Behind the founder: Drew Houston (Dropbox)

People just don't realize the wild journey that you have been on over the past 18 years building this company. It feels like there's almost been these three eras of Dropbox. The first era of you're killing it.

For the first several years, it was doubling 10xing every year, putting like, taping user counts that we printed out to the wall, and then running out of space on the wall, having to put 100,000 users, 200,000, 500K, a million, 10 million on the ceiling.

And there's the second era, which is. I'll just say everyone's trying to kill you.

We started getting all the incumbents, Apple, Microsoft, Google, all. All of them launched competing products. But weirdly, it was sort of like, you see the videos where there's like the mushroom cloud in the distance. You see it, but you don't hear or notice it. But there is. It was also clear that winter was coming.

It feels like the year 2015 was a pivotal year where things started to shift.

I'd start to hear kind of a louder set of critics inside and outside the company. Less than a year later, Google Photos launches. And not only does it provide a lot of the same value, but they also gave you free unlimited storage for life. And so they just totally nuked our.

Business model, end up fighting wars on three or four fronts against the big kahunas that have infinite cash and can do whatever they want.

So I killed Carousel, killed Mailbox, went all in on productivity. And I wish I could say, like, then everything got better. It was the opposite, actually. The narrative completely flipped on the company. Suddenly your employees don't want to wear your T shirt anymore. Everybody's looking to you, is wondering, like, how the hell did you get us in this situation?

Today, my guest is Drew Houston. This may be the most interesting and most useful episod episode of my podcast so far, especially if you're a founder or if you someday want to be a founder. Drew shares the very real talk story of what it's been like to build Dropbox over the past 18 years, including the ups and especially the downs. He shares stories that he's never shared before, the struggles he's been through that very few people know about, what it's like to compete with big tech, how he's thinking about the future of the company, and also what he's learned about himself throughout the journey. This is a very special episode that I suspect founders will be studying for years to come. A big thank you to Drew for sharing these stories and lessons with us. If you enjoy this podcast. Don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously. With that, I bring you Drew Houston. This episode is brought to you by Paragon the integration infrastructure for B2B SaaS companies is AI on your 2025 product roadmap. Whether you need to enable rag with your user's external data like Google Drive files, Gong transcripts or Jira Tickets, or build AI agents that can automate work across your users other tools, integrations are the foundation. But building all these integrations in house will cost you years of engineering time you don't have, given the fast pace of AI. That's where Paragon's all in one integration platform comes in. Build scalable workflows to ingest all of your users external data into your Rag pipelines and leverage ActionKit, their latest product to instantly give your AI agents access to over 100 integrations and thousands of third party actions with a single API call. Leading AI companies like ai21u.com, 11X and Coffee AI are already shipping new integrations seven times faster with Paragon keeping their engineers focused on core product development. Ready to accelerate your AI roadmap this year? Visit useparagon.comlenny to get a free MVP of your next product integration. This episode is brought to you by xflo, a game changer for customer facing analytics and data reporting. Are your users craving more dashboards, reports and analytics within your product? Are you tired of trying to build it yourself? As a product leader, you probably have these requests in your roadmap, but the struggle to prioritize them is real. Building analytics from scratch can be time consuming, expensive and a really challenging process. Enter Xsplo. Xsplo is a fully white labeled embedded analytics solution designed entirely with your user in mind. Getting started is easy. Xsplo connects to any relational database or warehouse, and with its low code functionality, you can build and style dashboards in minutes. Once you're ready, simply embed the dashboard or report into your application with a tiny code snippet. The best part? Your end users can use Xsplo's AI features for their own report and dashboard generation, eliminating customer data requests for your support team. Build and embed a fully white labeled analytics experience in days. Try it for free at Xplo Co. Lenny that's E x p l o.co/lenny Drew, thank you so much for being here. Welcome to the podcast.

Oh thank you Lenny. It's Great to be here.

I have been so looking forward to this conversation for so many reasons. One is I feel like people just don't realize the wild journey that you have been on over the past 18 years building this company. You told me a few of these stories when we had dinner recently, and I was just like, you need to come on the podcast and tell this stuff because I think it'll be really useful to a lot of people. And then also I feel like you're just like a very real talk sort of founder that isn't afraid to share what's really going on. I think a lot of founders don't actually tell you the things they're going through. It's always like killing it. We're killing it all the time. So for all those reasons, I'm really excited to have this chat and this opportunity to sit down with you and hear these stories. So thank you again for doing this.

Me too. And I've been a big fan of the podcast.

Oh, I learned a lot. Oh, wow. I appreciate that. The way I'm thinking we structure this conversation is as an outsider, it feels like there's almost been these three eras of Dropbox and tell me if I'm missing something, but essentially feels like there's like the first era of you're killing it. Just up and to the right killing it. Dropboxes on fire. And then there's the second era that I think fewer people know about, which is I'll just say everyone's trying to kill you. All the incumbents are coming after you. I like that. I do need to aside this is going to be good. Yeah. And. And then there's the current era, I'll say the third era of just rethinking what Dropbox could be. Does that sound roughly right as a good way to think?

I think that's right. Yep.

Okay, awesome. So let's start with this first era and spend some time here, which is, I think, the era most people know you for. There's like the big hacker news launch, the demo video, the thumb drive, you're always losing, the referral program. Everyone's always studying. Like, you're almost the epitome of viral growth. And so let's just talk about just things here that maybe people don't know about. Maybe some moments that are really important to you, memories that stand out to you. So maybe just start wherever you want to start about this time of the history of Dropbox.

I mean, I started Dropbox because I more I just personal frustration and it really felt like Something that only I was super interested in as far as like, file syncing and just really. And focusing on one customer, which is myself. And then, you know, the story of me forgetting my thumb drive on a trip to New York and things like that and coding. I won't get into all that. But then having a lot of. I had a lot of friends who were in Y Combinator and many friends who had, like, moved from Boston, where I was living out to California and doing that whole pilgrimage, or kind of maybe one way pilgrimage, and feeling a little bit left out. But then also having this idea for Dropbox. And then I think some of the most memorable things were the moments where Dropbox really felt like it was taking on a life of its own or maybe maybe like, belong to the Internet and not so much to me anymore. So, for example, we had a lot of success with these demo videos. First was just getting into Y Combinator. I made a. It sort of worked backwards from thinking about, you know, what does Paul Graham do all day? And my hypothesis was that he just like hits refresh on Hacker News like everyone else. Like me. Like everyone else.

This was you trying to figure out how to get Paul's attention? Yeah, I love that. What does Paul Graham do all day? Okay.

Yeah, well, because my first company was doing online sat prep and, you know, I was like 21 when I started that. But in the world, there's a lot that Y Combinator has in common with college admissions. You have like a million people applying for very few spots. And the more you can get some kind of hook or find some kind of side door. That was the thinking. And I was like, all right, well, I'll just put. If I could put this. If I could create some kind of like viral video, put it on Hacker News, get Paul's attention, that'd be one way to do it. And that was an idea I'd read from that was inspired by a book called Guerrilla Marketing that I had read, which is basically, how do you do marketing if you have no money? Which was a good fit for where we were. I say we. It was just me at the time. And sure enough, I made this video that was basically a pretty straightforward screencast of Dropbox, showing it working on my computer. And then it hit the top of Hacker News for two days, which doesn't. I don't think it can really happen anymore. But sure enough, we got a note from Paul saying, hey, this is interesting, but you need a co founder. Which was a problem because it sort of like. Because it's Clear that the YC application deadline for the next cycle was maybe a week or two away. So Paul was basically sending me a helpful note that, you know, I know you're not dating anyone, but you need to be married in the next two weeks if you want to get into yc. So I ended up finding my co founder, Arash. And, you know, there's just tons story after story like that in the early days. So I say the first chapter was. Yeah. Characterized by, you know, just feels like one. One moment I'm sort of paddling in the ocean alone on a little board. The next I'm just like a hundred feet off the ground on this tidal wave, trying to stay on.

How long does this period last of just like hacker news to something starts to change. How long is this kind of up into the right period?

