
Dropbox: Startup Lessons Learned [ppt] - huangm
http://www.slideshare.net/gueste94e4c/dropbox-startup-lessons-learned-3836587
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barmstrong
Greatest insight I got out of this: offering money as a referral commission
might not be the most effective.

Here he offered additional storage which is (a) cheaper for dropbox to provide
probably and (2) closer to what users actually want.

I'm anxious to try this out on UniversityTutor.com now. I have a referral
program to try and get tutors to refer other tutors, and they get $3/month if
their referred tutor upgrades. But not many tutors upgrade. I think I'll try
out giving them free job requests for each referral instead, since the free
tutor account is limited based on how many job requests they can get. Great
insight on dropbox's part here...

~~~
10ren
I considered a $-based referral program, but it seems a bit shady to me in
that it provides a motivation to refer that is independent of the quality of
the product. A kind of moral hazard.

But if the referrer is a user themselves, and their reward is more use... then
the motivation is aligned.

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jolan
My favorite part:

VC: "There are a million cloud storage signups!"

Drew: "Do you use any of them?"

VC: "No"

Drew: "..."

~~~
tszming
What if the VC replied "Yes"?

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prabodh
may he would have asked 'is it easily usable by your grand mother?'...answer
would be a definite NO

~~~
paraschopra
And VC would have asked how big is the market for file sharing for grand
mothers..

Just joking, but I find the parallel to usable by grand mothers quite amusing!
A lot of products are usable, yet they aren't what grand mothers would use.

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theycallmemorty
My Favorite Quote: "Search is a way to harvest a market, not create it."

~~~
bryanh
I believe it was "Search is a way to harvest demand, not create it", minor
nitpicking but I picked up on it just the same.

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10ren
Drew, could you share what books you found especially useful, please?

The slides mention Steve Blank, and allude to his "4 steps to the epiphany"
and (maybe?) 37signals' "Getting Real".

~~~
maxklein
And what do you expect the books to do for you?

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10ren
You're asking me to justify reading books that are recommended by someone I
admire? Seems like such a trollish request! But I've liked some of your
comments, so I'll try to answer straightforwardly.

I often read books for information, ideas of how to approach problems, and
also for inspiration/motivation/reassurance/encouragement. That's what I hope
to get.

Now, Drew is a very clear thinker, eg in his YC application., but obviously
reading books that he's found valuable is not going to suddenly make me as
clear as him - but it might help [I actually deleted that from my original
comment because it seemed sort of irrelevant to the question].

Now, for these specific books, I've liked Steve Blank's blog, but if Drew has
followed or used that book somewhat, that would be a significant
recommendation. I have some doubts, because it seems to be a fact-driven
approach, and sometimes the facts can't be ascertained - eg customers can't
want something they can't imagine; you have to build it first and show it. (eg
The Innovator's Dilemma). Drew mentions this in _people weren't actively
looking for what we were making_ and _'I didn't realize I needed this'_
(#27,28). I also think that being too focused on specific questions can close
your mind off from serendipity. But that's just my opinion.

I have to say that what Drew has done is just so cool: a new technology-based
product that is revolutionary. The slides also have some of that magical sheen
of founder folklore. Although my last software business supports me
financially, the technology wasn't revolutionary and it didn't start a
revolution in usage. I hope my present one will be closer to it (that would be
awesome!). I do have a bit of a "fan" attitude to Drew's success; perhaps
that's why you're requesting justification.

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nopassrecover
The use of a minimum viable product that wasn't actually the product (a video)
was an awesome idea.

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gsk
"Product-market fit cures many sins of management." Great insight.

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solahere
I don't get this. How is having 4M users an achievement or success? Isn't the
real question how many of the users actually use the paid service? It's
interesting how the presentation talks nothing about that unless of course I
missed it :)

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vladocar
I love this slide: Typical Dropbox User (Hears about Dropbox from a friend
blog, etc. and tries it -> "I didn't realize I needed this" -> "it actually
works" -> Unexpectedly happy ->tell friends)

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sachinag
Here's Drew's original submission referenced in the presentation:
<http://news.ycombinator.com/item?id=8863>

~~~
revorad
Is the original screencast available anywhere? Would love to see that.

Dropbox has shown that if you build something that solves a big problem well,
you can overcome even a seemingly high barrier to entry (installing client
software).

~~~
mikeyur
<http://dl-web.dropbox.com/u/2/screencast.html>

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aerique
I assume they've done studies of the monthly subscriptions model versus buying
more storage for a single sum? Because the latter option appeals to me a lot
more.

I like their service a lot, especially since it works on Linux, Mac and
Windows but the monthly subscriptions are too expensive.

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d0m
__really __interesting presentation !! Still, one question, even thought there
are millions of users, does the majority of the profit is made from ads? And
also, it must cost a lot to give a couple of gig freely to each new users..?
How do you exactly make profit?

Thanks

