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Is the writing on the wall for DocuSign?

Ben Hillman Sep 14 2022

When was the last time you signed a document? I mean like actually signed something with a pen and paper. Unless you’re signing autographs or you have an affinity for paper checks, there’s a good chance that it’s been a while.

With the advent of e-signature technology, signing and authenticating a document has now become incredibly easy, more convenient, and safer from forgery. From employee onboarding and insurance claims to customer forms and non-disclosure agreements, the use cases for document authorization are many and varied.

Over the past couple of years, the e-signature market has grown by leaps and bounds. By 2027, the global e-signature market as a whole is expected to reach $20.4 billion.

One company in particular seems to have made quite the impression. An OG of the market: DocuSign. It’s growth exploded in 2020 and posted subscription revenue of $410 million. With the shift to remote work, it’s no wonder the brand has seen so much success. But after reaching a share price of $310 in September of 2021, DocuSign’s stock started to tumble — hard. It got so bad that after losing more than 60% of its value to $60, CEO Dan Springer resigned in June of 2022.

So how did DocuSign get to such a high peak in the first place? What were the causes of its downfall? What SaaS lessons can you take from these successes and failures? We’ll get into all of that. I’m Ben Hillman, and this is Verticals.



It’s difficult to imagine printing and manually signing every piece of paper that requires our signature these days. And though we may not always think of the huge impact it’s had on all of us — not just businesses — the e-signature has definitely made our lives easier. 

DocuSign pioneered this now multi-billion dollar market. And it does continue to lead, it’s not as impressive a lead as it was. The lesson: You must plan and prepare as much as possible for what comes after those unprecedented or uncertain times. Pandemics end, wars end, inflation slows, recessions end, etc. Things are ever-changing, especially in business. 


  • Your happy customers are your best sellers

    In its early days, DocuSign used referral marketing (aka word-of-mouth marketing) in order to grow its customer base — and it worked. Today, it’s just as powerful, if not more, because of the many communication channels that exist. In fact, according to a Nielsen report, 92% of consumers trust the referral of friends and family over corporate advertising. And another 88% trust online reviews written by other consumers as much as recommendations from personal contacts.

    So, keep your customers happy by delivering exceptional service. Nothing speaks more highly of your product or service than a customer recommending it. 

  • Focus, focus, focus

    When it comes to building a company, it's best to focus on the things that will create even more opportunity. Many companies make the mistake of trying to be everything for everybody — but that will never be the case. That’s not to say you can’t expand in the future, but initially it's probably best to place your efforts toward one thing at a time — one project, one industry, one audience, etc. 

    DocuSign’s focus within the real estate industry is what helped accelerate its growth and eventually led to many other opportunities.

  • Don't lose sight of the future
    While DocuSign, like many others, was able to capitalize on the pandemic because of the shift to online transactions, it seems it was unprepared for what came after. As businesses began to reopen, people went back to the office, and more and more face-to-face interactions started taking place, usage declined and so did those crazy high numbers.

    Forecasting and planning around the unknown is part of business, but it’s even more crucial during extraordinary and unprecedented times. “There is nothing more constant than change.” - Heraclitus



An electronic signature, or e-signature in short, is defined as symbols or other data in digital form attached to an electronically transmitted document as verification of the sender’s intent to sign the document. An e-signature can take several forms: a person's name typed out, an uploaded image of the individual's signature in cursive, or a signature drawn on the screen of a tablet or a smartphone.

Signatures have long been the only way to authenticate an individual's identity, but in the 1800s, the evolution of signatures took an interesting twist. On May 24th, 1844 a man crafted a message in the Senate wing of the US Capitol. The message said, “What Hath God Wrought.” Moments later an identical message appeared in Baltimore, Maryland. Was this the first text message? Hardly. Those in attendance had just witnessed the first telegram. The man who sent this message was Samuel Morse.

