"What’s preventing Google from disrupting your success?"
Drew Houston’s company may be valued at $10 billion, but here in GSB Faculty West 104 on the Stanford University campus he’s being grilled like a newbie on Shark Tank. The three dozen students in this class, called "Disruptive Innovation", are relentless, even though he’s been invited as a guest. Another pupil brings up what he believes is another giant threat: "Amazon [Web Services] was this huge competitive advantage for you when you were first starting," he says. "But now they have this competing Cloud Drive."
Houston is the epitome of Northern California cool. With his full beard, hair sticking straight up, and a silver hoop piercing the middle of his left earlobe, he leans back in his chair and placidly fields the queries, no matter how snippy. "Pretty much any big company, for any sufficient market, is gonna have some chips on the table," Houston says, explaining why he thinks Amazon and Google now have services that compete with Dropbox. "That doesn’t mean it’s gonna work."
Houston, 32, finds himself in the dead center of one of the tech industry’s most fearsome turf wars. Dropbox has the distinction of being the only cloud service—and perhaps the only startup—ever to compete simultaneously against Apple ($748 billion market cap), Google ($369 billion), Microsoft ($357 billion), Amazon ($173 billion), and Tencent ($160 billion).
The stakes are clear: whomever controls your stuff may control the digital future. Over the last few years, storing and sharing data in the cloud has become an almost ubiquitous habit. Conventional wisdom had been that cloud-based storage was a commodity business, a digital file cabinet. But a better metaphor for the potential of cloud-based storage might be a portable office. "Your whole computing environment ought to follow you around," explains Houston. "Your financial records, your health information, your music playlist . . . anything that’s ‘mine.’ It’s a pretty long list." Better yet, you should eventually be able to interact seamlessly with everything in that portable office: work on documents with colleagues, send email, chronicle inventory. About storage, he says, "that’s kind of the easy part. The more interesting part is, What can you do with it?"
Unlike his amply financed competitors, which were all founded during the desktop computing era, Houston has been embedded in the cloud for eight years, ever since launching Dropbox in 2007. He’s not building smartphones, holographic lenses, or self-driving cars: his sole focus is solving the annoyances created by the invisible networked quilt that is modern computing. The cloud makes it possible to work from anywhere, anytime, but keeping everything safe and in sync is a massive software challenge. Our economy’s workforce is increasingly independent, mobile, and flexible, and the line between work and home continues to blur. The traditional design of business computing was not built for how we work today. "[Employees] are basically saying, ‘I need to get my job done,’" says Maureen Fleming, a VP at the analyst firm IDC. Those employees will gravitate to whichever service makes it easiest for them to do so.
No one yet dominates the new global network, but Dropbox just may be the most adroit cloud company in the world, the one that has solved more problems for its users than any other. That’s why Dropbox is not just surviving its onslaught of competition, but is thriving. The company says it has more than 300 million users and 4 million companies using the service. According to IDC, Dropbox owns 27% of the consumer market for file-syncing and sharing documents, more than Microsoft and Apple. It is also the most popular file-syncing and sharing service used by businesses. More than 100,000 organizations, including Hyatt, Under Armour, and Spotify, pay $15 per employee per month for Dropbox for Business, while a tiny fraction of its consumers pay $99 per year for the Pro service. Our conservative estimate of all those paying customers (assuming five employees in each business and 1% of consumers) puts Dropbox’s revenue at approximately $450 million annually, which is why the company is rumored to be going public before too long.
A potential IPO is just one of the many reasons 2015 is a critical year for Dropbox. Houston is already rolling out new features that enhance Dropbox’s utility, letting users do things such as save any file within an iPhone app to Dropbox with two taps, and edit Office documents without having to save them to a computer. These new additions will be a test: of Houston’s bet that Dropbox is a business and not merely a feature; of Dropbox’s ability to stay rigorously focused on solving customer problems at a time when it is growing madly; and of Houston’s ability to fend off his rivals’ cloud initiatives.
