Drew houston. Drew thanks for having me. Emily my life is stored on dropbox. 252 gigabytes. Is that a lot . Drew it is pretty good. [laughter] emily the criticism is it is so simple, other companies can do it also. Google, microsoft, apple, box. How do you compete with that . What makes it a Good Business . Drew i would be curious to hear why you use dropbox or why you continue to use dropbox. But for our users, i think it is a couple things. A few things. One is the product is really easy to use. The other is it is the most Popular Service of its kind in the world. And if you share something on dropbox, it is more likely that if i share something with you that you will already have a better experience emily dropbox has 400 million users now. Who are they . Where are they . Drew the vast majority are all outside the u. S. More than 2 3. And it has been that way since the beginning because people use it not just for storage but for sharing. Emily you grew up outside of boston. What kind of kid were you . When did you get into computers . [laughter] drew i think it started in a living room when i was maybe three. My dad had just taken this thing out of a box, and it was an ibm pc junior. My parent have pictures of me i was not very tall, so i had to reach up and over to get the keyboard, and my parents have pictures of me trying to mash the keys. I think i was mesmerized from an early age by this glowing screen. My dad showed me how to write my first lines of code when i was really little. Emily he was an engineer. Drew he was an engineer. Emily your mother kind of resisted this. Drew i think she was sort of puzzled. She was like, arent kids supposed to be playing with legos and going outside . And they definitely urged me to have or made sure that my siblings and i had that kind of balance. Emily you went on to m. I. T. Tell me about this founding story, the line of code written on a bus. Drew i was on a trip to new york. I forgot my thumb drive. This was in the days before the iphone. This was the era where you really didnt have anything to do. God, i hate myself. I keep doing this. I am so disorganized. What does this keep happening . Because i had a bunch of time, i just opened up the editor and started writing some code, having no idea what this would turn into. Emily why is dropbox worth 10 billion . Emily you hear entrepreneurs talk about starting companies, it is like staring into the abyss of death, i believe elon musk said. Or swallowing shards of broken glass. What was it like for you . Drew i do not think it was that dramatic. [laughter] when i add up all the times i forgot my thumb drive, days of my life were wasted, and so that is was a motivator. You fastforward to today, people save one billion files on dropbox. The technical and design challenges involved in building something at that scale are really exciting for an engineer. Emily how many employees do you have now . Drew i think about 1200. Maybe 1300. Emily what does the bulk of the workforce do . Drew every time i wait a few weeks, we have a new office somewhere. Everything from the engineering of the product, design, the user interface design. People involved in marketing. Emily how many people are focused on security, for example . Rishaad salamat drew so we have a dedicated security team. People are really dedicated to security. A couple of dozen dedicated across all of these different facets of security. And more broadly, you think about people who build our infrastructure, or are sort of responsible for the reliability of the service. It is much bigger, probably on the order of a magnitude. Emily what does the office of the future look like . Drew well, i think there is a lot more freedom. In the old days, you would show up at work, and they would issue you a laptop and phone and say you must use these things. And now, as we all know, we have a lot of choice. And people are using all kinds of different devices. And so people i think that has become a basic expectation. Anybody at work wants to have choice, and dropbox is instrumental to that. We support all of the different platforms. People expect to work on their own terms. They want to be mobile, not tied down to any one environment. A big part of what people like about dropbox is they can be free to work anywhere. All this choice means that there is a lot more fragmentation. You have your calendar, your email, and your dropbox, so it is kind of a mess. The big thing we think about is how can we tie together all these Different Things you use . I think that expectation of freedom and seamlessness is something that is really important and a big area of our focus. There are a lot of things we can make easier. Emily those 400 million users how many of those are paying customers . Drew most people are using the product for free. If you need more space, you can buy more. Now, dropbox is in 8 million business, up from 4 million two years ago. And we have 100,000 business customers. Emily who are the biggest fortune 500 companies you signed up . Drew the vast majority of fortune 500s are using us in some capacity. There are some household Name Companies using dropbox under armour, hyatt hotels. Every quarter, we are adding big new customers. Emily what has been the biggest challenge in terms of penetrating the enterprise . Drew i think that businesses every Technology Goes through this curve where in the beginning, people are unsure about it. I think in the last couple of years it has started to flip, where actually people realize it is actually safer to have our information in Services Like dropbox and the cloud in general, the same way we dont put our cash under our mattresses anymore. The bank does a pretty good job of taking care of that. Emily what is the Value Proposition to a business to choose dropbox . As opposed to box, which focuses entirely on business. Drew anybody can provide storage. More and more it is about of course, my stuff will live in the cloud. Organize it for me. Help me collaborate. Help me search it, help me share with other people. Storage is just an ingredient. Emily another big part