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Congrats Dropbox (blog.ycombinator.com)
1543 points by runesoerensen on March 23, 2018 | hide | past | favorite | 265 comments

Thank you Paul and Jessica for taking a chance on us — we wouldn’t be here without you and YC :)

And thank you HN — I’m pretty sure the upvotes on the original screencast helped us get into YC and on Paul & Jessica’s radar to begin with!

Even you BrandonM — https://news.ycombinator.com/item?id=9224 — my favorite HN comment thread of all time :)

It's funny how often that comment—which I made as a 22-year-old undergrad—resurfaces. Someone even reached out to me 2 weeks ago because they wanted to use it in an article as an example of "the disconnect between the way users and engineers see software"!

I like to think that I've gained a lot of perspective over the last 11 years; it's pretty clear to me that point #1 was short-sighted and exhibited a lot of tunnel vision. Looking back, though, I still think that thread was a reasonable exchange. My 2nd and 3rd points were fair, and I conceded much of point 1 to you after your reply (which was very high quality).

Obviously, we have the benefit of hindsight now in seeing how well you were able to execute. Kudos on that!

Congrats on your success! I wish you nothing but the best going forward!

Well put.

Also, one thing I think people ignore is that BrandonM's comment was notable because it was voted to the top.

Which means that the people reading and voting on the thread, at the time, thought it was the best reply. But no one will ever point a finger at them, because they're anonymous. They also have less chance for self-reflection - who remembers an upvote?

I also think people might overlook BrandonM's follow-up reply to dhouston's reply on April 6th - "All of your feedback was well-thought-out and appreciated; I only hope that I was able to give you a sneak preview of some of the potential criticisms you may receive. Best of luck to you!"

Yup. It's really only the first part of the comment which had tunnel vision.

(Which does of course raise the question: were people upvoting for that part, or despite it? We'll never know)

I think the biggest issue with people is a lack of introspection, and this example shows the issue here. Most interactions are too meaningless and therefore difficult to self improve on.

I don't know what's the best system to make people reconsider their actions, however. After all, giving a single upvote and walking away is incredibly easy. Coming back to recognize your mistakes is hard.

I think people are always looking for a take on a new product that can be shown with 20-20 hindsight to be proven wrong...

" No wireless. Less space than a nomad. Lame." for the original iPod, springs to mind.

I hereby point a finger at the people who silently upvoted that comment

I think your feelings were shared by hundreds of professional investors that passed them up so dont be too hard on your 22yo self at the time. :)

I see you getting some flak here but for what it's worth, I read it as a very grounded discussion and feedback. I appreciate the fact that you conceded the points that seemed reasonable post Drew's comment.

To be honest I like seeing some posts like that where the entire concept of the idea is being challenged from the ground up, especially if the creator has to step in and defend it. Oftentimes I get more perspective into a product from the defense of its perceived shortcomings than I do from any marketing material.

3rd point (viral): The dropbox solution was great, of users getting more dropbox when they brought in another user. By rewarding with more dropbox (instead of money), only people who genuinely value dropbox would spread it. These aligned interests can't be gamed.

I thought dropbox was a great idea from the very beginning... but I've been repeatedly amazed at the scale of the opportunity. People working cross-mobile/desktop must be a big part of it.

> but I've been repeatedly amazed at the scale of the opportunity. People working cross-mobile/desktop must be a big part of it.

Or just multiple computers. Also don't forget file sharing and collaboration.

I'm a long-time Dropbox user, and my first use cases were, in order:

- shared folders with friends at university, when we were working on projects together

- shared folder for myself between personal computer and a station at work

Nowadays I use it mostly as a way to sync up my time/task tracking (in Emacs/org-mode) between multiple machines and mobile devices.

OTOH, my SO regularly uses Dropbox at work to exchange bundles of 200+MB files with other companies, and it's telling - there really is no better, safer solution for a regular user to send someone larger files when they no longer fit in an e-mail.

Your comment was one of a handful that lead to me registering for an account on HN instead of just lurking, I love that this got closure in my mind. Thank you for responding to this

That bit about closure made me smile. You're welcome :). I owe a huge thank you to the HN member who emailed me to let me know about this discussion.

I think your initial comment, your reply - and now this all say the same thing.

You seem like a great person & I wish you well with your own projects.

That's very kind, thanks!

This may be the most civil discussion I've ever seen on the web. Spread out over 11 years! Amazing. I love HN.

Your original HN comment perfectly captures the quintessential HN user at the time. I feel like every “Show HN” thread has those types of responses of like trivially explaining away all the hard work with just a few “simple” hacks.

I think the typical HN user has morphed a bit at this point(re: crypto) but it’s great to be able to reference the totally aloof engineer that existed at that time.

I came to Hacker News through Paul Graham's essays. I learned about Paul Graham because we used ANSI Common Lisp in an elective Common Lisp class. His essays were specifically suggesting that many college-aged techies would benefit from starting a startup instead of going into the traditional workplace.

I bet that describes a lot of the early HN (originally: Startup News) users. I don't think it was really "totally aloof engineers", but instead young geeks without much perspective on the world. Most of us weren't even engineers at that point, by any reasonable definition of the term.

It seems funny now looking at retrospective that neither Drew or Brandon said anything about syncing on Mobile. Congrats Dropbox!

Mobile was barely a thing then. Amazing the decade of progress in personal electronics.

I just looked it up -- The first iPhone was officially released 3 days after Dropbox received their YC check (June 29th, 2007 vs. June 26th). Astounding.

Drew and Brandon, together again!

Feels like the “I’m a Mac, I’m a pc” ad.

What do you do now Brandon ? edit: nvm, found this https://news.ycombinator.com/user?id=BrandonM

I also spent about 2 years working remotely and traveling with my wife, living in different places in Europe, Asia, and the US for anywhere from a few days to a few months. We have a travel blog and twitter account (all thanks to my wife) that I'm happy to share via email with anyone who's interested.

