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I'm trying to work these different leads on co-founders and then I met had met this kid Kyle and so Kyle's like hey, you should talk to my friend
Arash and what do you know about Arash at that point virtually nothing just a recommendation from somebody else's like hey this guy he might be a good co-founder. Yeah, and he's
a stone school, right? So we get together in the student center and just start
hashing it out. And that
was what was so crazy. I was just like you gotta drop
To school to do this. Yeah, and I'm like, alright, I'm expecting have to talk to the parents and like do all this stuff and he just bounces a couple days later. He had just dropped out of school.
From NPR how I built this show about innovators entrepreneurs idealists and the stories behind the movements they built.
I'm guy Roz and on today's show how Drew Houston came up with the idea for Dropbox on the day. He forgot to bring his thumb drive for a weekend in New York and how that idea grew into a multibillion-dollar business.
I probably don't have to explain why walkie talkies are sold in multiples. Yes in practice. You could use just one. I suppose maybe to scan the frequencies or he's drop on other two way radios or you could just talk into it and hope someone hears you but that's no fun and not really what these things were designed to do to get the most out of a walkie-talkie. Ideally, you have someone else or even Lots
Other people talking on the same channel in this idea is basically what Venture capitalists and other investors called the network effect. And in the past few years products that grow through networks have become extremely attractive to these investors and why because the network effect allows a product to grow on its own without a whole lot of marketing. So here's an example. Someone sends you a survey to complete and the survey was
Has created using SurveyMonkey you fill it out and send it back and by doing that you have seamlessly become a Survey Monkey user and the next time you want to create a survey you are likely to use Survey Monkey. It's the same story for calendly when someone invites you to schedule a meeting you get an email from calendly inviting you to use the service as well slack Works in a similar way if one person on our team uses it.
Rest of the team will jump on as well. It's a concept called Product LED growth. If you use it, your friends have to use it to engage with you and then you are all users and the product grows and grows and grows. And this early Insight back in 2006 is what allowed Dropbox to scale into a multi-billion dollar business in a few short years because Drew Houston knew that the product he was building.
Would grow organically and exponentially all at the same time because when one person signs up for a Dropbox account and wants to share a file or document with another person that second person also has to sign up for a Dropbox account and most people do because it's free the vast majority of Dropbox users. Don't pay a dime for it yet. The company makes huge profits from the three to five percent of its customers who pay
Namely businesses. Now if you don't already know Dropbox is basically a hard drive in the cloud and you can seamlessly access all of your data from any of your devices Andrew came up with the idea when he took a weekend trip from Boston to New York and forgot to bring his thumb drive. So after mulling over the idea for a few months Drew decided to apply to the now legendary accelerator program y combinator or YC, but before that happened before
Before he grew Dropbox into a company with a seven and a half billion dollar market cap true was not surprisingly the kind of kid who was obsessed with computers from a very early age. He grew up in Acton, Massachusetts. It's a suburb outside of Boston his mom was the school librarian and his dad was an electrical engineer. And when Drew was just five years old, he wrote his first line of code in basic
I dabbled in programming, but then I my dad would bring
Home computer games from work. So these adventure games like king's quest and things like that and so place is great. Yeah. So I played a ton of computer games when I was little and then was also just interested in figuring out how they worked and making my own computer
games and and I guess like at age 14 you really jumped into computers as a job like a summer job to work for a gaming company. What what's the
story? Yeah when I was in 8th grade, I think that
I had signed up to test this online game. So I started poking around under the hood of the game and I found all these security vulnerabilities and I emailed the developer really is over icq. I'm like hey, you know, you guys need to tighten up a few of these things and they're like, okay got it. You're right. Would you like to fix that for us? It was a start-up. So they're like, well, we can't really pay you a salary, but we can give you stock options
today.
You're 14 by the way.
Yeah, then I'm like, yeah, this is all well. I'm like is it okay if my dad signs of paperwork and they were fine with me working remotely and part-time and
everything. Wow, so they gave you equity in the business. And by the way, did that ever? I'm not did it ever come anything?
Absolutely not. No.
Okay. I got you. It's just like Smooth basically smoke and dust
right? Yeah, but it was a great experience. I mean, it was awesome. Yeah, that guy was a game developer. This is my dream. I thought that's what I was gonna do. Wow life.
