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How two strangers set up Dropbox and made billions (bbc.co.uk)
191 points by scriptstar on July 16, 2018 | hide | past | favorite | 127 comments



When Google Drive and iCloud and One Drive all cropped up, copying the same service with the addition of deeper integration into different devices and software, I was worried Dropbox would be unable to compete. But they've hung in there, and I remain a happy customer.


What kind of deeper integration do you find useful in those competing services?

For me, I found OneDrive being automatically installed on windows and nagging me to sign on too intrusive. Windows setting the default Document folder to onedrive would be convenient if I hadn't already signed up to dropbox, but it's just annoying if I don't have Onedrive. I like the fact that Dropbox isn't part of google or microsoft, which already have a lot of my info in their email services.


Co-Authoring


Out of curiousity, what does Dropbox do for you that they don't? Have you stayed because of price, service, features, laziness to switch? :)

I personally don't have many storage needs so I just email myself important files, back up some things to USB, and sometimes will add things to Google Drive


Google Drive is like "I guess you can use the desktop client instead of the web one". One Drive is like "I guess you can use a Mac". iCloud is like "I guess you can have non-Apple devices". Dropbox just syncs your files from and to anything you have, equally well. I'm pretty sure none of the others even have a Linux client at all, but Dropbox does.


Yeah, this is really it. Dropbox just let's you use it they way you want, because they have no larger agenda than letting you share your files with yourself.


For Google Drive, even if not an official client I find that Gnome's Nautilus integration works extremely well and without friction (it's treated like an external storage) for the random file I could need to share with another device...


Except smart sync only works on mac and windows. Linux is a second class citizen.

I’d sign up for Dropbox if they had feature parity on Linux.

Also a plan in the $5 range would be greatly preferred. My threshold for moderately helpful services is usually $5/Mo.


> Also a plan in the $5 range would be greatly preferred. My threshold for moderately helpful services is usually $5/Mo.

Very much this. I was using Dropbox, and the 2 gig free plan wasn't enough, but I sure as hell didn't need a whopping 1 TB, so I switched to Google Drive. The 15 gig free plan is enough for me, and I can rest easy knowing that if I end up needing only a little more, I can get 100 gig for $2.

That said, I definitely preferred Dropbox's client more. Google Drive for some reason is frequently showing an X on it's sync folder indicating it isn't syncing even though it's working fine. Google Drive's client also seems to be really slow to start.


I'm not sure what you mean by "smart sync", but selective sync does work on Linux last I checked (a few months ago)


https://www.dropbox.com/smartsync

No, it’s not the same thing and no, it does not work on Linux.


I believe Linux also has a headless/command-line-only client, which is pretty freakin sweet


Along with that, there seem to be more useful integrations with dropbox, than with other services.


Well said.


I've mainly stayed because I don't want to support the mega-corporations when there's a smaller ($12bn counts as "smaller" these days...) company doing a fine job. That aside, I appreciate that they've mostly stayed focused on the core task of syncing files between computers, that there's no bias in terms of devices or OSes, and that their client software tends to work just a little bit better than the competition.


Thank you for your quick and honest reply!

I fancy myself as someone who supports "the little guy", and the Dropbox team's story is an example of how "the big guys" totally and completely fell asleep in a pool of their own money while Dropbox built something that people wanted before other bigger players.

I therefore find it ironic that I don't support them with even just a little bit of money per month, when a big portion of the pitch for the job I currently work and the small project is "but we're different because we're smaller and therefore client focused!"

I hope everyone can reflect on who their money supports. But I'll tell you two large corporations I'm very happy to support: Bozzuto, my apartment company, and Bank of America, my bank.

I would never trust a small landlord to take care of me for the right price (I've been burned so many times by private owners). And well, I store my money in a place that is FDIC and regulated... Ok I have a credit union too :)


Why do you like B of A?


Before they introduced Zelle, it was a free and relatively trustworthy way for me to exchange money with no fee between most of my friends. It just so happened we all had B of A.

