No. of Recommendations: 2
I found this to be ironic from an otherwise stellar (4.5 anyways) review of the SpringCM product:

Cons: Template and label management with docusign should be easer.

History and status from Docusign do not alway work, we have contract that get signed but never update in Spring CM. The systems should have a shelf auditing process between them.


The company has about $15-$20 million in sales. They say they have 600 customers. That works out to $30k per customer on average.

According to the review site that I linked to, and the worthless SpringCM video they have on their page (I thought they would demonstrate their product. They don't. They just have a few people rave about it) they charge $39 per month/per person.

That is less than I pay, per month, per person, for my legal practice management software. That is a not a large price point. Doing the math, they have ~64 users per customer to get to the $30k average. The median would of course be much different but we do not have information for that.

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Lets say they can do the same, but move it out heroically to 10,000 customers! That equates to $300 million!...errrr ;( is more like it. I mean $300 million is not chicken feed but at a multiple of 5 it is worth $1.5 billion, at a multiple of 10 it is worth $3 billion. Now of course if they can grow it to 50,000 or 100,000 customers using the same density of users at the same price point then you have something huge.

The math however is difficult here. Going from 600 to 10,000, in this much more competitive market, is a feat in and of itself. I do not know how they are going to price the product, or if the advertised $39 per month, per person, is for a basic product without customization or something, but that is the math.

At a 10 multiple, and they grow it to 10,000 companies, with at least 64 users per company, you are getting less than 50% of the current market cap of the company. This product is producing no great upside potential.
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At 50,000 companies with the same use density and price point you get $1.5 billion. Now that would be huge!!!! :)) me smiley then! I can see that adding $7.5 to $15 billion to the current market cap then.

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I know that Mongo is growing customers at greater than 60% each quarter, but of course much smaller numbers. Docusign is growing customers at 28% or so a year.

I guess, in the end, there is only so much calculating one can do. As we have seen many times, "don't ever tell me the odds," or the discounted cash flow.

There clearly is potential there for real upside, but the potential requires some real large penetration numbers in selling. There may also be different enterprise price points that was not listed on the site, and Docusign may add functionality that makes the product worth more.

I mean, in a very competitive market, as a solo, if I am paying $50/ a month, per person, I do not see why this product is only at $39 per month. A price increase has to be forthcoming as well.

But as Duma states and links to, the management team at Docusign appears to be creme da la creme. That is what you invest in in the end.

But no harm in further digging.

In comparison, as I ran back of the envelope numbers, Mongo gets just a bit more than $30k per customer (of course many customers are brand new and will significantly up their spend, so the real number at maturity is probably $40 or $45k per customer and growing) but that is in the ballpark of what Docusign can do. Particularly if they raise the price to $50 per month, per user (if they can).

Fascinating of course, good to look under the hood, but in the end INVEST IN DOCUSIGN FOR THREE REASONS: (1) A POWERFUL BRAND, (2) VERY LARGE AND LOYAL USER BASE, AND (3) MANAGEMENT TEAM. The closeness with Salesforce is helpful as well. With Zscaler, any company that moves to Office 365 is likely to consider moving to Zscaler. With Docusign, any company that uses Salesforce as its CRM is likely to consider Docusign first.

Tinker
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