The Real Story Behind DocuSign's Early Struggles – Court Lorenzini

Shamil Malachiyev: Hello everyone. Hi, Court. Thank you so much for coming to the podcast.

Court Lorenzini: It's great to be here. I'm excited to do it.

Shamil Malachiyev: Before we move into your current state of the journey as a founder, to speak about Founder Nexus and your DocuSign story, let's go back to your early days to understand your childhood, and to understand who Court Lorenzini really is. From what I know so far, you were born into a family of an inventor and an entrepreneur. How did that affect your childhood? How was it?

Court Lorenzini: Well, it actually goes back even farther than that. My grandfather was a pretty famous engineer and entrepreneur as well — my father's father. He spent his career developing solutions for Standard Oil back in the early days of the oil industry in the United States. But my dad was the real inspiration for me. I think he was the one who let me understand that being an entrepreneur not only was a career, but a very full, potentially very fulfilling and exciting career — something I could pursue and make something for myself with. From the time I was very young, we were always out in his workshop, making stuff, testing stuff. I was a tinkerer, I would say. I love to build things with my hands.

By the time I was young, I was taking apart cars and figuring out how they worked. My very first car, which was brand new — I hadn't had it a week and I completely took the engine out, everything. I completely rebuilt a brand new car because I wanted to make it go faster, make it more interesting, and just try some things I'd never tried before. That was something I got from my dad for sure. My mom is also a very handy, capable person. We all liked working with our hands and building things and trying new stuff.

As far as the household was concerned, the story I like to tell, because I think it sums up what it was like in my household: my father was the person who invented the process — the commercial process — for growing silicon. What that meant was his was the company that supplied all of the raw silicon to what was to become Silicon Valley. If you look up the history of Silicon Valley in the history books, there are eight names that pop up as the fathers or the founders of Silicon Valley, and my dad was one of them.

He's not a name that ever became super famous like a number of them, but his was the base material — the thing they all needed to build semiconductors and test them and understand them. Of course, as a kid, I didn't understand that. I just thought he was my dad. What was interesting is that the people who were his friends were the luminaries, the ones that novels and books have been written about from the founding days of Silicon Valley. Gordon Moore was a family friend, Bill Hewlett and Dave Packard, Andy Grove, and Jim — what's Jim's last name? Applied Materials. These are the guys we would just have over for family dinners.

I grew up with them as friends of the family. To other kids, these were the big bright stars. Jim Morgan — that's the name I was trying to remember, founder of Applied Materials. That was just normal. And to know these people, these bright, capable entrepreneurs, as just friends — people we would have dinner with and ski with — normalized them. It never made them famous to me, it just made them people. I think that helped a lot, because it meant that I never stood in awe of the brightest stars in the industry. Even as I got older, these were just people that I knew.

So fast forward a little bit into my early high school teenage years: my father was also one of the very first venture capitalists in Silicon Valley, or in the country at that time — the late sixties, early seventies. And he was one of the founding members, the first three people who started the very first angel investing group in the US, called Band of Angels, in the Bay Area. But the part that is influential, particularly to me, is that in his venture capital capacity he had five other general partners in the fund. The six men in this fund had a tradition: once a month, every month, each member of the partnership would host a dinner at their home. The other five would come, they'd have dinner, and over their brandy and dessert they would adjourn into the living room of that person's home, and they would invite one entrepreneur to come in and give a pitch in the living room. So twice a year, every year, I had not only a big group of these eventually interesting investors come over for dinner, but they would then go into our living room and invite a person in to come pitch.

Now, in those days there were no overhead projectors. You had very simple — I would call them slides, but that would be almost giving them too much credit. And they would sit there and listen and drink their brandy and let the person talk. Then they would exit the person out of the home, and they would sit there for the next two hours and debate whether it was a good pitch, whether it was something they wanted to invest in, what was good and what was bad, and what they thought this person needed to do or not do. And I got to sit in and listen to these, twice a year, all the time.

So the idea of raising capital, and what it took to impress a group of professional investors — I just absorbed that. There's no other way to say it. It was fantastic. It was the best possible learning I could have ever had. By the time I got through school, it was very easy for me to comprehend what it was going to take to be successful — not only at starting a business and the key questions I needed to answer, but also the key questions investors needed answered to feel confident and capable enough to write the check. That's always been an area I have been incredibly grateful for. It was only in my later years that I realized how unique that was.

Shamil Malachiyev: But seeing so much success in your early formative days, did it impose any level of pressure onto you? As in, this is the benchmark from where you start — it's not even where you aim, because this level would probably be something a lot of people would aim for within the next five, ten years. And as I understand from your upbringing, this was something that was expected from you from day one. How was that? Was that hard?

Court Lorenzini: Having several children myself, I understand that — the phrase I use is "nature kicks nurture's butt every time," which means that kids tend to come out the way they're going to come out, and the parents only have a small amount of influence over who they become. I've certainly witnessed that with my own family, and I was definitely that way. I was a thoughtful, high-achieving, aggressive kid. I joke about the fact that my middle school to this day still has my name on the walls, because I was the only person in the history of the school — almost 50, 60 years later — to receive most valuable player in every sport in a single year.

That's just who I was. That was the way I was wired. It wasn't pressure from my parents. It wasn't my father or mother or anyone pushing me. That's just who I apparently was, and am. The way I operate is — of course everybody likes to win, but I like to think about the details it takes to win. So I was always a great student. I was a good athlete, because I pushed myself and I really didn't let up. And yeah, my parents were very happy — you have a kid that does well along the way. But I don't think that came as much from them. Frankly, I think it would have come more from my mom than my dad. My mom demanded a lot of me. She wanted me to be great. She wanted me to be a great student. She really helped push and cajole and help me along. And look, my dad was an entrepreneur, and anyone that's started a business knows they're busy all the time. He was really busy, and I didn't get a lot of his time or attention, to be honest. And that's okay. It was just the way it was. My mom really picked up the slack in that relationship.

