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Except Dropbox is now a 12 year old company. So I don't see how that was insightful? It reminds me of The Sharks saying "a product is not a company". It's a vi

by Reedx 7y ago

Except Dropbox is now a 12 year old company. So I don't see how that was insightful? It reminds me of The Sharks saying "a product is not a company". It's a virtually meaningless statement.

ses1984 7y ago
Dropbox market cap is crazy and they are trying to pivot to something else like paper.
scarface74 7y ago
Are they profitable? Despite what the techno digerati have you believe, a successful company is not based on how the market values it but whether they can get people to give them more money than it costs to produce a good or service. There is no better evidence that Dropbox is just a feature than for the same price that Dropbox charges for 1Tb of storage, you can get the full Microsoft Office Suite for up to six users and a total of 6TB of storage.
- wgerard 7y ago
  Just as a caveat, I have 0 affiliation with Dropbox (I don't think I even know anyone who works there). > Are they profitable? Profitability isn't the end-all metric for a company. Amazon famously circles around the profitable/not-profitable line frequently and few people have doubts about Amazon's viability as a company. Dropbox reported ~20% growth in revenue YoY and seems to have dumped most of that into R&D (you can see their R&D costs have grown by nearly as much as their revenue has). Other operating expenses remain mostly the same. > There is no better evidence that Dropbox is just a feature than for the same price that Dropbox charges for 1Tb of storage, you can get the full Microsoft Office Suite for up to six users and a total of 6TB of storage. Ok, but a growing subset of people clearly choose Dropbox. There are huge advantages to being a first mover that are sometimes insurmountable, even for gigantic companies. The zune was in many ways "superior" to the iPod, but we all know how that story ended.
  - scarface74 7y ago
    Amazon is not the greatest example. Amazon retail is still a poor low profit margin business with huge overhead and if that’s all Amazon was - a company that sells physical products - they would still not be worth anything near what they are worth. Most of Amazon’s profit comes from AWS where they do have economies of scale and relatively high marginal profits. What are the chances that Dropbox will ever find a high margin profitable pivot? What is their customer acquisition cost? The lifetime value of a customer? What type of pricing power do they have. Everyone loves to point at Amazon as evidence that all of these money losing companies will be highly profitable one day but it hasn’t happen. Let’s not forget that out of all the big tech companies - Facebook, Amazon, Apple, Google and Microsoft. The only one that wasn’t profitable before they went public is Amazon. Other operating expenses can’t remain the same. Storage cost real money on a marginal basis unlike software (Microsoft) and search (Google) which has close to zero marginal cost.
    - mcguire 7y ago
      "What are the chances that Dropbox will ever find a high margin profitable pivot?" I always thought that was selling ("aggregated") access to user's files.
  - autokad 7y ago
    > "Amazon famously circles around the profitable/not-profitable line frequently" I dont agree with this common saying. Amazon was founded in 1994, IPO in 1997, and made a profit by 2003. Amazon's philosophy is to reinvest money, thus they swing between profit/loss. Amazon went from selling books online to everything online + AWS + Echo + Go Store, etc etc. So it took Amazon to make a profit, but they truly were growing, not paying people to buy movie tickets. Conversely, usually when people say 'look at Amazon' when talking about profitless companies, we are talking about companies that spent a decade + private, IPO with huge valuations, slowing growth, and huge losses with no profit in site. Dropbox for example, founded in 2007 and IPO'ed 11 years later with an 8 billion valuation. A 100$ investment in Amazon would have yielded 127k$. To give you that kind of growth, dropbox would have to reach a market cap of 10+ trillion. This is a huge problem because people are treating these unicorns like growth companies, when their best years are behind them and with their valuation, its mathematically impossible for them to have the huge growth that companies such as Amazon, Netflix, Google had. I think rules need to be enforced / changed to prevent companies from staying private so long. This shenanigans is going to cost generations saving for retirement significantly.
- fortran77 7y ago
  I switch from Dropbox to OneDrive for this very reason. OneDrive works fine for me (it even works better for photo and video sharing) and for the same price as DropBox I also get 1TB, Office365 online, for the iOS and Android and two desktop install licenses. And an outlook.com account. Terrific deal.
  - chrisan 7y ago
    It is really a no brainer. I kept my free dropbox account thinking "I'm just going to use this for the stuff I want to share because I hate the OneDrive client and just store photos/videos in OneDrive" But now the reverse is true and I don't know the last time I used Dropbox.
- joombaga 7y ago