All right you working for this company and you're in
high school and this has become like what you do throughout High School, like you're not doing car washes. You're working for this company or you go work for other companies doing similar things.
Well, it was really important stepping stone because you know my resume before that was babysitting. So having a programming job became a way in to get another programming job at a different local store the different startup that was local so
There was this the startup called Soft Servo systems and what I did there was they had they were running everything on Windows the I was like, hey, if you if we can move this stuff over from Windows to Linux, which is free. Then you could save even more cost on the hardware. So, you know, like figuring out how to move all this stuff and these are just it was just kind of one interesting project after another
see you you finish high school and you went to MIT. Yeah.
And your ambition from what I gather from this conversation is was to go on and maybe start a gaming company or make game somehow was that is that right? Well, I had during high
school as I had these because I was a literal game developer, but then these other experiences with startups expanded my horizons. And so I'm like, all right in college and like I definitely want to do engineering definitely want to be involved in startups. And my first company was an SAT prep company. It's called a
Gallade this is why you were at MIT. Yeah. I took a leave of absence in the middle of MIT and teamed up with a teacher at my high school who actually had his own his own little SAT prep business and that is running out of his living room. You know, the SAT is changing because it went from 1600 points to 2400. I'm like now all of those books like all that material is now obsolete because it says this new yeah, and there's not really a great way to do this online. So,
What if we teamed up and did that and you know, we met in a Chili's and Westford and we're washing out trying to figure out how do you incorporate a company and all these and then that really began the entrepreneurial Journey. So I basically took a leave of absence my junior year. It was important that I come back and finish my degree. So I did that and then I got a job at a network security company called bit 9, which so anyway, I was working during the day at that star.
It up and I was Moonlighting on my on a contactless. I see Professor.
Should this this is important because a lot because you know, you hear a lot of people say, oh, you know, I this is my fifth startup or my six startup and I think a lot of people have this idea that oh, you know, all engines are go and need startup and you raise a lot of money and you come up with a product that actually a start-up can just be two people working on their computers and and the business might be a file folder and that might be the start up by the way is a company still around it's not is that okay? So did the
Just kind of just kind of fizzle
out. Well, we had constraints like right so he was not going to leave his teaching job and neither of us were really ready to kind of throw in completely and we got it reasonably far along and we had customers we had income we had at least the rudiments of a working product, but it made us a nice good kind of side income but it's a seasonal right? So there's only a couple months a year where you're really
I'm going and then it's hard to keep momentum. And so I started getting really distracted and then another one of my friends Adam Smith his he started. He runs a company called kite now. He started a company called job knee but he got into YC and it was just this amazing experience and I actually
because of the because of the support and the resources of Y combinator.
Yeah, and it just felt like they were just getting to escape velocity a lot
faster. Hmm.
It's kind of doing it the right way. And as the
SAT prep idea kind of started to fizzle out were you thinking about other things you could do is because it doesn't sound like you really wanted to stay as a as a, you know, a programmer or a tech person suffer an engineer for bit nine like doesn't sound like that's really what you want to do. You were just kind of that you were biding your time earning a paycheck.
Well, I love the work and I was learning a lot. So what ended up happening was with Accolade is I had to
work across a bunch of different computers. It was this huge pain to to move around I'd use a thumb drive, but it was slow and I kept most putting in the washing machine and now but I was really frustrated by the problem. Like why can't I just have my stuff everywhere.
I read that around this time in 2006. You were taking the bus a lot from Boston to New York. Yeah, why are you doing that?
I had a lot of friends who had moved to New York and every month or two I try to get out there and see them so I would take
The Fung Wah, the Chinatown Bus that's now-defunct. And so on one of those rides. I was like, I have a few hours each way to get work done. So I'm like, okay, so and I open up my laptop as the bus had pulled out of the station. I realized I'd left my thumb drive back at home. And I'm like now I can't do anything like all right. Well, I can't get any work done. And then I'm like well now it I'm just sitting there being like I just never want to have this problem again. Yeah, and so I started coding he started coding.
Ting we're on the bus on the bus coding code for what I'm like, I'm just gonna have this thing that like watches this folder and just keeps everything in sync didn't have a name.
And by the way, is that easy to do like just for yourself? Is that take? Like, can you do that on a three-hour bus ride
you certainly can't finish it, but you can certainly start the programming is relatively. It's really easy to make something that kind of works very very hard to make something that works in a bulletproof way. Yeah.
