The Great Dropbox Space Race | Hacker News Reader

The Great Dropbox Space Race

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99 pointsjoshma100 comments

I don't really understand Dropbox's pricing strategy. Free is 2GB, which is no-where near enough. But if you want to pay for more, you have to go all the way to 100GB, which is way too much, for me at least. And the only in-between option is to engage in these kind of games or spamming your friends to try to make them sign up. I'm not going to do that.

Dropbox, if you would just offer $20/20GB and $50/50GB accounts I know at least 5 people who would upgrade immediately. I feel like people want to pay, but such a massive and unnecessary jump in capacity from the free to the lowest paid plan is a real problem. And yeah, I do feel a bit personally annoyed about this - I (somewhat reluctantly) pay for a 100GB account; I use perhaps 10% of it.

I really don't care about this viral marketing to school students. Dropbox, concentrate on your actual paying customers please.

EDIT: I checked and I use 7.0% of my 104.2GB paid account allowance.

There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that people who pay low amounts are the most demanding in terms of support, and don't actually contribute much to the bottom line.

Ignore for a moment that 100 GB is more than you need. Is $10/month too much for you? Well...

But you don't need to spam friends, there are regularly things like contests (Dropquest 2011, 2012) where you get free space for completing tasks.

And then there's of course the competition.

> There is a case to be made that charging less than $10/month for a service is not good business.

I don't think so. Just last week I signed up for unblockus.com; $5/month. Every domain name registrar on the planet - $12 a year or so. Full automated services should not be subject to a monthly minimum, and they shouldn't need support.

> people who pay low amounts are the most demanding in terms of support

Do you really think this would be a big factor for Dropbox? If so - just say any under-100GB account has the same support as the free account.

> Is $10/month too much for you?

Well no it's not, obviously, since that's what I pay. But I am the only person I know with a pro account, since it's such overkill, and even I kind of resent paying for so much more than I need.

I like Dropbox, I want to use it. Just let me pay an appropriate amount for an appropriate usage!

> you don't need to spam friends, there are regularly things like contests (Dropquest 2011, 2012) where you get free space for completing tasks

I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age. Free space for completing tasks? That does not even make sense, because if you have to complete some task it is obviously not free. How about I just do my job, and buy things I need (like dropbox), and everyone is happy.

> I kind of resent paying for so much more than I need.

I wonder if Dropbox might make more money if they charged $10/month for 20 GB, because 20 GB is not more than most people need. (It would be a worse deal, but if the main problem is having more storage space than you need...)

> I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age.

That is the point. As the value of your time goes up, so should your willingness to pay $10/month. This is price discrimination, with price points of $0 and $10.

I think you might have a point. Only now it's probably too late for them to do that, you can't take away what users already have.

Note, it's unblock-us.com -- and it's a vpn service, not a registration provider if I'm mistaken. Just because an entity exists selling something at $x doesn't necessarily mean it's financially viable. Companies go out of business all the time because they don't charge enough. My company used to sell services at $6 a month and we had 2x the client-base that we have now at 1/10th of the revenue.

If dropbox worked on a usage-based billing model they'd never net nearly as much income as they do offering ~100 gigs to users who would barely use ~10 gigabytes of space a piece on average.

Unless I'm mistaken, the previous poster wasn't calling unblock-us a registrar, just referring to two different businesses that charge less than $10/mo.

Not very important, but unblock-us.com is not a VPN service, it's a specialized DNS service.

Very odd in light of their homepage title being 'smarter faster VPN'.

The problem for Dropbox is that they use S3. It's really easy to bypass Dropbox entirely and save money, even if you're non-technical. I use Arq on OSX, and pay only for the amount of data I have on S3 (about $10 per month right now). Dropbox's pricing is a race to the bottom.

It is cheaper to store 100GB in Dropbox than to store your own 100GB in S3. It would cost $12.50 plus transfer costs to use S3. It costs $9.99 and no transfer costs (besides your own net access) to use Dropbox. Dropbox is storing a lot more than 100GB, so they get bulk prices.

They also take advantage of a ton of redundant data.

Not for me, I only back up my original content on Arq (video and pictures, mostly).

The amount of people who are willing to set up an AWS account, generate account keys, download an external tool like Arq, and set it up to use those keys...

No, I don't think that's the biggest danger for Dropbox.

For me Dropbox is all about keeping files in sync between different computers and different people, the backup aspect is very much secondary. Any solution that doesn't do cross platform and cross user syncing and sharing isn't at Dropbox replacement as far as I'm concerned.

