17 ms·

I always find juicy information in the S1 that doesn't get reported on right away. Off the top of my head: * Reliance and risks of Zynga in the Facebook S-1 *

by teej 9y ago

I always find juicy information in the S1 that doesn't get reported on right away. Off the top of my head: * Reliance and risks of Zynga in the Facebook S-1 * Customer acquisition costs in the Blue Apron S-1 * Growth specifics and positioning of algorithms in the StitchFix S-1 * Infrastructure costs in the Snapchat S-1 Besides, an S-1 filing is not written in legalease, it's written in plain language. One of the target audiences is street investors so it's meant to be accessible. I'm looking forward to digging into this one.

swrobel 9y ago
Give us the dirt on this one!
- teej 9y ago
  There's nothing shocking and I think that bodes very very well for Dropbox. It looks like a solid foundation with great growth. The standouts to me were - * They cut costs on an absolute and relative basis for the last two years. This is fantastic and I hope the trend continues. * I don't understand how the $112 ARPU number foots with their pricing. They are telling a story that "teams" is driving growth but on the surface that's not reflected in the ARPU number. There's some sort of promotional discounting that's happening that isn't exposed here. I hope that they are aggressively managing their promo strategy internally because unchecked it can tank a whole company (see GAP). * No idea where they expect new users to come from given they have 500M accounts. Presumably people have 2+ dropbox accounts (personal + work). I'm interested to know how many unique active users dropbox has.
  - pvg 9y ago
    What keeps them from making money (asking, not being facetious)?
    - teej 9y ago
      If they maintain the current trend of lowering costs, keeping headcount growth in line with revenue, and continuing to achieve economies of scale in sales and marketing then they will show a profit in the next couple of years. They don't promise any of this in the S-1 because they need to be extremely conservative in their statements to the public. To be honest I'm not super familiar with the comps to know how good or bad their numbers are relative to others. But just from their own reporting they look like they are on track. That's not by accident. It's very likely that constructing this trend has been a major focus for the company in the last few years.
  - ceejayoz 9y ago
    > Presumably people have 2+ dropbox accounts (personal + work). I'd imagine there's quite a few with dozens, as they offer more space (up to a bit over 30 referrals) if you refer new users. I remember "referring" myself with a new email address whenever I'd need an extra 250 MB.
  - jonwachob91 9y ago
    >> No idea where they expect new users to come from given they have 500M accounts. 500M accounts, but only 11M paying users.
ddorian43 9y ago
Why infrastructure costs in Snapchat ? Doesn't look special ?
- toomuchtodo 9y ago
  Their infrastructure commitments are ridiculously high. "In its disclosure, Snap has said that it is contractually obligated to “spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google.” Of the current losses at Snap, more than 80 percent of those funds go straight into Google’s pockets." https://www.recode.net/2017/2/7/14526832/snap-ipo-snapchat-s1-wall-street-business-google-cloud https://www.recode.net/2017/2/7/14526832/snap-ipo-snapchat-s... https://www.forbes.com/sites/quora/2017/02/22/could-snapchat-have-saved-money-by-building-its-own-cloud-infrastructure-instead-of-paying-google/#daef8317f792 https://www.forbes.com/sites/quora/2017/02/22/could-snapchat... https://www.cnbc.com/2017/02/09/snap-cloud-bill-aws-google-cloud-higher-than-2016-revenue.html https://www.cnbc.com/2017/02/09/snap-cloud-bill-aws-google-c... EDIT: @dfee How that revenue is recognized is usually based on when the services are delivered, but I am not an accountant.
  - dfee 9y ago
    Imagine the sales commission on that one. “Here’s a $10B - Closed Won”. When talking about deals that are the enterprise valuations of Fortune 500 companies, do you value the sale as if it were an acquisition? Or, some other way?
    - jeroen 9y ago
      $2 billion, not 10.
      - sjg007 9y ago
        Still a good reason to become a AWS or GCP sales engineer.
    - 9y ago
defen 9y ago
Do you have a 5-second summary of what you mean by "Growth specifics and positioning of algorithms in the StitchFix S-1"? Just the fact that they use algorithms to tailor individual boxes, or do you mean something more specific?
- teej 9y ago
  I currently work at an e-commerce company and there has been a ton of debate around how "algorithmically driven" Stitch Fix actually is. The general feel in the space from non-technologists is that computers cannot do this job well now and won't be able to do it well in the near future. Stitch Fix makes it a major brand point that computers are an important part of the process. So the real question is - are they making this point because it's true or because it helps their valuation (tech co. 5-10x multiples instead of ecomm 1-4x multiples). The way Stitch Fix talks about it in their S-1 makes it seem like the latter is the priority. I'm not yet convinced that the practical value driven by algorithms at Stitch Fix is up to par with how much they talk about it. I was interested in growth to understand both their growth rate but also to get a feel if it was driven by increasing user acquisition costs like Groupon, Blue Apron, etc or if it was organic.
  - genericpseudo 9y ago
    > Stitch Fix makes it a major brand point that computers are an important part of the process (which even if you disregard everything else is a really good line to take if you're after recruiting good machine learning engineers!)
    - achompas 9y ago
      You hit the nail on the head. They also reveal this strategy through their data science "thought leadership" posts, which are seemingly meant to appeal to data folks (own your code! add value through modeling! don't worry about collaborating with engineers!) but do not reflect the realities of industrial data science. (Note: I'm biased and tweetstormed about Stitch Fix's most recent blog post earlier today. https://twitter.com/achompas/status/967085860763193345 https://twitter.com/achompas/status/967085860763193345)
godzillabrennus 9y ago
This is my biggest concern with the Dropbox platform summed up in the filing: * Our business could be damaged, and we could be subject to liability if there is any unauthorized access to our data or our users’ content, including through privacy and data security breaches. They have made progress. They managed to get SoC II compliance for all of their offerings. They now offer HIPAA compliant hosting as well. Not that long ago though (circa 2013) I remember a series of articles that made it clear that DropBox employees had access to customer data. That spooked me enough to recommend folks pair it with https://www.sookasa.com/ https://www.sookasa.com/ if they were going to use it.
- nugget 9y ago
  For a single user with no need to share access, you can also just stick everything in a VeraCrypt vault stored on Dropbox. Dropbox seems pretty good at updating only the parts of the vault that have changed, versus the entire (sometimes huge) vault file. I've heard OneDrive updates the entire vault file every time, although I haven't experimented with it myself.
  - varenc 9y ago
    Dropbox's client uploads binary diffs to make updates to things like your VeraCrypt value efficient. Using a modified librsync last I heard. Sounds like OneDrive is missing this feature. https://www.dropbox.com/help/syncing-uploads/upload-entire-file https://www.dropbox.com/help/syncing-uploads/upload-entire-f... https://github.com/dropbox/librsync https://github.com/dropbox/librsync
    - deleted 9y ago
      [deleted]
- varenc 9y ago
  Dropbox, GDrive, Box, OneDrive, etc. aren't using zero-knowledge encryption, so it must be technically feasible for them to access user data. If a company has a forgotten password reset feature, it's a good sign that it's possible for them to access your data. You have to trust the company providing the service, right? Of course in practice, accessing user data should be tightly controlled and require good business reasons and levels of approval. Zero-knowledge alternatives like Spideroak exist, but this approach makes them sacrifice features. (and doesn't appear very popular based on market share)