Over the next few decades, Morse code was used to communicate across great distances. In some instances, it was even used to sign contracts and authenticate documents. Then in 1869, a landmark ruling by the New Hampshire Supreme Court confirmed such contracts as enforceable:  "It makes no difference whether the operator writes with a steel pen an inch long attached to an ordinary penholder, or whether his pen be a copper wire a thousand miles long. Nor does it make any difference that in one case common ink is used, while in another case a more subtle fluid, known as electricity, performs the same office." This was, in many ways, the earliest validation of electronic signatures. However, it would take more than a 100 years for the idea of e-signatures to truly pick up pace more broadly within society.


In the 1980s, signed documents sent by fax were considered valid and enforceable, so much so that government entities and courts started to recognize and use them. In 2000, the U.S. government gave the adoption of e-signatures yet another boost with the ESIGN Act. Under this Act, electronic signatures were given legal equivalence to handwritten ones. In other words, the law nowadays fully recognizes electronic signatures and records as long as all parties to a contract choose to use electronic documents and to sign them electronically. Businesses definitely took note… and just around the corner lurked what would soon be a major player.


Early Leaders

In the year 2000, Seattle-based entrepreneur Tom Gonser was working at NetUpdate, a company he founded in 1998. NetUpdate had acquired a few companies, particularly a firm called DocuTouch. DocuTouch held several patents on e-signatures and even had a plug-in for MS Word2000. This gave Gonser an idea. He left NetUpdate in 2003 to focus on a new company with assets that were purchased from DocuTouch by cofounder Court Lorenzini. Along with Eric Ranft, the trio would go on to found their new company: DocuSign.

Over the next couple of decades, DocuSign paved the way for the e-signature space. An early deal in 2005 with zipLogix resulted in a massive customer base within the real estate space. In 2010, it added support for iPhone and iPad authentication. Additionally, it partnered with, which meant that DocuSign would now play a prominent part throughout the entire collaboration process. In July of 2012, DocuSign boasted that approximately 90% of Fortune 500 companies had signed up.

These key moves meant that DocuSign was now a stalwart of the e-signature space. In 2018, with a single IPO share going for $29, DocuSign was able to enjoy mind-blowing profits by putting all of its 21,700,000 shares up for sale, which ultimately raked in $629.3 million. More recently, DocuSign has invested in internal R&D, 24/7 document monitoring, and building tools like an SMS alert system. It seems like DocuSign has always been destined for greatness, but if DocuSign were to ever fall, which company would be primed to pounce on its lucrative market?

VRT-S01-E02-Early Leaders

EchoSign started operations in late 2005. EchoSign, like DocuSign before it, benefited from streamlining legacy processes and reducing clutter. It even began with a freemium plan for folks who needed to manage 20 documents or less. This tactic helped boost EchoSign to more than 2.5 million users by 2011. Not too shabby. That is, until you look at DocuSign’s over 13 million users as a comparison. EchoSign needed a prayer if they wanted to compete.

In July 2011, they got just that. EchoSign was acquired by Adobe, a move that saw its name conveniently changed to Adobe EchoSign and offerings expanded to include support for mobile devices. The company later changed its name to Adobe Sign, which has stuck to this day. As we speak, Adobe Sign is a full-fledged e-signatures and digital signing software. With Adobe’s large technical war chest at EchoSign’s disposal, DocuSign needed to adapt quickly to stay competitive. So what were some of the steps that ultimately led to DocuSign’s success?


Reasons for success

There are a multitude of reasons DocuSign succeeded, the  first of which started early on in the company’s existence. The tactic it used was referral marketing. As far back as 2009, DocuSign had a referral program whereby it would send a $20 visa gift card to customers who managed to get another person to subscribe to DocuSign. Reportedly, 1300 referrals poured in. While that may seem like a lot to pay in Visa gift cards, consider this: at the time, the professional plan cost $15. If each of those customers stuck around for at least two months, DocuSign is more than breaking even. And considering how folks rave about DocuSign, I’m sure their average LTV is healthy enough to withstand it.

