tv Studio 1.0 Bloomberg December 20, 2015 6:00am-6:31am EST
♪ emily: it all started with a line of code written on a bus traveling from boston to new york. that is now the foundation for dropbox, a cloud-based file sharing service that allows you to share and store and access any file from any device anywhere. today, dropbox is valued at $10 billion with 400 million users in 200 countries around the world. joining me today, cofounder and ceo of dropbox, drew houston. my life is stored on dropbox.
252 gigabytes. is that a lot? drew: it is pretty good. emily: the criticism is it is so simple, other companies can do it also. google, microsoft, apple. how do you compete with that? what makes it a good business? drew: i would be curious to hear why you use dropbox or why you continue to use dropbox. for our users, i think it is a couple things. one is the product is easy to use. the other is it is the most popular service of its kind in the world. if you share something on dropbox, it is more likely that i will share something with you that you will already have it better experience. emily: dropbox has 400 million users. who are they, where are they? drew: the vast majority are all outside the u.s. more than 2/3. and it has been that way since the beginning because people use it not just for storage but for
sharing. emily: you grew up outside of boston. what kind of kid were you? when did you get into computers? drew: [laughs] i think it started in a living room when i was maybe three. my dad had just taken this thing out of a box, and it was an ibm pc junior. my parents have picture of me, i was not very tall, so i had to try to reach over to get the keyboard, and my parents have pictures of me trying to smash the keys. i think i was mesmerized from an early age by this glowing screen. my dad showed me how to write my first lines of code when i was really little. emily: he was an engineer. drew: he is an engineer. emily: your mother kind of resisted this. drew: i think she was sort of puzzled. she was like, aren't kids supposed to be playing with legos and going outside? they definitely urged me to have -- or made sure that my siblings and i had that kind of balance. emily: you went on to m.i.t. tell me about this story of a line of code written on a bus.
drew: i was on a trip to new york. i forgot my thumb drive. this was in the days before the iphone. you really didn't have anything to do. god, i hate myself. i keep doing this. i am so disorganized. why does this keep happening? because i had a bunch of time, i just opened up the editor and i started writing some code, having no idea what it would turn into. emily: why is dropbox worth $10 billion? ♪
emily: you hear entrepreneurs talk about starting companies, it is like staring into the abyss of death. or swallowing shards of broken glass. what was it like for you? drew: i do not think it was that dramatic. when i add up all the times i forgot my thumb drive, days of my life were wasted, so that was a motivator.
but fast-forward to today, people save the one billion files on dropbox. the technical and design challenges involved in building something at that scale are really exciting for an engineer. emily: how many employees do you have now? drew: about 1200 to 1300. emily: what does the bulk of the workforce do? drew: every time i wait a few weeks -- everything from the engineering of the product, design, the user interface design. people involved in marketing. emily: how many people are focused on security, for example? drew: we have a dedicated security team. people are really dedicated to security. a couple of dozen dedicated across all of these different facets of security. more broadly, you think about people who build our infrastructure, or are responsible for the reliability of the service. emily: what does the office of
the future look like? drew: i think there is a lot more freedom. in the old days, you would show up at work, and they would issue you a laptop and phone and say you must use these things. now, as we all know, we have a lot of choice. people are using all kinds of different devices. so i think that has become an expectation. anybody at work wants to have choice, and dropbox is instrumental in that. we support all of the different platforms. people expect to work on their own terms. they want to be mobile, not tied down to any one environment. they can be free to work anywhere with dropbox. it means a lot more fragmentation. you have stuff in your calendar, your e-mail, seven your dropbox, so it is kind of a mess. the big thing we think about is how can we tie together all
these different things you use? i think that expectation of freedom and seamlessness is something that is really important and a big area of our focus. there are a lot of things we can make easier. emily: those 400 million users -- how many of those are paying customers? drew: most people are using the product for free. if you need more space, you can buy more. now, dropbox is an $8 million business, up from $4 million two years ago. and we have 100,000 business customers. emily: who are the biggest companies you signed up? drew: the vast majority of fortune 500's are using us in some capacity. there are some household name companies using dropbox -- under armour, hyatt hotels. every quarter, we are adding new customers. emily: what has been the biggest challenge in terms of penetrating the enterprise? drew: i think that businesses --every technology goes through this curve where in the beginning, people are unsure about it. i think in the last couple of years it has started to flip. people realize it is actually
