[ryanSrich]

This is a good reminder that HN is a horrible place for investment advice.

Rarely, very very rarely, does the tech being differentiated ever matter. At Docusign’s level, it’s much more about sales and marketing. They’ve been the market leader for years, and even if they slip to 2nd or 3rd place, they’re still a massive multibillion dollar company.

I think engineers and technical people often have a hard time truly grasping how absolutely gigantic certain markets are (I struggled with this for years). Docusign’s market is unimaginably large.

[adam_arthur]

Competition and ease of replicability matters a lot in the long run.

"Weak Competition" or legacy players are largely irrelevant, which is an important distinction to make.

I have no doubt in 10 years there will be numerous ways to sign documents electronically and margins will be thin.

Think about cloud storage and other areas with a high amount of competition. All of these things will trend towards margin compression in the long run, almost by definition of being in a competitive/free market.

Cost of switching matters a lot too. It's easy to move from DocuSign to some competitor. It's more difficult to move from managed MongoDB to managed Postgres, due to having to define some translation layer.

The thing is that we're just early in the digitization cycle so all these first movers becomes pseudo monopolies. That won't last for more than a decade or two.

Highly likely that stock performance for a lot of these 20-100x sales stocks will be very poor over the next 10 years. But you may get a good stretch of high returns in the short/medium term.

Think about when Ford created the assembly line. Did that give them a forever Monopoly on cheap production of cars? There's this attitude that competition doesn't matter in technology, but we can clearly see in things like laptops, routers, hardware etc, that margins became very low after market got saturated.

It's only just the last few years that things like DocuSign were even possible to create.

This is especially true for software where once it's built, marginal cost to deliver value is extremely low. Theoretically, a well designed and cloud native/managed version of DocuSign could be run by just a handful of people in the long run. Do people really expect that nobody will accomplish this in the next 10-20 years?

Where there's margin, there's opportunity.

[rightisleft]

Circling back on this - "DocuSign shares plunge nearly 40% after the company gave weak guidance". Just saying...

[abledon]

yes! I was thinking of this thread reading the news today... what a coincidence

[hodgesrm]

This. I would add that tech people and many others also fail to grasp some of the real market barriers to entry. (Well sometimes.)

To cite a single example: corporate procurement systems. It's like trench warfare to get enrolled in many companies, but once completed your sales team can then recite the following incantation: "we're an approved vendor." The effect on sales can be magical. ;)

Disclaimer: I use Docusign and have done so for years. It's transformative in a way that's similar to password managers.

[neilyio]

Curious… what helped you cross this conceptual gap?

[imajoredinecon]

Working at a startup with a solid but not dramatically-better-than-the-others product, but an amazing sales org, did it for me. (Said startup is now worth many, many billions of dollars)

[ryanSrich]

Mostly by building a product and competing in a market where the leaders have horrendous products. HR, Compliance, Corporate Training Software, Healthcare, etc.

In terms of pure tech and UX, its almost a disqualifier to have good tech or good design as ironic as that sounds.