Shamil Malachiyev: And as I know, in 1975 your father was running Siltec, and it was one of the first tough periods for the business — 1975 to '85 — and you were ten years old. Do you remember how you experienced that, the perception of a really tough part of the founder's journey your father was going through?

Court Lorenzini: Actually, that's not the one I remember. The one I remember was later. At ten, I don't think I was as aware of his work. Most ten-year-olds I know couldn't tell you what their parents do for a living. I knew what my dad did for a living, but I didn't understand the pressure he was under at the time. To say that I remember him being maybe more irritable than normal, or just more distracted, is probably fair, but I don't think I could remember more than that. It really became more real in the eighties, when there was another big shift in the semiconductor industry. That one I remember much more directly, because at that point I was closer to 20 and very much aware — I was already on my own journey.

In fact, my awareness was heightened in that cycle because during the time I was in college I was working for his company. My first job for him was, literally, janitor. So no nepotism here. My father was a tough cookie. He didn't say, "Hey, this is my son, he gets to have this great job." It was: you get to come in and clean toilets and scrub floors and paint walls. That's your job. Okay?

It was through that that I learned how to just work with people. Each summer as a young person I would work my way up through opportunities, and new departments would offer me jobs. It wasn't because of my father — it was because they saw me working and said, hey, this is a hardworking person, I'd like to include them in my team. By the middle eighties I was in college and the second round of challenges hit the semiconductor industry. I knew the people in the company, I knew the industry, I knew what was happening globally, and I was acutely paying attention. I was a lot more aware of that one. So by the time he ended up selling Siltec in the later eighties, I could understand why.

Shamil Malachiyev: Yeah. My story is a little similar — the first real job I had was also working for my father's wheat flour mill, though he was nice enough to let me start in sales. Your story really fascinates me because it matches the story of Jensen from Nvidia, who started out as a janitor as well. It's a way to teach your ego not to be at the forefront of your motivation, and to come from a place of learning — learning to be humble, evaluating your skills, and trying to improve as time goes by.

Court Lorenzini: And to take pride in any form of work. That's something I have always appreciated — I really can connect with and relate to any job, because I do like working with my hands, and I didn't mind being a janitor for a summer. It wasn't a bad job. It was actually a good job. I met some really interesting people, and it gave me an opportunity to do something different the next summer. My father's company made equipment for the semiconductor industry, and the QA department — because I was in there a lot cleaning up — said, hey, do you want to come work for us? You can do quality control of new parts and tools that come in from our suppliers. I said, sure, that sounds like fun. So that was my next job in the summer: being a QA person, which in turn got me exposed to the engineering team, because I was the person either accepting or rejecting all the parts they were specifying and having built. And so the third summer was the summer the engineering team said, hey, would you like to come work with us? It was an interesting, fun progression. By the time I was there, I knew a bunch of people. I'd been around almost every department. When you're picking up their trash, you can't help but meet them a little bit.

Shamil Malachiyev: Was your father ever trying to teach you about every single part of the business so you could take over at some point? Or was it just, okay, come play?

Court Lorenzini: Never. No. In fact, quite the opposite. You talk about work ethic — my father, very early in my life, told both me and my sister: I'm never going to give you a nickel. You need to earn your own way in the world. So don't expect an inheritance. Don't expect any special treatment. Don't expect anything from me. You've got to earn it. That was the bar set for me at the very beginning.

Shamil Malachiyev: How did that feel, though?

Court Lorenzini: At the time it was frustrating, if I'm being honest. Over time I took pride in it. It created a sense of motivation for me to excel on my own. My father passed away a year and a half ago, but he had an 11-year bout with Parkinson's and dementia, and DocuSign had not gone public by the time he was incoherent. So by the time that phase of my life had occurred, he wasn't aware of the success. We couldn't celebrate it together, which will be a sadness for the rest of my life, certainly — that we couldn't share that together. But time gives us what it gives us. I regret it, but I can't change it.

Shamil Malachiyev: I think as a father, he would have loved nothing more than to sit down with you and celebrate.

Court Lorenzini: A hundred percent. That's my point — that was his form of pushing, to say: you've got to make it on your own. And by the time I actually reached that point in my life, he just wasn't aware enough to celebrate it with me. And that's just sad.

Shamil Malachiyev: To go back to the time when you were choosing which degree to pursue at university — you went with an engineering degree and three masters. What was the main influence? Was it the engineering department telling you, Court, you need to get a masters in engineering to really become part of our team?

Court Lorenzini: No, it was my own ambition. There's a practice I started when I was about 14 years old. As a freshman in high school, I was starting to become aware of the fact that I wanted, potentially, to run my own business someday — to be an entrepreneur. And again, this wasn't something my father was promoting. This was something I was coming to of my own accord. Having always been a tinkerer, and always been a person who was very observant of things, I started taking college-bound notebooks — the physically bound little notebooks you use to take notes — and I would carry one around with me all the time. In that notebook, day, night, whenever, I would write observations of things that were interesting to me. It could be a product idea, or the way a manager at work handled a particular employee or technical situation. I did this from the time I was 14 until about 34, 35. So I did it for almost 20 years.

Okay, so what was that about? At the time, it was just me creating little notes: this is the thing you thought was interesting. What it became over time, though, was really quite fascinating. And to answer your question about starting a business and choosing my major: because I like to build things, because I like to tinker and I like to invent, I was always in my dad's shop creating or inventing new things, and this notebook was very instrumental. It would help me think through ideas. I'd draw in it, I'd write in it, I would do all sorts of things. It wasn't a journal — some people journal; this was not a journal. It was my observational experience of the world. And then I got into this habit where every six or eight months I'd go back and read every entry from the start, from when I was age 14, to current. What that did turned out to be really interesting: it allowed me to take concepts I had maybe scratched the surface of at a younger age, put them together with a few other things over time, and then really have them come into bloom in the current moment, when I had a deeper understanding of those subjects.

