The following interview is a conversation we had with Gaurav Oberoi, CEO and Co-Founder of Lexion, on our podcast Category Visionaries. You can view the full episode here: $35 Million Raised to Build the Future of Contract Management
Gaurav Oberoi
Thanks for having me, Brett.
Brett
No problem. So, to kick things off, can we just start with a quick summary of who you are and a bit more about your background?
Gaurav Oberoi
Yeah, absolutely. So I am Garab Oberoy. I am the CEO of Lexion. So Lexion makes software that we sell into in house legal teams. But my background is not in law, as many people ask. It is in engineering and product. I studied computer science in college. I went to work for Amazon early in my career, which took me to Seattle. But then my career took a different turn, and I went to go start my first company when I was 25 years old. It was the first of four, this being my fourth one. The others were all bootstrapped, and I exited several of them. And this is my first one that’s venture backed.
Brett
And a couple of questions we like to ask. And the goal of these questions is really just to better understand what makes you tick as a Founder and as an entrepreneur first one, what Founder or CEO do you admire the most and what do you admire about them?
Gaurav Oberoi
Oh, gosh, I love builders. So David Hennemeyer Hansen, the Founder, the builder of Ruby on Rails and the Founder of 37 Signals. I love that he bootstrapped his business. I love that he built his products with his own hands. I feel the same way about Jeff Lawson at Twilio. He built twilio along with his co-founders. He wrote a big chunk of the initial code and went on to build a great company. And I used to know Jeff personally back when he lived in Seattle. I also love Sridhar Vembu. He’s the Founder of Zoho, a very large Indian company that was entirely bootstrapped. So I really admire people who’ve built things from the ground up. And as a builder myself, it’s very inspirational to me.
Brett
I’m a big fan of the base camp guys as well. What’s his name abbreviated to? Is it DHH?
Gaurav Oberoi
DHH.
Brett
I love his contrarian views, and he’s never afraid to pick a fight and get into it on Twitter, which I’m not brave enough for the Twitter trolls, but he seems to be pretty fearless there.
Gaurav Oberoi
He has no fear. I don’t know how he does it.
Brett
He has such good content. Did you see the post he had about his view, like, then and now?
Gaurav Oberoi
I have not. No.
Brett
I’ll send you a link. It’s really know. It’s like his office. Everyone talks about his office in Malibu. It’s like this big. Yeah, here’s where it started. Here’s the crappy office where this all began.
Gaurav Oberoi
That’s right. No, I have seen both of those. Also awesome. I mean, again, he literally has built the product, the business, everything from the ground up. And it’s what I love to do, and I’m inspired by people who’ve done it so well in their careers.
Brett
What about books? Because we talked about the base camp folks, we can skip any of their books, even though they have awesome books. What books have had a major impact on you as a Founder?
Gaurav Oberoi
This may be a bit of a contrarian view. I find a lot of business books to be a little bit tedious and additive. So in general, I have read more summaries of business books than not. Managing Humans is a book that I read several years ago that was really helpful to me early as I started to manage people and organizations. But one of the books that really inspired me is actually not so much a business book. It’s called? Don’t make me think. And it’s a design a UX design principles book written by this guy, Steve Krug. And it’s pretty old at this point. Maybe it’s 20 years old, but it’s something that really inspired every product that I’ve built. And really, this concept of you really want to design products such that when people start using them, they don’t need to think. Like, make sure if a button is supposed to do something, call it what it’s supposed to do.
Gaurav Oberoi
Make it front and center. Make sure your navigation and your information architecture is very simple and easy to understand and always orient your design decisions towards Don’t Make Me Think. And it’s something that I’ve used in every product I’ve built, including here at Lexion. And I think it has been a key part of our success at every one of those, especially at Lexion. And I’ll talk more about that later. Nice.
Brett
Well, let’s dive right into it. So just to give know some context, can you talk to us a little bit about what Lexion does?
Gaurav Oberoi
Yeah. Lexion is the fastest way for companies to get contracts done. That is what we do. That’s how we help businesses. Now, when you think contracts and companies, you think, oh, you’re selling to the lawyers, and the lawyers are the only ones using your product. And while it’s true that we typically enter organizations by selling into legal teams, the reality is no contract in any company is done just by legal. Legal really just looks at the legal terms, but there’s usually a salesperson or a procurement person negotiating all the commercial terms. There’s finance that needs to approve a variety of financial terms. There’s it that’s going to look in for security to make sure things are good. You might loop in your engineering or customer success teams if you’re agreeing to certain kinds of implementation guarantees or new features, and then execs need to get involved.
