Keith Krach believes that in order to impact the world, you have to have a winner-take-all philosophy. In fact, recent studies show that the category king—new-industry pioneers that confront the challenge of creating a new market category and achieving significance within it—capture 76 percent of the market cap for the industry.
Krach has become a category kingmaker, building four game-changing companies from robotics to engineering software to e-commerce to e-signature and digital transaction management. All four companies are considered disruptors, became the clear market leader through category creation, generated significant shareholder value, and chose paper or manual processes as its main competitor.
The companies took advantage of four different paradigm shifts at different points in time in different industries. “The principles, strategies, and tactics utilized were essentially the same, while learning new successful concepts along the way with each successive company,” Krach explains.
It’s a playbook that Krach brought with him to DocuSign when he became chairman in 2009 and CEO soon after that, where he leveraged the concept of e-signatures. But what led to DocuSign’s hypergrowth was the category creation of Digital Transaction Management (DTM). In a world of increasing digitization, mobility, and speed, DocuSign capitalized on the opportunity, need, and paradigm shift to create DTM, which empowers anyone to transact anything, anytime, anywhere, on any device—simply and securely.
Paying it Forward
Much of the success that Keith Krach has accumulated over the years he attributes to his upbringing, from his engineering background at Purdue University to his leadership skills acquired from Sigma Chi to the business strategies he gained from Harvard Business School.“I have always felt a great bond and gratitude for my alma maters—Purdue and Harvard Business School,” Krach says. “I was given the opportunity to give back to Purdue as the chairman of the board of trustees. This experience was the perfect synergy of my business experience and personal sentiment, and I am proud of the great work we accomplished.”
“I have always felt a great bond and gratitude for my alma maters—Purdue and Harvard Business School,” Krach says. “I was given the opportunity to give back to Purdue as the chairman of the board of trustees. This experience was the perfect synergy of my business experience and personal sentiment, and I am proud of the great work we accomplished.”Krach believes his greatest achievement, and one that will forever change the destiny and trajectory of
Krach believes his greatest achievement, and one that will forever change the destiny and trajectory of Purdue, was appointing Mitch Daniels, the sitting governor of Indiana, to be the twelfth president of the university in 2012. In Krach’s view, this was another opportunity to create a category.
“There is a paradigm shift upon us in higher education, and we have the chance to break the mold and harness this moment with an out-of-the-box innovator and leader,” he says. “While the wisdom of this unconventional appointment was as clear as day to me, it was perhaps my greatest exercise in diplomacy to bring him into the Purdue family with the full support and fanfare he deserved from our academic college, alumni, and students.”
To this day, the DocuSign Global Trust Network has more than 300,000 companies standardized on DocuSign, more than 200 million unique users in 188 countries, and is putting on 300,000 unique users a day.
Krach believes, though, that most categories do not occur randomly. Instead, he puts a high importance on leveraging growth models, optimizing profitability, growth, and market power, and quantifying the value proposition for the customer. He also believes in building a strong team as well as the virtue of organizational courage. “It takes a high-performance team that thrives on challenging the status quo and innovating with every discipline of the company,” he says.
And Krach knows from experience. Before joining DocuSign, he became the youngest-ever vice president of General Motors at the age of twenty-six. He was also the founder of GMF Robotics, a joint venture between GM and Fanuc. With the innovative risk-taking nature of Krach’s youth and the power of GM, GMF Robotics quickly became the industry leader while putting IBM, GE, and Westinghouse out of the robotics business. To this day, Fanuc Robotics is the global leader, and Krach is recognized as an early pioneer in the robotics industry.
From there, Krach joined the founding team of Rasna Corporation, which created a new methodology for optimizing mechanical designs, a category known as Mechanical Design Synthesis. Rasna was number three on the 1994 Inc. 5000 fastest growing companies in the United States and later sold to Parametric Technologies for $500 million in 1995. In 1996, Krach became the first entrepreneur-in-residence at Benchmark Capital. It was during those early Benchmark days that he and his fellow founders came up with the idea that would change the way business is done: B2B e-commerce.
Known as Ariba, the company soon became the de facto standard by creating the first enterprise application written on the Internet and establishing the category of B2B e-commerce. At the time, it was the fastest growing software company, with its revenue doubling quarter over quarter for the first twelve quarters. The company then went public after only a little less than three years after its founding. Ariba’s stock more than quadrupled from the offering price on opening day, making the company worth about $6 billion.
In 2000, the stock value continued to climb, and Ariba’s market capitalization was as high as $40 billion. SAP acquired Ariba in 2012 and now has $1.3 trillion going through the Ariba Network annually, which is more than eBay, Amazon, and Alibaba combined. “Our success was not timing, not a fluke, not good luck,” Krach says about the success of Ariba. “It was simply recognizing the profound patterns, looking for the need, the paradigm shift, assembling the team, and giving them a clear mission.”
These same principles that Krach outlined at Ariba were also applied at DocuSign, which means being a category kingmaker isn’t luck or fortune. It’s a playbook. And Krach is knows the plays backward and forward. A combination of academic, professional, and personal experiences have made him realize that successful category creation is teachable, duplicative, and all about pattern recognition. “My desire at this point in my career is simply to inspire the next generation of global leaders along their journey,” he says.
Keith Krach is a notable example of the many ways Purdue University alumni deliver innovative solutions to solve global challenges. Our graduates help feed the world. Engineer life-saving devices. Lead Fortune 500 companies. Pen Academy Award-winning movie scripts. Journey into space. At Purdue, what we make moves the world forward.