  Dropbox gives you 2TB for $10/month. Office 365 Business Essentials, which is the cheapest plan and comes with 1 TB of storage (as you said) is $5/user/month*6users = $30/month So same price for the storage, but you also get the web and mobile versions of the Office apps. The desktop versions cost extra. I've gotten along fine the last few months with just web and mobile though. • https://www.dropbox.com/buy https://www.dropbox.com/buy • https://products.office.com/en-us/compare-all-microsoft-office-products?activetab=tab:primaryr2 https://products.office.com/en-us/compare-all-microsoft-offi... Edit: I guess having 6 accounts isn't the same as 6 contiguous TBs though.
  - scarface74 7y ago
    Office 365 Home for 6 users is $79.99 a year With Dropbox if you have 1TB and someone shares a folder with you that has 1TB, your total allowed storage is still 1TB. With Office, you can share folders across users and the storage is contiguous.
- mbesto 7y ago
  No, but they have extremely high GM and continually are generating more FCF year of year: https://www.marketwatch.com/investing/stock/dbx/financials https://www.marketwatch.com/investing/stock/dbx/financials https://www.marketwatch.com/investing/stock/dbx/financials/cash-flow https://www.marketwatch.com/investing/stock/dbx/financials/c... It would be safe to say that they are "printing cash".
  - kgwgk 7y ago
    It’s easier to give the impression that you’re “printing cash” when a considerable part of employee compensation is paid by “giving away the company” (stock compensation expense is around 15% of revenue). They also leave out in their free cash flow calculation some relevant things (capital leases). Amazon for example provides three free cash flow calculations, Dropbox only the good-looking one. https://www.cnbc.com/2018/03/21/dropbox-may-have-intentionally-overstated-its-free-cash-flow.html https://www.cnbc.com/2018/03/21/dropbox-may-have-intentional...
    - mbesto 7y ago
      Fair enough. But this doesn't neglect the fact that they're at 70% GM. They're spending 750M/750M split between SGA and R&D, which means you could basically cut those both out significantly (assuming support/hosting costs are in the COGS) and the company stops growing (on a $1B+ revenue top line) but just starts printing cash. The ~$100M in capital leases is a rounding number then. Not to mention, since their data centers appear to be capital expenditures, it means they have the possibility of extracting even more ROI out of that in the long term. PS - your article is from 2018 speaking about 2016 and 2017 numbers. Anything updated since? Dropbox has continually increase FCF YoY regardless...
      - scarface74 7y ago
        So do you think they are just wasting R&D money and it isn’t an engine to keep the company a going concern? Do you also think that the rest of the tech industry could cut their R&D and stay relevant? Servers breakdown, while we don’t have any statistics of how often Dropbox needs to replace hardware, we do know how often hard drives fail at scale from Backblaze’s frequent reports.
filmgirlcw 7y ago
Disclosure: I work for Microsoft but not on OneDrive or Office or any of that stuff. I love Dropbox (well, OLD Dropbox, I do not like the new desktop app at all) and have been a paying user basically since you could pay to use it (and a general user since it launched in what, 2007? 2008?), but Steve Jobs wasn't wrong. The original service Dropbox offered has indeed become a commodity. Dropbox (like Box before it), has had to pivot into other areas like "collaboration" and has had to change its focus from consumers to small business/enterprise in order to grow, and even then, it's struggling. I don't actually think MoviePass and Dropbox are that analogous though. Sure, both are middlemen (or "features") and reliant on their potential competitors, but Dropbox's value prop strikes me as better. MoviePass could have licensed its technology around geo-fencing/ticket-buying to theater chains so they could do their own subscriptions -- the impact wouldn't be as big, but there is a services story there. But MoviePass is always tied directly to the theater chains and the margins there aren't negotiable and won't change. Whereas Dropbox might be reliant to an extent by the OS makers it supports -- and Apple/Google/Microsoft might be able to theoretically build in better native integration with their services vs Dropbox -- but Dropbox can still come up with solutions and be elegant and cross-platform in a way that is better than the platform options. Whereas MoviePass can't do anything unless it wanted to try to start its own theater chain.
- canuckintime 7y ago
  You mixed that up! Apple's competitor to Dropbox isn't cross-platform but Google Drive and Microsoft OneDrive definitely are. In contrast MoviePass was truly 'cross-platfrom' while the new alternatives (A-List etc Al) mostly work within one theater chain.
  - 1024core 7y ago
    And before any of those, there was Yahoo Briefcase. Years before.
  - shuckles 7y ago
    iCloud Drive has a Windows client.
- 7y ago
duxup 7y ago
Dropbox as just a cloud drive fit the description, and perhaps the fact that they are more than that and have since stuck around that it fits the quote too?
ghaff 7y ago
It’s like many aphorisms or random links people like to post here because it’s a cheap low effort way to make people think they’re smart. (It doesn’t.) That said, there are a fair number of would-be products that seem fairly clearly destined to be a component of another product.