by teej 9y ago

swrobel 9y ago

Give us the dirt on this one!

teej 9y ago
There's nothing shocking and I think that bodes very very well for Dropbox. It looks like a solid foundation with great growth. The standouts to me were - * They cut costs on an absolute and relative basis for the last two years. This is fantastic and I hope the trend continues. * I don't understand how the $112 ARPU number foots with their pricing. They are telling a story that "teams" is driving growth but on the surface that's not reflected in the ARPU number. There's some sort of promotional discounting that's happening that isn't exposed here. I hope that they are aggressively managing their promo strategy internally because unchecked it can tank a whole company (see GAP). * No idea where they expect new users to come from given they have 500M accounts. Presumably people have 2+ dropbox accounts (personal + work). I'm interested to know how many unique active users dropbox has.
- pvg 9y ago
  What keeps them from making money (asking, not being facetious)?
  - teej 9y ago
    If they maintain the current trend of lowering costs, keeping headcount growth in line with revenue, and continuing to achieve economies of scale in sales and marketing then they will show a profit in the next couple of years. They don't promise any of this in the S-1 because they need to be extremely conservative in their statements to the public. To be honest I'm not super familiar with the comps to know how good or bad their numbers are relative to others. But just from their own reporting they look like they are on track. That's not by accident. It's very likely that constructing this trend has been a major focus for the company in the last few years.
- ceejayoz 9y ago
  > Presumably people have 2+ dropbox accounts (personal + work). I'd imagine there's quite a few with dozens, as they offer more space (up to a bit over 30 referrals) if you refer new users. I remember "referring" myself with a new email address whenever I'd need an extra 250 MB.
- jonwachob91 9y ago
  >> No idea where they expect new users to come from given they have 500M accounts. 500M accounts, but only 11M paying users.

ddorian43 9y ago

Why infrastructure costs in Snapchat ? Doesn't look special ?

