Dropbox Could Be A Bargain At An $8 Billion Valuation
techcrunch.com
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Selling dollars for 90 cents would be a negative gross margin business. Any business with negative gross margin should be valued as worthless
It seems the only way to really get a massive valuation as a "company" is to make sure you don't start making any actual money, otherwise people will stop harping about "growth is the only thing that matters, this valuation is accurate" and switch to "profit is the only thing that matters, this valuation is ridiculous."
Which, I guess, is a long way of saying "I agree with you". I think my theory does at least fit the patterns of conversation, though.
Dropbox stores files. On Amazon, by the way.
We don't know what Dropbox is going to be, yet, but it's already far more than a service that "stores files". It's the default way students and startups share files and work together. That's a pretty good market to build on.
How much would a company be worth if it was the default way most people worked together? What chance does Dropbox have of being that company? Those are the factors that justify $8B.
Dropbox? Very little barrier to entry. Just like them, you could use S3.
The real barrier to entry is not competition from other companies, it is building a great product/service/company yourself. If it were so easy to "use S3" to start a Dropbox, why is there only one Dropbox? What's stopping anyone from "using EC2" to build another Facebook?
How exactly do you explain how Google/Apple/MS/etc became Google/Apple/MS/etc?
The moat is much higher than it was 5-10 years ago. Do you have billions of dollars that you're sitting on that you could use to compete against Google/Apple/MS?
My point was about why people get cynical about a company that is actively making money but are more lenient on ones that aren't. When profit is an uninteresting point in the discussion, it tends to not be discussed.
If every risk paid off, there's no such thing as a risk. These investors are making the calculation that DB has some % chance of being in a similarly dominant position as Amazon is today.
All these operations seem so vulnerable to innovation that is quite likely in the next eight years. I'm skeptical about the super high valuations.
A client to something like OceanStore.
This isn't P2P in the common sense (end-user devices aren't talking to each other). And it doesn't eliminate the need for AWS-esque providers, even if their backend happens to be federated among multiple companies. To the end-user, there's zero difference.
Edit: Even the overview says "The providers automatically buy and sell capacity and coverage among themselves, transparently to the users." It's clear from the overview that it's meant as a way to achieve a better availability than a single company, not as some magical free P2P replacement.
If a company that is making $1B in yearly revenues is raising a paltry sum of $250m through investments I am not sure if they see themselves in good financial situation.
It is also important to note that they are not making $1B yet, but have just hit a run-rate of $1B. Having $250M in cash is a different thing.
From my point of view, Tesla brings me at least ten times the value of Dropbox. I don't even think Dropbox represents a problem that should exist long-term assuming a re-disintermediated Internet, which is where I am optimistic we're heading eventually. Storing and sharing my data using someone else's service is retrograde.
For all of my personal syncing I use BitTorrent Sync. However, because a few friends want to share files with me, I'm still a Dropbox customer.
I've literally never heard of anyone, company or individual, paying for Dropbox.
That's the Dropbox strategy - if you use it as an individual, you probably won't use that much. But, once you start using it in a social way - you quickly need to pay for a pro account.
>snapshot
>10 minutes of referral link + revert
>???
>45GB of free space for life
Hi. Nice to meet you.
Also - a combination of Dropbox + ARQ + Backblaze/Crashplan + SuperDuper gives you a pretty rock solid backup system.
8 billion is a bit of a joke
Now if they owned their own equipment in their own datacenters...
They are a service provider and want to make money.
They aren't. If they switched tomorrow or supplemented AWS with their own data-centers, you'd never notice a difference.
But, yes, I suppose "my supplier could lose their mind and destroy the product I buy from them" is a concern that needs to be evaluated.
And several competitors already there (and something called Box that is less consumer orientated?)
Add in the switching costs are low to non-existent (it is just git isn't it?) - surely their competitive most is almost non-existent - in which case their profits are going to constantly eaten by competitors.
What is it I am missing?
Why do we keep believing that a better, freer mousetrap has anything to do with valuation?
Dropbox makes it dead easy. People now Dropbox files to each other instead of email.
I trust dropbox. Dropbox has a great track record (with me). Dropbox is installed on all my tablets/smartphones/desktops/laptops. And, at $100/year, it's cheap enough that I'm not really inspired to bother price shopping.
This is clearly a case where Dropbox came in and won - and now it's time for them to invest aggressively, and make sure nobody else enters this market.
Now - I am not saying that people aren't using other systems - obviously Microsoft and Google have their products, and both Google Drive and Microsoft Skydrive are excellent products, that are technically comparable to what dropbox is offering. Apple's icloud is just annoying for knowledge workers, so I'm not going to include that in the same class - but, in terms of a generalized folder Sync Product - Dropbox has won.