In addition to that, their fraud resolution department has always been nice to me and their branches are nearby my house if I'm ever required to go in there. Still, right now, I trust my credit union more. But, my credit union wasn't founded by "two dudes" like Dropbox was, is the analogy I'm trying to make here.

Corporations I trust with my business - BOA, Google, LG, Walmart

Corporations I don't trust with my business - Comcast, Chipotle, McDonalds

"Two Guys" I trust with my business- My local mechanic, my local electrician (it took years of searching and relationship building).


I can’t see myself paying $10/month for Dropbox when I can get Office365 for the same price with 1tb apiece for up to five users, plus office for 5 computers, and 5 iPads.


There are lots of things wrong with OneDrive which is what you will be using. Off the top of my head: no delta sync; no LAN sync. End result was that every single file change will result in your the entire file being uploaded to the web and your ENTIRE team downloading it again ... Can't remember the others, but it was enough for me to continue with DropBox despite the rising cost when recently compared to OneDrive.


We use OneDrive at work and I think it's awful.

My biggest complaint is how slow syncing is some times. I have a desktop and laptop at work and I can save something in my OneDrive folder on my desktop and it'll take over an hour for it to appear on my laptop unless I manually pause syncing and then unpause it to force a refresh from the OneDrive server.

I've never had that with Dropbox. It's been damn near instant every time.


I can't use onedrive due it's lack of a Linux client. There are thirdparty ones available, but upstream API changes have caused data corruptions so I don't trust it as my main driver anymore.


The equivalent Dropbox plan is also 1TB. I personally don't ever use Office so for me that element of it is not a benefit.


How many large businesses do either use MS Office or Google’s enterprise offerings?

Dropbox will gladly take money from consumers but the money is in the Enterprise and that’s what they are chasing.


Right, and that's where they have a competitive disadvantage. They did launch Paper which is pretty neat, and they've done some partnering, but I could understand a business not using them for that reason.

https://techcrunch.com/2018/03/01/dropbox-to-add-native-g-su...


Can I ask why syncing files between computers if a useful thing for you? I'm on the verge of cancelling my Dropbox account since I realized the Dropbox account is not useful as an external drive, but only as a syncing tool. To me that's not worth anything bit I'm curious what use the happy customers have for it.


Saving everything into Dropbox is just so incredibly easier than trying to manage and keep track of and not damage an external drive.


Storage is cheap enough these days that each of my computers has more HDD space than I need for my whole Dropbox, so I don't have a need for a "true" external drive. I primarily use it as a backup and secondarily use it to sync across machines. Every file of importance lives in my Dropbox directory, so when I'm working on a project or something I don't even have to think about backups. If my apartment building burned down or all my drives simultaneously died, I wouldn't lose any data. And if I ever need to glance at some file away from home I can always do so.


For backups I understand. What I'm curious about is what is your setup that involves multiple computers. Is it one personal computer and one at work? Do you have multiple personal computers for some reason? Just curious about usage patterns that differ from my own.


I have a Windows/Linux desktop and a Macbook, both personal. Also and Android phone. If you truly have ample storage you can also use Dropbox as a way of syncing between OSes on the same machine, in a VM or on separate partitions. Duplicates a bunch of data, but you don't have to mess with mounting and differing file systems and everything.


Thanks, I hadn't thought of using Dropbox as a file sync between different OSes on the same machine.


Good comment. Dropbox is like how companies used to be: offer an amazing service and stay in your lane.

These days, I wouldn't be surprised if Google sent me an email that said: Hey Widgetco, become a Certified Ad Partner to join our Managed Preferred Storage Solution or else your files on our legacy system will be deleted when it is deprecated in 24 hours. Also please fill out this Google Form (Google.com Account required; get one, it's easy!) and in this Google Form please tell us more about your company, including: how many employees do you have, what is in your product pipeline. Also would you like an investment from GV? No? You have violated our Terms of Service!

(Two weeks later)

We're proud to announce Widgety by Google, launching today!

(Nine weeks later)

Widgetco's website doesn't adhere to Chrome's latest Super Safeweb standards.