~~~
jolan
I think they use Amazon S3, so their cost is 5 cents/GB of storage + bandwidth
costs. I would assume more referrals = more conversions and any conversion
should be very profitable.

~~~
pavs
I wonder if they will reach a tipping point where it will be cheaper for them
to have their own distributed hosting setup. I think Ubuntu One is doing it
right now (I haven't used it yet) <http://en.wikipedia.org/wiki/Ubuntu_One>

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MartinCron
The impression I got (at the conference yesterday) is that the dropbox guys
are extremely smart and hardworking, but there's a huge amount of luck
involved in that the timing was just perfect.

One thing that I kept thinking throughout a lot of the presentations is that
certain product/service offerings are almost inevitable. If it weren't DropBox
(or Twitter or Facebook or Google or whatever) then it would have been someone
else around the same time with something similar that fit the emergent needs
of the market. The market, in a way, designs the products by choosing which of
the thousands of new things succeed or fail.

~~~
gruseom
But I don't think there was any luck at all in how good a product they made,
and that was clearly the most important distinguishing factor.

~~~
MartinCron
High quality product. Good market fit. Smartly promoted. I am not arguing with
any of that.

If they had made the same product four years earlier or four years later, I
strongly doubt it would have been a success. Too early, the market won't "get"
it. Too late, some other product would have owned the space.

~~~
gruseom
I'm not sure I agree. Similar products (or similar-sounding, at least) had
been around for years, so much so that Joel Spolsky wrote a post ripping the
idea of file-synchronization apps as the biggest failed cliché around. The
space was regarded as saturated. So Dropbox was a late entry, not a luckily
timed one.

There's another (rather prominent) precedent, of course, for a startup
entering a space that was widely believed to be saturated and taking it over
on the basis of a simple product that just worked better. I hadn't thought of
it before now, but Dropbox kind of reminds me of them in this respect.

~~~
MartinCron
That's my point. Similar products had been around for years, those products
were launched before the market was ready for them.

~~~
gruseom
Oh, I know it's your point; it's what I disagree with. If those products were
anywhere near as good as Dropbox, Dropbox wouldn't have been able to take the
market from them.

I guess our disagreement isn't really resolvable since both positions rely on
a counterfactual: imagining what would have happened if their timing were
different, which of course it wasn't.

~~~
MartinCron
This is odd, I'm _sure_ that there are solid examples of a perfectly good
product or service failing because it was too ahead-of-its time, but I'm
drawing a blank at the moment. Ugh.

Anyway, the point I was getting at is that timing does matter, and that
DropBox was, in addition to being well-executed, was also well-timed. And that
given enough time, eventually, someone else would have come along and executed
well once the market was ready for it.

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jasonlbaptiste
@dhouston - Can you give us more insight as to why a) the affiliate program
didn't work and b) the referral program worked / what you mean by "2 sided
referral program"?

im assuming affiliate is where payment is in the form of $ and to non-users
who promoted dropbox and referral is payment of more storage on dropbox (ie-
250 mb per referral more) to actual users. Do you think a mix of the two would
have worked well ie- payment of actual $ instead of the 250mb, BUT to actual
users.

~~~
barmstrong
I was curious about the 2 side referral too, I think what it means is both the
referrer and new user get 250 MB's of additional storage.

~~~
tomjen3
If so that is a brilliant idea but it should absolutely be more prevalent of
their homepage.

I specifically didn't use their service because I think that going out to tell
people "you should use this service, it is great and free" and then profit
from it wrong (I don't have a problem with money but I want to keep my money
and friends separate).

~~~
pavs
The thing is most people would still recommend it even if there was no
incentive (I know I would), it is indeed "great and free". Come to think of
it, I didn't take advantage of the referral system yet and I have recommended
it two at least a dozen people I know.

Also I think its a very silly reason not to use Dropbox.

~~~
tomjen3
True, I should have typed I didn't use their _referal_ system, I am indeed a
happy dropbox user.

Sorry for the confusion.

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10ren
Is there video or audio of the presentation? It's easier to grasp attitudes
than just seeing the slides (good though they are).

~~~
revorad
<http://www.justin.tv/startuplessonslearned/b/262672510>

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revorad
I sure hope Drew is not on the Durant trajectory.

Great entrepreneurs like him should live on to grow up into great businessmen.

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friendstock
does anyone have a link to the actual video of the presentations at the
Startup Lessons Learned conference?

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kvogt
yep, it was on justin.tv:

<http://www.justin.tv/startuplessonslearned/b/262672510>

~~~
friendstock
thanks!

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aw3c2
Any chance for a non-login download of this? I do not use Flash and thus have
no chance of reading the slides.

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yosho
the powerpoint and the video aren't working. Anyone have an alternate host or
cached version?

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wingo
PPT link?

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huangm
Drew tweeted a link to his actual ppt: <http://bit.ly/bVOSfw>

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wingo
Thanks!

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TotlolRon
Great product and great presentation? fffff life is not fair.

(would love to learn more about the details of the 2-sided incentive)

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jolan
So sign up and see what the 2-sided incentive is... :)

<https://www.dropbox.com/referrals/NTU5ODg5ODI5>

~~~
X-Istence
Well played, extremely well played!