Gaurav Oberoi
When you’re providing discounts or making some sort of a big strategic deal. This happens pretty much for every contract. And when you imagine organizations with 5100 250 salespeople or large procurement orgs, you can imagine that this could lead to complete chaos if it’s done the way that it is in many companies, which is entirely via email. So, Lexion, what we do is we come in and we give these companies a variety of tools to speed up this whole process. One, we give them intake so everyone in the company doesn’t have to bother to learn a new tool. We don’t make them think they can just email into legal at as they normally do, but on the back end it’ll turn into a nice line item on a dashboard where legal has full visibility into what’s going on, as do all their counterparts. They can do the same thing from Salesforce.
Gaurav Oberoi
And what this means is when we talk to sales leaders and they say, oh boy, when we get to the last phase of our deal making, we lose all visibility and control. It just gets stuck in Legal. Well, now, that’s not true. Legal says hey, actually, of the twelve deals that you think are stuck in Legal, we’re only working on two of them. Five of them are with the counterparty, three are waiting for finance approval, and two are in your inbox waiting for you to approve the discount. So that’s how we help on the intake side by providing visibility. Another thing we do is we provide sophisticated automations. They range from hey, just fill out a few fields and generate a contract and automatically send it off for signature to hey. If the dollar value for this contract is more than 50 grand, make sure finance gets an automated approval sent to them, or it should always be looped in.
Gaurav Oberoi
And we allow teams to build really sophisticated automations without writing any code. So they’re dragging and dropping boxes and they’re able to do things like, hey, now that a deal has been signed, make sure we file a Jira ticket over here and also email it to our accounts receivables team so they can start working on it. So we bring a lot of order to that chaos. The third thing we do is we have an incredible repository that is powered by AI. And what that means is you could say, hey, gosh, I have 5000 contracts sitting in Google Drive and I really don’t know what’s in them. And we have all these questions coming up and we say no problem, Lexion will pull them all in, read each contract, and then build for you a report of upcoming renewals and cancellations and deadlines, we will automatically extract clauses.
Gaurav Oberoi
So you can really quickly run a report and say, hey, we’re updating our marketing site. Whose logo can we use? Or Engineering wants to open a data center in Europe, which customers have disallowed that, et cetera. So that’s our intelligent repository. And then the last thing that we help teams with is we’re using generative AI inside a lawyer’s favorite tool, which is Microsoft Word. And as they are editing a contract, Lexion’s Add in helps them write new clause language, modify existing clause language, and our latest feature, which is in beta, acts like a junior attorney that walks through the whole contract running any predefined rules you’ve given it and comes back and says, hey, I’ve gone through and redlined your contract. Here’s what passed, here’s what didn’t, and here’s my suggestions. So we use automation in AI to speed up contracting and bring visibility to the whole process.
Brett
And take me back to February 2018. I see that’s when the company was officially formed or officially launched on LinkedIn, at least. What was that early insight that made you say, yes, this is a problem that I want to solve? Because I think, as you mentioned at the intro, you don’t come from a legal background. You aren’t a lawyer who was grinding away on these contracts personally. So where did that market insight come from and that opportunity insight come from?
Gaurav Oberoi
Yeah, we founded the company at the very end of 2018, like, the last few days of December. The way this came about is before I started this business, I was at SurveyMonkey. I had sold them my last business and been at the company as it grew from 50 to 700 people. After the tragic passing of our then CEO Dave Goldberg, I decided to leave, take a little bit of time off, and then get back into building a company from the ground up. Around that time, were seeing a new wave of AI, and particularly, it was all ImageNet. There were these amazing object detection algorithms that were far surpassing any previous benchmarks. It was around then that the Allen Institute for Artificial Intelligence, a amazing research institute here in town, funded by the late and great Paul Allen, tapped me on the shoulder and said, hey, look, we’ve accidentally spun out a few incredibly successful companies.
Gaurav Oberoi
Xnor, for example, bought by Apple for $300 million, and we want to do more of this. And you seem like the kind of profile that we want. You’re a technically minded Founder, so why don’t you come and hang your hat here? I thought it was a wonderful opportunity, and I spent a year there. In that year, I really tinkered with a lot of different novel technologies that were being developed. Mid 2018, there was a groundbreaking paper that came out of AI two called the Elmo Paper, and it advanced the field of natural language processing by creating really what were the first large language models. And Google soon after that came out with Bert. And what all this technology meant is it really pointed to the ability to train algorithms to read text with far less annotation. That was typically required before. And we looked at this tech and said, hey.
