Cloud storage providers like Dropbox and Google Drive have certainly made our lives easier in terms of giving us the ability to access our files and documents from anywhere in the world. But when it comes to document management, they fall short. Similarly, if you want to get some insights on how many people have checked out the document that you shared across, you don’t get this functionality via these services. Enter DocSend, a document management software that was launched in 2014 to specifically cater to such needs. We managed to get in touch with the company’s CEO Russ Heddleston at the sidelines of Collision From Home, held in the month of June, to talk about what led him to start DocSend, its evolution over the years and its future.
PS: The interview has been edited for the sake of brevity.
Table of Contents
1) Before we begin talking about DocSend, can you tell us about your journey into the world of SaaS?
To this, Mr Heddleston mentioned that “I’ve got a vast experience, right from internships at Microsoft and Trulia to working at a mobile ad network, Greystripe. After that I went back to the business school to learn more about just the business side, because I really wanted to start a company. To answer your question, I started my first company called Pursuit that was selling software into HR. I started it with two friends of mine from Trulia, who were also software engineers, and we raised $500,000. We got 60 companies signed up for it, and I realized it was not a viable business. Like we built the software, and I was like, this isn’t going to make it as a business. So, we were extremely fortunate that we were able to sell it to Facebook. One of our first kind of talent acquisition. That was a great experience for me, the experience of starting a company, raising money, going through the exit process taught me a lot about what’s the difference between building a product and building a company.”
“Then for a couple of years, I was running a product for the Facebook Pages team. And then I left to start a DocSend with two other friends who are also software engineers, with whom I worked with at Greystripe, and we went to undergraduate degree at Stanford together. So we built DocSend with an eye on the business side of things. Like we’ve always had confidence that we can build the software. The question is, is it the right software to build? And is it a good business? And that’s tricky because there are a lot of different go-to-market models and you have to be thoughtful about it. So most of the time when I talk to entrepreneurs and they sent me their pitch deck like that, they don’t spend enough time thinking about their go-to-market model, which is really important,” he added further.
He continued by saying that “SaaS is a great example. It implies a business model, where people are paying for using software as a service. We see a lot of people on the business side who think a lot about the business and are good at sales, but they’re not good at software, so to make it. And so I’ve been interested in that for a long time, especially as you pointed out, software becomes increasingly crowded, and more and more people trying to quit their jobs. And it’s harder to navigate everything is competitive. Like how do you make a real business out of it? But at the same time, there are a lot of people complaining about the software they use and how it is just bad software, or it was built 15 years ago, or they just don’t adapt. And so there is a clear opportunity there for people who can navigate that in terms of fundraising, early sales, go-to-market and marrying all these things together.“
2) What was the insight behind launching DocSend?
He replied “for my first startup Pursuit, I was cagey about sharing what we were working on with people. Cause I used to think that someone’s going to copy my idea. And then while I was at Facebook, I also interacted with a lot of entrepreneurs who were cagey with me about what they were working on. From my perspective, which was ridiculous. Like everything has been thought of. Like, if you came to me with it, you would not be the first person to have this. And so, people who were talking to me, those entrepreneurs had more to gain by sharing with me what they were working on. And I could tell them my view on it from Facebook’s perspective.“
“When we started thinking through the ideas, the insight was that, despite there being so many ways to send an attachment, people still don’t do that. Like one of the features, we launched while I was at Dropbox was sending a link to a document to the other person. And I thought that it’s an excellent feature as you never need to email an attachment again. Fast forward a year later, and people are still sending attachments. So, I went around and interviewed a bunch of people in various business roles and asked them, why are you sending attachments? And the answers were interesting, for there wasn’t a good reason. For them, it was just too annoying to use some other system and there weren’t any clear benefits. Then I realized that this is an interesting opportunity,” he went on to add.
