Category winner: Dropbox: 'It Just Works'

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This case won the Entrepreneurship category at The Case Centre Awards and Competitions 2015.
 
The case

Who – the protagonist

Drew Houston – the 27-year-old cofounder of Dropbox. Drew was introduced to computer programming and startups at a young age. He started writing software at the age of five and at 14 began testing an online game. When he identified security problems with it, the developer hired him as a network engineer. He graduated from Massachusetts Institute of Technology (MIT), US, in 2006 and is now worth an estimated $1.2 billion.

What

Dropbox is a downloadable application that allows users to easily share, sync, and store files such as photos, documents and videos, across most computers and smartphones. 

Why

Drew got the idea for Dropbox while waiting for a bus – he’d planned to work during the four-hour ride, but had forgotten his USB flash drive. Frustrated, he began designing a service to sync and share files between personal computers via the Internet.

When

DropboxDrew began working on Dropbox in 2006, taking on Arash Ferdowski, who had dropped out of MIT, to help with the project. In 2008, Dropbox publicly launched its Windows and Mac clients, then added a Linux version in response to demand from beta users.

Where

Drew and Arash initially worked for four months in a tiny apartment in Cambridge, US. They then opened offices in San Francisco, moving to larger premises in 2011 on the fourth floor of the China Basin Landing building in San Francisco, occupying 85,600 square feet (7,950 m2). In 2014, Dropbox opened offices in Austin, Texas, US.

Key quote

‘It’s hard to imagine Tom Cruise in Minority Report sending himself files via Gmail or lugging around a USB thumbdrive.’ – Drew Houston

What next?

Dropbox had plenty of cash in the bank and its freemium business model was working well. But how could growth be accelerated? And what should the company’s product strategy be? Should it continue to offer a single product for all users, or segment its diverse and growing user base? Should it create a ‘professional’ version to target ‘power users’ or a separate product for small to medium-sized businesses?

 
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Dropbox: “It Just Works”
Ref 9-811-065

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The authors

Thomas R. Eisenmann, Michael Pao and Lauren Barley

Thomas explains why he thinks this case is popular and discusses the huge potential of simple ideas.

Unmet need

Drew is an exceptional entrepreneur. He balances deep technical know-how with a solid grasp of business. He was very resourceful in launching a new venture into an already crowded market. He found an unmet need and then tested and iterated his product in a rigorous but nimble way. So, I think the case is popular not only because it profiles a great entrepreneur, but also because it illustrates ‘lean startup’ principles being put into practice in a powerful, effective way.

Brilliant new businesses

IdeasDropbox has become an enormously successful company based on a simple premise. ‘Obvious’ ideas can have huge potential. Look at Uber and Airbnb. Or Rent the Runway, which rents designer apparel online. Or Blue Apron, which ships ingredients for meals, pre-cut and portioned. The simple ideas behind these brilliant new businesses seem obvious now, but it took brave and clever entrepreneurs to envision them.

Wider lessons

The ‘lean startup’ approach that Drew employed in launching Dropbox works particularly well in software-based businesses, where rapid cycles of testing and product iteration are possible. But this experiment-driven approach to entrepreneurship is increasingly being applied in all sorts of businesses. Product development cycles in hardware are getting shorter with the availability of CAD/CAM, 3D printing, and other rapid prototyping tools. And big companies like General Electric and Intuit have embraced the lean startup idea.

Case writing advice

Specify your teaching objective in advance; in particular, the role the case will play in your syllabus. Try to resist the lure of ‘bright, shiny objects’ – that is, cases that may engage students because they profile familiar, interesting businesses, but lack a strong pedagogical purpose. Look for a sharp ‘trigger issue’, that is, a decision point that will generate lots of class debate. Remember that a case with an obvious ‘right answer’ will not yield as much learning as one where reasonable people could differ on how to approach the decision in question.

About the authors

Thomas R. Eisenmann is Howard H. Stevenson Professor of Business Administration at Harvard Business School
e teisenmann@hbs.edu
tw @teisenmann

Michael Pao is Group Product Manager at Uber Technologies Inc. (MBA 2011 Harvard Business School)
e mike@uber.com
tw @paomichael

Lauren Barley is a Research Associate at Harvard Business School California Research Center
e lbarley@hbs.edu
tw @lbarleyCA

 

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