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 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 a kind of a louder set of critics inside and outside the company.
Less than a year later, Google Photos launches.
And not only is 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 you 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 as 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 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.
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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 stand 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 learn 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 it feels like there's like the first era of you're killing it just up and to the right, killing it.
Dropbox is 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 this is gonna be good yeah and and then there's the current era uh i'll say the third era of just rethinking what dropbox could be does that sound roughly right as a good way 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 of the thumb drive you're always losing the uh 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 was 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 um but then having a lot of i had a lot of friends who were in white
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 a Dropbox really felt like it was taking on a life of its own or maybe maybe it like belonged to the internet and not so much to me anymore so for example we had a lot of success with these demo videos um first was just getting into Y Combinator I made it it sort of worked backwards from thinking
about you know what's 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 Graham's attention yeah I love that what does paul gramm's you all day okay yeah um 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 if i could put this if i can 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 those inspired by a book called guerrilla marketing that i'd read which is basically
how to 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 um and sure enough like i made this video that was a 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 I got a note from Paul saying hey this is interesting but you need a co -founder which was a problem because it's 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 is 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 and no i see so i ended up finding my co -founder arash and you know there's just story after story like that in the early days i say the first
chapter was yeah characterized by you know it just feels like one one moment i'm sort of paddling in the ocean alone on a little more the next i'm just like 100 feet off the ground on this tidal wave um trying to stay on how long does this period last of just like hawker news to something starts to
change how long is this kind of up into the right period uh it was the first several years so i started coming back in 2007 um I just uh you know I've been 24 at the time moved to California and so I'd say his first probably seven years uh from 2007 to 2014 were really that kind of crazy fever dream
you know dot -com experience where uh 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 um uh 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 invited us there yeah he runs pear now um he introduces sequoia he came with us um to the pitch which is i learned later was unusual you know and i was on a friday and then saturday mike moritz is in our apartment um but anyway so we were we raise
uh money from sequoia and then we we then at that and there was a seed round in 2007 so right after we finished by combinator um and then the base basically you start with a pretty narrow circle of what you're working on i mean right in the beginning it's really just like coding and talking to customers
um 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 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 basically doing this another version of that hacker news video um engineered to be even more viral and kind of have all these memes and things in it but um 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 um like Tom Cruise jumping on a couch and 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 um 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 by early 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 um so we took a while to get the beta right
before we opened felt comfortable opening up to the broader public um 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 things like zynga and 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 um so and then we had we're like oh there's no reason this wouldn't work for dropbox and um some of our early investors hati 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 uh 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 you know 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 ,000, 500K, a million, 10 million on the ceiling.
So it was wild. And it was super fun, but it was also super stressful.
But going from, you know, maybe 6 million valuation in 2007 to 27 million in 2008 to then 4 billion valuation in 2011, you know, being on magazine covers, Just that whole experience was wild.
The visual of the user numbers extending onto the ceiling is such a good one.
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. Yeah, let's talk about that.
Yeah, maybe the end of the first era, the start of our teenage years would have been around 2013 -14.
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 and 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 um so mostly it just seemed like nothing happened when you know steve jobs is like on stage in 2011 announcing iCloud calling out Dropbox by name as something that will be viewed as archaic um 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're sort of quivering waiting for you know the shoe to drop um and the products launched but you would never be able to look at our numbers
and see when that happened um and the press often writes about competition like oh it's a shotgun blast um when a leader out learns more of a boa constrictor but the end of that first chapter really culminated in us recognizing that you know Dropbox is we've experienced a lot of benefits of being this kind
of product for everyone and in fact it'd be kind of hard for me to describe in the early days who Dropbox is for what it does because it was similar it's like you know what's a phone for what's a computer for um and um in the beginning that's 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 um 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 that 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 um 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 refit we pulled the all the photo sharing functionality out into a separate and new app we called carousel um 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 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 yeah that's a really
good point which was crazy and so we're like i don't know maybe this is gonna be our instagram um and so we bought those guys uh and then 2014 i'm on stage painting this picture of dropbox's future i'm like we're gonna help be the way that you like you remember your life and we have um we're gonna be
the your productivity the new productivity suite on your phone and all these things but then um it was it was this dissonance where there were so many things that were going right and that's certainly the numbers um user numbers revenue numbers all just we were sort of accidentally cash flow positive
maybe a year after launching uh but there is it was also clear that you know winter was coming or that like not all not all things weren't exactly as they seemed um because um then the start of the second chapter 2015 um 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 standing for thinking for a long time like all right man we're really fighting wars on all these very disparate fronts right We're 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, you know, then there's this experience of 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 impact.