More recently, in 2016, Amy Wong, Director of Web Acquisition at DocuSign, said that for every referral it gets back, on average, 1.5 customers. But perhaps more importantly, she stresses that it’s not really about getting a high quantity of leads. Instead, it’s more about the high quality of leads that end up converting. Folks who end up referring others are typically those who love the product in the first place. And who better to sell your product than happy customers?


Another area where DocuSign succeeded was focusing on a single industry in which to make its mark. That industry was real estate with DocuSign’s partnership with zipForm (now zipLogix). 

In real estate, there are several paper forms required, including loan applications, property inquiry forms, and house seller forms. DocuSign was a perfect fit for this need. To make things better, in 2010, the National Association of Realtors released DocuSign Realtor Edition. It was an exclusive offering dedicated entirely to real estate agents. At the time, the NAR represented 1.2 million members across residential and commercial real estate industries. This was a massive client base from which DocuSign was able to grow.

So, with all of these building blocks toward success, why did DocuSign lose 60% of its value as well as its CEO, Dan Springer? In 2020, the SaaS company saw improved growth as demand for e-signatures grew. Costly paper stock and needing to shift towards a remote working environment drew companies to search for virtual solutions. DocuSign benefited.

While it was beneficial in the short term, DocuSign’s growth could not be exponential forever. As businesses opened back up and workers moved back to the office, platform consumption declined, especially as renewals came up. DocuSign isn’t underwater by any means. In fact, it has been growing — just not as much as has been projected. It will recover, but it's still better to watch out. There’s blood in the water and the sharks are out to play.


Just recently, Dropbox and HelloSign partnered up. Dropbox, an innovator in its own space, boasts over 500 million users. While adoption of the product isn’t guaranteed to be automatic, it puts HelloSign in a great position to acquire new users. By combining their powers, HelloSign and Dropbox have powerful ammunition in the e-signature war.

Adobe, as mentioned before, is a behemoth in its own right. Not too long ago, Adobe announced that government agencies in all 50 states would start using its products. And in March 2021, the company rolled out a new suite of tools dedicated to small businesses. Put together, these strategic moves depict Adobe's commitment to get to the top of the e-signature market by all means possible.

Can DocuSign remain afloat in such trying times? Well, it's possible, but there needs to be concise, well-calculated steps made along the way.



One thing stands out above all else: e-signatures are incredibly important to folks running SaaS businesses. Not only does this technology save time, but it also saves on paper costs and provides top-notch security. In many ways, it takes business to a whole new level of efficiency and flexibility, a feat that only a pinch of technologies today can achieve.

Putting all the aforementioned struggles aside, DocuSign is still in a good position and it's still very much the king of the e-signature world. SaaS business owners can learn a thing or two from DocuSign's meteoric rise to stardom and, if possible, replicate similar industry-winning strategies within their own entities, however daunting that may seem.

The e-signature industry isn't without its fair share of challenges. Issues of document security and verification, legality, and trust continue to cause headaches among key industry players. Now more than ever, companies in the e-signature space need to stay true to customer-centric practices or risk a Biblical customer exodus sometime in the future.

It's quite clear that the e-signature race is more open than it has ever been in the past. More and more companies in the e-signature realm are doing everything possible to get closer to the customer, meaning this race is really anyone's to win. Who will be first to the finish line? 


Who's up next week?

Next week, we'll take a look at how MailChimp tackles Spam.

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This is a Paddle production—the first media network dedicated entirely to the SaaS and subscription space.


By Ben Hillman

Senior Show Producer at Paddle. Ben is a YouTube fanatic, contributing videos to the platform for 15 years, and amassing 2,000 subscribers to his personal channel. Prior to Paddle, Ben headed up the video team at Boston-based sports firm, CoachUp.

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