I'd love to follow along - my beautiful wife and I are planning to hit the road as remote workers, so always keen to learn from others who have done it as couples / families.

Funny to see how many "analysts" laugh at Brandon without even realising that their "analysis" use to be very flawed.

I think you were still very right in your intentions. I despise Dropbox, personally, and wish it would die. This is what Operating Systems are for.

However, the fact it has not died and is in fact 'a success' from the capitalist side of things, means what I think about filesharing being an OS service, doesn't really matter. Microsoft and Apple and all the other vendors are asleep at the wheel - but it has to be said that its just a distro upgrade away from being the end of Dropbox for a lot of people.

Love that Drew posted this from the stock exchange floor this morning

Here's a link to the actual presentation https://web.archive.org/web/20100817162301/http://dl-web.dro...

That web interface is soooooo much easier to understand and use. Makes me sad how unnecessarily complex modern UI is, not just on dropbox, but across the whole web.

Hell, even the menu bar UI on OS X is still terrible; they 'broke' it maybe 5 years ago and it's been the same mess ever since. It used to tell you what % of your dropbox was used, it used to tell you syncing status, it used to tell you all kinds of things. Now it's some weird changelog that looks nothing like anything else in OS X (or Windows, for that matter) from a UX perspective.

I mean, I guess I'm glad they didn't pull a Google and break it in new and exciting ways every 6 months, but really, it should have been changed back a week after they screwed it up.

Big congrats to the Dropbox team, though -- I use their product personally because it Just Works. Interviewed there back in 2011 when the office was (next to?) the old Fry's in Palo Alto.

It still does tell you those things (they've just moved around a bit).

The % used is seen when you click on the settings. I think because, honestly, they're trying to abstract the idea that you need to do that (the average user just cares that it works not the %).

Get where you're coming from tho - it's not the most clear or clean UI.

A "power user" toggle in most apps would be great. PayPal's site kinda does this with a "classic mode" toggle.

The response when he shared the file on his messenger was "why are you sending me this crap" :)) so funny if this was part of the original presentation of what would become dropbox.

which presentation is it to whom? to get into ycombinator?!?!

Seems like BrandonM's quote comes up all the time, but Joel Spolsky wrote in 2008:

“Imagine all your devices—PCs, and soon Macs and mobile phones—working together to give you anywhere access to the information you care about.” Wait a minute. Something smells fishy here. Isn’t that exactly what Hailstorm [2001] was supposed to be? I smell an architecture astronaut.

And what is this Windows Live Mesh?

It’s a way to synchronize files.

Jeez, we’ve had that forever. When did the first sync web sites start coming out? 1999? There were a million versions. xdrive, mydrive, idrive, youdrive, wealldrive for ice cream. Nobody cared then and nobody cares now, because synchronizing files is just not a killer application. I’m sorry. It seems like it should be. But it’s not.


Has he made any public comment on synchronizing files / killer app in the intervening years?

Congratulations to the entire team.

I think it's interesting to go back to that thread, look at what the author (BrandonM) has done since then and learn some important lessons about being able to step outside of your own head to see the bigger picture.

Looks like he's still working for another company and has an unfinished blog (http://shebang.brandonmintern.com) but he seems like a really smart guy. The takeaway I got from the thread is "Don't be afraid to try something and finish it".

You guys had a lot of courage and perseverance to take an idea that people trivialized, have a working implementation, build a company around it and then IPO.

Looking at his LinkedIn profile, it seems like he was still in college then. He was wrong, of course, but I think his errors were pretty reasonable given his situation.

It's very easy for tech people to say, "But it's totally easy, you just [long string of steps that they've learned over the course of years]." It takes time to learn that no, easy things for you can be hard for others. If you want them to use the thing, you have to make it dead easy. I note that Apple made a shit-ton of money because so many tech companies (e.g., MP3 player makers) refused to really learn this lesson.

His second point, that USB sticks were still necessary, wasn't bad, just not forward-looking enough. He wrote it before the introduction of the iPhone, after all. But back then, high-quality connectivity was much less common. Then, Dropbox would have worked better for some than others.

And his third point was correct. Charging cash money is important.

So really, it's not a bad comment for a CS student. And it reminds me that I'm very thankful that most of my youthful opinion-spouting happened in offline and pre-web contexts.

Thanks for such a fair evaluation! That's honestly the first time someone has put my comment in context like that... I appreciate it :)

Hah! Very welcome.

The people we really should be raking over the coals are the VCs who didn't invest. Spotting good products is their job.

As an engineer, "But it's totally easy, you just..." is my least favorite phrase. "Just" in particular. You can obscure so much effort with 4 simple letters.

well you can't be too hard on Brandon

if every Brandon out there was able to see the big picture, Dropbox would have had A LOT more competition, when Dropbox was still in the early stages. It would have made it a lot harder for Dropbox to succeed, right?

So in a way, the fact that the millions of Brandon's out there who think curlftpfs is the best, and are not capable of seeing the true value of Dropbox--perhaps that was a positive thing for Dropbox, right? Otherwise they might have tried to make a similar product and competed with you years ago :)

Congrats Drew and Arash, amazing job! I still remember meeting you at Startup school and wear account #27 with pride :).

Next up AirBnb and perhaps Stripe (speculation). Those early YC investments are really paying off huge returns.

Unlike investing in the stock market, where you want to hit lots of singles, angel/startup investing is all about hitting home runs as the vast majority of the time you are going to strikeout.

It's too bad the original screencast page is gone: http://www.getdropbox.com/u/2/screencast.html

Edit: someone posted an archived link: https://web.archive.org/web/20100817162301/http://dl-web.dro...

Congrats Drew!

One of the highlights of my MIT experience was going to your ~yearly tech talks that you did at the beginning of the fall semester. I’m excited to see Dropbox continue to grow as a company. :)

I think you handled BrandonM's critiques pretty well, and not immediately getting defensive around the products shortcomings was well played. Congrats to you and your team.