safer to have our information in services like dropbox and the cloud in general. the same way we don't put our cash under our mattresses anymore. the bank does a pretty good job of taking care of that. emily: what is the value proposition for a business to choose dropbox? drew: anybody can provide storage. more and more it is about -- of course, my stuff will live in the cloud. organize it for me. help me collaborate. help me search it, help me share with other people. storage is just an ingredient. emily: another part is building applications on top of that. you have mailbox for e-mail, carousel for photos. drew: each of those is a new adventure. emily: how many users do those services have? drew: we don't break them out separately, but they have been growing, too. we want to make sure the product is right before we spread our new apps throughout the business. emily: why is dropbox worth $10 billion? drew: we are in 8 million
businesses now. there is a ton of room for us to grow. even at 400 million users, there are still billions of people on the internet. you look at how valuable that problem is. the things people put in their dropbox are the most important possessions. the stuff in your dropbox is stuff that if your house were burning down, these are the things you would get. for a company making their team productive, having a safe place for their most important information, these are extremely valuable problems we solve. we are shipped on most samsung phones out of the box. we just partnered with microsoft last year to build dropbox into office. there's a lot going on, and investors see the potential here. emily: you always said dropbox is a standalone company. do you have that same conviction today that you had two years ago, eight years ago when you started? drew: for sure. it is important that we are --
being independent allows us to support all of the different platforms equally. you see as the other companies try to move in the space, they tend to favor their native platform at the expense of others. that is something that is really core. the switzerland approach is valuable to us and our users. emily: how do you weigh the decision of going public versus raising more money in this environment? drew: we have been able to do a lot in the private markets. we were able to raise money we did not really need. emily: why take it if you don't need it? drew: we want flexibility. we do everything from investment infrastructure, we have made a ton of acquisitions. having a stronger balance sheet gives us flexibility to make big, long-term investments. emily: do you have the cash you need to reach your long-term goals? drew: for sure. and we have control. the important thing is to keep
investing, not generating a bunch of cash. emily: could you go public without raising any more money? could you get to that place? drew: for sure. raising this money means we are not forced to go in any direction and we can stay focused on building and growing our audience. emily: what are your plans to go public? drew: we don't have any right now. again, that is what we get with the flexibility from raising this money. emily: what have you learned from box's ipo? it has gotten hammered. drew: i am happy we have our approach. our sales force of hundreds of millions of people means we don't have to spend the kind of money that others do on sales and marketing. emily: are you profitable? drew: we don't break that out right now. again, our investors are happy. things have been going well. our focus is really not on profitability, it is on investing and growing. emily: marc andreessen has warned about to burn rates.
what is your view on burning through cash too quickly? drew: it has to start with your business model. we are fortunate that our model has not changed much. we have been largely funded by our users, not investors. emily: how do you balance between the fancy office and the company perks and making sure you are being responsible? drew: we have a great office space, and we invest in things to make our employees lives easier. you will not see super expensive paintings -- we really make sure it does not look opulent. the danger companies can run into is giving everybody the impression that we have made it. we have tried to be balanced. emily: one of the things i have heard -- and this is just word on the street -- is that dropbox is losing some talented engineers. how hard is it to keep good people? drew: it is part of the war on talent, selling information like that. [laughs] emily: ok.
so it is not happening? drew: certainly, people -- it is kind of the circle of life. people don't join any company and expect to stay there their entire lives. our recruiting numbers have been better than ever. emily: really? how so? drew: we monitor close rates and things like how many engineers are joining. we don't break that out, but that is another thing about building a great engineering team is they all have friends and people they worked for at previous companies, and if you get a core of great people, it makes it easier to recruit the next round of great people. we're building this amazing roster of people, and it makes it really exciting for those that consider joining. emily: what is dropbox's moonshot? drew: our hands are pretty full.
what companies like google have done for the world's public information, we are trying to do for the world's private information. emily: uber is working on a self-driving car. airbnb is going into cuba. what is dropbox going to do? is there a stretch goal? drew: take something like carousel, for instance. ok, here is a photo app from dropbox. but when you step back, we are like, ok, i have this problem of, like, my photos are in 100 different places. in the future, we should be able to have every photo you've ever taken with you wherever you are in your pocket. you multiply that times hundreds of millions of people and this is one of the largest collections of human memories ever assembled. we want to completely reimagine how people work, we want to completely reimagine how people remember their lives. those are going to keep us busy for a long time. emily: how much do you think about building your own server? is that something you would ever do? drew: we invest a ton in our own infrastructure.