That's why I continued it for 20 years. As I was looking at these old ideas — new ways of how to manage people, how to build a company, what to do, what not to do, how to fire people, how to hire people, how to do it right, how to do it wrong — all of these things were in this journal. So choosing my major was more about the fact that I like to build and explore and create stuff. I started college overly ambitious, I will say. Again, I'm a pusher — I like to push. I literally tried to start my freshman and sophomore year as a double major in electrical and mechanical engineering, which I quickly learned, at the end of my sophomore year, was basically impossible, because the prerequisites for both were quite different and there was no good way to manage my schedule. Maybe I could have done it if I'd decided to take five or six years of undergraduate. So at that point I dropped my electrical engineering major, made it a minor, and actually shifted it to computer science, because at that time computers were really starting to take off — this was the early 80s. I focused on my mechanical engineering with a real emphasis on the computer side, and since I'd done most of the electrical engineering prerequisites, I pretty much understood a lot of the principles there as well. So I had a pretty well-rounded undergraduate experience: my major was mechanical, my minor was computer science, and I had a certificate, if you will, in electrical. And I thought, okay, now I'm off to the races. I really love engineering. I want to learn more.

Shamil Malachiyev: How old were you when you graduated?

Court Lorenzini: Twenty-one — well, just before my 22nd birthday.

Shamil Malachiyev: Okay. So then you went into nine years of working and trying yourself out in different fields, until 1996, when you finally decided: this is the time I want to build something. How did that happen? How did you make the switch?

Court Lorenzini: So, okay — recall the notebooks. This was all quite important, in fact. The first job I had out of school was working for a different semiconductor equipment company called KLA Instruments. After I left my dad's company in college, they hired me out of school, and I got some incredible opportunities there. As a young person — at the age of 25, three years out of school — I had done multiple jobs for KLA. And they gave me a pretty much unprecedented opportunity: they wanted to open up an office in what was to become the European Union. This is around 1995; the Berlin Wall has just come down and all of that has just happened.

They had a small office in a town called Coburg, Germany, which was a border town between East and West Germany — a border-crossing town, I should emphasize. They had a tiny operation there doing service of their equipment in Europe and the Middle East, and they wanted to turn it into a full-scale operation. They wanted to take advantage of what they perceived as the emergence of the European Union as an economic center. So they sent me over there to start a full-service sales, operations, engineering, and manufacturing operation. I lived in Germany on the former border for nine months, trying to figure out whether the people in that service operation were the right people — ultimately one guy decided to come with us — and I was also touring all over Europe trying to figure out where to put this new facility. Interestingly, we ended up in Switzerland of all places, which didn't join the EU until much, much later, but was very centrally located, had a very favorable economic development program, and — because of the watchmaking industry in Switzerland — a large pool of highly technically skilled manufacturing workers.

Anyway, all through this I was doing that job. We moved to Switzerland for a couple of years and I was basically running this operation. It was me and two other guys. I was in charge of engineering and sales, which is an odd combination, but it's just because I was good at selling. I had a colleague in charge of production and a colleague in charge of finance, and that was our executive team. And it really taught me the hard lessons. I learned a ton of hard lessons. I made a ton of mistakes doing that. Honestly, invaluable experience. But again, that notebook came in handy, because I could make mistakes, write them down, revisit them, and get better.

Shamil Malachiyev: Can you actually share some of those mistakes? I believe the mistakes are the parts of our journey that really are the milestones that shape us. Maybe you can share some of them, and what they taught you that helped you in the future.

Court Lorenzini: Well, I wish I could say they taught me quickly. When I was leading people in the beginning, I made a classic assumption of a young, upstart, smart manager: I've got to tell people what to do. And that was the exact wrong thing to do. I made that mistake again and again and again. It took a while — multiple iterations — for me to figure out that I needed to be a better listener and not such a good talker. I needed to let them tell me what needed to be done, and then create an environment where they could be successful, rather than saying: I need this completed, and it needs to be done by X, or in this way. So I was over-directive, and certainly not what I've come to think of as a manager who enables people — not at that phase of my career. I took a lot of lumps for that. I got bad reviews. I got a lot of friction with my employees, no surprise. In the earliest days it was not successful, as one can imagine. So that taught me a lot of lessons around people: hiring, directing versus coaching. Those are the lessons I learned the most in that earliest time. Was I perfect by the time I started my first company? No, by no means. But I was a whole lot better.

Shamil Malachiyev: Yeah. It seems like you really took control over your ego during that transformation period. Whenever a founder starts — for example, their first managerial position at their first company — they like to think: I know better. They're creating the company and hiring people to make themselves feel important, to feed their ego. And after a lot of failures, you start understanding: this is not getting anywhere. I don't care about ego anymore, just get this stuff done. And that routes the transformation towards efficiency and learning rather than "I know better than others." It seems like you went through that fairly quickly.

Court Lorenzini: Yes, I would say that's true. And I think every person who becomes a leader of people has to go through some evolution like that. Everyone develops a style. What that led to for me was a style that was much more collaborative — much more based on listening and encouraging and empowering people. That was the manager I became out of that. Different people go through the same experience and become more authoritarian, more dictatorial, more controlling. And I'm not suggesting that there's a right way. One of the things I've learned in my career, observing so many different leaders and managers, is there is no right way. There's just your way. It has to be organically appropriate to you as a human — the way you're made up and the way you go about interfacing with people. That was the way my style developed. And I've seen other people with completely different versions of style be infinitely successful — way more successful than I am. So I'm not suggesting that's the right way. It was just my way.