Congrats Drew. I remember seeing the TechCrunch 40 pitch and writing about you guys. You inspired me to do YC myself. Congrats on the IPO my friend.

What a classic and inspiring YC story :) Big congrats!

As they say, don't listen to the naysayers... and you did not! Congrats.

On point 1, he failed to understand that 99.9% of population is not IT savvy, not to mention how much time such setup would take and then maintain to run smoothly with all security patches, etc.

2. He misunderstood initial description of Drop; that the files will reside locally even if you lose internet connection you still can access those.

3. He was wrong about "viral" but right about inability to "make money off of this" :)

Congrats on listing!

By the way Jessica, you told me that year that if one of us went public you'd do a keg stand. Just let me know in advance when that's going to happen so I can book a flight :)

Oh shit.

I know you grew up and had kids since then but I'm holding you to it :)

There should be a video of this with Jessica, Drew, Arash, and preferably BrandonM. :)

You can count me in! :)

Please livestream it! Here's the man page... [1]

[1] https://m.wikihow.com/Do-a-Keg-Stand

This is great.


Incidentally, Drew's relationship with the HN community is even older than his relationship with Y Combinator. Two weeks before we interviewed Drew and Arash, Drew posted Dropbox to HN:


With the requisite "why would you do this? it's trivial to <insert something incredibly time consuming, annoying, and non-trivial> instead!"

I genuinely laugh every time at that comment every time this gets reposted, as if 99.99% of people wouldn't run away if they read 'curlftpfs' and 'mounted filesystem'

HN had a higher percentage of people at that time that would've considered that to be a reasonable alternative to Dropbox.

Hacker News used to be for hackers.

Thanks for this comment and the one about ftp. I also didn’t see the difference between Facebook and MySpace. It’s hard to understand the money side of reality until you are older and have seen some things.

Even funnier, using cvs (LOL) or even svn over effing unsecure FTP was already wrong at the time.

(Oh and of course it was the most voted comment, the 2nd one had more legitimate concerns)

Classic “less space than a Nomad, lame”. That post did not age well. Even today there’s nothing I can deploy on my own server that would be anywhere near as good.

I think there's another point to be learned from both the Dropbox comment and CmdrTaco's original infamous iPod take. And that's the importance of a really well-designed product that's simple and easy to use. Both Dropbox and the iPod weren't the first to try to solve the problems they were addressing, but they were the most elegant, intuitive solution. Both implementations effectively got out of the way of their users and exposed the underlying function with a little impedance as possible. It's always important to remember that the goal isn't for users to use your product. The goal is for users to get the value your product delivers. That sounds obvious, but a lot of product development teams forget that. Both Dropbox and the original iPod seem to embody that distinction.

As for your "nothing I can deploy on my own server" comment, checkout syncthing or Resilio. Both take a bit more doing than a simple Dropbox install, but I've found syncthing to be pretty bulletproof once it's configured and I've heard a lot of people prefer Resilio.

There was nothing intuitive about the iPod click-wheel interface; in casual use of other people's iPods I never did determine how to use it before it was superseded by touchscreens.

I don't believe you. firstly rotate the wheel to adjust a level (i.e. level of menu selection highlight) is literally how volume knobs have always worked. secondly clickwheel was in the iPod for 5 years? 8 years? in all the time you never figured out how to use it?

I think it is a reasonable comment, even in hindsight. It didn't dismiss the idea completely like CmdrTaco did, it just offered three criticisms of the business plan. All three points are real issues that Dropbox faced. They obviously dealt with all of them successfully, but there was no guarantee that any company in the space would deal with those issues successfully.

> Even today there’s nothing I can deploy on my own server that would be anywhere near as good.

Well... https://syncthing.net/

No iOS support that I can discern. A deal breaker for me.

ownCloud is also similar and has an iOS client.

Ha-ha, but for every one where the criticism turned out to be wrong, how many are there where the criticism was spot on? We laugh at things the HN Dropbox critique and the Slashdot iPod critique, but without people there to criticize and point out potential pitfalls, we’re all just patting each other on the back and telling each other how awesome everything is. Is that how good ideas grow?

When you have a success rate of 10%, blindly dismissing everything gets you 90% accuracy, but it's not particularly insightful.

Show HN threads tend to get both constructive and mindless criticism. I don't think it's wrong to point out the unhelpful kind of criticism.

Point of order, the iPod went no where until they added syncing with a PC - something everyone point ted out as being necessary on launch.

I recall having the same basic response to http:

"Why would anyone want to keep downloading the same content over and over again when you could just ftp it to your machine?"

Stallman still does this doesn’t he, give or take an email step.

Who said, "Why would you do this?"

Man the comments on this. HN gold.

It would be a fun experiment to put comments like this as quotes on the "Add Comment" page so you had to read them while typing your own comment. Might make people take a second or two extra to reconsider.


I remember this post. One of many "show HN" posts that have hit it big. Congrats!

> It does not seem very "viral" or income-generating. I know this is premature at this point, but without charging users for the service, is it reasonable to expect to make money off of this?


I don't think that comment is necessarily unfair. Dropdox does charge for the service if a user wants over 2GB. I think the more questionable comment is that first point:

>For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software.

That is the epitome of not getting it.

I'd love to hear from Drew on what pieces of advice from that ShowHN discussion actually affected their thinking for better/worse.

But they aren't profitable (and never were), right?

That’s me in the bottom right in the striped shirt! Congratulations Drew, I am in awe.

