About
Dropbox is the leader in cloud-based digital file storage and device-agnostic sharing/syncing. Its service enables the user to access and edit files from any device at any time. Frustrated by working from multiple computers, founder Drew Houston was inspired to create a service that would let people access their files anywhere, with no need to email attachments or share via physical media. Drew Houston and Arash Ferdowsi (Co-founder) moved to San Francisco in fall 2007, received seed funding from Y Combinator, and launched Dropbox.
Thesis
As services and products continue their relentless "march to the cloud," Dropbox is strongly positioned to both capture and accelerate this move, from individual consumers to entire enterprises. Dropbox is a very powerful platform that is disrupting the file storage space by providing a best-in-class solution for users to easily share, edit, store, and access files from any device at any time. In addition, the freemium model has proven to be extraordinarily powerful in driving user growth—and ultimately provides Dropbox a massive barrier to entry.
People
Dropbox was founded in 2007 by Drew Houston and Arash Ferdowsi. Houston graduated from MIT in 2006 with a BS in Computer Science. Prior to Dropbox, Houston founded Accolade, an online SAT prep course while still in college. Ferdowsi, also a graduate of MIT, earned his degree in 2008. Key investors include Sequoia, Accel, Benchmark, Index Ventures, IVP, Greylock and Goldman Sachs.
Key Board Members:
Management Team
- Sujay Jaswa, Head of Business Development
- Was a Principal at NEA
- Rajiv Eranki, Head of Server Engineering
- Graduate of MIT
- Rian Hunter, Head of Client Engineering
- Graduate of MIT
Product
Dropbox allows users to securely share files with other people, sync them across multiple machines, and access them from various computers and mobile devices. Once Dropbox users download the software from Dropbox.com, they can share up to 2GB of online storage for free and they can pay for up to 100GB of storage. Once users elect to backup or share a file—users can backup or share any file type—Dropbox automatically syncs that file whenever a change or update is made. Dropbox uses a "freemium" model where users get 2GB of storage for free and can get up to 100 GB of storage for $19.99/month or $199.00/year.
Potential
Dropbox has established itself as the leader in the Storage-as-a-Service market, a subset of the Cloud Computing market. According to Forrester Research, the global cloud computing market is expected to reach $241 billion in 2020 compared to $41 billion in 2010.
Megatrends
- Internet
- Knowledge
- Social
- Globalization
- Brands
- Convergence
- Free
How Big Can This Be?
With its slick technology and intuitive, super-simple smart interface, Dropbox trends ahead of Apple, Google, and Amazon in file storage and sharing. With individuals and businesses moving increasing amounts of data onto the cloud, Dropbox stands on the forefront to be the leader in this emerging megatrend.
Predictability
By employing a freemium model as a Trojan horse, Dropbox has already built a formidable economic moat around its core business. Users quickly reach their 2GB data storage limit to reach a pay-for-storage level, and given the proliferation of personal and enterprise content/data, Dropbox should continue to see rapid revenue growth even in the absence of user growth—a compelling model. Dropbox's user growth has been accelerating, currently estimated at 50 million users, up from 19 million at the end of 2010.
Risks
The company faces competition from established players in the space, as well as other well-backed startups like Box.net and SugarSync. Amazon recently announced the release of the "Cloud Drive," a cloud-based music storage and streaming service. Apple has also long been rumored to be releasing a cloud-based version of iTunes and Google is rumored to be working on developing a similar product.
