Dropbox founder Drew Houston is an MIT graduate. But what sets this young entrepreneur different is the fact that when Steve Jobs made an offer that he couldn't refuse to buy his intelligent creation, he turned it down without a second thought!
"I mean Steve friggin' Jobs," quips Houston, who is now just 28. Dropbox is the creation of Drew Houston, and it tries to solve one of the oldest problems the Internet has ever had: How do I access all my files from anywhere I go, no matter what device I am on? Simple it may sound but the statistics of growth for this humble startup is simply startling. The 50-million user figure was only one-third that a year ago, and the revenue is set to hit $240 million in 2011, despite 96% of its user base being free users! Even if Houston is reluctant when it comes to revealing margins, we know this much: the 70 employee team that runs Dropbox, most of them engineers, generate three times more revenue per employee than even industry hulks like Google.
Statistics must be Houston's favourite because they also predict, that the 96% free users are filling their 2GB free accounts at scorching speeds and will soon upgrade to 50GB for $10 a month or 100GB for $20. This means even if no user signs up newly in 2012, his sales will double! "But we will sign up many, many customers". Dropbox has become a verb and has joined the many recent additions to the vocabulary like 'twittering', 'e-mailing', you can now, "Dropbox Me"!
Born in suburban Boston, Houston's father is a Harvard trained Electrical Engineer and mother a high-school librarian. His mother had the intuition that her son is geek material when he started tinkering with an IBM PC Junior at the age of 5! She promptly made him learn French, made him hangout with friends, and never allowed him to skip a grade. At 14 Houston signed up to test online games and was soon rooting out security flaws. The company soon hired him as their network programmer. He worked at startups throughout his high school. Dropbox is his sixth.
By his freshman year at MIT, Houston had largely become what his mom feared most- he was churning out code big time. He was finally convinced by Daniel Goleman's "Emotional Intelligence" that Intelligence was not all that counted if he was to run his own company. "No one is born a CEO, but no one tells you that" says Houston. “The magazine stories make it sound like Zuckerberg woke up one day and wanted to redefine how the world communicates with a billion-dollar company. He didn’t.” He then went for an MBA or “a crash course in project management and getting people to do stuff for you.”
The idea of dropbox was conceived three months later when he was travelling to NY; having forgotten his USB drive he was left with no code to work on. Frustrated and challenged, he then set to write code for seamless synchronisation of files across different platforms, and voilà, four months later he was flying to San Francisco to meet Paul Graham of Incubator Y Combinator, who would later fund his startup.
Impressed by his innovative idea and work done so far, Y Combinator promised funding but insisted he have a co-founder before submitting application. Houston had two weeks; enter Arash Ferdowsi, son of Iranian refugees, studying Computer Science at MIT. After their getting together, Ferdousi dropped out of MIT with just six months to go! With the $15000 from Y Combinator, they could rent an apartment and buy a Mac. Houston and Ferdowsi spent 20 hours a day trying to reverse engineer and make their application fit on Mac.“Devices are getting smarter—your television, your car—and that means more data spread around,” says Houston, “There needs to be a fabric that connects all these devices. That’s what we do.” Months later, they presented Dropbox at Y Combinator meeting, and from then on there has been no looking back!
Houston and Ferdowsi spent the next year pulling all-nighters. They were perfectionists. One time Houston had to track down a copy of Windows XP for Sweden because it had a unique coding quirk that was stalling Dropbox slightly. Ferdowsi had a designer spend hours tweaking the shade of Dropbox’s button inside the file system on a Mac. It was a touch darker than the Apple buttons, and it drove him “crazy” for weeks. “I am the gatekeeper here,” says Ferdowsi. “Everything has to be just so.”
