Company spotlight: EchoSign and its CEO and cofounder, Jason Lemkin

This week’s company spotlight is on EchoSign and its CEO and cofounder, Jason Lemkin. EchoSign is a Web 2.0 company that supports electronic signatures. In 2005, Jason and fellow attorney Jeffrey Zwelling saw that small businesses were being left behind in the web consumer revolution. They asked themselves what services, made simple, could help keep these businesses in the game. In response, they developed EchoSign, a 100 percent web-based, full digital signature solution. Users upload their electronic documents and enter the e-mail address of recipients. Recipients are able to sign instantly online, then send it back.

What business challenges, if any, has your company faced? In Jason’s words:

I’m extremely proud of where EchoSign is in 2010. We now have over 16,000 customers and 1,200,000 users worldwide using our electronic signature website to get contracts signed and filed in just a few clicks.

But getting there was quite a challenge.

First, we launched over four years ago – to a complete thud. We did just about everything wrong.

• The idea wasn’t quite right – people weren’t ready to sign documents online en masse yet in January 2006.
• The market wasn’t right – we thought our sweet spots would be in HR, legal, and finance. It turned out we’re a killer sales tool.
• The product wasn’t right – we thought our users would be one-man shops and individuals. Instead, it’s small and medium-size businesses and groups within larger companies. Either way, it’s primarily groups – not individuals. So our 1.0 product was all about solo users, when group usage was the killer need.

So EchoSign almost died eight months after launch. With little capital left, half the team gone, and the wrong product for the wrong market, things looked grim.

How did you meet those challenges?

We made a few key bets. The first was that the few customers we did have – sales teams – were representative of the larger market we were going to attack. So we created an award-winning integration with Salesforce.com, and have since gone on to a No. 1 rating on Salesforce for four straight years. Second, we focused on making a few key customers extremely successful. One was a very large customer: British Telecom in the U.K. We grew that account from a handful of users to over 6,000. We did everything we could to make them a huge success.

So, we went from abject failure to market leader. It took four years, a near-death experience, and a complete refocus. Today, the market has finally caught up to our original vision…and we’ve expanded dramatically into real estate, HR, finance, procurement, and many other verticals and segments.

What words of advice do you have for business owners?

I've been with four start-ups; founded two, and had good exits with the others. What I’ve learned: surround yourself with talented people you enjoy working with. It doesn't really matter what your business does – I've been involved in software, Internet, nanomaterials, legal businesses – it's the journey that matters, and that journey has to end in some definition of success. What matters most is who you travel with, and that you make it there.

What are your top five tips to thrive in these tough economic times?

1. Cut all the fat, immediately. You don't need it.

2. After the fat is gone, get rid of anyone in your enterprise that brings you down or has a negative attitude.

3. Focus only on what works. Don't go off chasing a new, pretty penny. Your business only works if its core engine works.

4. Plan for success. The economy will recover. For the tech sector, it was relatively fast – about 12 months. For other segments, it will be years. But don't be caught when it does, or you'll lose.

5. Give yourself extra runway. Since the market will come back, buy yourself time. Do whatever you need to do to get more cash in the bank and extend your runway. Give bigger discounts for prepaying up front. Change your sales team's comp structure. Focus on market efforts that have a shorter return – whatever it takes. Create runway, because it will get better...and you have to survive to thrive.

To learn more about EchoSign, visit http://www.echosign.com/.

Special thanks to Elissa Leonard, research assistant and writer at The Law Office of Delida Costin.

For more articles about starting your own business, subscribe above to receive regular updates from this column. You can also follow The Law Office of Delida Costin on Twitter or become afan on Facebook. Visit www.costinlegal.com to learn more about The Law Office of Delida Costin and the legal and negotiation expertise it offers growing businesses.