I’ve seen Docusign mentioned a couple times with regards to companies that could/have benefited from the COVID-19 situation, but most of the attention on the board as of late has been focused on ZM and AYX, so I thought I would share my own anecdote on Docusign.
I work for a decent sized pharma company, not a J&J or Pfizer, but still in the $ billions range in revenue, 12,000+ employees globally. Almost anyone that can do their job from home has been since March, and even managerial positions have been rotating schedules so they are only on site a portion of the time. This makes signing documents extremely difficult. If anyone has experience in the pharmaceutical industry, then you’ll how how important documentation is. Everything, and I mean everything, has to be signed or initialed and dated. Everything has to be GMP/GLP, and anything electronic has to comply with 21 CFR part 11. This is especially important as there has been a huge emphasis on electronic data integrity within the industry over the last few years.
About a month ago our company approved Docusign for use. Docusign has a 21 CFR part 11 module (I had no idea). Previously I had only ever used Docusign for signing mortgage/home related documents. I was pretty surprised at how easy the software was to use; after a couple short training modules it only took me a couple minutes to create a file packet and distribute to people in my department working remotely. What struck me later, was the fact that it was almost faster to create the document and send it electronically than it was to print out the paperwork and go physically find the person to have them sign it. (Imagine having to have a document signed by the General Manager and Director level individuals, all who are busy and in meetings constantly throughout the day, and some work in different buildings). I have no doubt that even when most of the workforce returns to their offices, there will be continued use of Docusign even when the individuals signing are physically on site. If anything, the Docusign signature is also superior to physical signatures as it is easier to read (most people’s signatures are completely illegible) and also includes a time stamp along with the date and a unique ID code.
I saw an article yesterday from Tobi Lutke talking about remote working, and he mentioned that all Shopify offices will remained closed until 2021, and even then the majority of employees will continue to work from home permanently. There’s several other articles mentioning how these last few months could be sparking a huge shift to remote work, as technology is now making the modern office obsolete. How many large tech companies have closed their offices with almost zero impact to their operations? What is the true TAM for a company like Docusign? Imagine if 10 - 20% of the workforce shifted to working remotely.
Docusign has been one of my best performers over the past year. The stock is up +144% over the past year and the call options I bought last June are up more than 500% in less than a year.
I still really like the long term story, as they ride the wave of companies moving to digital signatures with their already dominant market share, and I still like the potential for the agreement cloud to further boost growth. The pandemic has certainly accelerated many companies moving in this direction.
The shares are starting to get pricier now. I sold about 25% of my calls this week since they expire in January and were in an IRA. But I plan to hold all of my regular shares even at today’s prices.
If the stock keeps moving up over the next couple of months, I may trim the calls a bit further if I feel I have a better place to deploy those funds.
It’s currently my second biggest position and I’m up on average 155%. They won FedRAMP approval in 2017 but we all know the government is slow to implement changes. I’d be curious how much future growth could come from government contracts alone as agencies adopt DocuSign.
I’ve seen a TAM figure of $25 billion stated, but I think that could grow as well as the world continues to shift to remote/digital work.
What struck me later, was the fact that it was almost faster to create the document and send it electronically than it was to print out the paperwork and go physically find the person to have them sign it. (Imagine having to have a document signed by the General Manager and Director level individuals, all who are busy and in meetings constantly throughout the day, and some work in different buildings). I have no doubt that even when most of the workforce returns to their offices, there will be continued use of Docusign even when the individuals signing are physically on site. If anything, the Docusign signature is also superior to physical signatures as it is easier to read (most people’s signatures are completely illegible) and also includes a time stamp along with the date and a unique ID code.
I’ve been saying paradigm shift but have not gotten any meaningful responses. WFH is an incredible boost in white collar productivity. You just laid one one example. But think about this. To work from home you don’t have to shave, shower, or fight rush hour traffic twice a day. Suppose 10% of the population can work from home, that’s over 30 million people. Suppose rush hour is two hours going and two coming. A year had approximately 250 working days. Do the math:
Workers 30,000,000
Rush traffic hours 4
Work days 250
Average hourly pay $40 <- WAG
Saving $1,200,000,000,000
$1.2 trillion. How can that not be a game changer? A paradigm shift? Add the saving on work clothing, baby sitters, and home cooking. Add the tax deduction for the home office. Add the saving on tires and gas…
We did not go back to hunting and gathering after we invented agriculture. We did not go back to horse and buggy after we invented cars. We are not going to throw away the efficiency of working remotely.