Haha, this is extremely true. I endeavor to keep my needs so small that I'm never in the crosshairs of BigCo's "PLATINUM PARTNER NETWORK (TM)". That's a Kafka-esque place to be!


I used Dropbox in the early days because of the ability to place a file in your public folder and allow others to download a copy of that file using a standard URL.

You could share a file with your colleagues by simply emailing a URL to the file. No other service was as straightforward at the time.

When that feature was later removed, I stopped using Dropbox.


(Used to work there; haven't in several years.)

Such a feature was a pretty bad phishing and social engineering vector, particularly when you could render html out of that folder, but even when html was dropped that there were social engineering attacks a bad actor could pull relying on the user's trust of a dropbox url. You could also guess other files in the public folder based on the url, which was a privacy concern.

Multiple years before support was dropped, shared links were added, which fix these concerns. You can set ?dl=1 to get a raw link. `curl/wget` (set to follow redirects) still get you the raw contents even if you don't set ?dl=1.


They removed the public folder but you can still share a file(s) via url via their website.


The Dropbox client still syncs files much faster than the competitors.


Tell me about it. Google Backup and Sync is a horrendous mess, taking several hours just to start syncing every time the sync engine is relaunched.


Really? And I thought Dropbox was slow. I find myself asking what's the point of gigabit internet when I haven't found a service that users more than 50Mb.


I had the same Dropbox slowness. On Google drive I see speeds around 400 megabits over my gigabit fiber.


Gigabit Internet is largely pointless for home use. Unless you have a Mormon family all watching different 4K shows at the same time or something.


Seriously.

I have a 30 mbit fiber connection. The only time I ever notice is when I'm downloading a new game. Otherwise, my wife can be watching Netflix while I'm gaming and there's no difference in my latency.


Sounds like you're asking the right questions


I use both Dropbox and Google Drive, and the in-OS integration is a killer feature for me. The ability to just drag and drop into a normal folder (or work from a folder) and have those changes sync is great. I use Google Drive mainly for Docs and collaboration on those documents, not really for other files (due to the "manual" upload process, just a little bit more work to do).


Having used Dropbox and then switched to Google Drive, what had me coming back to Dropbox was how much Dropbox is used for sharing than Google drive.

Because of the rapid growth of Dropbox specifically in regards to sharing it's still used for that so it continues to increase the funnel and reactivate customers, while Google Drive feels more like a personal storage system.

That could be one large factor.


Google Drive lost some of my files due to syncing errors early on. Dropbox didn't.

Google Drive might have improved since (and I do use Google Apps for email and documents), but I haven't been able to forget that experience and trust Dropbox.


It's a texbook case of:

- It's good enough

- It just works

It solves the problem of sharing files across different devices and does it with no fuss.

I have tried alternatives such as Google Drive and Onedrive and changing terms (looking at you Microsoft), incompatibilities, clunky interfaces always made me drop them.


They wouldn’t grow if they were just good enough, but they happen to be better at what they do and that’s why I use it. Google drive and google anything seems to eat all memory you throw at it, and it could be shut down or changed anytime. iCloud is nice, but doesn’t have sharing options otherwise I would have migrated it all to iCloud.


I like Dropbox but I think they now focus more on enterprise and forgot individual users which led them to where they are today.

First is the price. If you need more space than the free option provides, the cheapest upgrade is $100/year. The competition is about $25/year. The $100 doesn't even contain basic features like full text search when searching your Dropbox folder in the browser. You need to pay more for that. I'm sure most companies don't mind paying the extra cost for a better service, but individual users are much more likely to go with the significantly cheaper option even if that means inferior product.

I totally understand that for the big tech companies it's easier to lower prices and even lose money to gain market share. Dropbox will need to find a way to fight back.


Individual users are definitely no longer their focus, and it makes sense why.

You could see their individual focus for a long time (ex. developing Mailbox and Carousel) and in an ideal (and theoretical) world, it sounds wonderful to have a consumer-SaaS company focused on delivering amazing software to the masses and making money directly from it. But at the end of the day, you can't ignore the real world and the messy side of business.

