What is the value of Dropbox aiming at listing?

Cloud storage on February 26, 2018DropboxHas submitted Form S1 (listing application form) to the US Securities and Exchange Commission (SEC) in 10 years from the start of service, and started preparing IPO (initial public offering). We have highly appreciated Dropbox's potential from the beginning of serviceStratecheryMr. Ben Thompson is analyzing the value of Dropbox before listing, while comparing it with the rival service Box.

FORM S-1 Dropbox, Inc.
https://www.sec.gov/Archives/edgar/data/1467623/000119312518055809/d451946ds1.htm

The Dropbox Comp - Stratechery by Ben Thompson
https://stratechery.com/2018/the-dropbox-comp/

Dropbox has always been compared with rival Box, but it is because both companies' core services are the same content as "cloud storage". However, the fact that both companies that are comparable but still the same service always have different business styles have always been emphasized.

One major difference is that Box is a business for enterprises from the beginning and Dropbox is a service for general consumers. As of 2014 "BATTLE OF THE BOXIn the article that Thompson pointed out that Dropbox needs to target companies as consumers do not want to spend money on software with billing content in the game apps, at that time Box I concluded that it is prudent to invest in. According to Dropbox, in fact there are 11 million paid users, 80% of business plan users are paid members. In the 4 years Dropbox has successfully modified the strategy.


However, even though Dropbox has grown to have overwhelmingly 500 million people, paid users are only 2% of the total, with 57 million users, Box smaller than Dropbox is 17 Compared with% being paid members, there seems to be a feature that there are few paid users. Thompson says these differences are reflected as a big difference in the strategy "Who will sell the service to whom?"

Box is a traditional way of operating a large company using a sales base, and the free account is positioned as temporary use or "trial use" to be handed over to a paid account. In contrast, in case of Dropbox, "self-service" is the most important sales channel. Dropbox boasts that overwhelmingly the pattern that users who use for free through applications and websites become paid members at their own will. The difference between the two companies' approaches is reflected in the cost required to acquire customers, Box spending $ 81.7 million in the third quarter of 2017 and Dropbox spending $ 74.7 million in marketing expenses in the third quarter of 2017, It accounts for 63% of revenue, whereas it is reflected in the fact that it accounts for only 26% of Dropbox revenue.

The graph below shows the time (month) the user who registered as a free member took to become a paid member. Looking at the blue graph showing the users registered in January 2015, you can see that it is the 27th month that you earned twice the number of paid members who became paid members in a month. On the other hand, looking at the green graph showing the users registered in January 2017, we succeeded in obtaining twice as many paid members in less than 10 months, and the pace of Dropbox acquisition of paid members grew year by year You can see that it is rising.


The graph showing the percentage of users by the start of usage as a percentage of sales shows that all the layers are spreading to the right, indicating that the old users do not leave and contribute to sales steadily.


However, Mr. Thompson pointed out that while the majority of 500 million users evaluate potential customers (paid members), the percentage of paid members has hardly changed over time It is. In addition, we point out that we have not been able to develop a way to provide more services to users who have become paid members and to get more consideration. Mr. Thompson stated that the data preservation world where Dropbox fights is as important as it was ten years ago and it will not change in the future, while controlling the future of enterprise computing such as Amazon, Microsoft, Slack, Google It seems that he does not seem to be in a position to do.