Drew Houston’s Mission: Get The World Working Collectively On Dropbox

As I walked right into a convention room dubbed “The Mint” — a tribute to an area karaoke bar the place Dropbox staff can jam on devices — Drew Houston sat on a sofa plucking a Martin Acoustic guitar.

He appeared surprisingly calm, in an off-the-cuff Silicon Valley apparel (black shirt, denims and sneakers), for the CEO of an organization many critics say won’t stay as much as its $10 billion valuation. He continued enjoying as I sat down.

“We’ve got a reasonably good setup right here,” he stated as he set his guitar to lean up towards the sofa. “That is the jam room. It’s a Dropbox custom.”

Houston is in a difficult place. One of many vanguards of on-line storage, Dropbox critics will argue the corporate now finds itself beneath assault from all sides — with corporations like Apple and Google providing free on-line storage and corporations like Field providing enterprise collaboration instruments. It has to not solely proceed to develop its companies, however inform the world what Dropbox’s mission is in 2015.

Dropbox now has greater than four hundred million registered customers — it stated it had 300 million in Might 2014, and hit 200 million in November 2013. It redesigned its Android software and in addition just lately launched a device that permits customers to request information from those that aren’t on Dropbox. All these might look like one-offs, however they’re a part of a broader play to offer customers with instruments to share, view and collaborate on information — and no matter comes after information — throughout each sort of system.

And that, Houston says, is the crux of the corporate’s aim: to persuade individuals to host their photographs, their work paperwork — and primarily their lives — on Dropbox and provides these individuals simpler methods to attach and collaborate with one another. And it needs its customers to have the ability to entry that know-how wherever they’re, whether or not it’s by way of Dropbox, Gmail, Microsoft Workplace or any of the opposite integrations it has.

“There’s a component the place, we need to allow you to tie collectively all these totally different instruments you’re utilizing with out prescribing that you need to solely use the stuff that we make,” Houston stated. “Once you additionally speak about competitors there’s a pair basically various things about our strategy. With Dropbox you’re free to make use of no matter you need.”

“If you additionally speak about competitors there’s a pair basically various things about our strategy. With Dropbox you’re free to make use of no matter you need”

— Drew Houston

Houston hopes to inform Dropbox’s story after staying heads down, for probably the most half, for the previous 18 months. In that point, Dropbox opened seven new worldwide workplaces and has tripled its headcount to 1500 individuals. It now has eight million companies that use Dropbox and one hundred thirty,000 Dropbox for Enterprise clients — and that may quickly hit one hundred fifty,000 clients, Houston stated.

When Houston was youthful, he stated he would go to his father’s office and be surprised by the know-how within the constructing. It was far superior to what he and his household had at residence, he stated. However now it’s the exact opposite, with bigger companies typically operating on clunky, older hardware — like fax machines, even. It’s simpler to maintain up together with your private life than it’s your work life, which is a part of the intrigue for Houston as he and his firm proceed to construct new merchandise.

.textual content .crunchreport h3 shade:#fff

Newest Crunch Report

“Evolution doesn’t all the time transfer issues ahead, and it’s created all these new issues,” Houston stated. “And so, we expect there’s this large alternative, we consider what we’ve constructed — a whole lot of it’s simply writing up tons of of tens of millions of people that have themselves introduced Dropbox into tens of millions of companies. For them Dropbox is that this collaboration platform that connects each individual, each firm, each ecosystem, as a result of increasingly more individuals are in several nations and totally different corporations and utilizing all types of various know-how and you’ve got all of the platform corporations making an attempt to struggle one another and lock you in.”

In additional direct phrases: Houston needs Dropbox to work no matter what platform you’re on. All these disparate platforms drive customers to providers which are ubiquitous on cellular units — which, usually, is e mail. So Dropbox seeks to additionally work throughout all these platforms. 

“Sure, there are proprietary issues we will construct to maintain individuals in our ecosystem, however that’s like what everybody else is doing,” Houston stated. “Plenty of what individuals love about Dropbox is that freedom that you could have something in there, and that you understand it’s okay if the individual is in one other firm, one other nation. I don’t have to fret about whether or not they have an iPhone or not — the sharing will simply work. The whole lot will simply work. Our strategy is round constructing one of the best product versus artificially creating lock-in.”

That was taken one other step additional on Monday with a brand new function that permits Dropbox customers to create groups — and, successfully, an entire new Dropbox — with out having to join Dropbox for Enterprise. Customers have been already self-organizing and utilizing Dropbox to run their enterprise, so the corporate determined to construct a brand new device that may assist them proceed to develop. The pure consequence right here is that, because the enterprise continues to develop, so will its dependence on Dropbox — which results in them turning into a paying Dropbox for Enterprise buyer.

Drew Houston’s Mission: Get The World Working Together On Dropbox

Dropbox additionally faces one other problem: getting into what, with cellular units proliferating, is actually a submit-file world. An instance of that might be photographs, which usually keep locked away in a smartphone’s photographs software. Storing and sharing these photographs is one thing the corporate has tried to faucet into with Carousel, however the app by no means noticed the runaway success that has outlined different social networks. “Clearly, nevertheless many individuals we have now utilizing it we would like ten occasions as many individuals utilizing it, and with Carousel and Mailbox they’re each new ventures for us,” Houston stated. “We’re determining how do you handle a portfolio of apps.”

There’s one other catch, too — the notion of a file may be slipping within the office as properly. There are instruments like Slack rising the place customers can indiscriminately share just about something in a communications platform. These “information” then exist inside a stream of communication, which may be discovered via an inner search engine, and aren’t saved, shared or collaborated on in a standard trend. However that’s to not say that the corporate isn’t considering rigorously about what the submit-file world appears like, and methods to faucet into each the file-pushed and submit-file world beneath Dropbox.

