7 ms·

They were losing ~$500m a year (and growing) doing one thing and doing it well.

by thinkharderdev 7y ago

jacobcohen11 7y ago
Maybe it's because they were expanding too much and hiring too many people
- asdkhadsj 7y ago
  I'd be curious if they simply couldn't compete, and they recognized that. Ie, their competition is heavily Google, Microsoft, Amazon, etc which offer competing products as part of their suite. Yet, Google/etc doesn't really care about file sharing/storage. It's just one component in a much larger model. I'd be curious if, due to cloud prices/etc, Dropbox didn't feel they could actually sustain a competitive price and become profitable. So they're trying to expand to other avenues and find something that works.
- andrewjrhill 7y ago
  It's a lack of focus on increasing sales throughput. They should have looked to resolve bottlenecks between when a lead first hits their website and when a sale is finalised. There's always something along that process that is poor and holding back the rest of the process. An increase in throughput = increased sales.
  - arkitaip 7y ago
    You don't think their funnel is optimized already? The truth is that Google and Microsoft have the mind shares and products that integrate well with their respective eco systems already. Google Drive and OneDrive just work and are highly affordable already.
- asdff 7y ago
  Who provides dropboxes actual storage? That provider could just keep squeezing dropbox until the provider creates a copy of dropbox or has them bent over just to the point of them switching to another provider. Maybe dropbox should have been building their own data centers in the mean time, cutting their overhead. That idea of restraining growth in favor of long term stability probably wouldn't sit so well with the shareholders who want their pie tomorrow.
  - karlding 7y ago
    I believe they have migrated most (if not all) of their storage off AWS to their own infrastructure [0]. [0] https://techcrunch.com/2017/09/15/why-dropbox-decided-to-drop-aws-and-build-its-own-infrastructure-and-network/ https://techcrunch.com/2017/09/15/why-dropbox-decided-to-dro...
  - manigandham 7y ago
    They do have their own storage infrastructure now. It's just a very low margin business and newer entrants like Wasabi are constantly pushing the edge in raw pricing.
pwinnski 7y ago
I have long thought that one of Steve Jobs' biggest errors was in telling Dropbox "that's a feature, not a company." It sure seemed like he was really wrong, but if Dropbox can't make money, maybe he was right after all.
- tonyedgecombe 7y ago
  Well it is now a feature in iCloud. Perhaps those original comments on the DropBox launch people keep referring to were right all along.
  - azinman2 7y ago
    And it doesn’t work nearly as well. He underestimated how hard it would be to solve it properly.
    - lotsofpulp 7y ago
      Only major thing missing was folder sharing, and it's coming later this year: https://9to5mac.com/2019/06/11/share-icloud-drive-folders-iphone-ipad/ https://9to5mac.com/2019/06/11/share-icloud-drive-folders-ip... Perhaps it won't be as polished as Dropbox, perhaps it will. Either way, Dropbox is playing defense versus Apple/Google/Microsoft.
    - asdff 7y ago
      Onedrive at least works great in my experiences. I bave a dropbox account, but my uni supplied me with a huge onedrive allotment. I sync every user file on my computer and I can access it anywhere with an internet connection. The msoffice integrations are great too, and ms office online is pretty feature rich. Dropbox had a great idea, but it's not hard for a large company to copy it like microsoft did. Apple just does a lot of things half assed if it's not a priority to them. Nothing stopping iCloud from being better than dropbox in a couple years if apple one day decided they gave a damn about it.
      - signal11 7y ago
usaar333 7y ago
I don't think Dropbox ever lost that much per year. $200M was lost in 2016 (once Dropbox decided to not burn money like crazy); $300M in 2015. Source: S1 (https://www.sec.gov/Archives/edgar/data/1467623/000119312518055809/d451946ds1.htm https://www.sec.gov/Archives/edgar/data/1467623/000119312518...). In general losses were shrinking, not growing. (Don't believe the 2018 annual numbers; something like $450M of that "loss" is the result of accounting issues where RSUs converting to stock at IPO is considered an expense)

