EP 119: Drew Houston (CEO, Dropbox): Reflections on the 17+ Year Battle Against Big Tech

Drew Houston has now been CEO of Dropbox for over 17 years. In my latest conversation, he opens up about the pivotal leadership lessons he's learned, the mistakes that shaped the company, and the true challenges of going head-to-head with big tech. We also dive into the highs and lows of fundraising, how valuations can make or break a company trajectory, and discuss the opportunities AI presents for the future of work. [0:00] Intro [0:44] AI Opportunities for Dropbox [5:57] Dropbox's AI Principles [7:52] Introducing Dropbox Dash [9:18] AI Enhancements in Search [12:33] Personal Productivity with AI [17:10] Memo-First Culture at Dropbox [22:15] Reflections on Leadership and Growth [31:21] Early Challenges and Viral Growth [48:22] Facing Fierce Competition [51:51] Strategic Shift to Collaboration [53:20] Navigating Internal Challenges [55:18] Reevaluating Productivity [1:03:07] The Birth of Dash [1:16:32] You Don't Want to Feel Like a Victim [1:30:29] Closing Thoughts and Lessons Learned Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Logan Bartlett?

  Welcome to the Logan Bartlett Show. On this episode, what you're going to hear is a conversation I had with co-founder and CEO of Dropbox, Drew Houston. In this discussion, Drew and I talk about a number of different things, including his reflections on the growth of Dropbox over the last 17 years, how he's learned to become a better leader and CEO, his reflections on the different mistakes that he made along the way, what happens when you try to compete with big tech, as well as his view on the future of artificial intelligence and the opportunity that it presents for Dropbox going forward. Thanks for coming on. I'm glad we were able to make this work.

• 0:40Speaker 01

  It's great to be here.

• 0:41Logan Bartlett?

  So, one of the topics of yours, I don't know, your perspective on this is artificial intelligence these days. And I think you sit in an interesting purview, both as the CEO, founder of Dropbox, but then also you fairly recently joined Facebook's board?

• 0:55Speaker 01

  Yep, about five years ago, a little under five years ago.

• 0:57Logan Bartlett?

  Okay, so not that recent, but you've probably seen, I mean, this has been an interesting, was it Facebook at the time?

• 1:03Speaker 01

  It was Facebook at the time, and then they changed the name a couple of years in.

• 1:07Logan Bartlett?

  So you've seen a lot of the AI investment that that business has gone through. I'm curious, like, how has that seat, that purview, informed your perspective on the AI opportunity for Dropbox?

• 1:21Speaker 01

  Well, it's been great to watch. And I won't speak for Meta itself, but certainly, like, seeing the rise, or seeing the power of open source and the impact it's had on democratizing AI has been really powerful. And, you know, whenever there's like a new era of computing, there's a question of, you know, is it going to be open, is it going to be closed? And so, open source has been super powerful, clearly, in terms of making AI more accessible, and in terms of both being able to use it, build products with it, research. I think on balance, it helps with things like safety, because you can be, you have a lot more people working on that problem, versus a situation where, you know, one, a couple of companies are the gatekeepers to everything. I think there was definitely

• 2:04Speaker 01

  an alternate future where we'd all be kind of like paying rent to a couple of big companies. But instead, we've seen the price performance of these AI models plummet, you know, like drop 10, 100 times, or 10 or 100 times better price performance every year. And that's for a product developer like me, or like Dropbox, that means like what we can build is a lot more exciting and more affordable, and things that would have been kind of priced out as being too... Expensive to do that much inference at our scale, suddenly become viable. So it's been awesome to have that vantage point, too.

• 2:36Logan Bartlett?

  Did you have a moment in time that you can remember that was like, okay, this is gonna, I clearly need to focus on this for Dropbox business going forward?

• 2:47Speaker 01

  For me personally, it was, it started to heat up. I mean, I started playing with more classical machine learning several years, you know, 20, mid 2010s, because I didn't, I wanted to go to, or at least thought about going to grad school, did my undergrad in computer science, but never did like the grad level courses. So I tried to self teach classical machine learning to see what that was about. And then certainly as deep learning, large language models came on the scene, then there was like that thunderclap, you know, iPhone launch moment of ChatGPT. And when you, when they had these instruction tuned models and like GPT-3, then it was a little embarrassing. I was like on my honeymoon, like coding and playing with these things.

• 3:30Speaker 01

  Where I was like, oh my God, it's happening. Like all the stuff I wanted to build and, you know, back when I first started studying this stuff is like, I hit all these roadblocks because like computers basically couldn't understand text. But then the large language models, like not only does it understand text, it can write text, it can write you JavaScript and then write a sonnet about the JavaScript. I'm like, wow, a lot just happened in like one, one minute, what it seemed like.

• 3:52Logan Bartlett?

  I would be a very unusual person that could do all of those things, which is powerful to the AI side.

• 3:56Speaker 01

  So it was a big wake up call.

• 3:58Logan Bartlett?

  Is there something that you look at now, both from your seat as CEO of Dropbox, as well as, you know, getting this purview into how Meta is making these investments that you sort of think is an inevitability that maybe we're not thinking about? If you pick a point, I don't know, 10 years in the future, that sort of feels to you like innately, obviously this is gonna, this is gonna happen, but might not be, you know?

• 4:20Speaker 01

  Yeah. I mean, the thing I'm most excited about is we sort of have this, we have our human intelligence or our human brain, and then there's this new silicon intelligence or silicon brain.

• 4:32Speaker 01

  And just as you saw in computing, where adding a GPU to the CPU suddenly made all these new things possible, like AI, in our working lives, it's, we're in this really kind of wild partnership with our, like, as we plug in the silicon piece of our brain. And so I think a lot of Work will be reimagined where we'll be able to offload a lot of our busy work and be freed up for more like creative or relational tasks. You know, I don't think anybody can really predict exactly what this, the precise route will be through this, through the fog here. But I think we'll be able to have, or I think we're opening the door to being, you know, where anybody can

• 5:13Speaker 01

  be a 10x person and people that really figure out how to master these tools can be 100x people. So I think it'll be certainly the most transformative change in our lifetime.

• 5:23Logan Bartlett?

  Have you played with any of the physical devices, like the pendants or any of those things?

• 5:29Speaker 01

  Not a lot. I mean, I'm very excited about voice or the ability to have sort of like an infinite memory and all these different contexts as you're using your computer or your phone, for sure.

• 5:37Logan Bartlett?

  It needs to become more socially acceptable. I think a lot of those things are very, it's very cool, but there's some social element of adoption that exists in the real world.

• 5:48Speaker 01

  Yeah. And I mean, even there's some basic like legal restrictions. You're not allowed to just go around like taping everybody.

• 5:54Logan Bartlett?

  Single party consent and all that stuff, yeah. Now, Dropbox has some AI principles?

• 5:59Speaker 01

  We do.

• 6:00Logan Bartlett?

  And what are those?

• 6:01Speaker 01

  So we established pretty basic principles around transparency, around how we use AI, things like privacy, safety, kind of all the, all the, setting forth all the things that Dropbox will and won't do because, I mean, for a number of reasons. But one is, you know, customers, and I'd say all of us are really excited about the good parts of AI, pretty concerned about the things that can go wrong. And then when you intersect that with like your stuff or your like most important information, your personal information, your company's information, you care a lot about making sure that you can trust your counterparties or the services that you're using.

• 6:44Speaker 01

  And we had some experiences around this with Dropbox 1.0 because people for the first time, you know, or a lot of people for the first time were putting their most important information into the cloud. And this happens a lot, you know, whether putting your money in a bank instead of under your mattress, or putting your credit card over the internet, or putting your files in the cloud. Start out with a lot of same apprehension. That's very justifiable. And so this was a way for us just be on front of that. Say, here's how we'll use your data. Here's how we won't and reinforce one of Dropbox's big advantages, which is that our incentives are much more fundamentally aligned with our customers from a trust perspective because I think a lot of people worry about, when you think about how these models are trained. It's like, oh, man, is this service can like take all my stuff and sort of grind it into little pellets to either like sell me ads?

• 7:30Speaker 01

  Or to train their next foundation model or have other some kind of, you know, undisclosed use of my information. We wanted to draw a bright line and say, no, we're not, you know, you could, I think everybody's looking for providers they can trust. And so setting these principles affirmatively was a step we took pretty early on and a lot of companies are have also published similar principles.

• 7:52Logan Bartlett?

  And so folks that don't know, what, what AI products have you released to date? And what are some of the things you're excited about for the potential going forward?

• 8:01Speaker 01

  Yeah, the most notable one is we have a new products called, a new product called Dropbox Dash, which is really centered around universal search. So the basic, first basic problem we're solving is, you know, I can't, I know that thing exists, can't find it. And this question of like, why do we live in a world where it's easier to search all of human knowledge with a Google search? And then when I go to search for my company stuff or search my company stuff, search my own information, you know, I got 10 search boxes.

• 8:30Speaker 01

  And it's much worse experience. And then weirdly, despite all this technological progress, this problem is like much worse today than it was 20 years ago. 20 years ago, if you wanted to find your stuff, you'd just like search your hard drive, right? Or your email. So maybe one or two search boxes, but now we've had this, it's kind of gone wild. So Dash is really about fixing that, giving you one search box that can search everything. So it'll search your Google Docs, your Slack, your email, your files, but really anything. You don't even need files in Dropbox. This is completely, it can be a completely standalone thing or integrate with your Dropbox. But we see that as like a very fundamental challenge that, that a lot of knowledge workers have, and especially as we've moved into these like distributed ways of working, like where's the information I need to do my job?

• 9:15Speaker 01

  And all the paper cuts that come along with that. So.

• 9:18Logan Bartlett?

  How, by the way, how is that powered or enhanced by AI today? Enterprise search is a market that's been around for a long time. And it sounds like this is both consumer and B2B elements of it.

• 9:30Speaker 01

  We're focused on work use cases, yeah. So it's, on the one hand, enterprise search has been around for a long time. On the other hand, sort of similar to cloud storage, like when we started. There were a lot of other things that sort of claimed to do it. But, you know, in our view, none of them had really done it right. And I think there's a similar dynamic that we've seen with how enterprise search has evolved. Where, yeah, it exists, but no one really, when you ask the average person, like, do you use any of these enterprise search products? They're like, no. And you know, have you used them? Yeah, it didn't really work very well. And so certainly the generative AI allows you to not just do search, but really get answers.

• 10:09Logan Bartlett?

  Yeah.

• 10:10Speaker 01

  And so Dash is also, we also view Dash as for a lot of the questions that ChatGPT can answer, because it's not connected to your stuff. So if you ask, you know, if you or I ask ChatGPT a question, we'll largely get the same answer. But then if I want to ask, like, when does my lease expire? When does, where's the slide from last year's product launch? Things like that. You need a product like Dash, which is connected to all your stuff and can, is grounded in all of your content.

• 10:35Logan Bartlett?

  And so is the search opportunity then, forgive me if this is a little nerdy, but more enabled in the natural language of how you can ask? And then how you can, I guess, is there anything on the backend that's more intelligently done through large language models or whatever that actually surface this stuff up?

