Dropbox’s quest to win your heart, and Wall Street’s too

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By Ian Sherr

What do you do when Steve Jobs says you’re destined to fail?

That’s what Dropbox co-founder Drew Houston had to answer after meeting Apple‘s co-founder seven years ago.

Houston’s startup made waves when he unveiled his storage service in 2008, offering a dead-simple way to upload and save your files in the cloud and then synchronize them between your computers. At 27, he was talking to the most influential name in tech — and his own personal hero.

“It was an interesting conversation because he said he liked our products,” Houston (pronounced “how-stun”) later recounted to Forbes. “I can’t think of much higher praise than that.”

But Apple’s co-founder wasn’t convinced Dropbox was destined for success. Jobs wanted to buy the company, likely to integrate it with Apple’s own forthcoming file-syncing service.

Jobs declared Dropbox to be a “feature, not a product.” Or, put another way, Jobs believed Dropbox didn’t have a future as a standalone company. Houston said no thanks.

Since then, Houston and his team have been trying to prove Jobs wrong.

They’ve added more than a dozen features, including specialized photo storage and document editing. They’ve made it so apps can connect with Dropbox to store and sync files across devices. And they’ve worked to become even more attractive to businesses by making it easier for teams of people to share files.

So far, Dropbox has convinced more than 500 million people and 200,000 businesses to sign up. The question is, how many people are paying for its service? A privately held company, Dropbox won’t say how many people pay. And unless it tells us, it’s nearly impossible to know.

Dropbox, like most web companies, gives away a limited free version of its service when you just sign up. Over time, the company hopes you’ll come to rely on its offerings, at which point you may decide to pay more (starting at $10 per month for individuals and $25 per person per month for teams) to store additional files.

Even so, all those people using Dropbox helped turn it into one of the first and largest Silicon Valley unicorns, or companies valued at more than $1 billion — on paper, at least. For Dropbox, that happened in 2011, when investors valued it at $4 billion, according to CrunchBase.

Dropbox seemed on its way to becoming one of the great tech success stories, complete with a future that included a high-profile initial public offering beneath the ringing bell of Wall Street.

“They had the market cornered,” said Brian Blau, an analyst at Gartner.

But it hasn’t happened. All those years after meeting Jobs, Dropbox is still a private company. Its value, which zoomed up to $10 billion in 2014, hasn’t changed. Bloomberg reported in August that Dropbox’s financials may not justify that value when the company eventually begins selling public shares, something that could happen in the not-too-distant future. According to Bloomberg, Houston was preparing to file paperwork to begin that process.

Dropbox said in January that it’s on track to tally $1 billion in sales this year, more than the nearly $400 million its already-public competitor Box tallied last year.

Houston, now 34, hopes that data point, among others, will make Dropbox a compelling buy for Wall Street. “Warren Buffett better be able to look at our business and say, ‘This lemonade stand makes money,'” Houston told Bloomberg.

As for getting you and me to use Dropbox and pay for it? Houston has a plan for that, sort of. After years of working to come up with new and innovative ideas, Dropbox is now trying something else: an artsy rebranding campaign.

Starting Tuesday the San Francisco company freshened its look with new colors, different fonts and a flattened version of its storage box-like logo. Ultimately, the company is hoping to help remind people there’s more to it than the free syncing service they signed up for and maybe rely on for work. It’s also to remind them that Dropbox is more than just an always-there “feature,” as Jobs put it so dismissively.

Dropbox now wants to be known as a place for creativity as well. Whether it will or not remains to be seen.

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