I (and I'm sure a big chunk of the HN population) would love to support a company like this, but there just aren't enough of us. Drew & team probably found out how difficult getting people to pay for stuff (especially productivity software) really is.

This enterprise shift is necessary for Dropbox's survival.


Annecdata, but I would gladly pay iff they were a zero-knowledge company (they should never see cleartext), but they aren't and I must assume that will limit enterprise adoption as well.

I have _literally_ looked for an alternative for more than a decade, but nobody can touch Dropbox on a really wide range of metrics and the trend amount competitors seems to move away from the hyper-simple file system abstraction.

I think I have tried most commercial options and practically all open source alternatives. I had high hopes for Syncthing, but I found high load and erratic syncing (was testing with 320 GB). Also no iOS client and no partial sync :(


Regular paying user here. I agree that it's overpriced. They need to fight back on features. They'll never win on price alone.


The fact that they were strangers is super surprising, especially given how YC seems to discourage that kind of "founder dating", suggesting instead you found companies only with people you trust deeply.


OTOH, the fact that dhouston was able to convince a current MIT student and otherwise total stranger to drop out and follow him on this journey in just a few hours' conversation is telling of both his and the product's prowess.


That narrative doesn't quite align with the article stating that "for various reasons none of his friends were able to join the business." In retrospect all of Houston's friends made a huge mistake! Maybe Ferdowsi was tired of MIT and joined him on a lark? I am curious to hear the story from his perspective.


Ferdowsi says joining was like scratching an itch here.[0] I've heard from alumni he spent a lot of time coding in his room, like more than average compared to your friendly neighborhood MIT student; I can imagine the prospect of high-risk, high-reward coding for 18 hours/day was very appealing.

[0] https://medium.com/the-story-of-grip/how-two-guys-that-barel...


from the article (medium, not BBC)

"The pair worked tirelessly for three months in a cramped office in Cambridge, waking up everyday at noon and working till dawn the next day. “I think we started like most of these tech companies begin. Just a couple of guys in their boxers coding in a dark room,” Houston says. “We just kept our heads down and built.”"


Yeah but the thing YC discourages even more than that is solo founders.


I love my Dropbox. Except one thing. They still don't support SmartSync on their Linux client.

For all the people that commend Dropbox for supporting Linux, they now treat the Linux client as inferior.

To add insult to injury, they promote the SmartSync feature inside the preferences of the Linux client.


It might not be as good as its windows and macOS counter part, but it’s much better than other vendor’s Linux clients.

The sheer fragmentation of Linux space makes something as complicated as smart sync not a very financially viable product to support.



There is so much gold in that link, thank you!

A random pick: "The concept that I'm most excited about is that the core technology in Dropbox -- continuous efficient sync with compression and binary diffs"

* Andrew Tridgell of course created rsync (which is referenced elsewhere) and pioneered the binary delta model which has inspired so much progress. Dropbox's sync in clearly directly influenced by this. Outstanding achievement!

* "efficient sync with compression and binary diffs" is key here but astonishingly appears to be a secondary concern for many (most?) competitors which is why they su^H^Haren't as good.


Slightly off topic, but I discovered the other day that shared folders count towards the disk quota for each account it's shared to.

I had several GB of photos shared with me on Dropbox, and it blew right over my free limit, despite the fact that none of them were actually mine. The photos also count towards the quota of the account sharing with me.

That's soured me quite a lot on Dropbox.


You can leave shared folders if you don't want it to take up your space. Just ask the owner to make the folder public and share the link with you and you can view the pictures in the browser or download the folder as a zip and keep a snapshot of the folder locally. Seems reasonable to me.

If they didn't have this limitation, I would 100% have made tens of accounts and shared folders across all of them owned by just one of them, each device running a different dropbox account, effectively quadrupling my space for free.


That's probably done to prevent people from creating many free accounts and sharing folders with each other to simulate having more storage space.


I have a big archive of family photos (130 GB and growing) that I’d like to share with my wife in read-only mode.

She only needs Dropbox for a bunch of documents, so paying an extra €10 per month is not something we can do.