• 10:52Speaker 01

  Absolutely. So with search, there was a couple of aspects. When you sort of like double click on this specific problem, there's, people often have like retrieval use cases where it's like, I know there's a thing or I'm looking for a specific asset and I actually just want the thing. I actually don't want to have a question I want answered. Or I want an answer to a question like, I'm really, at the end of the day, looking for, okay, what is the Dash, what's Dash's roadmap? Or what's, when's the release date? Or what are the key features? Things like that. So it's a question and those. The Blue Links kind of format is actually pretty good for retrieval. You just want to get the thing quickly. But then when you're discovering things or you don't know the answer, don't know where it might be, then a natural language fits in a lot better.

• 11:37Speaker 01

  And then there are also like some of the underpinning technologies of large language models. These embeddings or a lot of semantic search, neural search, fuzzy search, vector search, a lot of names for it, same thing. But basically, you, one of the unlocks was you can now search without having to match the exact keyword. So if you say like, oh, what's the 2025 strategy or the 2025 plan? These vector search can help turn up the right results for both of those.

• 12:05Logan Bartlett?

  The things within the proximity that are close to it rather. It could be, you could say 2025 plan. And if it was only language based, it might show nothing if it was actually called whatever, company estimates through 2030.

• 12:18Speaker 01

  That's right.

• 12:19Logan Bartlett?

  But it can get directionally there.

• 12:20Speaker 01

  Yeah. And when you implement these things properly, these can also be learning systems where they're always, they're always getting smarter based on how you're, it's becoming personalized to you as you use the service. And then just smarter overall as the world is using the surface.

• 12:33Logan Bartlett?

  I guess at a personal level, are there things you're using AI for to make yourself more productive? Or regular behaviors that you've kind of adjusted?

• 12:43Speaker 01

  Yeah, lots. I mean, you know, my first love is the engineering. And, and I grew up as a little kid coding. And so when the large language model came along, you know, around the chat GPT timeframe, I was suddenly like coding like an 18 year old again. And I'd say even before that, when I was like learning classical machine learning or the kind of the pre deep learning techniques, there was lots of stuff that I wanted to automate. And I, you know, even my career, I started out as an engineer. I knew I wanted to be a startup founder. Wasn't actually sure I wanted to be a CEO, sort of backed into it. But as I really inhabited that role and the company was really scaling,

• 13:25Speaker 01

  I was like, man, there's a lot of tedious stuff that managers or executives do. So yeah, I would have all these little tools to, you know, audit my calendar or figure out. Which of these emails needs a response? Or actually, the motivation for Dash, from my perspective, was like, I can't find my stuff. I need to, we need a better, I need a better way of managing this personally. Forget a product. And then I wrote, and I was like, oh, and there's these embedding based, or you know, these vector search is a new thing. And I built this little prototype of a personal search engine. And I'm like, oh, my God, it works. It's super scalable. It's super fast. Everybody's gonna be using something like this in a few years. This is maybe 2018, 2019. And I'm like, we should be all over this.

• 14:07Speaker 01

  So actually, this is a lot of, I still write many thousands of lines of code a year. And that's like, one of the key ways that I really get more of a tactile feel for like, here's what the technology is, here's what it can do, here's what it can't. And this stuff's fully baked, this stuff isn't. And yeah, I mean, I think it wasn't just my prototyping that led us to Dash. But that's really what caused me to have a lot of conviction pretty early and put a lot of chips on the table.

• 14:35Logan Bartlett?

  AI, removing AI from the equation, is there anything you've done from a productivity, either calendar tracking, or email triage, or just anything you would recommend that people that are busy and managing, you know, different constituents and all that? Anything you've done that you reflect on even outside of AI?

• 14:50Speaker 01

  Yeah, there's, there's a lot of good stuff. And I'd say the, the best stuff is really timeless. And often, the principles are pretty straightforward to describe. And the ones I lean on are, some of my favorite books are High Open Management by Andy Grove. I guess one of the best books on management ever written. Another is The Effective Executive by Peter Drucker. I could give a lot more, but, but just on the sort of productivity and effectiveness angle, I think those two probably get you 95% of what you need to know from a theory perspective. But what's really hard about it is applying it, right? Because it's sort of easy to read the book, and then, you know, it's probably a super

• 15:33Speaker 01

  disappointing fraction of people actually apply the lessons. And this is kind of this constant fight. So a lot of my use of AI was really to automate some of these things. So for example, one thing that every, every busy person struggles with, like, is how am I using my time? And the first chapter, after the introduction of Effective Executive, the title is Know Thy Time. So what you do is you basically do a time audit and you're like, okay, here's, here's all the stuff in my calendar and I'm going to categorize it, put in these buckets. And, and then you line it up to your priorities. And so, you know, I read the book a long time ago, about 15 years ago, I probably did my first time audit with my admin at the time.

• 16:15Speaker 01

  And I was like, oh, I probably spent most of my time on recruiting and on products. I don't know. And then after the audit came back, we tallied it up and we're like, actually, I spend my time on just about everything except for recruiting and product. So it sort of highlights this. It's one of these areas where it's not just that we don't, we, it's actually worse than not knowing where your time goes. You actually, where it actually goes and where you think it goes are often like wildly disconnected. And that's like one of the first findings in the book is like people are usually shocked by a time audit. And so, you know, it's something you have to do periodically, but it's a really manual process. And so it's something that lends itself well to automation. But yeah, all kinds of things like that. How am I using my time? Am I focusing?

• 16:59Speaker 01

  How am I, how am I keeping on top of my communication, personal search? Yeah, there's a lot of, there's a very, there's a lot of little code repositories in my, my little bag of tricks.

• 17:10Logan Bartlett?

  You've, I've heard you've moved to like a memo first culture internally. I guess what was the shift to doing that? Was that something you guys did in the early days?

• 17:19Speaker 01

  Yeah, it was something we did in the early days. And, but I would say it was really reinforced after we started, or after COVID and particularly after we shifted to being about 90% remote and really kind of rethinking our working model of being a distributed company and sort of navigating the new world. So I think it became much more important then. And the origin, or what really emphasized it is

• 17:47Speaker 01

  So Jeff Bezos said of all the decisions he made when scaling Amazon, like the single best decision was actually had nothing to do with like his products or his markets or any of the other things where they've been successful. That's what I would have thought he would have said something about that. But he's like, no, the best decision I ever made was to ban PowerPoint in the company and switch to this narrative-based culture for like a bunch of reasons. I mean, one is, well, the reason why it was, is helpful is because like we've all been in those meetings where someone's presenting, you've already read the slide, but you have to wait for the person verbally to catch up. Or, you know, someone interrupts and asks a question, but the question's answered a couple of slides later.

• 18:34Speaker 01

  And one way or another, the presentation format kind of limits how many people you can have in a room to have an effective conversation. It's the, how compelled you are by the presentation is less about the merits of their arguments and more about their skill in presenting and thinking on their feet. So there's a bit of a distortion or bias that comes in that way. And then conversely, narratives are, they work really well because they, they have a much higher bit rate. So most people can read a lot faster than they can hear. And then when you not just write the narrative, but spend the first, you know, 10, 20 minutes of a meeting, reading it, which is part of Amazon's practice, something that we also

• 19:13Speaker 01

  do, it's like then everybody has, instead of like some vague, like very vague and disjoint sets of context, suddenly everybody has the same kind of high def 4K view of like what is, like what are we talking about? What is the plan? And you know, everybody has that kind of fact base and it's super, it's super efficient to download that, you know, you can have like 15 or 20 people in a room and have it still be efficient. I mean, the challenge with it is that there's a couple of issues. One is it's very time consuming for the writer, but it, or it's a trade-off. It's very hard for the writer. Easier for the reader, but that's generally a good trade-off, especially in a bigger company, because there's a lot more readers and writers, and often when you're communicating something,

• 19:56Speaker 01

  it's a lot more efficient to just give people the source of truth, rather than verbally, sort of game of telephone, broadcasting it over and over again. And then it can also become, there's sort of a proxying that can happen, where people sort of forget that the point of the narrative is to help get the work done. The point is not to write the narrative itself. So if you have all these, like, and I think you've seen this with some of what Amazon's reported recently, like, yeah, if people are having the meeting, the pre-meeting before the meeting, and there's a lot of bureaucracy around the document, then you can lose the plot that way.

• 20:28Logan Bartlett?

  Once the people have done the readout, then is it open Q and A for people to ask? Or is there, generally, do you follow the points through for discussion at each point along the way? Because that's one of the things I've seen, is you read it, and then it's like, any questions? And then it ends up being a little too open-ended.

• 20:45Speaker 01

  Well, I think there's different ways to do it. We certainly start by doing the pre-read, and then while we're doing the pre-read, I mean, we do it in Dropbox Paper, which is sort of our document tool, where, but you can do this in Google Docs or Notion or anywhere else. People leave comments in line. And so you both want sort of the fine-grained feedback on like, okay, this specific little thing. But then you also want people to zoom out and be like, all right, what's your overall reaction to this? And we've even had things where, like, you have a little form, where at the end of the pre-read, you put your overall reactions and like a rating or things like that, which some other companies have done.

• 21:26Speaker 01

  So I think all those things can work, but I think the biggest win is that you can get that 10 or 20 minutes, you can get a much higher fidelity download to everybody in the room than you could get in an hour of just talking about it and interrupting each other. And then as far as how to start at a high level or a low level, I think Amazon does care a lot about, they're like, they ask everybody in the room to go around and give their reactions, and Jeff goes last. I think things like that can be helpful to not bias people.

• 22:01Speaker 01

  So I think that, but I think there's like multiple ways to do the review. I think that just the key thing is like, is sort of doing your meetings through, through memos or narratives versus just conversation or presentations.

• 22:15Logan Bartlett?

  As you reflect 17 years into the journey now, I guess it's still not at the point of more time with Dropbox than not, but you know, at some point that'll cross in the next couple of years, right? I'm curious if you could go back and tell Drew from 2007 or 2010, something about, I don't know, leading a business or growing, or is there something you reflect on and you wish you could impart to someone going through this journey that you've now been on?

• 22:43Speaker 01

  Totally. I think the first thing would be something like, it's a journey and just like, hold on, in that, and then more specifically, becoming a CEO or becoming a leader is something that is more learned than innate. Cause I'd had sort of a picture in my head, like, oh, CEOs are like this, or they, you know, come out of the womb in an Armani suit with perfect hair or something. And I was like an engineer and I hadn't really ever been a business person. All I could see is like, well, what those CEOs look like and the things they know. I don't know a lot of those things. I don't have that, seem to have that skillset. So, you know, as a first time founder, technical founder, I was like, probably like a lot of others, like insecure

• 23:26Speaker 01

  about, am I gonna be able to figure this out? Cause always, the more I know, the more I realize I don't know. So it's intimidating. So I think the advice would be, you know, just understanding that's part of the, it's part of the game. All the best, you know, a lot of the best tech founders started out as engineers and learned the business part on the job. Very few people went the other way. So it's a learnable thing, but it doesn't mean it happens by itself. Like you really have to be systematic. The advice part that I would send myself now is like, you have to be systematic about training yourself because as CEO, you know, to be effective, you really do need to, it's very helpful if you know a lot about a lot.

