Tom Gonser is founder and chief strategy officer of DocuSign of San Francisco, CA.
Give me an overview of the trajectory that electronic signatures have gone through.
I started DocuSign about 10 years ago to try to do electronic signatures the right way. Before we started DocuSign, the way that happened is you literally had to have a piece of software on your computer and understand complex things like digital certificates in order to actually do it. It wasn’t working very well for anybody.
We decided that rather than having people encrypt files and then email them around the Internet, a better way to do it was to turn it inside out and store the files securely in the cloud and then have people authenticate in order to access the documents. What that allowed us to do was not require anybody to have any special software. We could hide the complexity of all the encryption and audit trail and all that in a server. You could sign just using a browser from any device. That is what allowed the market to take off.
I would say for the first couple of years as we were rolling out this new way of working, we spent most of the time just working with the user interface and making sure it was familiar and easy for people to do. People got both the ability to do it in a way that was easy enough so you don’t have to learn anything new, but also the security and legality so that it would stand up in court if it was ever challenged. And I’d say the last three years, we’ve really started to see it take off pretty dramatically.
You mentioned the legality of signed documents. Was that a challenge that had to be made so that it wasn’t a question?
It’s interesting. In the US, there was an act that was passed, a federal act actually, the US E-Sign act. It basically said if you process an electronic signature using steps — then they described specific things that need to be true — then that signature will have the same legal effect as an ink signature. We had the pattern, we just needed to make it easy. That was really the trick.
Once we did that, in the early days there were still a lot of questions about, “How do you know this is legal?” We had to become experts in the E-Sign act and communicate that to folks that weren’t aware of the fact it has legal since 2000 to do it this way.
Now that said, not every country in the world is governed by the US E-Sign act, obviously. There’s really three main sets of laws that are out there on the planet that deal with what a legally binding electronic signature is. Luckily, most countries have something that is defining in electronic signature. There’s the US, which is similarly adopted in other common law countries. There’s an EU directive, which governs what an electronic signature is in the EU. And then there’s a UN-based electronic signature guideline which is used through the rest of the world. Our job and our role is to make sure that the DocuSign platform can conform to all three of those different types of electronic signature sort of jurisdictions, as it were.
Ink signatures are refutable. You could just say, "I didn’t sign this" and there’s no foolproof way to say you did or you didn’t. Is the electronic version more promising for legality?
Exactly. It’s actually kind of funny. Once you start using DocuSign, people will come back after a month or a year and say, “I can’t believe we were just accepting handwritten scribbles on paper from people we’ve never seen their signatures before. And the documents could obviously be changed. We had no idea.”
In the DocuSign platform, the signature is tied to the identity of the person using any number of tools that we provide. The whole document is itself encrypted and stored, so that if any changes were made after it had been signed, you could detect it. The whole process is just much more efficient, but also much more believable when you’re done.
We’ve done two mock trials to see what it would be like to go to court, despite the fact we’ve done half a billion documents. We’ve only had eight chances to have customers say that they want to refute it. In all those cases, there’s just too much information about what actually occurred. But the depth of information about all the aspects of what happened during the signing process is all stored with that signature. It doesn’t happen in the paper world. The paper world, you literally have a scribble. A lot of times it’s faxed in. You’re just taking it on faith that it’s actually correct.
I saw the YouTube video in which you were speaking about going to a new doctor and being handed a stack of papers that needed to be signed in a bunch of places to then be keyed in someplace else. When you look at the healthcare market, what opportunities do you see there?
The healthcare market is probably the largest market for DocuSign. The DocuSign platform manages the data and form data and routes contracts around securely to different parties. You can imagine in the healthcare example … we’ve been working with a couple of companies in that space, something called DocuSign for Patient Engagement, which allows literally patient onboarding, with a partner of ours called Kryptiq.
If your doctor’s office subscribes to this, patients can fill in all the paperwork they need to before they show up. Even make the payment through the DocuSign system before they show up. All the information doesn’t need to be re-keyed. You can verify that it’s accurate. If the patient waits until they get into the office, they can just grab an iPad and fill out the same information.
You’re dramatically reducing the cost. There’s a statistic we saw the other day that one third of the cost of healthcare in this country is derived by the operational aspect, you know, paper and paper management, all that overhead. You’re looking at billions if not tens of billions of dollars of waste that can be corrected by using electronic signature management like DocuSign.
Is the company an electronic signature company or a workflow company?
Forrester started looking into something they call Smart Process Applications. They define Smart Process Applications as those applications that involve human beings interacting with data and documents and potentially interacting in and outside the firewall. What turns out is that most of the things that are behind the firewall back office, ERP and stuff that you never really see, is highly automated and digitally connected. The challenge is that when you start dealing with those transactions where human beings are involved, either filling out a form or responsible for signing it or sharing with somebody else or it’s going outside the firewall, as you would see if you’re a patient involved with a clinic or something. Those processes typically have not been automated, which is where the paper load comes from.