I first met Drew at MIT, and first saw Dropbox when he was showing off what he was hacking on on his Windows laptop in a coffee shop in Cambridge at the start of the summer. My user id is 88, haha. The batch was tiny by today’s standards (what was it, 20 companies? less?). YC invested $5k plus $5k per founder, for food and rent and servers for three months, in exchange for 2-10% of your company. You could have office hours with Paul every week if you wanted. At the end of the summer, a bunch of us moved out west and lived in Crystal Tower in SF. When Drew raised $1m from Sequoia, I was shocked! YC founders at the beginning of the summer were generally two guys with an idea (if that), so raising VC out of the gate was rare. AppJet was another favorite of the batch, and we raised $90k from several angels to keep going. YC had already had its first acquisitions, like Zenter (presentation software acquired by Google).

In those days, the entire YC community was smaller than one batch today.

It is amazing to me to see start-ups I remember from back then still going, and even become household names. AirBnB (2008). Weebly (2006) is even older than Dropbox.

Way to change the world, PG and Jessica. And of course Drew and Arash!

My favorite part of Jessica's memory:

"he suggested Drew delete his Demo Day presentation in the middle of giving it, and then recover it from Dropbox and keep going. Usually we don’t suggest gags like this during pitches, but this one made people pay attention."

Did it sync? She delivered a joke without the punchline.

I assume it did :)

This is very clever

Dropbox is on my list of reasons why I no longer naysay anything run by technical founders with some product sense. I remember hearing they were just essentially re-selling AWS storage back in the day (before they started building their own data centers). I thought 'why would anyone want to buy marked up AWS storage'. Then a few years later I learned to stop doubting great product focused entrepreneurs ever.

Pictures of the actual checks :) https://twitter.com/sama/status/977215073386053632

ok, I'll be the one to ask. How much is this check worth now?

Probably 3,000$ and 12,000$ respectively?

GP is asking, how much did this investment translate into.

2007 Dollars != 2018 Dollars.

Assuming that's what was meant, and not what the other comments did:

$3000 -> $3614.05 according to https://www.bls.gov/data/inflation_calculator.htm

Probably around 0.06 * 10,000,000,000

Assuming no subsequent investments, dilution, selling of shares, etc.

So 600M is the upper bound. Drew Houston owns roughly 25% of the company now, and he probably owned ~75% at when YC invested, for a dilution rate of 3. I'd say YC investment probably has dilution rate of 10, for the real amount of 60M. Not bad, but not Whatsapp scale either.

I know. Sucks to be them, right?

Helping other people realise their dreams and only making 8/9 figures in the bargain. Can't imagine why they would bother.

Dumb question: Why would YC get diluted so much more than DH? I've started to read up on venture financing and this doesn't match my mental model for any of the mechanisms I've learned about. (Like if anything I'd expect YC to have less dilution due to follow-on/pro rata investments, if they did any.)

I believe that when founders stock is fully vested, additional grants are an option to retain the founders beyond 4 years (or whatever the founders stock beating period is). 11 years as CEO likely led to additional grants. For a much bigger example, look at the additional grant Musk got this last week for Tesla.

Using that math, the initial investment of 15000 returned 4000x

Hahaha. This comment is hilarious.

I remember seeing the release of DB on HN and immediately had a "holy shit" moment, I was literally carrying a portable shuttle computer back and forth to the office before DropBox - congrats to the entire team and thank you for a product I've used daily for 10+ years!

And this is yet another good lesson for would be angel investors AND startup employees - DropBox to me was one of the most obvious product-market-fit startups with a great, competent founding team, A+ quality investors etc and it still took them 13 YEARS to go public and drive liquidity for founders, early employees, etc.

Is there any talk about how late stage employees have done? I suppose they’ll be in the waiting game as their lockup progresses.

Stock is up beyond the last valuation in 2014. Assuming the stock holds its value for he 6 month lockup, they'll get at least what they signed up for.

Drew Houston was rejected by YC when they interviewed him for his previous idea. When they attempted to judge him as a founder, prior to any success, they completely failed to identify one of the best candidates they had ever seen.

After another attempt at getting YC's attention, Drew Houston even got shooed out of YC's offices and went home feeling rejected and having "sour grapes" about the situation.

He only got into YC because he created a demo video that HN loved. And that HN post easily could have been buried by a bigger story or whatever. A quantum of luck was involved.

This should have permanently disproven the entire concept of judging a founder's potential in interviews. Unfortunately, people love the feeling of being a judge. Deciding the fate of other people, however incompetently, is an irresistible joy for many.

Paul Graham talked (in his speech at Stanford) about his own inability to correctly judge founders after a decade of trying. Calling it guesswork. Too bad that he retired and it went unfixed at YC, but something crowdfunding-ICOs may be the ultimate fix anyway.

Thanks to decentralization, we can (hopefully) look forward to an accelerating number of companies as good as Dropbox.

You invest your money, you get to decide, it's that simple.

I don't think anyone suggested otherwise.

I just wanted to point out that it took 13 years to reach IPO. Hard work, dedication, but most importantly time. Lots of founders nowadays forget that "Rome wasn't built in a day." Congratulations to team Dropbox and team YCombinator.

What's with the Boston VC's? The minute I saw the original Dropbox video here on HN it looked like a can't miss product. I told all my friends about it. Heck not only did Sequoia invest, but Steve Jobs tried early to buy the entire company.

There are some companies where it's easy to see why they were missed. I never saw the point of AirBnB, never would use the service myself. But DropBox had almost universal appeal.

I agree totaly with your comment. I also miss the point with airbnb and dont use it but I know a lot of people who do.

I've said it before and I'll say it again: Dropbox is the first app I'll install on any new device. It works on all relevant platforms and is getting more and more integrated with other platforms (Google Docs, Office) all while remaining platform agnostic. Once I reach my free limit (roughly 7 GB) I will gladly pay for their service.

Congrats to Drew, Arash, and the Dropbox team!

I'm already paying for it. Partly because I can't be bothered to clean up the clutter I keep on it, which would easily get me back down to free tier - but partly because I got so much value from using Dropbox that it's only fair to give back.


I only now remember off hand the passwords for less than a dozen apps. Dropbox being one of them, my private email/domain, Google account and a handful of others.