It was at one of his meetings-over-lunch that he realised how big Dropbox has become. While explaining the concept, someone at the table said, “I know, I use it all the time.” Rather than a tech CEO, his drinking buddy was rapper Will.i.am of the Black Eyed Peas, who told Houston he used Dropbox to collaborate with producer David Guetta on the hit “I Got A Feeling.” Such anecdotes now pour in. After his laptop crashed during final exams one law student wrote in: “Without Dropbox I would have failed out of law school and be living under a bridge.” A watch design firm just outside of Venice, Italian Soul, uses Dropbox to create new pieces with a designer in Mendoza, Argentina, the hulking 3-D files living painlessly in the cloud. Haitian relief workers kept up-to-date records of the deceased and shared those names with Miami and other cities. Professional sports teams inventory videos of opponents’ plays, accessible wherever the team is playing. Last Thanksgiving even the shadowy Ferdowsi, donning a Dropbox hoodie, was mobbed by star-struck teens in an arcade in Kansas City, his hometown. “That’s when I knew we’d hit it,” says Ferdowsi.
Born in suburban Boston, Houston's father is a Harvard trained Electrical Engineer and mother a high-school librarian. His mother had the intuition that her son is geek material when he started tinkering with an IBM PC Junior at the age of 5! She promptly made him learn French, made him hangout with friends, and never allowed him to skip a grade. At 14 Houston signed up to test online games and was soon rooting out security flaws. The company soon hired him as their network programmer. He worked at startups throughout his high school. Dropbox is his sixth.
The idea of dropbox was conceived three months later when he was travelling to NY; having forgotten his USB drive he was left with no code to work on. Frustrated and challenged, he then set to write code for seamless synchronisation of files across different platforms, and voilà, four months later he was flying to San Francisco to meet Paul Graham of Incubator Y Combinator, who would later fund his startup.
Impressed by his innovative idea and work done so far, Y Combinator promised funding but insisted he have a co-founder before submitting application. Houston had two weeks; enter Arash Ferdowsi, son of Iranian refugees, studying Computer Science at MIT. After their getting together, Ferdousi dropped out of MIT with just six months to go! With the $15000 from Y Combinator, they could rent an apartment and buy a Mac. Houston and Ferdowsi spent 20 hours a day trying to reverse engineer and make their application fit on Mac.“Devices are getting smarter—your television, your car—and that means more data spread around,” says Houston, “There needs to be a fabric that connects all these devices. That’s what we do.” Months later, they presented Dropbox at Y Combinator meeting, and from then on there has been no looking back!
Houston and Ferdowsi spent the next year pulling all-nighters. They were perfectionists. One time Houston had to track down a copy of Windows XP for Sweden because it had a unique coding quirk that was stalling Dropbox slightly. Ferdowsi had a designer spend hours tweaking the shade of Dropbox’s button inside the file system on a Mac. It was a touch darker than the Apple buttons, and it drove him “crazy” for weeks. “I am the gatekeeper here,” says Ferdowsi. “Everything has to be just so.”
It was at one of his meetings-over-lunch that he realised how big Dropbox has become. While explaining the concept, someone at the table said, “I know, I use it all the time.” Rather than a tech CEO, his drinking buddy was rapper Will.i.am of the Black Eyed Peas, who told Houston he used Dropbox to collaborate with producer David Guetta on the hit “I Got A Feeling.” Such anecdotes now pour in. After his laptop crashed during final exams one law student wrote in: “Without Dropbox I would have failed out of law school and be living under a bridge.” A watch design firm just outside of Venice, Italian Soul, uses Dropbox to create new pieces with a designer in Mendoza, Argentina, the hulking 3-D files living painlessly in the cloud. Haitian relief workers kept up-to-date records of the deceased and shared those names with Miami and other cities. Professional sports teams inventory videos of opponents’ plays, accessible wherever the team is playing. Last Thanksgiving even the shadowy Ferdowsi, donning a Dropbox hoodie, was mobbed by star-struck teens in an arcade in Kansas City, his hometown. “That’s when I knew we’d hit it,” says Ferdowsi.
As for now,Houston’s estimated 15% stake is worth, on paper, $600 million.
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