It was the first several years. So I started the company back in 2007. I just, you know, I'd been 24 at the time, moved to California. And so I'd say his first, probably seven years from 2007 to 2014 were really that kind of crazy fever dream, you know, dot com experience where it's a blur. I mean, basically get into Y Combinator, then it's like, okay, we need to. After we finish Y Combinator, that culminates in demo day and getting your first investors. And so we got. We got a person at demo day was this guy named Pejman Nozad, who's a angel investor who also owned a rug store in Palo Alto. And he runs there. Yeah, he runs per. Now he introduces Sequoia. He came with us to the pitch, which is, I learned later, was unusual. You know, that was on a Friday, and then Saturday, Mike Moritz is in our apartment. But anyway, so we raise money from Sequoia, and then we then at that. And that was a seed round in 2007. So right after we finished Y Combinator, and then basically you start with a pretty narrow circle of what you're working on. I mean, right in the beginning, it's just really just like coding and talking to customers. But that circle kept expanding pretty rapidly. So in 2007, we're just building the first prototype of the product. It was in closed beta for about a year. And in 2000-2008, we launched at what's now TechCrunch Disrupt. Our demo totally failed. The WI fi wasn't working on stage. So a live demo is quite underwhelming. So that took a few years off my life. But fortunately we had accumulated this big beta Waiting list from, from basically doing this another version of that hacker news video engineered to be even more viral and kind of have all these memes and things in it. But similarly, like a few minute demo video of what's Dropbox and here's moving stuff between a Windows PC and a Mac and here's all these little Easter eggs about, you know, the HD DVD encryption key or Tay Zonde who was one of the first YouTubers or like Tom Cruise jumping on a couch in Scientology. All this stuff that was like at this was a long time ago, 15 years ago or something. But we put this video on Dig and Reddit and our beta waiting list went from 5,000 to 85,000 people overnight. So we got this initial seed audience by chasing that early adopter set. And then we also figured out these viral motions around our referral program and shared folders. And so Dropbox started expanding virally for the first several years. And then a lot of the engineering that we applied to the product of, you know, Dropbox can't have a bad day when you're, you know, when it comes to your running photos and tax returns and all the things people put in Dropbox. So we took a while to get the beta right before we opened, felt comfortable opening up to the broader public. But then we applied that same engineering mentality to these viral loops. And this was all the era when social media was exploding and Facebook and Facebook platform, like all these startups were setting kind of new land speed records for like fastest to a million users or 10 million users and things like Zynga. And all of this was built on this emerging playbook of virality, which in turn came from epidemiology. Like the study of the spread of viruses turned out to be a good parallel for the consumer Internet. Draw your own conclusions. But so, and then we had, we were like, oh, there's no reason this wouldn't work for Dropbox. And some of our early investors, Hadi and Ali Partovi, talked to us about how Facebook thought about growth. And then there was a lot of, there were a lot of great people in the early days who had really fine tuned and mastered a lot of that. And so a lot of we tried many things conventional and unconventional, but the things around virality and the referral program really worked. And so for the first several years it was just doubling 10xing every year, putting user, like taping user counts that we printed out to the wall and then running out of space on the wall, having to put, you know, 100,000 users 200,500 K a million, 10 million on the ceiling. So it was wild. And we. And it was super fun, but it was also super stressful. But going from, you know, maybe 7,6 million valuation in 2007 to 27 million in 2008, to then 4 billion valuation in 2011, you know, being on magazine covers, like, just that whole experience was wild.

The visual of the user numbers extending onto the ceiling is such a good one of just how quickly things grew. Okay, so let's transition to the second era. So things have been going great, keeps growing, obviously, challenges along the way, but it just feels like it's just grow, grow, grow. It feels like the year 2015 was a pivotal year where things started to shift. Does that sound right? Yeah. Okay, so, yeah, let's talk about that.

Yeah, maybe the end of the first era, the start of our, like, teenage years would have been around. Around 2013, 14, so. And maybe before that, 2011, 2012, we started getting all the incumbents or all the big platform companies, you know, Apple, Microsoft, Google, all of them launched competing products in one form or another. But weirdly, it was sort of like, you know, you see the videos where there's, like, the mushroom cloud in the distance. You see it, but you don't hear or notice it. So mostly it just seemed like nothing happened when Steve Jobs is, like, on stage in 2011 announcing iCloud, calling out Dropbox by name as something that will be viewed as archaic. And similarly, we always felt like we were in the shadow of the hammer of Google launching Google Drive, which had been rumored long before we even started the company. And so we were just always, for the first several years, we were sort of quivering, waiting for, you know, the shoe to drop and the products launched, but you would never be able to look at our numbers and see when that happened. And the press often writes about competition like, oh, it's a shotgun blast, when later I would learn it's more of a boa constrictor. But the end of that first chapter really culminated in us recognizing that Dropbox is. We experienced a lot of benefits of being this kind of product for everyone. And in fact, it would be kind of hard for me to describe in the early days who Dropbox is for or what it does, because it was similar to, like, you know, what's a phone for, what's a computer for? And in the beginning, that was a blessing because it meant that those viral loops would really work because pretty much everybody you would hit would have a need for something like Dropbox. Either a personal need or a work need or both. But we recognized even back then, before competition that hey, you know, people are using us primarily for things like backup, packing up their devices or storage. Things are. People are using us for photo sharing. People are using us as kind of a collaborative space at work and often in huge companies. So I've. And then we felt that there was a lot of tension between these use cases. So for example, the id, the ideal like file server replacement for an IT admin is going to look quite different from the ideal like consumer photo sharing app. And we also recognize things like, well, we're going to be competing in many cases with the device or the operating system. When you look at something like icloud, it's like, yeah, when you turn on your iPhone for the first time, it's probably not going to give you like an ad for Dropbox. So we're like, hey, we need to address some of these issues. So we and expanded to some new areas to diversify. And so the first of that was, or the first two things we did were after getting enough complaints from IT administrators asking us what the hell these photo sharing features were for, we pulled the all the photo sharing functionality out into a separate and new app we called Carousel. Where the basic value prop was phones to that point had, were limited in their storage by the amount of physical storage on the device. We're like, this is silly. You should be able to have your whole life in your pocket. So be able to store everything in the cloud but have the experience be as if everything were locally there through a lot of caching and sleight of hand and thumbnails and things like that. So as much engineering there. And then secondly we saw people were using us at work and we're like, well there's a lot of different adjacent workflows and there's a startup called Mailbox that built like the first great mobile email client, had a lot of funny parallels. Like they had.

Oh, that's right, they're famous for that wait list. That was, that's a really good point.

Which was crazy. And so we're like, I don't know, maybe this is going to be our Instagram. And so we bought those guys. And then 2014, I'm on stage painting this picture of Dropbox's future. I'm like, we're going to help be the way that like you remember your life. And we have um, where it be the, your productivity, the, the new productivity suite on your phone and all these things. But then it was, it Was this dissonance where there were so many things that were going right and that certainly the numbers, user numbers, revenue numbers, all just, we were sort of accidentally cash flow positive maybe a year after launching. But there was, it was also clear that, you know, winter was coming or that like, not all, not all things weren't exactly as they seemed. Because then the start of the second chapter, 2015, we'd start, I'd start to hear kind of a louder set of critics inside and outside the company. And, you know, I'd been think, standing for, thinking for a long time like, all right, man, we're really fighting wars on all these very disparate fronts, right? Where with storage, we're competing with the device to back up the device with photo sharing, we're competing with Facebook, Snap, Instagram, Google, Apple on productivity, we're competing with Microsoft and Google. And then there's a whole new cohort of companies like Slack. And then there's this experience, like one day I'm standing on stage talking about how all these carousel and Mailbox and everything are the future of the company. Less than a year later, Google Photos launches. And not only does it provide a lot of the same value and look a lot of the same, in many ways, very inspired by what we had done, but they also gave you free unlimited storage for life, not just photos, but video. And so they just totally nuked our business model in ways that were sort of bad enough in terms of just their obvious impacts, but even worse because it was so, like, easily anticipated. So, you know, so, so this became kind of a very public and personal embarrassment for me because, like, how could we not have predicted that or been out in front of that? And then that started to. That started this period, I'd say that was the beginning of chapter two, where it's like that we went from the company that could do no wrong to the company that could do no right, which was a big flip. So, you know, it's probably early summer, maybe late spring when Google Photos launched. And first I'm just thinking like, okay, this was a big miss on my part. How do we get out of this? We need to like, tackle some of these competitive issues much more head on. And then what's the problem? Well, the problem is that every incumbent is going to copy your product, they're going to bundle it with their platforms and then they're going to kill the economics. And that was clear what was going to happen with Google Photos, right? It's very similar product experience. Bundled with Android, bundled with all the Google all of Google's different touch points and then free. So that was problematic enough for Carousel, But I'm like, wait, this is going to happen, like, with everything that we're doing? Same thing with Mailbox. I had even pitched the founders to join Dropbox by saying, like, look, you're going to wake up tomorrow and Gmail and Apple Mail and everything's just going to have these swipes and snoozes, and it's just going to be part, the UI is not a good or it's not a durable source of advantage. We'll buy that problem from you. And that's exactly what happened. So I'm like, all right, even in theory, how do we deal with this? And I'd gotten the criticism over the years that Dropbox is a commodity. And investors in the early days would be like, hey, this is kind of a graveyard of space and kind of doa. And I thought, well, how do other companies deal with this kind of competition and, you know, commodities? So there's a Great book by A.G. lafley and Roger Martin called Playing to Win.

Roger's been on the podcast.

