Drew is the founder and CEO of Dropbox.

Rejected once before, Drew eventually went through Y Combinator in the Winter of 2007 with Dropbox and has since grown it to over 500 million users today.

Access podcast and transcript versions of this interview here:
http://www.ycombinator.com/future/drew/

So, you were in Y Combinator with Dropbox in the summer of 2007.

How did you come up with the idea and end up at YC in the first place?

The sort of origin story of the company was when I was riding the Chinatown bus from Boston to New York and forgot my thumb drive and couldn't get anything done on the trip.

And then I had another problem which was I was working on my first company which we can talk about And I had a real pain point around collaborating with my co-founder around The things that we're working on so but it was personal frustration.

I'd hacked together all these scripts to try to fix it but then that bus ride was the last straw.

You mentioned you had a first company, you had applied to YC before.

It was, so my first company was called Accolade, and it was doing online SAT prep, because we realized that back in the day, the SAT was changing, and no 1 had really built a good online course.

And so, started that company, applied to YC, rejected largely because we were both, my co-founder and I were both part-time on it, couple other reasons, market size, probably some other stuff.

When I got a little more feedback from about what happened in that, and some of the concerns were the ones I said about my co-founder and I didn't know each other super well, neither of us was full time on it.

We kept working on the company until I started Dropbox and then it sort of drifted apart.

You applied to YC as a single founder and then met Arash rightly after, right?

Usually these co-founder stories start with, my childhood best friend.

No, Arash and I probably knew each other for maybe 2 or 3 hours before Wow.

How did you, what gave you the confidence to be okay with doing that?

So I applied as a single founder to YC and I got an email from Paul saying, hey, idea seems interesting, but you really need to find a co-founder.

Only problem was application deadline was like 3 weeks away.

So that's like saying, oh, you need to get married in the next 3 weeks.

So what happened was, Kyle Voigt, who's 1 of the founders of Justin.tv, which turned into Twitch and then started Cruise.

So far the only YC founder with 2000000000 plus exits.

And we were both in the Entrepreneurs Club together.

They were floor mates in his campus at MIT.

And Arash was having a pretty similar experience to 1 that I was having, which is we had friends who had moved from Boston, who had dropped out of school, moved from Boston, settled in San Francisco.

Suddenly their companies are raising millions of dollars, taking off.

And so I think both of us had a little bit of cabin fever.

Literally 2 or 3 hours you guys spent together.

Kyle sent, or just told, I was complaining to Kyle, I need, you know, is there anyone great that you know who could be a potential co-founder?

Because all my friends or the folks I was closer to, just for whatever reason, timing wasn't right, weren't ready to make the jump, whatever it was, and then Kyle suggested Arash, and so I probably have the email somewhere where Arash just said, hey, let's meet up, and we hung out in the student center for a couple hours, and he dropped out of school the next day.

I have to add this to Kyle's list of special services to YC.

So you guys just started working on it immediately, talked about the equity and went forward.

So we met up in the student center at MIT.

He was already pretty excited about the concept of starting a company, of doing YC, and we hit it off.

I wish I could say that, oh yeah, here are the 17 things I was looking for on this 7 point scale.

But no, we just, I was like, this kid's clearly smart, a little quiet, but very thoughtful.

And over time it became clear that this was a really good fit.

How did you guys validate the need for Dropbox?

I've heard stories, although it may be apocryphal, that you posted on Reddit to ask people if they wanted something like Dropbox.

Well, the first real test was I made a demo video.

And it was initially just to get into YC because the whole YCometer application process was pretty similar to the world where I came from, which was college admissions and test prep.

And 1 of the things you can do to give yourself an edge in admissions is just do something different.

So I knew everybody was going to have a demo link in their application or whatever that would be, but I thought this was something that would really, that Dropbox was something that would really appeal to the Hacker News audience.

And it was really to get him to YC, where I made this three-minute demo video with some music equipment that I had for my band.

It stayed at the top of Hacker News for 2 days.

I got the thing I was looking for, which is the email from Paul.

The thing I didn't want was that you also need a co-founder in 3 weeks, but that was the first.

First again to YC, then to build some momentum around the company.

There's this infamous comment either on that poster, or a future 1, you made probably that 1, where someone's like, I think this is the stupidest thing I've ever heard of.

Like, don't these people know that Wget exists?

We send that around to other founders when they get demotivated because people shit on their idea on Hacker News or Reddit or something else.