• 24:02Speaker 01

  And like going, and there's an 80/20 in each discipline, but there's like a lot of disciplines and a lot of skills you need. So the way I've always broken that down is I've got to keep my personal growth curve ahead of the company's growth curve. And in practice, what that means is thinking about, well, it's really thinking about what do I need map out? Like, what do I need to know, you know, one year from now, two years from now, five years from now? And what will I wish I had been learning today to kind of get ready for that? Because, and so, you know, 2007, when I started the company, we didn't really have, we didn't really have much of a company. There's sort of like, there's just like coding, or my to-do list would have been like, let's build a prototype. Yeah, we're gonna need to hire a couple people.

• 24:46Speaker 01

  Okay, if we hire people, we're gonna need some venture fund, et cetera. Then like two years out, it might be more like, well, we're gonna have a product, but we're gonna need to get users. So we're gonna need to do marketing or figure out distribution. We're gonna have to have a business model. And then five years would be like, all right, how do I scale an organization? How do I be a leader, manager? How do I tangle with all these big platform companies who are all gonna come after us? So first thing you know is like, those are all pretty different things. And so you have to work back to like, all right, well, what, you know, what do I need to start learning today? And some of those things you can learn pretty quickly, like, all right, what are the mechanics of raising venture funding? It's, there's a lot of technical details, but conceptually, it's not that complicated. But then something like, how do I become a great leader, a great manager? Like, that's much longer.

• 25:30Speaker 01

  Get comfortable with public speaking, like any of these things. Like, it just takes a lot longer. And I think people psych themselves out because they're like, oh, I, you know, I didn't, I'm not good at this, I'm not good at public speaking, so I'm not even gonna try. It's intimidating to be a CEO, and so I'm like, not gonna try. But I think people sort of, yeah, in five weeks, you're probably not gonna learn to be a great CEO, and any more than you'd be learn to be a great guitar player, a great doctor or something. But in five years, you can go a long way. And so I think that mindset of like, everything's Like learnable and the best founders like and CEOs like end up learning on the job. You know, no one's born a CEO. I think that would have given me some comfort and some, you know, pointed me in the right direction.

• 26:14Logan Bartlett?

  Were there good resources? I know you're a big book reader. And so how much did that help you versus just simply doing and making mistakes versus turning to people for advice that have been down? Which was the most useful for you?

• 26:27Speaker 01

  Yeah, by far, reading is the single, for me personally, I mean, different people learn different ways, but I think reading is by far the most efficient because like most of the lessons about leadership or any of the, or you know, any of the disciplines, you know, it's a lot more efficient to like learn from other people's stories and mistakes than try to do them, everything by trial and error. But reading for sure, I mean, even before Dropbox, like my first company was like an online SAT prep company, but like I would, I was in college and I would just like search for like sales on Amazon, buy a bunch of sales books, search for marketing on Amazon, buy a bunch of marketing books. And like that was how I just sort of started getting the initial scaffolding.

• 27:05Logan Bartlett?

  By the way, is it true you and your wife both got perfect SATs on both 1600 and 2400? Is that true?

• 27:11Speaker 01

  Yes, well researched.

• 27:12Logan Bartlett?

  I had heard, maybe two of the only people in the US, but you guys didn't meet over SAT?

• 27:19Speaker 01

  We did not meet over SAT prep.

• 27:21Logan Bartlett?

  But probably bonded over it.

• 27:22Speaker 01

  But after our first date, I Googled my wife and I was like, no way.

• 27:26Logan Bartlett?

  There's an article from some like Texas periodical.

• 27:29Speaker 01

  You found it. So mine, hers was a little rougher because like she was like right on the bubble of the test went from like 1600 points to 2400.

• 27:41Logan Bartlett?

  We're probably the same age. That was me. I was like right, right in that.

• 27:44Speaker 01

  And so she had to take both. She got a perfect score both times.

• 27:48Logan Bartlett?

  I did not.

• 27:49Speaker 01

  Mine was a little more business minded, right? When I was applying to college, I did, or I actually wrote all this software to like flash, like to drill the vocab and then. That helped a lot to, I mean, I got a perfect score on, and when I was in high school and then to sort of, to get ready for the SAT prep company, which was actually, I started because the test was changing and made all those like 800 page books obsolete. And at the time, there weren't like great, like adaptive online learning, online courses. So that was the opportunity we were going after. So I went, you know, as a 21 year old to Brookline High School.

• 28:30Logan Bartlett?

  Went back and took it.

• 28:31Speaker 01

  Pulling up in my car and Starbucks.

• 28:32Logan Bartlett?

  Billy Madison style.

• 28:33Speaker 01

  Yeah.

• 28:34Logan Bartlett?

  Yeah.

• 28:35Speaker 01

  Yeah.

• 28:36Logan Bartlett?

  I'm sure the kids at Brookline were like, what is going on here? If only they knew, three years later, you would have started Dropbox. That, that, that journey and all those lessons about like, I'm sure everyone has this element of imposter syndrome. I guess as you think back on the, the 17 years that you've been at it, do you, do you reflect on each moment with similar nostalgia of like, this was, this was a fun part of the ride? Or are there particular points that really stand out either to the positive or to the, to the negative on the journey?

• 29:11Speaker 01

  Totally. Yeah. Um, you know, I started Dropbox so soon after college that it was sort of, that all of that was just this kind of continuous blur where, um, I mean, so I, I loved all those stages of Dropbox. Um, I don't know if I loved all of them. I think they were all, certainly the early years were magical in that, you know, you move out to California, your couple of kids fresh out of the dorms or whatever. Um, and you know, you don't even know what you don't know. And you're just trying to build something cool to then you've catch lightning in a bottle and have that kind of hypergrowth

• 29:52Speaker 01

  or, you know, dot com experience that I thought I had missed because I, I was still in high school during the dot com boom. And I was like, oh man, maybe, maybe I just totally missed it.

• 30:03Logan Bartlett?

  Too late.

• 30:04Speaker 01

  Fortunately didn't. Um, and, and then that, the hypergrowth period where the thing is just taking off and just, no matter what you're doing, it's just the numbers just going up into the right. Um, it was a really cool experience or sort of like, you know, being a novice surfer and then suddenly being on a wave. That's like a hundred feet tall. You're like, okay. I mean, it's awkward and scary, too, because you're like, you know, there's not a lot of style points. You're not doing things kind of technically right, but you're just trying to hold on and stay on the board. Then it gets tough when sort of that wave flattens out, or you're or like they're like the natural competitive responses to your thing being successful. It's like all of your all the big tech companies are going to come after

• 30:46Speaker 01

  you. You have to scale an organization. So there are a lot of and then we we launched a lot of new products that we had to shut down, which is a super painful experience. And then there are ups and downs. Then we had another kind of up period as we went public, a down period during COVID. AI happens, back up again. So, yeah, I feel like either like all of the periods either were like fun to go through in some way, or they weren't fun to go through, but they like were pretty necessary. Or like, you know, maybe I did need kind of a to get my teeth knocked in a little bit.

• 31:22Logan Bartlett?

  Wait, I'm curious, actually, as you reflect, like, the reason the product took off to the extent it did in the early days. Obviously, product was elegant, very well done, and, you know, market right timing for it. Was there anything I've actually not heard in the prep that you did that was like actually a particularly good viral distribution hack or some reason that it really shared?

• 31:43Speaker 01

  Yeah. Well, I think there are a few things. And I think part of why Dropbox was able to thread the needles, we sort of got a bunch of things right in disciplines that usually don't go together. Meaning, we needed to there were a lot of other like storage companies or sort of online storage was like the startup cliche, the way that, you know, photo sharing or social apps or there's these like fad things like storage was one of those. It's hard to remember now, but that but there are a million of these things. Problem is none of them worked really well. And to get it right, you need to get a few orthogonal things right. So you needed to get the engineering right because part of why I built Dropbox instead of just like using one of the other services.

• 32:27Speaker 01

  Like if one of those services had worked, I wouldn't have started the company. But then I would go into like the support forums of each of these other tools and they'd be like, hey, this thing like ate my wedding photos or I put in my tax returns, not coming out, like help. And so that was pretty terrifying to me. Or you'd put in like a file with like a non-English character and the thing would crash. Or you put in a big file and it would never finish sending. All that kind of stuff. So I was like, I don't trust any of these services. I really just want to get it right. And then there's even within the engineering, there's a part that's like a more mathy, algorithmic, like the sync protocol, correctness, rigor, that kind of thing. And then there's just like grungy like operating system, like being in the guts of the kernel and you know, it's like all this.

• 33:12Speaker 01

  And just the plumbing where you had to really, we had to like basically cloud enable other people's operating systems without the source code. And even things like putting the sync icons on the files.

• 33:23Logan Bartlett?

  So that's just getting it to like work.

• 33:25Speaker 01

  That's just getting it to work.

• 33:25Logan Bartlett?

  It sounds like most people did not, weren't able to do.

• 33:27Speaker 01

  But that was like pretty hard.

• 33:28Logan Bartlett?

  Yeah.

• 33:29Speaker 01

  And it was not something where you could throw like lots of people at it. You need to throw like a small number of really like experts at it. Second is the design and the user experience. A lot of these tools just had a lot of knobs and dials.

• 33:41Speaker 01

  And ironically, actually, our early customers, if they were searching for like Windows file synchronization software, they were pretty bad customers because they wanted to twiddle with all these things, whereas we wanted to build something simple. But that was even just like, I was one of the, I was, I was that kid in the neighborhood who would just get called to fix everybody's computers. And then you learn a lot about like, here's what easy, here's what easy looks like.

• 34:04Speaker 01

  So there's a design piece and then as you're alluding to, they're getting distribution. Like how do you get distribution as a startup?

• 34:11Speaker 01

  We, that was a huge unsolved problem when we got started. Like, all right, is, people aren't looking, you don't know you need something like Dropbox till you have it. For the most part, and you know, some things like that, like TiVo, like, oh, you didn't know you needed TiVo till you had it, but you weren't really looking for it.

• 34:33Speaker 01

  But I had a bunch of questions, like, how are people going to find something like that? I mean, maybe it's like antivirus. People weren't like shopping for antivirus really. It's sort of, or antivirus is pre-installed on your computer. So like, maybe we should go partner with a bunch of big, big companies. So, and then, or maybe we should try conventional PR, marketing, those. But like, none of those things worked. So we were like, oh, God, how are we going to get, how are we going to acquire customers? What really did work was borrowing from a lot of the consumer internet playbook for how you scale these products. And particularly like the social platforms. They were the first to really apply a lot of the viral math, which actually came from like epidemiology. So it's things like RNa and spreading, you know, different factors.

• 35:14Logan Bartlett?

  Things that came back into the vogue.

