
Dropbox Said No To “Nine-Digit” Acquisition Offer From Steve Jobs - pitdesi
http://techcrunch.com/2011/10/18/dropbox-said-no-to-nine-digits-acquisition-offer-from-apple-steve-jobs/
======
run4yourlives
I love dropbox (use it daily, but only the free version). To be honest I think
this decision will probably be looked on as a mistake.

Personally, I'm moving to iCloud soon. The reason for this is that it will
enable syncing of the notoriously closed Apps and music that come with Apple.

The non-apple crowd will not see this benefit, but once Google or Facebook
decide they want to be in the cloud storage game too, Dropbox is going to find
themselves squeezed between players that can pour money into this space.
Dropbox is already not competitive on price, that much is certain. It's only a
matter of time before their primary attribute (seamless usability) is
duplicated enough to erode their base.

They should really look to sell, not try to build an empire. The numbers
and/or culture with Apple might not have been right, but this should really be
their primary goal.

If it isn't, I hate to say that the very best they could hope for is to be a
niche player in a space that will be a commodity in 2-5 years.

~~~
ernestipark
I think people are taking a very narrow minded view of Dropbox. You're
absolutely right that iCloud, potential entries of Google or other big players
could hurt Dropbox and be competitive.

However you have to imagine Dropbox is looking beyond "just file syncing" on
client computers. Do you think when Jobs re-joined Apple, he was thinking
"lets make Apple a better computer company". Dropbox gave an info
session/tech-talk at MIT recently (which they do often), and talked about how
they want to be the "Filesystem of the internet". With the money they've
raised recently, and the ferocious hiring they're doing, you have to imagine
they have plans to move into other spaces that might not necessarily be
exactly client/cloud file syncing. I'd gander they have other aspirations and
ways to make Dropbox as a platform be pervasive throughout the internet.
Dropbox can focus on this one thing. Google can offer space for super cheap,
but I can't see them attacking this large problem from as many angles as
Dropbox can, since it's the "one" thing they do. This is all speculation, but
I don't suspect Dropbox is going to sit complacently in the space they're in
with potential pressure coming from so many competitors.

Also, iCloud's goal seems to be more to lock users into Apple products rather
than be a great file syncing service. Photos off my iPhone get synced to
iPhoto, rather than a folder I designate on my computer (ironically, a Dropbox
folder). But to be fair, I haven't dived too deep into what I can do with
iCloud yet.

~~~
run4yourlives
I don't disagree with you re: iCloud, as that Apple's MO in all their actions.

However I can only gauge risk based on what I can see. It's possible that
dropbox can revolutionize some new space that changes the equation, but this
isn't evident right now, nor is it easily foreseen to be imminent. Given that,
it doesn't look like a viable strategy for them, at least from my removed
vantage point.

~~~
erikpukinskis
Did you factor this into your strategy viability assessment?:

If DropBox sold to Apple, they'd be out of The Game. Instead of carving out
their own niche, with the thrill and risk that goes with it, they'd be
supporting a game that Apple has already defined, and is winning. They
wouldn't be able to gallop forward towards a future of their choosing, with
competitors making them Better from all sides, they'd be IT support for the
iApps division.

Do you factor the love of entrepreneurship into your equation?

~~~
chubs
But here's the thing: if i had sold out for almost a billion, you could either
see that as a retirement, or you could see it as a __platform __that you can
use for even bigger entrepreneurial projects? Ie with that kind of money
behind you, you can take on, say, healthcare or something much bigger.

There can be more to it than 'if i take the money, i'm forced to spend the
rest of my days on a yacht, enjoying life but wasting away'. At least that'd
be how i'd justify selling out to myself :)

~~~
erikpukinskis
Most "bigger entrepreneurial projects" are built on a platform that includes
BOTH money AND a sustainable core business. Think Microsoft's BASIC compiler,
Odeo, the Tesla Roadster, etc.

I think many founders who sell out realize that the latter is often the harder
of the two to procure.

You are correct, though, if your goal is buy a yacht you should sell when that
becomes possible.

------
krmmalik
Congrats to Dropbox on their success. It seems to be Steve Jobs has been used
as the hook here to get more interest on this article.

While i am happy for dropbox , the real point that i learned in the summary
article was that Apple is planning products two to three years into the curve
which means if anyone wants to even dream or think of competing they need to
come up with products that are two to three years ahead of the curve.

------
jroseattle
I love Dropbox, but Jobs is right -- they are a feature, not a product.

They will be relevant up to the point where operating systems simply makes
their functionality a native element of their file system.

At least Drew is wise to the fact that they could become an also-ran, so it's
not like this will happen to them overnight.