And so I just became obsessed with this problem.
All right, so you are is this is late. I think it's like late
2006. Yep. It's around Thanksgiving
and Thanksgiving and you start to Tinker with this idea, but you're still working is still an employee of this cyber security company. Yeah, and I want to get a sense of where your head was where you like. This is it this is the thing that I am gonna do or did that was a Slow Burn
To take longer for you to get there.
Well, I could feel that sense of liftoff in terms of my passion because I'm like, this is totally in my Strike Zone. I'd love to get into y combinator the next application deadlines in April, but I'm like, you know, this is doable like I could probably find at least make it exist. And then maybe it's a business maybe not but I wasn't really think about that. I'm like, I just want to build this thing and I need it and if I could just like not have to carry my thumb drive around and I have one customer me like great.
And do you Disick and of consume you pretty quickly after like do you start to spend nights and weekends just like trying to build this thing for
yourself? Oh, yeah totally obsessed and it came together really quickly. How fair is a that was kind of around Thanksgiving then I had a conversation in January with my boss at bit nine and I'm like, hey, you know, I'm really going to go for it and start a company and get into Y combinator and but it was pretty clear.
Clear early on that. I'm like, yeah, this is going to get going and I just remember.
Trying to think through the name. This is made so that Christmas 2006. I'm just on I am with one of my high school buddies and we would have these Lan parties back in high school. Everybody bring their computers to someone's house and you play video games together on a local network. But anyway, so one thing we would always do is everybody would set up a shared folder called a Dropbox on their computer. So I'm like we was just called Dropbox and that was it really that bad.
I'm conversation. Where where I settled on the name and I'm just like photoshopping the logo.
So the base of the the logo for Dropbox today is what would you kind of designed and yeah, like on your computer. Yep,
and since then are the pros of taken over and simplified it a lot,
right? Okay, so got a name and now it's 2007 and you've got a prototype that you kind of like created. Yeah, and you had this goal which was to get into y combinator. Yep. All right, so, what'd you do?
So I started working it I had so many friends who had Adam had shipped out to California at this point. And so I've gotten to know a lot of the other y combinator founder socially, so I'd go out and visit them in San Francisco where I went to like one of the social events at Y combinator and I'm literally like walking around this party with my laptop like trying to demo Dropbox to anyone who will pay attention, but one thing that was very clear from the Y combinator
Later guidelines is that you need a co-founder? They don't just
fund single founder. They said to you if you want if you want us to consider you you need a co-founder
you need a co-founder
and this is like Paul grams thing like Paul Graham is one of the co-founders and partners the Y combinator program. Yes. I'm like, this is his one of the main criteria for investing is is is a co-founder because yeah because it's a anyone who listens to the show knows that starting a business can be really tough right and their moments where you want to
Give up and quit but but the thinking is it was a co-founder you kind of increase your chances of not giving up because when you might be low the co-founder might be at a different mental or emotional place. And so I'm assuming that's probably why they wanted you to find.
Yeah, exactly. So the Y then I'm trying to find a co-founder, you know, if it's March in the application deadlines like April Fool's Day cut like a few weeks to get married to someone and I'm not even dating.
So I started shaking the trees, but my search hadn't really turned up anyone yet. So my friend Aaron he was a classmate of mine MIT errands. Like I just I love Dropbox. It seems really interesting if Paul Graham is interested, then I'll do it, but you needed him to be
interested. Yeah, and you couldn't wait to be formally admitted to this
thing. No, so I'm like, well, I'm going to drop by the YC office and see what I can do. You know, I'd show up in my lap.
Top and then I knew Jessica who was one of the partners and you knew her from where I had attended a couple y combinator dinners and just been kind of in the mix. So I was like, hey Jessica. Hey, do you mind if I is Paul busy? I just want to show him some and she's like, yeah, we know he's not busy. Yeah go on in and so I kind of take a deep breath and like go for a walk over and crack the door open a little bit of like Paul. Hey, you know, I'm really sorry to bother you. So just take a minute and he cuts me off.
