Drew Houston (left) the founder and Chief Executive Officer of American Cloud Storage company Dropbox, never met Arash Ferdowsi before they launched Dropbox. (Image courtesy bbc.co.uk)
Drew Houston, while speaking in the BBC’s weekly programme ‘The Boss’ says, he had only two weeks to find a complete stranger to get married. In 2007, then the 24-year-old fundamentally desperate to get to accept his idea for starting his business on cloud storage.
Silicon Valley’s most prestigious backers of new start-ups were ready to take a bet on Houston’s “Dropbox” but there’s a catch-they want to get a business partner. Their argument was that many new companies are not successful if you have more than one founder, more than one person who takes the time to make decisions and deal with a lot of workloads.
The problem for Houston was that at that time, it is a person who works alone, but for many reasons, nobody in his friends was ready to join the business. So he only had two weeks to complete the search for someone, to be his co-founder.
“It is like getting an email from the dean of attending your favorite college, but the deadline for this program is in the coming weeks and you should be married at that time, not just to find a date,” he said.
Moving quickly, Houston manages to convince the 22-year-old student, Arash Ferdowsi, to quit the university and join with him in his business. Ferdowsi was a friend of a friend but he and Houston never met.
That was eleven years ago. Fast forward to today, and San Francisco-based Dropbox estimates now over $ 12 billion. (equivalent £ 9 billion). While Houston’s net worth is estimated at $ 3 billion, and Ferdowsi stood at $ 1.3 billion.
Not bad for a company that many say they have never been successful and that Mr. Steve Jobs (late) of Apple had said that he will destroy. Inspirations for new business may have come from anywhere, but Houston mind got the idea of Dropbox when he was traveling on a bus from Boston to New York in late 2006.
As a graduate of computer science at the Massachusetts Institute of Technology (MIT), he travels six hours or more on trips to work on some earlier business ideas. But when he got the seat, he realized that he had forgotten to bring his memory chip containing soft copies of all the documents.
He said: “I’m very disappointed because I feel like something happened.” “I do not want this problem again, so there’s something to do … I start writing some code [to resolve the problem], but no clue about what’s going to happen.”
What Houston has come up with, it’s the idea of Dropbox-Remote Repositories that users can have access to anywhere they have. After two weeks he created the model and his name.
But just a few months later, a strange friend showed an interest, therefore, Houston returned to MIT, where he would meet Ferdowsi, who was a student of electrical engineering and computer science at his old university.
“We met at the student center for one or two hours, then Arash left school next week,” said 35 years old Houston.
“In thinking about the past, it’s crazy … I’m sure his parents have different plans for him, including leaving college.
“But he was so excited to do it. And I do not know if we really know what we were getting. ”
After shifting into the base of Silicon Valley’s Y Combinator, an American seed accelerator, Dropbox started his operation in the year 2008. To appeal to customers for the first time, Dropbox has made promotional videos that were placed in discussion areas such as Reddit and Slashdot websites. The goal was to get users of the tech industry to start using this service in the hope that they will talk positively about the product, and then the number of users will increase thanks to word of mouth.
This idea of promotion was proved successful, and 5000 customers were placed on a waiting list within a few days, Dropbox had registered 75,000. Then this went from 100,000 to 200,000 customers “in something like 10 days.”
The number of users grew faster and faster than when Houston and his team reached the project with a promotional scheme along with the incentive to the users. This provides more Dropbox users with free storage if they can get friends to sign up. Other people will also have more free space, and so on.
This scheme attracted millions of new customers and drew attention to the late Steve Jobs’ who had shown interest in acquiring the business in the year 2011. While Houston declined to comment on it, however, in previous interviews, he concluded that Jobs did not do well when he refused this offer. Business Insider last year quoted Houston, saying that he had threatened to kill “Dropbox” after the rejection of Steve’s offer.
Apple released its own cloud storage service after 2011 namely iCloud, but it did not stop the growth of Dropbox. Today, Dropbox has over 500 million users, of which 11.5 million people pay a yearly subscription fee for extra storage. This includes more than 300,000 premium business customers.
The company floated on the New York Stock Exchange earlier this year and its market capitalization, which has a total value of more than $ 12 billion. Its annual revenues exceed $ 1 billion, and over 2000 employees are working around the world.
CCS Insight researcher Ben Wood said that there are many reasons behind the success of Dropbox, like easy to use, and “It’s very important that people can easily store and share large files, which are still email servers are unable to provide such facilities.”
Houston said he and Ferdowsi, who are still in senior management, continue to work well together. Regarding his specific role as CEO, Houston said his current focus is to make sure that employees ignore the recent success of share flotation, instead of “focusing on why we are here – making customers happy”