~~~
brlewis
Operating systems we run Dropbox on at my house: Ubuntu, OSX, iOS, Windows,
Blackberry 5.

Someday they may all have Dropbox-like functionality built in, and someday
after that they may interoperate. Dropbox can stay in their current business a
long time regardless.

~~~
flipbrad
Given Ubuntu _already_ has that functionality built in (Ubuntu One), and
offers Win, Android and iOS 3.1+ clients, we're really not so far off from
that being the case already.

~~~
justinhj
So what it has over Dropbox is the lack of Mac OS X? I haven't used Ubuntu One
since I tried it pretty early on, and it was nowhere near as easy to use and
convenient as Dropbox.

------
randlet
Original story:
[http://www.forbes.com/sites/victoriabarret/2011/10/18/dropbo...](http://www.forbes.com/sites/victoriabarret/2011/10/18/dropbox-
the-inside-story-of-techs-hottest-startup/)

~~~
Sukotto
I really enjoyed that. Thanks for posting

------
atldev
It's been fascinating to follow Drew's story from the link to the early video
on HN, to the YC application as a solo-founder to a "nine-digit" offer. This
speaks to the importance of a good product. When Dropbox was pitched early on,
everyone would point out how many competitors there were. Drew would silence
the crowd by asking "how many of you actually use one of those services?"

It's all about the product.

~~~
technoslut
It is all about the product but it's not as if Dropbox isn't facing some very
serious competition. iCloud, G-Drive and Skydrive are all concerns. Dropbox's
advantage may be being platform agnostic but one has to wonder if Dropbox's
fate may eventually be the primary storage of pirates. There have already been
stories written regarding the content owners' interest of litigation.

~~~
icebraining
_one has to wonder if Dropbox's fate may eventually be the primary storage of
pirates_

That's further reinforced by the existence of Dropship[1] (although I don't
know if it still works), which enabled people to get copies of any file in the
whole Dropbox network with just its hash, by taking advantage of their
deduplication techniques.

[1]: [http://forwardfeed.pl/index.php/2011/04/24/dropship-
successo...](http://forwardfeed.pl/index.php/2011/04/24/dropship-successor-to-
torrents-eng/)

~~~
Talon
Dropship no longer works.

------
channelmeter
"Houston cut Jobs’ pitch short: He was determined to build a big company, he
said, and wasn’t selling, no matter the status of the bidder" Props to Drew. I
don't think many other entrepreneurs would've been as zealous and decline such
an offer.

~~~
betterth
Nine figures buyout? You really do have to believe in your future success to
turn that down, especially as a two year old company and long before the
current milestones.

That kind of money, Drew's payout would have been substantial, enough to
bankroll any project he could dream of (or live comfortably forever).

He must really believe in what he's doing.

~~~
nhangen
I'm sure he's flying high right now, but I think he's foolish to turn down an
offer like that in the same way Groupon was foolish to turn down Google's 11
digit offer.

Sure, one could argue that money is less important than achieving a vision,
but with that kind of money, Drew could work on 5 additional visions of
similar size, knowing his product was in good hands.

~~~
DilipJ
It takes real balls and vision to turn down that much money. The thing is,
without having the confidence to be able to turn down millions, it's unlikely
one will ever be able to build a product worth millions. Those in it for the
quick buck usually will fold under the slightest bit of trouble.

~~~
nhangen
I would disagree that saying yes to an enticing offer is the same as looking
for a quick buck.

------
eekfuh
What is interesting to me is when this got posted several weeks ago, an
admin/mod deleted it off HN.

~~~
sunnydaynow
The main purpose of this site is to promote YC backed startups (same as
TechCrunch).

I still learn a lot from this site, so I don't really mind. Although I wish it
would be different.

At least they are motivated to maintain it well!

