Contracts can be one of the most tedious aspects of doing business. Getting them drafted by a lawyer is just the first step. Many contracts must be reviewed, renegotiated, rewritten and renewed on an annual basis, or even more frequently, to remain valid and binding.
A business might have dozens, hundreds or even thousands of contracts on its books. That means the contract renegotiation and approval process can take a lot of time — and cost a lot of money.
CoLabs, a Tampa-based software incubator formed in December 2017, thinks it has found a better way for businesses to handle contracts. IntelAgree is the company’s debut Software as a Service product. Launching in July, it’s being marketed as a tool that uses artificial intelligence and machine learning to optimize and streamline time-consuming yet important business processes.
Thanks to advancements in AI and machine learning, IntelAgree, short for intelligent agreements, can pick up patterns and tendencies it detects in contracts and other business records.
CoLabs’ efforts to hit the marker aggressively have been bolstered by $4 million in seed funding from the three founders — David Hull, John Wagner and Marc Miller — as well as Valley National Bank and private investors.
“We are playing in the CLM space,” says Hull, using the acronym for contract lifecycle management. “The goal is for both parties [in a contract negotiation] to get to ‘yes’ sooner.”
“We are not replacing attorneys or people, but our goal is to make everyone more efficient and make sure everyone knows what they are signing.” David Hull, CoLabs.
IntelAgree accomplishes that goal, Hull explains, by tracking and indexing contract information in a database that, over time, can be analyzed and acted upon by AI. At its core, it’s no different than the processes that goes into an airplane’s autopilot function or a smartphone’s facial recognition feature.
“We saw the writing on the wall that if you are going to be building software products, you really need to have AI part and parcel of your application,” says Hull, 48, and a founder of area technology staffing firm Veredus, which grew to $100 million in annual revenue by the time the company was acquired by Hays in 2014.
The other founders are the brains behind eStaff365, a cloud-based employee hiring platform that launched in 2013 and went on to be acquired by Boston-based Erecruit less than two years later. Wagner boasts the additional credential of being a founder of AgileThought, a Tampa custom software development firm that's made numerous appearances on the Inc. 5000 list of the fastest-growing private companies in the country.
More start power: CoLabs’ advisory board includes executives with experience at Spalding, Evenflo, Anchor Glass, Harrod Properties and Manhattan Associates.
The company has 15 employees and plans to hire more, Hull says, as it refurbishes office space it acquired in downtown Tampa.
He declines to offer pricing information for IntelAgree because it’s still in the testing phase, but says a wide range of early adopters — in industries including investment banking, technology, staffing, professional services and commercial real estate — are evaluating its capabilities. One early goal is to have at least 100 customers using IntelAgree by the end of 2019.
“With just small amounts of data, it can start seeing enough patterns to recommend process changes to your contracts,” Hull says. “If the machine starts recognizing patterns in the negotiation, it can recommend, ‘Hey, you typically agree to this, so I’m going to try to guide you there a little quicker.’ It reduces friction between you and the customer.”
Hull says while there's abundant competition for IntelAgree, rival products don’t utilize AI like CoLabs does. A core challenge, he adds, is both finding the appropriate customers and articulating the value. The SaaS model was chosen because CoLabs anticipates its customers will need IntelAgree on an ongoing basis, not just during a contract negotiation.
“You’ve got to maintain the agreement,” he says. “You might get audited by your customer, and the AI will pull information and data and formulas out of your contract so you can make sure you’re in compliance with what you've agreed to with your customer.”
Hull points out, however, the product is not meant to be a substitute for the advice of business professionals.
“We are not replacing attorneys or people," he says, "but our goal is to make everyone more efficient and make sure everyone knows what they are signing."