Dropbox is a fairly expensive service. I’ve used it for years however I can no longer defend my choice.

Extended versioning is gone. Expiring sharing links are gone from Plus, so I have to pay €20 per month for it ... yes they grandfathered old accounts, however I made the mistake of trying out Pro and their Support refused to reinstate my old Plus account.

Want to search your documents? Pay €20 for Pro. Which wouldn’t be bad, except that their search is terrible. And I could not get their support to admit that they aren’t indexing all my documents.

Just to get an idea, they aren’t indexing all PDFs (that Google Drive is indexing just fine) and they aren’t indexing text files with a .log extension either. A comparison with Google Drive isn’t even funny as GDrive does text recognition on images, indexing everything.

Speaking of Dropbox’s support, I’ve never been more frustrated in my life as the only issue they’ve ever solved for me was a refund, which they had to provide by law due to me being an EU citizen.

All in all, I ended up paying €20 per month for link sharing I had in Plus, broken full text indexing and piss poor support.

Also they keep pushing collaboration features but I wonder for whom. I don’t think they’ve thought this through. If Dropbox is no longer a good place to keep my photos then it stops being a good service for sharing work items with colleagues.

Do they hope for Dropbox to become a service imposed by management? Probably, however in that space they are competing with the likes of GSuite and we already have GSuite for email. And Extending that to the Business edition that gives you Unlimited space is much cheaper than going with Dropbox.

I’ll grant that Dropbox’s desktop sync is the best in business. But I can deal with the warts of the others.


I had sort of the same issues as you and ended up with OneDrive because other family members needed Office.

In Australia you can often find 1 year x 5 accounts (1TB Onedrive space, Office, Skype minutes) for ~$70.


10 or 20 a month is completely reasonable for what you need...


Maybe a good idea to comb through your photo archive and delete the bad shots. I do that once a month and it helps a lot.


Google Drive seems to have done this right — the file only counts towards the storage quota of the creator/"owner" of the file.

That particular approach does have some other issues though.


What is wrong about Google Drive is that they count your email and drive storage in same quota. Few months ago, I exceeded my quota on Drive, and Gmail started giving me warning that I am running out of space, and will stop receiving emails if I do not upgrade, or free-up space.


What is wrong about it? Would you prefer to have 2 GB shared quota, or separate quota of 1 GB each? With shared quota you have more flexibility as to what service you prefer to use more.


Email is a critical service. Loosing emails because a misclick or uploaded a too big of file is not acceptable UX.


In that case, aren't you arguing that quotas shouldn't be placed on email at all? It's not like they instantly block receipt of mail if you go over the quota, you have time to fix it, which is much better than many mail services.


Not really, a gigabyte goes a long way for email and if you get a warning with 200 MB left or something you have lots of time to act on it.

In contrast to a video recorded even by phones today a gigabyte is consumed in no time. Accidentally (without realizing how big it is or how much quota you have left) uploading a short clip is not something you put a lot of thought into.

It's not like they instantly block receipt of mail [...]

Well true, but it sucks having to rely on googles good will for that, you don't know the hard limits and they can change at any time without notice. It is still unacceptable UX.


I once was over the quota for over two months in a row, and still had no problems sending and receiving email. So I think Google does understand that email is critical service :)


True; however, this bad behavior could be easily countered with a very simple algorithm. Dropbox could do better here.


Exact same thing happened to me and it was the last time I ever use Dropbox. Product experience was a barrage of growth hacking

I can imagine their investor deck. “62% of people are total chumps, that’s our target market”


Just curious, what do you mean by growth hacking in this case?


Can't speak for the parent comment. However I can relate. Today I installed Dropbox for my grandfather and their default entry-level free account comes with 2GB, but as soon as you create your account and install the software, they offer to give you 25GB of free space if you add 1 file to your account and you install Dropbox on your mobile.

Not sure if that helps them artificially boost their numbers (by claiming more installed devices), or if they try to get your contacts to get more accounts.


Without being overly familiar with that specific tactic, on the surface I think it is actually much more benign.

