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