of your strategy is building applications on top of that. You have mailbox for email, carousel for photos. How are those product doing . Drew good. Each of those is a new adventure. Emily how many users do those services have . Drew we dont break them out separately, but they have been growing, too. We want to make sure the product is right before we spread our new apps throughout the business. Emily why is dropbox worth 10 billion . Drew we are an 8 million businesses now. There are orders of magnitude greater. There is a ton of room for us to grow. Even at 400 million users, there are still billions of people on the internet. You look at how valuable that problem is. The things people put in their dropbox are the most important possessions. The stuff in your dropbox is stuff that if your house were burning down, you would go get. For a Company Making their team productive, having a safe place for their most important information. These are extremely valuable problems we solve. We are shipped on most samsung phones out of the box. We just partnered with microsoft last year to bills dropbox into office. Theres a lot going on, and investors see the potential here. Emily you always said dropbox is a standalone company. Do you have that same conviction today that you had two years ago, three years ago, eight years ago when you started . Drew for sure. And i think it is important that we are being independent allows us to support all of the different platforms equally. You see as the other companies try to move in the space, they tend to favor their native platform kind of at the expense of others. That is something that is really core. That sort of switzerland approach is valuable to us and to our users. Emily how do you weigh the decision to go public versus raising more money in this environment . Drew fortunately we have been able to do a lot in the private markets. We were able to raise money we have not really needed. Emily why take it if you dont need it . Drew we want flexibility. Right . We do everything from investment infrastructure, we have made a ton of acquisitions. Having a stronger Balance Sheet gives us flexibility to make big, longterm investments. Emily do you have the cash you need to reach your longterm goals . Drew for sure. And we have control. The important thing for us is not to generate a ton of cash, it is to keep investing. Emily could you go public without raising any more money . Could you get to that place . Drew for sure. Raising this money means we are not forced to go in any direction and we can stay focused on building and growing our audience. Emily what are your plans to go public . Drew we dont have any right now. Again, that is what we get with the flexibility from raising this money. Emily what have you learned from boxs ipo . It has gotten hammered. Drew one thing i take away is i am happy we have our approach. Our sales force of hundreds of millions of people means we dont have to spend the kind of money that others do on sales and marketing. Emily are you profitable . Drew we dont break that out right now. But again, our investors are happy. Things have been going well. And our focus is really not on profitability right now, it is on investing and growing. Emily Marc Andreessen has warned about burn rates. And founders and companies burning through cash too quickly. What is your view on that . Drew it has to start with your business model. We are fortunate that our model has not changed much. We have been largely funded by our users, not investors. Emily how do you balance between the fancy office and the Company Perks and making sure you are being responsible . Drew we have a great office space, and we invest in things to make our employees lives easier. You will not see super expensive paintings or other, like we really make sure it does not look opulent. One danger companies can run into is giving everybody the impression that we have made it. And so we have tried to be balanced. Emily one of the things i have heard and this is just word on the street is that dropbox is losing some talented engineers. How hard is it to keep good people . Drew i think it is all part of the war on talent, selling information like that. [laughter] emily ok. So it is not happening . Drew certainly, people it is kind of like the circle of life. People dont join any company and expect to stay there their entire lives. Our recruiting numbers have been better than ever. We are building the Engineering Team faster than ever. Emily really . How so . Drew we monitor close rates and things like how many engineers are joining. We dont break that out, but that is another thing about building a great Engineering Team is they all have friends and people they worked for at previous companies, and if you get a core of great people, it makes it easier to recruit the next round of great people. You will be sitting next to the creator who wrote the python language. Were building this amazing roster of people, and it makes it really exciting for those that consider joining. Emily what is dropboxs moonshot . Drew our hands are pretty full. [laughter] what Companies Like google have done for the worlds public information, we are trying to do for the worlds private information. Emily uber is working on a selfdriving cars. Airbnb is going into cuba. What is dropbox going to do . Is there a stretch goal . Drew take Something Like carousel, for instance. Ok, here is a photo app from dropbox. But when you step back, we are like, ok, i have this problem of, like, my photos are in 100 different places. In the future, you should be able to have every photo youve ever taken with you wherever you are in your pocket. You multiply that times hundreds of millions of people and this is one of the largest collections of human memories ever assembled. We want to completely reimagine how people work. We want to completely reimagine how people remember their lives. And so those are going to keep us busy for a long time. Emily how much do you think about building your own servers . Is that something you would ever do . Drew we invest a ton in our own