Denny Schlesinger
My broker had me sign documents via EasySign or something. It sure beats FedExing paper documents!
Hi Denny, I’m with you on a paradigm shift! And I agree that it will save enterprises gobs of money. And think what it will save the people who don’t have to commute, on their own dime, to work every day.
Saul
"$1.2 trillion. How can that not be a game changer? A paradigm shift? Add the saving on work clothing, baby sitters, and home cooking. Add the tax deduction for the home office. Add the saving on tires and gas…
I would have to give this more thought, but my immediate reaction is that this savings benefit could possibly be understated and would need to be run through a few additional filters to get to the potential total WFH population:
Total Population in U.S. = 328 M
Total Employment in U.S. = 158 M (2020)
From the base of $158M, we would then need to determine what subset of Total U.S. Employment could be of the type that could effectively WFH. In other words, focus on white collar or similar type employment as the workforce that could potentially WFH. As we know, very few service workers could WFH or probably no Construction, Manufacturing, Transportation, etc. workers could WFH.
At the end of the day, we are talking about 60% of Total U.S. Employment (determined to be 59.9% in 2002 by Department of Professional Employees) or about 95M would be considered “white collar” or similar, although as of 2006, U.S. Bureau of Labor and Statistics no longer uses the categories of “white” or “blue” collar.
Off a base of 95M office/white collar employees; we need to be comfortable with approx. 31% WFH in order to align with Denny’s original $1.2T Savings. [Keep in mind that according to the U.S. Census, 5.2% or approximately 8.2M workers are already WFH.]
I remain a big WFH believer. My wife and I have been WFH’ers since 1989!!
In Seattle, for COVID, some streets converted to pedestrian/bike. And our infamous West Seattle bridge now is closed for at least 18 months (to do badly needed/postponed repairs). The city has long been considering some sort of congestion pricing to handle gridlocked downtown during rush hour. Particularly when it rains or there is an accident on I5.
Also, less cars, less pollution, better health & greener parks and mountain vistas. Less fossil fuel dependence, climate change …
We just contracted with a top 10 Pharmaco. Last time we had to do MSAs and SOWs we used pdf and eSignatures coupled with physical signatures (1.5 years ago). This time the process seemed to be the same for us except it was completed with Docusign with zero added friction on our side but I assume with greater efficiency and lower risk for the client, (so I assume this was just Docusign rather than the full SOA solution). Procurement was then supported by ZenDesk as it happens.
It doesn’t surprise me in Life Sciences to see Docusign succeeding. It is one of the most regulated industries on earth.
I’ve seen a TAM figure of $25 billion stated, but I think that could grow as well as the world continues to shift to remote/digital work.
I have the same $25B figure, and that’s just for e-signature. For what it’s worth, my notes have management implying the contract lifecycle platform could double that.
WFH, meeting electronically, and doing ID’d signature confirmations and so on paradigm shifts are long long over due, but will not be total.
I have been teaching NGO and non-profit groups who wanted to save travel money to use digital connections (from typed text up through zoom last week) to do BofD, briefing and training and other meetings since the mid 70’s, and one thing I have learned is that these groups need to physically meet and do mammal stuff — eating, eyeballing, gaming — from time to time to make the virtual sessions far more effective.
Humans are pack creatures, and a lot of our biology ‘wants’ to get together to feel together so as to best work together. And some forms of work make it inherently harder to fake out the biology. I have ‘Agile Programming’ friends who insist that their scrums need be in close proximate physical space to maintain the groups’ intensity and interplay, although even they are learning new digital modalities with the pandemic lockdowns.
