

Dropbox: The Inside Story Of Tech's Hottest Startup - blurpin
http://www.forbes.com/sites/victoriabarret/2011/10/18/dropbox-the-inside-story-of-techs-hottest-startup/
Jobs tried to buy Dropbox, from Forbes profile of Dropbox and cofounder Drew Houston
======
pg
Drew's case shows how hard it is to generalize. We're generally reluctant to
fund single founders. And yet the most successful startup we've funded had a
single founder at the time he applied:

<http://dl.dropbox.com/u/27532820/app.html>

We strongly encouraged Drew to get a cofounder, and he found Arash before the
summer 2007 cycle began. Arash turned out to be the perfect cofounder. So
Dropbox is pretty much the best case scenario for a single founder applying to
YC. And the variation in startup outcomes is so great that even though we have
such a large data set, the best single founder outcome is so far better than
any of the multiple founder outcomes.

This is why one of our rules is that we'll break any of our rules.

~~~
0x12
That application is a joy to read.

One answer stands out for me, it probably was instrumental in the eventual
success for dropbox:

    
    
      # Do any founders have other commitments between June and August 2007 inclusive?  
      > No; I've given notice at Bit9 to work on this full time regardless of YC funding.
    

That's really great. Drew had already decided to push ahead, with or without
YC, he basically positioned himself to negotiate from strength, in turn
increasing his chances of getting funded by YC.

That's showing a lot of business savvy there. Instead of coming 'cap in hand'
he's telling YC: "If you want on board you may, but the train will run
regardless."

~~~
pg
That does count for a lot with us. It's surprising how many of the groups who
apply have a cofounder who's not willing to quit his or her job. It's a
worrying sign when someone who knows the company a lot better than we do isn't
willing to bet on it. But again, there are always exceptions.

------
dr_
Jobs never changed his interpretation of things. He did in fact feel cloud
storage was a feature and not a product, and that's exactly what iCloud is.
For Apple it's a feature that will hopefully tie people in to their iOS
devices. And with the likelihood that over time they will offer greater
amounts of storage for free or a minimum payment, that's not good for Dropbox.
I like Dropbox, I use it almost daily. But so far I've never actually paid for
it. Same, so far, with iCloud. To Apple, this would be largely irrelevant, but
for Dropbox, that's not so great.

~~~
0x12
What is the difference between you not paying apple or you not paying dropbox?

The upside for dropbox is you commenting here that you are using them and that
their free tier is usable, so you are effectively a part of their marketing
arm.

If you really get utility out of dropbox then it is in your best interest that
they continue to exist. Sooner or later that might translate into you pulling
your wallet.

Freemium offerings are predicated on statistics and dropbox seems to be doing
just fine in spite of the freeloading nature of some of their customers.

~~~
dr_
There is no difference to me, there isn't much difference to Apple but there
is to dropbox - their business is dependent on users paying for cloud storage.
The problem with that, as I see it, is that in the longer run cloud storage
becomes a commodity. Hence Jobs' description of it as a feature, instead of a
product.

~~~
0x12
Access is also a commodity. That doesn't stop ISPs the world over from making
a killing on it.

Yes, it is a feature if you've already got an OS and a bunch of devices out
there.

But it is a product if you can do this seamlessly across _all_ os's, and all
devices.

Both perspectives are equally valid in this case. In the end to the DropBox
guys their product vision was worth more to them than Jobs' feature vision
allowed him to pay for it.

Time will tell if that was the right decision, for either party.

------
simplekoala
_"Jobs had been tracking a young software developer named Drew Houston, who
blasted his way onto Apple’s radar screen when he reverse-engineered Apple’s
file system so that his startup’s logo, an unfolding box, appeared elegantly
tucked inside. Not even an Apple SWAT team had been able to do that."_

Can anyone throw more context around this hack. Technical challenges to
accomplish this will be bonus.

~~~
kitsune_
<http://forums.dropbox.com/topic.php?id=12498>

"more pertinent is the fact that none of the integrations we do with the
Finder are actually supported by Apple. this means that it takes significant
reverse engineering of the Finder to make icon overlays/contextual menu items
to work. Apple completely removed support for contextual menu items in SL
(it's possible to have right click options, but it's not possible to have a
submenu, or a submenu with options that change dynamically based on context).

in order to make these integrations work we have to inject code into the
finder to make in memory replacements of finder code with our own (many
complexities/details of hackery omitted). if it were easy, you'd see more
products than just Dropbox able to do it ;-)"

also: <http://forums.dropbox.com/topic.php?id=938>

~~~
rkudeshi
I had no idea installing Dropbox meant they were modifying the Finder. Why
isn't there an option to disable this?