by Reedx 7y ago

Except Dropbox is now a 12 year old company. So I don't see how that was insightful? It reminds me of The Sharks saying "a product is not a company". It's a virtually meaningless statement.

ses1984 7y ago

Dropbox market cap is crazy and they are trying to pivot to something else like paper.

scarface74 7y ago

Are they profitable? Despite what the techno digerati have you believe, a successful company is not based on how the market values it but whether they can get people to give them more money than it costs to produce a good or service. There is no better evidence that Dropbox is just a feature than for the same price that Dropbox charges for 1Tb of storage, you can get the full Microsoft Office Suite for up to six users and a total of 6TB of storage.

wgerard 7y ago
Just as a caveat, I have 0 affiliation with Dropbox (I don't think I even know anyone who works there). > Are they profitable? Profitability isn't the end-all metric for a company. Amazon famously circles around the profitable/not-profitable line frequently and few people have doubts about Amazon's viability as a company. Dropbox reported ~20% growth in revenue YoY and seems to have dumped most of that into R&D (you can see their R&D costs have grown by nearly as much as their revenue has). Other operating expenses remain mostly the same. > There is no better evidence that Dropbox is just a feature than for the same price that Dropbox charges for 1Tb of storage, you can get the full Microsoft Office Suite for up to six users and a total of 6TB of storage. Ok, but a growing subset of people clearly choose Dropbox. There are huge advantages to being a first mover that are sometimes insurmountable, even for gigantic companies. The zune was in many ways "superior" to the iPod, but we all know how that story ended.
- scarface74 7y ago
  Amazon is not the greatest example. Amazon retail is still a poor low profit margin business with huge overhead and if that’s all Amazon was - a company that sells physical products - they would still not be worth anything near what they are worth. Most of Amazon’s profit comes from AWS where they do have economies of scale and relatively high marginal profits. What are the chances that Dropbox will ever find a high margin profitable pivot? What is their customer acquisition cost? The lifetime value of a customer? What type of pricing power do they have. Everyone loves to point at Amazon as evidence that all of these money losing companies will be highly profitable one day but it hasn’t happen. Let’s not forget that out of all the big tech companies - Facebook, Amazon, Apple, Google and Microsoft. The only one that wasn’t profitable before they went public is Amazon. Other operating expenses can’t remain the same. Storage cost real money on a marginal basis unlike software (Microsoft) and search (Google) which has close to zero marginal cost.
  - mcguire 7y ago
    "What are the chances that Dropbox will ever find a high margin profitable pivot?" I always thought that was selling ("aggregated") access to user's files.
- autokad 7y ago
  > "Amazon famously circles around the profitable/not-profitable line frequently" I dont agree with this common saying. Amazon was founded in 1994, IPO in 1997, and made a profit by 2003. Amazon's philosophy is to reinvest money, thus they swing between profit/loss. Amazon went from selling books online to everything online + AWS + Echo + Go Store, etc etc. So it took Amazon to make a profit, but they truly were growing, not paying people to buy movie tickets. Conversely, usually when people say 'look at Amazon' when talking about profitless companies, we are talking about companies that spent a decade + private, IPO with huge valuations, slowing growth, and huge losses with no profit in site. Dropbox for example, founded in 2007 and IPO'ed 11 years later with an 8 billion valuation. A 100$ investment in Amazon would have yielded 127k$. To give you that kind of growth, dropbox would have to reach a market cap of 10+ trillion. This is a huge problem because people are treating these unicorns like growth companies, when their best years are behind them and with their valuation, its mathematically impossible for them to have the huge growth that companies such as Amazon, Netflix, Google had. I think rules need to be enforced / changed to prevent companies from staying private so long. This shenanigans is going to cost generations saving for retirement significantly.
fortran77 7y ago
I switch from Dropbox to OneDrive for this very reason. OneDrive works fine for me (it even works better for photo and video sharing) and for the same price as DropBox I also get 1TB, Office365 online, for the iOS and Android and two desktop install licenses. And an outlook.com account. Terrific deal.
- chrisan 7y ago
  It is really a no brainer. I kept my free dropbox account thinking "I'm just going to use this for the stuff I want to share because I hate the OneDrive client and just store photos/videos in OneDrive" But now the reverse is true and I don't know the last time I used Dropbox.
joombaga 7y ago
Dropbox gives you 2TB for $10/month. Office 365 Business Essentials, which is the cheapest plan and comes with 1 TB of storage (as you said) is $5/user/month*6users = $30/month So same price for the storage, but you also get the web and mobile versions of the Office apps. The desktop versions cost extra. I've gotten along fine the last few months with just web and mobile though. • https://www.dropbox.com/buy https://www.dropbox.com/buy • https://products.office.com/en-us/compare-all-microsoft-office-products?activetab=tab:primaryr2 https://products.office.com/en-us/compare-all-microsoft-offi... Edit: I guess having 6 accounts isn't the same as 6 contiguous TBs though.
- scarface74 7y ago
  Office 365 Home for 6 users is $79.99 a year With Dropbox if you have 1TB and someone shares a folder with you that has 1TB, your total allowed storage is still 1TB. With Office, you can share folders across users and the storage is contiguous.
mbesto 7y ago
No, but they have extremely high GM and continually are generating more FCF year of year: https://www.marketwatch.com/investing/stock/dbx/financials https://www.marketwatch.com/investing/stock/dbx/financials https://www.marketwatch.com/investing/stock/dbx/financials/cash-flow https://www.marketwatch.com/investing/stock/dbx/financials/c... It would be safe to say that they are "printing cash".
- kgwgk 7y ago
  It’s easier to give the impression that you’re “printing cash” when a considerable part of employee compensation is paid by “giving away the company” (stock compensation expense is around 15% of revenue). They also leave out in their free cash flow calculation some relevant things (capital leases). Amazon for example provides three free cash flow calculations, Dropbox only the good-looking one. https://www.cnbc.com/2018/03/21/dropbox-may-have-intentionally-overstated-its-free-cash-flow.html https://www.cnbc.com/2018/03/21/dropbox-may-have-intentional...
  - mbesto 7y ago
    Fair enough. But this doesn't neglect the fact that they're at 70% GM. They're spending 750M/750M split between SGA and R&D, which means you could basically cut those both out significantly (assuming support/hosting costs are in the COGS) and the company stops growing (on a $1B+ revenue top line) but just starts printing cash. The ~$100M in capital leases is a rounding number then. Not to mention, since their data centers appear to be capital expenditures, it means they have the possibility of extracting even more ROI out of that in the long term. PS - your article is from 2018 speaking about 2016 and 2017 numbers. Anything updated since? Dropbox has continually increase FCF YoY regardless...
    - scarface74 7y ago
      So do you think they are just wasting R&D money and it isn’t an engine to keep the company a going concern? Do you also think that the rest of the tech industry could cut their R&D and stay relevant? Servers breakdown, while we don’t have any statistics of how often Dropbox needs to replace hardware, we do know how often hard drives fail at scale from Backblaze’s frequent reports.