but um even worse because it was so like easily anticipated so you know so so it became kind of a very public and personal embarrassment for me because like how could we not have um 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 um 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
um how do we get out of this um what do we need to like tackle some of these competitive issues much more head -on um 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 there's very similar product experience bundled with android bundled with all the google all of google's different touch points and then free um so 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 is just going to have these swipes and snoozes and it's just going to be part of 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've gotten the criticism over the years that um dropbox is a commodity and investors in the early days would be like this is kind of a graveyard of space and kind of doa um and i thought well how do other companies deal with this kind
of competition and you know commodities uh so there's a great book by ag lafley and roger martin called playing to win roger's been on the podcast yeah rogers i'm a huge fan of rogers um and i was like all right well if we think we're selling a commodity like try literally selling um paper towels uh
which is what procter and gamble and a lot of cpg companies do and and ag was the ceo of procter gamble at the time and and basically he and roger did this download of like how they think about um competition and markets and advantage um so that and a lot of it's like being really 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 a very timely thing to read in terms of like all
right what 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 um and i've been a big fan of andy's high open management uh is another great book of is, which is my introduction to management, at least the 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, um, that I wasn't aware of.
And we all know Intel as like the microprocessor company, right.
Intel inside, at least in the eighties, nineties, but before they were in microprocessors, they were actually, they sold memory like Ram.
Um, and in their, in the 70s they were running into a situation where they had built their business really high growth successful business selling memory but then then they had these japanese competitors um 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're this feeling like you know not only they might just be better at the game but there's also not a level playing field and but meanwhile that you wouldn't see it in their numbers
like they're they're still growing it's just that there are these weird dissonant um experiences where sales people just suddenly have problems selling into accounts that used to be a slam dunk um or things that used to work to stop working and this happens like you know it's like blackberries and nokia's
best sales years happened in the lot the years after launching the iphone so it doesn't these things don't actually change immediately and so 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, 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 um 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 um it's like google saying yeah let's get out a search um and go on in on gmail or something or youtube um 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 um but you really want to do in these strategic inflection points is um go on in one thing or you know smart towing put it like put all your eggs in one basket and that basket um but what the the implication of that and i was like all right this this makes sense to me but man this is uh this is gonna be
painful so we like go away for fourth of july with my family in New Hampshire um I reread the book I come back I'm like I'm like well we really gotta do it then I so I killed carousel killed mailbox um went all in on productivity um to some extent that was an easy a relatively easy decision because most
of our subscribers you know 80 % of people paying for Dropbox were using 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 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 um as the opposite actually the narrative completely flipped on the company the press started you know we killed these new products and then um internally and externally the narrative became super negative um the you know articles would come out every week
or two like dropbox would be the first dead deck of corn um and then sometimes you know we've all seen this in tech like companies sort of get in get in this washing machine of negative sort of self -perpetuating negative press and if it goes deep enough um i mean uber had this for a while later you
know meadows had this over their history lots of companies um 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 um and you know i'm not playing i mean i'm not i'm not it it 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 um 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 um and meanwhile you know we i've talked mostly about the external market competitive forces but inside the company was a mess too like we were 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 not doing the mailbox like what are we doing and you know the truth was like if i knew the answer to that like we could be doing it but it's just this is going to take some time to figure
out so it's pretty tough um you know when everybody's looking ever looking to you as the founder and ceo um 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're 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 it's like okay great we're gonna 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 um or is like okay this is tough and we need time to figure it out well we
can act about the apple thing too because that also send you know i created a much smaller version of the sort of tempest in a teapot that the google photos did it's just much less public um or it was just less obvious that way it would be so in such so out of position um and actually we were more surprised
to the upside when you know it's google drive launches iCloud launches one drive launches and even as they build like version two that we just didn't really notice that much of a problem um and you know I also studied over the years uh you know what happened to Netscape and companies like that or you
