Dropbox

“Sean Ellis invented the term when he worked at Dropbox”

“Actually had a term sheet out to him. Ended up losing on valuation and a very, very small differential on ballot valuation, which was a massive lesson for me in that, you know, there are crazy valuations and there are not crazy valuations, but when you're talk…”

“Our first investment for homebrew was a company called Clementine, and it was kind of a joint effort between us and the founders in terms of spending time in a particular problem area and then coming up with a product idea. So it was almost an incubation of so…”

“And so, yeah, I think every six months we did a pretty significant reorg.”

“Dropbox had 70% of its users outside of North America, and the biggest chunk of those were in Europe”

“And if you look at my portfolio, your company, some of the best company I've ever invested founders are Iranian, you know, naming it Dropbox, one of them, Sound Hunt, the other one, and then current fund has few amazing Iranian founders.”

“I actually became one of the first investors in In Dropbox”

“And as we saw today with Dropbox, the IPO priced Below the last round valuation.”

“And if that would have been the case, you know, Dropbox, we would have led to see the series a and probably kept a drew in Boston and it would have just changed everything.”

“All of those companies look small in the beginning, you know, Airbnb, Dropbox, Pinterest, like the lists, you know, even Uber in the beginning, they all looked like they were going after something small in the beginning, Amazon just doing books.”

“So whether it's Dropbox, or Slack, or the Microsoft, the three, six, five efforts, or what Adobe is magnificently doing, a lot of the enterprise is actually moving towards the consumer metaphor to sell software.”

“First round offered Twitter their first term sheet months before Union Square led their round. We offered Dropbox their first term sheet, and I'd say we lost both of those due to sticking to price.”

“I mean, for us, our investors were all people that we had already known. In other words, the lead investor from Index, Mark Goldberg, we worked together at Dropbox.”

“At Dropbox, you know, the LTV to CAC Ratio was actually in the double digits when I was there, and so that enabled us to have the revenue predictability that was key to our IPO in 2018, and it was just a few years after we pivoted most of the business from con…”

“My boss at the time, who's now the CFO of Dropbox, Ajay Vashi, took me aside and said, you're going to spend 80% of your time the next six months hiring. And I was furious. It sounded crazy to me. All I wanted to do, there was so much work, was to put my head …”

“Two of the best deals of all time were seeds by Sequoia. I think an initial almost 600,000 dollar investment in Airbnb and a million dollar investment in Dropbox to get very large ownership positions.”

“Three days, 19 interviews later, I ended up getting the job at Dropbox”

“Dropbox did a lot of innovation in terms of their intern program. For example, they had a parents weekend where they would invite the parents of the interns to come just so that they would feel comfortable.”

“It took more than a year to convince Aditya Agarwal to join as a head of engineering, for example.”

“Dropbox was the company that shattered and started the BYOA move.”

“Dropbox was one, and it was a weird story. And it was a miss because Drew and I were already friends. I knew him before he started Dropbox. Talked to him out of the prior startup he was going to do. We would meet regularly. He's another MIT guy. And it was a m…”

“And I think this lack of that level of commitment early on, I think at Dropbox was what plagued us. You know, we had wonderful, fantastic go-to-market leaders at the company, but we just had them, like each one came for, you know, a couple of years and then le…”

“The way that we wanted to find people who could potentially replace Arash, we analyzed who said no more often and who was right in the hiring decisions more often. Like we took the entire database of our interviews for the company, and then we found those two …”

“At Dropbox, we had this initiative to try to replace our final interviewer for a very long time has been the co-founder. Arash has been the co-founder. He interviewed every single person of the company until we were like 500 plus people.”

“I think at Dropbox we launched the first region outside of the US when we were over a hundred million in ERR, and I think that frankly was too late. I think you can start doing this when you are at about 20, thirty million because it just takes a very long tim…”

“I would argue actually that companies like Asana or Dropbox were a little too late into enabling the enterprise motion on top of PLG.”

“I would say that Dropbox did struggle at times with a core identity of whether it was a consumer company or whether it was an enterprise sales company. And so I think that we spent a lot of cycles and we missed a lot of opportunities because we didn't have tha…”

“Every iconic PLG company, whether it's Slack or Dropbox or Asana or Zoom, you know, at some point they have to add on that sort of direct selling motion to complement the PLG business.”

“Whatever your company is or startup is right now is sort of the seed crystal for the company it will become. Okay. What does that mean? Well, you know, people don't usually want to join companies where the people are like less talented than them, right? So tal…”

“Yeah, it was a 1.2 million on 3.8 pre, so five posts.”

“A manager's performance cannot be rated higher than the output of their organization.”

“I had started another company at the time doing online SAT prep of all things.”