Shamil Malachiyev: Yeah. Let's talk about your first e-commerce engine startup. How did you decide to take the jump into building something of your own — the first initiative? How had your previous journey prepared you for that, and what unforeseen challenges were you faced with? What did you believe at the start about how it was going to go, and how was the real journey?

Court Lorenzini: Ooh, okay. Let's start with — at the time I decided to make that leap, I was working for Cisco Systems. At the time, Cisco had become the fastest-growing company in the history of companies. Being part of that organization from '92 to '96 was like holding onto the tail of a rocket ship. It was incredible. The learning I absorbed in that place — the people were great, the leadership was great. To this day, my first CEO there, John Morgridge, is the bar by which I hold myself in terms of the best CEO I ever met or worked for. And that includes my dad and all the other CEOs — I mean, Jim Morgan of Applied Materials is probably right in that same class — but he was extraordinary. And talk about taking notes on what it takes to be a good CEO and lead a company through extraordinary growth and change.

That also meant I had to keep up as a manager. I was a director-level employee at that time, but I was exposed weekly to the executive briefing center, coming in to give briefings to their biggest clients from all over the globe. I was talking to the executives and leaders of these other companies about what Cisco was building and producing, because my job was running all the software development for Cisco across all of its various platforms. So I had a very influential role in building, prioritizing, and delivering product to real customers at scale — at insane scale, in fact. That taught me a lot about how to interface with those people, how to sell at a high level, how to convince, how to organize a team. The number of engineers I was overseeing was well over a thousand at the time. So by my second or third year there I felt like I had a pretty good handle on how to grow a company, how to scale a company, how to sell a technical product, how to set expectations with customers.

I met my co-founder through my wife. He and she had been dear friends at college. By the way, we all went to the same university, but none of us knew each other there — I didn't know my wife then, and therefore I didn't know her friend — yet we all graduated from the same university in the same year, which is also funny. He was working for Microsoft at the time, in charge of Microsoft server products, and he'd had a number of interesting roles at Microsoft. And we just got talking: wow, what is this new internet thing that's coming along here? Can we take advantage of that? Is there a business to be had? He was very entrepreneurial as well. The more we talked, the more we ideated on something we both got excited about, which was an early comparison-shopping tool. Reminding everyone: there was no e-commerce at this time. There was no buying and selling of anything on the internet. It was just data presented in a more visually stimulating way, and you had very static web pages. There was no buying of anything. So the original concept was to create a comparison-shopping tool for consumer electronics.

So he decided to leave Microsoft, I decided to leave Cisco, and we kind of roshambo'd for who had to move. In truth, because we had both achieved some amount of financial success and independence through our prior employers, we wanted to self-fund as far as we could, and we realized that the Seattle market — which is where we ultimately landed and started — was a lot less expensive to start a company in than Silicon Valley, where I was living at the time. That really drove the decision. We both very quickly took the leap, quit our jobs, incorporated the company, and started building this set of tools. And that was its own ride. It started in a tiny little almost-garage space at the back office of a rug-cleaning company — that was our first office. And yet we just kept hiring and growing, hiring and growing. Eventually we had about 150 people and were doing a pretty decent business.

From '96 through about '98 we morphed into selling. We realized the future was not going to be just comparison tools — we had to sell something to really make the next big amount of money. So we took on the role of disaggregating and building the very first e-commerce engine for mobile phones and service. That was our big breakthrough. We grew that business quite healthily and ended up selling it a couple of years later to another company that kept it going for a number of years. In fact, I think they just retired the brand two years ago — almost 25, 30 years later they finally retired the brand they bought from us in 2001.

Shamil Malachiyev: Wow. Did you ever feel like you should have just kept going and entered the book-selling industry as well, to maybe give competition to Jeff?

Court Lorenzini: No. Obviously Jeff Bezos has been much more successful than I have, but he and I started at basically the same time. He was starting Amazon when I was starting Point.com, and we got to know each other a little bit in the early days. There was a period of time when Amazon was courting us to buy the comparison tool we were building, because at the time they were just selling books, and then videos. They didn't have anything that could sell an electronic product at scale, for example. So the engine we built for comparison shopping was very attractive to them. We did some early licensing, but it didn't end up in an acquisition, obviously. The company that did acquire us wanted to compete specifically in the area of mobile phones and service, so they took it and ran with it.

The other thing that happened in that business: the tool we built for comparison shopping was good enough that it became the de facto engine behind Verizon and AT&T's sites. They actually licensed that technology from us in the early days. And the other thing they licensed, which is just an interesting piece of history — back in the early days of mobile phones, every local market was its own unique entity in the United States. A national brand like Verizon or AT&T did not know or even control what was happening in every market operating under their name. They were basically like local franchises: people would buy the use of the name, but they didn't have to report anything other than financials up to the mothership. What this meant was those companies had no visibility, control, or access to the way their services were being sold in each market. Because we wanted to be able to sell phones in every market, we ended up having to build a system that understood, documented, and managed the data around every cell phone plan, at every level, in every market.

So what did that actually mean? It meant we had this incredibly unique asset, because by the time the carriers themselves wanted to start selling mobile direct to consumer, they actually had to license their own data from us. We were the only player in the whole country that had the entire national footprint of every provider in every market, every plan, every phone. And so they paid us a handsome licensing fee to basically buy their own data from us.

Shamil Malachiyev: Yeah. And I'm starting to see the engineering background you've had coming into play with all of the different startups. So let's fast forward a little bit. After selling Point.com, before 2003, you tried VC investing for some time, then realized it's not as fun as running your own startup. And in 2003 you had Tom reach out to you telling you: I'm selling this company, and it has a lot of these items — the domain name, the IP, the technology. Do you think we can put something together? Can you tell me a little about this starting point of the journey?