know MySpace or these other cautionary tales uh and interestingly internet explorer was the thing that eventually like 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 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 this constant bundling or the constant iteration or you know um 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 in a bad place and then but another
thing that was interesting was one cool thing we got to do and moving to california is you get to actually meet people who had been at these companies um and one of those people um was a guy named bill campbell who was at netscape who during that whole period and i'd asked him i'm like man that's like
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's he's looked at me he sort of laughed it and snorted and he's like he's like Microsoft did not kill us like we killed ourselves and so that was the other half
of what was the problem within Dropbox was um a lot of our wounds were self -inflicted um in that we were struggling to keep scaling and launching all these products and the dropbox products had kind of stagnated um 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 um 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 uh
kept going any or we were just like too confident in our ability to respond or we sort of got into the lulled into this complacency we're 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's something about the google photos launch that just
really set things off kilter um and then and then also for me personally i mean i think uh you know go from feeling pretty good all the time good but stressed out all the time to mostly feeling bad all the time um and you know i just remember like leaving um or 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 uh so i was like doing that in hawaii but didn't feel very good in any uh in any way and um Um, and then I like learned that I had to like really figure out a lot of different things for myself
to be like the leader that could get us through this.
Um, cause mostly what I felt was like, man, I felt like we'd been doing such a good job, but now like, man, if I ever like really screwed this up or like, I don't, 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 uh i just remember thinking like um 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 um
and so i'm like how i'm like yeah both of those things are true like how do i navigate that um and i think one one part that was really helpful sort of getting a sense of equanimity basically um 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 um 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 um a little bit uh so what that looks
like for me is sort of recognizing like yeah there's really not an easy button that keeps things up and to the right um 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 um so the presence of badness is not necessarily you are bad and um and it's like yeah no you're just getting your stripes as an entrepreneur um and people were really helpful during that period so i mean i mentioned bill campbell um he was nice enough to we just
stayed in touch and he would take me out to dinner you know every now and then and i would be freaking out but i was always afraid he'd never seem to be freaking out and mostly he would just be saying like all right he'd sort of like dust you off and kind of smack you and say like get your ass back
out there um and he's you know he was literally a coach of the columbia football team um but in addition to being a great technology executive um and advisor to the many of the great founders that i looked up to um but you know he just sort of he was really helpful because he sort of helped me believe
in myself um even when like i wouldn't believe in myself uh 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 this raised then that raised a question for me i'm like okay i've been through this chapter one where everything's up into
the right um 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 of this many users we got it to where we got this valuation or let me back up so my whole life and um 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 um you know first get the right test scores then get in the right college get in the right college take the right classes get the right internship to 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'd cleared all that and so actually one of the other problems like i don't even know what dropbox needs to be in the world
and i don't even know what i need that i want to be in the world and so part of this was also like re 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 um it's also like 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 um so uh you know are we just inventing things 10 minutes before google and apple do if not what are we doing um 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 um 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 um and i was like well you know what um i'm going
to do this what i ended up settling on was like look you know kind of going coming back to my 18 year old self i'd be like i would like with 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 um you get to do this really
meaningful work to build things for millions of people work with awesome people or work with awesome teammates you know there's always good things about it and you've like chosen this life so stop complaining about the burdens um because it's really dangerous if you start to resent the job um or feel
like a victim because that's just like corrosive to everything else that 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, 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 were a couple unlocks that were pretty fast, but I think, you know, again, this was not like, oh, then I felt better and we live happily ever after at all um you know there were some moments of recognition where I was able to like I always try to get away from kind of the mayhem or the whirlwind
and and recenter myself and do think weeks and things like that um 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 Did I miss this important thing?