“There are specific issues that we’ll present, like quite simple instruments like a shared folder or the power to have a dialog round one thing, however something that solves this drawback in a elementary means will unify the file world and submit-file world,” he stated. “We’ll do lots in each areas — you need to tie collectively all of the stuff that individuals are utilizing and create a platform the place you should use any ecosystem, and also you need to have this sharing community the place the facility of Dropbox is everyone seems to be already operating on it.”

All of those challenges collectively have drawn up one giant query amongst some critics in Silicon Valley: is Dropbox actually a enterprise come beneath adequate assault that it’s now dealing with an existential menace?

Drew Houston’s Mission: Get The World Working Together On Dropbox

Houston argues that the corporate has a particularly defensible enterprise mannequin, beginning with its present clients. Solely round 1% of Dropbox’s customers that use the service for enterprise functions are paying for Dropbox for Enterprise — so there’s loads of headroom to develop there, Houston stated. The corporate’s freemium marketing strategy — a mannequin which has propelled many startups to billion-greenback standing — has helped it break into companies that ultimately find yourself paying for Dropbox. And now the corporate is investing in buying bigger clients, however all of them have already got some connection to Dropbox, Houston stated. To make certain, the enterprise acquisition gross sales cycle may be extraordinarily pricey, however all that taken collectively helps Dropbox justify its valuation, Houston stated.

CrunchBase
  • Dropbox
  • Drew Houston
    • Bio Drew Houston is CEO and Co-Founding father of Dropbox, and has led Dropbox's progress from a easy concept to a service utilized by tens of millions around the globe.Earlier than founding Dropbox, Drew acquired his bachelor’s diploma in electrical engineering and pc science from MIT in 2006. He took a fast depart from faculty to type Accolade, an internet SAT prep startup, and in addition labored as a software program engineer at numerous …
    • Full profile for Drew Houston

“These are all three comparatively companies however they’re all extraordinarily environment friendly and scalable,” Houston stated. “The standard SaaS firm, the disadvantage is, you need to rent all these salespeople and all this advertising and for each greenback you absorb 50 cents goes off the highest to gross sales and advertising, that’s simply not the case right here. That’s the facility of the hybrid mannequin. We now have the expansion traits of a shopper web firm however the monetization of a SaaS firm. I can’t consider another examples the place that’s occurred. It’s somewhat little bit of a special species of unicorn.”

Dropbox turned eight in Might, and has undoubtedly been busy on the recruiting entrance. Most-just lately it employed Todd Jackson — Twitter’s head of discovery — to be its VP of product. It employed a brand new CFO Vanessa Wittman from Motorola Mobility in February. And Houston says that most of the founders from the businesses it acquires find yourself discovering themselves in necessary positions inside the firm. That’s a sign that the corporate has completed a reasonably good job of retaining its expertise as an alternative of buying the corporate and watching the staff depart as soon as their lockup expires. Although, to make certain, there’s additionally been a number of departures, similar to Ilya Fushman, and Gentry Underwood additionally stepped down.

If Dropbox have been to do it another time, Houston stated that the corporate was pretty valued and he was joyful about how he made the corporate’s fundraising selections. Dropbox says it has tons of of hundreds of thousands in income and that each of its companies — Dropbox for Enterprise and Professional — proceed to develop quick. That’s given the corporate the pliability to not have any plans to go public, Houston stated, as a result of the corporate has principally raised all of the capital it wants. “We’ve all the time raised cash at a tempo that we really feel is consistent with the basics of the enterprise,” he stated.

“We have now the expansion traits of a shopper web firm however the monetization of a SaaS firm. I can’t consider another examples the place that’s occurred. It’s just a little little bit of a unique species of unicorn.”

— Drew Houston

“It’s not typical to see freemium working at scale, and also you additionally don’t see this crossover into these different new companies,” he stated. “ It’s a enterprise the place the freemium half additionally helps you purchase enterprise clients tremendous cheaply and effectively and scalably, after which additionally brings you into these bigger locations.”

Getting the subsequent one hundred million customers gained’t be straightforward. Dropbox’s registered consumer progress has slowed a bit (which, when you begin hitting lots of of tens of millions of customers, is to be anticipated). However Dropbox is pre-put in on principally each PC producer, and works with OEMs to seek out methods to combine Dropbox into new smartphones. It additionally has partnerships with corporations like Deutsche Telekom and Vodafone. And naturally, there’s the freemium facet — customers who’re already on the product attracting different new customers with the attract of free sharing and collaboration instruments on-line.

With all of the work he’s been doing, he’s hardly had the free time to pursue his private tasks, like studying the right way to kite surf and enjoying in a canopy band. Earlier than leaving, he leaned in to ask what I considered Dropbox today. I requested Houston yet one more time: What’s Dropbox in 2015? And he reiterated what he stated earlier — that it’s an area the place individuals can “get collectively and do no matter’s most necessary to them,” and construct the only and strongest collaboration platform.

“Connecting any individual, firm or ecosystem,” Houston stated. “Within the 90s we type of had that, anybody with a PC and an e mail handle might work with anybody else with a PC and an e-mail tackle. We type of misplaced that, as a result of cellular and the cloud have created this chaos with all this fragmentation and preventing. We’re all caught duct-taping all of the items collectively, and it sucks. A few of these issues are like hundreds of papercuts, some are massive new merchandise that must be constructed. The answer includes the little and large issues.”