For pure backup there's Backblaze, which is much cheaper than S3

You can make a good business on $10 a month, you just need to be as good as Dropbox at customer acquisition to do it. That is not an easy bar to clear.

I agree with the general point, though: coming up with something to accommodate a $23 yearly budget for 14 GB is not a good use of their time relative to, say, finding the next million people who don't think $100 is a lot relative to "all the data my life depends on."

> There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that people who pay low amounts are the most demanding in terms of support, and don't actually contribute much to the bottom line.

Well right now they're charging $0 which is even less of a business for the same amount of hassle. I'm in a similar boat, I would like more than 2GB but am not interested in 100GB. Regardless of the money, it's the psychological thing of paying for something that I know I won't use.

The pricing for Google Drive is a lot less lumpy. I would switch to Google Drive fulltime if they only had an official linux client.

Do they have an official client for any OS?

That being said--do you know how command-line connections are supported with GD? I'm see a potential open-source opportunity here.

They have only Windows and OS X clients, officially[1], for desktops (Android and iOS are also both supported). They do have a public API, so you are free to make whatever you need to if you wish[2].

[1] https://support.google.com/drive/bin/answer.py?hl=en&ans...

[2] https://developers.google.com/drive/

edit: here are some various projects I found really quick, including a Linux client:

https://github.com/gimite/google-drive-ruby

https://github.com/Grive/grive

https://github.com/tom-dignan/gdrive-cli

There are official clients for OSX and Windows. I believe there is also an unofficial client for Linux built with the APIs GDrive provides.

Why not just skip the abstraction layer and interface directly with your offsite backup using unix primitives, and tools like rsync ?

I know there's a provider out there that does this ... on the tip of my tongue ...

Because I don't want just Linux. I use Linux, Android and Windows regularly.

Also what I'm after isn't offsite backups but seamless directory syncing (with cloud storage to eliminate the need for peers to be online simultanously), which is related but not exactly the same.

Dropbox, SkyDrive, Google Drive fit this niche generally speaking but Dropbox is the only one that has full coverage across the OSes I use regularly.

SpiderOak does zero knowledge backup & sync across Windows, OSX, and various flavours of Linux, and has Android & iOS clients; 2GB free + 1 GB for each friend you refer, or $100/year for 100GB (deduplicated) and no limit on devices.

The UX is not as nice as Dropbox, but I've been using a free account for about 2 years now and I'm pretty happy with the service and the support (especially given that I'm not a paying customer).

Quirks are that deleted files count towards your quota until you delete them from the list of deleted files (deduplication makes this a bit less painful), and there isn't a way to bulk restore files deleted after a certain time.

The abstraction the whole idea. Dropbox is expensive capacity that has much more functionality than offsite backup. It's multiplatform online shared storage with good disconnected operation support, file history, dedup, etc etc. Different use case.

Why should I pay $20 when I can have 24GB free forever? You don't have to spam your friends, just put the link on your blog or somewhere like that.

I want to pay a fair price for a service I am using. Then I feel like we have a business relationship and my needs will be catered for.

I feel this is the whole point of commerce. Maybe you can wangle things for free, good for you, but it usually means that someone, somewhere is paying your way, and you are beholden to that someone in unpredictable ways.

I don't think that this is point of Dropbox way of managing things. They just want to spread the word. Why should they pay big bucks for advertising when they can use their own product to promote the service?

I still pay for things that I need and use. Advertising a link on a site isn't free either.

I don't want to sound like a dick but aren't you admitting I am right?

Yes, you are getting dropbox credits by performing marketing for them, in whichever way is good for you. This might be advantageous to you but it is wrong to call it "free", at best you are paying with some kind of barter.

You're right about one thing: pay for things that you're actually using. That's what modern economy is all about and that's why we had (still have?) a recession.

I don't use or need more than 4GB of Dropbox space. I found promoting a service that I use daily good for me, people that follow me and good for Dropbox because they're getting more quality users from me than from other sources.

The thing you're wrong about is that there isn't really any difference for Dropbox if they offer 20GB, 10GB or 100KB for free. They are still getting payed from people and corporations that use way more than us. That free quantity they offer is negligible.

The link I keep posting in conversations like this is the one where we wrote about the antagonistic relationship that "free", almost free, and flat-rate service providers enter you into:

http://blog.kozubik.com/john_kozubik/2009/11/flat-rate-stora...

It's different with dropbox, though, since their pricing (beyond the free 2GB) is not flat rate ... you really do pay more the more you use ...

Although I suppose that if the range is 10-200 GB, and you're paying $9 (or whatever) there is a pretty strong incentive to keep you as close to the bottom of that range as possible - and you can bank on their policies and system behaviors to reflect that incentive.

