Six years later, the floor inside a conference room at the AI2 Incubator in Seattle still shows signs of Gaurav Oberoi’s dedication to solving customer problems.
This is where the Lexion CEO paced in circles on call after call, gathering the input that he and his colleagues needed to a build a tech startup that uses artificial intelligence to scour and glean insights from complicated legal documents.
“I don’t know if there’s a more perfect example of quite literally the physical manifestation of Gaurav’s customer discovery than the worn carpets in our conference room,” said Jacob Colker, managing director at the AI2 Incubator.
Lexion announced this week that it will be acquired by Docusign in a $165 million deal, marking a successful exit for the Seattle startup co-founded by Oberoi in 2018.
It’s the third company Oberoi helped launch that was later acquired — a track record that few in Seattle’s startup ranks have matched, placing the Rice University computer science grad among the most respected company builders in the region.
Oberoi may not be a household name — like a Rich Barton of Zillow or Jeff Bezos of Amazon. But Oberoi is an entrepreneur who commands attention from venture capitalists that laud his ability to parse a startup idea and determine its validity.
“I would work with him again in an instant, ” said Tim Porter, managing director at Madrona and Lexion board member.
Colleagues and investors say the 44-year-old possesses a rare combination of technical talent, business judgment, and emotional intelligence.
“When you talk to him about customers, he doesn’t give you a rote answer,” said Pioneer Square Labs Managing Director Greg Gottesman, who worked with Oberoi on a variety of ideas at his Seattle startup studio. “He’s giving you the answer that’s three chess moves ahead. He’s really trying to understand the customer problem — not only as well as the customer understands it, but maybe even better.”
The desire to build something of value for the customer dates back to Oberoi’s youth, when he created computer games and passed them out to classmates on floppy disks.
“They loved it and they’d come back and tell me to do more of this and that,” Oberoi told GeekWire on Tuesday. “That social validation felt good. I had this unique skill where I could make this widget, and people like the widget. That’s fun.”
Diligent discernment
Oberoi previously sold bill-splitting app BillMonk to Obopay and automated survey startup Precision Polling to SurveyMonkey.
Oberoi spent more than five years at SurveyMonkey, helping it grow from 50 to 700 employees.
He co-founded SurveyMonkey Audience, which helps users of the service find respondents who fit the specific demographics they want to take their surveys.
In 2017, Oberoi joined Pioneer Square Labs. After dozens of interviews with potential customers and a deep analysis of the competitive landscape, Oberoi’s industrial IoT sector concept didn’t take root.
“Ultimately I determined that there was insufficient demand for the idea, and presented my findings along with next steps to the managing directors,” Oberoi writes on his LinkedIn page.
That ability to shelve an idea — after countless hours of research — is part of the reason why Oberoi has found entrepreneurial success.
Later that year, Oberoi joined the AI2 Incubator as its first entrepreneur-in-residence.
He dove into one idea related to synthetic photo generation, but the technology wasn’t quite mature enough (though a viral blog post on deepfakes landed Oberoi in an episode of Buzzfeed’s Netflix documentary series Follow This).
Another idea was around AI software for ultrasound devices, which drew interest from one large customer but the potential market was limited, and the business plan didn’t align with Oberoi’s skillset.
In an earlier interview with GeekWire in 2022, Oberoi said he follows a playbook for evaluating different ideas, writing the “equivalent of a PR FAQ” — mirroring a common practice at Amazon, where Oberoi previously worked as a software developer two decades ago.
“If you understand the problem super well, you will find the right solution.”
“What is this product? Who is it for? What’s it going to do?” Oberoi said of the questions he tries to answer. “Then I’ll do a combination of talking to a lot of customers to say, hey, if I solve this, would you care? How much would you pay? Meanwhile, I’ll also do tech diligence, while starting to build some sort of a prototype to see if it’s feasible. And this is where I needed input from people experienced in the space.”