Well, we were getting it from all different directions.

So actually, we can jump to that because I think that's a really interesting 0.1 of the things I respect most about you is you have just kept doing your thing no matter what noise there is in the ecosystem about Dropbox this or Dropbox that, whether it's like, I don't need this because I can use Wget or this company is overvalued or whatever.

And now you're just like this behemoth and everyone's like, well, we were wrong about Dropbox.

How do you handle just constant negativity from people saying this isn't going to work or anything like that?

think the first thing is you have to recognize that that is always going to happen.

And we experienced that from the day we founded the company, actually before that, and all the way to now.

And when you zoom out, you realize that a company like Apple, quarter after quarter, can post the best, the most revenue, most profit of any company in business history.

And the next day, it's like, but they're really dead now.

So you have to kind of, you have to appreciate that that's human nature and that's just gonna happen.

I think where it gets a little harder is you have to simultaneously have thick skin and be able to tune things like that out.

But you also have kind of thin skin, and if your customers are unhappy or your team's unhappy, you have to respond to that.

So that's a weird dynamic that you have to handle.

But I think it starts with just getting some perspective that that's always going to happen.

How do you decide when you need to address something with customers or team versus just let it go in its normal

Well, I think the, Well, maybe more in the fundraising context.

the comments were negative, but actually a bunch were positive too.

We heard a lot of, we got a lot of pushback from investors saying, hey look, this is, Google's gonna do this, it's a commodity.

Online storage was kind of the startup cliche at the time, the way that Bitcoin or other things have been.

I was like, yeah, Google can probably do this.

Yeah, we don't really have a lot of structural advantages.

Yeah, we're not really sure how we're gonna make money.

But at the same, so that's all true, but that's, you have to realize that's like, that's not causal, like that doesn't, it's sort of just, just because other folks have done something doesn't mean it's a, or done it in a way that you don't think is good, doesn't mean it's inherently a bad idea.

Or maybe, put another way, I would ask investors, do you use, yes, there are 50 of these things out there, but do you use any of them?

And I'd say, yeah, isn't that interesting?

Was this the biggest problem that you found in early days was just the level of competition or presumed competition in the market?

Competition didn't bother me that much because our sites were also a lot lower in the beginning.

And really I had a target customer of 1, which is really myself.

And victory would, for me, would be never having to carry on a thumb drive.

How long did it take you from the day you had the idea for Dropbox until you had a product where you, into the last minute used a thumb drive?

Probably about, it's a couple months, maybe 6 weeks, 6 to 8 weeks.

You know, when it's early you can make massive progress like that.

But then it took a long time to, like, a long time to make it bulletproof and sort of safe for the world to use.

So what were the big initial problems that you faced?

Or what were the, as you think back towards, like, the few times Dropbox almost died?

So I think the early problems, when they're real problems, were just keeping up with growth.

So we had this idea to build a prototype.

We made this video and we put it on Dig and Reddit and that just blew up, which I can talk about.

But then you need to build a company because you start a product, and then you're like, hey, we have a product, now we need users, okay, let's go figure out how to get users, okay.

They always leave this part out of the movie of startups.

Well, it's just you're on this treadmill of, that you have to, every day, you have to do everything you were doing yesterday, just as well or better, and then you have a bunch of new stuff to deal with.

And so it's like, okay, well we need to build a product, we need engineers, Okay, wait, before we need engineers, before we can get engineers, we need to pay them.

And so you deal with that by dividing and conquering.

You hire people, but then you have a new problem which is you're hiring people to do something you don't know anything about suddenly Everybody's running off in different directions and so I think the hard things were really keeping up with that The rate at which things were breaking was faster than we could fix things.

And that was a really hard thing to get used to because you're used to, especially if you're kind of used to getting good grades in school and things like that.

He said the average grade for running a company is like a 22 out of 100.

So when you're used to getting As, that's a humbling thing.

And you have to simultaneously keep 2 things in mind, which is, on the 1 hand, you really should aim for perfection and try to make things as good as they can be and not, when problems arise, not tolerate them.

But at the same time, you've got to recognize, like, things, you know, it's like trying to bake a cake in 5 minutes.

Like, there's just going to be stuff on the walls.

It's going to be a little screwed up, no matter how good you are.

And what you really need to do, and probably even harder, is your job as CEO changes every 6 months, every year, every couple years.

