Y Combinator FundingApplication
Summer 2007
Application deadline: 12 midnight (PST) April 2,2007.
Please try to answer each question in less than120 words.
We look at online demos only for the mostpromising applications, so don't skimp on the application because you're relyingon a good demo.
We don't make any formal promise about secrecy,but we don't plan to let anyone outside Y Combinator see these applications,including other startups we fund.
We recommend you save regularly by clicking onthe update button at the bottom of this page. Otherwise you may lose work if werestart the server.
# Username:
dhouston
# Company name:
Dropbox
# Company url, if any:
http://www.getdropbox.com/
# Phone number (preferably cell):
(redacted)
# Usernames of all founders, separated by spaces.(Please have all founders create YC accounts, or create accounts for them.)
dhouston
# Usernames of all founders who will move to (oralready live in) Boston for the summer if we fund you.
dhouston
# What is your company going to make?
Dropbox synchronizes files across your/your team's computers. It's much betterthan uploading or email, because it's automatic, integrated into Windows, andfits into the way you already work. There's also a web interface, and the filesare securely backed up to Amazon S3. Dropbox is kind of like taking the bestelements of subversion, trac and rsync and making them "just work" for theaverage individual or team. Hackers have access to these tools, but normalpeople don't.
There are lots of interesting possible features. One is syncing GoogleDocs/Spreadsheets (or other office web apps) to local .doc and .xls files foroffline access, which would be strategically important as few web apps deal withthe offline problem.
# For each founder, please list: YC username;name; age; year, school, degree, and subject for each degree; email address;personal url (if any); and present employer and title (if any). Put unfinisheddegrees in parens. List the main contact first. Separate founders with blanklines. Put an asterisk before the name of anyone not able to move to Boston forthe summer.
dhouston; Drew Houston; 24; 2006, MIT, SB computer science; houston AT alum DOT (school i went to) DOT edu;--; Bit9, Inc (went full time to part time 1/07) - project lead/softwareengineer
Although I'm working with other people on Dropbox, strictly speaking I'm theonly founder right now. My friend (redacted), a great hacker, Stanford gradand creator of (redacted) is putting together a Macport, but can't join as a founder right now as a former cofounder of his startedan extremely similar company. My friend and roommate (redacted)from MIT is helping out too, but he works with me at Bit9, and a non-solicitclause in my employment contract prevents me from recruiting him (and the VP Engexplicitly told me not to recruit him.)
In any case, I have several leads, have been networking aggressively, and fullyintend to get someone else on board -- either another good hacker or a moresales-oriented guy (e.g. the role Matt fills at Xobni). I'm aware that the oddsaren't good for single founders, and would rather work with other people anyway.
# Please tell us in one or two sentencessomething about each founder that shows a high level of ability.
Drew - Programming since age 5; startups since age 14; 1600 on SAT; startedprofitable online SAT prep company in college (accoladeprep.com). For fun lastsummer reverse engineered the software on a number of poker sites and wrote areal-money playing poker bot (it was about break-even; see screenshot url laterin the app.)
# What's new about what you're doing?
Most small teams have a few basic needs: (1) team members need their importantstuff in front of them wherever they are, (2) everyone needs to be working onthe latest version of a given document (and ideally can track what's changed),(3) and team data needs to be protected from disaster. There are sync tools(e.g. beinsync, Foldershare), there are backup tools (Carbonite, Mozy), andthere are web uploading/publishing tools (box.net, etc.), but there's no goodintegrated solution.
Dropbox solves all these needs, and doesn't need configuration or babysitting.Put another way, it takes concepts that are proven winners from the devcommunity (version control, changelogs/trac, rsync, etc.) and puts them in apackage that my little sister can figure out (she uses Dropbox to keep track ofher high school term papers, and doesn't need to burn CDs or carry USB sticksanymore.)
At a higher level, online storage and local disks are big and cheap. But theinternet links in between have been and will continue to be slow in comparison.In "the future", you won't have to move your data around manually. The conceptthat I'm most excited about is that the core technology in Dropbox -- continuousefficient sync with compression and binary diffs -- is what will get us there.
