

Ask YC: YC (Dropbox) vs YC (ZumoDrive)? - startingup

Sorry for the attempt to be cute with the title :) but seriously, isn't there a substantial overlap between these two? Does it matter if two YC companies end up directly competing? As a very occasional angel, I wonder how this works ...
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mattmaroon
Due the fact that companies often evolve substantially from their original
business models, it is impossible to make a lot of investments without at some
point having clashes among your portfolios. A group that makes 40 per year
couldn't possibly avoid such a thing.

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rokhayakebe
And given the current funding climate, it would be great for such companies to
merge.

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fallentimes
Why?

Don't you think the transition period would dramatically hurt productivity?
What about clashing cultures? M&A usually fails.

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jwilliams
_M &A usually fails._

Yet a lot of YC companies will end up getting acquired.

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staunch
A big company can accept that some of its acquisitions won't work out well.
Small companies aren't as strong.

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jwilliams
So what you're saying is that when it works, the reward is enough to offset
the failures.

Given this, there is no reason startups should avoid merging simply because it
"usually fails" (as the post above was suggesting)... In fact, it's a risk in
the same league as doing a startup in the first place.

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staunch
It's enough to offset the failures for a big company if they're any good at
acquisition. For a startup the payoff has to be a heck of a lot more. The odds
of the merger going bad are higher (too many chefs) and going bad means a
total failure of both companies.

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jwilliams
I think we're debating at cross-purposes.

The original statement was along the lines of - M&A usually fail, so there is
no point in doing this for startups.

Now, maybe being a startup modifies the M&A rules in some or many ways - but I
don't think it precludes M&A as a worthwhile option.

A merger in a high risk field might be a tipping factor - might improve your
chances or getting a critical mass of users, funding, or some other key factor
- so whilst the merger is risky, it modifies the chance of success in some
critical way.

In the highly competitive field such as online storage, this kind of advantage
may well be something worth pursuing -- I'm not 100% convinced in this case,
but it does have some interesting implications.

So - totally agree - might be risky. Might be risky most of the time... But
certainly not worth dismissing.

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fallentimes
More like: they usually fail so proceed with caution

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pg
Originally they weren't competing. ZumoDrive evolved out of Versionate. Even
now there are significant differences in the way the two work. They should be
able to both succeed.

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nailer
Have you encouraged them to join? Dropbox has more customers and awareness.
Zumodrive has better technology. They'd be stronger together than apart.

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pxlpshr
Hmmm, I'd like to see a formal comparison of the two. I haven't used zumodrive
but I'm soooooo impressed with Dropbox. It's amazing.

I know this is against the grain, but Dropbox replaced SVN for our development
projects. It's a lot easier for designers to use... SVN is too tedious.

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andreyf
_I haven't used zumodrive but I'm soooooo impressed with Dropbox._

One fundamental difference is that Dropbox syncs things between drives and
cloud. Zumodrive only uses your local machine as cache. The difference is when
you have 20 gigs in the service, a Zumodrive doesn't actually use up any of
your HD space. On the other hand, you don't have to be connected to the
internet to see/edit your Dropbox files, only to sync.

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sunilbhargava
While is it true that Zumodrive by default uses local storage as a cache, if
you have enough space you can set it to keep everything local.

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qhoxie
I believe that PG has said in the past that YC has no problem investing in
companies within the same market. If they are promising enough and the market
is sufficiently large, it won't be an issue.

The storage market with these two companies seems like a pretty good example.

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perezd
I'd like to know the answer to this too, I feel like there are a ton of viable
options out there now, but I am waiting to see who stands out as defacto.

The ZumoDrive/iTunes integration is truly innovative, though. Majorly cool!

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whalesalad
ZumoDrive turned me off instantly with their horrible Mac offering. I like the
idea, but Dropbox actually has a real nice client on Mac.

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keevon
I'm curious what it is you don't like about the ZumoDrive Mac client.

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Dilpil
Nothing wrong with diversification. If it is good for the economy at large to
have so many competing smaller entities, then perhaps it is good for an
individual fund to have stakes in many competing smaller entities as well.

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Rabidmonkey1
I would love to see ZumoDrive support Linux. I've recently adopted Linux
pretty much full time, and the Dropbox client for it is great; it really
offers seamless integration.

Does anyone know if ZumoDrive plans to offer Linux support in the future? I
have a huge flac library I'd love to be able to stream to my lower storage
laptop. Heck, I'd store a ton of stuff in the cloud.

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davidz
We are looking to support Linux soon :)

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crad
ZumoDrive is notably down right now.

500 - Internal Server Error Oops, something went wrong on the server. We'll
investigate this ASAP. In the mean time, click here to go to our home page.

On every page :-(

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crad
It's back now :)

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alaskamiller
I own AMD and Intel stock.

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shergill
Cloud living is pretty expensive :(

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ajkirwin
Dropbox.