And in fact, some of the things that made you good at the prior stage become a hindrance for the next stage.

So for example, I wrote most of the first version of Dropbox, and certainly Rosh and I did together, But there just became too much stuff to do and I had to stop coding.

Any of your codes still running in production?

And a lot of how the core product works in the protocol has been pretty stable, which has been cool.

I think there's, although there's so much advice online about how to start a product, there's actually very little advice about how to transition to a company.

So have anything else that either is particularly good advice that you heard or advice you now give to entrepreneurs who are trying to build the next Dropbox about how to successfully transition from an engineer to someone running a large company?

Yeah, so the first thing is, that would have been helpful to know is just, first of all, nobody's born a CEO.

And the challenge is you just don't know what your blind spots are.

And so you know how to build, At least in my case, I grew up programming.

We knew we could get people on Hacker News excited about it.

We knew we could make our early users happy.

But if you want to bring a company to scale, the chess board is a lot bigger than just building a good product.

And you have to be able to make smart and fast decisions about what markets do we go into, our business models, competition, strategy, how do you build a team, how do you run a team.

That's pretty tough when you've never done anything.

You don't really have a lot of context on those things.

You don't even know that those are important.

I think the first thing you need is, on the 1 hand, a healthy paranoia around, okay, probably 1 of the most useful questions that I like to ask myself and still do is 1 year from now, 2 years from now, 5 years from now, when I look back on today, what will I wish I had been learning?

And so I think really taking it on yourself to be systematic about how do I train myself, what am I going to need to know.

They say you go from coder to psychiatrist, which I found this totally true, or politician in the job.

And so, and then there are a lot of different points in between.

And did you mostly figure this out yourself or did you ask people, like, what am I going to need to be doing?

So reading was probably the single most valuable thing that I did.

Anything you'd recommend other people read?

So I think my favorite book on management is High Alpha Management by Andy Grove, which is kind of the bible of how do you scale an organization.

I mean I have a very long list of recommendations, but The Effective Executive by Peter Drucker is really good.

But basically what you're talking about is you need to have good judgment about a lot of different things.

And so it's like how do you, what that really is saying is how do you gain wisdom very quickly?

And last book recommendation, Poor Charlie's Almanac by Charlie Munger is probably the best book on that that I've read, which is really about how do you build a bunch of mental models to sort of break down the complexity of the world and know when they would use each.

But, reading is part of it, but then also having, you sort of think about that 1 year, 2 year, 5 year, having friends that are 1 step ahead, 2 steps ahead, 5 years ahead, and just sort of looking at the deltas between them.

And so I remember I had a coffee meeting set up and Sequoia, our first venture investors, were really helpful in connecting me with other entrepreneurs.

And so I remember racing out of the office, running down the Starbucks, having a seat, and start peppering him with questions.

And I asked, so how do you spend your time?

And he's like, well, it's really important that we have a great mission as a company.

And he's like, and it's really important that we have great values and a great culture.

And I'm just like, I'm starting to tune out because I'm like remembering which bugs I didn't fix.

I'm like, did I finish that before I, you know, committed the code?

And I'm like, what the hell is this guy talking about?

Like, this is, none of this has anything to do with our customers getting code out the door.

But then, you start hearing that 5 or 6 or 10 times, and you realize, okay, the only 1 here who's confused is me.

And so, and then you realize you're going from designing, especially if you're an engineer, you're going from designing a system of code and algorithms, which is very orderly and discreet, to a system of people And things like culture, values, all kinds of other things are the programming that makes that work.

I think everyone's confused when they hear that for the first time and

So have you found any way to get entrepreneurs to internalize that earlier?

I never have, so I'm curious if you've figured out a way to.

It may just be something you have to live.

Yeah, I think you really need that portfolio of different ways that you can train yourself.

Mentorship or getting advice from people at different stages is another.

I like to study just the history of business and really excellence.

And so learning about, okay, well, it's 1 thing to know how Google was built or how Facebook was built, but then you can learn a lot by understanding, well, how does a consumer packaged goods company run?

How does Swiffer, how do you come up with a Swiffer?

How do you think about competition there?

I've certainly learned the most from studying business that are not in the technology industry.

So how would Phil Jackson, who, you know, with the Bulls, the Lakers, the Knicks, like so many championships, Like how do you build a culture on a team like that?

And then you can also lean on your investors and the board.

So for example, Condoleezza Rice is 1 of our board members.