• 35:15Speaker 01

  Yeah, they sort of transplant, yeah, exactly. So, but you could really, there was a lot of good stuff about how the social platforms were able to go from like zero to millions of users overnight. And things like Facebook platform were all just flying. It's like taking off in 2007 when we were starting the company. So we were sort of in the, it was, it was all around us, like that sort of virality and, you know, the, the birth of like growth hacking. But we basically applied a lot of the same engineering discipline to customer acquisition. And that ended up being the thing that really worked, where there are a couple of vectors. So one was, well, first we tried a bunch of stuff, and most of the stuff didn't work, but the things that worked really worked.

• 35:59Speaker 01

  So one was this referral program that we created where if I tell you about Dropbox, you know, send you a referral link. You get some extra free space. I get some free, extra free space. So we sort of, sort of double-sided incentive, kind of gamifying the referral process. And that drove probably triple-digit million signups. And then we put little other bells and whistles on it. Like, we would do it within schools and have schools race against, the students in the schools race against each other. Like, which college can have the most like free space? So that, you know, I still have people who sometimes say, oh, yeah, I got Dropbox from that. However, many years later. And then the other piece was just sharing, right?

• 36:43Speaker 01

  And this is more classically viral stuff. If I share a folder with you, you become a Dropbox user, or you hear about it. And then, you know, and then there was all this crossover of like, oh, I started using Dropbox at home. I brought it into work. I started using it with my coworkers. And then that little team becomes a department, becomes a wall-to-wall deployment. And that's a game of inches because you sort of have to really think about the funnel. Starts with signup, then how do you onboard people successfully? And then how do you get as many people sharing as possible? And then if you're sharing, like Mac, have as many recipients as possible, and then make the recipient experience really good, like make sure that as many of those invitations are accepted, or, you know, shared things are accepted. And so, we were, we put unbelievable amounts of effort and like sanding down all these rough

• 37:28Speaker 01

  edges in terms of the onboarding experience. So, for example, when we started, maybe like 20% of people would figure out how to download the Dropbox app and then put a file in. And that was like, unfortunately, that was like a big kind of limiter on the whole system. But then we took, we brought five people in off of, literally off of Craigslist. We're like, here's 40 bucks, brought them into our office above the Walgreens on Kearney Street in the city. And we're like, alright, go from this email to sharing a file with this email address. And they all, and then we were like sort of simulcasting it in the other conference room in the office where literally the whole team, we were all watching live as people were like fumbling their way through this. None of them succeeded, zero

• 38:08Speaker 01

  of five. But we made this list of like, here are like 85 things, here 85 little rough edges, some big, some small. We sanded them all down. 25% went to 65%. And then we did same things with like viral, make sure the email deliverability is good, make sure the copy is clear, make sure there's a few steps as possible, contact list, importers, you know, all this stuff. So, but we then, once we got that working, suddenly then the thing just was like an anti-gravity machine. It was like a million users, 2 million users, 10 million users, 20, 100, 500, you know?

• 38:40Logan Bartlett?

  How many rounds of Craigslist people did you have?

• 38:42Speaker 01

  We just did, you know, we did that, that first one was like humbling enough where we, we wrote down so many things that we were able to kind of.

• 38:51Logan Bartlett?

  You didn't need to go back.

• 38:51Speaker 01

  I think we probably did. Of course, we did more user testing.

• 38:54Logan Bartlett?

  Yeah, sure.

• 38:54Speaker 01

  But I think that was just like such a searing moment in all of our memories. And even that was born from like, in the early days, we would get. Like whenever you emailed like press@ actually it's getdropbox.com in the beginning, but like press@ support@ like it would actually go to the whole, whole company, you know, all 10 people in the company. And so everybody could see all of the customer feedback continuously. But I got these, I remember like reading through the support emails one day and I was, the first email was like, "It's the most beautiful, elegant, wonderful product, saves my life, love you." And I was like, "This is great." And the next one was like, "This is the most

• 39:36Speaker 01

  like impenetrable, incomprehensible garbage I've ever used. Like you MIT nerds like can't design a product to save your life." And I was like, first of all, they like personalized it to my college.

• 39:47Logan Bartlett?

  Yeah. You're like, "Thanks dad."

• 39:49Speaker 01

  Okay. Yeah, exactly. But I'm like, more than any of that, I was like, "How can I literally be getting these two emails like one after the other? Okay, we should probably do some music testing."

• 39:57Logan Bartlett?

  Yeah.

• 39:58Speaker 01

  But it ended up being one of the most important things that we did.

• 39:59Logan Bartlett?

  What about, so there was the period of time of just like viral growth and it was a rocket ship ascension through that. And I'm sure there's a bunch of things that you look back on finally and also you're just hanging on as that wave is taking off. I guess as you reflect on that, I'm sure people would be very fortunate to find themselves in a position. But is there something that you look back on during that period of time that you wished you had done differently? Or was it just kind of survive and advance as much as you could?

• 40:29Speaker 01

  I mean, obviously what sort of is not shown is like there were like 100 other things that we tried with like partnerships with PC manufacturers, antivirus, referral programs.

• 40:39Logan Bartlett?

  Yeah, all survivorship bias.

• 40:40Speaker 01

  Other stuff that like had no, no returns. But no, I mean, I was super proud of what we, and there were other things, not just the virality, but also just monetization, like the freemium model, how we acquire business customers. Like we were pretty early in

• 40:58Logan Bartlett?

  Pretty pioneering in terms of the product-led sort of

• 41:02Speaker 01

  Kind of transplanting this like consumer playbook to business software. I mean, the industry's taken it many steps further since then. But yeah, no, I'm like super happy with that.

• 41:15Logan Bartlett?

  You referenced like having to shut down products, which I'm sure was a hard decision.

• 41:21Speaker 01

  Yeah.

• 41:21Logan Bartlett?

  There was, there was mail and carousel and probably a few others.

• 41:27Logan Bartlett?

  But you did fairly, you didn't beat around the bush with it, at least as I reflect on how long it took you to do that. One, in making a decision like that to ruthlessly prioritize on something, was that an instinctual thing or was the data just telling you like this, this isn't where you need to go?

• 41:47Speaker 01

  I think it happened gradually then suddenly. It was rough. I mean, in 2014, we were spreading our wings as a company. And we knew we had a, I think, early on, even like well before then, I think even 2007, 2008, we're like, we're just going to get crushed by the big companies. And we're just sort of waiting under the shadow of the Google Drive hammer that was one day just going to come down and just like

• 42:16Logan Bartlett?

  And you were, I mean, to your credit, you were pretty public about when people would say that, you're like, yeah, probably. Like, that's probably what's going to happen. But if not, what could this be? And what could people singularly focused on this problem actually be able to accomplish? Which I think is a level of self-awareness and also to anyone that's fundraising, at least on our side, it's like, yeah, no. I mean, statistically, most things will get beaten by some competitor. And there's a level of self-awareness and humbleness that I think in saying that is effective.

• 42:52Speaker 01

  Well, and then I think when you just sort of start from the user experience, we're like, what two investors, they're like, yeah, this is a graveyard. No, none of these companies have succeeded. It's a commodity. But mainly, mainly it's just like too much competition. And I was like, okay, but do you use any of these products? And they'd be like, no. I'd be like, isn't that interesting? Step one in our adventure was not like conquer earth. It was like not carry a thunder. So, and I, you know, it's also pretty clear, like, okay, even if we did get totally just like mocked by one of these big companies, like, all the other companies would need some solution. They, you know, we could sell the company and go do another kind of crazy side project or whatever.

• 43:34Speaker 01

  But, but that like didn't happen. Well, it was interesting, like, then all these products launched, iCloud, Google Drive, OneDrive, Amazon had things in the space, like everyone had things in the space. And so

• 43:52Speaker 01

  But it was sort of like you sort of saw the mushroom cloud in the distance, but you didn't hear or feel anything.

• 43:56Logan Bartlett?

  Yeah.

• 43:56Speaker 01

  So it's a very delayed reaction where, I mean, the press likes to write like, oh, you know, Google launches competing product, the startup's just like dead tomorrow. And it doesn't really, comp just is more like a boa constrictor than a shotgun. In that, you know, we could not, you could not look at our analytics and point to a date, you know, our engagement numbers, our revenue numbers, anything and be like, oh, that's when iCloud launched, oh, that's when OneDrive launched. What it was, what it was more like was sort of a taking the oxygen, like slowing our future growth or taking our future customers. And then I think what made that, so I would have expected that, oh, maybe the 2011, 2012,

• 44:40Speaker 01

  that whole period when these things launch was going to be the painful period. Actually, that was fine. If anything, it's just sort of reinvigorated everyone that like, okay, well, all the competing things will launch, we can't really tell, that doesn't problem here. And yet, it was pretty clear, like, we were on borrowed time and like strategically effed, as one of my mentors might have put it. Where, you know, because what was challenging is like we were spreading, Dropbox was still taking off, but I reckon that we, it was pretty obvious that, and problematic, that Dropbox was not a great, not going to be a great experience for all the different use cases.

• 45:24Speaker 01

  So we experienced the benefit of Dropbox being such a horizontal general product in that, you know, who's Dropbox for, what's Dropbox for? It's like, well, what's a computer for, what's a phone for? So this meant we had like an infinity, kind of like literally anyone with an internet connection kind of TAM from one perspective, but then when you think what people actually do with the product, tons of difference. And it's like, all right, well, you know, people use Dropbox to back up their phone and they use it to share photos, they use it to like do, replace their file server, or they're just run their companies in the cloud. But like the ideal products for each of those use cases is like quite different.

• 46:00Logan Bartlett?

  And so what you do from a complimentary standpoint with the next act is if you sample 100 users, you might get 500 different answers.

• 46:09Speaker 01

  Yeah. And then, you know, some kind of products kind of die this way or don't reach, a lot of products kind of don't reach their potential because they get kind of picked apart from unbundling. Like Craigslist in the beginning was like, You know Airbnb plus Upwork plus like all these companies, but like all the, the list goes on, all kinds of things. But the most valuable verticals got kind of picked off by more purpose-built, like, oh yeah, Airbnb is a much better experience for like, short-term housing, or you know, getting a job. There's a lot of better alternatives. So we launched things like Carousel as a photo-sharing service, like recognizing that, no, we shouldn't, you know, we shouldn't have a bunch of like, photo-sharing should not be a bunch of JPG files, starting with like DSC 004, you know,

• 46:54Speaker 01

  right? So we built a more purpose-built thing for that. And then we're like, well, we should also branch out from storage and like, getting into these more like collaboration use cases, mobile email, or like, Mailbox, we bought this company that was like the first good mobile email client.

• 47:09Logan Bartlett?

  What was the name of the company?

• 47:10Speaker 01

  Mailbox.

• 47:11Logan Bartlett?

  It was Mailbox.

• 47:11Speaker 01

  Yeah. And these guys had like a million, they had-

• 47:13Logan Bartlett?

  That was a great product.

• 47:14Speaker 01

  Yeah. They had a beta waiting list with a million people on it. And so we're like, we haven't seen this since like our own thing. And, and bought the company and the founders were amazing. We made a little bit of a mistake where we put the founders in charge of all this other stuff at Dropbox. And so the product itself kind of-

• 47:28Logan Bartlett?

  stagnated.