Oberoi began working closely with fellow AI2 entrepreneur-in-residence Emad Elwany, a former Microsoft engineering leader who built an early version of Lexion at a hackathon based on a problem his wife faced in procurement at a large telecom company.
James Baird, a longtime engineer and also an AI2 entrepreneur-in-residence, joined as another co-founder, adding more crucial technical expertise.
Oberoi made hundreds of calls to lawyers, paralegals, contract managers, consultants, and various other stakeholders. He learned that companies were struggling to track contracts. There wasn’t an easy way to sift through those documents to get answers to questions. And companies weren’t investing in legal-related software — not yet, at least.
“There were some products out there in this space, but they didn’t do it very well,” Oberoi said. “They were priced incorrectly. And there were entire market segments that were underserved.”
Lexion also had some secret sauce in powerful text-mining capabilities developed at the Allen Institute for Artificial Intelligence (AI2).
One of their first proofs of concept was for Wilson Sonsini Goodrich & Rosati, the prominent law firm that serves as legal counsel for major tech companies.
As a way to test the capabilities, Wilson Sonsini gave the Lexion team a large number of venture financing documents, and asked them to extract specific venture deal terms from them. The process normally would have taken a team of annotators months to complete, Oberoi said in a 2023 conversation with Shauna Swerland, CEO of Fuel Talent, on the “What Fuels You” podcast.
“We were able to rapidly build models and turn around the project in the span of a week,” Oberoi said on the podcast. “That really blew them away.”
Wilson Sonsini became not just a customer but also an investor in Lexion.
“I loved how customer-driven and intellectually honest Gaurav was in evaluating this idea (and dismissing several others),” said Madrona’s Porter.
Listening to customers and colleagues
Lexion’s initial product was a smart repository for contracts, giving legal teams a way to quickly answer basic questions about existing documents, based on AI extractions of key terms and clauses.
The startup later built products for the contract creation process — helping not just legal but also sales, IT, finance, HR, and anyone dealing with contracts or documents such as RFPs and questionnaires.
“They listened to customers about what ‘next’ features they needed,” Porter said.
Lexion raised modest investment, taking about $36 million from investors including Point72 Ventures and Khosla Ventures (it was Oberoi’s first time taking venture capital). The company didn’t grow headcount exponentially — it currently employs around 100 people — and avoided making any layoffs amid the broader tech downturn.
That contrasts with many of its peers during the venture capital boom times.
“We have a very pragmatic culture,” Oberoi said.
Jessica Nguyen, chief legal officer who joined Lexion in 2020, praised Oberoi for his humility, thoughtfulness, and lack of ego, particularly for a CEO.
“There are a lot of folks out there who are incredibly talented and intelligent, but don’t listen,” she said. “I can see him listening based on the decisions he makes, and also the results.”
Porter pointed to Lexion’s ability to recruit and hire. One key early decision was to bring on Nguyen as the company’s chief legal officer, much sooner than many startups would hire a lawyer, when Lexion had about 10 employees.
“We did it because Jessica is not just a lawyer; she is an incredible influencer, marketer, Voice of the Customer, or salesperson,” Oberoi told Swerland on the “What Fuels You” podcast. “She was really our GTM [go-to-market] engine in the early days, as well as our number-one user and product feedback person.”
Docusign said this week it plans to integrate the Lexion’s technology into its Intelligent Agreement Management Platform. Oberoi, Baird, and Elwany are slated to join Docusign in senior product and engineering roles.
Lexion — officially known as DocuSmart Inc. — is a finalist for Workplace of the Year at Thursday’s 2024 GeekWire Awards, and Oberoi is also a finalist for CEO of the Year at the event this week in Seattle.
Oberoi advised other entrepreneurs to execute fast, to make sure all employees are aligned in the same direction, and “lean in” to what customers are telling you.
“It’s not about the solution, it’s about the problem,” Oberoi said. “If you understand the problem super well, you will find the right solution.”