She's seen scale in all kinds of different environments, from running the State Department, being Secretary of State, it's an 85, 000 person organization.

She's Provost at Stanford, that's a 20, 000 person organization, and so on.

So you wanna triangulate from a bunch of different sources, which helps you internalize these lessons more than if you just read a blog post about it.

The most interesting meeting I had in terms of thinking about how to build YC in the last year was going to the Vatican and listening to how they talk about, I think, on thousand year time frames and about a billion people.

And it's like, yeah, it's a very different perspective.

What are the biggest, if you were gonna start a new company today, what do you think the biggest opportunities are?

Well, I think that The whole AI, machine learning, machine intelligence is going to be transformative, especially when you zoom out.

And I think things like, when paired with things like robotics, machines are going to take on a new role in our lives, which will have a bunch of really interesting positive and negative effects, which we can get into.

I'm not as worried about the robots killing everyone and taking over the world, but we can talk about that later.

good and bad shit about that happens, I think.

Well, in our world, we talk about Dropbox evolving from keeping files in sync to keeping teams in sync, which is a little bit of a departure because when we started we had this, we're like, all right, our goal is to make it so nobody has to carry a thumb drive around again and life would be a lot better if your stuff was in the cloud.

But along the way, it opened our eyes to a bigger problem when we realized that for a lot of our happiest customers, It wasn't really the storage that people were buying, it was the sharing.

And it was really using Dropbox to get their team on the same page.

And so, but that meant a shift, which we can talk about.

But a couple of years ago, we were like, okay, of all the things, we were sort of blessed and cursed with this original product because We struggled in the beginning to people like well, what's Dropbox?

Or what's Dropbox for and the answer when you think about it?

So we ended up really supporting all these different use cases, but at the same time, it was very clear even in the beginning that the role of files in people's lives are going to change.

So in the beginning, yeah, maybe you'd have text files and MP3s in your Dropbox, but in the world of iTunes and Evernote and Spotify and Netflix, there's not a file to be seen.

And so, you have to really think, tech just moves quickly, and so you always have to keep evolving with the patterns and what's changing.

Was this a strategic shift that you consciously made?

Did you say to the whole company, some data in all hands, like we used to be a file company and now files are dead and we're gonna do this other thing?

We did expand from, I would say there was an expansion and then a contraction, which I can talk about.

So we knew that files were going to, the role of files was going to change.

Files are never going to go away, but they're going to change.

And we thought about, okay, What place do we really occupy in people's lives?

Another was collaborating with a team on files.

And then the third was we had a platform, we do, we have an ecosystem of all these developers.

And So we expanded to say, okay, we're gonna really build a separate thing for photos because that's kind of a different product.

We're gonna do a lot more around collaboration and so on.

And then that was when we started to buy, We bought Mailbox, we started building something called Carousel, which is our photo app.

I think what we found was, First of all, I think it's easy to make strategies that look great on paper.

And when you think about your overall market, you want to hold on to as many of these use cases as possible.

And so many of our users are so happy with things like sharing photos, and we could do such a better job there.

But at the same time, you look at photos and collaboration, it's like very different products, very different ideal business model, very different competition, everything is different.

And so we found ourselves sort of straddling these 2 worlds, which made it very hard A, to build the best focused product, and B, just made it hard for people to understand what we were doing.

And as much as like, oh yeah, we were out in front of all this, competition sets in, and I think there's just sort of a sense of, We're doing a lot of stuff, it's not really working, and people are just getting agitated.

And then I re-read a book called Only the Paranoid Survive by Andy Grove, which describes how actually Intel wasn't always a microprocessor company, they actually started in memory, And they were getting crushed by the Japanese.

And he talked about the story of that transition from memory to microprocessors.

And as I was reading it, my stomach started churning, because I'm like, oh my God, the strategic inflection point he's talking about, that's what we're in.

And there's a part of the book where it says, CEOs like to keep their options open.

What you really need to do when you're in the middle of 1 of these inflection points is put all your eggs in 1 basket and watch that basket, quoting Mark Twain.

And so I went in the office the next week and we're like, we're not doing carousel anymore, we're not doing mailbox anymore.

Was there resistance or did the team get behind you quickly on that?

I think you find that when your company gets bigger, everybody knows.

It's not like a secret that some of these things aren't working the way that you want them to.

And so in a sense, to 1 side of people, it's a relief.

It's very disappointing to the people that are working on it.

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