• 47:29Speaker 01

  stagnated. But again, the bigger issue is like, we're just gonna get like, everything we build is gonna get copy bundle kill.

• 47:34Logan Bartlett?

  I mean, maybe it was just inevitability. But as you look on that, one, in making the decision, not what you should have done, but I'm curious of that in a second. But like, in making that decision, did you, did you take too many inputs and opinions from people? Do you wish you were more declarative about, no, this is what the company is gonna be? Or is this just an inevitable, when you have a lot of different use cases, it's hard to know what's signal and what's noise?

• 47:59Speaker 01

  Yeah, I think we were sort of, so during that, you know, 2011 to 2014 period, I think there were a lot of problems, or kind of a lot of debt that was gonna, that's maybe strategic debt that was gonna come due. It kind of all came due at once in like 2015. So what happened was, so you know, 2014, we launched things like Carousel, Buy Mailbox, improving these things. But-

• 48:24Speaker 01

  It was clear all along the way that like, alright, all these use cases of Dropbox, you're backing up your phone. Okay, so in that market, we're like competing against the iPhone to back up your iPhone. Like, how is that gonna go? Then in photo sharing, it's like, alright, well, now we're competing against like, not just Google and Apple, but also Facebook and Snap and Instagram and all these guys. And it's like, how's that gonna go? Then it was like, alright, well, there's like this work use case and collaboration. And fortunately, that was pretty durable. But even then, we're fighting against Microsoft and Google. So, but I think the question is sort of like, that faces you, or that faced me, was like, well, how are we gonna get out of this? This is, yeah, maybe it's a little bit time delayed, but, you know, I studied companies

• 49:06Speaker 01

  like Netscape versus Internet Explorer, or MySpace, or Friendster versus Facebook. There are a lot of dead pioneers. Yeah. And I was like, I see this happening to us, where, and especially if we start losing, like, no one wants to work at the MySpace when the Facebook is kicking your ass. So, and then, as you, as, even back then, like, Netscape didn't get killed by Internet Explorer 1.0, or 2.0, or even 3.0. It was like, I3, I4, I5, then that's when things really started, the bottom started falling out. And so, we could start to see that happen

• 49:47Speaker 01

  in 2014, 2015. But I'd say, like, one of the, there were a bunch of notable things. Like, one was, Google Photos launched and just gave away, like, unlimited free storage to everyone for life, just like, not even trying to make money. Yeah. And then bundling it with their phone, and just doing all the things that, you know, an incumbent would do. And I'm like, wow, do we look stupid? Or, wow, do I look stupid? But then, like, everybody, you know, all of the industry, all of our employees are like, what the hell are we doing?

• 50:19Speaker 01

  Like that bet looked really bad. And so I'd say there was sort of a groundswell internally of like, how are we gonna solve? Like, what are we gonna do? None of these things seem viable. And I reread this book, Only the Paranoid Survive, because we were not the first company to be in this kind of situation. Intel actually had this pretty early in their lifetime. I mean, we all know Intel is like this microprocessor company, but actually they were founded as a memory company, making like RAM for your computer. But then they, you know, long story short, they had all this sort of onslaught of like Japanese competitors that were like subsidized by the government or other, one way or another, there's like totally unlevel playing field. Like, they weren't dying yet, but they were probably going to.

• 51:04Speaker 01

  And Andy walks through that whole, you know, sort of a memoir of that whole experience. And he's like, if we were advising ourselves, or this little vignette where they're in, the two of the founders are in Andy's office, and he's CEO at the time, and he's like, you know, if we were advisors to ourselves or consultants to ourselves, what would we advise? What advice would we give or what would we do? And they're like, oh, we'd get out of the memory business and go all in on microprocessors. And sort of sounds easy, but sort of like Google saying like, yeah, let's get a search. Sure. And then Andy talks convincingly about, yeah, there are these strategic conflation points in markets, and, you know, when you're in one, you really, like CEOs normally want to hedge and sort of keep all these options open. That's the opposite of what you should do.

• 51:45Speaker 01

  You should put all your eggs in one basket, watch that basket, and the Mark Twain quote. So I'm like, yeah, that's what we gotta do. We have to sort of stop focusing on anything else but this like collaboration opportunities. Stop thinking about photo sharing, stop thinking about consumer generally. And it was tough, but I'm like, we, but I would never forgive myself if like, we were fighting 10 wars, lost all 10 when we could have won one of them. Yeah. And so that's, that's what we did, and I'm like, super glad that we did that. And so it was pretty, I mean, it was a slow build, but, you know, I remember going home, kind of licking my wounds in New Hampshire with my family, like rereading that book. And I'm like, oh, God, I gotta do this. And so I went back, shut everything down in one shot. I wouldn't say that like solved all our problems. Yeah.

• 52:30Speaker 01

  I think that sent like the narrative of the company into a tailspin. Certainly sent morale and other, all these other problems. But I'm kind of triaging the issues. You know, we, we went from hemorrhaging cash because we were sort of in land grab mode to being That was the start of being like pretty financially disciplined. We turned cash flow positive maybe seven, eight months after that in 2016.

• 52:52Speaker 01

  But yeah, that was sort of like the initiate, like the hazing ritual into the big leagues.

• 52:56Logan Bartlett?

  Sure.

• 52:57Speaker 01

  But it was really, it was really tough.

• 52:59Logan Bartlett?

  Was there something after that journey that you thought about reinvesting in? I mean, you subsequently lost your off box paper. Now we have Dash on the search side. And so at some point, you've picked your head up and, and launched other products. So what was that decision to go after and do other stuff after?

• 53:20Speaker 01

  Yeah.

• 53:23Speaker 01

  Well, let's see, there was a pretty long period of malaise, both like with the company and then me personally as CEO. I was sort of like, okay. So we shut down all that stuff. People like, got it. I understand what we're not doing, but what, what are we doing? And you know, the truth was like, if I knew the answer to that question, like we would.

• 53:39Logan Bartlett?

  We're doubling down. What is my job now?

• 53:42Speaker 01

  I'm like, yeah. So, and then part of it was also just for me personally, like stepping back, like, like, I don't know, like, this is a pretty rough. Like we built this awesome product. It wasn't that like these products were like bad or didn't work. Actually, the product problem was like, they were really good and like rapidly copied.

• 53:58Logan Bartlett?

  Yeah.

• 53:59Speaker 01

  But I'm like, all right.

• 54:00Logan Bartlett?

  What was the scale of the business? How many people at this point?

• 54:02Speaker 01

  About 500 people.

• 54:03Logan Bartlett?

  500 people doing a hundred million?

• 54:06Speaker 01

  Doing, yeah, probably a few hundred million. That's right. Yep.

• 54:10Logan Bartlett?

  And about to be break even. So these are caviar, caviar scale, but you know, some very real problems.

• 54:18Speaker 01

  Totally. But you know, again, there are BlackBerry, Nokia, like a lot of these companies got way further than we did.

• 54:24Logan Bartlett?

  Sure.

• 54:25Speaker 01

  And, you know,

• 54:28Speaker 01

  so it was pretty terrifying. And it wasn't even like we had them. It was like, okay, we're going to focus on collaboration, but we didn't really have an answer of like, what that would look like or why would we be better? And then, you know, for me personally, I'm like, I also not, we just got totally like crushed by an incumbent, like in one area. So, you know, it's not even just a question of like, what, what do we do? It's over what can we build? It's like, what? Like we could have 100 ideas on what to build and probably 99 of them would face the exact same fate of being like, oh, cool idea Dropbox. Thanks for being free R and D for us. Copy bundle kill. So that was really the problem. Yeah. Decision paralysis of like the inevitability.

• 55:10Speaker 01

  Or just like, you know, yeah, you're like, okay, I'm trying to play chess as well as I can, but like they got eight queens in the back and this is, this game isn't that fun anymore. Yeah. And so then it sort of drew me to like, well, why does Dropbox need to exist? If we're just like inventing stuff 10 minutes before, you know, the big, the big tech company is like, that's, that's cool. I guess, but it's like, really, it's not, it's not very fun. Was that the closest you thought of getting off the, the ride, like selling the company at that point? Yeah, totally. It sounds like a point in time, most founders would just sell. Yeah. So yeah, it felt sort of like, I don't know, like being in, like in the basement in Fight Club, but not in a cool way. It's like, like in the, yeah, it's my, I'm bleeding and my teeth are on the ground. Sure.

• 55:55Speaker 01

  But like, I don't know how I'm going to get up from this. But it's sort of, like a lot of these things were, were all coming together. We're sort of, on top of that, like this company is like super successful, but I'd sort of run out of merit badges to get. I'm like, we'd raised the money at the valuations we wanted. There's like, is this it? Or is this big numbers bigger? And, you know, yeah, maybe it's time for my like tech bro ascendancy. Like maybe I should be flying car, working on flying cars or space or climate or, you know, but not files. Like we kind of did the file syncing thing. Like maybe it's done. And that, that would be okay. I think it'd be okay. And, and then I was even just looking

• 56:35Speaker 01

  at my own experience and I was like, okay, this is cool. You know, the company's like so much more. My 18 year old self would be like baffled why I'm upset at all. They'd be like, dude, you did it. But, you know, as I'm just going through running this company, I'm like, oh man, like I am just in meetings all day. Emails all night, sleep, repeat, you know, first world problem, but.

• 57:02Logan Bartlett?

  But still, I mean, you recalibrate to the new normal of all that stuff and like getting your, it doesn't matter what your paper bank account says at that point in time.

• 57:12Speaker 01

  Yeah, no, I was not thinking about money.

• 57:13Logan Bartlett?

  Your days are bad.

• 57:14Speaker 01

  My days are bad.

• 57:15Logan Bartlett?

  Yeah.

• 57:16Speaker 01

  And well, cause I was like trying to really do a retro of like, all right, God, I could have totally predicted that these companies are going to respond this way. Like, well, I was that was a stupid, why did I go after these things? I was like so easily countered and that it and I was like, oh, I don't really.

• 57:30Logan Bartlett?

  But you knew, you knew that way back in 2000, you always, you sort of, that, that was always the risk.

• 57:36Speaker 01

  When I was like doing the root, sort of trying to do some kind of like root cause and I'm like, oh, like I really have like no time to think.

• 57:43Speaker 01

  This, and I'm like, this is really weird. Because I, my like subjective experience of work is like, I'm just like busy, but I'm not really productive. Or I don't know if I'm being productive and like my brain just feels stuck in first gear. And like, yeah, I would have probably had like a better solution to some of these problems if I just had like some space to think. And then I just like, I'm like, wait, why does knowledge work like work this way? Isn't the whole premise like we hire these people for their minds, but then why do we not give them like the space and time to think? And so I just like went down this rabbit hole of like, what, what is going on with productivity?