~~~
DilipJ
Dropbox is YC backed. It is probably the greatest thing to come out of YC
(from a monetary standpoint).

------
inopinatus
I use Dropbox, but only the free version. For bulkier data I am just rsync'ing
to my linode, with exactly the same utility to me. It is quite telling that
the dropbox app uses librsync.

In other words, the value to the consumer is in the simple, reliable interface
and easy sharing. They have got this right where Jungledisk got it wrong.

However, the value to investors is in the customer base and an implied CLV for
those that pay offsetting the exponentially decaying cost of storage for those
that don't.

In other words, it's a Ponzi scheme for storage and they're betting on Moore's
law. Unfortunately, it is almost trivial to reimplement their utility; any
half-decent systems programmer will instantly grasp what they're doing. So I
would not invest in Dropbox, but whilst they maintain some momentum I am happy
to store low-value documents on their service.

------
mseebach
> (pronounced like the New York City street, not the Texas city)

What does that mean in non-US-English?

~~~
bill-nordwall
Houston the NYC street is pronounced "How-ston" whereas Houston the Texas city
is pronounced "Hew-ston".

~~~
llimllib
Maybe Hyew-ston is more phonetically clear for how people say the city in
Texas?

------
sebastianavina
I still don't understand why google didn't launch the gdrive... we really
begged for it.

~~~
brown9-2
There was an interesting point in "In The Plex" where, IIRC, some executive at
Google decides to shoot down GDrive because they (Google) wants to push for a
reality where you don't even need to keep files on a device in the first place
- the files would just always be in the cloud, and then who needs a copy on
whatever device you happen to be using?

If true, this seems like a real wasted opportunity - even if that is the
future we are getting to in several years, why not release a ready product
that people would find useful in the meantime (and would help people arrive at
that vision)?

edit: here is the excerpt: [http://allthingsd.com/20110425/how-google-killed-
gdrive-and-...](http://allthingsd.com/20110425/how-google-killed-gdrive-and-
spiked-its-skype-acquisition/)

 _He went to Bradley Horowitz, the executive in charge of the project, and
said, “I don’t think we need GDrive anymore.” Horowitz asked why not. “Files
are so 1990,” said Pichai. “I don’t think we need files anymore.”_

~~~
wladimir
I still remember that as well. They wanted to get rid of the whole "file"
concept, as in a single isolated opaque blob of data. They thought it is an
outdated concept in today's interconnected age.

Although there is some truth in that, personally I don't think locking data in
cloud-based silos is any better than locking it locally in proprietary data
formats. If anything, it is a further step backward.

For example: Does anyone know the native format of Google Documents? Can you
import/export it losslessly? I don't think so.

~~~
jseliger
_Can you import/export it losslessly? I don't think so._

Apparently not: my students occasionally use Google Docs to get papers from
their computers to printers in the library (or vice-versa), and the formatting
of their papers constantly gets fucked up. When I see weirdly formatted
papers, the students almost always blame Google Docs. Granted, I don't know if
that's because the students don't know what they're doing or if Google Docs is
hard or confusing to use, but still.

~~~
cpr
Confirmed.

We build a Google Docs to InDesign linking product
(<http://emsoftware.com/products/docsflow/>), and there's lossage/lack-of-
direct-mapping when converting both from Word to Docs, and then from Docs to
anything else (HTML, ODF, etc.).

------
Semiapies
Why not actually link to the Forbes story and not another site's regurgitation
of it?

------
darksaga
The major difference for me is Apple builds applications which work with its
own products and not other platforms. Can I use icloud on my Linux box? Nope,
but I can use Dropbox.

Granted, Dropbox comes with its own limitations, but when I'm looking for
software, I want to make sure I'm not pigeon holing myself based on my OS.

------
vaksel
not surprising, Dropbox is an actual business with long term potential. And
with recurring revenue model, they have growth in revenue every month.

There is no need for them to flip like other sites who either need to make
sales every month to stay in business or are reliant on Google staying nice to
them in order to keep their traffic numbers.

Recurring revenue really is the key to lasting success on the internet.

------
keeptrying
Any company that mediates between a bunch of other companies which each
provide similar complementary products/services will always be in business.