He's like no it have do not want to see your demo the whole reason. We have an application process. And so we don't have like random people coming by and pitching us on stuff. So absolutely not. Yeah, and I'm like, oh my God because I'm just like total
failure. Well and you probably I mean cause you were pretty young at the time 25, maybe
20. Yeah 24
probably thinking I screwed this up. Oh,
I was a disaster because I'm like that failed and now I've like
and my chances of like getting my sea funding at
all. So so what happened next like what did you do to like make up for that and and eventually get into the program so I'm like,
all right. Well, my application needs a hook. Like I need some way of kind of standing out. So I thought about what might get Paul's attention and I figure like well, what is he doing in his office? Then? He's probably doing what I do every day just like browsing.
Canoes and just keep hitting Refresh on that. What's Hacker News for people who don't know so Hacker News is basically startup news that it's a start-up news site kind of like Reddit. Yeah, but focused on technology and startups for the most part. So I'm like, I wonder how I could get something on Hacker News that could draw some attention. I'll make a demo video of of what I'm doing and it wasn't just for Paul. It was really just to see if this is a viable
concept and what was the video what it look like?
It was a it was called a screencast so which is just to say like I did see a video of your screen and then I'm narrating right Mike. Here's Dropbox if you have multiple computers that it and it's very kind of it's still on YouTube somewhere, right, but I make this to three minute video stay up all night doing it, you know the night before the application deadline finish the application. I'm like, I don't have a co-founder working on it. Well, hopefully get there before interviews and then I posted my demo video too.
Hacker News and it hit the top of Hacker News for like two
days. What was so I'm just curious. What was the thing about it? That was such a big deal among that Community it was it because there were ways to save information and data in the cloud at that point not great stuff. But what was the thing? Yeah I did. But why was there so much interest in this video?
I think it was just kind of getting your files on multiple computers kind of a niche probably like most people had one.
Computer right? You didn't have a smartphone but this audience very technical audience. Like they're the early adopters virtually all of those people were carrying around a thumb drive the title of my post I think was like throw away, you know Dropbox throw away your thumb drive. Yeah, what goes into a click Beatty title? That's a good title throw away your thumb drive, you know. Yeah, and so I think it just it made sense. It was simple it was in like a lot of that Community had struggled with the
same problem. All right, so you make this video you get
Tension on Hacker News you put your application in but you still need the co-founder. Yep,
and I get a one-line email from Paul Graham. Yeah saying they like the idea certainly like your software but you need a co-founder like thanks Paul,
right? Okay, that's good.
That's a good sign progress. Yep. And so then I'm trying to work these different leads on co-founders and then I met had met this kid Kyle who had been in the entrepreneurs club with me at MIT.
And so Kyle's like hey, you should talk to my friend Arash Arash sent me an email saying hey, I saw your screencast on Hacker News looks pretty interesting and he's a stunt school. Right? So we get together in the student center and just start hashing it out at MIT at MIT. And what do you know about Arash at that point virtually nothing
just a recommendation from somebody else's like hey this guy he might be good co-founder. Yeah, like he's smart. He's good at Jenner.
And he had been the director of the computer science programming competition at MIT had been one of the finalists and I had done that too. So I'm like, okay, that's a pretty good filter. That's a starting filter and we just hit it off. I mean as a practical matter, I'm like, yeah, I need a co-founder, you know, usually these co-founder stories start with like, hey, we played we're on the same t-ball team, but definitely not here and we kind of just went for it. That was what was so crazy. I was just like
You gotta drop out of school to do this and he's like yeah
wait, this was based on one conversation
and no is a series of conversate, you know, but not a lot, you know as like a the equivalent of a few days. Okay, if you're you know, a few coffee dates basically and I'm like, all right. I'm expecting have to talk to the parents and like, you know, all this stuff and he just bounces a couple days later. He had just dropped out of
school. He just says, all right. I'm good. I'm
out. Yeah, and I'm like respect.
Okay. Alright, so he joins U and Y combinator gives you the green light there you're in. Yep, and that comes with a lot of support and and introductions but also $15,000 which yep imagine was not nothing in 2007. Which got you. What is $15,000 get you
some desktop some Ikea furniture a couple months of rent, right? So we get into YC April May and then the summer program for YC is in Boston. Mmm. So we
And the summer together he was living in this dorm. You know, we'd just be in the trenches like we'd wake up at noon. I pick him up from his dorm. We code till 4:00
5:00 in the morning pizza and stuff like that again.