# What do you understand about your business thatother companies in it just don't get?
Competing products work at the wrong layer of abstraction and/or force the userto constantly think and do things. The "online disk drive" abstraction sucks,because you can't work offline and the OS support is extremely brittle. Anythingthat depends on manual emailing/uploading (i.e. anything web-based) is anon-starter, because it's basically doing version control in your head. Butvirtually all competing services involve one or the other.
With Dropbox, you hit "Save", as you normally would, and everything just works,even with large files (thanks to binary diffs).
# What are people forced to do now because whatyou plan to make doesn't exist yet?
Email themselves attachments. Upload stuff to online storage sites or use onlinedrives like Xdrive, which don't work on planes. Carry around USB drives, whichcan be lost, stolen, or break/get bad sectors. Waste time revising the wrongversions of given documents, resulting in Frankendocuments that contain somechanges but lose others. My friend Reuben is switching his financial consultingcompany from a PHP-based CMS to a beta of Dropbox because all they used it forwas file sharing. Techies often hack together brittle solutions involving webhosting, rsync, and cron jobs, or entertaining abominations such as those listedin this slashdot article ("Small Office Windows Backup Software" -http://ask.slashdot.org/article.pl?sid=07/01/04/0336246).
# How will you make money?
The current plan is a freemium approach, where we give away free 1GB accountsand charge for additional storage (maybe ~$5/mo or less for 10GB for individualsand team plans that start at maybe $20/mo.). It's hard to get consumers to payfor things, but fortunately small/medium businesses already pay for solutionsthat are subsets of what Dropbox does and are harder to use. There will betiered pricing for business accounts (upper tiers will retain more olderversions of documents, have branded extranets for secure file sharing withclients/partners, etc., and an 'enterprise' plan that features, well, a reallyhigh price.)
I've already been approached by potential partners/customers asking for an APIto programmatically create Dropboxes (e.g. to handle file sharing forAssembla.com, a web site for managing global dev teams). There's a naturalsynergy between Basecamp-like project mgmt/groupware web apps (for the to-dolists, calendaring, etc.) and Dropbox for file sharing. I've also had requestsfor an enterprise version that would sit on a company's network (as opposed tomy S3 store) for which I could probably charge a lot.
# Who are your competitors, and who might becomecompetitors? Who do you fear most?
Carbonite and Mozy do a good job with hassle-free backup, and a move into syncwould make sense. Sharpcast (venture funded) announced a similar app calledHummingbird, but according to (redacted)they're taking an extraordinarily difficult approach involving NT kerneldrivers. Google's coming out with GDrive at some point. Microsoft's Groove doessync and is part of Office 2007, but is very heavyweight and doesn't include anyof the web stuff or backup. There are apps like Omnidrive and Titanize but theimplementations are buggy or have bad UIs.
# For founders who are hackers: what cool thingshave you built? (Include urls if possible.)
Accolade Online SAT prep (launched in 2004) (http://www.accoladeprep.com/); apoker bot (here's an old screenshot: https://www.accoladeprep.com/sshot2.gif;it's using play money there but worked with real money too.)
# How long have the founders known one another and how did you meet?
There's a joke in here somewhere.
# What tools will you use to build your product?
Python (top to bottom.) sqlite (client), mysql (server). Turbogears (at leastuntil it won't scale.) Amazon EC2 and S3 for serving file data.
# If you've already started working on it, howlong have you been working and how many lines of code (if applicable) have youwritten?
3 months part time. About ~5KLOC client and ~2KLOC server of python, C++,Cheetah templates, installer scripts, etc.
# If you have an online demo, what's the url?
Here's a screencast that I'll also put up on news.yc:
http://www.getdropbox.com/u/2/screencast%20-%20Copy.html
If you do have a Windows box or two, here's the latest build:
http://www.getdropbox.com/u/2/DropboxInstaller.exe
# How long will it take before you have aprototype? A beta? A version you can charge for?
Prototype - done in Feb. Version I can charge for:8 weeks maybe? (ed: hahaha)
# Which companies would be most likely to buyyou?
Google/MS/Yahoo are all acutely interested in this general space. Googleannounced GDrive/"Platypus" a long time ago but the release date is uncertain (afriend at Google says the first implementation was this ghetto VBScript/Javathing for internal use only). MS announced Live Drive and bought Foldershare in'05 which does a subset of what Dropbox does. Iron Mountain, Carbonite or Mozyor anyone else dealing with backup for SMBs could also be interested, as none ofthem have touched the sync problem to date.