That's the biggest endorsement I can provide for any successful product that I use, day in and day out.

Connections connections connections - that is what it is all about

   We’d met Drew the year before. [...]
   Adam Smith’s big brother in MIT’s
   Phi Delta Theta fraternity. 
   He came to the afterparty at our house
   [...] I remember him being likeable,
   earnest, and very energetic.

dhouston, what ever happened to the option of "an additional passphrase (or private key) when installing in order to encrypt your data before it leaves your computer."


Spideroak is what you're looking for, I use it and I'm happy with it.

I'm still looking for such a solution that works well on mobile. Spideroak's iOS app is very rudimentary compared to Dropbox.

Cryptomator is headed in the right direction (and open source!), but they have not yet implemented iOS 11 Files integration. Boxcryptor has, and it actually works OK, but desktop performance is poor.

I don't believe they ever set up a warrant canary.

> what ever happened

Rice happens.

I like Dropbox and YCombinator, but this line near the end was odd: "Today is a big milestone for YC. When we launched 13 years ago, we never imagined that a company that we’d funded would one day go public."

Really? What were they doing funding it, then? I hadn't realized that wasn't the original idea at YCombinator.

YC was started as a way for PG and Jessica to learn about angel investing. They originally gave teams like $20k for the summer and positioned it as alternative to a summer internship. They told students that if they decided at the end of the summer to quit the startup and go back to school, that was ok. They expected the cost of this education on angel investing would be some failed investments in startups. Most people back then apparently thought they were crazy for writing checks to undergrads and having them start companies -- this was in 2005, before zuckerberg, right after the dot com crash, when the world was a different place. I'm sure the YC founders thought in the back of their minds that their startups would succeed, but they probably were hesitant to say that out loud.

It's easy to take the YC model for granted today, but back then what they were doing was sort of crazy. Their insight was that these young founders were diamonds in the rough, and their brilliance was fighting for these founders when no one else would




Edit: readability, more links

We thought they'd be successful, but it's very rare for a company to be this successful.

The original idea was to make a summer camp alternative for students so that they didn't have to be interns at big tech companies. I think YC was first called "Summer Founders Program."

Funding a company that IPOs is pretty wild when you think about it in that context.

Don't forget that YC was started mostly with money that came from PG and Trevor and RTM selling Viaweb to Yahoo. Most exits then and today were sales to bigger companies. The expectation was that most of the companies would fail and maybe one or two would sell to a big company for a life-changing amount of money for the founders and nice return for YC.

You don't need to have an IPO to be a successful venture??

Some ventures get acquired. That can be a path to success, too.

Bacardi does revenues of 5 billion plus and they're private. I'd say that's a successful business.

Samsung is privately held as well.

~$300bn revenue.

Samsung isn't privately held. It's listed in the Seoul market as KRX:005930


See reference at the bottom:

"Samsung is not to be confused with its publicly traded subsidiary Samsung Electronics"

Thanks. I also found this: "the Samsung Group comprised 59 unlisted companies and 19 listed companies"

A lot of them sellout.

I think they mean that Paul Graham et. al launched YC as a small, cheap experiment, and never imagined they would have success like this.

I could be wrong, but wouldn't VCs prefer some type of large acquisition, a la WhatsApp, as opposed to an IPO?

Why would there be a difference? They're both liquidity events.

Both parties have a lot more flexibility with M&A (this includes vested partners) — meaning private deals have far better conditions if the deal isn't a saving grace.

IPOs can have lengthy lock up periods and are generally much worse for leadership than acquisition (disclosure of personal information like compensation).

180 day lock up probably for employees mostly.. maybe founders are included in that.

IPO's tend to be bigger paydays even if they are more risky so I would assume they prefer IPO's.

I think you're simultaneously reading too much and too little into it. I think when they first started it they didn't even know if the premise would catch on. But also a lot of startups fail or get acquired and acquisitions are also a favourable outcome for YC.

Agreed, that line seems like ludicrous false modesty. If anything, I think they should be shocked about how long IPO#1 took.

Congrats to the Dropbox team.

Apologies if this is a naive question but I haven't had much success Googling.

I've never heard of a company going public without an investment bank's support. I assume there was a law to require this.

When did that happen?

>I've never heard of a company going public without an investment bank's support. I assume there was a law to require this.

Dropbox had the support of lots of investment banks[0]. Even Spotify is hiring banks to advise it in its direct listing, even if the banks aren't underwriting [1]. If you want to read about the roles of investment banks and other financial institutions in IPOs and the existence and history of alternatives, you might want to read some of the news coverage surrounding Spotify's choice to use a direct listing.

[0] https://www.reuters.com/article/brief-dropbox-inc-files-for-... lists about a dozen investment banks involved in the underwriting

[1] https://www.bloomberg.com/view/articles/2018-01-16/spotify-w...

Thank you

Congratulations! What a consistent drama free run. Also, resisted an acquisition offer from Steve Jobs!

When I read that Drew rejected Jobs' offer I couldn't believe it. Big props for backing yourself and growing it larger than the offer.

If Jobs did succeed in acquiring Dropbox, it would have been shuttered and the tech would have been absorbed by the iCloud borg, depriving us from the Dropbox product.

Thanks for that!

How was it drama-free? There was a #DeleteDropbox campaign after they hired Condoleezza Rice, widely considered to be a war criminal (especially outside US conservative circles) and definitely a proponent of domestic spying programs.

> widely

I'm not sure you'll find much well-reasoned support for this notion outside of California and college campuses.

> I'm not sure you'll find much well-reasoned support for this notion outside of California and college campuses.

Contemporary events for another notion you wouldn't find "outside California and college campuses" succeed in toppling Brendan Eich at Mozilla. The only difference I could tell then was that the Dropbox board put its foot down in support of Ms Rice and Mozilla's board folded.