Yeah, Rogers. I'm a huge fan of Rogers. And I was like, all right, well, if we think we're selling a commodity, like, try literally selling paper towels, which is what Procter and Gamble and a lot of CPG companies do. And AG was the CEO of Procter and Gamble at the time. And basically he and Roger did this download of how they think about competition and markets and advantage. And a lot of it's like thinking really critically about where do you play and how do you win. So being very selective about the markets you're in and only being in markets where you can have a leadership position and then being really crisp about what is your leadership position. And so that was a good, very timely thing to read in terms of, like, all right, well, we're actually. Dropbox looks like a one product, but it's really participating in many different markets. And our big risk might be that we're the number two best thing in each of those markets, which would be a bad situation. Another really influential book was Only the Paranoid Survive by Andy Grove. And I'd been a big fan of Andy's. High up in Management is another great book of his, which is my introduction to management, Lisa Theory of Management. So just love that book. And then Only the Paranoid Survive talks about Intel's experience where they actually had something like this happen that I wasn't aware of. And we all know intel as, like, the microprocessor company, right, intel inside, at least in the, you know, 80s, 90s, but before they were in microprocessors, they were actually, they sold memory like Ram. And in their, in the 70s they were running into a situation where they had built their bit. They were really high growth, successful business selling memory. But then, then they had these Japanese competitors that were just building, building memory faster, better, cheaper, just on every dimension and potentially also things like anti competitive things like where the government might be subsidizing these manufacturers. And so they were this feeling like, you know, not only they might just be better at the game, but there's also not a level playing field. But meanwhile you wouldn't see it in their numbers like they're, they're still growing. It's just that there are these weird dissonant experiences where salespeople just suddenly have problems selling into accounts that used to be a slam dunk or things that used to work just stopped working. And this happens like, you know, like BlackBerry's and Nokia's best sales years happened in the years after launching the iPhone. So it doesn't, these things don't actually change immediately. And so Andy labeled these moments strategic inflection points for a company. And I'm like, yeah, we're definitely in a strategic inflection point. But they were dealing with like, okay, like our whole business is memory. How do we deal with this competition? And there's this little vignette where he and Gordon Moore of one of the other co founders of intel said, hey, let's pretend we're consultants to ourselves. What would we do? And what they immediately decided was like, oh well, we clearly get out of the memory business and put all of our chips on this sketchy little microprocessor thing that was much smaller but very high growth and potentially big market. And then they're like, well, you know, why don't we do that? Only problem with that is that's like saying it's like Google saying, yeah, let's get out of search and go on on Gmail or something or YouTube. So it just seemed insane. But they caution or Andy cautions in the book that like, look, most of the time CEOs want options, they want to hedge their bets. But you really want to do in these strategic inflection points is go all in on one thing. Or you know, as Mark Twain put it, like, put all your eggs in one basket and watch that basket. But what the, the implication of that? And I was like, all right, this, this makes sense to me. But man, this is, this can be painful. So we go away for 4th of July. I'm with my family in New Hampshire. I reread the book. I come back, I'm like, well, we really got to do it. Then I. So I killed Carousel, killed Mailbox, went all in on productivity. To some extent, that was a relatively easy decision because most of our subscribers, 80% of people paying for Dropbox, reusing it at work. But that meant foreclosing on photo sharing and consumer and storage and all these things that Dropbox had become synonymous with and, and to this day are some of the things that people were most recognized for. And I wish I could say, like, then everything got better as the opposite, actually. The, the narrative completely flipped on the company. The press started, you know, we should. We killed these new products. And then internally and externally, the narrative became super negative. The, you know, articles would come out every week or two like, oh, Dropbox is gonna be the first dead Decacorn. And then sometimes, you know, we've all seen this in tech. Like companies sort of get in. Get in this washing machine of neg of sort of self perpetuating negative press. And if it goes deep enough, I mean, Uber had this for a while later, you know, Meadows had this over their history. Lots of companies where you just can't get the monkey off your back. And then what? Because what the reporters end up doing is they basically, you know, park their metaphorical van behind your office, they interview all the people that you just fired, and then print everything that they say anonymously as if it were facts. And, you know, I'm not playing. I mean, there's a lot of truth to what the press are saying. So I can't really blame them or saying they were being unfair. But it immediately put recruiting into this deep freeze. You know, you're just in the situation. You've started this company, it's been super successful, and then suddenly, you know, your employees don't want to wear your T shirt anymore. And frankly, you don't even want to wear your T shirt anymore. It's just you, you completely take your pride in your own company, takes a big hit. And meanwhile, you know, we. I've talked mostly about the external market competitive forces, but inside, the company was a mess too. The business's revenue had scaled so much faster than our ability, than our ability to hire and sort of build the right infrastructure and operations internally. And so everybody's just kind of like panicking and being like, all right, well, good, Drew, we're not doing carousel. We're not doing a mailbox what are we doing? And the truth was like, if I knew the answer to that, we would be doing it. But it's just this is going to take some time to figure out. So it's pretty tough, you know, when everybody's looking, looking to you as the founder and CEO, looking for quick fixes and answers and also just wondering, like, how the hell did you get us in this situation?

Wow. So we're going to talk about how you are actually turning things around and the work you're doing now, learning from this experience. But I have a lot of questions about this part of the journey.

Yeah, yeah.

Just to kind of almost summarize the journey, it's like launch killing it viral. Find all these opportunities, find all these big markets. You kind of start three different product lines. There's like the enterprise use case, there's the consumer file storage use case, there's photo sharing, there's productivity. And then basically every big incumbent's like, okay, great, we're going to come eat your lunch. And you end up fighting wars on three or four fronts against the big kahunas that have infinite cash and can do whatever they want. It's interesting the way you described the Apple launch of just like it was this mushroom cloud that you didn't quite see for a while, but. But the Google Photos launch was like, okay, that was like more clear of like, okay, this is bad news. Is there anything. I know it's always easy in hindsight of like, oh, I should have done something different when Apple launched this thing, but is there anything maybe you could have done? Or is there, was it even possible to have adjusted course at that point? Or it was like, okay, this is tough and we need time to figure it out.

Well, we panicked about the Apple thing too, because that also sent, you know, that created a much smaller version of the sort of Tempest and a teapot that the Google Photos did. It was just much less public or it was just less obvious that we would be so in such, so out of position. And actually we were more surprised to the upside when, you know, it's Google Drive launched as ICLOUD launch, as OneDrive launch, and even as they build like version two, that we just didn't really notice that much of a problem. And, you know, I also studied over the years, you know, what happened in Netscape and companies like, or, you know, MySpace or these other cautionary tales. And interestingly, Internet Explorer was a thing that eventually undermined Netscape enough to sort of permanently throw it into a negative trajectory. But Internet Explorer 1.0, 2.0, even maybe 3.0 just weren't that good and didn't really do anything but Internet explorer like 4.0, 5.0 and all the bundling that really made a big difference or big negative difference. And then another thing that was interesting was so there's a big time lag where, between when these products launch and when they actually have an impact. Because often it's not so much the existence of the product or its availability, it's the sort of constant bundling or the constant iteration or you know, it's the boa constrictor. It's like in any given second it's not much tighter but you know, over the, over the following day, you know, you're, you're in a bad, bad place. And then, but another thing that was interesting was one cool thing we got to do in moving to California is you get to actually meet people who had been at these companies. And one of those people was a guy named Bill Campbell who was at Netscape during that whole period. And I had asked him, I'm like, man, that's really unfair. That sucks. What happened with Microsoft and bundling with Windows and all these things and the antitrust and this and that. And he looked at me and he sort of laughed and snorted and he's like, Microsoft did not kill us, we killed ourselves. And so that was the other half of what was the problem within Dropbox was a lot of our wounds were self inflicted in that we were struggling to keep scaling and launching all these products and the Dropbox products had kind of stagnated. And I started to learn the hard way that okay, yeah, this, I, I now understand what Bill is talking about because we are hiring all these smart peoples, but the things we would do as a company would seem really stupid. And then some of these things were me personally, like, yeah, I knew about, from reading all these different things but for, for whatever reason, I guess we just like kept, kept going anywhere. We were just like too confident in our ability to respond or we sort of got into the, lulled into this complacency where like oh well, you know, because it hasn't been a problem, it won't be a problem in the future. But I'd say there was something about the Google Photos launch that just really set things off kilter. And then, and then also for me personally, I mean, I think, you know, go from feeling pretty good all the time, good, but stressed out all the time, to mostly feeling bad all the time. And you know, I just remember like Leaving really trying to get away from the office for a little bit during this period. Kind of like picked my teeth up off the ground. The good news, I bought a place in Hawaii. So I was like doing that in Hawaii, but didn't feel very good and I, in any way. And then I learned I had to really figure out a lot of different things for myself to be the leader that could get us through this. Because mostly what I thought was, man, I felt like we'd been doing such a good job, but now, man, have I really screwed this up or maybe I don't know what I'm doing. And so I think maybe the. Some of the best. And then I had to really reset on a number of fronts. Like one is I just remember thinking like, you know, my 18 year old self would be like, what the hell are you complaining about? Like, you did it. Like, it's so great. And yet I felt so bad about things. And so I'm like, how can. I'm like, yeah, both of those things are true. Like, how do I navigate that? And I think one, one part that was really helpful. Sort of getting a sense of equanimity basically and doing a lot around like mindfulness and meditation to sort of distance. One thing that happens when you're a founder and your company succeeds is your identity is fused with the company. And so it's easy to get in a situation where you only feel good if the company's or however the company's how you feel is how the company is doing. And you need to sort of separate that a little bit. So what that looked like for me is recognizing, yeah, there's really not an easy button that keeps things up and to the right forever. And most of the entrepreneurs that are like my heroes had various periods of wandering in the desert. Those things, instead of just being problems, were probably the crucible that forged the people that they became. So the presence of badness is not necessarily you are bad. And it's like, yeah, no, you're just getting your stripes as an entrepreneur. And people were really helpful during that period. So, I mean, I mentioned Bill Campbell. He was nice enough to. We just stayed in touch and he would take me out to dinner every now and then and I would be freaking out. But I was always surprised. He'd never seemed to be freaking out. And mostly he'd just be saying like, all right, he sort of like dust you off and kind of smack you and say like, get your ass back out there. And he's, yeah, he was literally a coach of you know, the Columbia football team. But in addition to being a great technology executive and advisor to the many of the great founders that I looked up to. But, you know, he would just sort of. He was really helpful because he sort of helped me believe in myself even when, like, I wouldn't believe in myself. And then people like Andy Grove, who had written all these books, I'm like, well, at least I'm having this problem. But, yeah, then that raised a question for me. I'm like, okay, I'd been through this chapter one, where everything's up and to the right, but I sort of ran out of, like. Like merit badges or, like, Xbox achievements to collect. Like, I was like, we have.