• 58:24Speaker 01

  And I'm like, something, it's just something seems to have, some, something went like very wrong with like the tools we're using where, you know, imagine, I would think like, all right, imagine if Einstein were alive today, you know, even back then, certainly still now. But like, yeah, even back then he'd wake up, he'd check his email. He'd like delete a bunch of LinkedIn invitations, right? Then he'd like, okay, start, sit down and start working or writing equations. But then like someone would slack him being like, hey, do you have, you know, a PDF of that, of your paper or, you know, and then okay, yeah, here, think back to work, the phone would buzz with some like tweet. And I'm like, would we still understand relativity?

• 59:10Speaker 01

  And then I would talk to people who were actually working on these other moonshots. Like I interviewed an engineering director from SpaceX. And I was like, I was kind of jealous. I'm like, wow, like, it's just so cool. You guys are like actually going to Mars. Like, how's that work? Like, how do you guys work together? He's like, what do you mean? I'm like, I don't know. Like, how do you collaborate? What tools do you use? Like, what's it like to work there? He's like, and basically, what's it gonna take to put someone on Mars? And the answer was basically a lot of emails and a lot of files. And I thought about that, and I'm like, man, okay, yes, on the one hand, emails and files are probably better than what preceded them. But like, we have to think of technology not just as a force multiplier,

• 59:53Speaker 01

  but also as like the limiting factor on progress. And somehow, and we can only go as fast as our tools let us go. And I felt like the, you know, all of these companies, and even the people working on these other moonshots, were like all constrained by like, I can't think. And the, and our environment at work had become so kind of distracted and overwhelming and full of all this sort of busy work. And these things that we were hailing as like the frontier of productivity, like Slack, were actually these like distraction engines that are introducing like all these empty carbs, you know, into the, into our experience. They're bombing us or peppering us with all these interruptions.

• 1:00:38Speaker 01

  And, and it was bizarre, because I'm like on the, you know, in brain science or even just like common knowledge, like, yeah, people do their best work when they can focus in some kind of flow state, not being, when they're not interrupted, blah, blah, blah.

• 1:00:53Speaker 01

  But then we go to work, and there's a bunch of like cultural problems, but even just like technically, like the technical environment, the screen we look at. It's like, if you wanted to design an environment that made it impossible to ever get into a flow state, like, that's kind of what we have. And I'm like, okay, maybe the real moonshot here. The moonshot that powers all the other moonshots is like helping people get back to being able to use their brains at work, or like being able to run their brain in something more than first gear, or just like not be distracted and overwhelmed all the time. So we, that was sort of the first answer for like, okay, what problems are not solving themselves? Because like, you know, a photo gallery in your pocket that was synced to the cloud,

• 1:01:38Speaker 01

  like, we were the first to ship that at scale, but that probably would have, like, happened. And, you know, Apple would have figured out, the whole premise of iCloud was like, yeah, your phone should be backed up to the cloud by default, duh. But, so like, a lot of things we were building, which probably have been figured out by other people, but I'm like, here is a problem that, it's like, not even, not only is it not solved, like, no one's even framing it properly. And when you think about, like, the ultimate non-renewable resource that we have, like, that I have as a person, or my company has, or our economy and society have, it's like, really, your brain power, right? Or your time.

• 1:02:18Speaker 01

  And I'm like, we don't even, like, we're really good at managing money as a species, but like, when it comes to our, like, time or our attention, like, we are completely blind. So we established this new mission for Dropbox, to design a more enlightened way of working on the premise that, yeah, the way we're working isn't functioning, like, it's unenlightened, unexamined, it'll look really medieval in 10 years. And I think, yeah, well, civilizationally, we'll look back on this, be like, yeah, remember that we had that weird detour sometime in the 2010s, where we basically just, like, stopped using our brains at work, and like, put ourselves in these, like, super cognitively polluted environments? That was nuts. And so, that's really what we're, that's like the biggest umbrella.

• 1:03:00Logan Bartlett?

  What year was that?

• 1:03:01Speaker 01

  2017.

• 1:03:02Logan Bartlett?

  17. And that's led to what products have been sort of the offshoots from that for you?

• 1:03:07Speaker 01

  So the biggest one is Tash.

• 1:03:09Logan Bartlett?

  Yep.

• 1:03:10Speaker 01

  I mean, we've had other products, like Dropbox Paper, we've done some acquisitions, but I'd say to really move. In the direction of our mission, Dash is the most important first step. And it also requires a couple of things. So first, COVID was another big turning point where suddenly all of work is digitized and the world recognized, hey, we can work out of screens instead of offices. And that shift had been happening for a while, but like COVID like completely permanently finished the swing. But then that created all these new problems where like now we're using our screens a lot more, putting a lot more stress on the system. And when you're distributed or remote or hybrid or whatever flavor, same problem, like I can't find the basic information I need to do my job.

• 1:03:52Speaker 01

  And that's a problem because like knowledge work without the knowledge is pretty hard to do. So Dash is like a very direct.

• 1:04:01Speaker 01

  It's both like a direct response to that problem. Like, how do you make it easier? Make a better environment that sort of knows what you're working on and can surface this to you. But search is just one piece of it. It's really, Dash is like the 2024 version of the problems we started solving in 2007. Problems I started solving in 2007 was like, yeah, I kept, I didn't like carrying my thumb drive, didn't like emailing myself files. But really, the bigger picture was like, I can't find my stuff. I can't organize it. I can't share it. I can't keep it safe.

• 1:04:31Speaker 01

  Because it's like all my stuff is scattered in all these different devices and these different operating systems. And you know, back in the day, the solution looked like file syncing to the cloud and across everything. But today, we're sort of back to the same problem.

• 1:04:44Speaker 01

  And maybe 100 files on our desktop are now 100 tabs in our browser. And we've talked about search, but there's also problems like, how do I organize my stuff? How do I share my stuff?

• 1:04:55Speaker 01

  And they're as basic as just like, there's no persistence in the modern world, right? So when you go to bed and wake up, your physical papers are still on your desk. You reboot your computer, your files are still there. But when your browser, your browser sort of like clears itself out, either because you like close it by declaring tab bankruptcy or your operating system like updates in the wrong way or one or another. When you close your browser, it takes all of your state with it. And so if you don't even have like a durable place, what does it even mean to organize anything? What does it mean to organize things across multiple tools? It's just like a broken system. And you know, files and folders had their problems too, but it's sort of weird that it's like, well, files have folders, songs have playlists, links have. There's like no collection concept, right?

• 1:05:38Speaker 01

  So there's a lot of UX problems hidden in plain sight or things that actually were better 20 years ago and worse today. So just concept of organizing your stuff and then sharing, right? Whether you're remodeling your house or getting ready for a board meeting. What do you do if you have like a Google Doc plus an Airtable plus a 10 gig 4K video? There's no common container that holds mixed format things. And so Dash is really designed to solve all these problems, like both starting with search, but then giving you a start page that kind of organizes your stuff and what you're working on and the system kind of like organizes your stuff the way that YouTube or Netflix or Spotify organize your content for you in a consumer context.

• 1:06:22Speaker 01

  And then sharing, like we have stacks, which are basically these smart collections that can hold any kind of content. And our aspiration is for this to be like the default way to share mixed format stuff on the internet. But these are really kind of solving the same genre of problems that we were successful with in Dropbox 1.0. But with Dash, it's really about how do we solve these in more like a cloud native, browser native, modern context. I mean, we also support your files too, but it's revolving from storing and syncing your files to organizing all of your cloud content. And then that sort of step opens up a lot of new stuff on the tech tree after that.

• 1:06:58Logan Bartlett?

  As you think about galvanizing behind a mission like that, it obviously started with coming up with the new way of working and operating, which I totally resonates. It's amazing how by interruption, we operate even today. It just gets worse every day. As you think about like setting the mission or the vision around something like Dash, how do you go about identifying that opportunity? I assume there's been a bunch of different iterations on it. Then when you find it, how do you get the company behind it, especially as a public business that you have to share things with shareholders and all that stuff?

• 1:07:43Speaker 01

  Well, I think you triangulate.

• 1:07:47Speaker 01

  On these opportunities from a bunch of different directions. And you know, the ones that pass all these filters are the ones you really double down on. So, you know, first is a mission. I talked about, you know, okay, how do we, I think a lot of people agree, okay, yeah, sure, work sucks, I know, okay, but like, what do you do about it? Right? So where specifically should we try to fix the environment? And then one of the things that, what plays to Dropbox's strengths? So there's sort of a strategy piece of it where it's like, well, one of Dropbox's advantages is that we're platform agnostic and a lot of the other companies are going to try to keep you within their garden. Dropbox is not going to try to do that. And then, you know, universal search, enterprise search, it has to be kind of platform agnostic by default because we just don't live in a monoculture world anymore. So like, everybody has this problem. So like, okay, that's a good fit for Dropbox.

• 1:08:32Speaker 01

  And it also requires a lot of customer trust, also requires a lot of like solving new technical problems. Also, you know, it also helps if, you know, if step two is organize all your cloud stuff, step one, get hundreds of millions of people to trust you with your files is like a good stepping stone to that. So even if we had gone directly at Dash, we would have built all these kind of prereqs along the way. Then it's, you know, I like to experience things myself and that, you know, just coding the first, sort of the proto version of Dash or coding a personal search engine myself and being like, whoa, okay, there's a big why now here because like there's all these new search technologies that make a completely better experience.

• 1:09:15Speaker 01

  But weirdly, you know, enterprise search was kind of a graveyard. It was sort of, yeah, a lot of people had swung at this, this is an idea. Enterprise search plus like ideas like the internet, like had been around for a long time. And Google desktop search, 2004, like, so there were also precursor things that were good. So I think Google desktop search is an example of like, that was a great product, but Google kind of killed it. You know, and then plus. Well, we seeded the dash effort by buying a company called Commandee that had been working on this.

• 1:09:49Speaker 01

  So a kind of a lot of things pointed in the same direction. I don't think there's any one like, you know, a home. Well, I think that if there was an a home moment for me is like doing that search myself and be like, oh my God, this is so much better than what I'm doing today. Like, we have to get after this. So that's probably the singular most important thing to me. But then it passed all the other filters from like a product, distribution, strategy standpoint.

• 1:10:11Logan Bartlett?

  Sounds like there's a lot of enthusiasm right now about all of this stuff. And AI has been something of a jolt for you.

• 1:10:20Speaker 01

  Totally.

• 1:10:20Logan Bartlett?

  Is that fair?

• 1:10:22Speaker 01

  That's absolutely fair. I mean, it was pretty rough in the late innings of last season when it's sort of like, yeah, we're sort of checkmated. First of all, you know, a lot of the workflow files will be around forever and they're still a critical part of the kind of work experience. And they're especially critical with our kind of key customer segments, like people that create media or people that do a lot of external sharing. Like they rely on Dropbox.

• 1:10:47Logan Bartlett?

  We're big users for this stuff.

• 1:10:48Speaker 01

  Yeah, right. So, but it's sort of like, I don't know, were we in a situation like creating more demand for it? It's like, is that like Blockbuster? Like, how would you create more demand for walking into a store and renting a DVD? It's just sort of, maybe it's just sort of had its time or it's peaked. And so like, what do you do about that? And then, yeah, with AI or any sort of new era in computing and like the ones I've been sort of was grown up through. We're like, I saw the internet era. I saw the cloud and mobile. They made Dropbox possible. And then now AI was the next big one. I'm like, okay, yeah, the concrete kind of unfreezes. And for a few years, there's just like this chaos sort of raining on the racetrack.

