This guy’s last company sold for $4.3 billion — now he’s back with a $3 billion startup that's replacing paper
Eugene Kim
Docusign CEO Keith Krach
(Docusign) Docusign CEO Keith Krach
At the age of 57, Keith Krach isn’t the prototypical young, brash college dropout CEO so often seen in Silicon Valley.
Still, Krach is leading one of the hottest startups in today’s tech scene, pushing through an epic career that spans over three decades.
Once the youngest VP in General Motors’ history, and the founder of two extremely successful startups, Krach is now the CEO of Docusign, a $3 billion e-signature company that wants to replace paper signing.
“Basically, think of wherever there’s paper, there’s a 9 out of 10 chance that we could get rid of it,” Krach told Business Insider.
If this sounds like hyperbole, just take a look at the list of investors buying into it: Kleiner Perkins, Accel Partners, Bain Capital, SAP, Microsoft, Salesforce, Intel, and Samsung, just to name a few.
Docusign has raised over $500 million to date, including its $280 million Series F round in May.
“I’m having a time of my life, as you can see," he tells us.
GM's 26-year old Vice President
Krach started his career as one of the GM Scholars at the age of 19, when he was a sophomore at Purdue University.
It was a demanding job, requiring midnight shifts at an autoplant in Detroit. “I had about 30 of the biggest guys you’ve ever seen in your life working for me,” Krach recalls. “Two of the biggest issues you had to deal with were drugs and prostitution.”
Krach still managed to leave a good impression and was later offered an engineer position when he graduated. But he was more interested in business, and instead got into the GM Fellowship program, which paid for tuition, books, and half of his salary to go to Harvard Business School.
When he returned to GM, Krach worked under Rick Wagoner, who went on to become the CEO of GM for 10 years.
Krach’s rise to fame came while leading a joint venture between GM and Fanuc, a multi-billion dollar robotics company whose equipment is used to manufacture Tesla and Apple products now. That JV quickly became an industry leader, and helped promote the 26-year old Krach to GM’s youngest VP in company history.
“People thought I was nuts”
Docusign CEO Keith Krach
(Docusign) “I probably had as good a chance as anybody to be the future CEO [of GM],” Krach told us.
By any means, Krach was having a great career at GM. His team was beating big shot competitors like GE and IBM in his space. He had pretty much locked up a promising future at the company.
“I probably had as good a chance as anybody to be the future CEO [of GM],” Krach told us.
But it was right around then that Krach started to feel the entrepreneurial itch. He was working with a lot of Silicon Valley-based companies at the time, and saw how fun and rewarding the startup life appeared to be.
So when GM offered him another promotion, Krach turned it down, simply saying, “I want to build my own company.”
On his 30th birthday, Krach quit his job at GM and moved out to Silicon Valley.
“People thought I was nuts,” he says.
Getting whacked in the face by a '2X4'
But Silicon Valley wasn’t what he imagined it to be. He constantly butted heads with the CEO of the startup he joined, and ended up quitting the job within a year, right when his first son was about to be born.
“It was like getting whacked in the face by a 2X4. It was the most miserable year of my life,” he says.
Still, being in the Valley connected him with a lot of good talent, and eventually he was able to find a group of PhDs who were willing to start a business with him.
They launched a company called Rasna Corporation, which developed mechanical engineering software, and in 1995 sold it to Parametric Technology for $500 million.
“I’m sitting there, in my mid-30s, with more money than I’d ever thought I’d make, thinking, ‘What am I going to do next?’” he says.
From zero to $4.3 billion
craig federighi ios 9
(Justin Sullivan/Getty Images) Craig Federighi, Apple's SVP of software engineering, used to work at Ariba.
That’s when Krach got a call from Benchmark Capital, and became its first-ever entrepreneur-in-residence, a position given to people who want to incubate startups while working at the VC firm.
Krach was still in touch with a bunch of Rasna guys then, and with six of his best people, he formed another new startup called Ariba.
This was around 1996 when the internet was just getting started. Ariba’s goal was to create an online service that could speed up the entire procurement process for businesses, making things like supply chain management, invoicing, and billings a lot easier.
Ariba was able to raise $6 million in just two days, and turned cash flow positive from the second quarter of its existence. A few years later, in 1999, Ariba went public, becoming one of the first internet software companies to IPO.
Ariba may not be a household name, but it's had some of the most talented people who went on to do big things in the Valley. Its CTO was Craig Federighi, now Apple's SVP of software engineering, while Jim Steele and David Rudnitsky, the two pioneering former Saleforce executives now at Insidesales.com, were also part of its sales team.
Krach eventually left Ariba in 2001, shortly after the dot-com crash. Once a company worth over $30 billion, Ariba was sold for $4.3 billion to SAP in 2012.
Semi-retired 'soccer dad'
For the next 8 years after leaving Ariba, Krach spent most of his time with his kids, enjoying life as a semi-retired, “soccer dad,” he says.
During that time, he took his son out of school for a year to travel around the world, from Mt. Kilimanjaro to the Amazon jungle and the African desert.
Then one day, after he returned to the States, Krach received a call from Pete Solvik, then-CIO of Cisco, who he knew through a previous deal at Ariba.
“I have a company to show you,” Solvik said. “It’s like Ariba on steroids.”
Solvik was referring to Docusign, a software company founded in 2003 that allows users to send signatures and manage documents online. Krach was immediately hooked and soon got on the board.
Docusign signature
(Docusign) You can electronically sign documents and run your workflow around it with Docusign.
Replacing paper
The Docusign board was looking for a new CEO to take the company to the next level at the time, and had Krach in mind.
But Krach had some reservations about returning to a CEO position. He knew more than anyone how draining and tough the job could be.
Krach says he made up his mind after a brief conversation with his wife. “I remember going back home, telling my wife, ‘These guys want me to do the CEO thing, but I can tell you don’t want me doing this. There’s no peace of mind,” he told her. “I don’t know if this is a good idea - what do you think?”
Krach’s wife told him: “All I know is when you go to a Docusign board meeting, you’re so excited. And when you come back home from one, you’re even more excited…I’ve seen husband Keith, father Keith, Purdue Keith, but I’ve never seen CEO Keith that’s having this much fun.”
So in 2012, Krach accepted the offer and became Docusign’s CEO.
Krach says his decision to ditch semi-retirement and resume what he calls the "CEO thing" was largely predicated on the opportunity he saw ahead for Docusign. He says its technology that allows people to sign paper electronically in a secure environment — within minutes, as opposed to days when it's on paper — is a game-changer that will completely disrupt the document approval and management process.
"I came back because I really saw an opportunity to change the way business is done and to build something that's built to last," Krach says.
Docusign has been quickly expanding its presence across the world, reaching 50 million unique users across 188 countries. More than 100,000 companies use it for document approval and transaction, as well as workflow management. Now it's estimated to be worth $3 billion.
Is an IPO the next step?
Krach won't say exactly.
"Everybody asks that question, but for us we just look at being public as a financing event," he says. "We choose with our equity strategy, not ony the most efficient way, but also to ensure that we get long term investors and strategic partners in terms of investments like Google, SAP, Salesforce, NTT, Mitsui, Samsung."
In any case, he says that a company has really made it when the brand becomes a verb, the way that Google or Uber are used in place of the words for "online search" or "taxi-hailing." Docusign has now become a verb too, he says, as in "just docusign it" when people ask for an electronic signature.
Krach believes this is just the tip of the iceberg, with much more room to grow. “Not only large and small companies can use it, but every department within those companies, and every person are potential users," Krach says. “The value is infinitely quantifiable.”