Gaurav Oberoi
Using this as well as ideas from a Stanford project called originally the Deep Dive and later the Snorkel project said, we can combine a lot of these novel technologies and build a system where someone could come to us with any kind of complex doc and say, hey, I need to understand all these things in this doc. And I have humans that are manually filling out spreadsheets or typing it into salesforce or into our ERP, but can you automate this? And we very confidently could say, yes. And not only can we automate it, but we can train these models very quickly and relatively inexpensively. So that was the origin. It was we have this tech that can read documents. Now, at the same time, my Co-Founder and CTO, Ahmad, is an incredibly talented engineer and researcher who was at Microsoft Research at the time, working on deploying large scale NLP products.
Gaurav Oberoi
He said, look, my wife works in procurement, and they deal with thousands of contracts at the very large company she works at, and they struggle with these challenges all the time. Contracts are an important business document. They exist in every business, and there’s lots and lots of different kinds of them. There’s not just vendor contracts and commercial contracts. There’s leases. There’s HR agreements. When you go into specialized organizations, there are interbank loan agreements or different kinds of insurance agreements. It’s a vast market with a lot of opportunity. So we started looking around in the early days to say, hey, we’ve built this tech that can understand documents like contracts. Where do we apply it? And that’s when we got connected with David Wong at Wilson Sinsini. He is their chief innovation officer, and he was running experiments with a few other early AI companies that had been around at the time to say, hey, who really has the chops to do this and who just has marketing fluff?
Gaurav Oberoi
We were lucky to get connected. He had a whole experiment set up. He sent us documents and a challenge, and we responded to him within a week with highly trained models that he could run his documents through. And he looked at this and said, wow, this is incredible. It led to us not just having a commercial relationship with Wilson CD, but them also investing in us. And it really got us tuned to, hey, if we look at contracts, this is a very large market, and where do we go from here? So really the origin of the business was, we have a cool tech that can read contracts. Now, what?
Brett
This show is brought to you by Front Lines Media, a podcast production studio that helps B. Two B founders launch, manage, and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. And are there lawyers or maybe like more junior lawyers or paralegals who think, whoa, whoa, this guy’s trying to put me out of business, or he’s trying to take away my job? Is there any fear of it?
Gaurav Oberoi
With all such technology, anything that can automate aspects of people’s roles? There’s always some fear around, oh gosh, you’re going to take my job away. In the early days, there were certainly some of those questions, but I think as people came into touch with the technology, they began to realize that this tech automates away the most painful parts of my job, the part that I don’t really want to do. So I’ll just give you an example. In your personal life, I’m sure you’ve signed a DocuSign form and even in your professional life for your business. Now, when that happens in your personal life, you get that email back, DocuSign, complete PDF attached. And what do you do? You’re just like, eh, that’s fine, I’ll search for it in my email later. But if you’re in a business and you’re, let’s say, a paralegal, your job is to download that PDF, open it, read the counterparty and the date and what kind of agreement it is, rename it in some standard nomenclature, then go create a folder in your folder structure someone can find it later.
Gaurav Oberoi
That’s what you’re doing dozens of times a week so that you can keep all of these things in a place that’s findable and searchable. When we go into companies and say, all of that is now fully automated, as soon as something is signed in DocuSign, we’ll pull it in, we’ll file it away. We’ll even connect it to Slack so a salesperson doesn’t have to bug you saying, hey, where’s that contract? Or do we have an NDA with so and so? They can just ask in Slack or Teams or write from salesforce teams. Go, wow, that is awesome. Now I can go back to focusing on higher value work, like helping close strategic deals and improving our entire process.
Brett
And can you talk a little bit about the traction, the growth and adoption that you’re seeing? Our audience loves to hear metrics, so anything that you can highlight to talk about the growth you’re seeing would be awesome to hear.
Gaurav Oberoi
Yeah, happy to do that. So last year, Lexion, we grew our revenues threefold. It was a fantastic breakout year for our product, and I think it really showed that we’ve been able to hit that sweet spot of solving critical problems in a way that is easy to adopt and implement, because that is one of the biggest challenges in this industry. We also have incredibly high retention and net retention. So our customers, we’ve had almost no churn in our business. And again, it speaks to the value that we’re providing companies. It’s not just, hey, we sold you a Widget, good luck. It’s, oh, you’re engaged, you’re using it. You’re actually seeing true ROI, and you’re not going to go back to how it was done before. We also see very high engagement. A little over 90% of our active accounts are logging in more than 20 days out of 30 in a month.
