How Did Dropbox Become Successful? Find Out.

Business.com / Managing / Last Modified: February 22, 2017

It's best to learn from other startup's mistakes. Learn how Dropbox CEO Drew Houston made mistakes and bounced back to success.

Dropbox has more than 200 million users. But did you know the guys who run this cloud-based storage program weren't always so successful in their business ventures? In fact, after coming up with the idea, they realized that no one wanted it. Before the program boomed, the startup learned a lot about running a successful business.

Read on to discover the lessons Dropbox learned and how your startup can thrive, too.

They Gave Users Something Valuable

At Startup Lessons Learned 2010, CEO Drew Houston said that one of the biggest things Dropbox learned was that to make people want its product, they had to produce something of value (Tweet This!). When searching for funding, no one was on board with the idea, partly because they didn't really understand the program.

Related:How One Startup Gained 16 Million Users by Learning From Mistakes

Dropbox then decided to step out of the regular comfort zone and show potential users what they were all about so it could receive quick, real-time feedback. This is the video it ended up creating:

http://youtu.be/7QmCUDHpNzE

They Found a Target Audience

Dropbox's success can't be solely attributed to this video. The company was also smart about finding a way to put the video in front of a specific audience and target it toward their needs. Among those needs, Dropbox made a point to speak to the audience in an authentic way. To attract more attention, they hid jokes and humorous content within the video to help it resonate with the audience.

And then they shared the video where the audience hung out. After sharing the video on Digg, Houston recalls, "It drove hundreds of thousands of people to the website. Our beta waiting list went from 5,000 people to 75,000 people literally overnight. It totally blew us away." After a single day, the video already had 10,000 Diggs, and Houston attributes much of this to the Easter eggs they hid in the video designed to speak to Digg's audience.

They Realized to Succeed, You Can't Be a Know-it-All

If you enter a startup thinking you know everything about everything, you're going to get nowhere fast. It's not a practical mindset and will lead to closed-mindedness. As an entrepreneur, you should be open to new ideas and willing to take chances.

CEO Drew Houston explains that getting good at ignorance and realizing you have a lot to learn can help your company succeed (Tweet This):

"Get out of your comfort zone with things even as straightforward as public speaking. It's a mindset--spending a lot of time thinking about what you don't know that you don't know. Those are questions to ask: 'What am I going to need? What is the company going to need? What should we be doing 3, 6, 12, 24 months from now.' If you can back that up to today, that can be a useful lens to figure out the skills you need to develop."

Not only do you have to be open to new ideas, you have to be able to wear many hats and step out of your comfort zone as an entrepreneur. Houston also admits, "I transitioned from writing all the code myself to not coding at all. So the things you used to be good at matter less and less on a day-to-day basis, and all the things you need to be good at can be pretty uncomfortable for people when code is their backyard."

But Taking the Time to Learn Can Pay Off

While Houston is humble admitting that he made mistakes and didn't know everything about running a company before starting one, he still maintains the idea that you have to be willing to learn to succeed. As he explains, "I didn't know a lot about these other things that really matter in business, from marketing to sales to management." So he took to learning about it.

Related:The Three Biggest Startup Financing Mistakes

"Reading a book about management isn't going to make you a good manager any more than a book about guitar will make you a good guitarist, but it can get you thinking about the most important concepts," he says. Expanding your knowledge with anything from a simple book to getting an MBA degree from a university like this, is important for business success.

They Found Evolution is Necessary 

Of course, if you're running a software program, your software must evolve to keep up with technology. But you also have to be willing to evolve as an entrepreneur while also allowing your products to change to customer needs. Houston says, "There's this joy that comes from sitting down to solve a problem and standing up when it's done and good. Building a company or managing people is never just done."

While you can quickly fix some problems, Houston reminds us that running a business is all about constantly evolving and making things better, not just fixing them. Not only has the company learned that there's constant evolution in management, but their program has evolved since the beginning, such as with the release of Dropbox for Business, an upgrade that provides users with an easier-to-navigate experience.

They Learned From Mistakes

Like any successful company, Dropbox took mistakes as learning experiences. For instance, when Dropbox started, they were just a group of software engineers without any prior knowledge in marketing. Even after hiring a marketing firm, they still found their marketing efforts ineffective. They weren't being smart about keyword use, were  running a "shady" operation by hiding the free option, and ran completely awful ads and affiliate marketing campaigns.

But did this stop the company? No. After just seven months, they boasted one million users (Tweet This!). After analyzing actions, they learned they didn't have to do things the traditional way. That offering a useful product users loved was crucial to success and that hard work really does pay off.

Related:The Six Biggest HR Mistakes You can Easily Avoid

If you're interested in hearing more about the Dropbox journey and what the company learned, check out Drew Houston's slideshow detailing Dropbox's startup lessons.

Author Bio: JT Ripton is a freelance business, marketing and technology writer you can follow him on Twitter @JTRipton

(Image via dropbox.com)

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