infrastructure. We also rent a bunch of infrastructure from amazon. So we are really big Amazon Web Services customers. And i think for a lot of our infrastructure, we can get a lot out of just commodity servers or commodity hardware. There may be additional gains by trying to bring some of that inhouse, but there are already companies all over that do a good job of that. Emily meeting steve jobs. How did that happen . What was that like . Emily you are 30 drew 32. Emily 32 years young. What is the hardest lesson you have learned as a ceo . Drew well, i think the hardest challenges are really around people. You know, you bring 1300 people together and get them all pointed in the same direction. In any group, there will be people who are unhappy. How do you get people to collaborate even if they have different backgrounds . Emily i know you are friends with mark zuckerberg. What kind of advice has he given you . Drew he has given me a lot of advice on company scaling. How do you organize people . How do you set of systems . Set up systems . With scale, you have to be a lot more thoughtful about how do you compensate people, how do you think about mundane things like their titles. You have early stage things, have more merger products, a portfolio. How do you keep that running when the challenges are so different at either end of the spectrum . So it is a lot of things like that. Emily your cofounder arash i read that it was like married at first sight at the beginning. [laughter] drew Something Like that. Emily how has your relationship changed over the years . Drew i think it has been pretty steady. We have kind of grown up together doing this. Our values have shaped by going through this experience together. Emily you went through the y combinator. I know you pitched paul graham in the early days. One thing he told us on your first application is you would sell dropbox for 1 million. [laughter] drew yes. Emily obviously, that has changed. Drew i am glad no one was willing to offer us 1 million. Emily it was good you did not get that offer, right . [laughter] drew then and today what motivates us is building something people love. Emily meeting steve jobs. How did that happen . What was that like . Drew it was interesting. Apple became aware of dropbox early on. It wasnt steve who first learned about it. We had some conversations with their team because they were curious about how we managed to put the little green icons on the files. It turns out that to do that, it was actually a pretty tough technical challenge. And so what we had to do was openheart surgery on the finder, on code we did not write, and their team understood this was some pretty crazy acrobatics and something no other company had done. Eventually, it ended up steve reached out and wanted to talk to us. We had repeatedly said look, were not interested in selling the company. We are still not interested in selling the company. We want to be respectful of your time. But, you know, if you want to hang out, sure. [laughter] drew and so it was wild. We would get up in the morning, and we had the zipcar. Loop, oh, it is already in the phone. We talked for the formal part of the meeting maybe 15 minutes. It was pretty clear they were interested in buying the company, but we were having fun building it and were not interested in selling. Emily he said i want to buy you . Drew he in so many words. Sure, yeah. We did not talk a number. It is important for me i did not want to go too far down that path. And we spent the rest of the time talking about i had a lot of questions about why he came back to apple, and why cupertino. He had different advice for us. He spent a lot more time than he needed to with us. You know, we were pretty clear that we were not going to sell the company, but he was also taunting us a little bit. He was like look, we are going to have to come after you. Emily they did. They unveiled the ipod. [laughter] emily how do you think that worked out for them . Drew i think different products solve different problems. What people love about dropbox is it is easy to use. You are not locked into any one platform. Emily apple had a huge problem. Icloud was not hacked but peoples passwords were hacked. How do you make sure that does not happen to dropbox . Drew we have teams, account security teams of people who think about what can we do even if you are kind of sloppy with your passwords or reuse things, we try to proactively identify suspicious behavior. We go at it from a bunch of different angles. Emily how has your personal life changed now that you are rich and famous . [laughter] drew i think people would be surprised. It is not actually that different. I still spend most of my waking hours thinking about dropbox. Emily you have been on Silicon Valley, an hbo hit show. Drew i had a very Important Role just standing there at a cocktail party. [laughter] drew it is fun. I look at all of this as a new whole series of interesting experiences. Emily what is next for drew houston . Drew we have a lot work to do. [laughter] emily what do you want your place in Silicon Valley history to be . Drew i think arash and i both the two things we really care about are, one, we want to create a great company, a place where people can do their best work. And our culture is a little bit we admire all of the other companies, but we have our own distinctive culture, and there are a handful of aspects we really want to preserve. For me, it is we are a pretty big scale now. What does it mean to get to 10x that . Or, you know, we solve a lot of problems for people today. What are ways that we can go even further . Build this kind of treasure. This home for everybodys most important stuff is something that matters to a lot of people. Emily at any point, have you ever regretted not selling . Not selling to steve jobs . Drew no. There are good times and hard times, but it is all part of the adventure. Emily all right. Drew houston. Thank you so much for joining us. This was awesome. Drew thank you. Emily great to have you here. 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