This is a great example of understanding a market. An engineer might think that a document management platform should have a great UX/UI and lots of bells and whistles. But that stuff is secondary to "a court will accept it." THAT is the product differentiator for DocuSign. "We are a document management platform that courts will accept." BOOMTOWN.
Ask HN: Why is Docusign a $50B company?
111–120 of 348 posts
Re: Ask HN: Why is Docusign a $50B company?
#112Which competitors does DocuSign have?
Re: Ask HN: Why is Docusign a $50B company?
#113Earlier quoted context omitted.
> DocuSign has a hard to penetrate moat It's the same reason Coinbase, Square, Stripe, Airbnb (among many others) are worth what they are (ie rich multiples on sales). Their domains are extraordinarily difficult to do very well and now that large competitors are in place (in those segments) it's borderline impossible to take a big chunk of the market away from them. They're entrenched, potential future monopolist tec…
The “extraordinarily difficult to do very well” part gets ignored here by most people DocuSign’s feature list is huge. It’s not just overlaying a signature on a doc. It’s a massive and complex app that most people will ignore or trivialize, but that shit just works. Mark all the signature locations? Multi-user? Chained dependencies? Recording and redownloading later? SSO Audit / identification Salesforce integration?…
Even if we grant this as true, a $50 billion valuation implies that they'll return 3-5 billion in profit at some point. Their revenue right now is an annualized ~2 billion. So they've got to at least 2-3x their revenue while increasing their operating income from slightly negative to 50% of revenue.
As for the features, of course it's not whip it up in a weekend. But MS/Google/Apple are all in a position to put out a competitor that integrates into their platforms. It probably won't put DocuSign out of business but would cut into their margins.
Re: Ask HN: Why is Docusign a $50B company?
#114Earlier quoted context omitted.
Hm ok, well while I don't think Tesla can really be called a scam I definitely think it's overvalued
Can we talk about Dogecoin and similar ?
With Dogecoin and friends we're entering scam territory. But really I was curious because it sounded like the GDC7 was suggesting there were multiple trillion-dollar scam companies. The reason I commented was that while I think there are a lot of ridiculously valued companies, I'm not so sure we can consider many of them a "scam".
Re: Ask HN: Why is Docusign a $50B company?
#115Earlier quoted context omitted.
In terms of features, all the things you listed aren’t technically very impressive. While I recognize their value, a potential competitor could replicate them within a reasonable timeframe. What they couldn’t replicate is the brand name.
Lots of technically quite simple things are enough work that people will happily pay a company you do it. Did nobody here learn from the famous Dropbox comment?
This is a different point. We’re already talking about a company trying to build the same feature set, not an individual doing it themselves using existing technology.
Re: Ask HN: Why is Docusign a $50B company?
#116Earlier quoted context omitted.
In terms of features, all the things you listed aren’t technically very impressive. While I recognize their value, a potential competitor could replicate them within a reasonable timeframe. What they couldn’t replicate is the brand name.
Lots of technically quite simple things are enough work that people will happily pay a company you do it. Did nobody here learn from the famous Dropbox comment?
The real lesson from Dropbox is that things that seem technically easy to implement are in fact bedeviled by all sorts of hidden little gremlins, and finding and killing those gremlins is valuable.
Lots of services can sync files and folders. Having used many alternatives (One Drive, Google Drive, iCloud Sync, even scripted rsync), it turns out I still pay for Dropbox. It’s the most reliable for my use cases, and is not too expensive.
There is a huge difference between “I can conceive of how to implement this feature” and “this feature works for years on end at large scale with adequate reliability and usability and low enough cost.”
Re: Ask HN: Why is Docusign a $50B company?
#117Unrelated to open source, but DocuSign is literally one of the examples i list when explaining why the tech sector is over bought. They've tripled their market cap since the beginning of the pandemic, and while there is some merit to work from home, their moat is laughable. There are plenty of alternatives to DocuSign that should make share holders terrified... Adobe Sign, Panda Docs, HelloSign - i wouldn't even bet…
I hear this a lot, blockchain is going to replace X accepted industry solution. I always go back to, who’s going to invest in actually building the new blockchain solution and for what reason? Big companies pay other big companies like Docusign to figure it out for them and they pay a premium for not having to deal with it themselves. Blockchain as a technology really doesn’t offer a lot of practical advantage over traditional tech in a three party signature system.
When I hear startups sell on the fact that their solution uses blockchain and is somehow inherently better for it, I turn and walk the other direction. Same for AI/ML, BigData, etc.
Re: Ask HN: Why is Docusign a $50B company?
#118I don't think anyone believes from a traditional value perspective that it is. There are two elements to the stock markets: 1) The traditional element in which people attempts to buy and sell companies at good values to produce a return 2) The portfolio construction, pure supply demand element. People have money sitting around and they need to try to find a way to at least protect that money from inflation so they ha…
This explanation is too vague to be of any use. You can apply this argument to any company whatsoever, in which case all tech companies should be worth $50B.
The question is why is Docusign, specifically, valued at $50B while other tech companies, even those that are publicly traded, are not valued at $50B.
Re: Ask HN: Why is Docusign a $50B company?
#119My guess - DocuSign has a hard to penetrate moat: It's known and accepted in courts. Everything else doesn't really matter. Imagine you're a legal department. You have to choose between DocuSign, which you know the court will accept, or a competitor. DocuSign costs 10x as much as the competitor. But that's nothing compared to the cost of litigation, or worse, the cost of losing litigation. So you will likely choose D…
> DocuSign has a hard to penetrate moat It's the same reason Coinbase, Square, Stripe, Airbnb (among many others) are worth what they are (ie rich multiples on sales). Their domains are extraordinarily difficult to do very well and now that large competitors are in place (in those segments) it's borderline impossible to take a big chunk of the market away from them. They're entrenched, potential future monopolist tec…
Coinbase is overvalued because people don’t understand the difference between Coinbase (which has enourmous fees for guaranteeing a price for selling/buying cryptocurrencies) and Coinbase Pro (which is a market maker with lots of competitors, where you can just create a market order and you will execute the trade with a much more competitive margin). As competitors copy the ease of use (like Strike with a 0 profit on buying/selling Bitcoin), Coinbase’s main business will decrease relative to Bitcoin’s market cap (it may still increase in dollar terms).
Re: Ask HN: Why is Docusign a $50B company?
#120My guess - DocuSign has a hard to penetrate moat: It's known and accepted in courts. Everything else doesn't really matter. Imagine you're a legal department. You have to choose between DocuSign, which you know the court will accept, or a competitor. DocuSign costs 10x as much as the competitor. But that's nothing compared to the cost of litigation, or worse, the cost of losing litigation. So you will likely choose D…
I don’t think this premise is correct; I don’t know of any evidence that courts accord any special status to Docusign’d documents, over other ways of electronically signing contracts.
The concept doesn’t even make sense to me… Docusign is not attesting to the contracts they manage. They’re not an automated notary. They’re just facilitating something that anyone can do themselves: electronically sign a contract.
There probably is a “nobody got fired for buying Docusign” effect, but it would be supported by their mindshare, not some special status in courts. The vast, vast majority of Docusigned docs will never end up in a court anyway (most contracts are never litigated).