They were losing ~$500m a year (and growing) doing one thing and doing it well.

jacobcohen11 7y ago

Maybe it's because they were expanding too much and hiring too many people

asdkhadsj 7y ago
I'd be curious if they simply couldn't compete, and they recognized that. Ie, their competition is heavily Google, Microsoft, Amazon, etc which offer competing products as part of their suite. Yet, Google/etc doesn't really care about file sharing/storage. It's just one component in a much larger model. I'd be curious if, due to cloud prices/etc, Dropbox didn't feel they could actually sustain a competitive price and become profitable. So they're trying to expand to other avenues and find something that works.
andrewjrhill 7y ago
It's a lack of focus on increasing sales throughput. They should have looked to resolve bottlenecks between when a lead first hits their website and when a sale is finalised. There's always something along that process that is poor and holding back the rest of the process. An increase in throughput = increased sales.
- arkitaip 7y ago
  You don't think their funnel is optimized already? The truth is that Google and Microsoft have the mind shares and products that integrate well with their respective eco systems already. Google Drive and OneDrive just work and are highly affordable already.
asdff 7y ago
Who provides dropboxes actual storage? That provider could just keep squeezing dropbox until the provider creates a copy of dropbox or has them bent over just to the point of them switching to another provider. Maybe dropbox should have been building their own data centers in the mean time, cutting their overhead. That idea of restraining growth in favor of long term stability probably wouldn't sit so well with the shareholders who want their pie tomorrow.
- karlding 7y ago
  I believe they have migrated most (if not all) of their storage off AWS to their own infrastructure [0]. [0] https://techcrunch.com/2017/09/15/why-dropbox-decided-to-drop-aws-and-build-its-own-infrastructure-and-network/ https://techcrunch.com/2017/09/15/why-dropbox-decided-to-dro...
- manigandham 7y ago
  They do have their own storage infrastructure now. It's just a very low margin business and newer entrants like Wasabi are constantly pushing the edge in raw pricing.

pwinnski 7y ago

I have long thought that one of Steve Jobs' biggest errors was in telling Dropbox "that's a feature, not a company." It sure seemed like he was really wrong, but if Dropbox can't make money, maybe he was right after all.

tonyedgecombe 7y ago
Well it is now a feature in iCloud. Perhaps those original comments on the DropBox launch people keep referring to were right all along.
- azinman2 7y ago
  And it doesn’t work nearly as well. He underestimated how hard it would be to solve it properly.
  - lotsofpulp 7y ago
    Only major thing missing was folder sharing, and it's coming later this year: https://9to5mac.com/2019/06/11/share-icloud-drive-folders-iphone-ipad/ https://9to5mac.com/2019/06/11/share-icloud-drive-folders-ip... Perhaps it won't be as polished as Dropbox, perhaps it will. Either way, Dropbox is playing defense versus Apple/Google/Microsoft.
  - asdff 7y ago
    Onedrive at least works great in my experiences. I bave a dropbox account, but my uni supplied me with a huge onedrive allotment. I sync every user file on my computer and I can access it anywhere with an internet connection. The msoffice integrations are great too, and ms office online is pretty feature rich. Dropbox had a great idea, but it's not hard for a large company to copy it like microsoft did. Apple just does a lot of things half assed if it's not a priority to them. Nothing stopping iCloud from being better than dropbox in a couple years if apple one day decided they gave a damn about it.
    - signal11 7y ago

usaar333 7y ago

I don't think Dropbox ever lost that much per year. $200M was lost in 2016 (once Dropbox decided to not burn money like crazy); $300M in 2015. Source: S1 (https://www.sec.gov/Archives/edgar/data/1467623/000119312518055809/d451946ds1.htm https://www.sec.gov/Archives/edgar/data/1467623/000119312518...). In general losses were shrinking, not growing. (Don't believe the 2018 annual numbers; something like $450M of that "loss" is the result of accounting issues where RSUs converting to stock at IPO is considered an expense)