We will still need specialized group working spaces, just not as much of it, and what we will use will not be separate squirrel cages, nor ‘open’, but space optimized for teams with cubbies for individual work.
I expect a lot of office space in expensive urban centers to start to convert to residential.
Denny, I am not really arguing with your analysis, but it ignores the vagaries of management decision making. I am ten years into retirement. I’m sure things are changing, but whenever there’s an opportunity to go backwards, trust that there will be executive management who take it in that direction. Here’s an anecdote from my working days.
I was employed in IT at very large company. We had a CIO (we called our guy Chief Information Officer, a truly great misnomer) who loved the idea of people working from home. To him it was a simple case of returning leased office space to the pool. The engineering arm of the company was in near constant expansion mode and always looking for more desks. Our CIO was a hero for giving up entire floors of office space. And it was also good for morale and productivity. That was an unplanned benefit. Coders can be like hermits at times. Yeah, they have to come to code review meetings and such. This was years before Zoom, we reluctantly used Webex, but usage was mostly driven by geography. When all the players were in the same region of the country Webex was not even a consideration. In any case, hardcore coders loved the ability to perform heads down work uninterrupted by colleagues, break room chatter and so forth. I know we’ve got some hackers who hang out on this board. Is this still the case?
But then the CIO moved on to another position (maybe left the company, I don’t remember) and we hired a new guy. The new guy was indeed a “new guy”, as we hired him away from a major telecom. He had great ambitions. He wanted to turn IT into a profit center by selling our services much like Accenture. As he was new to the company he didn’t realize that a few years prior we had shut down the IT commercial consultancy business as it was a dismal failure. Not long after he was hired the new guy did a walk through of several of the IT facilities. It was reported via the internal grapevine that he asked his guide, “Where are all my people”? When informed that they were working from home as well as remote desk facilities that were maintained at all the major business centers he responded, "I want to see butts in chairs when I walk through an IT facility.
And so it came to pass. Within three months amidst much grumbling and general unhappiness IT butts were returned to their office chairs in company owned or leased office space.
And so it came to pass. Within three months amidst much grumbling
and general unhappiness IT butts were returned to their office
chairs in company owned or leased office space.
And how many of their best people did they lose, middle fingers held high, to companies with more forward-thinking managers?
One goofball hired by your company is the guiding light to the future.
FWIW over the course of a career of 40 years half in senior management I’ve met my share of goofballs who’ve made terrible decisions sometimes based only on minimal knowledge which have cost many millions of dollars and ruined major divisions and subsidiaries. So I would not rule out entirely the vagaries of mgt. myopia.
In particular people with inadequate technical background tend to make erroneous judgments as they
somehow manage to encounter or be put in charge of unfamiliar circumstances. Chapter and verse would fill a small book and definitely be OT.
I’m a bit late to this discussion as I spent the weekend camping with friends (while maintaining at least 6 feet of distance even while talking outdoors).
I discussed WFH with a friend who is a veteran attorney at a mid-sized law firm in one of the more populous cities in North Carolina. She noted that many clients are realizing how much work can be accomplished remotely with no need to schedule meetings on site or pay for transportation and lodging, etc. She expects many clients will prefer to continue having remote meetings even after coronavirus shutdowns are lifted. The law firm shareholders see many advantages as well. The firm is monitoring WFH and productivity is as good or even better as it was in the office.
Many of the younger attorneys love the change and have adapted to it quickly. Once the shutdowns are lifted, I would expect many of them to ask to work remotely at least part of the time if not most.
We sometimes forget that many people worked from home until fairly recently in human history, often with the shop or store on the first floor and living quarters on the second or in back. Or the wealthier had an office on the edge of the grounds or in one wing of their large house.
My friend’s law firm uses Docusign for their work. I would expect most law firms to stick with a service such as Docusign unless something significantly better (as in easier to use) and cheaper came along, b/c law firms would not want to devote significant time and energy to switching technology and training their staff frequently. With many early adapter law firms using Docusign, more will follow, even after the pandemic.
She did mention that there have been some cases in which a Docusign signature has been contested, but that’s the case for any will if someone is sufficiently motivated to contest it.