As far as I know they both had support from their respective boards. But Rice was 'only' up for the position as board member. Eich was to be the highest public and private facing position of the company. The controversy surrounding him, unfairly or not, also affected people personally. Basically Rice only needed the trust of the rest of the board, while Eich would have had to fight to run or represent the company. Your own comment being an example of how the Internet doesn't easily forget things.

The protests against the Iraq war is considered the largest global protest in history. I would call that "widely".

Yeah that is the sole reason neither me and mine do not have a Dropbox account to this day, and why I would not consider applying there

Well, not quite drama free.. their security failed resulting in 60+ million customer login details being let into the wild.

I have a new goal-

Get so big I can give the middle finger to Apple.

Although I've gotten less bitter since I found React-Native.

Or simply create your own contribution to the world without anchoring relative to any other entity.

Remember when people used two floppy disks to save files so if one floppy break you have a backup one?

I remember the first day I heard about Dropbox and I was amazed by it, it made perfect sense. Since then I'm a client and as an entrepreneur, it's a company I always looked up to.

I remember the first day I used Rsync (developed by famous reverse engineer Andrew Tridgell of Samba fame [1]) and the first day I used WebDAV and later on WebDAVFS. Nowadays, I use TransIP STACK (1 TB free) and Google Drive (15 GB) plus public key cryptography.

Dropbox might've been the first in the field, but it has no selling point above STACK for me since it doesn't implement public key cryptography just like the other providers. Google's sell point is that compressed photos are free storage (although -obviously- unencrypted).

Which suggests, to me, that they're accessing the data or perhaps saving a few GBs with say ZFS dedup (ultimately not a trade-off in the interest of the user). Because otherwise, the lag would be client-side only (after all, the clients employ the cryptography).

[1] https://en.wikipedia.org/wiki/Andrew_Tridgell

I definitely remember "oh no, I think the floppy is corrupted" as a popular excuse when it was essay hand in day at college

So in those 11 years, did YCombinater make any money on Dropbox? Or is incubating more of a 'long term' investment?

"When we launched 13 years ago, we never imagined that a company that we’d funded would one day go public."

That statement suggests YC was looking more for buyouts than IPO's, which isn't necessarily wrong, but it wasn't a quote I'd have anticipated.

looks like they mispriced. Most of those gains are accruing to underwriters and speculators rather than the company. Same thing happened to eToys.

There's an optics component to pricing an IPO. If your shares surge and stay higher than the IPO price for several months, people view that as a positive sign. I'm not saying it makes sense, but it's definitely something that you will see research analysts discuss when talking about newly-public companies. Keep in mind that big players in the equity market are sophisticated about financial reasoning, but not necessarily well-educated when it comes to the technology itself.

When you aren't sure how to value the assets and business of a company, optics unavoidably make a difference in the way you trade the company's stock. Look at all these software and tech services companies that are priced off of wonky numbers like EV/sales multiples if you don't believe me.

If people see a strong bid, they may be more likely to perceive it as bullishness, which influences their own trading decisions. As a result, the company may actually end up with a higher eventual valuation once the IPO dust has settled and the price has found an equilibrium.

Not to mention that the offered stake isn't the whole company.

There's going to be a lot of bankers and their clients celebrating tonight. With 36M shares outstanding, dropbox left around 360M on the table for the bankers.

that's actually a pretty well executed IPO, and most banks shoot for a decent double-digit percentage gain on day 1.

its in the company's interest to have IPO investors (their first public mkt investors) rewarded, as it keeps them from selling too much, and it attracts other investors to the stock. dropbox is still unprofitable, so it will probably need to raise more equity in the future, and it helps to reward your early investors

it also makes the investment banks happy -- their clients made money on the deal. if dropbox's banks are happy, that helps dropbox, bc as mentioned above, it will need their services again

the happier public market investors are, the higher the stock price will go. most employees cant sell stock for at least a few months, and if outside public investors are happy, then by the time employees can sell, the stock will be worth much more

if you price too high and all the proceeds accrue to the company rather than investors, you get a debacle like facebooks IPO, where the stocked dropped and didnt recover for over a year

people always say this during IPO... you need to take volume into account.

What is the volume trading at 44% above the opening price?

When you put $700mm of securities on the market you need to price them low enough so that investors hold.

18 million shares traded on the open at $29, and since then 23 million shares have traded between $28.80 and $31.60. Safe to say there's a healthy bid at $29.

Right. But who were the buyers? Would the same buyers have bought 10 million shares at $29? Or was it thousands of smaller sized investors paying a premium? You need whales to keep the market stable and I don't think the whales would have bought at $29 ... look at the volume over time post IPO, not just day of. The big investors who came in cheap will buy back shares if the price dips... right now they are profiting off the pop.

No most of those gains are still accruing with the management team, employees and early investors.

It will be interesting to see how Spotify’s direct listing does.

Yeah, the bankers made out like bandits on this one.

RIP pre-IPO investors.

Pre-IPO investors don't have to sell their entire stake on an IPO. Often, they don't even have a choice to sell, due to lockup provisions.

Am I correct that if there were stock options granted to the first employees of Dropbox in 2007 then they expired in 2017?

There were several opportunities for liquidity for people with options prior to this point (not to mention extremely early employees should have had an extremely low strike price and should have been able to afford exercising prior to this point with relatively little risk)

I was at Dropbox from 2012 to 2016 and (while I'll lose out, relatively speaking, on taxes due to having a lot in RSUs, and I've mentioned on HN before being frustrated with the illiquidity of RSUs) people in my employee "cohort" should be fine as well.

Congrats to dropbox and YC as well.

Side note: what does Dropbox use to build the UI for their desktop app? I think it's written in python no? so what UI do they use?

The core UI is Qt 5.5.[1] When I started, it was still wxWidgets (shudder). We take a GTK dependency on Linux for some desktop integration in GNOME.

There's a bit of webviews these days, although there are Qt fallbacks or handoffs to actual browsers for everything important, for both compatibility and accessibility. Screen readers and QTWebViews did not play nice together when we implemented it.