We.

We did it. We got the product to this many users, we got it to where we got this valuation. Or let me back up so my whole life and. Or it's common, I think, for a lot of founders, especially, you know, you get good grades and stuff, you follow a pretty linear path from childhood, from, you know, first get the right test scores, then get into the right college, get in the right college, take the right classes, get the right internship, you get the right job. And early startup life is like that a lot. It's like, okay, have an idea. Find a co founder, get into Y Combinator, get funding for sequoia, launch an MVP just in 10 million 100 million billion valuation. And I felt like we had cleared all that. And so actually, one of the other problems, like, I don't even know what Dropbox needs to be, and I don't even know what I need. I want to be in the world. And so part of this was also, like, sort of reconnecting to some kind of sense of purpose. Because I. If I was really honest with myself, I was like, well, I'm just, like, checking boxes and sort of advancing and leveling up like a video game or something. But now I'm here. I'm like, all right, what is it? Just big numbers? Bigger. It's also not that fun to just launch something that you put your, like, soul into and then just have it get crushed. These competitors. It's even worse when you're bringing all these hundred other people who worked on that thing through that, you know, meat grinder too. So, you know, are we just inventing things 10 minutes before Google and Apple do? If not, what are we doing? And then if we're really, really honest with ourselves, I'm like, I think it's kind of hard to argue that no one would have invented, like, cloud photo gallery that wasn't constrained to your local storage. So I had to like really rethink like what, you know, what does the company need to do? That actually took a longer time to answer than I wanted. But then also just what do I want to do? And I was like, well, you know what? I'm going to do this. What I ended up settling on was like, look, kind of coming back to my 18 year old self. I'd be like, I would like, all right, stop complaining. This is like a pretty good situation. You wanted something where the learning curve would be steep. Here it is. You have to do this really meaningful work to build things for millions of people, Work with awesome people, work with awesome teammates. You know, there's all these good things about it and you've like chosen this life. So stop complaining about the burdens because it's really dangerous if you start to resent the job or feel like a victim because that's just like corrosive to everything else. And you can get in this spin cycle.

What helped you come to that place? Because that sounds like a very hard place to get to and a very important place. Was that like Bill Campbell advice? Was it a lot of you, how long did it take you to go from this is not going well and that life sucks to okay, let's look at it this way.

I think there are a couple unlocks that were pretty fast. But I think, you know, again, this was not like, oh, then I felt better and we lived happily ever after at all. There were some moments of recognition where I was able to like, I always try to like get away from kind of the mayhem or the whirlwind and recenter myself and do think weeks and things like that. And so those are really helpful because I felt when I diagnosed like, well, when I'm on this treadmill and just like firefighting or how did I miss this important thing? It's like, well, the, basically the root causes of being on the treadmills. I was just like, had no. I was like too busy firing to aim. And then like, I thought I would do my aiming on vacations and things like that. But like, no, it really needs. I need to get off the treadmill every now and then and make the space to really address some of these bigger questions because it's not like I didn't forget about them. They just were like always below the fold on my to do list to deal with. And then until, you know, you know, a few years go by and you're like, wait, yeah, we really were just strategically out of position. The other way I sort of came to some of these conclusions. There's a combination of things. So I think picking up like a meditation and mindfulness practice, having therapists personally having coaches, having friends and mentors, other founder friends. And so I wouldn't say it was any one thing but I think it was a whole, you have to like build this whole ecosystem of support around yourself and recognize like no one's going to do that for you and it's super important. And then to the other, you know, Bill's other point is like yeah, we're killing them or the Microsoft wasn't killing us, we were killing ourselves. I think, you know, having to ask some hard questions to myself of like yeah, this, some of these wounds were self inflicted. This, you know, as much as there might be Microsoft I could look at this and say oh, Microsoft was mean or Google was mean or Apple was mean. But I'm like at the, you know, I drove the ship towards these rocks. So like, you know, there's no one I can. That's one downside of being founder CEO, you can never, you don't really have some, you can't blame the last guy. I think every founder has to really one of the big questions every founder has to figure out is not just like how do I have equanimity, what's my purpose? But then also like what am I doing that is destroying the company? And because everybody's got strengths and weaknesses, but as CEO, both your strengths and your weaknesses are massively amplified and a lot of blind spots in your personality can become huge cultural dysfunctions in the company. And so step one to dealing with that is like building awareness. And one thing that kind of floated around the company for a while was the enneagram which on a surface is a personality typing thing like Myers Briggs. I often describe it as, it's like Myers Briggs but actually useful. The way it works is it's a personality typing system. You get a number from one through nine that's kind of your dominant personality. There's nine types that are numbered. It's similar to Myers Briggs in that Myers Briggs has 16 types of letters like ENFJ or different things. But I find that Myers Briggs is more descriptive. So it doesn't really, it tells you like, okay, you're an introvert, not an extrovert or vice versa. You're judging instead of perceiving. But I could never really work out what that meant. And so it's descriptive versus predictive or causal. Enneagram I find is the motivations or the theory of it is really about your fundamental motivations. Like, what are you. What are you running towards, and what are you running away from? And the theory goes, like, through some combination of your wiring from your genetics and your early childhood, you're kind of. Your autopilot is kind of fixed after your. After your childhood in that, like, you just have instinctive responses to things. Now it's autopilot. Doesn't mean it's your destiny. You could override it. But it's super important to become aware of, like, you know, what. What you're. What is. What are you running from and towards? And the enneagrams are. Gives you a really good map to do that. So. And so I'm reading this book, and it starts by, like, you type yourself, and I'm kind of rolling my eyes. I'm like, okay, I'm a seven. What's a seven? And then you read. Each type has its own chapter. And you read the chapter, and I was like, oh, my God. This, like, completely describes, like, who I am down to my core. And I was like, almost, like, looking over my shoulder like, who the hell did this? Like, I thought I was a special snowflake, but apparently not. Okay, I'm listening. And, you know, and it dovetailed with a lot of my early coaching experiences, which are, you know, you do a360, your coach sits you down. They're like, here are your strengths. You know, in my case, it'd be things like, oh, you're really creative, and you like new ideas. Like, that's okay. And second, you really love people. You build great relationships with people. I'm like, okay. Third, you're really comfortable in chaos and resilient. I was like, this coaching thing is great. See, that was my first coach. And then you flip to your development areas because no one calls them weaknesses. It's like, all right, one is, you're bored by routine and really undisciplined. Second is you're really conflict avoidance. And third is you're like, you're intuitive, but you're also pretty chaotic and don't create enough structure for people, so they're mostly confused. And when you sort of pair the two together, you're like, oh, wait, yeah, I'm creative and like new ideas when I'm bored by routine and, you know, bit of a space cadet. All right, you love working, you love good relationships with people, but you don't want to make them unhappy, so you don't tell them the truth. Basically, about things that are difficult to hear. You know, so. And it's going to be a similar kind of map of things depending on your personality type or circumstances. But the enneagram was that map for me to be like, okay, I've got these things that are genuinely great, but I need to like address but, but, but these downsides of like the company's conflict avoidance so we're like not telling the truth and then making a bunch of predictable mistakes. Or I'm creating this really chaotic environment where people don't know what they're supposed to be doing. Like that's a problem. Like my personality is like quite directly going to torpedo the company unless I do something about it. The same is true for any founder. It's. And you know, it'd be, I'm a type 7 and see enthusiast. It's like, you know, again, central casting is like, you like a lot of new things and creative and love just interesting things. But then kind of a space cadet fomo, you know, some of the shadow side of it. And every type has a thing like that. So really understanding. Okay then I was also just like frustrated in the day to day of my work. I'm like, yeah, I'm not really getting to do these like creative things or I'm like too busy firing to aim. I'm like missing these like bigger picture things that are really taking the ship way too close to the rocks. Like, okay, then I need to then understand what those things are and either like work on myself or like hire the right people who don't have those issues or one way or another, just like make it so the company is not so exposed to like my personal dysfunction. And so yeah, it was a whole kind of constellation of things like that where it's like, all right, we have to get. I mean after this whole tailspin, like, we got to work. I'm like, all right, first, business issues were just like the most urgent issues. We're just like blowing all this cash. We need to get the P and L to look a lot better and get out of this land grab mode or fighting with Google on giving more free storage away or just being in these fundamentally unprofitable things. And so we did that. We cut the unprofitable parts of the business. We turned cash flow positive in 2016, maybe several months after this reckoning. And that set set the tracks for getting to a billion run rate in 2017, going public in 2018. We had to come up with a new vision and mission for the company, which I'll maybe save for for chapter three and Then I was also just trying to do things that were, like, more that helped sustain me through the difficult things. Like I'm like, well, I an engineer. As a little kid, I was coding since childhood. I knew I wanted to be a founder. I didn't know I wanted to be a CEO. So I sort of backed into being a CEO. And then so I'm like, man, there's a lot of. There's a lot of tedious things about being an executive. So I was like, I would find ways to, like, automate tedious parts of my job and learn machine learning in 2016, 17. And that. That ended up being really important later on. But then also, it's just like, coming to terms with my job and, you know, what I wanted to do from a personal perspective, which included things like, you know, I'm lucky in that being a CEO is, you know, I always wanted a steep learning curve in a lot of professions, like in sports or, you know, math or chess or certain academic fields. Like, you kind of peak in your 20s or 30s. CEO is not like that. You can kind of go your whole life and still not be, like a master. So I'm like, you know, for better or worse, it's pretty cool that I can. Can do this kind of work. And then, you know, I. I don't really get that much out of just, like, chasing bigger numbers. I just really want to. Like, the thing that is my favorite thing about Dropbox is like, looking over someone's shoulder in Starbucks and seeing if the little Dropbox icon is there. Like, building something that becomes a verb, like taking some of the pain out of technology. Things like that. So really reorienting. Yeah, it's not about just like, the score, like, external scoreboard as much. It's more about like, the craft of being a great CEO and, like, building things I'm really proud of are really making a difference. And so that those kinds of things, none of them, all kind of coalesce. It's sort of like this lens that, like, slowly and stubbornly comes into focus. But making the time to have some of that reflection was super important.