It's like, well, the, basically the root causes of, 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, um, I need to like get off the treadmill every now and then and make the space to really address some of these bigger questions.
Cause 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, we're just strategically out of position or the other way I sort of came to some of these conclusions.
Um, uh, there's a combination of things.
So I think picking up like a meditation and mindfulness practice, um, having therapists personally, having coaches, um, having friends and mentors, uh, 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 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 um this you know as much as there might be microsoft yeah 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 that 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 strength and weaknesses but as ceo like you know 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 deal with that is like building awareness and one thing that kind of floated around the company for a while was uh, the Enneagram, um, which, you know, on a surface is a personality typing thing
like Myers -Briggs. Um, I often describe it as like, it's like Myers -Briggs, but actually useful.
Um, 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, you know, Myers -Briggs has 16 types, um, of letters like ENFJ or different things and but i find that meyer's breaks is more descriptive so it doesn't really 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 like what that meant and so it's descriptive versus like predictive or causal um enneagram i find is that 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 um after your childhood um in that like you just have instinctive responses and things now it's autopilot you doesn't mean it's your destiny you can override
it but it's super important to become aware of like you know what what's your what is what are you running from and towards and the enneagrams are gives you a really good map to do that so um and so i'm reading this book uh 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 just almost like looking over my shoulder like who the hell did this like i thought i was a special
snowflake but apparently not um okay hey, I'm listening.
It dovetailed with a lot of my early coaching experiences, which are you do a 360, your coach sits you down.
They're like, here are your strengths.
In my case, it would be like, oh, you're really creative and you like new ideas.
That's okay. 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 so yeah this is my first coach and then then you flip to your like development areas um because no one calls them weaknesses it's like all right one is like you're like bored by routine and really undisciplined uh second is you're really conflict avoidance um
and third is um you're like you're intuitive but you're also like pretty chaotic and like don't create enough structure for people so they're mostly confused um and when you sort of pair the two together you're like oh wait yeah i'm creative i like no ideas but i'm bored by routine and you know a bit
of a space cadet all right you love working you'll have 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 gonna 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 um 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 i'm gonna torpedo the company unless i do something about it um the same is true for any founders and you know it'd be i'm a type
7 it's the 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 um 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 um 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 were just like blowing all this cash we need to like get the pnl to look a lot better and get out of this land grab mode or like fighting with like you
know google on like giving more free storage away or just being in these fundamentally unprofitable things and so we we did that we cut the unprofitable parts of the business uh we turned cash flow positive in 2016 maybe several months after this reckoning um and that's set the tracks for getting go
billion run rate in 2017 going public in 2018 um we had to come up with a new vision and mission for the company which i'll maybe save for for chapter three um 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'm
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 um and then um so i'm like man there's a lot of there's a lot of tedious things about being an executive so um 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 was just like coming to terms with my job and you know what i wanted to do from a personal perspective um 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 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 um so um really reorienting yeah it's not about just like the score like external scoreboard just much it's more about like the craft of being a great ceo um
and like building things i'm really proud of or really making a difference and so that those kinds of things i 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 uh 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
uh 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 chesski on the podcast i asked you what should 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 sort of uh
it's a bit of a rorschach test um 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 um and unfamiliar and then you're also like very involved in all the details because there's
no one else to be involved in details like you know it's like someone else is like coding for you if you're just like in your room at home um Um, so, but then over time you have to, there's this like, uh, Ben Horowitz calls it the products, the product CEO paradox where companies, the first way that companies
die is from founders not letting go.
Um, and so, uh, you need to learn to like scale yourself and like hand off your responsibilities and operate in a higher level of abstraction.