But the real worry with dropbox is just the unsustainable business model. It was illustrated so well with the backblaze-costco-drivearound-silliness - storage really costs something, and it's price sensitive enough that you'll drive around all week ripping desktop drives out of USB enclosures ... and if you're giving that away in a bubble 1.0 "anything for customers" model you should be worried.

Consider doing the math on how many paid users need to exist to subsidize each free user. Suppose each free user uses, say, 20% of their space and does every single available promotion, yielding 20GB of space. This means each free user uses 4GB (a huge overestimate, I suspect.) This means that given S3 storage rates (and if Dropbox doesn't have better than the public rates, they're doing it wrong), each free user costs Dropbox $0.22 per month. Let's say that each paid user uses half their space, and that all the users are only using the 100GB plans. Then paid users cost them $2.75 per month. This also assumes that absolutely no data is deduped.

Now, let's assume that Dropbox pockets a quarter of the money to pay salary, other business overhead, and so on. This means that Dropbox needs a conversion rate of about 4% to be profitable. Sounds completely reasonable and sustainable to me, especially given how generous my storage numbers are.

I'm another would-be Pro user if they had a smaller/cheaper account but for different reasons. I have the free account with only 9.25 GB of space, and I use less than 1GB. So it's definitely not a space issue.

I want to support services I like. I don't even really care about any of the Pro features; I just want to throw a few bucks their way to say thanks for providing an awesome service. Unfortunately, there's no way for me to do that. Dropbox has made it clear that they aren't interested in offering lower tiers, and so right now, I'm content in using the free service that Dropbox is content to provide.

Agreed. I just used Fiverr to max out on my referrals. Now I have 21.4 GB for $5 and I didn't have to bother any of my friends. :)

except of course now you have an account that can be easily identified by dropbox as "referal abuse" https://forums.dropbox.com/topic.php?id=58068#post-436831

That's an excellent suggestion. I did just the same last night.

It's a qualitative difference. With 2 GB, you have to manage and consider which files you want to put there. With 100GB you just put all your files there and don't think about it anymore. I only have 7.5 GB out of my 100 but knowing I can just throw a DVD image or all the photos on my camera in there whenever I want is worth something to me.

Why do you think 2GB free is no-where near enough? I know a lot of users that use Dropbox's free plan and are happily syncing and sharing.

I use 7% of my 12 GB.

Dropbox reminds me a lot of webmail before Gmail. There were lots of small increments in available space but it was always an issue for users. When Gmail launched wih the promise that users would never again have to manage remaining space they obliterated the competition.

Dropbox is training users to attach a high value to small amounts of space. When a competent competitor launches with an order of magnitude more space it will immediately seem like a much better deal because of Dropbox's years of conditioning their users to think the only value proposition is the physical space.

The question is: how do you monetize near-limitless storage? Google figured that out with ads. Until someone finds a way to pay for it, that won't happen and once someone figures it out, Dropbox will probably be able to do the same.

If dropbox wanted to be evil, they could put ads on your filesystem.

Popups in your notifications and system bars :|

While I agree with your point generally, I think it's unfair to say that Dropbox is conditioning users to think the only value proposition is disk space.

For me, the Dropbox client, web integration and storage features are streets ahead of the competition (at least, last time I checked). The free on-by-default document versioning is invaluable to me. It's just difficult to "condition your users" to value software features because by the time you're in a position to condition them to value anything, they already have access to 100% of your software features.

"When Gmail launched wih the promise that users would never again have to manage remaining space they obliterated the competition."

Except that they didn't. For the last few years, Gmail was a distant third competitor in the webmail space. It seems that now they're finally catching up, and maybe overtaking Hotmail/Yahoo. But saying that at its launch it "obliterated" the competition is simply incorrect.

They didn't take over immediately (it's a pain to change email addresses, the lock-in is pretty high), but they did force nearly immediate changes from the major players. Hotmail at the time was offering only a few megabytes of storage (!) while Yahoo! was offering 6MB. Within months both providers greatly increased their storage, though not immediately to the level of Gmail, to help retain users.

Agreed. I think this is a pretty good example of competition and market forces causing all users to have an improvement, even though the vast majority don't know or care about these things.

I see that the rewards for this program are for a limited time (extra 3GB for 2 years). Maybe they realized their free plan + referral space was too generous. I currently have 21.9GB for free on my Dropbox taking advantage of the 18GB of referrals you can get as well as the additional couple GB they give you if you use the "Camera Upload" feature.

If they gave all these students that 3GB permanently that might bring people up to some sweet spot where most of them wouldn't have a real need to pay for the service.

