SaaS eSignature Market: From $1 Million in 2006 to $1 Billion in 2018

  • First, we didn’t really know until about 6 years in. It’s OK if you can only mostly see it early on. Around 2010, the market got big enough ($30m in actual revenues) that it was organically doubling each year. Only then could you feel it — that it not just could be big, but that it would be big. But even then, the top vendors didn’t know it would be this big. From $30m in 2010 to $1000m in 2018 is a lot of growth. We knew, but we didn’t fully know. Probably not until $100m in total revenues in the category, or Year 6–7 so.
  • It compounds. This goes back to the first SaaStr post ever, but it can be hard to feel it. But $30m in 2010 doubles to $60m in 2011, to $120m in 2012, $240m in 2014, $480m in 2015, etc. In fact, the market didn’t even have to really even double each year to reach $1 billion in real, realized revenues in 2018. Doubling each year? Hard, yes. But hardly impossible.
  • Vendors change markets, and can make them much larger. Our original comparables were eFax and similar simple document services. But the eSignature leaders quickly realized you could go upmarket from there, and actually radically improve core business processes. That let us grow deal sizes to $100k, then $500k, then $1m, and then beyond. You probably can do the same if you change a category and add dramatically more value to it.
  • Top brands endure, and build on themselves. If you have super-high NPS (the top vendors have 50+), net negative dollar churn, and a strong market position — you can scale for decades. Maybe don’t sell at $10m with 50 NPS and 100% YoY growth. Because just think of what that will be in a few years.
  • Go long once you get to $10m ARR in a new market. $10m in an old market may be immaterial. But in a new market, that truly is special. If you can find a way to get $10m where there was $0 budget before … of course you can get to $100m.
  • In a new category, people will tell you are stupid when you start, and even for quite a while. One of the toughest parts of eSignatures in the early days was that many folks who weren’t customers didn’t get how valuable the products were. A Unicorn CEO looked at me at a dinner and said — and we were already at $8m ARR at this point — “I can’t imagine why anyone would pay for your product”. Yeah, it hurt, even then. And in the earlier days, the doubters were endless. This comes with a new category. Bring a thick skin with you.

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Jason M. Lemkin

Jason M. Lemkin

15.9K Followers

SaaStr. Pre-nicorn VC. Co-Founder CEO of EchoSign. Served as VP, Web Biz Svcs at Adobe. Also built nanobatteries implanted inside your body.