Court Lorenzini: Yeah. So this is the origin story of DocuSign. Tom Gonser, my co-founder at DocuSign, had worked for me at Point.com, the e-commerce company. He had left to go start his own business. Years had gone by, and he had given up the CEO role to someone else; he was now on the board. In the meantime, his company had acquired the assets of a failed venture in Seattle called DocuTouch — that's the name of the company they bought. That company had spectacularly failed: spent a lot of money, done nothing of substance. His company had bought the remnants when it went under, which included, at the time, a little bit of software, an issued patent on electronic signing, and a few other things, including the trade name DocuSign.

Tom approached me and said, hey, my board wants to sell this asset. I think there's something here — I think we could create this really interesting document management company from these assets. It would be fun to run it back together. So we sat down and talked about it, and ultimately decided the concept of a big document management company was not the right way to go, but that this one patent and this one name were, at least for me, very interesting. So we started talking about it. Tom is perhaps the most brilliant product thinker and designer I have maybe ever come across, and he just kept ideating ways to turn this thing into a product. That was the birth of the DocuSign concept.

So what ended up happening — because Tom was already on the board of his company, I purchased the assets, the software, the trade names, and the patent in the name of a company that had not yet been formed. And I said: my trade with you, in order to acquire these things, is that I'm going to give you a certain dollar value of shares in an unformed entity. You're going to give me the IP and the patents, and I will lose the right to keep them if I don't raise enough money to turn it into a real company. That was the trade-off. So with that they gave us the IP, we went and incorporated the business, and I went and raised the money and hit the bar. So we got to keep the assets.

Fast forward: that company eventually failed and went under, never returning any money to its investors as an entity. However, their initial stake — the equivalent stake they put into buying the first shares of what became DocuSign — was a huge hit for them. That was what all their investors ended up getting: distributed shares of DocuSign, all those years later. I'm a big fan of encouraging entrepreneurs to think outside the box, and sometimes buying the assets of other failed ventures can turn into something really interesting. And even selling assets — in this case the company was called NetUpdate; NetUpdate sold those assets to us and then eventually made a killing on it over time. So it was a great journey. We ended up bringing one more guy in as an engineer, and we were starting to figure out what we wanted to do with it.

Shamil Malachiyev: Could you tell me about the first years, before you'd taken Microsoft on as a client? How was that journey? Was it really smooth, or were you going every couple of months saying: it's burning down, what do we do?

Court Lorenzini: Oh, it was so lumpy. I think every good founder has existential moments in their company where they're just not sure it's going to work, not sure it's going to go. And we certainly had our fair share along the way. One of the challenges we faced in the early 2000s: our competition was the fax machine, and to a certain degree a FedEx envelope. These were very well understood things people did every day. They were perceived to be low cost — well, FedEx not so much, but the fax machine most people perceived almost like it was free. So convincing them to spend money on an alternative to either of those was hard.

The harder part, though, was convincing them that it was legally binding. At that time, nothing similar to what we were doing had been demonstrated as stable and legally defensible. We were asking companies: hey, we're going to ask you to sign your sales contracts like this. And they'd say, well, I'm not sure it would actually hold up in a court. If somebody ever decided not to pay us, would we have a defense? That was a huge hurdle to get over. And there's a whole story around how I figured out how to get around that, which led us to the Microsoft deal. The Microsoft deal was one of two deals that were transformational.

Shamil Malachiyev: Before we get into the details of those deals — what helped you power through the make-it-or-break-it points in the company's history?

Court Lorenzini: I definitely was, and still am, a believer in what DocuSign represents, which is a faster, simpler, more intuitive way of getting things approved — signed, in this case. And I believed in the use case, because it was clear to me that the users using the system were getting tremendous breakthrough benefits out of it, for very low incremental cost. But yeah, we had moments where you're running out of money and you've got to convince your investors to give you a little bit more, just to scrape and claw and get to the next milestone. Those are tough days. Those are days when sometimes you have to do layoffs, and you have to recast roles and responsibilities. You have to give up on certain initiatives because you don't have the resources to pursue them. You have to give up on certain customers because you don't have the resources to maintain them. A lot of use cases went by the wayside early, because we just didn't have the people or capability to maintain a broad array of use cases.

I think one of the biggest lessons learned was it's okay to fire your customers. And it's okay to say no even to big companies that come to you early, when you feel like you have to earn the next dollar — to say no to them because saying yes is so distracting in terms of allocation of resources that it would cost more to earn their money than to not serve them at all. Those were really, really hard lessons. But when your back's against the wall, you kind of have to make those decisions.

Shamil Malachiyev: And even in those times, you still chose uncertainty rather than having certain clients who would bring the revenue you could use to cover the expenses.

Court Lorenzini: Absolutely. I am stubborn. I think most good entrepreneurs are. But stubborn with an eye towards practicality, right? If I was getting no signal, no uptake, or limited response to the value proposition, I think it would have been easier to consider walking away, shutting it down, selling it, doing something. I mean, we got approached by Adobe very early in our cycle, to buy us and become part of their suite of services. And even though we hadn't hit any breakout moment at that point — we were seeing traction, but not what I would call breakout traction. We turned them down and we said, nope, we think this is better as an independent company. We think we're going to have more upside in our future than you are willing to provide.

So they ended up buying the next-largest competitor in the market at the time, called EchoSign. And EchoSign was the basis of what is still today Adobe Sign. But they did with it exactly what I saw and we predicted 25 years ago: they just wanted to make it a feature of their software. They never wanted to make it an economically stable and independent source of revenue. Whereas we saw it as its own business, and we knew Adobe didn't. We knew Adobe just wanted it as a feature. What DocuSign has been able to do has so far outstripped whatever Adobe has been able to do, just because of different strategies and, I think, different focus.