• 1:11:31Speaker 01

  Suddenly all these people can make all these moves and really change position in ways and create new franchises in ways that are just not possible when things are more kind of more hardened. So, yeah, I got a massive jolt of enthusiasm, both because of what it meant to the market. But then more importantly, what it meant for the technology and the products we can build. Suddenly there's like all these new colors we can paint with.

• 1:11:54Logan Bartlett?

  We were talking about motivations a little bit before we started recording. At this point, like what along the journey, I'm sure different motivations have come and gone.

• 1:12:04Speaker 01

  Yeah.

• 1:12:05Logan Bartlett?

  You don't need to be doing this, doing this next act in Commandee. I'm curious like why, what keeps you motivated to get up every day and sort of fight this knife fight at different points in time when they had eight queens or whatever you said across the back of the board?

• 1:12:21Speaker 01

  Um, well, I think it was in the early years, it really was kind of the novelty of, okay, I want to start a company and that's something I dreamed of. And, and then that, that process can be pretty linear and kind of merit badgy. It's like, okay, let's get into Y Combinator. Okay, let's raise money from, you know, venture, let's go.

• 1:12:40Logan Bartlett?

  I'm sure the first five to seven years were pretty like, yeah.

• 1:12:42Speaker 01

  It was awesome.

• 1:12:43Logan Bartlett?

  Serendipitous journey.

• 1:12:44Speaker 01

  Six million valuation, now we're going to raise money at 27 million valuation. Oh, we're going to, now we're going to raise it a 4.2 billion valuation a few years later. Like it was sort of, yeah, there was always like these next hurdle, no, 10 million users, 100 million, 500, whatever. So, and, and I think that was part of what made the competitive stuff for that sort of reckoning pretty difficult to sort of like, you know, not only are we in this like really bad competitive position, but now I'm just kind of rudderless. Like what do I even want to do? And so I think.

• 1:13:12Logan Bartlett?

  Like identity becomes tied up in.

• 1:13:14Speaker 01

  Yeah, like what do I want to do in my life?

• 1:13:15Logan Bartlett?

  Higher valuations and the, you know, more users.

• 1:13:17Speaker 01

  And that's sort of stopped being motivational to me because not in, you know, I, I certainly like enjoy the process of making a commercially successful company. It's fun to make money. The most fun is like having access to all these interesting people and, and just, um, so there's a lot of good stuff there, but it wasn't like a 2X more of that money or valuation was really going to make it that much of a difference in my life.

• 1:13:47Speaker 01

  And so, but like going through that fire like did get me through the other side with like a new purpose of like, okay, this meta moonshot of like helping people use their brains to work. That's something that's like unsolved, really matters to me, something I feel like I can put a dent in. So personal sense of mission and purpose, but then also just like, all right, why do I want to be a CEO? And yeah, I'm not really, I've sort of cleared what I want to clear as far as, you know, resume. And so I decided like pretty explicitly, I was like, all right, I'm gonna do this. Keep, oh, I really want to get great at the craft of being a CEO because that's something you can, like it's totally within your control.

• 1:14:32Speaker 01

  It's a, it's something you don't really even master at, you know, in a lifetime. You know, Steve Jobs was probably like just hitting his stride at 55, you know, 55, 56 when he died. So I was like, I feel pretty lucky to be in a line of work where you don't like peak in your twenties or thirties. Cause I mean, if you're in, you know, sports or like math or different things, you often have like a sort of artificial ceiling on, or you know, a sort of an externally imposed expiration date. But like business and being a CEO isn't like that. And it's painful. And I even when I was like 20, in my early twenties, like I was like, I want a job that gives me, that has like a high learning curve.

• 1:15:14Speaker 01

  And I was like, oh God, well, I certainly got that. And then, you know, I just never get tired of, you know, hearing people's, of hearing about how Dropbox has changed their experience. And it's like really gratifying when people say like, oh, I love Dropbox. You know, I will always look over someone's shoulder in a Starbucks to see if the little blue, you know, little icon is there. And that feeling of like, oh, we actually like changed how people do something. You know, or it's certainly at the peak when like people were using Dropbox as a verb and it was like, you know, on, in movies and stuff like that. Just that feeling of like leaving, just really making something better at scale and that

• 1:15:55Speaker 01

  kind of impact is like super addictive. And I think like tech was really rallied around that concept for a while. And then sort of tech had a pretty necessary correction, you know, with the narrative where.

• 1:16:09Speaker 01

  You know, stop taking so much credit for all the good things without taking any responsibility for the bad things. But it's like always been true that technology is both like the source of all our problems and it's still the solution to all our problems. And there's really, you know, pick your favorite problem of the world, like we're gonna need to invent our way out of that. So it's really around like craft and invention and impact that still keeps me going.

• 1:16:31Logan Bartlett?

  Yeah.

• 1:16:32Speaker 01

  And just like, I love that the game is hard. And, you know, I think one of the things you have to learn to beyond reading or, you know, the more technical aspects of the job or some of the things are more around like character or mindset. Um, you know, if you, you should, it, you never wanna feel like a victim, practically speaking. Um, and you wanna focus on the things in your control and like, you know, you can't control what happens to you per se, but you can control how you respond. So, you know, sure, you know, I'm human, like I certainly, I'm not not bitter about, you know, some of the competitive stuff, but at the same time, like, well, uh, a lot of, there's definitely things I could have done to like navigate us through that a little bit better or stuff that I've learned now.

• 1:17:16Speaker 01

  And even when I talked to some of the execs who worked at like Netscape, um, I was like, man, that must've been, like, that was, that was BS, like, they shouldn't have, like, copied, you know, that you, blah, blah, blah, Microsoft. And the guy kinda snorted and they got Bill Campbell was his name, he's like snorted and laughed, he's like, no, trust me, our, our wounds were entirely self-inflicted. And I, that just stuck with me as like, oh, man. Um, uh, that's like really honest. And I think it's like mostly true, like most of our, you know, if I'm really honest to myself, we've, we've had like a long period of stagnation. Um, but that's okay, like companies do and, you know, fortunately, tech's a sport where you can hit like a 50 run homerun and, um, and no really, nobody really cares about what happened last season.

• 1:18:01Logan Bartlett?

  I guess you've gotten exposed. Bill Campbell, did you get Andy Grove too?

• 1:18:06Speaker 01

  I did, yup.

• 1:18:07Logan Bartlett?

  You sort of spanned both generations of tech in that way, I guess, right? Coming up in 07 through this period of time, like the old guard was still

• 1:18:20Speaker 01

  Yeah, totally.

• 1:18:21Logan Bartlett?

  around in some ways. And those two passed away around in the same time.

• 1:18:24Speaker 01

  They did. And actually, that was, I left it out. I think, you know, as I sort of, all this stuff was swirling and I'm like, what do I want to do in my life? And like, what do I, you know, I was like, at least I was able to read Only the Paranoids Survive and Andy's books. And so I'm like, Bill Campbell was like kind enough to spend time with me. Like, we didn't, we weren't that close, but we went out to dinner a bunch of times. And I was like, you know, again, like nursing my wounds and he's like, he's like, shut, shut up and get your ass back out there. You'll be fine. You'll figure it out. And he's like, I really needed that.

• 1:19:01Logan Bartlett?

  Yeah.

• 1:19:02Speaker 01

  And I felt like, so.

• 1:19:03Logan Bartlett?

  Campbell was coached by Jobs and Sergey and Larry and, I mean, on and down the list.

• 1:19:10Speaker 01

  Yeah. And so he's sort of like, made you believe in yourself more than you actually believed in yourself. Which meant a lot to me because he wasn't an advisor. He didn't have any equity. He got sort of nothing sort of tangible from that. And I was like, that's just like so cool that someone would do that. And I really needed it. And then Andy, you know, his whole, one of his big inventions was like this concept of like managerial leverage. And he really, you know, and what's nuts about, and I mean, Andy had a crazy life, like immigrating from Hungary and all these different things. But like, just think about, you know, he's running Intel, which was kind of the Google of its time.

• 1:19:50Speaker 01

  And like, in whatever spare time he did, he had, he would just like write these books to like, light the path a little bit for those who may follow. So like, you know, Only the Paranoids Survive, High Open Management, like those had a big impact on me. I'm like, well, I'm like, at least I'm having this set of problems because if I didn't read that stuff or I weren't exposed to things like this, then I wouldn't, you know, my life would be very different. And so through both, and then when they both died, I was like, man, you know, maybe there's something I should be doing kind of in this vein. Like make it, it should be easier to scale human organization. Like we should be. Man, we should be treating our, you know, limited brainpower with a lot more reverence.

• 1:20:32Speaker 01

  Like, we should be redesigning our environment to like, like, to not have these problems. And I'm like, in this privileged position where I can actually like, have, I have tons of like, capital and resources and people to go do something about it, which is like, super cool. And, but like, you know, and when I have like, so many, so much more leverage to solve a problem like this than either Bill or Andy did. Like, Andy, his best like, mechanism to make things better was like, write a book. But the book, you know, High Open Management was like, published in like, 1983. Like, of the people who like, need to read it, maybe 0.1% have ever heard of it. And you go all the way down the funnel, you're like, how many people like, read it and then take no action whatsoever as a result? But, you know, our customers would tell us, like, Dropbox is not just the place where

• 1:21:17Speaker 01

  I like, sync files. This is like, my, this is where I like, go to work. Like, this is where my dreams come true. This is, it doesn't keep files in sync. It keeps like, my team in sync, keeps people in sync. And we're just like, people are using all these metaphors even 10 years ago of like, Dropbox being this workplace or this like, working environment. And I was like, we had just like, never thought of it that way. And I was like, man, if we did think of it that way, we'd have done things like, so differently. And so, we get to do a lot of that now.

• 1:21:46Logan Bartlett?

  I guess, one, that I think you might be appropriate to weigh in on, but you had a number of, you had a number of successful fundraises. I'm curious, as you reflect, do you think fundraiser and valuation, like, is that just a rounding error in the history of the company? And hey, raise as much money as you can, and at the end of the day, you'll survive or not on your own merit? Or do you reflect on high valuations or things and say, some way that might have exacerbated some of these

• 1:22:21Speaker 01

  Oh, yeah.

• 1:22:22Logan Bartlett?

  ... concerns? Basically, can you say that founders should raise at lower valuations? Because I can't say that. It sounds very self-serving when it comes from me. When it comes from you, it's more credible.

