How DocuSign's leader disrupts and dominates a nascent industry
The future of the company will depend on ‘control freak software for control freaks,’ Krach says
One of Keith Krach’s favorite phrases is “escape velocity”, which is the speed at which any object can break free from the gravitational pull of a central mass.
Krach uses it often — both in conversation and internally at the company he has led since 2010 — to describe Docusign’s long-term evolution from an e-signature provider to a global transactions giant worth an estimated $3 billion.
“It’s when nothing can stop you,” he says.
Recent developments at DocuSign — including a busy year of acquisitions and partnerships, a Series F investment, a constant drumbeat of IPO rumors, and finally the news that Krach will soon step out of the CEO role — seem to infuse the term with new meaning. In an October memo leaked to Re/code, Krach wrote to employees that he would resign as CEO as soon as a successor is identified, but that he’ll remain as chairman for at least the next three years.
“We’re still in the early innings,” Krach, 58, says of the nearly 13-year old company, which he originally joined as a board member in 2010. “We’re looking for a leader who can take this into the next decade, the next seven to 10 years.”
That means a long-term thinker who can seamlessly take the reins without disrupting the business, he says. Krach confirms to us that the company will IPO, but characterizes the public offering as “just a financing event” in what will be a long story spanning decades.
“It’s not a question of: When can you? It’s a question of: When should you,” he said of the company’s eventual filing. “And that is based solely on the company, not on market conditions.”
Replacing Krach, a force of personality who famously “came out of retirement” to join DocuSign, will be no easy task.
At the time he took over, there were about “40 to 50 people in the company,” he remembers. “I didn’t expect to be doing the CEO role again. But when you look at what we do, it’s replacing something that’s been done the same way for 3,000 years. That’s what got me hooked.”
During the first dot-com era, Krach co-founded and led the commerce network Ariba — which ultimately went public in 1999 — and describes many parallels between the trajectory of the two companies. “At Ariba, we were the first enterprise application written on the Internet,” he says. “At DocuSign, it’s the perfect storm between cloud, mobile and digitization.”
That has meant a period of growth that has accelerated rapidly over the past year: Owing to the innate network effects of e-signatures — virtually anyone who’s had to buy, sell or rent a home in the past 5 years has encountered DocuSign — its network acquires 50,000 new unique users every day. It has been funded by dozens of companies, including SAP, Salesforce, Google, Comcast, Intel, Dell, Visa, Fidelity and many others.
Over the past few years, the e-signature field has narrowed from about a dozen vendors to just a couple of significant players, with DocuSign owning more than 50 percent market share. DocuSign’s many partnerships — “we partner with everybody,” says Krach — has led to several key buys, including three international acquisitions over the past two years. Although the company has built out most of its own networks, the international acquisitions have helped the company to navigate complex legal and regulatory environments across the world. Of those, the most recent was DocuSign’s purchase of the OpenTrust TDT division in France.
Although still best known e-signatures, the future of DocuSign lies in its Global Trust Networks, which refers to its full suite of identity verification, secure credentials and auditing services, which Krach describes as “control freak software for control freaks.”
That full-service transactions system — which includes bank-grade security and audit trails — has meant that DocuSign has gradually turned into a verb in industries like real estate, financial services and even the legal field, which has often been slow to embrace digital systems. Well beyond its beginnings as an e-signature provider beating out fax machines, it has leveraged a broader shift to digital to create its own category of business transactions over the Internet.
As Krach is quick to note, the sky’s the limit when your main competition is paper: “We could be used for anything from parents’ permission slips to global commerce. It’s endless,” he says.
That sense of limitless potential underlies what Krach calls a “built to last” succession plan, which begins this week as the company initiates its search for a new CEO.
The company says that it will do internal and external recruitment, and the process is likely to take months — it took nine months to hire current Chief Financial Officer Michael Sheridan — and Krach suggests that they’re in no hurry: “We’ll be turning over every rock,” he says.
DocuSign says it will give equal weight to internal and external candidates, but it’s clear that the company is putting resources into developing its next generation of executive brass. Over the past several months, it has recruited a swath of C-level talent — including Sheridan, head of brand Cynthia Ashworth, and VP of customer experience Catherine Courage.
In its six-story headquarters in San Francisco, it also recently opened an executive leadership center dedicated to training within what Krach calls the “Docu-family.” Outside of the C-suite, it has more than doubled its workforce in the past year and hires continuously to achieve what Krach hopes will become a decades-long legacy.
But, Krach insists, don’t expect him to slow down anytime soon.
“I tried retirement,” he says. “It didn’t work.”