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Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

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Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#31

Post by tedunangst »

seminal wrote: post #27
gruseom wrote: post #22

Earlier quoted context omitted.

Dropbox got on to something big early on Early on? Just the opposite. The space was so saturated that new entries into it were considered a cliche joke. http://www.joelonsoftware.com/items/2008/05/01.html The other great example of successful late entry into a saturated space, of course, is Google.

Facebook too. Can't think of many recent instances where the winner of the early adopters won the space. Netflix?

RedHat appears to have won the overpriced linux distro space. Amazon. People think of gmail as a late winner, but the numbers aren't quite there.

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#32

Post by jmreardon »

ThomPete wrote: post #11
rubyrescue wrote: post #9

Earlier quoted context omitted.

21 million seems pretty easy to achieve to me worldwide; every one of my social circles and peer groups, both technical and non-technical, in the US and South America, seem to use dropbox. my parents love it. my wife is non-technical to a fault and can't live without it; she just paid for the upgrade to 100gb because it represents safetey to her of her photos. even my under 10 year old son knows that saving in dropbo…

Just until windows and apple both offer the service. Apple is already on the way with iCloud.

Microsoft has had such a service for a few years now, they call it SkyDrive. Unfortunately it wasn't a very good user experience when I last looked at it. It's been a while though (and I just use Dropbox now), so it might have gotten better.

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#33

Post by sdizdar »

georgemcbay wrote: post #21
sdizdar wrote: post #18

Earlier quoted context omitted.

I believe that everybody will have a least one "cloud storage" account. Actually probably multiple "cloud storage" accounts since cloud storage providers will try to specialize and differentiate (i.e., you will have Google Docs account, Dropbox account, iCloud account, etc.). So 21M is a conservative number. And don't forget companies of all sizes are going into cloud: so replace 21 million users with 21 millin users…

I believe that cloud storage accounts will find widespread usage, I just don't think it is a $5 billion industry. I think it is more something that will exist as a free bonus within some other business model (eg. buy one Amazon album, get many gigs for free, or use Google Docs storage so google can have even more info on you for ad targeting). In short, I think Dropbox got on to something big early on, but they will…

I understand your point.

However, it might be that as cloud services become a critical for businesses and individuals will not be going for "free" solutions. Reminds of "Starbucks dilema": wanna a cup of coffee for 50c and have diarrhea or Starbucks coffee for $4? And how hard could be to make a good coffee?

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#34

Post by dont »

I tend to see the software world as divided between "Tools" and "Platforms"

Platforms are systems that enable a large number o similar behaviors -- Google is the search platform, Amazon the shopping platform, Windows is a platform as is MS Office. Platforms tend to be a winner take all business, as there are significant advantages to scale as well as strong network effects.

Tools on the other hand do one thing and one thing well. Most products start off as tools - then there are 2 ways to go, either become a platform (eg: facebook) or get bought by a platform (eg: flickr).

I don't see how dropbox is going to be worth $5B as a file sharing tool, nor do I see any platform buying them at that price.

So my question really is -- what is the dropbox platform gonna look like? What do the investors know that we don't?

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#36

Post by Maxious »

mtogo wrote: post #35
alFoX wrote: post #14

Have I chance to have open source client? I don't trust blobs on my computer.

https://www.dropbox.com/downloading

The source on that page is for the Nautilus (GNOME File Browser) extension that adds right click menus and special icons to the file browser and "dropbox" a command line client for talking to the dropbox daemon in the same way as the Nautilus extension.

The secret sauce is dropboxd which is not open source.

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#37

Post by ericd »

frossie wrote: post #10
johnrob wrote: post #6

I'm somewhat surprised that a file sharing company can get a valuation this large. Don't get me wrong, the product is great, but I'm skeptical that the "file sharing industry" is big enough for valuations like this. Some quick math: A 5 billion valuation implies earnings of at least 250 million/year. Assuming paying customers are worth 240/year and represent 5% of the user base, dropbox would need roughly 21 million…

Well, they don't just have the $240/yr plan. And file sharing isn't quite as sophisticated as you might think - it passes the grandparents test. I wish Dropbox would have a smaller priced tier (like $5/mo). The free plan is more than ample for my needs, but I like to pay for premium service from companies I use to support them. But $10/mo is a bit steep in comparison to, say, the value I get out of Netflix streaming…

I think Netflix isn't the best thing to compare things to. It's absurdly cheap for what it is, and they might not even be able keep it at that price point (undervalued, and the content companies know it).

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#38

Post by sprovoost »

jmreardon wrote: post #32
ThomPete wrote: post #11

Earlier quoted context omitted.

Just until windows and apple both offer the service. Apple is already on the way with iCloud.

Microsoft has had such a service for a few years now, they call it SkyDrive. Unfortunately it wasn't a very good user experience when I last looked at it. It's been a while though (and I just use Dropbox now), so it might have gotten better.

Microsoft may have just been too early. Once they recognize the success they can clone the usability in no time. Or patent troll Dropbox off the map. Very risky investment if you ask me.

That said, Dropbox is a great product and the free version is good enough for the small number of documents that I have that are not somewhere else in the cloud.

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#39

Post by sprovoost »

georgemcbay wrote: post #25
gruseom wrote: post #22

Earlier quoted context omitted.

Dropbox got on to something big early on Early on? Just the opposite. The space was so saturated that new entries into it were considered a cliche joke. http://www.joelonsoftware.com/items/2008/05/01.html The other great example of successful late entry into a saturated space, of course, is Google.

I'm an enthusiastic Live Mesh supporter that has been using Live Mesh from the beginning, so I'm aware that Dropbox (or Mesh for that matter) is not the first way to share files over the Internet, but none of what Joel is talking about in that piece was really both consumer facing and as simple as "run the app and forget about it" back then, so it is basically irrelevant to the value Dropbox (and the current Live Mes…

iPad is most certainly a big deal, but if Apple doesn't keep innovating they won't be half as relevant five years from now when tablets are a commodity. They're already resorting to patents to fight off competition.

Dropbox's simplicity is it's own undoing in the long run; it's too easy to commoditize. They'll be forced to lower their price to the cost of storage and that's when Apple and Microsoft will just subsidize their own offerings and kill them, unless a regulator notices it on time.

Google is not a good counter example; it seems simple to the user, but as Bing has shown, it's very hard to replicate. Dropbox on the other hand is trivial to clone. Any IPO event would just increase the likeliness of big companies noticing and putting some effort into it.

Re: Dropbox Chooses Investor Group, Valuation Set at $5+ Billion

#40

Post by sprovoost »

rokhayakebe wrote: post #16

Sometimes I feel like there is a little jealousy among the startup community which translates into I like this, but the valuation is absurd . Dropbox could be worth that much, I believe. Some say their business is not defensible because anyone else can build a similar product for free. Well until someone has, nobody has.

The problem with owning shares is that it takes a decade or longer to earn back your investment just through dividends. I'd say it's almost certain lots of competitors will be crowding the space with that time span.
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