~~~
JonnieCache
Note that they are injecting code into the running Finder process, which is
very different from patching the Finder binary. That would be very bad.

~~~
simplekoala
They are injecting code into running Finder process? Hmmm, so they figured one
of the jump instructions target address in Finder process ( for a function
invocation, most likely the code to show the pop-up), and changed that
location to jump to a different address where they injected their code? Don't
you need root privileges to muck with Finder's process space? I see dropbox
process running with non-privileged uid. Wonder, how they managed to change
the VMM space of Finder process to inject code. Any thoughts? Please correct
me, if I am totally off the mark here.

~~~
scott_s
A process can't change the address space of another process, period. Even if
one is a root process. Separation of address spaces is a basic security
service provided by the operating system. So I'm also puzzled how they are
able to modify memory in Finder's address space.

The closest thing I can think of is that Finder executes arbitrary processes
on behalf of the user. That is, when I double click on something, Finder has
to do the fork-exec dance to launch that application. A process fork, however,
creates an entirely separate address space for the new process. I would be
shocked if Finder did not do that. So, yes, I'm also wondering what it is they
do.

~~~
tlrobinson
Not true, at least on OS X:

<http://www.slideshare.net/rentzsch/dynamic-overriding>

<https://github.com/rentzsch/mach_star>

I don't know if this is how Dropbox works, but it seems likely.

~~~
scott_s
The first chunk of those slides talk about library hijacking. Say, you define
your own version of malloc, make sure the application links to your version of
malloc, and play your tricks from there. Process isolation has not been
violated.

The last five slides seem to be doing this:
[http://www.blackhat.com/presentations/bh-
usa-09/DAIZOVI/BHUS...](http://www.blackhat.com/presentations/bh-
usa-09/DAIZOVI/BHUSA09-Daizovi-AdvOSXRootkits-SLIDES.pdf)

Slide 4 is the difference: OSX is BSD running on top of Mach. So these
techniques use the Mach layer to get around basic process protection. This is
terribly insecure.

~~~
tlrobinson
Yeah, the injection stuff was what I was referring to.

Apple apparently changed OS X in 10.4.4 to only allow root or procmod group to
do this <http://guiheneuf.org/mach%20inject%20for%20intel.html>

------
JacobAldridge
_"Ferdowsi from the start insisted Dropbox’s home page be a simple stick-
figure video showing what the product does. No table of features and pricing;
instead, a story about a guy who loses stuff and goes on a trip to Africa."_

This made me realise I'd never been to the Dropbox homepage. I heard about the
company here on HN (Drew's YC Application form is a great read), and I didn't
have a need at that time - about 6 months later I took on a global project and
one of the first emails I got from the client was asking me to sign up for
Dropbox so we could collaborate.

As the article notes, that word of mouth (I've passed it on numerous times
since) has driven growth, perhaps more than the homepage. After all - it just
works.

~~~
paulmckeever
I found this part of the article a little strange. I've heard Drew present
alongside Adam Smith and recall him talking about how the design of the home
page started off way more complex and that it was through A/B testing they
ended up with the video.

Journalistic license maybe?

------
luigi
_Then come Chris, Jason and Joe (who has a Dropbox tattoo on his arm because
he feels “Drew is changing the world”), more MIT brothers aiming to live a
California dream they all imagined back in Cambridge as “billionaires, bottles
and babes.”_

Eww, that's offputting.

~~~
byrneseyeview
It was almost certainly a joke. Avoid sarcasm when talking to journalists;
some quotes, out of context, are too good to pass up.