Toward the end of the Stanford class, another future disrupter named Jordan bluntly asks Houston, "What made you the right person to start Dropbox in the first place?" In the jargon of Silicon Valley, he’s asking about what’s called founder-market fit. Why, Jordan wants to know, does Houston have more than a puncher’s chance against Amazon, Google, Microsoft, and the rest?
by J.J. McCorvey, Fast Company | Read more:
Image: Dropbox
Drew Houston’s company may be valued at $10 billion, but here in GSB Faculty West 104 on the Stanford University campus he’s being grilled like a newbie on Shark Tank. The three dozen students in this class, called "Disruptive Innovation", are relentless, even though he’s been invited as a guest. Another pupil brings up what he believes is another giant threat: "Amazon [Web Services] was this huge competitive advantage for you when you were first starting," he says. "But now they have this competing Cloud Drive."
Houston is the epitome of Northern California cool. With his full beard, hair sticking straight up, and a silver hoop piercing the middle of his left earlobe, he leans back in his chair and placidly fields the queries, no matter how snippy. "Pretty much any big company, for any sufficient market, is gonna have some chips on the table," Houston says, explaining why he thinks Amazon and Google now have services that compete with Dropbox. "That doesn’t mean it’s gonna work."Houston, 32, finds himself in the dead center of one of the tech industry’s most fearsome turf wars. Dropbox has the distinction of being the only cloud service—and perhaps the only startup—ever to compete simultaneously against Apple ($748 billion market cap), Google ($369 billion), Microsoft ($357 billion), Amazon ($173 billion), and Tencent ($160 billion).
The stakes are clear: whomever controls your stuff may control the digital future. Over the last few years, storing and sharing data in the cloud has become an almost ubiquitous habit. Conventional wisdom had been that cloud-based storage was a commodity business, a digital file cabinet. But a better metaphor for the potential of cloud-based storage might be a portable office. "Your whole computing environment ought to follow you around," explains Houston. "Your financial records, your health information, your music playlist . . . anything that’s ‘mine.’ It’s a pretty long list." Better yet, you should eventually be able to interact seamlessly with everything in that portable office: work on documents with colleagues, send email, chronicle inventory. About storage, he says, "that’s kind of the easy part. The more interesting part is, What can you do with it?"
Unlike his amply financed competitors, which were all founded during the desktop computing era, Houston has been embedded in the cloud for eight years, ever since launching Dropbox in 2007. He’s not building smartphones, holographic lenses, or self-driving cars: his sole focus is solving the annoyances created by the invisible networked quilt that is modern computing. The cloud makes it possible to work from anywhere, anytime, but keeping everything safe and in sync is a massive software challenge. Our economy’s workforce is increasingly independent, mobile, and flexible, and the line between work and home continues to blur. The traditional design of business computing was not built for how we work today. "[Employees] are basically saying, ‘I need to get my job done,’" says Maureen Fleming, a VP at the analyst firm IDC. Those employees will gravitate to whichever service makes it easiest for them to do so.
No one yet dominates the new global network, but Dropbox just may be the most adroit cloud company in the world, the one that has solved more problems for its users than any other. That’s why Dropbox is not just surviving its onslaught of competition, but is thriving. The company says it has more than 300 million users and 4 million companies using the service. According to IDC, Dropbox owns 27% of the consumer market for file-syncing and sharing documents, more than Microsoft and Apple. It is also the most popular file-syncing and sharing service used by businesses. More than 100,000 organizations, including Hyatt, Under Armour, and Spotify, pay $15 per employee per month for Dropbox for Business, while a tiny fraction of its consumers pay $99 per year for the Pro service. Our conservative estimate of all those paying customers (assuming five employees in each business and 1% of consumers) puts Dropbox’s revenue at approximately $450 million annually, which is why the company is rumored to be going public before too long.
A potential IPO is just one of the many reasons 2015 is a critical year for Dropbox. Houston is already rolling out new features that enhance Dropbox’s utility, letting users do things such as save any file within an iPhone app to Dropbox with two taps, and edit Office documents without having to save them to a computer. These new additions will be a test: of Houston’s bet that Dropbox is a business and not merely a feature; of Dropbox’s ability to stay rigorously focused on solving customer problems at a time when it is growing madly; and of Houston’s ability to fend off his rivals’ cloud initiatives.
Toward the end of the Stanford class, another future disrupter named Jordan bluntly asks Houston, "What made you the right person to start Dropbox in the first place?" In the jargon of Silicon Valley, he’s asking about what’s called founder-market fit. Why, Jordan wants to know, does Houston have more than a puncher’s chance against Amazon, Google, Microsoft, and the rest?
by J.J. McCorvey, Fast Company | Read more:
Image: Dropbox
