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1. Why is a 20x P/E ratio appropriate for a high-growth tech startup? 2. http://tech.fortune.cnn.com/2011/04/18/reviewing-dropboxs-vision-of-the-future http://

• johnrob 15y ago
  People have always wanted to do certain things online: search (google et all), shopping (amazon, ebay, et all), communication (email, aol, facebook, et all) are good examples. I've never really sensed a similar demand for syncing and backing up files. The idea that a single player has a 5 billion valuation implies the industry is significantly larger than that. That's what caught me by surprise. The numbers I threw out there were just guesses (including the 20x P/E ratio); I was trying to understand the basis of such a valuation. There are some good explanations in this mini thread, yours included, but I still struggle to imagine there will be this much money in a such a service. It seems like competition would drive the free offerings to the point where the paid usage gets pretty low. I guess what I'm really saying is that file sync/backup as a service doesn't feel like a 10s of billions industry. I don't have much real data to back that claim though ;)