Shamil Malachiyev: I guess that explains why they only have 12 percent of the total market share right now. Could you walk me through the day you got a call from Microsoft's legal team regarding your technology? What was that like? Because from what I know, it wasn't an outbound effort. This was one of those moments of luck in many entrepreneurs' journeys — the opportunity comes in and you just have to make it happen. How did that feel for you, after having gone through so many challenges up to that point, to get that phone call?

Court Lorenzini: Even as you're recalling it right now, it gives me a chill remembering it, because I remember that call like it was yesterday. And yes, it was inbound, not outbound, which was also fascinating. The storyline there: Microsoft had released, and was promoting at that time, a new technology — .NET. .NET was the darling of Microsoft at that time; they were really trying to advocate for it. And we had been a very early adopter. We were basing our original tech stack on .NET technology. So unbeknownst to us — there had been no outreach to Microsoft — they were internally doing a review at their executive briefing center where, apparently regularly, different teams from the company would come in and present to the executives: the status of their team, the status of the product line, interesting developments and opportunities coming up.

Well, it turned out on that particular day the .NET team had come into the EBC at Microsoft and presented to the executives the status of .NET, and they used DocuSign as their poster child. They said: this is the best possible exemplar of our technology in a commercial setting that we have found. And they went on to show the whole executive team what we had built and why they thought it was amazing. And we had no idea. To this day, I couldn't tell you who gave that presentation, or why — they just really, really liked what we were doing. And in the audience was, I guess, the second in charge — Kevin Harrang was his name. He was the associate chief legal officer for all of Microsoft corporate.

And he exits the meeting, literally picks up the phone, and calls me cold. He says: hey, my name's Kevin, I'm on the legal team here at Microsoft. I just heard a briefing at the EBC about your technology. Seems really interesting. Tell me more — it might be something we want to use. Because it is Microsoft's corporate policy to try to use their own technologies as much as possible — kudos to them for promoting the use of their own tech.

And that was the beginning of the dialogue. It was just a moment of: holy shit, Microsoft just called us and said they want to buy our product. They want to actually use it in their legal team, and they want to start a pilot program to evaluate whether to use it on a corporate level. And again — today Microsoft is still a big company, but at the time they were the biggest company in the world. They were the company everybody emulated, everybody wanted to be. In today's world it's Nvidia — everybody wants to be Nvidia, or Amazon maybe. Then, it was Microsoft. So for them to say: we bless this, we acknowledge that this is not only legally binding but something we want to use on a global basis to manage our sales contracts, our internal communications, our HR — it was transformational, strictly. It was extraordinary.

Shamil Malachiyev: A year down the line after that call, what was the effect of having Microsoft as a client on your bottom line, the revenue for the company?

Court Lorenzini: Honestly, I don't remember the revenue impact. What I remember is the difference in the sales calls. Prior to the Microsoft acknowledgement — or acceptance of the technology, if you will — we had to fight with every legal officer in every company, at every turn, over whether or not what we were doing was legally defensible and whether they could bet their business upon it. Because that's really what we were asking them to do: here, sell all your products and make the contracts DocuSigned. And they're like, well, we can't take all of our revenue — if those contracts become invalidated somehow, we're screwed. We can't do that. That's too big a risk. Once Microsoft accepted, adopted, and then was willing to help us be a reference customer, that conversation completely changed. We went from fighting everybody to: Microsoft's doing it? Shit. Okay, I guess we can do it. The questions generally stopped, and the tenor of the conversation moved from "is this legal and defensible" to "how do we implement?" What's the stack? Do you have all the tools we need to put this into our production environment? And how quickly can you integrate with all of the other back-office tools we already use, to make this a cohesive solution?

Shamil Malachiyev: But I guess it was the point in time where the company started turning from a startup — the romantic starting point of a business — towards something more foundational, with processes and systems: the stage-two kind of company where you have to scale, which is probably the thing not many startup founders enjoy the most. How did that feel for you? It turns into a more stressful, everyday, doing-similar-things, building-structure kind of business.

Court Lorenzini: I will correct you and say that that wasn't the moment when that happened. The Microsoft deal, I would say, was an incredibly important — i.e. critical — unlock for us in terms of removing a barrier to adoption. It was not the thing that, by its nature, took us to what you're describing as true product-market fit and growth mode. That actually happened quite a ways later. It was not immediate at all. It was several years — many years later, actually. Microsoft helped get us through the legal door, which was an essential one. There were a couple of other things we did that helped with that.

The next transformational deal was with the National Association of Realtors, who had a piece of software they distributed to all three million realtors in the United States. They agreed to embed DocuSign in their tool and make it nationally available to their three million users. That was the next most important thing that happened, because it not only meant we had immediate access to a large number of users in a very important transaction — but if you think about it, anybody that's buying or selling a home not only has assets, but also probably has a professional career of some capacity that they are navigating. And if they recognize: wow, I can actually use this tool to buy and sell my home, the biggest asset in my life — why can't I use this for my company? Can I use this for my day-to-day work? That got us a lot of inbound traction, just the exposure of working with the NAR on that.

But it wasn't until years later — I stepped down as CEO in 2008, and it was right around that time that we were still growing. It was about a $10 million a year business at the time, as I recall, but there was a lot of room to grow, obviously. And it was then that we really needed to start executing at scale. I've always found that my own skills are very well suited to the first phases — what I call napkin to product-market fit. But when the company gets to the point of: hey, I just need to do the same thing over and over at bigger and bigger scale, and I need to attract more customers — it's a scaling function. It's a lot of new process. A lot of new people, training, onboarding. The challenges are different. Frankly, I think the leadership challenges are different. And so I recognized, as did the rest of the folks around us, that this wasn't my time anymore. My time was the first phase, and it was time to give it over to somebody that's going to really knock it out of the park in the second phase. So I stepped down and moved on to starting another company — back to phase one again. And that's when we started bringing in what I think of as phase-two CEOs. The first couple of guys didn't move the needle that much in the first couple of years, so they didn't make it. Keith Krach, who eventually came from our board, took over a few years after I had stepped down, and he's the guy. He's the one who really turned the jets on and made it grow, grow, grow, and deserves a lot of the credit for getting it through phase two.

