the first entrepreneur-in-residence there and every day, I got to work with incredible researchers to discover ways to commercialize artificial intelligence.

This was in 2018, and in the years leading up to it, there were huge step-function improvements in ML algorithms across multiple domains, such as computer vision and NLP.

So my question was, how do we take these innovations and bring them into products that actually help people get their jobs done?

Enter Lexion.

The early days of Lexion at AI2 

Early on, we recognized a huge opportunity in automatically understanding the contents of long-form documents. While big cloud providers like Microsoft, Amazon, and Google did have APIs for text parsing, they were all really aimed at short-form text. 

So, we set out to create a technology that could help people understand even a 50-page contract.

We knew that there were many applications for this technology—from commercial contracts to case law and patents. Our hypothesis was that if we could build a system where you could come to us with a pile of documents, we could quickly design models that could extract important information for you.

For example, we had a proof of concept with Wilson Sonsini, a law firm that had thousands of pages of documents that needed to be reviewed. Normally, a lawyer would need to review each page, find different clauses, and track down terms, taking up considerable time. But with our technology, we were able to quickly extract the necessary information, leaving the lawyer with more time to focus on their job.

We knew then that we really had something. Wilson Sonsini became an investor in our company and their chief innovation officer sat on our board. It was a win-win situation for us and for them.

We were also inspired by groundbreaking papers and projects that came out around the same time, like the Elmo Paper and the Snorkel project. These innovations helped us create the initial technology prototype that got us to launch the company and go raise a seed round.

From AI concept to Lexion CLM

As our platform evolved, we continued to listen to our customers' demands, leading to the next evolution of our company. We needed to understand the market size, the urgency of the problem, and the effort required to meet the demand.

One of the critical realizations we had was the bottleneck that in-house counsels faced when working with contracts. That realization led us to invest in embedding AI and ML deep into contract management at the very beginning, creating seamless magic for the in-house counsels.

Unlike other contract lifecycle management (CLM) companies, we chose to build our machine learning stack first before building the end application. It was a high initial capital investment, but we believed it was the right move as we wanted to differentiate ourselves by significantly reducing the amount of effort that human users put in.

It’s funny, but the thesis of the AI2 incubator is the opposite of what a thesis should be for building a company: You should start with the nails, not the hammer.

You should ask “What are the painful problems that people have?” Not “How can I solve them with this tool?” But AI2 has never been afraid of flipping a model on its head, and that’s exactly what they do. They start with great AI technology and apply it to real business problems. 

As we built out Lexion as a CLM, I listened to potential customers every single day. I’d ask, “How do you manage your contracts? What are the pain points? Why is that a problem?”

(One of the founders at AI2 still jokes that I made a track in the carpet from all the pacing I did on those prospect calls.) 

Starting with the hammer isn’t the way for everyone to build a company, but it did enable us to sharpen our tool—with the right technology and with true customer listening. 

Lexion helps every team close deals faster

Making strategic decisions and listening to our customers' needs has been critical to our success at Lexion. We started with a narrow focus but evolved our platform to meet the demands of our customers and grow our business.

Now, we’re helping operations teams accelerate deals by managing pre-signature and post-signature contract management. Our platform now provides solutions for generating contracts from drafts or templates, negotiation, managing various redlines, getting approvals, and more.

I share even more of our story on Madrona’s Founded and Funded Podcast. You can listen here.

Bonus: A lesson for startup founders

If you're a startup founder or entrepreneur, my advice to you is this: don't neglect your own well-being. Make a conscious effort to prioritize sleep, exercise, and healthy eating habits. Trust me, it will pay off in the long run. 

Of course, this is all easier said than done. It can be tough to prioritize self-care when you have a million other things on your plate. But in my experience, it's absolutely crucial if you want to be successful in the long run.

When you're in a high-performance environment like running a startup, taking care of yourself is just as important as any other aspect of your business or your team. 

Learn more about the Lexion story and listen to the podcast here


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