(I work at Dropbox, although not on the client team, I had built some infrastructure that supported client webviews.)

[1]: https://www.dropbox.com/help/desktop-web/system-requirements

Thank you! I should have thought about the system reqs to see hints as to how it was built

I was looking at Python GUI libraries a few days ago, and it looks like Dropbox uses PyQt: https://en.wikipedia.org/wiki/PyQt#Notable_applications_that...

(That information might be incorrect or out-of-date.)

Overwhelmingly excited for Dropbox IPO, it’s truly both inspiring and has huge utility.. phuck GoogleDrive and lolwut iCloud Drive. Dropbox also proved regardless of how small you may be, if you do it right in a way humans will like it., you can always stay ahead of the competition.. I meant Google Drive was a pretty rad competition but they didn’t even get the sync icon right .. too ugly for my taste.

I use all three - Google Drive, Dropbox and iCloud and I don't see a meaningful difference between them.

I’m super curious, how much was the original investment YC made (i assume 50k?) and what is that share worth today as they IPO?

I was one of the evaluation team members at a large management consulting firm during their review of file sharing services. I got a look at all of them about 3 years ago and it was easy to see that Dropbox's engineers were leading in the space. The company I was at did not select Dropbox, but they had my vote.

Honest question: What about Sean Ellis? Maybe I am mis-remembering, but wasn't he the person behind the "invite for more storage" growth marketing effort that really helped propel Dropbox to mainstream use?

What exactly is your question? He, like other early employees, is probably sitting on a nice bundle of common stock that he will be able to sell X months after the IPO.

I guess I expected a mention since his work was a huge part of making Dropbox successful.

I made my account around Fall 2007 as a high school student. It completely changed how I did things and I'm still a happy user all these years later (and still have access to my poorly-written high school papers!).


Congratulations to dhouston for being a great example of a startup founder, and for creating a very successful company.

Surveillance partner for NSA PRISM program, with Condoleeza Rice on its board.

Stopped using DropBox due to ethical concerns years ago.

Me too. The product was great but it was too much to take in. They didn't just learn anything from the Snowden revelations but instead put people from the government in the board. I'd rather prefer to keep using my pendrive, thank you.

sh I had the same idea around this time and implemented something similar (different but similar), and I was that crowd was coming in and needed such a thing. I was too young to think that this is an opportunity and just dropped it, continued with my day job etc.

>When we launched 13 years ago, we never imagined that a company that we’d funded would one day go public.

What does that mean?

BIG congratulations! What an amazing journey and I look forward to tracking Dropbox and its impact!

Dropbox is a software I really like to use. Very well polished.

Do they still have Condoleeza Rice on their board?

Closed lower...

It closed at $28.42, more than 35% above the offer price of $21. In comparison, the S&P tech index was down nearly 3%.


Open for mortals was $29.00


Well done!

Edit: Removing comment.

There's something really odd to me about describing a $100MM acquisition as "middling"; wouldn't that almost guarantee multi-million paydays for the founders?

Yeah, way below Dropbox's valuation, but still significantly more money than I expect to ever be a party to.

I said less than $100m. I don't know how much the acquisition was for, but I know it's less than that.

Not necessarily. It depends on how much they raised, since investors get preferred stock.

Why did you remove it?

Here is how I see it. 1) He wasn't straightforward -- i.e. he didn't outright say "we are already funding an idea similar/identical to yours " but I wouldn't call him a liar. 2) Who knows what his intentions are. Maybe he wanted to eliminate competition. Maybe he saw the dropbox team ahead/better-positioned and wanted to save these new applicants the time.

But put yourself in his shoes. What would/could you do? The only other option was to accept them and merge them with dropbox team... but its not clear that this is a good idea or even an option acceptable to the dropbox team.

Because someone who is otherwise very busy privately questioned the veracity of it. From a bayesian perspective I decided that it changed how certain I was of the stories I heard from the founders. I know I heard a story that was essentially as I originally wrote it, because it was repeated a number of times, I'm just not sure about how embellished it was.

So given my new uncertainty I decided to remove it.

Update them priors!

Oh come on Drew, after ringing that bell I want to see a cool "hi" by dhouston as the top comment.

I think the caption "The Summer 2017 Y Combinator Batch – Jessica Sitting with Dropbox Cofounder, Arash" for the image should be 2007? Or am I wrong?

Thanks! Let's see if we can get it updated.

lol, I was just 'asking HN' why the DropBox IPO was not #1 on HN. It wasn't even on the front page 5 minutes ago. Thankfully, I decided to check before posting.

Congratulations all around, and we finally get to see whether DropBox is actually minting money or not.

Good Luck!

Is Dropbox a buy right now at ~$30? What do you think.

Trading at what 10 x sales ? That's a rich valuation. They've gotta show some impressive growth and get more to the bottom line or its coming back to earth.

Isn’t 10x sales pretty decent compared to the 100x, 200x we seem to see?

They had valued themselves at <10bn. That has doubled in 24 hours, thats definitely not positive, if not an ipo strategy


I'd suggest Drew now to delete his facebook account like just Elon Mask did.

not the best time to go public :) the stock market is about to take a serious hit.

Wouldn't that be the best time to go public? Before valuations drop?

Usually you don't want to sell your stock to the public after it's crashed.

Sure, we call it pump and dump. Awesome for insiders but terrible for investors. I'm talking from an investor perspective. By going public today it might only benefit a few early birds such as founders, angels, founding team, etc. If the market crashes it's terrible for new investors, anyone who bought the IPO. If you IPO after a storm your stock can only go up from the bottom.

That's not what pump and dump means.

Isn't that the best time to IPO? "Sell high..."

From an employee perspective, sure. Pump and dump is what you'd be looking for. But technically speaking you want your stock to go up as a company. Isn't it the whole point?