Dropbox is aiming to support every system under the sun. Android, Windows,
Linux, Mac OSX and all the hardware that they run on. Thats why Dropbox is
bigger than Apple's iCloud.

Apple isnt going to manufacture every device you own. But you will want your
files on every device you own. Lets say you have the following: Samsung phone,
ipad, windoze at work and a linux system you hack on at home. Install dropbox
and you have all your files everywhere.

Hell I dont even want my own devices. I want to be able to go anywhere, use
any make of OS/hardware and have all my stuff available to me. Why? Because
its so damn convenient.

Dropbox is building that. And its a very solid business business model.

Again any company that mediates between a bunch of other companies which each
provide similar complement products/services will always be in business.

Dropbox is infrastructure. And one that creates a huge convenience for the end
user.

------
bambax
Sonos is a company that's not often talked about but which seems to be doing
fairly well (although I don't know that for a fact; I'm just a (very) happy
customer).

Sonos is a direct competitor to AirPlay, and even a kind of crippled one:
Sonos only works on Sonos devices; AirPlay works on many non-Apple devices.

So why would anyone buy Sonos?

It just works. The quality is incredible. You can stream audio from the web to
all your speakers (which I don't think is doable, realistically, with
AirPlay).

Point is, just because Apple invests a market doesn't mean everyone else dies.

------
soheil
There is a huge difference when you do something because you think it's just a
feature that'd be nice to have than to dedicate yourself to something and do a
great job implementing it because you think that it _has to_ be done, dropbox
is doing the latter.

------
ralphc
If Steve was going to crush them, why bother to buy them, especially for nine
digits?

~~~
jedberg
Because first he tried buying them, and when that failed, he built it himself
(well, ordered the Apple employees to).

------
Semiapies
I simply don't believe this story. If you have $100+ million to throw at as
fundamentally simple a product as Dropbox is, you have more than enough to
make a good clone of it.

It's not like Jobs can deny it now.

~~~
badclient
_you have more than enough to make a good clone of it_

You are being naive if you think that given enough money, you can clone any
product. That's simply false, especially for large orgs where more money
invested towards a project can even become more of a problem than aid.

~~~
Semiapies
Sounds like someone once read a blog post about _The Mythical Man-Month_!

Hint: lots of companies that aren't five guys and a GitHub account produce
software. Apple is one of them, and DropBox isn't that mysterious a product.

~~~
badclient
Let's not change the topic of debate. The topic of debate never was whether
Apple can produce software. It was whether Apple can achieve the same goals or
even better by building instead of acquiring Dropbox _mostly_ because they
have money. I believe the answer is no.

~~~
Semiapies
There is no "topic of debate", there's just you making inane remarks and my
observing that you're full of shit.

------
uvTwitch
The right decision, in my opinion. As popular as the are marketed to be, most
people don't have iThings.

------
mkramlich
I have a few rules in life. One is to never turn down a $100m+ acquisition
offer from Steve Jobs. (Unless my percentage/net would have been too small of
course. Which then gets back to the rule that ideally you never want to take
outside investors or lose majority equity/control.)

------
startupcto
I think the fundamental differences between Dropbox and iCloud is the sharing
feature and Windows/Linux/Mac/etc support. iCloud is never going to be on
Windows and our company uses Dropbox to share project resources and our
machines are a mixed of PCs and Macs so iCloud means nothing for us.

~~~
lwhi
Exactly. As Steve Jobs is quoted in the article; Dropbox _is_ only half the
solution.

Apple's 'full' solution involves the necessary purchase of their hardware and
software as well. Dropbox works across the board, without prejudice.

~~~
2muchcoffeeman
No, the other half is getting people to use the product. It's easier if you
can make it seamless and bake it in rather than a third party solution. They
probably wanted to own the solution to leverage any trust they have with their
customers.

It's the same thing that happened with backups, they came up with Time
Machine. Pretty much all the Mac users I know have a Time Machine backup.

I believe the same thing will happen with version control once Versions
support is wide spread. Normal people will know about keeping versions of
their work rather than multiple differently named files.

~~~
lwhi
" _No, the other half is getting people to use the product._ "

More than 45 million people use Dropbox. I think they have that part of the
problem solved.