Gaurav Oberoi
And when you consider that includes weekends in there, we just have an incredibly engaged user base that are using this as their daily workflow tool. From that perspective, I’m really proud of what we’ve built the business. We just raised a round of funding. We raised a $20 million round just a couple of months ago, bringing our total raise to 35 million. And we did it in what is possibly the worst fundraising climate for Series B companies in the last decade. And were able to do it because investors saw that not only do we have good financial metrics and traction, but when you look at the opportunity ahead of us and the size of the market and the many different ways that we can help businesses from contracts and beyond. That created a lot of excitement investing and growing.
Brett
Alopexia and if you reflect on the journey so far from a go to market perspective, what was the greatest go to market challenge you faced and how’d you overcome it?
Gaurav Oberoi
I think the challenge we faced is very common. It’s not unique to us. It really comes down to building pipeline. How do we get more and more people to be aware of our phenomenal product and come into consideration, so when they’re ready to buy, they will consider us. When we get them into our buying cycle, when we’re one of the considered vendors, we have phenomenal win rates despite being in a fairly crowded and competitive market. And again, that speaks to the quality of our team and our product and the service that we’re able to provide. So, yeah, building pipeline, doing it in a way that is efficient. We don’t want to be burning cash just to get customers in the door in a way that isn’t scalable. So it really comes down to being creative in getting the word out. And what we found has really helped us is speaking to the community from people that are really credible.
Gaurav Oberoi
So something we did early on in our business is we brought on Jessica Nguyen. She is our chief legal officer. She is actually a lawyer. She has had a great career, starting as first counsel at Avalara, a company that went on to be a publicly traded company. She’s worked at Microsoft. She was most recently general counsel at PayScale before she joined us. So lots of great experience being a lawyer, and she brings a lot of credibility to the problem we’re solving. She’s lived it. She’s helped us build the product, told us what’s important, what isn’t. But she’s been able to go out there and evangelize and speak to the community. And so for us, what that translates into from a pipeline building perspective is if we’re able to go and educate other in house legal teams on, hey, here’s some things you probably weren’t taught in law school but are really critical to your job.
Gaurav Oberoi
Jessica is able to do that, and not just her, but other team members. On our team, we’ve hired multiple lawyers across our organization. Chase, our head of customer success, has a law degree. Krista, who’s on our business ops and legal ops team, has years of experience at multiple companies working on the contracting side, we have Lena on our sales.org. She has a law degree and has worked as a lawyer in our sales and so on. So we’ve really done this across the and it’s allowed us to build credibility and visibility to our audience.
Brett
And final question here. Since we’re up on time and only have about two minutes left, let’s zoom out into the future. So let’s say maybe three to five years from today. What’s that high level vision? What’s that big picture that you’re working on building?
Gaurav Oberoi
We’re building workflow operations tools for the entire company and in particular for the back office operations teams of the company. By that I mean the finance team, the It team, the sales ops and deal desk team, the procurement team, and, of course, legal. All of these people provide the machinery by which organizations run, but they are very underresourced on tools. Usually they’re using email and spreadsheets and file folders to get their work done. lexion.com in and gives them a platform by which they can not just get these agreements signed, but operate on them. What happens after it’s signed? Who goes and collects payment? How does that happen? How do we engage with our various teams to get these accounts set up? How do we really orchestrate this in a way that management has clear visibility and can see that all of these operations are working as best as they can?
Gaurav Oberoi
They have clear metrics on them, and they’re able to improve these functions. So we really see the opportunity as workflow operations software for organizations to run much more smoothly.
Brett
Amazing. I love it. All right, well, we are going to have to wrap here before we do. If people want to follow along with your journey as you build and execute on this vision, where should they go?
Gaurav Oberoi
Go to Lexion AI and also find us on LinkedIn.
Brett
Amazing. Well, thank you so much for taking the time to talk about what you’re building and share some of those lessons that you’ve learned along the way, I really enjoyed this conversation, and I know the audience is going to as well, so thanks so much for taking the time.
Gaurav Oberoi
Thanks for having me, Brett.
Brett
All right, keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for category visioners on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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