we also rent a bunch of infrastructure from amazon. so we are really big amazon web services customers. i think for a lot of our infrastructure, we can get a lot out of commodity servers or commodity hardware. there may be additional gains by trying to bring some of that in-house, but there are already companies all over that do a good job of that. emily: meeting steve jobs. how did that happen? what was that like? ♪
emily: you are 30 -- drew: 32. emily: you are 32 years young. what is the hardest lesson you have learned as a ceo? drew: well, i think the hardest challenges are really around people. you bring 1300 people together and get them pointed together in the same direction. in any group, there will be people unhappy.
how do you get people to collaborate even if they have different backgrounds? emily: i know you are friends with mark zuckerberg. what kind of advice has he given you? drew: a lot of advice on company scaling. with scale, you have to be a lot more thoughtful about how do you compensate people, think about mundane things like their titles. you have early stage things, have more merger products, a portfolio. how do you keep that running when he challenges are so different at either end of the spectrum? a lot of things like that. emily: your cofounder arash -- i read it was married at first sight at the beginning. how has your relationship changed over the years? drew: i think it has been pretty steady. we had kind of grown up together doing this.
our values have shaped by going through this experience together. emily: you went through the y combinator. i know you pitched paul graham in the early days. one thing he told us on your first application is you would sell dropbox for $1 million. obviously, that has changed. drew: i am glad no one was willing to offer us $1 million. emily: it was good you did not get that offer, right? drew: then and today what motivates us is most building something people love. emily: meeting steve jobs. how did that happen? what was that like? drew: it was interesting. apple became aware of dropbox early on. we had some conversations with their team because they were curious about how we managed to put the little green icons on the files.
turns out to do that, it was actually a pretty tough technical challenge. what we had to do was open our open-heart surgery on a code we did not write, and their team understood this was some pretty crazy acrobatics and something no other company had done. eventually, steve reached out and wanted to talk to us. we had repeatedly said look, we're not interested in selling the company. we are still not interested in selling the company. we want to be respectful of your time. if you want to hang out, sure. [laughs] it was wild. we would get up in the morning, and we had the zipcar. it is already in the phone. we spoke for the formal part of the meeting maybe 15 minutes. it was pretty clear they were interested in buying the
company, but we were having fun building it and were not interested in selling. emily: he said i want to buy you? drew: in so many words. we did not talk a number. it is important for me -- i did not want to go too far down that path. we spent the rest of the time talking about -- i had a lot of questions about why he came back to apple. he had different advice for us. he spent a lot more time than he needed to with us. you know, we were pretty clear that we were not going to sell the company, but he was also taunting us a little bit. he was like look, we are going to have to come after you. emily: they did. they unveiled the ipod. [laughter] how do you think that worked out for them? drew: different products solve different problems. what people love about dropbox is it is easy to use. you are not locked into any one platform.
emily: apple had a huge problem. icloud was not hacked but people's passwords were hacked. how do you make sure that does not happen to dropbox? drew: we have teams of people who think about what can we do even if you are kind of sloppy with your passwords or reuse things, we try to proactively identify suspicious behavior. we go at it from a bunch of different angles. emily: how has your personal life changed now that you are rich and famous? drew: i think people would be surprised. it is not that different. i still spend most of my waking hours thinking about dropbox. emily: you have been on "silicon valley," and hbo hit show. drew: i had a very important role -- just standing there at a cocktail party. it is fun. i look at all of this as a new series of interesting experiences. emily: what is next for drew houston? drew: we have a lot work to do. [laughs] emily: what do you want your place in silicon valley history to be?
drew: i think arash and i both -- the two things we really care about are we want to create a great company, a place where people can do their best work. and our culture is a little -- we admire all of the other companies, but we have our own distinctive culture, and there is a handful of aspects we really want to preserve. for me, it is we are a pretty big scale now. what does it mean to get to 10x that? what are ways that we can go even further? build this kind of treasure. this home for everybody's most important stuff is something that matters to a lot of people. emily: have you ever regretted not selling? not selling to steve jobs? drew: no. there are good times and hard times, but it is all part of the adventure. emily: all right. drew houston. thank you for joining us. this was awesome. drew: thank you. emily: great to have you here. ♪
♪ francine: welcome to leaders. santander is one of the oldest and biggest banks in the world. with a footprint in spain, the u.k., and the united states, it is a truly global bank with more than 100 million customers. recently, the spanish lender had undergone several big changes, most recently when emilio botin, the executive chairman, passed away in 2014. his daughter, ana botin, took over from her father and quickly