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A Look at the Box S-1
- jcampbell1 13y agoThis title is obnoxious, but the content is really good. The title refers to "burn rate", not that the company is a house on fire. I did a similar calculation... they are spending about $40M/quarter on sales people who are generating an incremental $5M in recurring revenue each quarter. Not great, but not a disaster. Especially when you account for the fact most of the sales people are new. A year from now, with the publicity from the IPO, and more experience and natural snowballing, the same $40M salesforce could be generating $15M in incremental revenue per quarter. That would be a recipe for a quite valuable company. He came to pretty much the same conclusion that I did: "When you look big picture, I believe they see themselves in a winner-take-all battle vs. DropBox and in this case, the strategy — while amazingly cash consumptive — does make sense." 5 years from now, I do see a possibility that Box is doing very well in enterprise, and Dropbox gets squeezed hard in the fiercely competitive consumer/SMB space.
- tg3 13y agoI agree that's their strategy, and I also agree that it may be their only play. However it feels like they're going all-in a little bit early. With a $23m/quarter burn rate and a raise of $250m, they only have a few years to "win" the market, and start moving in the direction of profitability.
- gtCameron 13y agoA few years is an eternity, its not like they have to keep burning through $100m a year until they either "win" or run out of cash, they could easily scale back on their customer acquisition spend and extend their timeline. I think their strategy is very aggressive but far from all-in