Incentivizing users to add their first file and install it on their phone (where it will likely want to slurp up photos, videos, etc. to back them up there) isn't a bad thing IMHO. It drives immediate engagement with the core product experience, and I'd be shocked if they didn't have data saying that people who upload at least one file and have the app installed on their phone convert to paid at some rate above people who don't. Thus, by incentivizing that behavior, they can likely boost conversion rates AND make users happier by getting more familiar with the service. Sounds like a win-win scenario to me. I wonder how many users sign up but don't ever use Dropbox.


I found it an interesting approach to an incentivised tutorial of sorts it's very easy to install Dropbox on your desktop and just forget that it's there. By offering you free storage space by introducing you to features, such as their mobile app, sharing, etc, they're making you curious and interested in what else they have to offer you.

You could call it growth hacking I guess. I think it's an interesting alternative to idk, a weekly "did you know that?" e-mail (e.g. Evernote) or a tooltips-driven tutorial, or Clippy.


> or Clippy

They should have a Droppy though


In case anyone's looking to participate in this promotion, note that the 25GB space is only valid for one year. [1] I looked it up because 25GB is more space than the quota of my years-old free account which has participated in a bunch of promotions.

[1] https://www.dropbox.com/help/space/25gb-promotion


I don't know how you got 25GB. I just created an account, and it only gave me 2GB. Care to elaborate?


I used Dropbox from 2009 through last month or so. Switched over to Syncthing. I was a little bit worried about stability but soon after I sampled it I felt convinced that it was the right move. I was previously using Dropbox as a kind of makeshift backup as well as a sync tool, but now I have a desktop again and run automated backups on that using Backblaze, so I'm a little bit more in control over the data by doing my own syncing.


Somewhat related, ive been a very happy resilio sync user since it was launched as bittorrent sync. I have similar backups -- it backs up to my 2 personal computers, and one of those is backing up to backblaze. My (nontechnical) wife is happy with this for storing all her phone and camera pictures.


My current Dropbox set-up: three hard drives, two of which are SSDs, each of which have a different OS (Windows and Linux respectively) and one really big HDD with NTFS to share data between the two of them. Which also is the Dropbox folder. In practice I only reboot to Windows to defragment the NTFS drive drive, but sometimes it's useful for develpoment.

Makes it quite easy to migrate to a new computer, or do a fresh install if I want to clean up the OS.

The only hassle is that Dropbox doesn't let you link an already existing Dropbox folder in Linux. Which is fixed by renaming the folder, "creating" a new one, moving all hidden files to the renamed folder and renaming it back.

I'm considering moving to another service, but it's just so convenient and the price is OK.


> ...as he sat down in his seat, Mr Houston realised that he had forgotten the memory stick that contained all the files. "I was so frustrated because I felt like this kept happening," he says. "I never wanted to have the problem again, so having nothing else to do... I started writing some code [to find a solution], having no idea what it would become." What Mr Houston came up with was the idea for Dropbox - remote storage that users can access online wherever they may be. Within two weeks he had created the prototype, and come up with the name.

Funny. I (and I guess countless people before) would have come up with a remote login via dyndns to my home computer or using ftp to some server. The idea of dropbox seems so obvious in hindsight but we were all blind.


When Dropbox was first demonstrated on HN, people made very similar comments.

[1] https://news.ycombinator.com/item?id=8863


I wouldn't say obvious. The reason you and I would have engineered the kinds of solutions you described (albeit I'd use HTTP(S) rather than FTP(S) because FTP needs to die) is because we would have designed something that didn't require installing additional software on the client machine (I mean other than what you'd normally expect on said machines).

Dropbox was originally scorned on HN because they took a different approach yet history has now proven they had a good idea.

So I wouldn't say it was obvious at all.


After watching the popular opionion about Dropbox for most of its early years, that it was a product (or worse just a feature) and not a sustainable independent company/business, I'm always glad to see them continuing to grow and thrive. Hats off to Drew and the Dropbox team.


Did anyone ever figure out what came of bringing a Bush cabinet member on board? Contract for mining data for NSA/FBI?


