In this episode, we sit down with Court Lorenzini, the visionary co-founder behind the $16 billion e-signature giant, DocuSign. Lorenzini takes us back to the early days, revealing that the path to success was a ‘slow grind’ rather than an overnight explosion. He shares the fascinating inside story of how a presentation at Microsoft’s executive briefing center led to landing them as a pivotal first customer, providing the seal of approval that catalyzed their growth. The conversation also explores the strategic partnership with the National Association of Realtors, which embedded DocuSign into the daily workflow of millions. Beyond DocuSign, Lorenzini opens up about his subsequent entrepreneurial journey, including a spectacular failure and the invaluable lessons learned. He now channels this wealth of experience into his latest venture, Founder Nexus, a community designed to help fellow founders navigate the treacherous startup landscape and increase their odds of success.
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Nataraj: You’ve started several companies; I’ve lost count on your LinkedIn profile. Everyone knows DocuSign, which has a market cap of $16 billion today, but you’ve founded a couple of companies before and some after. Could you share a bit about your career up to now?
Court Lorenzini: Certainly. I started my career as an engineer. My undergraduate degree was in engineering, and I did three postgraduate master’s programs in different forms of engineering. But I always knew I wanted to be an entrepreneur, so for me, that was just a pathway to getting to where I am now. Early in my career, I worked for a semiconductor equipment company, ran a division for them in Europe, and then went to work for Cisco in the early days when it was on a rocket ship. During the years when Cisco was considered the fastest growing company ever, it was a fantastic place to learn leadership.
Nataraj: I’ve had several guests who were at Cisco during that rocket ship phase. It fostered a lot of successful people.
Court Lorenzini: It was a great place to learn. I moved to the Northwest in 1996 and started my first company at the dawn of the internet era, before e-commerce. I built one of the very first e-commerce engines and ended up selling that company. I tried my hand as a venture capitalist for a bit but realized I enjoyed building companies more than investing in them at that time. DocuSign was my second company, which I co-founded with a friend who had worked for me in my first company. I ran that as the founding CEO until 2008 and then left because my passion is the first phase of a company. I love what I call the ‘napkin to product-market fit’ phase, where every decision is life or death. That’s my favorite part of growing a business. In my career, I’ve structured it so that by the time I get to about year five and there’s a product-market fit signal, I tactically exit and go start another one from scratch.
Nataraj: When you were starting DocuSign, what was the original thought? Did it evolve?
Court Lorenzini: My co-founder, Tom Gonser, had the idea. He came to me after leaving my first company. His own company was in the process of selling assets from a prior venture it had acquired called DocuTouch. He called me and said we should build a company around the IP his company was trying to get rid of. In that IP package were two things of value: the trademarked name DocuSign and an issued patent for signing documents via the internet. I thought that was interesting. We extracted that, bought the IP from his company, and that’s the basis around which we founded DocuSign. He left his company, and we built it together. It was amazing.
Nataraj: Was it obvious from day one that this was going to be big, or was it a slow grind to product-market fit?
Court Lorenzini: It was a really slow grind. I remember telling the very first venture investor that it was going to be a winner-take-most proposition. They kind of scratched their head, and I said that someday, one market leader would have about 70% of the worldwide market share. There would probably be a second player with about 20% and a bunch of copycats in the last 10%. If you roll the camera forward to today, DocuSign owns about 76% of the worldwide market, Adobe has about 12%, and everybody else is in that last 10-12%. It came true exactly as I predicted over 20 years ago. It was not obvious; it was a grind. It took a lot of creativity to figure out how to get product-market fit, and it took years. We founded it in ’03 and didn’t go public until 2018, so it was 15 years to a public offering.
Nataraj: Who were the first or most impactful customers?
Court Lorenzini: The most impactful relationships were the ones that took it from ‘kind of cool’ to ‘going to be amazing.’ The first one was Microsoft. This was an interesting story. We were a very early adopter of .NET technology. It turned out that at Microsoft’s executive briefing center, the .NET team was presenting to executives. Without telling us, they used DocuSign as an example of a company using .NET in a cutting-edge, valuable way. In the audience was the chief legal counsel for Microsoft. From that meeting, I got an inbound phone call from him saying, ‘I was just at the EBC. I heard this thing is really cool. We should be using that.’ That’s how we landed Microsoft. It wasn’t me calling them; it was them calling me. Because it came from the legal team, it was blessed inside the organization from day one. At that moment, Microsoft was the biggest company in the world, so that helped a lot of other companies get comfortable. It was the seal of approval I needed. The next one by far was the National Association of Realtors (NAR). The NAR had software used by three million realtors nationwide to create home purchase and sale agreements. They liked what we had and agreed to embed our signing tool inside their software as a white-label deal. This meant every realtor in the country immediately had an opportunity to send documents to home buyers via DocuSign. That was a huge deal because it gave us volume and exposure to an incredible group of end-users who had day jobs where signing things electronically would be fascinating. We got a tremendous amount of lift from that deal.
