How An Ohio Farm Boy Built a Billion-Dollar Software Empire
Leadership lessons from the serial entrepreneur who built billion-dollar businesses, DocuSign and Ariba
While many entrepreneurs dream of building a billion-dollar business, few are able to achieve that in their lifetimes.
So how did DocuSign's Chairman and CEO, Keith Krach, go from being an Ohio farm boy, who just wanted to help his dad out with a machine shop, to building Ariba and DocuSign, which are collectively valued at more than $7 billion?
While waiting for a bus near the DocuSign headquarters in San Francisco, I decided to cold email DocuSign's CEO and find out.
A week later he responded and we set up a meeting where we had a cup of tea and he told me his life's story, all the way from getting a full-ride scholarship from GM at Purdue and Harvard Business School, to the decisions that led him to building Ariba in 1996, along with building DocuSign to a company now worth more than $3 billion with more than 85 million users in 188 countries.
Here are 8 powerful lessons Krach shared with me about business and leadership that he lives and leads by:
Lesson #1: Find A "BIG" Unmet Need In a Big Market
I asked Krach how he decided to build Ariba and what drew him to DocuSign, and he told me the key thing he looks for whenever thinking about starting a business is to "look for a paradigm shift when it's about to happen, or just starting to happen."
"And when you find it, you need to challenge the status quo with a strong value proposition," said Krach.
Before 1996, procurement was an extremely manual process that required paper trails that slowed everything down. Krach built Ariba because he saw an opportunity to automate the purchasing process while also transforming it to paperless. Ariba was later sold to SAP for $4.3 billion.
Krach saw the opportunity with DocuSign in the Digital Transaction Management and eSignature space as another opportunity to change the status quo while tapping an even bigger market where "everyone on the planet who has to sign a document is a potential customer."
Lesson #2: It's All About The People
Krach firmly believes that the CEO's most important job is building a high performance team, and that who you hire can make or break a company, since "A players attract A+'s, but B's only attract C's." His mantra inside DocuSign is, "Hire the best, especially if they are better than you."
Lesson #3: Set A Crystal Clear Direction
Krach says his success came from "always having a crystal clear direction," which translates itself into the company's mission, values, team rules, and strategy.
"You need to have an inspired vision and true north," says Krach, "At Ariba it was all about 'building the Ariba network,' and at DocuSign we were focused on building the DocuSign global trust network."
Lesson #4: Have A Leveraged Growth Strategy
One of the things that most impressed me about Krach was how strategic he is.
With the mind of an engineer, he analyzes markets and makes business decisions like a strategic chess player.
It was clear that Krach had analyzed dozens of other market opportunities before joining DocuSign as chairman and then later taking on the CEO role. He architected a clear, inspiring strategy and set a path for fast but sustainable growth.
Lesson #5: The One With The Gold Rules
DocuSign appeals to both businesses and consumers, since Krach's mission for the company is to "help anyone transact anything, anytime, anywhere, on any device, securely."
Krach decided to sell to businesses because he could monetize that quickly as businesses would be willing to pay to accelerate their manual, paper-based processes. His strategic genius comes through in making DocuSign free for signers. That way, says Krach, "The product is highly viral with businesses exposing consumers to DocuSign, and vice versa."
Lesson #6: Integrate Your Financing Strategy With Partnerships
DocuSign has received investment from SAP, Comcast, Google, Visa, Dell, Intel, Microsoft, Samsung, etc, but Krach has made careful decisions in choosing which investors to align with because he also sees them as potential technology and go-to-market partners, as well as signature customer accounts.
Lesson #7: Measure Your Success By Your Customers' Success
Krach made a clear choice to evaluate the performance and endeavors of everyone at DocuSign based on the customer's success.
That's why DocuSign cares so much about the number of "successful transactions" their users make, since it is directly linked to user adoption, the customer's return on their investment, and their satisfaction with the product.
Lesson #8: Your Ego Is Your Enemy, and Humility Is Your Friend
Just before leaving, Krach told me, "Things go up and down in this world, but don't get too high on the highs, or too lows on the lows. The penalty of leadership is everyone has to take pot-shots at you, so never look too good or talk too smart."
His final advice to me was, "In the business world, having a self-deprecating sense of humor is a superpower that can save you when it seems like there is no way out."
If you want to hear more of Keith Krach's insights, or learn more about what he has in store for DocuSign, check out the company's annual customer, developer and partner conference, DocuSign MOMENTUM on April 5-7.