I'd forgotten all about this ...

I'm surprised she's still there: https://www.dropbox.com/about

and this page still exists: http://www.drop-dropbox.com

I have to say, I've not heard any mention of her in relation to dropbox since she was appointed tho'.


I once used a variety of services, but now use Dropbox (free version) exclusively. It does what I need and I prefer their privacy based model (in comparison to other set-it-and-forget-it solutions).


I wonder how those friends who turned him down feel. That would an interesting article to write. I am sure they are mostly super successful, but would still make an interesting article to read.


I think there is still space for open source on premise competitor. I don't trust Dropbox or other services, but I'd love to run something like this myself for full control.


How many schools allow you to recontinue your education again if you drop out to start a company but it fails?

Seems like if I had this option I would have dropped out at least once.


Some remote universities, I guess.

I'm studying a MCompSci for 7 years now and it only costs me 11€ when I don't do any courses in a semester.

I got all courses done, just need time for the thesis, hehe


Is your university remote? Can you provide a link by chance?



OffTopic: How did this story get let through when I submitted the same story with the same url ten hours before? Should the second submission have been caught?


is anyone else surprised he was able to build a prototype in two weeks? what technology did it use?


I for one no longer trust Dropbox to behave on my computer after this https://news.ycombinator.com/item?id=12463338


They now have a kernel extension as part of their app, supposedly to stop people from dragging files out of shared folders.


That’s even worse.


I noticed the word "profit" doesn't appear anywhere in the article. Will Dropbox ever make money?


Also, will they ever encrypt files on the client side?

(Hey, it's been only nine or ten years evading that question ...)


For every user wanting client-side encryption so that Dropbox can't see the content of the files you're storing, there's another user wanting server-side text searching, which isn't possible with client-side encryption.

The answer, of course, is to make client-side encryption an option.


This is the wrong question to ask about a company that still has growth potential.

If there is still potential for growth, it is irrational to declare profits; by doing so you're foregoing the opportunity for bigger revenues (and gross profits) in the future and leaving the way open for a hungrier competitor.

It's a valid question to ask whether they could be profitable if they ceased all investment in growth, and I would encourage you to explore that question. They're a listed company so their financials are public.

FWIW their share price is above the IPO price, so the markets seem comfortable.


>> If there is still potential for growth, it is irrational to declare profits; by doing so you're foregoing the opportunity for bigger revenues (and gross profits) in the future and leaving the way open for a hungrier competitor.

Dropbox, being a public traded company, must declare their financials. If they wanted to keep their financials a secret, they should have stayed private.

However, I don't get why you see growth (or potential growth) is tied to profit declaration. Can you explain a bit more? TIA.


Assume growth costs money.

If people believe there's room for growth, then earning profit implies you're wasting money. The money kept as profit could have been spent on growth. Money spent on growth is not included in profits.

To put it another way...

If you have a factory and produce 10,000 widgets that cost $10 to make and you sell them all for $100 each, then you've made $900,000. But if you spend all $900,000 on factory expansion because you know there's a demand for at least 1 million widgets, then you've made $0 in profit.

These numbers cause constant bickering when it comes to stocks. When people were talking about Amazon not being profitable, it's really because all the money they made was being re-invested back into the company.

People make noise about Tesla not being profitable, claiming it's stock is extremely overvalued. Well, if they completely eliminated R&D, stopped trying to improve batteries, automation, self-driving capabilities, etc., they'd probably be quite profitable.

Hence why people claim you shouldn't be declaring profits if there's still growth potential. If you're a publicly traded company, yeah your finances are declared publicly, but in this case, "declaring profits" means that your financial reports should be showing very little profit. If you're showing profit, it means growth is being limited.


Pulling out of a nosedive is a neat trick at an airshow, but it's less fun when the plane slams into the ground. Maybe you think Dropbox is on a trajectory to turn a profit, but we won't know for a few more quarters. It also remains to be seen how resilient their business might be against macroeconomic downturns.


Such determination to sneer!