~~~
dhouston
wildly out of context (comically so if you know me IRL) -- oh well :)

~~~
rajatsuri
Yeah I cringed when I read that part. I guess not every press piece will be
perfect, and hey, they have to sell magazines ;)

------
physcab
While I love Dropbox and have it installed, I think they are right to fear
ICloud. After getting a 4s and being able to simply type my AppleID, I
instantly had all my contacts, videos, photos, music, settings, and bookmarks
instantly and seamlessly synced. Best part of it all was that I didn't even
know I was _using_ ICloud. I didn't have to setup or download anything. It was
so simple. Since I'm a mac user, I really don't have much use for Dropbox
anymore.

------
DodgyEggplant
How many people would sit in front of Steve Jobs, refuse to a hundreds of
millions acquisition offer, just before Apple enters their market. You got to
admire Houston. He might reach the moon.

~~~
0x12
The dividing line between stupid and brilliant is usually determined
retrospectively.

~~~
wh-uws
Exactly look at the Groupon/Google situation

(which is still to be determined in my opinion)

~~~
reddit_clone
Also reminds me of Yahoo refusing to buy Google. I am sure they had good
reasons for that decision then.

------
rdp
My biggest issue with Dropbox, and I am probably not alone in this, is still
security. After the lapses earlier in the year, I still store most files in a
TrueCrypt share in my DropBox folders. Since I can't access the TrueCrypt
volume from my phone or other mobile devices, it limits the portability of the
data.

~~~
Maakuth
We've been told they do encrypt files internally. I don't think there is any
usable way to have users manage their keys by themselves. Who wants to input
large encryption keys to their mobile phone every time they want to use
Dropbox? And if the phone remembers the key, then it's not too far from the
current situation.

~~~
jaylevitt
"My phone stores my private key" is very, very far from "Dropbox's servers can
see all my data".

~~~
Maakuth
Certainly, but the practical privacy implications are probably similar. In
case of a stolen phone, the thief has access to all the files in both of these
cases. Sure it would be cool if Dropbox wouldn't have any access to our files,
but I don't see how it would happen without eroding the usability. It could be
an opt-in feature of course.

~~~
jaylevitt
Dropbox can be subpoena'd.

------
keithpeter
2 gig free, next step up is 50Gb. Anyone else find the big jump means they use
the dropbox just for day to day projects? A 10 or 20 Gig price point at $5 a
month would be something I could rationally use.

~~~
channelmeter
Agreed. I always wished Dropbox had a lower, entry-level tier for around
$5/month. I don't need 50gb. I just need 5-10gb.

~~~
kylec
There's no need to even _have_ tiers - it would be great if they would just
charge you $X/GB/month over the free amount.

~~~
Maakuth
I'd think it's a deliberate design choice having it this way. If you think
about it, paying only for actually used space would mean a lot smaller income
for the company.

Maybe it would also erode the magic in it - people would start thinking if
they should have this and that files on Dropbox or not. Or accidentally piling
up huge bills doing some mistake managing their files...

~~~
kylec
I don't know about that. Sure, there are some people using 5-10GB of a 50GB
account, but I'm sure there are lots of people that are sticking with the free
account when they'd gladly pay a little bit $1-$2 for slightly more storage,
and people at the other end that are either frustrated by the 100GB limit or
haven't even bothered using the service because they know they need to store
more than 100GB.

I trust Dropbox has done extensive market research and concluded that having
two price tiers, plus the other benefits that come with such simplified
pricing, outweigh the flexibility of usage-based pricing.

------
joejohnson
I really like Dropbox. I wish they were actually encrypting users' data in a
manner like they originally advertised they were. This is my only concern with
using their service.

I understand that they wish to save space with deduplication and that this
requires them to look at your files a fair bit prior to encryption. I just
prefer they let users opt into using their own private keys.

------
staunch
Been amazing watching the entire process, from YC hopeful to Forbes cover. Way
to go Drew.

------
marcamillion
$240M Revenue? Holy CRAP!

As I predicted some time ago - <http://marcgayle.com/how-dropbox-is-printing-
money> \- I am pretty sure that once Dropbox reveals their profit margins, the
world will be stunned.

Mark. My. Words.