Um, 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 what that's a big part of the problem uh that led to a lot of this chaos at the end of the chapter two where I was like oh man I'm yeah I'm on this trend I'm doing stuff but I'm clearly not setting the right direction or people are confused or just you know it's
not working um 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 um and so i think there's a debate to what extent found remote is sort of a mindset mindset or a destination um 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 and where suddenly it's a lot clearer you don't have the same kind of confusion or learning
curve problem and then then uh you know if you start off being being too far leaned in then you like lean out too far and i think a lot of that founder mode flip is like 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 um i need
to stop making excuses like i you know i need and it's not 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 um some of those elements of um you know
and i think part i don't know if there's a way to get to this destination without some level of pain you know um certainly like the elons and steve jobs of the world had sort of big big spans of like wandering in the desert um 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 a 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 don't know if anybody has a common definition of 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 um 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 pnl at google and like what am i supposed to tell him how sales works or marketing or like um but you end up it's easy to be too leaned out there where you're like not really giving setting clear direction um and so you know each founder is going to have their own
sort of things that are easy things that are harder um 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 um 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 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 into it well and specifically it's you know often well intended but you know as you um or it's often even not conscious but as you hire these execs and then you also build up like an hr function you
get coaches and things like that um and then there's the things are not going well you know one thing that can happen is you start collecting all this feedback and people are like wait um if i can give drew some negative feedback then maybe i can displace 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 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 um 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 execs
to somehow evade accountability um so there's these sort of systemic things that can creep in um 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 not 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 to at some point you end up like blowing that up as a founder and that was certainly my experience.
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I think that's a great segue to get into chapter three.
Basically, what I understand from what you're going through right now is you're rebooting the team, you're rebooting the core business you're booting the product i think it might be good to start with the team you talked a few times about just how you feel like you got to a point where the team wasn't
shipping as much as you thought you would as as much as you think they should uh talk about maybe that part of it of just they're realizing hey this this part of the business needs to change and then we can talk about the product and the direction you discovered well i mean my uh playbook as an entrepreneur
is to get like really frustrated by something and then try to solve that personally um so i'll cover the team and sort of the what direction we ended up choosing um 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 um 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 um but um 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 and just go 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 um and you you also you know one thing that was clear across the board from all the successful remote uh remote first companies was you have to be more documented um but then you have a lot more documents and so we were like you know this started
turning up like very obvious problems which is like wait why do i have like one search box at home and 10 search boxes at work you know 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 you
know we've got 10 search boxes that you search 10 percent of our stuff i'm like we should just like fix this um and again even just as a frustrated user maybe 2018 2019 i'm like having this problem myself i'm like it's really hard to find stuff plus there's always like cool like vector search stuff
and you know deep learning stuff happening even for chat gpt i'm gonna make like a personal search engine that takes us 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 uh you built this yourself you're saying yeah this was like a it sort of went nowhere for a couple years um but then after coven 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 um and i bet that like little hacked up search engine thing that i that i made uh could be part might be an ingredient to this um so we bought a little company called commandee 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 it and then obviously after chat gpt um 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 chat gpt can't because it's not connected to your stuff so if you ask chat gpt like um where's my what does my lease expire where's that slide from last year's product launch can't tell you because it's not personalized uh because it's not connected to your information and so we
did all of that before this whole connector platform where it connects we index the known universe of sass 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 um and then more than that like we want
to organize your working life for you um and stepping back and further um you know often it happens that a company like starts solving a problem and that problem is never like permanently solved um so in a lot of ways dash is like the biggest and best embodiment of like um solving the same kinds of problems
i started dropbox and 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 I the real issue is that like 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 like we've talked a lot about search but then organize is still a big problem like the idea of having there's no like desktop
folder or or desk top as in the physical realm when you're in your browser right it's just sort of this ocean of content that sort of like washes by you and then you get tired and you nuke the whole environment but yeah there's nothing to like come back to there's no like collection concept right and files
have folders songs have playlists links have right so if you want if 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 in an airtable, this is like a new problem.
