Dropbox Raises $250M In Funding, Boasts 45 Million Users | Hacker News Reader

Dropbox Raises $250M In Funding, Boasts 45 Million Users

techcrunch.com

118 pointsphilipDS43 comments

Of course, now the question is: what are they going to do with this $250M? The only new feature that has really come out of Dropbox recently is the API, and even that has been in development for some time.

As a paying Dropbox user, one of the things I most appreciate about them is how they are slow and cautious about rolling out new features, placing more importance on keeping the software stable, reliable, and reasonably fast.

I also use Evernote, which is a stark contrast. They roll out new features so quickly that it usually has many bugs and I have to learn a new interface ever year. I don't trust Evernote with anything critical (and I don't pay them) as a result. Just miscellaneous notes (To be fair, the Windows client finally seems to be stable and without any more glaring bugs).

One simple thing they could do with the $250m is to simply scale the business. They have had the same price structure in place from the start and are perceived as somewhat expensive at this point as competitors continue to lower prices. Lowering Dropbox prices will attract more paying customers which I'm guessing could be economical if they were 5-10x their current size.

They could make a land grab for enterprise users. There's tons of stuff you could do with that money to make Dropbox attractive to corporations.

This one. Making Dropbox more friendly to small-medium businesses: a black-box "dropbox appliance" you put on your LAN (or just the software, in a nice neat Ubuntu package to replace Samba), selective sync and access-management, user groups, encryption, etc.

The fresh money will be used for acquisitions, strategic partnerships and the recruitment of new people, the company said in a statement.

I'm hoping for more work on the web API: OAuth2, sending/accepting shared folder requests, push notifications of file updates.

They needed all this money so they could implement read-only folder sharing.

(I kid, I kid, huge dropbox fan here ;) )

You didn't see the Gizmodo featured comment on the sharing model?

A new datacenter.

That would be a huge distraction. If they're already profitable (according to Forbes) with the current model, they should focus on the product and customer acquisition, not cost-cutting.

The cost savings would be pretty massive for a company this size. This is not a trivial aspect to the business, but a way to get significant profitability gains.

Customer acquisition ?

Thought the same thing myself, that is a massive amount of money for a company like this.

I hope they buy AeroFS and integrate it into dropbox, giving it a P2P component.

founder liquidity!

Impressive that Dropbox only raised 7.2 million before this round.

Congrats guys! I'm really pleased with Dropbox's success. It gives me encouragement to stay focused on solving unsexy but fundamental problems.

I actually think Dropbox has a very sexy business model.

It's the Silicon Valley darling with the least amount of flaws in the business model, imo.

Too many others need to police their users to take their cut, e.g. AirBnb.

Now, in hindsight, when it's getting billions of dollar valuations, yeah it looks sexy. But when it was starting out?

Google, Microsoft, Apple were going to eat its lunch any day now.

You have to download a desktop client? Dude, the future's all about web apps.

All the real money is in social recommendations for the colour of your next toilet roll.

> Google, Microsoft, Apple were going to eat its lunch any day now.

Sure, there was potential serious competition, but not yet. It was still a big opportunity just waiting for someone to come and do it right.

It's the kind of service that everyone has a use for and many will pay for. Hook 'em with a free 2GB, and sell extra storage - a very solid business model.

Heh, I don't know why your comment reminded me of this old gem:

Of course, no one wanted to comment on how lucky I was to spend time reading software manuals, or Cisco Router manuals, or sitting in my house testing and comparing new technologies, but that’s a topic for another blog post.

The point of all this is that it doesn’t matter how many times you fail.It doesn’t matter how many times you almost get it right.No one is going to know or care about your failures, and either should you. All you have to do is learn from them and those around you because…

All that matters in business is that you get it right once.

Then everyone can tell you how lucky you are.

http://blogmaverick.com/2005/05/30/success-and-motivation-yo...

Dropbox also has the ability to take the path of becoming a platform more easily than something like AirBnB. I'm bringing this up because Steve Yegge's recent post on Amazon vs. Google struck a chord in me.