So much of what you're describing makes me think about founder mode in a lot of different ways. One is your point about how you didn't have a lot of time to think about where things might be going and how the markets are shifting, and that has to happen. Basically. No one else is going to do that if it's not you. Also, just this idea of how much of the solution was you understanding yourself better, reflecting on where you have strengths and weaknesses. Also, I'll mention. So before I had Brian Chesky on the podcast, I asked you, what should I ask Brian? And you asked me to ask him basically about Founder Mode, which was the first time, I think, you talked about it. And now it's like, this whole thing. And so you've been in the middle of all that for a long time, I guess. Just. Any thoughts on, like, the importance of that and how you think about that as a founder?

So Founder Mode means a lot of things to a lot of people. So it's. It's sort of. It's a bit of a Rorschach test. But I think, like, parts of it that really resonate with me are there's this evolution you go on as a founder where you sort of don't know what you're doing. Um, and. And everything is new and unfamiliar. And then you're also, like, very involved in all the details because there's no one else to be involved in the details. Like, you know, it's not like someone else is, like, coding for you if you're just, like, in your room at home. So. But then over time, you have to. There's this, like Ben Horowitz calls it, the products, the product CEO paradox, where companies. The first way that companies die is from founders not letting go. And so you need to learn to scale yourself and hand off your responsibilities and operate at a higher level of abstraction. But then the second way that companies kill themselves is the founders get too far away. And I felt like I had done that. That's a big part of the problem that led to a lot of this chaos at the end of chapter two, where I was like, oh, man, I. Yeah, I'm on this treadmill, I'm doing stuff, but I'm clearly not sending the right direction, or people are confused or just, you know, it's not working. And I was, like, too distant from the product. And then, you know, there's all kinds of issues you can get into as you hire an executive team and get that to function well. And so I think there's a debate to what extent Founder Mode is sort of a mindset. Mindset or a destination. To me, I think the destination part is pretty important. I think it's like after that learning journey, suddenly you have this conviction from actually knowing, from having lived experience and kind of navigated a lot of these things, where suddenly it's a lot clearer. You don't have the same kind of confusion or learning curve problem. And then if you start out Being too far leaned in, then you lean out too far. And I think a lot of that founder mode flip is when you're like, hey, this is not the company I want to be running. Things need to be like that. I need to be more involved, need to stop making excuses like I, you know, I need. And it's basically I also don't want to like apologize or negotiate all the time for the kind of company that I want to be part of and run. So I had that too over time, maybe in more towards like a chapter three some of those elements of, you know, and I think part of I don't know if there's a way to get to this destination without some level of pain. You know, certainly the Elon's and Steve Jobs of the world had sort of big, big spans of like wandering in the desert where they were not as cool as they are today and like the things they were doing weren't working and they managed things very differently in that sort of post wandering phase and suddenly had this level of like conviction and intuition that they might not have had before or they sanded down some of their more like counterproductive instincts. So, so again there's a lot of surface area. I, I don't know if anybody has a common definition to founder mode, but certainly that evolution, I mean that way I think about it is like it is very difficult. Like one of the hardest things when you're running a company is that you're hiring all these execs who, the only thing you know is like they know a lot more about their subject matter than you do. And so like what does it even mean to manage, you know, bring someone in, bringing an exec who had managed like a double digit billion dollar P and L at Google and like what am I supposed to tell him? How sales works or marketing or like. But you end up, it's easy to be too leaned out there where you're like not really giving sending clear direction. And so you know, each founder is going to have their own sort of things that are easy, things that are harder. Step one is being aware of them and then having, being intentional about how do I like offset those things. And then, and then you eventually get to a point where the learning curve flattens out. You actually do have some experience and you can have a lot more conviction about where the, what, what the company should do and where you want it to go.

Awesome. The way you described it to me, which has really stuck with me is like as a founder, as you said, you're in There leaning in, doing on top of everything, micromanaging. Then you lean out and hire execs that you think are smarter than you and delegate more. And then it's like, oh, things aren't going great and come right back into it.

Well, and specifically it's often well intended or it's often even not conscious. But as you hire these execs and then you also build up an HR function, you get coaches and things like that and then things are not going well. One thing that can happen is you start collecting all this feedback and people are like, wait, if I can give Drew some negative feedback, then maybe I can display some of the, you know, it's, it's sort of easy to get in a situation where you're sort of being. I'm my, my to do list of like problems and just like weaknesses and flaws I needed to work on was like super long, like way longer than anyone else's. And on the one hand I'm like, well, I want to be, yes, I'm wholly accountable and responsible for everything in the company as its CEO. So that's not wrong. But you can sort of end up just like taking on, carrying too much of the water. And so a lot of it ended up having to be kind of this like pushing back a bit and be like, all right, yes, there are things I need to work on but that can't be an excuse for my leader, my, my execs to somehow evade accountability. So there's these sort of systemic things that can creep in for sure where you, and then you end up, you get this feedback and you're like, now I'm doing all this behavior or now I'm behaving in ways that I don't think are really right or I'm like, everything is just like negotiated compromise with everyone on the roadmap or on how we behave or strategy. And so you need, at some point you end up like blowing that up as a founder and that was certainly my experience.

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Well, I mean, my playbook as an entrepreneur is to get, like, really frustrated by something and then try to solve that personally. So I'll cover the team and sort of the. What direction we ended up choosing perfect kind of together. So, you know, my first frustration was like forgetting a thumb drive and then wanting to, like, never have that problem again. But my second big frustration was like, man, I am run this. Scaling this company is, like, way harder than it should have been. And thank God I had people like Bill or Andy or friends, mentors to guide me along. A lot of people don't have access to that. But, you know, I. I feel like I could have, like, written myself postcards. First things you lose when you go distributed is context, right? We sort of get a lot. You get a lot for free from osmosis. I'm just like, oh, hey, how you doing? What's. How's this? Or, oh, do you have that thing? But then when you're remote, then a lot of that gets replaced with, like, endless video meetings and lots of slack messages, which is super inefficient. And one thing that was clear across the board from all the successful remote first companies was you have to be more documented, but then you have a lot more documents. And so we were like, this started turning up very obvious problems, which is like, wait, why do I have one search box at home and 10 search boxes at work? Why is it easier to search all of human knowledge than my company's knowledge? Why is this problem getting worse, not better, every year? Because if you think about, we've got 10 search boxes that you search 10% of our stuff. I'm like, we should just fix this. And again, Even just as a frustrated user, maybe 2018, 2019, I'm having this problem myself. I'm like, it's really hard to find stuff. Plus there's all this cool vector search stuff and deep learning stuff happening. Even before chatgpt. I'm going to make a personal search engine that takes this. So I shouldn't have to just write, you know, if I search for strategy and the title of the document is plan, it should sort of like get it right and the matching should be fuzzy. And then I built something like this. I'm like, oh my God, it like completely works.

