Term Scout’s Trust-Based Growth Engine: Building a Category Through Product Excellence

Trust isn’t just earned – it’s built systematically. In a recent episode of Category Visionaries, Term Scout CEO Otto Hanson revealed how his company transformed enterprise skepticism into advocacy by taking an unconventional approach to product development and market trust.

Learning Trust the Hard Way

Before founding Term Scout, Otto experienced the trust problem from both sides. “I worked in startups early in my career, got beat up by lawyers a lot and decided that if I was going to be a good entrepreneur, I needed to have some legal background,” he explains.

This experience shaped Term Scout’s entire approach to product development. As a former corporate attorney who had felt the pressure to “get every single I dotted and T crossed,” Otto understood exactly what would make enterprise legal teams trust – or distrust – a contract analysis solution.

The Failed Experiment That Changed Everything

Term Scout’s first attempt at building trust was through crowdsourcing. “The first idea that we toyed with and actually launched was kind of like a Yelp type app where attorneys could register, prove that they were an attorney… create a public review of a contract that you were reading.”

This experiment failed quickly but instructively. “Literally inside of a day, we had five different attorneys review the same contract on like, ten key metrics… and the results were all over the place. Like, one attorney gave it a five on privacy, another attorney gave it a one on privacy.”

Building Trust Through Verification

This early failure led to a crucial insight: in high-stakes decisions, trust requires verification. “Customers that get in there quickly find out, wow, they actually show their work. If we tell you that X clause is present within one click of the mouse, you can actually see the source language from the contract that proves the veracity of that statement.”

This commitment to verification shaped their AI strategy too. While many companies chase broad AI capabilities, Term Scout took a focused approach: “We’re kind of more like a small language model. We want a much smaller data set, but much higher quality signal in that data set.”

Creating a New Category Through Trust

This focus on verification and transparency has allowed Term Scout to create an entirely new category. “On the contract certification side, though, we’ve really created a category. And that category is all around using objective data to help people… Like real objective third party data to prove it. And in that particular space, there’s really no one else.”

The impact is measurable: “We’re seeing more than 40% of customers are starting to sign that contract without negotiating.” In the typically slow-moving world of enterprise contracts, this acceleration is remarkable.

Building for Both Sides

Perhaps most importantly, Term Scout recognized that true trust requires serving all parties. “We need a neutral, independent third party to help us get to contract faster. And what we’re trying to be is that neutral, independent third party for both parties, for both sides of the transaction.”

This neutrality has become a key differentiator. Instead of optimizing for either buyers or sellers, Term Scout has positioned itself as a trusted intermediary that makes the entire contract process more efficient.

For founders building trust-dependent products, Term Scout’s journey offers valuable lessons about the power of verification, transparency, and neutrality. Sometimes the fastest way to build trust isn’t through marketing claims or customer logos – it’s through building products that make trust inherent rather than earned.

The next challenge? Scaling this trust-based approach beyond enterprise to a broader market. As Otto puts it, “Contracts touch people and businesses equally. They don’t discriminate, right? Any person or business that participates in the economy is necessarily signing lots and lots of contracts.”