“My first company, my bootstrap company, like it never really succeeded and then it died, but like, then Dropbox was like succeeding massively and then seemed to be dying massively. And I'm like, that is way worse than any of the others.”

“When we were building Dropbox, like our team was only maybe 10, 15 people when we were reaching millions of people millions of customers.”

“We met on a Friday. Pejman actually came with us to our pitch, which was apparently, which I learned later is extremely unorthodox. And then Mike Moritz, kind of the godfather of Sequoia came to our apartment on Saturday morning. We had a handshake deal on Mon…”

“Unlike chess or sports or something where you can kind of peak in your twenties or thirties being CEO, something you can do for, you know, decades and still only be Kind of midway through your journey.”

“He was like, well, you guys are a feature, not a product. And now we're gonna have to like compete with you and kill you and you don't have distribution and dah, dah, dah, dah, dah.”

“My first experiences, his first experience trying to fire someone they ended up coming back to the office the next week, and they didn't really get that.”

“There's not going to be many after this whole recession is done that are worth ten billion, but Dropbox will be because it's just a cash flow machine.”

“The first person I ever fired, I won't, obviously won't say who they are, but it was a person in a leadership role at Dropbox and was clearly not delivering results. And Sequoia basically staged intervention with me. So Brian Schreier, who was on our board was…”

“When I was at Dropbox, one of the large, I won't say who, but one of the largest investors in the world In tech told me that they had run a survey of all the investments they'd ever made. And the founders that didn't actually talk to them, refused to take thei…”

“He was actually the person who kept the talent bar at Dropbox as high as he did. Like Dropbox has that well-earned reputation for being a place where lots of talented people worked, and it would have, the bar would have easily come down if it wasn't for him.”

“I think Dropbox was one of the first companies to go from a B to C company into the B to B realm and really work hard to get the enterprise posture and the security and controls right.”

“Dropbox, like, 2010 to 2017 on your resume, that really just opened all the doors”

“And then when I was at Dropbox, I was responsible internally for kind of trying to build a Slack like product, basically a product that would allow communication on top of like the documents that are in, in, in Dropbox. And we just, we really, really didn't fi…”

“Some horizontal products are actually, you know, a vertical of their own, right? When I think about, you know, a Slack or a Dropbox, I think they actually fall into a very well-defined category in my mind. Like, You know what you're going to use Slack for. You…”

“They really are. And one of the funnier ones to me is Dropbox. Now Dropbox has a built-in AI, and I don't know, I mean, I'm sorry, Drew, but I just want Dropbox to store the files. Bandwagon ride the hype wave aspect.”

“I think it's interesting to think about, and I've certainly seen PLG businesses that got well past 50 on one channel, or even back to Dropbox, got well past 50 in one channel.”

“And, you know, arguably, you know, even Dropbox and GitHub and in Heroku have fallen into this in different times.”

“You talk about zombies, but some of these zombies are approaching 40% operating margins, and look, it's not fun, I don't think it's fun to be running Dropbox today, ok, I don't think it's fun, I don't think it's anything like when Drew started, but they're app…”

“I think we are seeing some great companies like Dropbox and box settle into that and just feel that they without, unless they have a huge market cap and then go buy something that it is the world, right?”

“When we look at the boxes and the drop boxes, and I think both Aaron and Drew are honest here. They were very late to go multi-product and arguably drop boxes and multi-product at all. Arguably it's one product boxes kind of getting there, but I would say it's…”

“Competitors don't kill startups. Startups kill themselves. It's not that Google Drive killed Dropbox...”

“Like, I don't think the margins that Box and Dropbox is generating, if they could have generated, if they would just stay private. Because the growth was slowing, they were forced to look at the business and run the business better.”

“Dropbox, Dropbox, like with the referral program, Groupon and email, Pinterest and SEO, Duolingo, and just like a totally unhinged social media, right? All of them were kind of first to this concept and it really, really worked.”

“Even if Dropbox had shipped a perfect, hear me out, even if Dropbox had pitched a perfect functionally equivalent product to Glean, it would mean that for their existing business customers, which is a smallish percentage of their total business, they would win…”

“Your right to win is predominantly in your existing customer base, and ServiceNow is a big one, and Salesforce has a big one, and brutally in the enterprise, Dropbox doesn't.”

“When you're at the Dropbox stage in terms of growth, it's just when you need acquisitions the most, But you find it hardest to do as a public company, because you're still in the low-growth penalty box, and that must be a frustrating place.”

“That was the first million dollars, would have been a two billion dollar return because I'm like, what is this thing?”

“These companies, they're in a much more bounded world now. They might grow 15%. They might grow five percent. They might trade at six times revenues. They might trade at four times revenues. You know, if you look at the stock chart, the area of magic is gone, …”

“Dropbox growing minus one percent a year is not crushing it, is it?”