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Comment by sulam | Hacker News Reader

7 years ago they were talking privately about being cash flow positive. It will be interesting to see how that’s held up as they scaled.

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Would be quite amazing if they are not profitable. After all they seem to be quite conservative on the product development side and have always had courage to charge actual money for their service.

One thing I've always wondered is what is their actual cost structure. Based on my own usage I would assume the actual storage part is quite small compared to the data processing and bandwidth. Since the sync works so smoothly, it is convenient to keep all kinds of projects there. Thinking for example node.js projects, which take not so many megabytes, but may contain 10-100k small files (due to dependencies).

> After all they seem to be quite conservative on the product development side and have always had courage to charge actual money for their service.

Have we really come to the point where its "couragous" to charge money for your product?

I think it takes courage, because people will only pay if you provide some real value for them. Give out things for free and you might build a nice user base even if the offering is not so interesting.

Not necessarily; if you hook up people on free and have them invest time money or resources into your free by walled system, the cost of moving elsewhere overweight a small upcharge once you start charging.

Example is Twilio. They were first and we implement them very heavily into our systems. Currently our bills are at around $400 per month. Phaxio is much cheaper, but we just got used to Twilio and unwilling to spend time money and resources into jumping to something else just for the sake of little savings.

> After all they seem to be quite conservative on the product development side and have always had courage to charge actual money for their service.

They've always charged for higher tier services but they've also always had a free tier where they provide service without charging anything.

Pretty simple: they pay a gazillion dollars to host everyone's pictures and old resume versions, they get half a gazillion from enterprise customers storing work documents. They reduced a lot of costs by building their own data centers and getting off AWS.

I pay $10/mo for the storage bump. Not sure how many there are like me, but I suspect a non-trivial amount of their revenue comes from non-enterprise customers.

For example BackBlaze sells storage at $0.005/GB [1]. I picked them as an example, because I'm fairly confident their business model is based on making money with this. Based on this I would assume that at Dropbox scale you could do storage at least for the same price, maybe even cheaper. With those prices the free user storage would cost like max 1 cent/month. There's of course some users with more than 2GB, but there's also many who use less and all the de-duplication and shared folders pushing down the per free-user cost.

[1] https://www.backblaze.com/b2/cloud-storage-pricing.html

I analyzed Backblaze's business model before. It's quite fascinating. https://twitter.com/kiyototamura/status/934558071019339776

If I had to guess, Dropbox improves their margin by getting people to share files and folders (because that counts toward multiple users' quotas).

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