DocuSign boss Dan Springer comes clean on IPO challenge

DocuSign’s global chief executive says he is moving full steam ahead with a blockbuster, multi-billion-dollar IPO.

DocuSign chief executive Dan Springer: Picture: David Swan.

DocuSign’s global chief executive says he is moving full steam ahead with a blockbuster, multi-billion-dollar IPO despite many challenges, including an oversized board and a recent data breach.

Dan Springer took the reins of the electronic signature service provider in January, after driving Responsys’ Nasdaq initial public offering. The search for a new chief executive reportedly took the company 15 months.

Mr Springer says he wants to downsize the board, which is now made up of 12 directors, to run a tighter ship.

“Hypothetically (the number of directors) can cause a lot of challenges, but I’ve been very transparent,” he told The Australian in his only local interview. “We have a 12-person board and that’s probably not the right ­answer. I’d probably say seven to nine is a smart-ish range. After we go public, we’ll probably look at configuring the board in that way.

“If people make investments they often gain rights to be on the board. So with the various fundraising that happens, it’s new rights granted and a bigger board. I was concerned hypothetically; it’s a lot of people, but I’ve been ­really pleased.

“I’ve had my second board meeting and I told them I really appreciate that they had done such a good job at adjusting to having an active CEO.

“When a company’s in transition, the board does get more involved, and in this case they’ve flipped, stepped back and said you’re in charge now, go. I haven’t had any concerns or issues with the team, I’ve been ­really pleased they’ve pulled back.”

One less hypothetical headache for DocuSign was a data breach several months ago that saw customer email addresses ­accessed from the company’s ­internal systems. Those emails were then targeted in a series of phishing emails.

“Most of the phishing attacks were blocked by antivirus,” Mr Springer said. “The bad news is you could argue it would never end, but the value (of the email ­addresses) does go down drama­tically over the course of six to nine months. The better news is they’re not very effective phishing campaigns.”

Mr Springer said the attack led to the ­realisation at DocuSign that it needed the same kind of security for its ­staff systems that it had on its core systems.

“We’ve locked stuff down a little more for employees, put in some extra procedures,” he said.

“We already had two-factor authentication but we’ve dealt with a few access issues. Some employees felt they needed to jump through some extra hoops to do their job but it’s a worthwhile trade-off.”

Given his experience, one of Mr Springer’s core assets is his ability to bring a company public. He said that from his perspective there were still some boxes that needed to be ticked before pulling the trigger. DocuSign, which was founded in 2003, has raised more than $US500 million in funding, including a $US233m round in 2015 that valued the company at $US3 billion.

“When I joined in January, I had a lot of confidence that we would go public, and I did all the due diligence when I joined,” he said. “It had this scale, profitability, quality of customers, all the things it needs to be a listed company.

“I came to the conclusion I needed to see three or so quarters where I could become comfortable with predictability of our results and tell the market we’re going to be ­predictable.

“We’re just about through my second quarter, so after three quarters, I’ll have that confidence and hopefully the market can have that confidence.

“Towards the end of this year we’ll be in a position where, if those are all on track, we’ll be ready to select bankers and start that process. Things are going well on that front. I just haven’t set a date yet because I want to get those quarters under my belt.”

Mr Springer’s immediate focus is more on product innovation, whether through acquisitions or new functionality built in-house.

“It’s a huge important area for a software company,” he said.

“We also want to focus more on our international geographies. Eighty-five per cent of our business is in North America, and over the next couple of years we want to reduce that to 70 per cent.

“Our US business is still growing pretty fast so that means international will need to double a couple of times over the next few years. That’s a lot of growth.”

As with most tech companies, in 2017 success is about the contest for talent as much as it is about product, and Mr Springer says that is “not a trivial matter” in ­Australia. “We’re competing aggressively,” he said.

“I won’t say it’s going to be easy. The reality is if you’re not doing a great job at making your company a great place to work, you’re not going to win the talent war. If you take Australia, if we make that our goal and make each manager accountable, it’ll give us the ability to grow from 50 people to 100 people to 150 people.”