So Dash also helps, it 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 like how should one like 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 the first part of the answer and so we're super excited but we just launched it like six or seven months ago and signed up our first customers
and so and 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 um one is as you know part part of the problem we had with competition and this sort of chapter two was was external but a lot of it was internal where we
just didn't we couldn't organize ourselves um effectively and the business that scales so much faster than our ability to manage it um first is recognizing this not like a unusual problem and many companies not all but certainly many and actually many in sass uh sass 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 um so you know dropbox has fallen into that category you could say other you know zoom slack others so first it's 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 a lot of 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 working real row in the same direction for the same team to then when you have like multiple products then you have all these conflicts um where you know
how much do 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 spinning 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 um and and so then you respond by like sort of breaking up into groups or you know business units um so we have kind of a product business unit product gm structure um 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 you know is obvious is like mega obvious to experience people and you're just like 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 jeffrey moore and then there's a lot of cultural problems that set in and we just touched on some of the high level but you know whether you're in a company or in an empire uh a civilization what gets
you to the top it turns out to be pretty similar things you have sort of this like outsider, challenger mentality where you have to eat what you kill and the odds are against you.
And if you're like hard work and learning and grinding, you start moving up the curve faster.
But then once you're successful, then 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.
um and so I think what you know we experienced many other companies experienced Bill Campbell experience in Netscape um this sort of seeds like success plants the seeds of failure in terms of like complacency or entitlements um 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 like the turnaround merit badge and like part of that is the turnaround playbook like okay you know first it's just like getting out of this like
delusional state where you think you're great like it's just sort of splashing cold water and everyone be like look like we haven't shipped any like no last three years like the only thing our customers have really meaningfully seen from our product is a price increase like 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 um 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 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 even place for sort of the end of chapter two and three and part of what happens in in conjunction with a lot
of the cultural stuff i just talked about is also you can have this as as a tile 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 um 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 where the big big lessons from chapter two that we've addressed in chapter three the seniority gap is something
that can accumulate because uh the talent can be go can much of the talent can kind of fly to the next you know shiny thing um and what you do in response typically is like you promote a lot of people internally which is sort of good for them it's it sort of seems good for them in the short term because they're
just getting a lot more authority and responsibility quickly um so people like that on day one but it's a problem because suddenly people are you know solving problems through trial and error or things may be new to them that are not new to the industry and suddenly you know no knowns the industry are like
unknown unknowns to those leaders um and then usually you can get around that by hiring uh a layer of experienced execs um or having like enough of them in the company but in the sort of talent wars of the late teens um you know we were in the situation as were many companies where any exec you talked
to with any experience had like five offers from fang companies for like three times a comp and a third of the workload or like 10 offers from like i pre -ipo startups and like c -level roles and these are like offers in hand so like the only thing that really worked to even just like keep the lights
on was basically giving people like double promotions so that they could justify the you know someone who's a director at company x like making him a vp at dropbox and then you had to do that because like they literally had offers in hand of like many millions of dollars a year um and otherwise you
just hired like no one that cooled off a lot after the correction in SAS, um, 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, um, uh, 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 is 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 on hiring you can end up a situation where there's a huge um kind of voltage drop in terms of like people's matching between what your company needs and what they know how to do and uh 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 it was a big part of the stagnation um again it's not because the people but this was something that I was doing to my team so it's not them um 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 as the aggregate learning curve or the aggregate learning 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 become a founder.
Yeah, mind the seniority gap.
Like that's one of so many.
You know, people think about becoming founders, they start companies.
I'm going to start a company.
Here 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 on -level playing field.
So and like, 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.
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 i 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 my 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 i just sort of showed up that way so um and and so there's probably some
like chemical imbalance of some form that causes people to do it um but i i had a lot of kind of insecurity about should i be a ceo and because coming from the technical side 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 not 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 uh 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 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 like
all right well i'm gonna get the company to like you know 100 million valuation and the trend will just be going faster and 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 um but then
moving to the bay area you suddenly meet like you throw a rock and hit 10 people who've done that um and what do you learn like those this was just shocking to me because i talked to what 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 it i just you know i think they're 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 um so i think burnout is the biggest thing that will sort of kill you um and so i think that's why like these coping mechanisms and like getting your own head right um 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 um rewarding aspects of it um you know building great things with great people
that impact um huge populations it's like a really what i found is that founders keep doing this because they love it uh 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 um so but i think
to get through that you have to like you know ben horowitz also said you 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 and then how do you make sure you're not like resenting or hating your company
or yourself and view i think the hardest thing for a founder like challenge is not optional you're going to be challenged but the suffering is optional you don't actually have to suffer um 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 or being really angry and sad all the time um 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 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 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 anything a theme that's carried throughout a lot of these different chapters is like you have to figure out what game you're playing and what the rules are when the game keeps changing.