Yeah. I mean it's kind of very just
very unhealthy. Oh,
yeah dorm kind of experience that the prototypical start of experience. We were just like cooking and working every day coding. But yeah, and it was Boston doing what common areas like, we really found our element.
Other it's like 50 other Founders roughly 20 companies really got put on the rails and then we move out to California together into this, you know to splitting this two-bedroom kind of corporate like furnished apartment. Anyway, we finish every company gets I think we got seven minutes there a lot shorter now, you know, they put they take a room of investors. They take the company's. Yeah, but seven minutes for our demo YC ends with demo day and then all the investor conversations kind of pick up where that leaves off.
So we had to go start raising money
when we come back in just a moment how Drew in a rash is little business started to attract big attention from some of the biggest Tech entrepreneurs in the valley and how that attention turned Drew to an enemy of none other than Steve Jobs stay with us. I'm guy Roz and you're listening to how I built this from NPR.
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Hey, welcome back to how I built this from NPR. I'm guy Roz. So it's mid-2007 and Drew and his co-founder Arash finish up at y combinator. They're living in San Francisco and gearing up to raise money and trying to figure out how to convince investors that their idea is a risk worth betting on
when I first talked to investors particularly in Boston. They were like no one's really ever made this work before. This is a commodity
Ready Google Microsoft you name it was going to do this and eat your lunch and and
that's what people would say that it like these big companies are going to do this. You know, it's going to make what you're doing irrelevant or obsolete.
Yeah, and I totally agreed I was like, yeah, obviously
so how did you get beyond that feeling of agreeing with the the doubters?
Well, the fact remained though that no one had really done this properly.
And at this point I hadn't you only need one or two investors really be into it. And so by the time we got to through demo day we had come up with a pretty compelling pitch.
Can you explain something to me? What was I mean? I don't know if it's possible to explain this in a simple way. But let's try it. Sure. The idea here was to enable people to share files seamlessly across different their computer their laptop and this is when iPhones just started
I'm out and Yeah, smartphone Revolution is going to back to begin. What was so complicated about it. Why was this so
hard? Well, people had bitten off little pieces of the problem, but we were trying to do something bigger. And what was really challenging was how do you basically build a hard drive large enough to be everybody's hard drive. So there's a whole server and infrastructure component of it. That's very complicated. Hmm. There's a
Algorithmic component which is hard meaning how do you make it so that you can verify the correctness of the system? So, how do you how do you design something that doesn't stomp on people's baby photos or you know tax returns getting under the hood. That's a pretty hard engineering problem. So same for a lot of the same kinds of reasons that you know a Google search. It's like your type words into a text box and you get links to webpages. How hard can it possibly be? It's actually pretty hard. So it's that kind of problem and then there's a design element.
How do you make this really simple and accessible for normal people and then we want it to work with all
platforms? And when did you have a beta version ready to go? Like that was up and
running by the fall of 2007. We started opening up the meat a little bit. And so
it's around this time where you start to attract potential investors and you get the attention of Sequoia. Yeah, which is a huge deal and Michael Moritz, I guess who's a big deal? It's a wonder
senior.
From what? I understand he comes to your apartment in San Francisco a couple days after you meet him. Yeah, basically wanting to make a deal. Do you remember to remember him arriving your apartment?
Yeah, it was a whirlwind because we had just had our first meeting with Sequoia on a Friday and I wasn't super familiar with how these things work. But yeah Mike we do the pitch and then on Saturday morning. Yeah, Mike Morse shows up at our little apartment Dropbox world.
Ahq, and we walk them through. It doesn't say a lot has a couple questions about competition and Google but then leaves with little Fanfare. He's like come by on Monday to pinch the whole partnership which is kind of like the final boss
and during that pitch meeting were the were the partners throwing like tough skeptical questions or did it seem like they really wanted to do this.
I'd say it was thought they all had kind of a poker face. I think they were interested, but you
Your pitch you leave don't get a lot of feedback initially and then get a happy phone call or sad phone call and we got a happy phone call saying hey come to dinner. We want to hammer this out. Wow, and we had a handshake deal that night. So one business day turnaround. Wow, which we were not
expecting and all of a sudden you guys have a million bucks in the bank to work with. Yeah. What were some of the things you did at that point? Like did you start to hire other Engineers? Did you get office space or did you just continue you in a rash working at a year?
Apartment with that million dollars.