Nataraj: It seems like a sign you’re solving a real problem when customers come to you inbound. You predicted one player would dominate 70% of the market. It’s a seemingly simple software, so why does DocuSign still hold that position against competitors in the broader document management space like Adobe, Google Docs, and Box?
Court Lorenzini: There are two core reasons. First, humans prefer consistency. If we were constantly forced to use a whole array of different signing methods, it would get confusing, and it would be hard to find your stored documents. Human characteristics were going to drive standardization on one player. It’s also a trust factor. The other main reason it remains dominant is that early on, we recognized that a key element to resolve wasn’t the signature itself but the flow of data between the universe of document creation tools upstream and the universe of document execution tools downstream. Upstream, you have Word, Adobe Acrobat, and special-purpose platforms creating documents with relevant data. Downstream, you have big software companies like Dynamics, SAP, and Salesforce that need that same data to produce, ship, support, and bill for a product. We invested very early in a set of robust APIs that could take data from upstream systems and seamlessly move it to any downstream system. We built years of expertise in data translation via APIs, creating a large constellation of tools that really cannot be replaced by a third party. Most enterprises won’t take the risk of replacing us because a competitor would have to have all the same tools working perfectly on day one. That moat has been a huge differentiated advantage for us.
Nataraj: When you left DocuSign, did you sell your equity or keep it?
Court Lorenzini: I kept it all and moved on to start several more companies. By the time the company went public years later, I still had all my equity.
Nataraj: I spoke with Martin from Insights VC, an early investor in DocuSign, who said he never sold his shares and mentioned a ridiculous multiple. What did your multiple look like?
Court Lorenzini: The shares were founder shares, so they were basically fractions of a penny, and they got to over $300 a share. It was a very healthy return, let’s just say.
Nataraj: After five years, DocuSign was successful, yet you went on to found other companies. Are you an ambitious person?
Court Lorenzini: I think people would describe me that way. I’m certainly an optimist, and I love the thrill of getting something off the ground. When you’re successful and you do it repeatedly, it means you’re in it because you love the game.
Nataraj: What was your career like after DocuSign?
Court Lorenzini: The third one was a renewable energy company. I was trying a business model that didn’t require much venture capital, just a few hundred thousand dollars in angel money. It was intended to be a cash flow business, which it turned out to be, returning cash to my investors. I wouldn’t say it was a giant hit, but it returned capital. Then I started my fourth company, a consumer data acquisition company called Metabright. That one was my most spectacular failure. It was a rocket ship with 50% month-over-month growth on a multi-million dollar run rate. Between that and absolute catastrophic failure took less than three months.
Nataraj: Wow, why did it fail so drastically?
Court Lorenzini: The technology we were building was data extraction from checkout register receipts. We built an OCR-based system that could read and translate that cryptic writing into real product data. We were licensing it to other application providers. Our biggest customer was delivering 90% of our revenue and growing like gangbusters. One day, the founder of their company was at an event and sat next to a young man who had just finished his master’s program in Croatia. He and his buddies had written a program to read receipts using a cell phone and was willing to give his code to my customer for free. Within weeks, my customer tested it and called me up to say, ‘You’re out. He’s in. Bye.’ When your 90% revenue customer walks away with no warning, you don’t survive that. I went to Croatia to try and buy the technology, but couldn’t get a deal done. I called my investors and employees and said we had to shut it down. It was very gut-wrenching.
Nataraj: How do you evaluate opportunities now and decide if they’re worth your time?
Court Lorenzini: I have a methodology I promote to early-stage founders. First, validate your product by testing if someone will pay for it before you even build a prototype. Get them to put down a down payment or something to test the concept. Second, and this is the one most people miss, actively try to kill it. I go back and find founders of companies that preceded me in the same solution space. I ask them what happened to their company and why it failed. Through that exchange, I learn all the fatal, foundational flaws I need to be aware of. It’s an incredibly eye-opening process. If you can diligently uncover and resolve all those fatal flaws with your approach, you’re probably on the right path. I tend to be pretty rigorous about both of those things before I jump into something new.
Nataraj: Let’s talk about Founder Nexus. You’re not raising outside money for this. What is it, and why are you doing it?
Court Lorenzini: Founder Nexus is my thank you note to the venture capital industry. I’m not trying to get myself or anyone else rich, but I’m using it as a vehicle to help founders on what is an otherwise difficult, lonely journey that’s statistically destined to fail. The odds of failure for a venture-scale founder are over 90%. I see these founders as a valuable global resource that isn’t being optimized. So I’ve set out to figure out how to raise the odds of success for them. Founder Nexus is a way for founders with experience to get together regularly and be motivated to help each other by sharing experiences, not advice. I gather these venture-scale founders, put them in subgroups, and create opportunities for them to actively share their experiences to level up their game. Success in building a venture is a series of variables multiplied together. If a single variable is zero, the whole equation fails. If you can get every decision to be made at 50% or above its potential value just by gathering information, that will inevitably raise the odds of success for all participants.