So you sold all of your positions and will be re-buying after the hit?

doubt it

Eh they should have stayed private. Private companies have more control over their future. Public companies move to a quarter by quarter cycle and innovation goes at a snail's pace as marketing and bean counters take over.

this company has no future. Amazon and Google can kill it easily when they want.

They both have competing products (Amazon Drive and Google Drive) and yet Dropbox lives on.

Yep. Cashing out while they can, obviously.

This is nice from a business-perspective.

But, stepping back ... I'm sure that a lot of the folks here would agree that something as basic as file-sync should be a standard part of any OS, and follow a non-proprietary protocol.

So whereas they have turned something that should have been a commodity into a profitable business, I'm not sure what we have achieved here.

Drew and Arash went to MIT, where their everyday computing environment was UNIX systems with home directories on AFS. For those who haven't used it, AFS is a networked filesystem sort of like NFS, except with a better authentication model and the ability to support failover on the server side.

AFS, NFS, Coda, 9P, WebDAV, SMB/CIFS, FTP, Windows roaming profiles, AFP, etc. were all around and (to varying levels) built into OSes well before Dropbox. Dropbox was a fundamentally different model: files stay on your local machine and get synchronized, instead of living on the network. The entire idea that live synchronization is the correct approach is almost entirely due to Dropbox's success; any OS designer before 2007 would have said "Yes, we have something as basic as a networked filesystem."

If you're objecting to the fact that it takes a commercial venture to explore and develop these sorts of ideas, I too dislike that we're in that place. But it's true. We haven't achieved a way to develop standard computer infrastructure without capitalism, yes; but we've certainly achieved meaningful technology that did not previously exist that's actually working for people.

(And, also, almost all of those protocols I mentioned were developed by profitable businesses like Sun or Transarc or Apple or whomever, and only made non-proprietary at great effort. The ones that started off with public specs, like WebDAV and FTP, were the worst.)

> If you're objecting to the fact that it takes a commercial venture to explore and develop these sorts of ideas, I too dislike that we're in that place. But it's true. We haven't achieved a way to develop standard computer infrastructure without capitalism

While private business certainly is essential, let's not go too far. I can think of ... maybe just one or two pieces of standard computer infrastructure not developed by private business or for profit. Need I list them?

Doesn't seem like a correct characterization from my perspective. File distributions was "hot" from the early 00s until cloud everything of recent years. I think Dropbox is/was clever but not surprising, because that was the sort of things a lot of people were doing (or speculating about) at the time. Especially since most things were based on files and not web like today. The main reason it didn't develop wasn't so much lack of insight as that the Internet become increasingly hostile towards stand alone solutions, including the increase in phones and other different clients.

I definitely think that part of Dropbox bet was that the Internet wouldn't develop much in the future. A bet they aren't alone in making.

"Dropbox was a fundamentally different model"

You mention a bunch of filesystems (some of which with much better scalability than Dropbox), but omit Rsync. Rsync works with any of these filesystems.

The most successful data distribution systems which predate these are from the '90s and before Usenet (esp volume with the binaries) and scene (or FXP). However, the former is mostly public data and the latter is inherently insecure.

Dropbox was nothing special. It was just the first popular one who had a GUI on top of Rsync, and who sold data storage within a package. Its essentially a lucky shot.

WebDAV works great for client-server, but it has a disadvantage: locking works terrible. OwnCloud/NextCloud uses WebDAV, btw.

Dropbox is a lot more than a GUI on top of rsync. Even purely from an engineering standpoint (ignoring product & design) that's incorrect.

You might enjoy this talk: https://www.youtube.com/watch?v=PE4gwstWhmc

Live-synchronization became a thing when the use-model of the internet shifted from always-connected to sometimes-connected. I don't think that nobody ever thought of this synchronization model before. I mean, it's pretty close to rsync or git.

Doesn't AFS keep local copies of files too?

That’s similar to the line Steve Jobs took when negotiating with them. Hard to tell if that was just nasty Steve coming out during a negotiation that wasn’t going favourably, or if that’s what he thought. Given that Steve wanted Dropbox, I’d gues he was just posturing.


As long as NAT is the default mostly everywhere we'll be stuck with 3rd parties to interact between users, if only to poke hole in those NATs. You can fire up a local HTTP server on your machine very easily if you want to share a file but it's no use if your IP is not reachable.

Of course there's more to Dropbox than that, you also have 3rd party "cloud" storage which is an important feature, especially if you want your file to remain available to 3rd parties when you shutdown your machine.

It pretty much is a standard part of the OS. iCloud, OneDrive, etc.

It's the "non-proprietary" part you're not ever going to see. Someone has to pay for storage.

I think that GP's point was that a standard a la HTML or RSS should exist and be embraced by the OS. Something like Syncthing, I guess (just naming one of the first hits I got from searching, I haven't really kept up with what is being tried in this space).


Don't be so sure -- IPFS provides a possible path. We will see if it works.

Someone, somewhere has to pay for the disk.

Yes IPFS the collective internet prices and earns for contributing disk.

It's the protocol that's non-proprietary, not the service. IP is non-proprietary but you still have to pay for servers.

Why would non-proprietary preclude paying for storage?

Because each of those is trying to profit from it, not just pay for the storage. Thus, branding, and thus, they make them private and proprietary. Is it right? No.

> they have turned something that should have been a commodity into a profitable business

Commodity businesses are universally profitable businesses for the survivors. The companies don't stick around otherwise.

Convenience stores, typical pizza places, liquor stores, tons of grocery store products, most office supplies, generic clothing, power adapters, most physical digital storage, brick & cement companies, the 58000 self storage facilities, the world is filled with profitable commodity products and businesses (and they're often very large).

The secret is that it's not basic.

If it were basic, then it would be standard as you say. Therefore it must be a lot more complicated.

It's basic in the sense that git and rsync are basic: they are standard tools that everybody expects nowadays. I'm not saying the tech is trivial.

He achieved three commas.

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