Adding further, he stated that “then I went around to Box, Dropbox, Google, Microsoft, and I said, there’s this concept I have for using links and no attachments, and adding enough value to the sender to make them change the behavior, but make it really easy to do so it’s not that much harder than sending an attachment. And they all said, that’s a great idea. We’d like to build this someday. And when someone’s working with a couple of years out, that means never. I actually got a couple of acquisition offers from such companies. And when I asked, what would we work on? They said, this other stuff, like not even the concept that we wanted to build, which meant, they really weren’t serious about building this. And so I thought that it seems like there’s an opportunity here, so let’s just go build it. So, we built an initial version. We got a little bit of traction just in closed beta product feedback. And I couldn’t prove that it was a bad idea. I was like, people like it, it’s useful and a unique take on things. So then we went off and raised a seed round. So I always say you can prove an idea’s a bad idea pretty quickly, but you can’t prove it’s a good idea unless you just go do it and build it. You just kind of have to make it happen. It’s important to note that my two cofounders and I are all software engineers. So the first four months were just spent interviewing and chatting with companies to like vet out the idea that we had. And the way I described the vision for DocSend is to consolidate common workflows for sending documents externally into one intuitive solution. So bundling is like a tried-and-tested strategy. Everything from Amazon to Spotify, bundles things together. And so we’re trying to do that for common workflows for sending documents externally. I think there should be a company there that does that.“
Concluding the answer, he said “we’ve been very capital efficient. We’ve only raised 15 million. Our go-to-market motion is primarily word of mouth and viral. The company has 53 people. It’s a hundred percent inbound and it’s almost all self-serve. And there’s an interesting path ahead for us. Overall, it’s been a fun journey.“
3) What’s the best way to define DocSend? Is it a cloud computing service, is it an analytics tool to know who accessed your files or is it a document management software?
To this, he said “it’s like companies have a HelloSign or DocuSign account, and then they might use a virtual data room. They might use a Box, Dropbox in there. They’re using all this stuff and that’s fine for the enterprise. But when you go down market and there’s nothing that just bundles them all together.”
Illustrating some examples, he stated “if you’re an entrepreneur and you’re raising money, then you’re concerned that your deck is going to be shared with people. You don’t want it to be shared with everyone. So how do you prevent that? How do you know who’s reading it and who’s not, and who are they forwarding it to? So we’ll help those people understand engagement with their materials and constrict who can access it, but in a very user-friendly way. Another common workflow is that if you need to send someone five or 10 or 50 files. Do you use a Box or Dropbox folder? Do you invite the other person to a folder? That’s not the right model. So we have a feature for that called spaces, which is also a virtual data room. Now let’s assume that you might be a marketing person that’s sending out a research report or some case study. How do you do that? You could use HubSpot, Marketo, or MailChimp, but they don’t do a great job supporting documents being sent. And so DocSend integrates with those systems. So you can understand that of the 50,000 people on your email, how many actually read through that material. Or if you’re a commercial real estate bank, putting out your research reports, you know that people only look at those things when they’re in the market. So you can use DocSend to suss out interest and urgency, like who do you pick up the phone and give a call to. The last example is of an investment bank that’s using DocSend for all their research reports, but then they also use it as a data room that helps them get files from clients, organize those files, and send those files to potential buyers of the business and understand engagement there.”
Continuing with other use cases, “you also might need to get an NDA signed. DocSend can help you with that and you can even attach that NDA to getting into an individual document or a group of documents. And so we call that the one-click NDA feature. Then you also just need to get a contract signed as a salesperson, and DocSend can help you with that. You need to organize column materials from marketing and send that to a prospect who’s in a particular vertical. The software can help you find, organize, send and track all those files for that particular prospect. So, there are just a bunch of these things and I could go on and on and on,” he added.
4) Can you share the evolution of DocSend since its inception in 2014?
“As mentioned above, we see a large number of different use cases in our customer base, but the ones we focus on at least for now are fundraising and sales. We’ll also make a push later this year to get more into the virtual data room space, and then to support e-signature is like just a standalone thing. There are a couple of open those ones, but it’s nice having 13,000 customers because we can talk to them and they tell us what kind of features they’re looking for,” he said.
5) While analytics about who opened your files and what all they viewed is quite interesting for the sender, what do you think about the privacy for the recipient?
He replied that “we get this question a lot, but we usually get that question from senders who are worried about the people they’re sending the documents to. We don’t get that concern from people who are reading documents, which means most people get it. And if the sender allows downloading, so you can turn the downloading on or off. Watermark functionality is another one. We allow dynamic watermarking, which is an easy thing to do in DocSend. If it’s security-oriented, you turn off downloading and you turn on watermarking. So, people screenshot it and that gets back to you, you know who did that. But if your relationship with the recipient is such that you don’t want them to be tracked which also means that you also trust them, then you just turn on downloading. So as soon as they download it, then we stop the tracking, but it’s still useful because you know what version they downloaded. So, if you update a document on every link you’ve ever sent is updated, but I would know that the particular person downloaded the last version and not the latest one. In that case, I’ll send you an email that I’ve updated the document, and it’s the same link, you need to download it again. So, it really helps with some of those coordination issues.“
6) What is your marketing strategy, i.e. how are you reaching out to potential customers?