toomuchtodo 9y ago
Their infrastructure commitments are ridiculously high. "In its disclosure, Snap has said that it is contractually obligated to “spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google.” Of the current losses at Snap, more than 80 percent of those funds go straight into Google’s pockets." https://www.recode.net/2017/2/7/14526832/snap-ipo-snapchat-s1-wall-street-business-google-cloud https://www.recode.net/2017/2/7/14526832/snap-ipo-snapchat-s... https://www.forbes.com/sites/quora/2017/02/22/could-snapchat-have-saved-money-by-building-its-own-cloud-infrastructure-instead-of-paying-google/#daef8317f792 https://www.forbes.com/sites/quora/2017/02/22/could-snapchat... https://www.cnbc.com/2017/02/09/snap-cloud-bill-aws-google-cloud-higher-than-2016-revenue.html https://www.cnbc.com/2017/02/09/snap-cloud-bill-aws-google-c... EDIT: @dfee How that revenue is recognized is usually based on when the services are delivered, but I am not an accountant.
- dfee 9y ago
  Imagine the sales commission on that one. “Here’s a $10B - Closed Won”. When talking about deals that are the enterprise valuations of Fortune 500 companies, do you value the sale as if it were an acquisition? Or, some other way?
  - jeroen 9y ago
    $2 billion, not 10.
    - sjg007 9y ago
      Still a good reason to become a AWS or GCP sales engineer.
  - 9y ago

defen 9y ago

Do you have a 5-second summary of what you mean by "Growth specifics and positioning of algorithms in the StitchFix S-1"? Just the fact that they use algorithms to tailor individual boxes, or do you mean something more specific?

teej 9y ago
I currently work at an e-commerce company and there has been a ton of debate around how "algorithmically driven" Stitch Fix actually is. The general feel in the space from non-technologists is that computers cannot do this job well now and won't be able to do it well in the near future. Stitch Fix makes it a major brand point that computers are an important part of the process. So the real question is - are they making this point because it's true or because it helps their valuation (tech co. 5-10x multiples instead of ecomm 1-4x multiples). The way Stitch Fix talks about it in their S-1 makes it seem like the latter is the priority. I'm not yet convinced that the practical value driven by algorithms at Stitch Fix is up to par with how much they talk about it. I was interested in growth to understand both their growth rate but also to get a feel if it was driven by increasing user acquisition costs like Groupon, Blue Apron, etc or if it was organic.
- genericpseudo 9y ago
  > Stitch Fix makes it a major brand point that computers are an important part of the process (which even if you disregard everything else is a really good line to take if you're after recruiting good machine learning engineers!)
  - achompas 9y ago
    You hit the nail on the head. They also reveal this strategy through their data science "thought leadership" posts, which are seemingly meant to appeal to data folks (own your code! add value through modeling! don't worry about collaborating with engineers!) but do not reflect the realities of industrial data science. (Note: I'm biased and tweetstormed about Stitch Fix's most recent blog post earlier today. https://twitter.com/achompas/status/967085860763193345 https://twitter.com/achompas/status/967085860763193345)

godzillabrennus 9y ago

This is my biggest concern with the Dropbox platform summed up in the filing: * Our business could be damaged, and we could be subject to liability if there is any unauthorized access to our data or our users’ content, including through privacy and data security breaches. They have made progress. They managed to get SoC II compliance for all of their offerings. They now offer HIPAA compliant hosting as well. Not that long ago though (circa 2013) I remember a series of articles that made it clear that DropBox employees had access to customer data. That spooked me enough to recommend folks pair it with https://www.sookasa.com/ https://www.sookasa.com/ if they were going to use it.

nugget 9y ago
For a single user with no need to share access, you can also just stick everything in a VeraCrypt vault stored on Dropbox. Dropbox seems pretty good at updating only the parts of the vault that have changed, versus the entire (sometimes huge) vault file. I've heard OneDrive updates the entire vault file every time, although I haven't experimented with it myself.
- varenc 9y ago
  Dropbox's client uploads binary diffs to make updates to things like your VeraCrypt value efficient. Using a modified librsync last I heard. Sounds like OneDrive is missing this feature. https://www.dropbox.com/help/syncing-uploads/upload-entire-file https://www.dropbox.com/help/syncing-uploads/upload-entire-f... https://github.com/dropbox/librsync https://github.com/dropbox/librsync
  - deleted 9y ago
    [deleted]
varenc 9y ago
Dropbox, GDrive, Box, OneDrive, etc. aren't using zero-knowledge encryption, so it must be technically feasible for them to access user data. If a company has a forgotten password reset feature, it's a good sign that it's possible for them to access your data. You have to trust the company providing the service, right? Of course in practice, accessing user data should be tightly controlled and require good business reasons and levels of approval. Zero-knowledge alternatives like Spideroak exist, but this approach makes them sacrifice features. (and doesn't appear very popular based on market share)