What Smart Process Applications are is literally building an application to automate a process that involves people and documents and data that typically span more outside of an organization. DocuSign is a platform upon which companies are building Smart Process Applications. A perfect example of this would be Kryptiq, our partner that’s developed a patient onboarding system that is built on the DocuSign system, in order to make that entire process of getting a patient from pre-registration through to the doctor handled in an electronic form instead of a paper form.
There are obviously lots and lots and examples of these Smart Process Applications in healthcare, but also in real estate, in financial services, all the places where human beings are interacting in a transaction. Forrester looks at that market and says it’s a $34 billion market, so a big, huge opportunity.
Do you consider yourself to have any significant competitors?
If you look at that market, a lot of the competitors are the big iron providers where someone’s going to come in and hand code a process using the traditional IT processes. Those are big, expensive projects, not cloud-based.
The challenge is, once you build a process like that … let’s say you create this workflow for onboarding a patient or creating a patient payment process or something like that. Then a rule changes – some government agency says you need to fill this form out before you fill that form out, or it needs to be reviewed by the financial team before this. Some change happens because it always does. With those traditional IT engagements, start the clock, you’re out of compliance. It’s going to take you six months or eight months before your IT team can get in and re-code and rewire that thing.
The DocuSign platform, on the other hand, separates the workflow and data and documents. We allow our customers to create what we call templates, which govern the entire process of a transaction, including documents. An administrator could go in and re-sequence the way a transaction happens, or change out a document, or add another one. All of the Smart Process Applications that rely on that particular template are immediately changed. There is no coding re-work to be done. It’s a very, very flexible implementation. It saves a lot of time, not only in getting it going in the first place, but in the whole lifecycle of an implementation. All the changes and tweaks that you know are going to have to be made are much, much easier.
It’s a new way to do it. It’s all because we’re a cloud-based approach as opposed to the typical, heavy IT software approach.
It was a coincidence that a couple of weeks ago, I got a document that asked me to sign using DocuSign for the first time. It made me wonder then – does interest in the product spread virally as people get something to sign that doesn’t require emailing, printing, signing, scanning, and emailing again?
Absolutely. It’s amazing how viral it is. Typically when someone goes through that process, at the end they’re thinking, I didn’t even know you could do that. That was really cool. I could see a way I could use this in my business, or I’d like to sign all my documents that way. They could go to the Apple store, the Android store, the Windows store and get our mobile application that allows just consumers to DocuSign any document anybody might be able to email them. The ability for even consumers to use DocuSign for anything they want really starts to push the viral spread.
We’ve had a lot of business in real estate, for example. A lot of times, you’ll hear a story from somebody who’s buying a house or leasing a house or renting something. That does create business for us, because typically people who are doing that are employed somewhere and they can take DocuSign to their work.
What’s really exciting to us about the healthcare space is somebody buys a house once every nine years, but I think the number of times you visit a healthcare facility is like three times a year, maybe four times a year. The viral exposure that can be seen in DocuSign in the healthcare space is an order of magnitude stronger than it is in, say, real estate. It’s exciting to us because when you’re a consumer and you buy your house with DocuSign and then you go to the doctor and they use the same exact service, you can use your same signature. If you have an account, you can store all the same documents in the same place. It starts to get a lot of synergy just for that individual consumer.
Is further product development necessary that’s healthcare specific, or is it everything in place and you just need the uptake now?
There are two answers to that. One is that anybody could take the DocuSign platform and create these Smart Process Applications as they sit today to solve pretty much any sort of workflow problem in that market.
With that said, we want to help accelerate that. We’re strongly engaging in lots of partnerships in the industry to connect our DocuSign platform to the platforms that are already in place. We’ve only been really focused on the healthcare segment as a vertical that we really hire people into with domain expertise for about a year, maybe a little more than that. But so far we’ve got some good partnerships going with GE Centricity, NextGen, Allscripts, I mentioned Kryptiq, Greenway, Vitera.
There’s a number of partners, and we believe in this particular market, working with partners that have established of infrastructure in place that we can connect the DocuSign system to is really the best way to really get it to crank up and go. We also partnered with one of the bigger, actually I think it’s the only sort of identity provider for the smart pharmaceutical industry, SAFE-BioPharma. That’s sort of for clinical trials. If you wanted to put on a clinical trial, a lot of them would require that you use this credential from SAFE, and so you can now do that with the DocuSign platform that’s integrated in. It’s such a big market and there’s so many different aspects to it that we think partnering with the key platforms is really important.
Any concluding thoughts?
The next time you go into the doctor’s office or the dentist or whoever it is and you find yourself filling those forms out over and over, you should stop off at the front desk and tell them there’s a better way.