I'm not sure. They had time limited offers before this with both HTC and Samsung. If they didn't have a referral program I wouldn't use them.

With referrals, camera upload, and HTC's 25GB for two years free deal, I'm up to 34GB.

I have DSL internet with a peak of around 60 KB/s up (thanks to the US telecom monopoly, my only other option is cable for around $80 a month with 300KB up). I couldn't saturate my drive, dropbox, and Ubuntu one accounts even if I wanted to.

I'm just curious, but do you live in a rural area?

I wonder what they're going to do when the promotion time runs out. If they're going to delete or block access to a random 3 GB of data in someone's dropbox, they're going to be dealing with a lot of upset customers.

(Should these people be aware of the fact that their space is going to run out, and have up-to-date backups of their stuff? Obviously. But the hard fact of life is that people do use dropbox as their only backup, and if something goes wrong there, they're going to be a customer support headache.)

I'd imagine you'd just be prevented from uploading/syncing anything until you get back under the limit.

The way it currently works is that they just don't allow you to upload anything until you're below your limit. They continue to store whatever is there, and do not delete it.

I wonder what happens after the 2 years are over. If they deduct your limited 3GB and you are over your limit, will they just delete random files until you aren't over capacity anymore? Odd.

I'm really interested that MIT is now top of the board considering it's a relatively small university. It makes me wonder if this is going to become a situation like when Slashdot attempted to poll for best graduate cs department and it was botted to hell and back.

I've been sent the referral link about fifteen different times in the past hour from distinct people. It's been sent out on most mailing lists, shared like crazy on facebook and in facebook groups, etc.

I have a theory:

Are you less annoyed by the spam because it will benefit everyone at MIT? I think students will be more willing to spam because it isnt seen as being selfish.

Dropbox t-shirts are prime MIT fashion and the dropbox events at the career fair last week were way over capacity. People here are really enthusiastic.

I don't really understand what's going on here. Could someone please explain this to me?

Better description here: https://blog.dropbox.com/index.php/now-announcing-the-great-...

I love how number 1, 2, and 4 are Singaporean :D Nerd country!

Well that, and the time difference. Students in Singapore woke up 15 hours before their counterparts on the West Coast of the US.

It's neat to see the effects of a global operation.

If only I had a university email account. I would just launch an adwords campaign. :)

They block dropbox links nowadays.

Dropbox are genius at marketing their product. Absolutely genius.

Umm not to sound too negative, but genius is a pretty strong word. What about this is genius? Referral programs are hardly anything new.

I think the genius he's referring to is the fact that they're trying to get educational institutions and students hooked on Dropbox, who could then go on to deploying Dropbox for the whole university (unlikely, but it could happen one day) and the students can go on to relying on Dropbox for their future projects, potentially upgrading to Pro at some point.

Exactly this. Just looking at my posts in my Facebook newsfeed and Facebook groups, this thing went insanely viral in a matter of minutes and people really are signing up for Dropbox and really noticing it (those who haven't been using it before).

The fact that they have a competition among universities and have the "top students" at each university is a massive plus in getting people excited about Dropbox.

They need to pump the growth numbers a bit more before the IPO.

Not the profit numbers, mind you, but the user numbers.

Yep. Microsoft gave away free software for years (Windows, Visual Studio and Office suites) to students in order to get them excited about their technologies and familiarized with their development environment. One day, those students will graduate and be ready to join the .net (or what-have-you) workforce(). There are entire universities that only offer courses with Microsoft technologies (mine was one such school at one point), so it's not unreasonable or unlikely that Dropbox can infiltrate the education market.

() In some cases, though, Microsoft conditioned students to think that all software should be free... oh, the irony!

1. It has a good name and theme. "Space Race" is a genius choice due to its double meaning.

2. This is marketed more as a competition between organizations than a simple referral program. Neither is a new idea, but the combination is interesting.

Also, the references to the Cold War are interesting, though I may be looking into it too much. Personal rewards for referring friends is like capitalism. Group rewards for each school is like communism. With Dropbox, you get both! :)

Most of my friends don't understand what Dropbox is nor why they'd need it. They would rather transfer files by USB drive and email. And these are people that live off Netflix and Pandora and Facebook, so it's not like they're Luddites...

My friends were like that too. Netflix, Grooveshark, Spotify etc but still relied on remembering to bring a USB stick around. Once i showed them the usefulness of Dropbox (and the fact that you can store ebooks on your account and then transfer them to iBooks), they began to adopt it. A few months down the line, i have more friends with Dropbox than without, and we've also set up shared folders with our ebook collections and regularly talk about what we read this week. I could never imagine hooking my friends on to books, but i guess they all had the hunger for it, but not the means.