filmgirlcw 7y ago

Disclosure: I work for Microsoft but not on OneDrive or Office or any of that stuff. I love Dropbox (well, OLD Dropbox, I do not like the new desktop app at all) and have been a paying user basically since you could pay to use it (and a general user since it launched in what, 2007? 2008?), but Steve Jobs wasn't wrong. The original service Dropbox offered has indeed become a commodity. Dropbox (like Box before it), has had to pivot into other areas like "collaboration" and has had to change its focus from consumers to small business/enterprise in order to grow, and even then, it's struggling. I don't actually think MoviePass and Dropbox are that analogous though. Sure, both are middlemen (or "features") and reliant on their potential competitors, but Dropbox's value prop strikes me as better. MoviePass could have licensed its technology around geo-fencing/ticket-buying to theater chains so they could do their own subscriptions -- the impact wouldn't be as big, but there is a services story there. But MoviePass is always tied directly to the theater chains and the margins there aren't negotiable and won't change. Whereas Dropbox might be reliant to an extent by the OS makers it supports -- and Apple/Google/Microsoft might be able to theoretically build in better native integration with their services vs Dropbox -- but Dropbox can still come up with solutions and be elegant and cross-platform in a way that is better than the platform options. Whereas MoviePass can't do anything unless it wanted to try to start its own theater chain.

canuckintime 7y ago
You mixed that up! Apple's competitor to Dropbox isn't cross-platform but Google Drive and Microsoft OneDrive definitely are. In contrast MoviePass was truly 'cross-platfrom' while the new alternatives (A-List etc Al) mostly work within one theater chain.
- 1024core 7y ago
  And before any of those, there was Yahoo Briefcase. Years before.
- shuckles 7y ago
  iCloud Drive has a Windows client.
7y ago

duxup 7y ago

Dropbox as just a cloud drive fit the description, and perhaps the fact that they are more than that and have since stuck around that it fits the quote too?

ghaff 7y ago

It’s like many aphorisms or random links people like to post here because it’s a cheap low effort way to make people think they’re smart. (It doesn’t.) That said, there are a fair number of would-be products that seem fairly clearly destined to be a component of another product.