Drew Houston: evaluation

Transcript context

…Yeah. And so we're like, "I don't know. Maybe this is going to be our Instagram," and so we bought those guys. And then 2014, I'm on stage painting this picture of Dropbox's future. I'm like, "We're going to help be the way that you remember your life. We're going to be your productivity. The new productivity suite on your phone," and all these things. But then it was this dissonance where there were so many things that were going right, and certainly the numbers, user numbers, revenue numbers. We were sort of accidentally cash flow positive maybe a year after launching. It was also clear that winter was coming, or that things weren't exactly as they seemed. Then the start of the second chapter, 2015, I'd start to hear a louder set of critics inside, and outside the company. And I'd been thinking for a long time like, "All right, man, we're really fighting wars on all these very disparate fronts." We're with storage. We're competing with the device to back up the device with photo sharing, or competing with Facebook, Snap, Instagram, Google, Apple. On productivity, we're competing with Microsoft, and Google. And then, there's a whole new cohort of companies like Slack. And then, there's this experience of one day I am standing on stage talking about how Carousel, and Mailbox, and everything are the future of the company. Less than a year later, Google Photos launches. And not only does it provide a lot of the same value, and in many ways very inspired by what we had done, but they also gave you free unlimited storage for life. Not just photos, but video. And so they just totally nuked our business model in ways that were bad enough in terms of just their obvious impact, but even worse because it was so easily anticipated. So this became a very public, and personal embarrassment for me. How could we not have predicted that, or been out in front of that? And then, that started this period. I'd say that was the beginning of chapter two where it was we went from the company that could do no wrong to the company that could do no right, which was a big flip. It was probably early summer, maybe late spring, when Google Photos launched. At first, I'm just thinking like, "Okay. This was a big miss on my part. How do we get out of this? We need to tackle some of these competitive issues much more ahead on." And then, what's the problem? Well, the problem is that every incumbent is going to copy your product. They're going to bundle it with our platforms, and then they're going to kill the economics. And that was clear what was going to happen with Google Photos. It was very similar product experience bundled with Android, bundled with all of Google's different touch points, and then free. So that was problematic enough for Carousel, but I'm like, "Wait, this is going to happen with everything that we're doing. Same thing with Mailbox." of Google's different touch points, and then free. So that was problematic enough for Carousel, but I'm like, "Wait, this is going to happen with everything that we're doing. Same thing with Mailbox." I had even pitch the founders to join Dropbox by saying, "Look, you're going to wake up tomorrow, and Gmail, and Apple Mail, and everything is just going to have these swipes and snoozes. The UI, it's not a durable source of advantage. We'll buy that problem from you." And that's exactly what happened. So I'm like, "All right. Even in theory, how do we deal with this?" And I'd gotten the criticism over the years that Dropbox is a commodity, and investors in the early days would be like, "Hey, this is kind a graveyard of a space, and DOA." And I thought, "Well, how do other companies deal with this kind of competition, and commodities?" So there's a great book by AG Lafley and Roger Martin called Playing to Win.…

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