um so i like in addition to you know the enneagram or uh coding i also like a long time like video game uh player and there's a there's a great game called star it's there's everybody's familiar starcraft it's an awesome game i think it has many lessons um and riddles for an aspiring entrepreneur uh
many parallels with running a company um i'll save that for another one um but 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 um or like actions for 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 that when they in starcraft and other games there was this concept of like there's like a micro there's micro and macro um and i would add to that there's also the meta game okay so what's that so micro in these games um something like starcraft
is like all right can you click really fast and like move your people and build things really quickly and um it's like the mechanics uh like every second like how many how many hundreds of things are you doing per minute or you know 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 um well then it could come back to the micro in a product context or in 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 and 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 in the details and then there's kind
of a the macro game all right so in starcraft that might be things like well yeah clicking a lot is important but overall you're really managing um 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 do you know what the other person is doing it's 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 like the mechanics of like how does this feature work but more like all what's
the business model what's the market what's the um who are my competitors how do I differentiate myself um how's this all going to evolve over time um as the as the category goes from like super high growth to more mature things like that um and you know you respond okay we got to go from one product
to multiple products so then we have to like reorganize the company that way and we um blah blah and then then i'd say there's also this the meta game um which in gaming is like a pretty specific thing it's like either some combination of the game itself gets updated so that you know as the as the creators
like rebound they make this unit stronger and you know this air unit stronger and this ground unit weaker and sort of like um 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, you know, 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 than playing 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 business cycles.
So I think you'll have, as you see, there's 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 dot -com era in 99 -2000 or the Web 2 .0 era in 2007 or others.
And then you have these bust times like 2008 and 2000 2001, et cetera.
So there's like a market cycle thing that often has create similar dynamics where it's like, you know, 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 it 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 um 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 um and yet all the stuff we did
on social or going direct was like way way way more impactful um and it's not just dropbox or in tech but it's also like you know presidential election like these all the candidates are on podcasts right they're not so i mean yes they're on cnn too but not really so that's just like a new thing like
how do you you know promote 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 math you know using math from epidemiology to create these viral loops um 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 um and you need to get good at the micro
it's not that like the meta is more important than the it's like you need to do all three at the same time and so um that's really the hard part and then when when things are shifting because i would uh and the way you know what 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 um 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 you know 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 um you know i've co -readed a list of books that were really impactful to me who can find a way to share that all right yeah share that um but uh you know in a lot of ways you're basic
as a ceo you have to be like right about a lot of things especially and including things you haven't done before um 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 um so it's can be kind of around like higher level like almost philosophical
um 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 and i've also found it's interesting you learn having kind of stable
of people that you know are at the same uh stage as you a couple people just people a couple stages ahead you know two years ahead five years ahead 20 years ahead and this is founders other CEOs other founders yeah um founders and CEOs exactly um because you'll learn different things from them so first
of all when you're in the early innings like you you'll like you'll actually get more like useful advice often from your peers because are going through the same thing so it's like how do you raise how do i raise a seed round um you know you're gonna get a lot more out of someone who did that like a year
ago or or is doing that now then like if i asked zuck like how do you raise a seed round he'd be like i don't remember just like build a good company um um and you'll see that as you talk to people in 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 um distribution then there's sort of this continuum to like then it's about like your business model and modernization 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 the 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 like reading and community are the most important things but then the last thing is being like systematic about it so in line with or what does it mean to keep your this curve ahead of your personal growth curve in the company's growth curve i think one way to do that exercise is think
about is always be working back from right like in one year from now what will i wish i what will i wish i'd been learning today two years five years and often those to -do lists are pretty different right so in 2008 um i would have been focused on just like getting users for dropbox but then looking
ahead to a year later, I would have been building the first business functions in the company, and then five years later, I 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, how do I raise a scaled venture round and what do all these terms mean and things like that.
