Executive Summary:
Dropbox is a cloud based storage company that allows users to upload and access personal files from anywhere. Drew Houston, the founder of Dropbox built the company as a solution to a common problem that he had; how could he access his files remotely without needing to remember a USB stick or dealing with email attachments. The company started as a minimally structured entity, and after some initial failure and re-focus on a set of concise but broadly reaching rules, the company has expanded its consumer base and is looking to create a product for the SMB customers. As long as the company does not stray from its simple rules (appendix1), designing a new offering for SMB will help expand the breadth of Dropbox’s product …show more content…
Is Dropbox profitable as of June 2010?
See Appendix 3
When he applied to Y Combinator (see Ex. 2), what hypotheses did Houston hold about key elements of Dropbox's business model? As of June 2010, which of these hypotheses have been confirmed, and which have been discarded? What is your assessment of the approach Houston used to test hypotheses?
When Drew Houston applied to Y Combinator, his business model included offering a freemium cloud based data storage platform that was easy and reliable for consumers that could be integrated by large corporations and bundled as part of their products at some point. The version that Houston was able to charge for was supposed to be ready and deployed 8 weeks after his application. While a few of Houston’s hypothesis were correct, he missed the mark on his initial predictions of 8 week development time and the benefits of corporate parternerships/bundling. Missing the mark on these hypothesis is related to not having a distinct set of rules or clear cut image as to how Dropbox would grow. Houston acknowledged this with his analysis of why corporate partnerships and bundling did not take off – each client wanted customizations to the file storage, which is at odds with Dropbox’s areas of success. Through trial and error, Houston was able to identify the core competencies of Dropbox and work within a defined set of rules going forward.

An area of success for Houston from the early stages of