I could see Dropbox becoming a large file sharing network with great access controls. The amount of data that's produced every day needs a place to be stored and accessed, even if only a fraction of it is worth sharing. It's definitely a problem that many organizations and groups have, and there are few good solutions out there.

And they STILL cant offer users encryption.

But everyone else is using it now so who needs encryption anyway?

Sorry for the snark. I agree with you but trying to raise a raucous about client-side encryption seems to be useless at this point. I only hope they use some of that funding to implement encryption at the very least for those who want and would use it. Even to make it an add-on price is better than no client-side encryption. But then we still have to trust the actions of the binary executable to not do some other nefarious things.

Is iCloud going to be a threat for dropbox?

No, because there are even today a lot more non-apple users than there are apple users and dropbox is platform agnostic.

It may cause them some lost sales but nothing threatening.

And in addition, myself including, all apple users are not 100% apple users. I have macs, linux and android and dropbox works with all of those.

That's the big deal breaker really. You have to be pure Apple at home, at work and on your devices for iCloud to be a replacement.

Dropbox's platform coverage is truly impressive: Windows, Mac, Linux (LINUX!! GUI _and_ command line), Web, iOS, Android, Blackberry. And it just works on all of them.

The Linux support is a wise move by Dropbox for two reasons: (1) it encourages an eat-your-own-dog-food culture among employees who use Linux, and (2) it enables Dropbox integration with web-based services in ways the API isn't ready for yet. (File updates get pushed to you via dropboxd; you have to poll if you use the API.)

Apple users tend to be more vocal about what they like. At my last job, by the time the company was acquired, 5 of the 6 people have switched over to Macs.

So I think yes, iCloud will have its effects. Not yet though.

I think iCloud could actually help Dropbox.

Say an iPhone user (who only has a PC) says "Wow, iCloud seems really neat. I wish it worked with my PC though. "

Then his friend says to him "You can try Dropbox. Not exactly the same, but pretty close. Here's an invite. "

I think given how Apple treats its windows software properties (iTunes, Safari, QuickTime, and the Apple Updater come to mind), even if they did make a cross-platform iCloud client, it would probably have the same "ported from mac" rather than a "designed for windows" feel, so not likely to be a big threat.

I think so, yes. iCloud is a very different service but serves a similar purpose. I think ultimately it's a more elegant solution for what most people are using Dropbox for today. It's not just Apple though. It's Google & Microsoft too. I just don't see how DropBox a) makes money b) competes with deep OS integration of other cloud storage solutions.

Only if iCloud will run on every device. Normal people don't use 100% Apple products.

Congrats to Drew and the team! Dropbox is really a fantastic product.

I'm guessing the founders took a decent chunk off the table...

Yes, that seems to be pretty much the norm these days. But at valuation of $4B (as reported by TC), $250 million is just 6.25% dilutions so founders (and other early investors) did get a pretty good deal.

Could be participating preferred, accumulating dividends, etc. There's a lot more to it than straight %.

So when is Dropbox actually going to be profitable? If you have 45 million users and you can't be self-sufficient then maybe the business model doesn't work.

According to the current Forbes profile, Dropbox is already profitable, though it's not revealed exactly how profitable they are.

> The 50-million-user figure is up threefold from a year ago, and it has solved the “freemium” riddle, with revenue on track to hit $240 million in 2011 despite the fact that 96% of those users pay nothing. With only 70 staffers, mostly engineers, Dropbox grosses nearly three times more per employee than even the darling of business models, Google. Houston claims it’s already profitable but won’t reveal margins.

http://www.forbes.com/sites/victoriabarret/2011/10/18/dropbo...

Who said they're not?

Also, if there is any business that benefits from economies of scale, it's this one. Storage (and it's associated cost) scales very well as your user base skyrockets.

I just figured with 45 million users why would you need $250 million.

Of course if they're profitable, with that kind of user base they could keep growing organically. Perhaps they see some potential strategic investments that would give them lasting competitive edge, and that need big money.

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