But then how do I be a great leader, a great manager, comfortable speaking publicly, things like that.
um and those the things that are further out are often like the most intimidating but you also have the most time to learn and you often can psych yourself out in terms of like oh it's just like new and uncomfortable and it 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 um is run away from it because you're human it's like uncomfortable to like feel like um to confront these things that you're not good at or might be embarrassing or threatening um and so i think an important part of being a founder is like
learning to run towards that feeling not away from it um that's a big part of your learning rate um is the extent to which you're like pushing yourself beyond discomfort and then i'd say and and and so like having that list of like 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 the that kind of growth mindset and i'd say the last piece of it that is also tricky in addition sort of like going toward from a kind of heart or mindset perspective in you know walk going towards discomfort and in addition to a lot of the other stuff we talked about i mean like
how do you have a sense of equanimity you're not sort of burning out and and and finding a sustainable pace i think the other thing is like often smart people have more trouble learning than than uh than otherwise um and there's this great article uh that i it's probably my most handed out articles
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 um or the more you are sort of identified as like gifted or intelligent as a kid the more you get that you're that identity uh the more like not knowing
something or being wrong it's not just like not knowing something or being wrong it's like an assault on your identity and so i found that um one of the best predictors of an exec continuing to scale it's 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 um like they can convince themselves that well there was here's how they were like technically right even though like clearly they were wrong or clearly the thing didn't
work out uh and they sort of let themselves off the hook and and all this happens unconsciously as sort of a protective mechanism so i think finding ways to take responsibility uh or how always i'm like a mindset of like all right what if i were like 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 in or with perfect hindsight, what would I have done differently?
Um, and just like owning things ends up being more painful in the short run, but then, you know, some painful hours can save painful years.
Um, and there's a great book on that mindset stuff, the 15 principles of conscious leadership, Diana Chapman and some coauthors.
And she's, she's been a coach and friend of mine.
She's amazing. And it says really helped me on that front, but really like, how do you train your head and train your heart um 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 in a community to help you along this journey uh this article about how smart people learn and how to get past this block uh
so i love to just like 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 re 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 uh the epitome but we still gotta make
it fully out of the we're like on our way up we're we're clawing 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 it's not like you reach the a top um 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 uh broken by other people or if there's something you've discovered that is a big market and you 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 we're all really lucky to be able to do this kind of work right um and you know the things that i got out of the oh yeah when i was 18 the things i thought i would get out of starting company
would have been the things you would think it'd be like oh i'll be like really well known or really rich or build these awesome things um and um okay you know 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 the experience
and the journey of starting a company um can really be of you know forge for like a better character or like there's transfer a lot of what you learn here is transferable in many different domains like you know I just had a little kid Charlie uh he's one year he's one year old um so I know we're both
in kind of new dad mode um but I'm like it it will make me it's made me a better husband it made me a better father uh made me a better person and so and then I just the last thing like it there's like there's like no easy button where things are just up and to the right and so like don't look for one
um and don't feel bad if it if like things are difficult um but ultimately like one of the biggest surprises about like having being able to spend time with all these like 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 into the abyss and like yeah um and yet um for a lot of these people there's
at the end of day like nothing they'd rather do so i think finding the gun that i'm very excited to follow the next chapter of your journey uh 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 uh on all the socials and then um uh yeah we got a new product dropbox dash dropbox .com
slash dash um right now it's for companies we'll have a downloadable version you can just get on your phone or your computer uh soon but yeah i mean This was awesome.
Super fun. Really big fan of what you do.
Sam. Drew, thank you so much for being here.
Thanks. Bye, everyone.
Thank you so much for listening.
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