• 1:22:32Speaker 01

  Yeah, well, I think... The way I think about it is more, especially with some hindsight, like I've been overvalued, I've been undervalued, they can both be quite painful. Actually being overvalued, it can be more painful in some regards. So, yeah, for sure. I mean, we went from like a raising, raising a four billion valuation in 2011 to raising a 10 billion valuation in 2014. I wish I could say that our thought process or my thought process, I was just like, 10 sounds like a good number and investors were willing to give it to us, so we took it. And then after, I just remember afterwards, like looking at the market caps of all these

• 1:23:14Speaker 01

  public companies and like being like, wow, Dropbox is like more valuable than all, like than, you know, all these like blue chip companies that I really admired. I'm like, either I'm a genius or I'm an idiot. Because like, wow. And I knew very little about corporate finance at that time. And, you know, I don't, I don't think it was like categorically that. I think we did, we overshot by a lot, which then made a lot of the, made a lot easier to paint this like pretty rapid reversal or reversal in the narrative from like, oh, these companies now going from the little engine that could to then the first dead deck of corn and all these. There's only two narratives, right? Yeah. It's, it's either up or down. And so you gotta know which side of that.

• 1:23:58Speaker 01

  I think if we raised at six, probably much of that would have been like easier. But, you know, at the same time, I'm like optimized dilution a lot. It's not deterministic. And so it's just sort of, you know, you're trying to keep a lot of these things in balance. Like you, and importantly, I think whenever, the way I think about it less than like overvalued or undervalued is good or bad. I think it's more like, well, just like try to play it, like play the game forward a few steps and, and certainly work back from like, okay, if we're a public company, you know, by and large, our valuation will not be vibes based at all. It will be like a pretty basic function of like revenue growth. Profitability.

• 1:24:42Speaker 01

  Some plus or minus based on like sentiment.

• 1:24:44Logan Bartlett?

  Yeah.

• 1:24:44Speaker 01

  But like if you can't draw, you know, if you draw the dot where you are today to the dot where you would be as a public company. And if like where you're raising is like way off of that trend line, then you're in for, then you're either leaving a lot on the table or you're setting yourself up for, you're like opening 10 years of Christmas presents.

• 1:25:03Logan Bartlett?

  Most founders don't generally think they're going to end up on the, the wrong side of, of this stuff when they're raising, I've, I've found. Like I'm sure Zuck doesn't, uh, doesn't feel like he should have raised at a lower price from Yuri Milner way back when, right? It's like, it's a.

• 1:25:19Speaker 01

  It's not really practical, but like, I think it's more of the things where.

• 1:25:23Logan Bartlett?

  How much margin?

• 1:25:24Speaker 01

  Yeah, it's like, you know, you do have, you know, at some point the market will set the price, but then you do have some latitude to be like, are we really going to like juice it?

• 1:25:33Logan Bartlett?

  Yeah, wiggle around.

• 1:25:33Speaker 01

  You know? And I think, you know, this, it was compounded by me sort of like elbowing it up because I thought like, why not?

• 1:25:41Logan Bartlett?

  10 sounds good.

• 1:25:42Speaker 01

  Yeah.

• 1:25:43Logan Bartlett?

  It does sound good.

• 1:25:45Speaker 01

  And it went, you know, by, it actually wasn't that nuts, you know, in my modern standards.

• 1:25:50Logan Bartlett?

  Yeah, yeah.

• 1:25:50Speaker 01

  But you know, we're 250 million going to 400. So, you know, 40x revenue multiple going to 25. It's still very rich, but like.

• 1:25:58Logan Bartlett?

  It's not.

• 1:25:58Speaker 01

  You know, still 60%.

• 1:26:00Logan Bartlett?

  Yeah, exactly. There's, there will be way worse.

• 1:26:02Speaker 01

  Yeah.

• 1:26:03Logan Bartlett?

  That will.

• 1:26:03Speaker 01

  But like we spent the next 10 years digging out of that.

• 1:26:05Logan Bartlett?

  Yeah. What, um, the other one.

• 1:26:07Speaker 01

  We're still below that market cap today.

• 1:26:09Logan Bartlett?

  Just a nerdy, a nerdy one to end on, um, data centers.

• 1:26:13Speaker 01

  Yeah, sure.

• 1:26:14Logan Bartlett?

  When did you decide to do all that stuff in-house?

• 1:26:16Speaker 01

  Yeah, it was, um, the mid, somewhere kind of the mid teens, like 20, probably like 2015, 2016. We, we'd been like sort of experimenting our way into it.

• 1:26:24Logan Bartlett?

  Very contrarian at the time.

• 1:26:26Speaker 01

  Yeah, we were like the one car, we were like the one car going the other direction on the highway.

• 1:26:30Logan Bartlett?

  Yeah.

• 1:26:30Speaker 01

  Cause everybody else is migrating to the public cloud. We had actually started on AWS and went off of it.

• 1:26:37Logan Bartlett?

  I actually don't even recall, what was the, was it purely cost at the time?

• 1:26:41Speaker 01

  Cost was part of it. I mean, it's kind of funny where, uh, I mean, there, there are actually a few issues. One was, um, I mean, this one will sound kind of crazy, but like. You have to remember, like, the public cloud itself was, like, pretty nascent. And we were like users of S3. Amazon's S3 is one of the AWS services, the storage service. So we're big users of that. And then we were growing so fast. Actually, our biggest concern was like, are they going to be able to keep up with us? And like, I don't know what our recourse is if, like, suddenly they can't keep up. Like, having a hotline and being like, hey, can you guys please get our, like, company back up? Please, please, please.

• 1:27:24Logan Bartlett?

  You guys had to have been one of the biggest customers, if not the biggest at the...

• 1:27:27Speaker 01

  I think we were certainly in the top kind of echelon. I don't know if we were like number one, number one, but we were, you know, we didn't want to be number one. So there was a first question of like, is the public cloud even going to scale as fast as we need it to? And if something goes wrong, do we have, you know, what are our tools to actually make it better if we don't control it? That ended up not being a big deal. Actually, Amazon was a great partner. And they scaled just fine, but like, that was a concern. Then they did get a little trickier because like, all these guys, the public cloud providers were also competing with us, like, including Amazon. So, you know, Google had their thing, Microsoft had their thing, or OneDrive and Google Drive.

• 1:28:12Speaker 01

  Amazon had like a storage product. And so we were like, pretty uncomfortable with like, all right, so let me get this right. We're going to like, put all of our keys in someone else's hands that are also competing with us. What could possibly go wrong? So it's more like a no regret scenario. I felt like we'd look really dumb. Or just, you know, I felt like the responsible thing to do for our customers is make sure we were able to like, you know, protect their destiny as much as possible. And then, but then, third, yeah, cost performance. Like, the public cloud pricing like, stopped kind of following the hardware cost curves down. And like, yeah, they needed to take margin and, but like, yeah, there's absolutely no

• 1:28:54Speaker 01

  guarantee and probably it was unlikely that we would keep getting cost savings as the, or we'd basically be relying on the kindness of strangers to like, lower prices on the, and we were only really using the commodity pieces of just like, raw compute, EC2 and S3, like, raw compute, raw hard drive space. And so we were able to really build a tuned system. For just for our workload and then you get not just costs, but a lot of performance advantages, you can like more vertically integrate across the stack. And then that also is helpful for things like as you have more compute that needs to go to the storage or machine learning, then there are like advantages like that they even translate into the world today.

• 1:29:38Speaker 01

  I mean, you have to be careful not to, we, we're very surgical in what we do in our kind of private cloud. Cause you can sort of end up in a situation where sort of re-implementing the whole public cloud badly. But it's worked super well for us, but we're, we're a pretty unique.

• 1:29:52Logan Bartlett?

  Yeah.

• 1:29:52Speaker 01

  Case in that it's like.

• 1:29:53Logan Bartlett?

  So you're, you're glad you did it.

• 1:29:55Speaker 01

  It's super glad, super glad we didn't both, I'm super glad we started on the public cloud. It's really worked out to be on our own infrastructure. We still get massive cost and performance, say, or cost savings. And we were able to, you know, we go down to the, we co-design our servers, you know, we go down to like the hard drive and the rack, like as far as how all that infrastructure works. And our teams have done like phenomenal things to just keep writing that down. And we even, therefore we still have like software margins, even though, you know, you'd think a lot of the storage piece is kind of commodity.

• 1:30:29Logan Bartlett?

  I guess one last one before we hop. Anything that you would say, if you're a founder listening, we've touched on a bunch of different things that you've learned or thought of over the course of, you know, 17 years of, of doing this, but any other lessons or particular insights that you, you reflect on this, this journey you've been on that might be useful to leave people with?

• 1:31:00Speaker 01

  I think like scaling the company was a lot harder than I feel like it should have been. And we've talked about some of the books, which are largely, some of them are on management and things like that. But I think, you know, building on what we were saying about narrative culture and Amazon. I'm a big fan of Working Backwards, which is a book that really kind of chronicles the development of all their scaling mechanisms. And I think they had really good insight into like what goes wrong as you scale a bunch of people up. And narrative culture was just one part of it. So there's like, how do you maintain a high talent density and like we'll

• 1:31:44Speaker 01

  keep raising the bar as you hire people? How do you do business reviews? How do you? They basically have this operating system that's really powerful. And I was like, during some of the more difficult years, I was like, I would give anything to like sort of uninstall the operating system we have and install someone else's. And I would Amazon, Google, whatever. And it was kind of nuts to me that like, I there was like no way to do that. And even like implementing all these things, or these mechanisms are great around the kinds of things we've been talking about. But they're very still very like manual and human mediated. And the only real technology is like still like a memo or an email or like a spreadsheet. So I think there's like a huge opportunity to, you know, in a world

• 1:32:28Speaker 01

  where now all of work is like fully digitized, meaning like, you know, your AI agents or whatever can sort of see and hear and read and write, just like a human can. That was that's a very big change in the world from pre-COVID where, you know, even no matter how smart your AI system is, it's still if it doesn't have sort of like missing cell coverage, like if it doesn't know what happens in the real world, or if the real action is happening there, and the system is blind to it, then that'd be a problem. But after COVID, that's kind of fixed. And then with the large language model where it's like, and then large reasoning models, multimodal models, wherever, but just like these large

• 1:33:06Speaker 01

  models, you basically have sort of cognition in a bottle, or sand that can think. And so I think that it'll be so much, I'm really excited about the kinds of organizations you can build and, you know, have a, I think we'll see like many 10x things in terms of like a team of 10 people can do what used to take a team of 100. And either make like small teams perform big or make, you know, big teams feel small. I think the whole practice of management is going to be completely different where a lot of the repetitive aspects are going to be automated. And so

• 1:33:46Speaker 01

  I'm super excited about like opening my laptop in 2030 and having a much more sane and calm and focused experience and hopefully we're gonna have a lot of stuff well before you know, we've basically turned Dropbox into this lab for distributed work after COVID and hopefully have a lot of this stuff a lot long before that. Cool. Drew, thanks for doing this. Awesome. Thank you.

• 1:34:11Logan Bartlett?

  Thank you for joining this episode of the Logan Bartlett Show with co-founder and CEO of Dropbox Drew Houston. If you enjoyed this discussion, we really appreciate it if you subscribed on whatever podcast platform you're listening to us on, as well as shared with anyone else that you think might find it interesting. We're continuing to try to grow the show and so we really appreciate anyone's support and continuing to help us do so. Thanks everyone for joining and we'll see you next week with another great guest on the Logan Bartlett Show. Have a great weekend.