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Comment by adventured | Hacker News Reader

> DocuSign has a hard to penetrate moat

It's the same reason Coinbase, Square, Stripe, Airbnb (among many others) are worth what they are (ie rich multiples on sales). Their domains are extraordinarily difficult to do very well and now that large competitors are in place (in those segments) it's borderline impossible to take a big chunk of the market away from them. They're entrenched, potential future monopolist tech monsters.

The market loves these types of stories, right up until the growth inevitably declines to/near single digits and then they get a boring eBay valuation (circa ~2003-2019).

The short of it is, a lot of the future returns have been pulled forward.

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The “extraordinarily difficult to do very well” part gets ignored here by most people

DocuSign’s feature list is huge. It’s not just overlaying a signature on a doc. It’s a massive and complex app that most people will ignore or trivialize, but that shit just works.

Mark all the signature locations?

Multi-user?

Chained dependencies?

Recording and redownloading later?

SSO

Audit / identification

Salesforce integration?

Contract generation?

Orange site minimizing huge successful company because they care about one feature seems super on brand.

I just went through the trouble of researching eSignature companies, and many of them have roughly similar feature sets. We ended up going with HelloSign because their API is a lot more robust.

I wouldn't agree that DocuSign's continued success is because of the maturity of the product.

In terms of features, all the things you listed aren’t technically very impressive.

While I recognize their value, a potential competitor could replicate them within a reasonable timeframe. What they couldn’t replicate is the brand name.

Lots of technically quite simple things are enough work that people will happily pay a company you do it. Did nobody here learn from the famous Dropbox comment?

This is a different point. We’re already talking about a company trying to build the same feature set, not an individual doing it themselves using existing technology.

The real lesson from Dropbox is that things that seem technically easy to implement are in fact bedeviled by all sorts of hidden little gremlins, and finding and killing those gremlins is valuable.

Lots of services can sync files and folders. Having used many alternatives (One Drive, Google Drive, iCloud Sync, even scripted rsync), it turns out I still pay for Dropbox. It’s the most reliable for my use cases, and is not too expensive.

There is a huge difference between “I can conceive of how to implement this feature” and “this feature works for years on end at large scale with adequate reliability and usability and low enough cost.”

Storing and moving TBs of data doesn't sound that easy.

I'd rather pick insert an image in a document and keep a log of it as a weekend project.

Some of these may have been difficult when DocuSign was founded, but I'm not sure anything you've mentioned is technically hard today.

FWIW I sign a lot of documents (CEO of a company) and I use HelloSign/ Docusign interchangeably. Honestly, there's 0 meaningful difference, except I found HelloSign a bit easier to onboard, and I'd rather support them since I think the entire market of "sign a fake piece of paper" is the dumbest fucking thing ever and I hate that there's a company making shitloads off of it.

Technically hard isn't the only kind of hard. This is one of those spaces where a lot of people have a lot of complicated processes, and they will be pissed if you don't support their particular approaches. Writing the code wouldn't scare me off this market, but the work to discover the full extent of the domain and the user needs would sure give me pause.

Seems a bit of a moot point, though, as I'd expect most customers here see this as something they want to just work without problems, so they'll be heavily biased toward known major brands. It's sort of like the space for cloud computing in that way. Usually, my most important criterion for a cloud vendor is that their shit will stay up forever, because my whole goal is to not think about a bunch of things.

> Technically hard isn't the only kind of hard Yup that just about sums it up. The reason FAANG are so big is mainly legality, as well as PR, and having a big pocket to wait out the competitions. Nothing is really on technical merit in the real world.

Even if we grant this as true, a $50 billion valuation implies that they'll return 3-5 billion in profit at some point. Their revenue right now is an annualized ~2 billion. So they've got to at least 2-3x their revenue while increasing their operating income from slightly negative to 50% of revenue.

As for the features, of course it's not whip it up in a weekend. But MS/Google/Apple are all in a position to put out a competitor that integrates into their platforms. It probably won't put DocuSign out of business but would cut into their margins.

When the fed is printing money, valuations don’t matter. Just for reference, Rivian is a $100B company with no revenue and potential orders for 50000 cars that they only plan to make until the end of 2024.

In most cases , investors only care about growth. As long as they continue to see double digit growth, the stock will continue to grow . E.g TSLA. It is only when the growth stops that the stocks starts to crash - e.g. Peloton and Zoom .

Imagine being able to generate docs like these using the office suite , google docs or libreoffice. Bye docusign.

You can already digitally sign documents in LibreOffice (including "qualified electronic signatures" issued by European countries). I would be surprised if you can't do it in Microsoft Office too.

However, qualified electronic signatures are harder to manage than what eIDAS simply calls "electronic signatures" (i.e. anything you put your name on): DocuSign value-add is a third-party to record an audit trail (time and date, IP address, assurance signatory has access to a particular email address...), basically, someone with no interest in misrepresenting facts about signatories to a document.

There's a lot of legislation around this too, and that can be costly.

That's not 50B tech.

A self driving car is hard, a web app to edit a document with a few integration is not hard.

