E-signature platform DocuSign has ended a 15-month CEO search with yesterday's announcement that it has signed former Responsys CEO Dan Springer to the role. He becomes the fifth CEO in DocuSign's 13-year history, and the second to be appointed since Keith Krach, who continues as chairman, first said in October 2015 that he planned to step down.
Hours before Krach's replacement was originally due to be announced in March last year, that still unnamed person pulled out after being headhunted by another company. The setback was followed by other management changes as the company steeled itself for a new CEO search.
Springer previously served as Chairman and CEO of email marketing provider Responsys for a decade, during which he oversaw its Nasdaq IPO in 2011 and its later sale to Oracle for $1.6 billion in early 2014. DocuSign had approached him during its earlier CEO search, he told diginomica today, but he had not wanted to start a new full-time role at that time because he wanted to spend more time with his family. Second time around, he was more receptive:
They came back in November. It was still a little bit early but I said we'd have a conversation. I got so excited about the opportunity and by Christmas I was signed.
Choosing the IPO moment
As a unicorn valued in excess of $3 billion, backed by more than half a billion in venture funding, with over a quarter million business customers and 100 million users, DocuSign is a prime candidate for an IPO, which has been on hold while the CEO search progressed. Although there's already quite a few B2B SaaS companies slated for IPOs this year, DocuSign will be able to choose its own moment, says Springer:
I think DocuSign's a company that, regardless what the marketplace is for IPOs, it's of the scale and strength it can go out in any environment.
A range of factors including scale, growth trajectory, total addressable market and team strength combine to make the company "IPO-ready," he says, although he refuses to be drawn on whether he has a specific timescale in mind:
Looking across those requirements, this is all checked off here. This is a company that's ready.
On day two [as CEO], I don't have a timeline, it's something I need to figure out.
Many people are asking that question and we need some kind of timeline, but I need a little time to get comfortable on a timetable.
At the same time, there's no urgency in terms of cashflow, he says:
I look at the IPO as an important milestone but not that crucial to the success of the business. It's a staging point not a finish line. From a financing point of view, it doesn't matter too much when we do it.
One of the big drivers of DocuSign's continuing growth in the past two years has been an increased emphasis on providing its services through API connections. While its early growth was based on businesses and individuals signing up for and using its e-signature application on the web and on mobile, today it is making big inroads into the enterprise market as an API service that developers build into other applications, says Springer, whether that's SAP, G-Suite, Salesforce or an internally developed application.
We're pushing a strategy of integrating to whatever you have. Whatever kind of applications you're using, we want to integrate with them. Either to improve the digital transformation side of your business or to enhance the applications you already have.
While an API service generates less margin per user or per transaction than a full-blown application, that's outweighed by the potential to reach a much wider addressable market at a lower cost of sale, Springer explains.
It's just like the discussion about channels. If we can sell through our partners, our total cost of sale can be dramatically reduced.
Once you find someone that's got five or six processes we can transform, the opportunity is there to do much more. We have customers who have a couple hundred processes we can transform.
The API strategy opens up that opportunity.
Enterprises find the DocuSign service lets them eliminate paper-based processes as part of digital transformation initiatives. This goes further than simply replacing the physical signature with an electronic equivalent, to open up opportunities that fundamentally rethink the underlying processes, says Springer.
I've been realizing more and more, it's not just paper, there's a lot of folk that have electronic processes they've built on old ERP platforms, but they're still antiquated in the way they operate. Digital transformation is going to require you to think about redoing these processes in a modern way. That's what we're competing with when we're going out into the market.
Thus the API offering allows enterprises to drive new business processes as well as saving costs. That's a difference from the Responsys business, which was solely about driving revenue, he says.
Responsys was a significant revenue driver. DocuSign can drive revenue but can also be a huge cost saver.
That combination helps build the customer relationship over time, which is one of the reasons he's excited about the DocuSign business, says Springer.
It's not locking in the customer but adding more value. In the old enterprise software space, I get a lot of money up front. In a SaaS model it's kind of opposite. You have to earn it every day.
We want the customer to be in the best position to go forward with their digital transformation so they want to re-up with us. It's an ongoing value proposition for the customer and that's the real lock-in.
Growth potential is even greater internationally, says Springer, building on acquisitions and product investments DocuSign has been making in order to bolster its global appeal.
We're still growing dramatically in north America. We're actually growing faster but off a smaller base internationally.
To use a baseball analogy, we feel we're in the first innings of the game, and we're not even into the first tenth of the first innings internationally. While we think we're the leader in terms of market share, it's just tiny in terms of the penetration. So we think there's a lot of growth potential.
Phew, that took a while. At last DocuSign has found a convincing personality to be its CEO and can get on with the next phase of its story. An IPO is clearly part of that next phase. But equally important is to continue its progress in helping enterprises digitally transform what have hitherto been largely paper-based processes (even when digitalized). That's one of the reasons I like writing about DocuSign. Its customers are serious about changing the way they operate and to seize the opportunities to transform for a digital world.