3 ms·

I recently migrated to a new phone and one of the apps I had to re-login was Dropbox. A feeling of nostalgia washed over me. It was absolutely essential many ye

I recently migrated to a new phone and one of the apps I had to re-login was Dropbox. A feeling of nostalgia washed over me. It was absolutely essential many years ago but now the competition is huge. I'm not a fan of Private Equity but if it can keep the business alive, then it's worth exploring by the leadership.

Taikhoom10 2mo ago
No, definitely agree. One of the great SaaS companies, strategy matters, though, and the early success distracted them from building a defensible business.
- yojo 2mo ago
  I was at Dropbox from 2016-2020. We were certainly trying to build a sustainable business, but there was a major identity crisis. Were we consumer web? Buy Mailbox and build Carousel, then shut them both down. Maybe we’re Notion/Evernote? Buy Hackpad, plow a ton of money into Paper (which was legitimately good), then quietly deprioritize it. Maybe we’re actually some kind of enterprise document productivity suite? Buy HelloSign. Plow a bunch of money into a desktop app. Pull more plugs. A lot of smart people were trying. We made a lot of bets (too many?). None of them proved to be a second act, and the competitors eventually caught up.
  - Taikhoom10 2mo ago
    I intend to write a piece going deeper into the failures; I would love to chat if you're open to it. Also, not to say Dropbox sucked or anything, it is just that the broader strategy and industry structure make it hard; if anything, the success of the first product made it difficult to evolve the business.
Krutonium 2mo ago
PE's end goal is never the health of the business. Being bought by PE is a death sentence. Maybe drawn out by years, but a death sentence none the less.
- Taikhoom10 2mo ago
  It depends on the acquirer; Silver Lake could be a good partner.
- edoceo 2mo ago
  And despite their patterns giving not that great returns they keep doing it. Mostly it's an income play vs capital appreciation anyway. If you wanted the capital gains pre-seed and seed are doing well. ACA had a report which I think also got mentioned in Bloomberg.
- oersted 2mo ago
  That's an oversimplification. Private Equity's goal is to take control of the business and change it so that it has higher resell value. Often they do sell it for parts, or they enshitify the hell out of it to squeeze revenue from loyal customers. Not necessarily because it's the optimal strategy, but because truly fixing a business is hard and these are decent shortcuts from their perspective. But that's not a given, sometimes they do truly turn it around for the better.
- shuwix 2mo ago
  Exactly ... PE's wants shorterm return, just numbers in a sheetbook, and they special execs for such jobs. Their only "strategy" (my dog can figure out better) is aggresive monetization, layoffs pushing remaining employees to limits. Profits goes up ... so the strategy must work, lets increase monetization more and do more layoffs. Prices goes up, quality of service goes down. After few years, everything goes down the drain, PE and their execs can't figure out what went wrong.
- matwood 2mo ago
  In most cases you have the causal effect of PE incorrect. By the time PE comes in, the company has already peaked and is on a downslope. The original owners know this, want to get out and sell. Blaming PE is like blaming vultures for the roadkill they are picking over.
bombcar 2mo ago
Dropbox was huge before everything built in sync as SaaS. I still fondly recall the Dropbox backend to 1Password.
chorsestudios 2mo ago
I understand why it is a reasonable acquisition target for PE and worthy of exploration, but I’m not sure I understand how being acquired by PE would keep Dropbox alive longer other than shaking up the leadership and shifting priorities. Perhaps aggressively targeting enterprise customers currently using Box after rolling out the necessary features?
fsuts 2mo ago
Keep the business alive? Article says it’s making good money so no risk of it dying

Taikhoom10 2mo ago

No, definitely agree. One of the great SaaS companies, strategy matters, though, and the early success distracted them from building a defensible business.

yojo 2mo ago
I was at Dropbox from 2016-2020. We were certainly trying to build a sustainable business, but there was a major identity crisis. Were we consumer web? Buy Mailbox and build Carousel, then shut them both down. Maybe we’re Notion/Evernote? Buy Hackpad, plow a ton of money into Paper (which was legitimately good), then quietly deprioritize it. Maybe we’re actually some kind of enterprise document productivity suite? Buy HelloSign. Plow a bunch of money into a desktop app. Pull more plugs. A lot of smart people were trying. We made a lot of bets (too many?). None of them proved to be a second act, and the competitors eventually caught up.
- Taikhoom10 2mo ago
  I intend to write a piece going deeper into the failures; I would love to chat if you're open to it. Also, not to say Dropbox sucked or anything, it is just that the broader strategy and industry structure make it hard; if anything, the success of the first product made it difficult to evolve the business.

Krutonium 2mo ago

PE's end goal is never the health of the business. Being bought by PE is a death sentence. Maybe drawn out by years, but a death sentence none the less.

Taikhoom10 2mo ago
It depends on the acquirer; Silver Lake could be a good partner.
edoceo 2mo ago
And despite their patterns giving not that great returns they keep doing it. Mostly it's an income play vs capital appreciation anyway. If you wanted the capital gains pre-seed and seed are doing well. ACA had a report which I think also got mentioned in Bloomberg.
oersted 2mo ago
That's an oversimplification. Private Equity's goal is to take control of the business and change it so that it has higher resell value. Often they do sell it for parts, or they enshitify the hell out of it to squeeze revenue from loyal customers. Not necessarily because it's the optimal strategy, but because truly fixing a business is hard and these are decent shortcuts from their perspective. But that's not a given, sometimes they do truly turn it around for the better.
shuwix 2mo ago
Exactly ... PE's wants shorterm return, just numbers in a sheetbook, and they special execs for such jobs. Their only "strategy" (my dog can figure out better) is aggresive monetization, layoffs pushing remaining employees to limits. Profits goes up ... so the strategy must work, lets increase monetization more and do more layoffs. Prices goes up, quality of service goes down. After few years, everything goes down the drain, PE and their execs can't figure out what went wrong.
matwood 2mo ago
In most cases you have the causal effect of PE incorrect. By the time PE comes in, the company has already peaked and is on a downslope. The original owners know this, want to get out and sell. Blaming PE is like blaming vultures for the roadkill they are picking over.

bombcar 2mo ago

Dropbox was huge before everything built in sync as SaaS. I still fondly recall the Dropbox backend to 1Password.

chorsestudios 2mo ago

I understand why it is a reasonable acquisition target for PE and worthy of exploration, but I’m not sure I understand how being acquired by PE would keep Dropbox alive longer other than shaking up the leadership and shifting priorities. Perhaps aggressively targeting enterprise customers currently using Box after rolling out the necessary features?

fsuts 2mo ago

Keep the business alive? Article says it’s making good money so no risk of it dying