Most Admired CEOs 2015: With DocuSign, dot-com star Keith Krach has built an e-signature juggernaut
Keith Krach, chairman and CEO of the cloud-based e-signature juggernaut DocuSign, laughs a lot, and not infrequently at his own expense.
“I can be goofy. I’m not afraid to mock myself,” said Krach, 58, whose past successes include co-founding Ariba, the supply chain management Internet company SAP bought for $4.3 billion. Krach’s easygoing demeanor seems to serve a larger purpose, subtly conveying a rock-solid certainty that San Francisco-based DocuSign is riding a wave of historic change in its quest to eliminate paper signing from corporate transactions. That confidence is reflected in DocuSign’s spectacular growth since Krach took over as CEO in 2011. DocuSign has grown from 120 employees to more than 1,500 on Krach’s watch, raising more than $443 million along the way (bringing the total raised by the company to $508 million at a reported $3 billion valuation). More corporations have taken equity in DocuSign than any other private company, a recent report showed. Big names invested either directly or through affiliated funds include Dell, Google, Intel, Salesforce, Samsung, SAP, Telstra, Visa, Comcast, NTT Finance, Mitsui & CO (USA), Banco Bilbao Vizcaya Argentaria, the National Association of Realtors and the nation of Singapore. “It has allowed us not only to thrive in large enterprises, but also to combine their firepower with ours,” Krach said. “That has been a huge part of our success.
Early investor Pete Solvik, a partner with Jackson Square Ventures and a member of DocuSign’s board of directors, said that Krach is adept at convincing major players of “the inevitability of digital transaction management becoming the way things are done.” Krach warns that those unwilling to go fully digital: “Chances are, 20 years from now they will be irrelevant.” Those rallying to Krach’s call include John Hinshaw, Hewlett-Packard’s executive vice president of technology & operations, who says DocuSign produced the single biggest return on investment of any product his company has ever deployed. Solvik also credited Krach with being able to lure a lot of respected talent to DocuSign, like CFO Michael Sheridan, who jumped ship in August from the same position at the Milpitas network security company FireEye.
Krach announced in early October that he will step down as Docu- Sign’s CEO following an executive search, but that he will remain on board as a “fully engaged” chairman for at least three years after the new CEO begins. His decision to step back from the CEO role is part of a “natural succession planning process,” he said in an internal company memo. Solvik, former chief information officer at Cisco Systems, invested in DocuSign nine years ago when it was early stage and chiefly being used for student loan financings. DocuSign was founded in 2003 by Tom Gonser, now chief strategy officer. Solvik first got to know Krach at Ariba and invited him to join DocuSign’s board as chairman in 2010. At the time, Krach was spending much of his time serving as chairman of the board of trustees at Purdue University, where he got a B.A. in mechanical engineering.
Krach didn’t need the money when DocuSign came calling with a job. Before helping launch Ariba, he was the COO of a mechanical engineering software startup in San Jose that was acquired for $500 million. While Krach was CEO, Ariba’s valuation rose as high as $34 billion, though that later came crashing down as the dot-com boom went bust. Krach left Ariba in 2001 for what he says was a family reason. He could have continued traveling the world, as he did for a year with his now-adult son, and serving on the boards of companies like Angie’s List, where he was chairman, or XOJET, the private aviation company he helped found. He was focused on spending time with his wife, Metta, and on his way to having twins, now age 3. Yet Krach got so obviously excited about DocuSign and was making such a valuable contribution as chairman that several board members asked him to become CEO, Solvik said. It was his wife Metta who gave him the last nudge of encouragement: She saw him light up whenever he returned from DocuSign board meetings or talked about the company and its potential impact. “Since then, the company has grown very, very rapidly,” Solvik said.
DocuSign has continued to solidify its position as the market leader over Adobe, which bought No. 2 e-signature provider EchoSign in 2011, said Forrester research analyst Craig Le Clair (although Le Clair said Adobe has tripled EchoSign’s sales). “Keith is an excellent CEO. He is passionate about the company and the journey it is on,” Le Clair said. “He has strong people skills. He’s not just a numbers guy.” Krach is nevertheless a “financial wizard,” and he has been making some “very shrewd investments,” said Jim Lundy, founder and CEO of Aragon Research. “Four years ago they were just tiny. EchoSign was the go-to thing. Now you don’t hear about Adobe and their signature offering. DocuSign is killing them,” Lundy said. DocuSign in 2013, for example, bought Cartavi, an end-to-end transaction management platform for real estate, a sector in which DocuSign is so ubiquitous it’s a verb. Last year, DocuSign acquired Comprova, Brazil’s leading digital signature platform and digital certificate authority. In March 2015, it bought ARX, a digital signature technology provider for highly regulated industries like life sciences, government, financial services, healthcare and engineering. And in September, DocuSign agreed to buy OpenTrust’s Trusted Documents and Transactions division. Both the ARX and OpenTrust deals give DocuSign a stronger foothold in Europe. DocuSign presumably has money on hand to keep buying, and while larger companies like Lexmark have been moving into the digital signature realm, DocuSign is “formidable,” Lundy said.
Krach said more big strategic investment partnerships could be in the works. He also promised that soon DocuSign will be revealing the names of major customers that will require their vendors to use DocuSign. “Some of these companies have 200,000 suppliers,” Krach said. “They will be saying, anybody who wants to do business with us needs to use DocuSign.” Emanating the air of a man whose cupboards are full, Krach says his main challenge is managing DocuSign’s transformation into a global behemoth in an organized manner. Over the last year, DocuSign has handled as many transactions as it did in the company’s entire lifespan combined previously, he said. “We always say we’re not going to die from starvation,” he said. “We might die from indigestion.”