So there's a lot to do once you have a deal coming you need a lawyer. Then you have money in the bank you need an accountant. Then you have money you need employees. So we started recruiting the smartest people we knew from MIT as engineers. And so we would do these recruiting trips out there off and I would go meet people in the dorms and pitched our first few Engineers
that way so you start to build it out. And what does that mean? I mean are you guys because you've
Raschid already been pulling all-nighters for like months and months and months to get through this phase. Now, does it slow down a little bit or does it actually accelerate
it accelerates? Because at every point you just have this expanding circle of things you need to take care of because you have from a product standpoint you have this prototype, but then you need it to get it ready for Primetime you need users. And so we kept doing all of these unconventional things to try to get attention based on what had already worked before so the same kind of video
Oh that I put together to put on Hacker News. We did a another one that was a little more oriented around a broader audience that we put on Reddit and digg in March 2008. And so we were placing bets on how many people are going to get on here. And I think the high water mark was maybe ten thousand
people. So one of the things that I guess you've said is that Dropbox actually took longer to launch than other startups at the time like it took you almost a year from the time.
Yeah, I moved from San Francisco to launching it. Why did it take so long? Why couldn't you just put something out there and like January of 2008 that was good enough.
We knew early on that. We would not have a lot of margin for error and so, you know move fast and break things was not going to work for all right, because if you once you lose people's trust it's very hard to get it back. It didn't have to perfect but it had to be very good right so you can't kind of bait. It's hard to beta test a pacemaker and
And we knew that if there's a spectrum from like little website you can kind of throw up in a day to Pacemaker like we were much closer to that end of the Continuum, right? And so the other thing is this only became a mainstream need after the iPhone because most people had one computer home, but then suddenly with a smartphone everybody's got to and for the first time you need to get stuff back and forth very easily and the only way to do that is through the cloud suddenly. This one is from a problem.
The propeller had said to a problem that every mainstream iPhone
user and and how did people find out about it.
Well, I had read this book Crossing the chasm which talks about how technology is adopted starts with early adopters and then moves to kind of an early mainstream and so on and so this is the technology adoption life cycle and we're like we started with the early adopters intentionally. We're like who are the people that are like actively looking for something like this there they tend to be the kinds of people that hang out on the White
I combinator startup news site or Reddit or sites like that. So we seeded the audience with their and then it was viral because sharing is really important part of the drop box experience. And then if I share something with you, you have to become a Dropbox user if it's a shared folder and so the virality was a critical part of our distribution strategy because and we'd study that because things like Facebook and Facebook platform Works bloating and growing super fast, and it's pretty hard to build.
Big consumer service without having some kind of viral growth
element. I think, you know within two years or something you had like 15 20 million users are so huge not. Yeah people clearly. This is resonating. I mean clearly this was something that was working. I mean, it's kind of crazy within two and a half years your valuation were up to four billion
dollars. Yeah. It was like we were very careful to get the product right through the base.
ETA and then a public launch we turned on the paid version and we sort of became accidentally cash flow positive after that because it was just growing
so quickly. I mean, this is what's amazing to me is I think by 2011 you would 50 million users. Yeah, and your revenue is like almost a quarter of a billion dollars, but only four percent of users were paying you the rest of the 96% were using the free version which only gave you 2 gigabytes or whatever.
Storage space but so all that money was just coming from four percent of the users. Yeah, hang like 10 bucks a month or something. Yeah, and was that had you model that out. Did you know that that's all you needed? You just needed like yeah a tiny percentage of people to pay.
Yeah, and there is this new business model that have been popularized around then called free Mia where you know, you start with a free version and then there's a premium version if you need if you need
that by the way, I should mention.
When I read that Mark Zuckerberg, like sent you a Facebook message. Yeah and like 2009 saying hey, I'm interested in learning more about your company and you thought it was like a prank.
It was wild. I mean we got on his radar because we were recruiting some of his alumni, right? And you know, do you have Facebook open in a tab all day at work and in something like wait
what so but it was he interested in maybe acquiring you or just wanted to to meet
he was interested potentially an act and acquiring Dropbox.
We were still building so we weren't really interested in that and then we stayed in touch and then we became
friends and and I guess also that year in 2009. I read that Apple was interested in Dropbox to yeah, and that you even had him had a meeting with Steve Jobs. Is that is that right? What's the story?
