Dropbox CEO Turned Down Nine-Figure Buyout From Steve Jobs in 2009

This little nugget of a news story is a beautiful bit of real-life poetry, as it tells a tale of when one tech mogul at the peak of his career (and sadly, near the end of his life) crossed paths with another tech mogul at the beginning of his.

According to an article in Forbes, Dropbox founder Drew Houston and his business partner met with Steve Jobs in Cupertino in 2009. The purpose of the meeting? Jobs wanted to buy Dropbox for a reportedly nine-figure sum. The outcome of the meeting? Houston essentially said thanks but no thanks; Dropbox wasn’t for sale.

Jobs probably had meetings like this every week, where he hosted some whip-smart startup founders and tried to buy their company, either to remove them from competing with Apple products or to use their technology to build or improve an Apple product.

In this case, the meeting was notable for two reasons. One, because Apple was trying so hard to get into cloud storage (and apparently wasn’t coming up with a silver bullet solution its own) that it was willing to part with somewhere between $100 million and $999 million to do it. The other reason is that Houston chose a certain path for Dropbox that can be summed up in the colloquialism, “go big or go home”.

Anyone who turns down nine figures of easy, guaranteed money is stupid, crazy, or has a plan. So far, it appears that Houston had a plan. Bear in mind this 2009 meeting was before people (we tech writers included) would describe any similar service or product by opening with “It’s like Dropbox, except...”, or, as the Forbes article points out, Dropbox became a verb. (“Dropbox me.”) Dropbox has become to cloud storage and sharing what Kleenex is to tissues.

Of course, popularity and ubiquity is one thing, and financial success is quite another. So how has Houston done? According to the article, his 15% stake in the company is worth $600 million, the company itself is valued at $4 billion, and he expects Dropbox to take in $240 million in revenue in 2011. Dropbox also has over 45 million users and counting.

One can’t help but recall another story where a tech giant tried unsuccessfully to buy a new, exciting startup that later found success on its own--the one where Steve Ballmer tried to buy Facebook. Mark Zuckerberg wouldn’t sell, and now Facebook has become a Thing so pervasive that there are tweeners that can’t fathom a world where it hasn’t always existed. (Side note: Can you imagine what sad fate would have awaited Facebook if Microsoft had taken it over?)

It’s probably too much of a stretch to directly compare the Jobs/Houston episode with the Ballmer/Zuckerberg one, but the main thread the stories have in common is that the young guy wanted to create a big company, not cash in and be bought by one.

Of course, a couple of years after Houston’s bold move, Apple came out with a direct competitor to Dropbox with its iCloud service. But that’s another Steve Jobs story.
Via:  Forbes
AKwyn 3 years ago

It's certainly interesting to know, I mean in your infancy companies only want to acquire you because you have some technology they want to incorporate in their products or they see you as a threat. Either way, while it would of been interesting to see Dropbox under Apple; I'm kind of glad they didn't because Dropbox has grown a lot, it has an easy to use interface, it allows people to easily share files and it has 54 million users. Now what type of service can proclaim that to everyone else.

I don't know if these plans would work or not but the point is that these new companies are instant acquisition targets if they have some sort of working technology, and honestly I don't think buying out companies is the best way to acquire that; I mean just look at Jaiku, it went the way of the dinosaur. I don't know if Facebook would of thrived under Microsoft but by looking at their track record, I'm guessing it would of been another failed service Windows Live Home and something else entirely would of taken Facebook's place entirely, of course this can only happen in an alternate universe.

swiller 3 years ago

I think one big thing missing in this article is that Apple released the iDisk in 2000, a 20 GB cloud based hard drive heavily integrated in it's OS, 7 years before Dropbox even started. It was essentially the same thing. Drop Box became big with the windows crowd because it was new to them and free.

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