That's not universally true. I got my parents to use it and through that, my entire extended family uses it as our primary mode of photo-sharing. There are a few people in that group over 70 with paying subscriptions that know how to use dropbox more than almost anything else more complex than a word processor.

I wrote a blog post about this exactly! http://news.ycombinator.com/item?id=4656911

As of the time of this writing, there are 4 Portugese universities among the top 10. I would've expected tech-heavy universities to place among the top 10. Is this the case with these schools?

2 Universidade Técnica de Lisboa 3694 8298 points

6 Universidade de Aveiro 2244 4812 points

8 Universidade do Porto 2060 4538 points

9 Universidade Nova de Lisboa 1943 4079 points

Yes.

#2 is especially known for its technical institute (IST, where I study), which competes with another one in #8 for the title of the country's best engineering school (the one in Porto has been winning past years' programming competitions).

#6 is known in the country for its CS degree.

They are all portuguese tech universities. I have studied at #8.

Any word on if Dropbox will ever add the ability to sync arbitrary directories and not only the 'Dropbox' one? That's the reason I won't use their service. I want to see native support that doesn't require workarounds such as symlinks -- their competitors all offer this feature.

Do you have a philosophical objection to using symlinks? As of the last time I checked, you also need a symlink for Google drive.

That's what I use on ubuntu 12.04 and it is great. Only problem is that if your directories overlap inside dropbox, they count twice.

I'm rarely above 50gb though, so doubling a random directory (like linking my camera uploads to photos) is never a problem.

I personally don't have a problem using symlinks but it's a user-experience thing. I know plenty of less-savvy friends and family who have a need to backup and/or share things -- Let's say a 'Photos' directory or maybe a 'Taxes' directory. Telling those people they must relocate their directories inside 'Dropbox' is confusing and, depending on the source files, can often break things (in the event of application files that has a particular requirement for the directory structure)

Trying to tell those same users how to create a symlink is unrealistic and should not be necessary for a user-friendly backup & sharing platform.

I didn't want to name drop other competitors because that wasn't the intent of my post, but as you brought it up, I'm talking about more user-friendly competition such as Mozy, Carbonite or SugarSync.

Thanks for clarifying. I agree with you on the usability issues, but would have expected you to say "won't recommend" instead of "won't use". I have noticed a surprising number of non-technical (70-year old couple at church) people using dropbox, but that could be due to access to technical friends and family (their 25 year old programmer son).

The word is they won't: http://www.quora.com/Dropbox/Why-is-there-one-Dropbox-folder

How do "arbitrary directories" work across multiple computers? Multiple operating systems?

Thanks for the link, gives a great answer to their justification.

Other products (mozy, carbonite, sugarsync) handle arbitrary directories this by: You simply specify which director(ies) and where to sync those on each machine. You can also access all the data via a browser or on-demand downloads. A syncd directory only exists on a new machine when you specifically enable it. There's no automatic file overwriting or replacement issues. Sync is handled the same way as the 'dropbox' folder handles it.

Also, they all have the equivalent of the 'dropbox' folder which is the only thing installed by default -- exactly like dropbox.

Syncing a single arbitrary directory would be enough for me. It would be very neat if I could simply sync the Documents folder on OS X instead of the Dropbox folder, which I use as my Documents folder.

You can already specify the folder you want to sync.

You can specify a folder you want to place the Dropbox folder in, but you can't choose a directory you want to act as your Dropbox folder. I'd like my Documents folder to act as my Dropbox folder.

Perhaps I wasn't clear enough.

No, you can specify any folder, at the very least by editing the configuration directly (it's an SQLite DB). I've had it sync my documents too.

Great idea for a viral campaign

How will they reclaim the space in two years time for users who, for whatever reason, don't explicitly choose the files they want to keep?

They likely won't remove the files, just stop you from syncing until you remove enough files.

IIRC if you go over your limit you will not be able to add any more files. They won't delete them.

I believe the way it works is you simply can't add any new (or update existing) files until you delete enough stuff to make the space available. They won't actually delete your existing stuff. (well i suppose if your account is inactive long enough and they have sent you enough warning email they might, way down the road, simply delete your account. But lets face it, storage is pretty cheap per GB now days. I doubt they will find it necessary to do that.

When you're over limit, sync stops until you remove some items.

How much cheaper will that space be in 2 years, due to the advancement of storage technologies and proliferation of storage devices?

What other promotions has Dropbox done in the past?

That's a great idea to get users!

It seems that we can't use this in China.

And... NUS wins!

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