And you built this yourself, you're saying.

Yeah, this was like a. But it sort of went nowhere for a couple years. But then after Covid and after, like we're dealing with all these like information problems, I'm like, yeah, we should like be the company that helps you get the right information at the right time to the right person. And I bet that like little hacked up search engine thing that I, that I made could be part, might be an ingredient to this. So we bought a little company called Command E that was doing universal search and we created this new product called Dropbox Dash. And basically Dash connects to all your different apps, it gives you universal search. And then after, and then obviously after ChatGPT, not only do you can you do conventional search, but you can actually, you can ask questions in natural language and answer a lot of the questions that ChatGPT can't because it's not connected to your stuff. So if you ask ChatGPT like, where's my, when does my lease expire? Where's that slide from last year's product launch? Can't tell you because it's not personalized because it's not connected to your information. And so we did all of that for this whole connector platform where it connects. We indexed the known universe of SaaS. Apps have this kind of intelligence engine that brings all of it into a common representation and lets you do conventional search, natural language search. And then more than that, we want to organize your working life for you. And stepping back even further, often it happens that a company starts solving a problem and that problem is never permanently solved. So in a lot of ways, Dash is the biggest and best embodiment of solving the same kinds of problems. I started Dropbox to begin with because on the one hand I was talking about thumb drive, but I wasn't really. If you think about the higher level job to be done, I was like, no, the real issue is that it's super hard to Find my stuff and organize my stuff and share my stuff and secure my stuff. In the beginning that was like my stuff was my files and the scattering was across devices. Now the stuff is like tabs in my browser and cloud tools. But it's a lot of same problems. We've talked a lot about search, but then organize is still a big problem. Like the idea of having there's no desktop folder or desktop as in the physical realm when you're in your browser, right. It's just sort of this ocean of content that sort of washes by you and then you get tired and you nuke the whole environment. But there's nothing to come back to. There's no collection concept. Right. And files have folders, songs have playlists, links have. Right. So if you want, if you're getting ready for board meeting or remodeling a house, there's no common container. If you have like a Google Doc and a 10 gig 4K video and an airtable, this is like a new problem. So Dash also helps, has this thing called stacks and has basically smart collections that help make sharing a lot easier. But again, a lot of this was sort of an intersection of like, yeah, well, how has work changed since COVID What crazy little science projects have I done then? How should one find and organize and share their information in the cloud era? If I were to build Dropbox today, what would it look like? And Dash is first part of the answer. And so we're super excited. But we just launched it like six or seven two months ago and signed up our first customers, and then I can come back to just rebooting the core business too. So I think one of the big challenges or lessons from this whole period is that one is as part of the problem we had with competition in the sort of chapter, two was external, but a lot of it was internal, where we just couldn't organize ourselves effectively. And the business has scaled so much faster than our ability to manage it. First is recognizing this is not an unusual problem. And many companies, not all, but certainly many, and actually many in SaaS, SaaS productivity have this sort of sophomore slump where you have a super successful first product, but then it's challenging to build like the next, you know, the next platinum album, right? So, you know, Dropbox has fallen into that category. You could say other, you know, zoom, Slack, others. So first it just, yeah, like, it's just like this is not like, you know, it's easy to sort of feel bad about it yourself, but like, no, you're not. This is Actually a very common problem. And then there's a lot of solutions. People devise lots of solutions to this. So part of it is structural. So you have to. Your company has to go from a pretty fun and stable state of like a functional organization where you have engineering and product and design and there's one product and there's one customer and everybody's work, you know, ro in the same direction for the same team to. Then when you have like multiple products, then you have all these conflicts where you know, how much should we invest in the core business versus the new thing? How much you know, who should have authority in the company? How do we. You try to do. You try to build multiple products in a functional org, but then, you know, you lose accountability because people are like, well, I'm. I'm spending a lot. I'm trying to make Dropbox work and I'm trying to make Mailbox work and I'm trying to make paperwork and all these things. And so then you respond by sort of breaking up into groups or business units. So we have kind of a product, business unit, product GM structure. Then you have to refactor things to have like a common technical platform and all the GNA functions. So there's sort of, there's this metamorphosis and maturation you need to go through that's mega obvious to experienced people. And you're just totally blindsided by this if you're solving it by trial and error. So it's a great book zone to win that talks about some of this, what needs to happen internally by Geoffrey Moore. And then there's a lot of cultural problems that set in and we just touched on some of them at high level. But whether you're in a company or an empire, a civilization, what gets you to the top turns out to be pretty similar things. You have sort of this like, you know, outsider challenger mentality where you know, you have to eat what you kill and the odds are against you. And through like hard work and learning and grinding, you start moving up the curve faster. But then once you're successful, then you. There's a temptation to take the foot off the gas or enjoy the finer things in life or just focus on other things, be it other than what got you there. And so I think what, you know, we experienced, many other companies experience, Bill Campbell experience in Netscape, this sort of seeds like success plants the seeds of failure in terms of like complacency or entitlement or taking your eye off of what got you to be successful in the first place. And so, yeah, I kind of went from earning a lot of the early stage startup founder merit badges to earning the stagnation and irrelevance merit badge and now the turnaround merit badge. And part of that is the turnaround playbook. Like, okay, first it's just getting out of this delusional state where you think you're great, sort of splashing cold water on everyone. Be like, look, we haven't shipped any last three years. The only thing our customers have really meaningfully seen from our product is a price increase. We what the hell are we doing? And so, you know, and a lot of it is like getting back to like, hey, we have to focus on craft. We have to embrace like a growth mindset and learning. We have to stop blaming external factors or displacing blame. Like, we have to be a high agency culture. And so there's a cultural transformation that you have to personally embody and be clear about. And then, you know, in our case, we had to like reboot the whole exec team. So we've, you know, we've had all the time getting the right kind of leadership team in place for sort of the end of chapter two and three. And part of what happens in conjunction with a lot of the cultural stuff I just talked about is also you can have this as a. The talent flywheels flying forward and flies in reverse. You have a new set of issues where you get all these amazing people in the company, but, you know, they want to work for Facebook, not MySpace. So you start having retention problems when the narrative goes negative. So we start like bleeding talents and then not. And then it's also really hard to hire people for the same reasons. And especially, you know, as I think about one of the big, big lessons from chapter two that we've addressed in chapter three, the seniority gap is something that can accumulate because the talent can be. Much of the talent can kind of fly to the next shiny thing. And what you do in response typically is like, you promote a lot of people internally, which is sort of good for them. It seems good for them in the short term because they're just getting a lot more authority and responsibility quickly. So people like that on day one, but it's a problem because suddenly people are solving problems through trial and error. Or things may be new to them that are not new to the industry and suddenly known, known to the industry are like unknown unknowns to those leaders. And then usually you can get around that by hiring a layer of experienced execs or having enough of them in the company. But in the sort of talent wars of the late teens, we were in the situation, as were many companies where any exec you talk to with any experience had like 5 offers from FAANG companies for like 3 times the comp and a third of the workload or like 10 offers from pre IPO startups at C level roles. And these are offers in hand. So the only thing that really worked to even just keep the lights on was basically giving people double promotions so that they could justify someone who's a director at Company X, like making him a VP at Dropbox. And then you had to do that because they literally had offers in hand of many millions of dollars a year and otherwise you just hired like no one. That cooled off a lot after the correction in SaaS, after we got more of our kind of vision straight and certainly after we've been working on things like Dash. But that seniority gap is really rough where you actually, where you need to have enough experienced people in the company who can then train your high potential people. And again, that sounds obvious, but it's like very difficult to do that in an environment where the talent flywheel was going in your direction and then starts flying away from you really quickly. And then through the battlefield promotions and these sort of like double promotions on hiring, you can end up a situation where there's a huge kind of voltage drop in terms of like people's matching between what your company needs and what they know how to do and.

You.

That also doesn't mean like hire only experienced people either because then you're sort of splicing in a lot of like outside DNA into your organism and. But what you want is to keep it like roughly in balance. I mean, you know, 60, 40, 40, 60, 50, 50, whatever. But your high potential people also lose out if they don't have experienced people learn from. So that's a little bit, I think that was a big part of the stagnation. Again, it's not because of people, but this was something that I was doing to my team. So it's not them or certainly on my watch. So. But I think it's a dynamic you have to be careful of. Like, do we have the right balance of like, you know, people who are doing the, who are like super high potential and talented but doing their thing for the first time, you know, are they, are, are they paired with people who have been there, done that this is not the biggest job of their life and that they can help those people up the learning curve faster such that the Aggregate learning curve or the aggregate learning rate of rate of your company is what it needs to be.

Man, I feel like there's a book here of lessons for founders, things that you never hear about until you have a found mind.

The seniority gap.

Like that's one of so many, you know, people think about becoming founders, they start companies, oh, I'm going to start a company.

There we go.

And then, you know, they think about that first part of the journey that you talked about and most people don't even get that part. And like the best case scenario is you experience a ton of growth. And then like the way you described it to me previously is like, you kind of hit the final bosses where showing all the success and they're like, oh, I see there's a big market here, let's go after it. And you're battling Apple and Google and Microsoft and Meta, and a lot of people don't think about that and how that's the future if you do well.