Well, it was surreal. We weren't expecting that and it was is there was I was meeting with one of the VPS who reported the Steve and he
He's like Steve would like to meet you and so I was pretty intimidated because then I started talking to my friends and like this story is about Steve meetings were very scary.
Yeah. Yeah. This guy said Steve wants to meet with you not today, but at a future time.
Yeah, he's like well get something set up. Okay. I'm like, I guess I'm not going to say no.
Yeah sure can't say no. Yeah, it's Steve Jobs.
Yeah, so get there were like
We're here to see Steve Jobs. They're like, okay have a seat and then a rash and I are like, oh man, maybe he hasn't seen the product we have to do our kind of get our demo which already so we're furiously trying to set that up and few minutes later Steve comes in and I think the first thing he said is you guys have built a great product so, you know on my little bucket list under the table, I'm like, okay check good. I guess we might be getting a happy Steve story. Not an angry Steve story.
Re but we'll see and he was basically saying like, you know, you should really throw in with us because we're like a start-up with infinite resources. And
will you was it clear to you when you were going to meet him that this is what was going to happen. He was going to make an offer to buy you out.
Probably I was hoping you wouldn't get into numbers, right? Yeah. I'm I thought about goals for the meeting yet for that. I was like what am I trying to accomplish here? I think the primary goal from that from my meeting with him was just don't piss him
off. Yeah.
So he's telling you all the great things about being part of apple. And yeah, and then does he does he throw out a number?
No, he's like we'd love for you to to really consider. This thing would be great and then you know sort of like I'm like well look we admire everything you and apple do and have done love to find a way to work more closely together for sure, but we want to build this company and think it has a bright future and that's what we're focused on like I'm in and want to stay independent like, I'm sure.
Sure, you understand and
he said of course I do. I was an entrepreneur myself fair
enough sort of he was like, alright well in so many words. He's like you all you guys are a feature not a product, you know, we're gonna have to build our competitor and I guess I'll have to get to work on you know in so many words killing you guys wait he was
saying to you. Hey, if you're not going to work with me, then we're just going to crush you. We're going to build our own channel. We're just going to take you
down. Yeah, and here are your problems. You don't have the Opera.
System you need like Partnerships for distribution, like all these things and so because I was like in my head disagreeing with a bunch of what he was saying, but you know, and I'm just like again don't piss him off. So I'm just like, all right created this agree. But yeah, I mean the, you know that part of the conversation was over pretty quickly and he just kind of stuck around he's like so you know where you guys where you guys from and you know, I started talking about the the history of sort of the second coming of Apple.
And so I think we were lucky in that we got kind of a happy Steve meeting but I stuck around for another, you know, 30 40 minutes, but that was last time we talked.
Wow. I mean, well he passed away in 2011. But before he passed away, he did make good on his promise. I think it was his last keynote where he unveiled iCloud. Yeah, and and he named checks drop off and you probably saw that keynote. Oh,
yeah cancer.
My entire team and was your heart
pounding watching that
keynote. Yeah, it was but before that it was clear that there is definitely kind of a winter is coming Reckoning that was going to happen at some for Dropbox. Yeah, and I would say that from the moment we founded the company we were kind of always living in the shadow of whatever Google's thing would be or Apple's thing ever, you know, and then you'd hear a rumor and the Tremors of that would kind of reverberate through our
psyche.
You knew that there were a lot of big businesses in the Bay Area that that went down, right? Yeah Netscape landscape Myspace a party must have been thinking we're
next Well, we'd show those like tombstones very literally, you know on a slide in front of the
company, you know, you communicated this idea to your own employee. Yeah,
because hey, we need a focus. We need to execute. There are a lot of dead companies that were once great. It wasn't so much about Apple as much as this.
All kind of constellation of competing products. So we use those moments as a galvanizing Force to get us to really focus and execute quickly and motivate the team
and and how would you do that? I mean, I mean, I guess one of the ways to make sure that you wouldn't be buried would be to build very quickly build Partnerships like be everywhere be the go-to.
Right? Yeah, but it was clear that we were going to be moving into a new at some point with there would be a new act so
We were spreading our wings. We started building new products. We acquired a company called mailbox built a photo-sharing product called Carousel and I think we were you know, all that is to say this was sort of these are the years where I kind of had shift from being like a Founder to really being a CEO and getting good at the game. Yeah. So I remember going home for Fourth of July and I reread the book only the paranoid survive and so the book talks about this.