Nataraj: Community is all about curation. How do you ensure the right people are in the room?
Court Lorenzini: Curation is key. I filter out anyone who has never built a company before. They have to be well on their way, having already raised their first venture round or outside capital. I’m looking for valuable lived experiences. I also filter out investors, advisors, and service providers. This way, everyone knows the room is pure; everyone is another venture-scale founder who’s been there and done that. This creates an immediate sense of trust and vulnerability. We also build forums, but unlike others where you extract all the business wisdom in 18-24 months, our forums only last for 40 minutes each. Then, software reassigns everyone to new groups with new topics. You get three of these per event, so you hear from 12 to 20 new voices of lived experience each time. You’re also grossly expanding your network of highly qualified people for recruiting co-founders or C-suite talent.
Nataraj: How’s the traction? Is it limited to Seattle?
Court Lorenzini: We’ve held three events and have about 150 people signed up. We just opened it up to full membership. Our next event will be our first simulcast, with both a live and online component to allow non-Seattle participants. My long-term objective is to have chapters all over the world, stitched together so founders in one community can help founders in another. This way, venture-backed companies can live and excel anywhere.
Nataraj: You’re an LP in a lot of funds. How do you decide which ones to invest in?
Court Lorenzini: I’m very active in the Seattle ecosystem to give back to the community that helped me, but I’m not restricted to it. My wife and I have probably invested in almost 20 venture funds around the world. It’s always hard to decide who will be a good picker. I tend to like very early-stage funds; that’s where my passion is. Sometimes it’s a gut feeling, or seeing if a fund’s thesis gives them a leg up. A number of funds we’ve invested in are run by non-traditional VCs, like women or people of color in different regions. We think those investors know their market better and will probably get outsized returns.
Nataraj: Has any area surprised you in terms of performance?
Court Lorenzini: Geographically, no. But I will tell you that several of the women-run funds are grossly outperforming their peers. Female VCs are historically few and far between, but the ones we’ve invested in are dramatically outperforming the rest of the crew. It’s amazing.
Nataraj: What’s your view on the current valuation landscape, especially with the AI craze?
Court Lorenzini: I invest in early-stage funds, so by definition, these are not high-valuation entry points. If they’re betting on AI, they’re not writing big checks at high valuations; they’re coming in at the concept stage with bigger upside potential. My investing strategy is like a dumbbell. I have a ton of diversified dollars in the low end, and a few very concentrated private equity positions on the high end, right on the cusp of pre-IPO.
Nataraj: Why did you pursue three master’s degrees?
Court Lorenzini: Each of those master’s was opening a door to a new opportunity. I was working for a semiconductor equipment company that had a program to pay for advanced education. For me, each master’s program was a way to get a new promotion. I got three very significant promotions in a short time. Within three years of my undergraduate degree, I was going to Europe to start a new venture for that company. There’s no way I would have gotten that opportunity at 25 if I hadn’t done all that work. I did computer science at Berkeley, manufacturing systems engineering at Stanford, and optical engineering at the University of Wisconsin-Madison. Each one was a gateway to a new career step.
Nataraj: What are you consuming right now that’s influencing your thinking?
Court Lorenzini: I love to read. I recently consumed ‘The Three-Body Problem’ series, which was mind-opening. Also, ‘The Fourth Turning Is Here,’ which contextualizes where we are in history. I’m really fond of a book by John Levy called ‘You’re Invited,’ which was helpful for Founder Nexus. And another called ‘The Power of Pull.’ On a podcast basis, I’m a huge fan of Acquired and ACQ2.
Nataraj: Who are the mentors that helped in your career?
Court Lorenzini: Shout out to my dad first and foremost. My father was one of the eight people that founded Silicon Valley; he invented the process for growing silicon commercially and was on the team that discovered solar power. He started seminal companies. Also, the founder of KLA, Ken Levy; the original CEO of Cisco, John Morgridge; and his successor, John Chambers. They were huge influences.
Nataraj: What do you know now about being a founder that you wish you knew when you were starting out?
Court Lorenzini: I wish I had sought more experiential advice. I got a lot of guidance from people who gave me advice but not experience, and that usually set me in the wrong direction. When I talked to people who had lived the experience I was struggling with, I got better counsel. I also had to learn how to delegate effectively and, crucially, how to follow up to ensure things got done. And finally, learning how to proactively hold people accountable as a leader took a while to understand.
Court Lorenzini’s journey offers a masterclass in resilience, strategic thinking, and the importance of community. His experiences, from the heights of DocuSign’s success to the lessons of failure, provide invaluable wisdom for any entrepreneur.
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