------
gr366
Does Forbes.com have a print URL? I couldn't find one (did find a print.css
which does almost nothing to optimize for printing), and I'd rather not
encourage their splitting the article onto 4 separate pages by clicking
through.

~~~
shrikant
Single-page view:
[http://viewtext.org/article?url=http%3A%2F%2Fwww.forbes.com%...](http://viewtext.org/article?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fvictoriabarret%2F2011%2F10%2F18%2Fdropbox-
the-inside-story-of-techs-hottest-startup%2F&format=)

------
algoshift
I think context is important here. I don't think I am wrong in saying that
most YC startups consist of 20-somethings, perhaps even in their low 20's. At
this age few are truly prepared for the stress, conflict and issues that
running a business could bring to the table. And, in this context, it is
probably far better to have more founders rather than less.

I've been an entrepreneur ever since I can remember. And, retrospectively, I
know that I did a lot of dumb things when I was younger. It takes a while to
develop the business smarts, thick skin and, if you will, intestinal fortitude
a business requires. I've experienced business issues as I got older that I
know would have totally decimated me when I was younger. You are simply not
prepared for that sort of thing. Particularly things like impending
catastrophic failure, when you need to be mentally and emotionally in your
strongest mode.

Barely-out-of-teenage-years entrepreneurs (not meant with disrespect at all,
just chronological fact) need a support system in order to stay the course,
learn and not derail. That's why I think that in these cases the multiple
founder "rule" is probably a very good idea.

I would say that older solo founders with previous skin in the game are
probably a good bet (all else being equal). One young founder thrown into the
jungle that business can become is probably a formula for almost certain
failure.

While, of course, there are always exceptions to every rule, I do think that
what I am saying is a reasonable characterization of the problem.

------
esalazar
I use dropbox everyday for work and my personal life. I have two problems with
dropbox though. 1\. There is no paid plan between the free 2 gb account and
the $100 50 gb account. A nice 10 or 25 gb account would be great. It is hard
for me to justify spending the 100 a year when I don't need all that space.
2\. There has not been a huge change in dropbox since it's inception. I find
myself using it less and less, since it is so easy to share documents with
google docs.

------
skadamat
Inspirational story, thanks for that Forbes. I wish I had started programming
from an earlier age (I only started 4-5 years ago, I'm a junior at UT Austin)
but Drew is still an idol for me for both his crazy development skills and
entrepreneurial talent. I use Dropbox on a daily basis and definitely laude
him for seeing the idea through and not selling it to a big fish.

------
hosh
This story sounds like the story of Audion, SoundJam, and iTunes nearly 10
years ago:

<http://www.panic.com/extras/audionstory/>

------
kwamenum86
I think one lesson of the Dropbox story is that you can build a company around
a feature of minimal product if you have a savvy team and crisp execution.

------
hosh
I don't closely follow the changes to Apple developer APIs, so this may be
blindingly obvious to others but not to me. Does anyone know if Apple is
providing iCloud APIs for iOS/OSX?

I suppose, something similar to the file/db libraries, only these would go let
you persist files and settings to iCloud (similar to Valve's SteamCloud for
games).

~~~
hosh
Never mind. I see it. <http://developer.apple.com/icloud/index.php>

Does DropBox have anything similar? This looks like something that will run
over DropBox.

~~~
varenc
<http://www.dropbox.com/developers_beta>

~~~
hosh
So the fight is on two parts of the board: the part where consumer sees and
the part where only developer sees.

The next question: think iCloud -- or DropBox even -- will provide Google Wave
technology? I have no idea how useful that would be to all apps. But it would
benefit an app such as Ulysses.

Ulysses markets itself as a writer's editor. (To my programmer's eyes, it
looks more like an IDE). It distinguishes itself in the market with a very
strong document management system. However, it does not have auto-save, and
the backups are kept in some obscure location. That's ripe for iCloud or
Dropbox integration. However, it can go farther -- some method to sync changes
with editors and proofers without having to export to Word.

------
billtx
Dropbox is written is Python correct? Would it be faster/more
efficient/smaller footprint if it was written in C++?

I just have this (likely) wrong perception about Python from the original
BitTorrent vs uTorrent.

~~~
skadamat
I think he means that all the server side stuff is Python? The native Windows
application is probably written in C++ though. Or did I completely
misunderstand your comment?

------
rottendoubt
Just curious if Dropbox had a MVP? If so, what was it? Was it ready and
launched by Demo Day? Was it a purely free model, or were they already going
with the freemium model at launch?

------
MikeGrace
See a need, fill a need. Love it!

------
mike55
Sorry, I don't read articles divided in pages. Fuck you Forbes.

------
blurpin
Press release (and TC) says 45+ million users. Forbes says 50 million. I think
50mm is more like it.