Of a strategic inflection point where sort of it the business is doing well, but things seem off and everybody has this moment where they they recognize that things have really changed. So for us what that meant was we have to really understand. What are we what's the value are we that we're providing to our customers and our happiest and most profitable customers are using Dropbox at work. And so we decided to go all in on on for all intensive purposes getting out of the consumer business
being focused on business clients.
Yeah being focused on business.
It's and just use addressing the the work use cases. It did mean that if pretty embarrassing moment where I'm like, oh my God all the stuff that you know, it was on stage saying is the future of the company like Carousel and mailbox and all these other things like we're just going to shoot. I'm not to shoot all
of you just going to shut these things down to focus on just shut them down
and like so many things that I had proclaimed for the future of the company were like not going to be the future of the company.
I mean, it is amazing that
Or product was kind of made for these times. Yeah, I
mean it's designed for people to share and collaborate and they don't you have to be there in person. So I have to imagine you're one of these strange positions where covid the pandemics actually been good for your business.
Yeah. I mean folks have been turning to Dropbox or distributor work since the beginning. And in fact, that was I built it not to back up my photos I built it to be able to work from anywhere. So yeah, there's a through line from the
being here, but we're thinking about okay now we're painting on a much bigger canvas, for example, the big one of the problems we all have is that our stuff is everywhere right? A lot of our work happens in Cloud tools have various forms in our content is scattered and 15 different places. And we live in a world where it's easier to search all of human knowledge than my company's knowledge, right? So there are these big opportunities hidden in plain sight that for reasons that are very similar to like why the problem for
Box in the first place was unsolved. Like there are huge challenges that are right in front of us. The landscape is always shifting. And so there's always new opportunity.
Let me let me shift an S you a more personal question. Your company is now the market caps about eight billion dollars. Yeah, and you are on not just on paper, but in reality a billionaire, what does that mean to you mean? Does it do like its kind of? Yes, definitely
not what I had in mind.
When right, you know when I was at a point in
my life, well, that's the thing most the people on the show don't set out to become billionaires. They set up to solve a problem. They know they're going to if they're before except they'll make money, but the problem you want to solve was how to seamlessly integrate files and from one pressure than x but you weren't thinking oh, you know, I'm going to live in a gilded Palace and sit in a vault full of gold coins and throw them up in the air all day.
Yeah. I was always I just remember early on the idea of
Scaling a company. It was so scary that on the money front. I was just like look as soon as the company's worth a million dollars, that would be unbelievable. Then we started getting Venture money things like they're like, okay if I have a hundred million dollars after taxes like then I'm good. I'm done Beach. Yep, they'll happily ever after and then in the process of talking to some of our Angel Investors, you know, one of them had a really successful exit and he's like the day I sold the
Company was like one of the unhappiest days of my life. Hmm. And so getting back in touch with like why you do what you do is a really challenging and important conversation to have with yourself. And for me, it was like, I love reverse engineering things. I love building things. I love I will never get tired of seeing like a Dropbox icon over someone's shoulder in a coffee shop. Yeah. I know. I'll always
look yeah, you know
I never get tired of that. And so that sense of purpose is really
important. When you think about your story and your success do you think that it has to do with how hard you worked in and your skill and your intelligence or do you put more of it in lock or how do you what Dropbox folders do you put all those things into? I
think you need you need both. So I think about it like surfing like that waves will come.
And in our case like we had we caught this tidal wave, you know, we're just sort of sitting there on our board and then oh my God, you know something were 50 feet off the ground, but inevitably that wave-like slows down and then it's like about cats and another one and another one another one. So I think there's a lock in terms of when and how any given wave shows up and where you are in your board, but then there's a lot of skill and staying on and and finding the right wave that matters a lot.
That's Drew Houston co-founder and
CEO of
Box and by the way, remember how in the early days of Dropbox true got a Facebook message from Mark Zuckerberg who is
potentially interested in acquiring the company. Well, wow that didn't happen the two stayed friends and earlier this year.
Drew was invited to become a member of Facebook's board.
Hey, thanks so much for listening to the show this week. You can subscribe wherever you get your podcast. You can also write to us at HIV T at NPR
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