The value is not in how technically great they are, it's in their market position.

Coinbase is overvalued because people don’t understand the difference between Coinbase (which has enourmous fees for guaranteeing a price for selling/buying cryptocurrencies) and Coinbase Pro (which is a market maker with lots of competitors, where you can just create a market order and you will execute the trade with a much more competitive margin). As competitors copy the ease of use (like Strike with a 0 profit on buying/selling Bitcoin), Coinbase’s main business will decrease relative to Bitcoin’s market cap (it may still increase in dollar terms).

AFAIK Coinbase Pro isn’t a market maker, it’s a marketplace. a market maker would be someone who offers to buy/sell some asset for a specific price. for example when i use Coinbase Pro to place an offer to buy 1 Bitcoin for $55000, i’m acting as a market maker.

all the same, i agree with you: it’s already cheaper to use Coinbase Pro as an on-ramp to obtain USDC and then trade the USDC on a decentralized exchange that charges 1/5th the fees as Coinbase Pro. that wasn’t the case 2 years ago, and i don’t see any compelling reason to believe that Coinbase the company won’t continue to lose its mote, over the long term, in an industry which is fundamentally about decentralization.

You’re right, I used the wrong word.

> for example when i use Coinbase Pro to place an offer to buy 1 Bitcoin for $55000, i’m acting as a market maker.

My understanding is different. When you place an order, you're absorbing liquidity from the marketplace. A market maker is the party that generates liquidity by fulfilling orders, not the party that destroys it by placing them.

No, a market maker makes (adds to) the market by placing orders.

A market taker takes orders away from the market by completing transactions, thinning the order books.

From wikipedia:

> A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the bid–ask spread, or turn.[1] The function of a market maker is to help limit price variation (volatility) by setting a limited trading price range for the assets being traded.

> In U.S. markets, the U.S. Securities and Exchange Commission defines a "market maker" as a firm that stands ready to buy and sell stock on a regular and continuous basis at a publicly quoted price.

The concept of the market maker is that, if you as a third party want to buy or sell whatever it is, you can do that because the market maker will instantly fill your order. ("Liquidity provider".) Without the market maker, your buy/sell order would have to wait around indefinitely for someone else to file a matching sell/buy order.

In particular, note that placing a buy order without a corresponding sell order doesn't satisfy any definition of market making. And if it did, limiting the order to 1 bitcoin would still be disqualifying; to fill the role of liquidity provider, the market maker must stand ready to buy as many bitcoins as anyone wants to sell.

I don’t really find Square or Stripe to be doing something mind blowing, if we’re talking about the core payments features. These should just be an open standard as they are developing in India, where people can transfer their money to each other without rent-seeking monopolists or just tech giants sheltered from competition via network effects. Payments are just a basic utility for society, not something to be controlled by authorities like giant tech companies.

I remember seeing diagrams with some of the steps and stakeholders involved in nearly each credit card transaction, and it was quite the nightmare.

Sure, it should be simpler. Much simpler.

But given what we currently have, to have the option of abstracting all that away via pretty clear, mostly predictable and well documented APIs really is nice.

It’s also complex for a reason, and not just because of inherited legacy processes and systems.

Payments are a basic utility, but the hidden cost of ensuring funds are available on request in every conceivable location are not to be ignored.

If you disagree, why not run a payments service at no or low cost yourself?

Honestly, I thought about doing it.

It could be a nice passive business to be a small payment gateway provider. It's not rocket science, I could implement it alone. You invest some money to make it compliant with the security standards of the sector, charge less than all the other fat companies and you have another income stream.

The only cons is you have to abide to so much stupid regulation in order for it to be legal (not secure, I'm fine with the private rules to ensure safety in running the service), and then making sure your customers are not doing something your government doesn't want them to do (like cleaning "dirty" money) and identify your customers (KYC).

I looked also into starting a bank (you can do it with just 1mln in some places!) but you run into similar issues.

It's a legal nightmare; if there was no government, I'd definitely do it.

I think you are still ignoring the unknown unknows which are abstracted away through legislation and government.

If we exclude government, and avoid any fees from external providers (let's imagine a cryptocurrency-like asset), how would you warrant your solvency in fulfilling all the transactions and converting to fiat (which is ultimately what customers need today in a payments processor).

I can't see it having a widespread appeal without costs matching the order of magnitude existing ones do (sure you can do it cheaper, but why haven't cryptocurrencies achieved it?)

While we're at it we could go back to a monetary standard backed by physical assets. Not necessarily gold, let's say a basket of everyday assets (wood, wheat, iron), so that the value of currency is tied up to the basic needs of a society. If you want to convert from fiat to these goods, you can do that.

You can handle banks misbehaving and defaulting on their obligations with a competing system of private banks, third party services reviewing and auditing these banks and by paying a private insurance tied to the amount you own.

Given that generally banks will make money with your parked resources they could be able to pay for the private insurance from the interests on your money.

I don't think cryptocurrencies are the answer, they're a technical answer to a political problem and governments will probably just squash it or find a way to benefit from it.

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