Shamil Malachiyev: And what was your personal motivation for starting other companies after that? Were you trying to prove something to someone, or was it just your restlessness, or...

Court Lorenzini: I wish it was all of the above. No, it was actually very pragmatic. I go back to the notebooks. One of the things I observed early on, and ultimately almost created a formula for, was the idea of distribution of risk and reward for a startup founder. I'll just tell you the conclusion, because I don't need to talk through the logic. A founder who has issued founder shares, which are basically zero cost, will ultimately achieve 70 to 80 percent of their terminal value within the first five years of the company's existence. So what does that mean? If you stack that on top of the idea that over 90 percent of startups fail, the math will tell you that the most efficient path to creating wealth and success as a startup founder is to be the founder of multiple companies. Most of them are going to fail; maybe one of them, if you're lucky, and your basket succeeds. It's like creating a venture portfolio for yourself. And the third piece of data is: we all have a finite time on this planet. We only have so many functional, workable years in our careers.

So what I designed and realized early on is that I needed to start companies, operate them until about year five, then exit, then go start another one, and then another one, and then another one. Because the odds were that, even if I was lucky, only one of them would be successful. I conceived of this in my notebooks, just observing other founders, et cetera. And it's absolutely played out. I still give this advice to early-stage founders today: understand where your strength lies. Is it phase one, phase two, phase three? And then play that role in multiple different companies, because you're never sure which one is going to be your breakout success.

Shamil Malachiyev: And who in your life, through your experiences of both success and — because behind each instance of success we have numerous failures and challenging days, even months — who was there to be the shoulder to cry on, to support you when the times got tough?

Court Lorenzini: Mostly my wife, I'll be honest. She was amazing. I give her incredible credit. And in fact, I don't think she understood the nature of the roller coaster ride I was going to put her on when we first got together — she would certainly tell you that. Her family comes from academia, so they're very much one-job-for-a-lifetime: everybody very stable, everybody has a constant salary and benefits and everything else. She was amazing. I would also say, before my father fell ill, he was very good at helping me just normalize the entrepreneurial journey. He'd done it, seen it, watched it. And through his friends — again, I look back at guys like Jim Morgan, Ken Levy, Ross Brown, these are all luminary leaders in the Valley at the time who had just become my friends — these were men I could call on routinely and get their experience and guidance. It was just transformational. I wish I'd had more.

And honestly, that was the thing — when we talk about what I'm doing now with Founder Nexus, that's why I started Founder Nexus. I realized that the founder's journey is hard, lonely, and pretty much doomed to fail, for the most part. And finding people who can empathize and give real experiential guidance is very hard to do on your own. So what I do now in my life is very much an offshoot, a result, of all those early days and not having enough support.

Shamil Malachiyev: What I like to think is each of us has to play the best game with the cards we've been dealt. A lot of founders don't get that kind of surrounding — a community of people willing to share their experience, listen to their stories of failures, and show that support. Some of those aspects you were getting from the VC group your father ran, through their communication with each other. What would having a group like Founder Nexus, a business community like that, have meant for you during your first ventures?

Court Lorenzini: I wish I'd had it, honestly. I compare it to this: any time I had opportunities, either through the venture capital groups I was operating under or through invitations to periodic events where I was exposed to other venture-scale founders, I invariably learned more from a couple of hours with a bunch of other founders of the type and style that I was than I did even talking to my own board or anybody else. Because these were people living in the trenches, in the moment. And our ability to share stories, both positive and negative, and be very vulnerable with one another — the best guidance I got along the way, I was able to assimilate more from those conversations than from most of my board meetings, even though I had great board members for the most part. So it taught me that the conversation founders can have with one another, if they're willing to come to the table and be vulnerable, can mean the difference between success and failure.

Shamil Malachiyev: And you know, as we say, entrepreneurship — being a founder — is a very lonely journey, but with business communities like Founder Nexus it doesn't really have to be. Is there something within founders that is stopping them from actually coming together? Maybe it's the sense that it's not always rainbows and flowers — usually it's going through storms — and maybe your ego is telling you it's not safe enough to show yourself and your failures in front of others, given this image of success we portray on social media, where we only post when we've hit some milestone. What do you think — why don't people come together as groups and stop the loneliness of the journey?

Court Lorenzini: It's hard. There are many layers to that, I will say. Number one: every founder I know is running around with their hair on fire, constantly putting out fires, dealing with stuff. They're trying to juggle the incredible pressure of running a startup with a family life, if they have one, friends, just having a life. It's hard to have a life as a founder, to be honest. There aren't enough hours in the day for most things. So you end up staying focused on a couple of things, which means you're not really actively doing outreach or creating opportunities for yourself to meet the people in the community who might be helpful to you. It's hard to understand who they are, where they function, and how to get their attention — because they're also running around with their hair on fire, and they also don't think they have time to spare.

So the community of venture-scale founders as a group tends not to self-organize. If they happen to meet one another at various events, whether through their venture capital programming or local programming, they love the experience. But then it's: wow, I met this really cool person — if I got lucky enough to actually have a meaningful conversation rather than just, "Hey, my name's Court." "Hi, my name's Shamil. Nice to meet you. What do you do?" You waste a lot of time doing that, and that's how most networking and social engagements happen. You spend most of your time just understanding the person across from you: what's their role, their responsibility — not even their life journey, just who are you, and how do I even relate to this conversation?

So finding opportunities to put like-minded, experienced venture-scale founders together in a room, where you can guarantee them that every single person in the room is also an experienced venture-scale entrepreneur — that takes all the pressure off. It means two things. Number one, the work has already been done for you: the group has been curated as people with whom I can have meaningful dialogue. At Founder Nexus we limit the room to only experienced venture-scale founders. There's not even an investor, an advisor, or a service provider in the room. So you can immediately be okay being vulnerable.

