New Entrepreneurs
Dropbox and the failures behind it
BBC
In Silicon Valley it is said
failure is a badge of honour - and practically a prerequisite for success.
And so it has
proved for Drew Houston, the latest high-profile entrant into Silicon Valley's
billionaire club.
Mr Houston, 31,
co-founded Dropbox - an online file-sharing service - with Arash Ferdowsi in
2007. The company, founded just seven years ago, is now estimated to be worth
an eye-watering $10bn (£5.9bn).
But he had
several failures before this success.
While studying
computer science at the prestigious Massachusetts Institute of Technology (MIT)
he happened on the idea of an automated gambling "bot", a computer
programme designed to play real-money hands of online poker instead of humans.
However Mr
Houston's "bot" kept malfunctioning.
"There
would be bugs and it would fold my hand. It was an automated way of losing all
your money," he laughs.
The
entrepreneur's first serious idea was an online course to help students prepare
for their college entrance exams.
Three years of
work on that project proved fruitless, but his frustrations collaborating with
colleagues proved the spark of inspiration for Dropbox.
"I was on a
bus from Boston to New York and I had a big list of things I wanted to get
done. I fished around in my pockets only to find out I'd forgotten my thumb
drive," he explains.
"I was
like: 'I never want to have this problem again,'" he says.
With fours hour
to kill and not a lot else to do, he decided to start writing some code, and so
Dropbox - an online cloud storage solution for files - was born.
Initially
investors were lukewarm - as there were many other cloud-based storage
solutions.
"But I
would ask them: 'Do you use any of them?' And invariably they would say
no," he says.
Seven years
later, and Dropbox has proved a hit, recently reaching 300 million
users - an audience that he says he
could never have had with his previous ideas.
And that, he
says, is part of the key to success. "Make something people want. That
sounds so obvious, but when you look at why companies fail it's normally
because they don't have enough customers."
Timing clearly
played a part too - Mr Houston launched the firm at a time when users were
migrating towards multiple devices, from netbooks to mobile phones (and later
tablets).
Once you've
developed a great user-friendly product, Mr Houston believes the other
essential ingredient is good distribution.
"With
Dropbox people would tell their friends about it and collaborate. So when you
go into work and work on a project with colleagues you recruit them in essence
to become Dropbpox users because you're all working on a project
together."
Of course built
into the very idea of entrepreneurship is the notion of risk. But Mr Houston
believes that is overstated.
"One
misconception is that entrepreneurs love risk. Actually we all want things to
go as we expect. What you need is a blind optimism and a tolerance for
uncertainty."
He says that
when he started the company he would have been intimidated by having 700
employees and the scope of the operation that Dropbox has today.
"The good
news is it happens one day at a time," he says.
"One of the
great things about moving to Silicon Valley is that you're surrounded by all
these people who've done it before. This place is an assembly line that takes a
couple of twenty-somethings and walks you through everything you need to learn.
"What you
really need is just a commitment to learning and putting yourself on the edge
of your comfort zone to develop all these skills that otherwise don't come
naturally."
And about being
inducted into the billionaires club?
"It's very
disappointing actually," he laughs. "It would be great if there was
just a happiness switch which turns on. But of course I feel really fortunate
and more and more I and other people at Dropbox are going to spend more time
thinking about how to give back."