Mr Heddleston said: “there are a couple of things. One is that we have a really a good content marketing team. And our software is relatively cheap as well. We’re not doing enterprise deals. Like we do have some enterprise customers, but we don’t have an outbound sales team focused on getting more of them. So, if your strategy is to be relatively cheap software, that’s pretty transactional. If you go to our website, it talks about the specific value props by persona, by industry, by feature. That means you need the onboarding to be automated. You need it to be pretty easy. Hence the question becomes what marketing strategies work to acquire customers in this manner? And one of the ones that works best is content marketing. We’ have a content marketing team that does research on top of the data that we have. We actually work with Harvard business school on publishing some of that research. At Collision from Home, I gave a talk about venture capitalists raising their first or second funds, and it was quite interesting. This is all opt-in, and these people all agree to be part of it. But we also look for areas that people have asked, i.e. it’s hard to raise a venture capital fund. Like everyone would ne inspired to do that, but it’s really difficult. And the people who have raised aren’t really incentivized to help you as a new person, raise your fund. So, the question becomes for whom is it in their best interest to come out with research? We’re an obvious company that can actually provide some of this research. In fact, we already had 48 percent of VCs in the last two years that used DocSend for their fundraising. I also view this as a common good, for it’s beneficial for DocSend to get our name out there, but it’s also just useful for people. And so that’s a way we can spread awareness of the product. And then they come to our website and they get why they should use DocSend versus Dropbox or the likes. It’s not that expensive, but it’s way more useful than the usual cloud storage services, and just much more intuitive for them to use.“
“So that content marketing strategy has worked pretty well for us. The product that we have has given us opportunities that are unique to our company. It’s certainly possible that we could hire an outbound sales team, but it would need to be an average contract size of like above 50,000 a year. And when you’re selling contracts that large, you, you have an economic buyer who usually is pretty distant from the end-user. And so, the criteria set becomes different. And therefore, the product you need is different. There’s nothing that’s stopping us from building an enterprise feature set or building more of it later. But you know, being a company of 53 people, it’s kind of hard to do both. So, um, I suspect that we’ll go upmarket eventually,” he appended.
7) How has the ongoing crisis affected DocSend? Has your usage increased or decreased?
He told us that “the usage has increased considerably. Our company is growing really quickly, but it’s also a really stable company. Because if you have to spend a ton of money on demand gen to grow, then you run out of money, and if you stop that, your growth stops. So, a lot of companies have this, we got to raise another round of funding every four months. And if we don’t have that money to spend, then we stop growing and that’s fine. That usually fits like an enterprise business model as you have a payback period and a very sticky software. Then again, that’s those $50K and up contracts that the business is going after. And our insight is that there’s a lot of software for that category, but there’s not a lot of software for the category that we’re going after, and that requires a different go to market motion.“
8) What’s the future like for DocSend? Any cool features that one should look out for?
“I think we’re just going to continue to make our software more useful for people and make it more applicable to different use cases. I’d hope that the person who uses DocSend for fundraising would turn around and give it to their sales team to use. They then give it to the HR team for getting signatures done. They might use it as well as a board portal, or an investor relations portal so they can securely share all their investor updates. So we just hope people will discover using DocSend and more and more situations for using it, which makes it stickier,” Mr Russ Heddleston replied.
9) What are your favorite SaaS products out there?
He said that “I love Calendly. I think they’ve done a really good job of executing. Then there are Slack and Zoom, which are quite hot right now. I really admire Lucidchart as a company and how they built that. I think MailChimp has also done just a phenomenal job with executing on its strategy. Adobe has done an amazing job pivoting to be a SaaS company. I mean, they’re obviously much bigger, and it gets even more impressive that they’ve been able to turn it like that. I think PagerDuty is a fantastic company as well. How they’ve been able to create a category that wasn’t there and have done a really excellent job of bundling too.“