Dropbox and the failures behind it

Drew Houston says he has always been interested in computer programming

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.

online poker game Drew Houston tried to create a "bot" to play online poker while he was at university

Start Quote

Make something people want. When you look at why companies fail it's normally because they don't have enough customers”

End Quote Drew Houston

"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 four hours 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.

Drew Houston Drew Houston took to computers from an early age

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).

Dropbox pic Dropbox now has 300 million users

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 Dropbox 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.

New Entrepreneurs

Dropbox

  • HQ: San Francisco, California
  • Year founded: 2007
  • Number of employees: 700
  • Ownership: Private

"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."

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