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Dropbox May Not Be LeBron James, but Is Still in the Game

nytimes.com

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Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#101

Post by mrgordon »

malchow wrote: post #79
zer0defex wrote: post #77

Earlier quoted context omitted.

Nail on the head right here. The only thing Dropbox has these days is consumer confidence in it's syncing process. Beyond that, they trail every competitor feature-wise and frankly, they are succeeding despite their management, not because of it. Recent product enhancements have been, let's be honest, mediocre at best across the board and show no signs of that changing anytime soon. They exist now solely due to brand…

What if -- hold your breath! -- Dropbox is simply a medium-sized, privately held, profit-generating company that will end up satisfying a certain customer segment and paying dividends to investors? The horror!

I don't think you're going for medium sized when you raise over a billion dollars. The investors who put in $500 million at a $10 billion valuation would need a lot of dividends to even break even, much less make the 10x return they want out of a decacorn.

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#102

Post by subdane »

malchow wrote: post #79
zer0defex wrote: post #77

Earlier quoted context omitted.

Nail on the head right here. The only thing Dropbox has these days is consumer confidence in it's syncing process. Beyond that, they trail every competitor feature-wise and frankly, they are succeeding despite their management, not because of it. Recent product enhancements have been, let's be honest, mediocre at best across the board and show no signs of that changing anytime soon. They exist now solely due to brand…

What if -- hold your breath! -- Dropbox is simply a medium-sized, privately held, profit-generating company that will end up satisfying a certain customer segment and paying dividends to investors? The horror!

Their investors will revolt. Their investors need 10X returns in the next couple years to satisfy their fund's existence to their LPs. Funds need a few big wins like Hollywood studios need a couple blockbusters every year. Dropbox's investors are counting on them being a blockbuster. Dropbox's private valuation is an order of magnitude higher than Box's public valuation. And Box has a bigger sales team, more revenue, and more inroads into big enterprise than Dropbox. So it's a real pickle and dividends aren't going to get them out of it.

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#103

Post by morgante »

huac wrote: post #63
InvisibleCities wrote: post #54

Earlier quoted context omitted.

That's a great question, and one I won't pretend to have the answer to. On one hand, Basecamp has carved out a very profitable niche for themselves despite venture-backed competition from Jira and others, so it's certainly possible. I also think that there is a big difference between taking money when you are small with typical angel / seed-round terms and taking late-stage money with 2x VC liquidation preferences an…

Jira isn't VC-backed either ;)

Yes it is. They raised $60M from Accel. [0]

[0] http://blogs.wsj.com/digits/2010/07/14/accel-invests-60-mill...

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#104

Post by Dirlewanger »

new299 wrote: post #31

In my mind Dropbox became a company not worth supporting when Rice joined Dropbox's board ( http://www.drop-dropbox.com/ ). I don't know what their future holds. But personally, with a board member who advocates warrentless surveillance it seems unlikely that we share similar views on the security of my data, and I wont be using their service. I'd hope their customers are also looking at the security of their data in…

Eh, red herring. You really think Dropbox is the one sole large US cloud storage company that's bravely resisting the NSA's grasp?

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#105

Post by diogenescynic »

mangeletti wrote: post #98
shasta wrote: post #86

Earlier quoted context omitted.

I expect they're going to branch out into physical storage. Prediction: by 2020, there will be thousands of DropBox locations where you can rent space ranging from a small locker to a large garage. If they're smart, they'll start in rural areas.

Interesting; what made you think of this? Also, will I be able to sync my locker with my desk drawer? :)

It's not that far-fetched. Omni and MakeSpace are both already selling 'on-demand' physical storage and have similar business models to what shasta outlined. They pick up your stuff and store it somewhere, like Iron Mountain does for documents.

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#106

Post by mattzito »

jalonso510 wrote: post #73
mattzito wrote: post #66

Earlier quoted context omitted.

I obviously don't know the specifics of the dropbox option pool, but it's not uncommon to have employee options issued at a 409(a) valuation instead of the fundraising valuation. So even if money was raised at a 10bn valuation based on the expectation of future value, a 409(a) valuation would probably place the company at somewhere closer to 10-40% of that, which puts employees in a much better situation.

You're right that options are granted at the 409a price (the common stock price) instead of the price investors pay in the financing, but as companies become more mature, the common and preferred prices usually begin to converge somewhat. In a seed financing you might see common stock valued at 10% of the preferred price, but in a late stage, billion dollar company there will be much less of a discount applied. Emplo…

Right, but if the 10bn funding was at a high multiple relative to revenue, the 409a will probably still be a lot lower. I'm not saying that it would be at 2bn, but the GP was talking about people being granted options at 10bn, and potentially they're being granted at a much lower value.

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#107

Post by gerbilly »

tholmes wrote: post #85
malchow wrote: post #79

Earlier quoted context omitted.

What if -- hold your breath! -- Dropbox is simply a medium-sized, privately held, profit-generating company that will end up satisfying a certain customer segment and paying dividends to investors? The horror!

Companies like that don't usually hire 600 people in 12 months, though. Buuut I guess they could. I guess it just kind of looks like the explosive hiring you see sometimes when a company has projected huge growth but then falls flat and realizes it has way too many employees :(

>Companies like that don't usually hire 600 people in 12 months, though.

Maybe, are those 600 people there to fight fires and work on tickets, or adding product features?

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#109

Post by dsjoerg »

subdane wrote: post #102
malchow wrote: post #79

Earlier quoted context omitted.

What if -- hold your breath! -- Dropbox is simply a medium-sized, privately held, profit-generating company that will end up satisfying a certain customer segment and paying dividends to investors? The horror!

Their investors will revolt. Their investors need 10X returns in the next couple years to satisfy their fund's existence to their LPs. Funds need a few big wins like Hollywood studios need a couple blockbusters every year. Dropbox's investors are counting on them being a blockbuster. Dropbox's private valuation is an order of magnitude higher than Box's public valuation. And Box has a bigger sales team, more revenue,…

Would that be a smart move for those investors? Just because you need 10x returns doesn't mean there's a good way to get them.

Re: Dropbox May Not Be LeBron James, but Is Still in the Game

#110

Post by kolbe »

Spooky23 wrote: post #68

> Dropbox is not laying off workers or shrinking; it hired nearly 500 people last year, 75 since the start of this year, and it plans to soon move into a sprawling, custom-designed office building for which it has signed a long-term lease. Honest question: WTF are they doing?

I remember thinking years ago that Dropbox's product is the perfect example of the 90/10 rule of programming. I feel like the code Drew wrote at YC covers 90% of the usefulness of Dropbox. The rest has been really advanced and convoluted optimizations.
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