Because the other part of that equation is you're so attuned to the idea that people are judging and evaluating you all the time. It could be somebody you're trying to impress to hire them. It could be somebody you're trying to impress to get them to invest in you. It could be somebody you're trying to impress to get them to buy the thing you're selling. In every case, you have to be on your toes. You can't be vulnerable. You've got to be on your A game all the time. And not only is that exhausting — it means you pretty much feel like you can't be vulnerable anywhere. You can't really take it home and talk to your spouse about it, because they don't really get it. You can't talk to your best friends, unless they're venture-scale founders, because they don't get it either. So you have no outlet.

But when you come to a place like Founder Nexus, where the room has been precurated, it's: I'm with my people. These are people who get what I'm going through, intimately. They've got the same struggles and the same upsides. We don't even have to introduce each other and ask what we do for a living. We can go straight to: hey, I'm dealing with this thing — what are you dealing with? And then start to exchange experience. It's this breath-of-fresh-air moment where you can just be, learn a ton from your peers and colleagues, and be vulnerable. Let's just level set. Let's just understand that this is fricking hard, and each of these steps is fraught with potential failure. I wouldn't say we're all in it together, but we're definitely doing it at the same time. So I love the community we are building with Founder Nexus, because it gives these founders that moment of peace and calm and support and vulnerability which they can't have in any other context.

Shamil Malachiyev: Yeah. As a founder, I feel like this is something my soul is seeking all the time — a place which is really hard to find, where you can really be vulnerable and trust the people, to share and learn, to find your tribe. If you could envision a world ten years from now, with what you are trying to achieve with Founder Nexus, what would that world look like?

Court Lorenzini: Okay, that's a good one, because that's really the founding story behind Founder Nexus. Ten years or more from now, two things I'd like to be true. Number one, I'd like to be able to statistically demonstrate that the founders who were members of Founder Nexus had a higher degree of success, statistically, than the non-participating founders. The National Venture Capital Association and tons of other data sources talk about success and failure rates and their averages across the board. I believe wholeheartedly that any founder who participates in Founder Nexus as an active member is going to have demonstrably higher odds of success, and I think the stats will prove that out a decade or more from now. I'm highly confident in that. That's the first order.

The second order: I look at the world and the world's economy and I think, okay, founders are the engine of the world's economy, fundamentally. They create all the value. And yet our capital markets are very skewed to a small number of cities and geographies in the world, which has a distortion effect on the world economy — sucking most of the economic success into that small number of geographies and thereby draining all the other locales in the world at their expense. I don't think that's right. I think the world can, and should, with the right set of motivations and tools, be more balanced than that. So the other thing I'd like to see is that we have more venture-scale success stories outside the power-20 geographies of the world than we've had through the current year. We're in 2025 now; we can see what the economic benefits of being in one of the top-20 venture-based cities have been. Twenty years from now — maybe not ten, but maybe twenty — I would like Founder Nexus to have been one of the catalysts for those successes starting to happen in geographies that are non-traditional winners. And we start to see more leveling of the economic playing field globally — not just in certain countries, but all over the world. We start to see wins there, which mean those communities start to have more employment, better economic outcomes, better opportunities for their local residents and their local governments, et cetera. That, to me, would be the second-order scorecard I'd like to help influence.

Shamil Malachiyev: Yeah. And lastly, I cannot miss the opportunity to talk to you about the field of artificial intelligence and how you view it. Starting with your family — something your father created, the main process for silicon wafers, which later became the processors, which then allowed us to discover artificial intelligence through the GPTs and neural nets. Now this seems to be transforming the whole landscape for many industries. The way you view it: is artificial intelligence going to enable entrepreneurship, or is it going to take over a lot of the entrepreneurship potential? As a founder, as a venture capitalist, what is your view on the impact of AI on the world?

Court Lorenzini: So I take an historic view. And the historic view is this. Through the course of human history, every time we as a society of humans have created something that has a major impact on productivity — electricity, light, steam engines, semiconductors, the internet, you name it — the transformative nature of each of these technologies has historically always done two things. It has destroyed some jobs, or had some destructive effect in certain areas. But it has also been a major accelerant to employment, economic growth, and sustainable growth for every community across the planet.

And I see nothing different about AI. AI is going to be another transformational technology that will have a negative impact on certain jobs and certain roles — as a very minor sidebar impact; major to the people who are impacted, I don't want to diminish that. But once a company starts to use AI, they will not, historically speaking, reduce the number of humans they employ. They will accelerate, because they have bigger business, bigger opportunities, bigger markets, bigger things. And that means more people get jobs, more people get interesting opportunities, more economic growth and development for their region, country, world, what have you. So I see nothing but productivity upside, employment upside, and economic upside to the advent of AI. And I understand why it's scary to people. It has characteristics that are frightening, particularly if it's misused — you can certainly consider bad-actor circumstances. But every technology has that capacity, and AI is not different. So I'm not fearful, I am optimistic.

Shamil Malachiyev: I'm loving the positive energy with which you view the future. And I think that's something that is important for founders to have, in order to take the leap towards starting something with the uncertainty of the future while believing that everything will work out. Well, thank you so much for sharing your time, sharing your story, and providing all of these lessons for me and for anyone who's going to listen to this podcast. It was an absolute honor.

Court Lorenzini: Hey, Shamil, it's great. I love talking to you, man. It's awesome. And thank you so much for the opportunity to do this. It's always fun.

Shamil Malachiyev: Okay, let's do it again in the near future — I think when we'll be able to discuss more of Founder Nexus.

Court Lorenzini: That'd be great. Look forward to it. Thank you.

Shamil Malachiyev: Thank you.