Yeah, every time you move up a league, your reward is a stronger and better opponent and potentially a more unlevel playing field. So, and, and like you, you know, that's just the way it is. Like, you know, and you can't control that. All you can control is how you respond. And so you want your company's response to be to like, embrace that challenge and use it as a mechanism to get stronger. Uh, easy to say. Hard to, Hard to do.

Yeah. So maybe just to start reflecting on some of the lessons from this journey, because there's a lot here. Uh, like one question people may be wondering is, is, should I, should I even be a founder? Should I start a company? You know, a lot of people, like, there's a lot of pain that you've been sharing of the challenge of starting companies. What do you tell people of that? Are asking you, like, hey, should I start a company? Is, am I right to be a founder? Is there any advice there that you could share?

I don't know what made me want to be a founder. I just sort of showed up that way. So and so there's probably some like chemical imbalance of some form that causes people to do it. But I, I had a lot of kind of insecurity about should I be a CEO? And because coming from the technical side, because I was like, I can do the engineering and technology, but all I know about being a CEO is like, I do not know how to do all of those things that CEOs do and I do not look like that. I do not Talk like that, it's intimidating. So I think first is, you know, it doesn't have to be like an all or nothing decision. I mean obviously it's a, it's a all encompassing decision to become, to start a company. But you know, you'll have many points along the way where you can keep calibrating. And I think the biggest thing is, or advice I got from one of my, the founders of a company where I worked was like, I was like, oh, should I be CEO? Should I not be CEO? Should I be cto? He's like, look, just try it, be CEO, see how it goes. And you know, initially I thought I'm like, all right, well I'm going to get the company to like know 100 million valuation and the trend will just be going faster, faster and faster and faster. And instead of just getting thrown off of it, I'll just like hit stop and like retire. And what I, and I thought that sounded like a great plan. But then moving to the Bay Area, you suddenly meet like, you throw a rock and hit 10 people who have done that. And what do you learn? Like there's. This was just shocking to me because I talked to one, you know, one of the advisors I mentioned earlier. He's like, yeah, the day I sold my company was the saddest day of my life. I'm like, what? You know, as a 24 year old. And he's like, yeah, well I just felt like the company had kind of drifted away from what it was supposed to be and I just didn't like, I just, you know, I think there's certain in the trough of the founder mode, trough where you're so like, wait, things are like screwed up and it's on my watch, but I'm not really sure what happened and what do I do about it. So I think burnout is the biggest thing that will sort of kill you. And so I think that's why like these coping mechanisms and like getting your own head right is important. But if you do that, then it's also this like amazing experience. And then often so many founders go back and start another company and another company and you don't have to. But there's a, but there's a reason that people do that because there's just a lot of rewarding aspects of it. You know, building great things with great people that impact huge populations. It's like a really what I found is that founders keep doing this because they love it in some way or at least have like a love hate relationship with it. Or can't imagine something else that they would otherwise be doing. And I'm probably the same way. But I think to get through that, you have to like, you know, Ben Horowitz also said the hardest thing for a CEO is to manage your own psychology. And we've talked a lot about, like, yeah, first you have to be aware of what your psychology is, is. And then how do you make sure you're not like, resenting or hating your company or yourself and view. And I think that the hardest thing for a founder, like, challenge is not optional. You're going to be challenged, but the suffering is optional. Like, you don't actually have to suffer. I mean, look, there's like crunch periods or times where it's like taxing. But, like, it doesn't have to be this like, experience, like suffering all the way or burning out or being really angry and sad all the time. Although, you know, certainly my experience that I did get in periods where I was just like, sad and angry all the time. So you need to figure out how do you work your way out of that?

So along those lines, I'm curious, what. So you've shared a few things that have helped you level up as a leader and push through that. You mentioned meditation, Bill Campbell, a coach. You mentioned a few books. What if. What has helped you continue to level up and stay ahead of where the company needs you? And is that like, you know, sometimes you fell behind, sometimes you're ahead. What are some tips for founders that are trying to stay ahead of where things are going?

Well, I think first thing is like, I think a theme that's carried throughout a lot of these different chapters is like, you have to like, figure out what game you're playing and what the rules are when the game keeps changing. So I like, in addition to, you know, the enneagram or coding, I also like a long time, like, video game player. And there's a great game called Star. Everybody's familiar with StarCraft. It's an awesome game. I think it has many lessons and riddles for an aspiring entrepreneur. Many parallels with running a company. I'll save that for another one. But this idea, like Mindshare is like a big resource. It's not actually how much, you know, money or economy or land or whatever or like actions. Military. Yeah, it's like how much you can only do so much or think about so much, like your attention. But that's actually not the big lesson. In StarCraft and other games. There was this concept of like, there's like a micro. There's micro and macro. And I would add to that, there's also the metagame. Okay, so what's that? So micro in these games, something like StarCraft is like, all right, can you click really fast and move your people and build things really quickly? And it's like the mechanics every second, how many hundreds of things are you doing per minute? Or how many things are you doing per second? And that's sort of like a conditioning and practice and one kind of thing. Then there's the macro game. Well, come back to the micro example. In a product context or in a, a startup context, that might be things like, all right, how do I. It's often the stuff around, like product design and technology and distribution, right? So, you know, early founders especially are going to be like, totally fixated. Like, here's how I make this great design and here's how the engineering works and here's how we get users and here's how our sales motion works or here's how our like viral loop works or things like that. And it's like very in the details. And then there's kind of the macro game, right? So in StarCraft, that might be things like, well, yeah, clicking a lot is important, but overall you're really managing your economy. So do you have more expansions and resources than the other player? Are you building up your military? Are you getting your balance of the investment in economy and military rights? Are you scouting to know what the other person's doing? It's more strategic and conceptual. So things in the startup realm that would feel more like that are more like, all right, not just the mechanics of how does this feature work, but more like, what's the business model? What's the market? What's the. Who are my competitors? How do I differentiate myself? How's this all going to evolve over time as the, as the category goes from like super high growth to more mature things like that. And you know, you respond, okay, we got to go from one product to multiple products so that we have to like reorganize the company that way and we blah, blah, blah. And then I'd say there's also this, the metagame, which in gaming is like a pretty specific thing. It's like either some combination of the game itself gets updated so that as the creators rebat, they make this unit stronger and this area unit stronger and this ground unit weaker and sort of try to keep this big system in balance. And then also as this community of players figures out new strategies and sort of this big repeated game of rock paper Scissors. People figure out, okay, this one strategy is now categorically better. And it's always this kind of adversarial thing that's always shifting. And so playing StarCraft in 2020 is pretty different, like StarCraft in 2015 or 2010, because everything, both the players are shifting and the game itself is shifting. And the game is usually not shifting a lot. So it's really more of an ecological effect. So I think it's like super important. And then in a startup context, what's the metagame? Well, I'd say some of it is just like business cycles. So I think you'll have, as you see, there's like this boom in the late teens in SaaS and in tech. I mean, there's a bit of an AI boom happening right now. It's not that different from what. Or parts of it are not that different from what happened in the.com era in 99, 2000 or the Web 2.0 era in 2007 or others. And then you have these bus times, like 2008 and 2000, 2001, et cetera. So there's like a market cycle thing that often creates similar dynamics where it's like, five years ago, every tech company was hiring the maximal number of people that it could, and then that created one talent dynamic. Now it's like a lot of companies are keeping headcount flat or negative. So that's just like a very different thing. And so. But even those are kind of cyclical. Then you want to identify, like, how is this, like, game of, like, business actually fundamentally permanently changing? So, for example, you know, we launched Dash. We usually do like a press thing, you know, conventional press, tech press. We got like almost no coverage for it. And yet all the stuff we did on social or going direct was like, way, way, way more impactful. And it's not just Dropbox or tech, but it's also like, you know, presidential election. Like these. All the candidates are on podcasts, right? They're not so much. I mean, yes, they're on CNN too, but not really. So that's just like a new thing. Like how do you promote? How do you. How do you manage the brand of your company or launch products? Things like that. The nature of marketing is changing and that. And that changed when we. In 2007 too. Like, we. Instead of hiring PR firms and buying AdWords and stuff, we were creating these, like, viral videos and we were using mat, you know, using math from epidemiology to create these viral loops. In a lot of ways, Dropbox Took that, transplanted that consumer Internet playbook into business software. So. But the thing is, like, you need to understand what game you're playing and you need to get good at the micro. It's not that, like the meta is more important than the Mac. It's like you need to do all three at the same time. And so that's really the hard part. And then when things are shifting, because I would. And the way, you know, a game you're playing is to be systematic about training yourself. And probably the single most useful or, you know, at least important to me, piece of advice I could give is like, you have to figure out how to keep your personal growth curve ahead of the company's growth curve. Single most thing that's been the single most important, impactful thing for me has been reading because, you know, talk about this micro, macro, metagame, sort of abstractions like that. This is the kind of stuff you can learn from history. Like learning what happened in Netscape ended up being pretty important to what happened to Dropbox in 2014. Learning what happened to Procter and Gamble and selling makeup ended up actually being pretty relevant. So I think having like a broad information diet is really important. And, you know, I've collated a list of books that were really impactful to me. You can find a way to share that. All right. But, you know, in a lot of ways, you're basically as a CEO, you have to be like, right. About a lot of things, especially and including things you haven't done before. And I think from that perspective at least, I'd say there's like, things that are that. That are challenging for your head and things that are challenging for your heart. The head challenge is one that's more like, all right, how do you, you know, how do I cultivate wisdom really quickly? And so, you know, in addition to like a lot of technical books about here's how you do marketing or product or management or things like that. Some of this could be kind of around, like, higher level, like almost philosophical when it's saying, you know, things like Buffett or Munger or Bezos, like, would be more on that end of the spectrum. And then. But it's not just reading. I think having a community of people that you can learn from is really important. And I've also found it's interesting, you learn having kind of stable of people that are at the same stage as you people. Couple stages ahead, two years ahead, five years ahead, 20 years ahead.