In some ways, Dropbox is for arbitrary files what Basecamp is for lightweightproject management, and the two would plug together really well (although37signals doesn't seem like the buying-companies type).
At the end of the day, though, it's an extremely capital-efficient business. Weknow people are willing to pay for this and just want to put together somethingthat rocks and get it in front of as many people as possible.
# If one wanted to buy you three months in(August 2007), what's the lowest offer you'd take?
I'd rather see the idea through, but I'd probably have a hard time turning down$1m after taxes for 6 months of work.
# Why would your project be hard for someone elseto duplicate?
This idea requires executing well in several somewhat orthogonal directions, andmissteps in any torpedo the entire product.
For example, there's an academic/theoretical component: designing the protocoland app to behave consistently/recoverably when any power or ethernet cord inthe chain could pop out at any time. There's a gross Win32 integration piece(ditto for a Mac port). There's a mostly Linux/Unix-oriented operations/sysadminand scalability piece. Then there's the web design and UX piece to make thingssimple and sexy. Most of these hats are pretty different, and if executing inall these directions was easy, a good product/service would already exist.
# Do you have any ideas you consider patentable?
(redacted)
# What might go wrong? (This is a test ofimagination, not confidence.)
Google might finally unleash GDrive and steal a lot of Dropbox's thunder(especially if this takes place before launch.) In general, the online storagespace is extremely noisy, so being marginally better isn't good enough; therehas to be a leap in value worthy of writing/blogging/telling friends about. I'llneed to bring on cofounder(s) and build a team, which takes time. Othercompetitors are much better funded; we might need to raise working capital toaccelerate growth. There will be the usual growing pains scaling and findingbottlenecks (although I've provisioned load balanced, high availability web appsbefore.) Acquiring small business customers might be more expensive/take longerthan hoped. Prioritizing features and choosing the right market segments totackle will be hard. Getting love from early adopters will be important, butgetting distracted by/releasing late due to frivolous feature requests could befatal.
# If you're already incorporated, when were you? Who are the shareholders andwhat percent does each own? If you've had funding, how much, at whatvaluation(s)?
Not incorporated
# If you're not incorporated yet, please list thepercent of the company you plan to give each founder, and anyone else you planto give stock to. (This question is as much for you as us.)
Drew
# If you'll have any major expenses beyond theliving costs of your founders, bandwidth, and servers, what will they be?
None; maybe AdWords.
# If by August your startup seems to have asignificant (say 20%) chance of making you rich, which of the founders wouldcommit to working on it full-time for the next several years?
Drew
# Do any founders have other commitments betweenJune and August 2007 inclusive?
No; I've given notice at Bit9 to work on this full time regardless of YCfunding.
# Do any founders have commitments in the future(e.g. have been accepted to grad school), and if so what?
No. Probably moving to SF in September
# Are any of the founders covered by noncompetesor intellectual property agreements that overlap with your project? Will any beworking as employees or consultants for anyone else?
Drew: Some work was done at the Bit9 office; I consulted an attorney and have asigned letter indicating Bit9 has no stake/ownership of any kind in Dropbox
# Was any of your code written by someone who isnot one of your founders? If so, how can you safely use it? (Open source is okof course.)
No
# If you had any other ideas you consideredapplying with, feel free to list them. One may be something we've been waitingfor.
One click screen sharing (already done pretty well by Glance); a wiki withversion-controlled drawing canvases that let you draw diagrams or mock up UIs(Thinkature is kind of related, but this is more text with canvases interspersedthan a shared whiteboard) to help teams get on the same page and spec things outbetter (we use Visio and Powerpoint at Bit9, which sucks)
# Please tell us something surprising or amusingthat one of you has discovered. (The answer need not be related to yourproject.)
The ridiculous things people name their documents to do versioning, like"proposal v2 good revised NEW 11-15-06.doc", continue to crack me up.