Dropbox is not in any kind of nosedive. They have positive free cash flow margins that have grown steadily for three years [1]. That is precisely the opposite of a nosedive.

You'd have a point if we were talking about Uber, but we're not, we're talking about Dropbox, a company that has solid and improving financials, which is why it's trading at a healthy premium on its IPO price.

[1] https://medium.com/@alexfclayton/dropbox-ipo-s-1-breakdown-3...


Exactly. It kills me that the definition of a successful company is rarely - being able to deliver a product profitably.


They provided a spreadsheet on their investor relations page: https://dropbox.gcs-web.com/static-files/105a910a-1026-4056-...

Losses last three years are: ~300m, ~200m, ~100m.

They are going to be profitable by 2020 and their margin is growing, so I don't get this negativity.


They can predict a lot of things. But in the B2B market, they are competing with much larger companies that can offer the same amount of storage plus a lot more - Google and Microsoft.

In the consumer market, they are competing with Google, Microsoft, and Apple.

Would you really want to compete against the three most valuable companies in the US where as Steve Jobs said “you’re not a product you’re a feature”?


This is the kind of dismissal people make when there's nothing left of substance to criticize about a company. But it's an empty dismissal - see my comment above: https://news.ycombinator.com/item?id=17548438


Would you also say the same about Uber? Neither company has proven that there is a demand for their product once they set a price where they can make a profit.


This is false in Dropbox's case:

While on a GAAP basis, Dropbox is losing money, the company generated $0.18 of non-GAAP earnings per share in 2017, an incredible feat for a software business of their size and growth.

Their GAAP operating margin was (10)% in 2017, but the non-GAAP margin was 5%. Their free cash flow margin has been improving dramatically over the past few years, and was at 28% in 2017, up from 16% in 2016 and (11)% in 2015. [1]

I wouldn't say the same thing about Uber, because they seem to have a negative operating margin, unlike Dropbox.

This is the whole point. Anyone can look at the final result and sneer "unprofitable", but it's meaningless without actually looking at the figures and understanding what their cashflows are.

[1] https://medium.com/@alexfclayton/dropbox-ipo-s-1-breakdown-3...


Still fathoms me that Dropbox is worth billions of $ for the same functionality as FTP.


And that’s exactly why they’re billionaires and you probably aren’t. It isn’t about functionality, it’s about ease of use. It’s the same argument used when MS-DOS was being replaced by the GUI.

Explain FTP to your Aunt Edna. Get FTP working where everything on all devices is in sync automatically. Comment on a file via FTP. Send a link to a file they can consume on a mobile device — including playing audio or video without downloading the file. Create access lists for folders.

Sure you could do it using FTP. Now do it cheaply at scale and make it work everywhere and then convince your non tech friends to use it.

Why bother with GPS when we could all use a map and compass? Dropbox made file syncing accessible to everyone cheaply and securely.


Oh boy, someone believes in the startup myth.

A massive part of the success of such startups are connections, connections, connections.

The product itself doesn't matter that much, considering all the pivoting. Nor does making a profit, considering all the startups still burning VC money.

Yes, there is certainly an amount of skill necessary, but the scrappy startup that suceeds against all odds is a fairytale. Luck, connections and moral flexibility play an equally or more important part.


Except of course, that heard about DRopbox when it first launched, tried the free plan, thought 'this is a really cool product' and introduced it to all my friends. Dropbox hasn't pivoted much, and I knew nothing about their connections.

It was a scrappy start up with a good product.


That is a genius reply. This should be what people think every time they say no to a new idea with "put isn't this just xxxx, but a little simpler?". A little simpler can be very broad and Dropbox has done just what the founder envisioned - made a web-based flash drive.


I was joking to myself earlier today that "All you gotta do is..." is an alias for "I have not thought about it, and I'm encouraging you to do the same."


I know, right? Why would I want a directory that transparently keeps files in sync with multiple devices?

I'd much rather set up an FTP server, manually download my files, make changes, then re-upload, then manually download the new versions onto my other devices!

When you think back, cars were a silly invention. They have the same functionality as a horse-drawn wagon!




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