And this is founders, other CEOs, other founders.

Yeah, founders and CEOs exactly because you'll learn different things from them. So first of all, when you're in the early innings, you actually get more useful advice often from your peers because they're going through the same thing. So it's like, how do you raise a, how do I raise a seed round? You know, you're going to get a lot more out of someone who did that like a year ago or, or is doing that now than like if I asked Zuck like how do you raise a seed round? He'd be like, I, I don't remember. Just like build a good company. And you, you'll see that as you talk to people at different phases. Like I think, you know, again, like the early, early stage, it's more about the micro, about the product and, and, and distribution. Then there's sort of this continuum to like. Then it's about like your business model and monetization and the financials. Then it's about like defensibility and maintaining that advantage. And as you sort of talk to, as I talk to my peers would be more about the product. You know, each. That, that's, that was kind of the scaffold I would see over founder. And then people that were like further out, like actually they still knew all the micro stuff and like, were like had feelings about it. But they're almost like philosophical in nature, like philosophers and just like very broad intellectually and like drawing lots of distinctions from lots of different things. Like knew a lot about a lot. And I think most of the tenured founders that I'm, you know, most of the founder CEOs who've been at it for 10, 20 years plus I'm at 17. Like I almost all of them read voraciously. So I think combination of reading and community are the most important things. But then the last thing is being systematic about it. So in line with what does it mean to keep this curve ahead of your personal growth curve and the company's growth curve. I think one way to do that exercise is think about is always be working back from, in one year from now. What will I wish I'd been learning today? Two years and five years. And often those to do lists are pretty different. Right. So in 28 I would have been focused on just like getting users for Dropbox. But then looking ahead to, you know, a year later I would have been building like the first business functions in the company. And then five years later it would be thinking about how do we fight with Google and Microsoft and all these other things. And then for my own Skills, it would be like, you know, 2008, like how do I raise like a scaled venture round? And what are all these terms mean? And you know, and things like that. But then, but then how do I be a great leader, a great manager, comfortable speaking publicly, things like that. And those, the things that are further out are often like the most intimidating, but you also have the most time to learn them. And you often can psych yourself out in terms of like, oh, this is just like new and uncomfortable. And I just say this is one of the heart challenges. Like you're always going to have that feeling of discomfort and instinctively what you're going to want to do is run away from it because you're human. It's uncomfortable to feel, to confront these things that you're not good at or might be embarrassing or threatening. I think an important part of being a founder is learning to run towards that feeling, not away from it. That's a big part of your learning rate, is the extent to which you're pushing yourself beyond discomfort. And then I'd say, and so like having that list of like, yeah, a year from now, two years from now, five years from now, what, what can I start learning today? And then recognizing these things, they're all, they're all trainable. So you know, in five weeks you're not going to be a great guitar player or surgeon or you know, or manager leader, but in five years you can put a pretty big dent in those problems. And you know, people who enter college and leave college often have a lot more relevant knowledge after that experience, after those four years. So just sort of having that kind of growth mindset. And I'd say the last piece of it that is also tricky in addition to sort of like going toward, from a kind of heart or mindset perspective is, you know, going towards discomfort. And in addition to a lot of the other stuff we talked about being like, how do you have a sense of equanimity or not sort of burning out and finding a sustainable pace. I think the other thing is often smart people have more trouble learning than otherwise. And there's this great article that's probably my most handed out article is probably from the 70s or 80s or something called Teaching Smart people how to Learn. Because what ends up happening is the more kind of book smart you are or the more you were sort of identified as gifted or intelligent as a kid, the more that identity, the more like not knowing something or being wrong is not just like not knowing something or being wrong, it's like an assault on Your identity. And so I found that one of the best predictors of an exec continuing to scale is not just how, what they know or what they can do, but, like, the extent to which they can actually, like, be aware of their failures and not blame or dismiss things. Because, like, smart people have a really fast rationalization hamster. They can convince themselves that, well, here's how they were technically right, even though clearly they were wrong or clearly the thing didn't work out and they sort of let themselves off the hook. And all of this happens unconsciously as sort of a protective mechanism. So I think finding ways to take responsibility or always have a mindset of, like, all right, what if I were 100% responsible, responsible for this? Like, what if it was no one else's fault? Like, what if it's entirely in my control? And those things are never true, but that's always. Or with perfect hindsight, what would I have done differently? And just like owning things ends up being more painful in the short run, but then some painful hours can save painful years. And there's a great book on that mindset stuff, the 15 principles of conscious Leadership, Diana Chapman and some co authors. And she's been a coach and friend of mine. She's amazing. And so it's really helped me on that front. But really, like, how do you train your head and train your heart? There's different things you do for each, but all in service of keeping your personal growth curve ahead of the company's growth curve.

I love how tactical your advice is. There's this piece of advice of like, think, what do I need to know a year from now, two years from now, five years from now? This reading list, this idea of having staggered, staged founders and a community to help you along this journey, this article about how smart people learn and how to get past this block. So I love just how concrete a lot of this stuff is. So then just zooming out and maybe final reflections on this journey as you describe this. It's basically the epitome of the hero's journey that you've been on here. Things are good, trouble appears. You enter this other land of everyone coming at you, trying to squash you in every direction, battling them, and then emerging now into this new land with all the things you've learned, kind of coming back to the original idea of what Dropbox could have been. So I think that's partly why it's so interesting, is it's the epitome, but.

We still got to make it fully out of the. We're like on our way up, we're clawing our way back up.

You got, you got the. Yeah. The dragon is still out there.

Yeah.

The incumbents still exist.

Well, that's. And by the way, that's like, it will always be like that. Like, it's, you're never like done with that. You know, there's always, you know, it's not like you reach the A top or you don't have to if you don't want it.

Yeah. And it makes me think about, as you're talking, like people think about product market fit and something A lesson from this journey is just like product market fit is not a binary. You will have it now. You've got it and you have it and will last forever. It's like constantly being broken by other people. Or if there's something you've discovered that is a big market and he may be final reflection on the story you've shared, things that might be helpful to people, just the journey you've been on, that might be helpful to founders who are going through this right now or will probably go through this.

I think it's important to remember we're all really lucky to be able to do this kind of work.

Right.

And, you know, the things that I got out of the, you know, when I was 18, the things I thought I would get out of starting company would have been the things you would think would be like, oh, I'll be like really well known or really rich or build these awesome things. And okay, I think there's benefits to that. But I think over. But what I've like grown to appreciate a lot more is over time is, yeah, this thing or the experience and the journey of starting a company can really be a forge for a better character or like, there's transfer. A lot of what you learn here is transferable in many different domains. Like, I, you know, I just had a little kid, Charlie, he's one year. He's one year old. So I know we're both in kind of new dad mode, but I'm like, it will make me. It's made me a better husband, make me a better father, make me a better person. And so, and then I just say last thing, like, there's no easy button where things are just up and to the right. And so don't look for one and don't feel bad if things are difficult. But ultimately, one of the biggest surprises about being able to spend time with all these interesting people and founder CEOs who've created these iconic companies is at the end of the day. They do it because they love it. Um, and, you know, and. And so I think learning to sort of decouple, that doesn't mean they're always having a good time at all. You know, most of them use metaphors like, you know, Jensen or Elon, like, chewing broken glass, staring in the abyss, and, like. Yeah. And yet, for a lot of these people, there's, at the end of the day, like, nothing they'd rather do. So I think finding the good in that.

I'm very excited to follow the next chapter of your journey. I am really thankful that you shared these stories. I think this is going to be helpful to a lot of people. I think this is a story that people study for a long time because it's common and not talked about much. So, Drew, thank you so much for being here. For folks that want to maybe check out what you're building, anything you want to share, where should they go?

I'm just Drew Houston on all the socials. And then, yeah, we got a new product, Dropbox-Dropbox.com, right now, it's for companies. We'll have a downloadable version you can just get on your phone or your computer soon. But yeah. Lenny, this is awesome. Super fun. Really big fan of what you do.

Awesome. Same. Drew, thank you so much for being here.

Thanks.

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