There seem to be several companies in the "Dropbox competitor" space. A few have been funded by VC heavy hitters, so clearly there's something to this. But I do

There seem to be several companies in the "Dropbox competitor" space. A few have been funded by VC heavy hitters, so clearly there's something to this. But I don't really get it. Can someone help me understand this trend? What makes a company feel like they can win here? It seems like the benefit these companies are offering largely fall into these categories: 1. peer to peer/distributed storage 2. "value" more storage at cheaper prices 3. anonymity / better security While those all sound good, what I'm trying to figure out is how you make a business out of this. For the sake of argument, I'm going to take the "ugh, don't do this" side. These aren't pain points for Dropbox users. To each point above, in turn: 1. Most users don't care about how their files are stored, they just want them to be available. It doesn't matter to them that they're distributed or that its peer to peer. They just want them to show up whenever they click their shared folder. 2. This doesn't seem like a winnable race by selling more storage capacity. 98% of dropbox users don't use the free 2GB. 2% of them happily pay for more space. Sure "twice the amount for the same price" sounds compelling, but the only people you are going to reach are either (a) users who are unhappily paying [small subset, and the friction of switching services is still high], (b) users who would otherwise go over the free barrier but don't want to pay [small set, again, very high friction of switching services], and (c) people who are not Dropbox users and are comparing the Dropbox vs Space Money/BitCasa/etc side by side and decide to go with the "more space" option [hard to win this initially because Dropbox has rave reviews and you're unheard of, you have to be as good as Dropbox at reaching out to everyone, you probably won't have Dropbox's dead simple UI] 3. Anonymity / Better security -- Also something that sounds good, but not a pain point for the majority of internet users. The class of users for which anonymous file storage or next level security is an issue is (a) very small, (b) overlaps heavily with the "I'd rather implement this myself" computing class. This market isn't big. Again, there's a fighting shot when a user with no cloud storage compares both services side by side, but you still have to match Dropbox's reach. Dropbox was selling EASE. They have a really easy process, the product "just works", they are better at reaching their potential customers (more practice/lots of raving fans), support more platforms (I've been waiting for beta access for Linux for one of these for BitCasa for months), and most importantly: for the huge majority of internet users the additional benefits are irrelevant. Dropbox's win is serving a huge class of users and making most of them extremely happy. Another note is that the type of users who want to use these services for "infinite storage" are also very expensive users to support. If you're building a business you should prefer to serve the largest base of users who cost you the smallest amount of money but are willing to pay the same amount. Not, "a highly specialized, expensive user class that is highly price sensitive". 750k isn't going to be enough to overcome these hurdles. The only rationale I can come up with for VCs is that they are essentially writing it off as a lottery ticket in their portfolio.