Fourteen years ago, Drew Houston was a recent MIT grad pitching a startup to a roomful of investors in Cambridge. What if you could store all your important digital information — whether photos or spreadsheets — on your desktop and in the cloud? And what if you could keep those files synchronized, so that a change you made using your laptop in a hotel room would show up when you next opened that file from a desktop at your home office?
Investors in the room didn’t think this sounded like a winning idea. Couldn’t Microsoft or Apple, which build the operating systems your computer uses, just copy this idea and squash Houston’s startup?
Houston, who grew up in Acton, was undeterred. Today, his company, Dropbox, is publicly traded with a market cap of more than $11 billion and about 2,700 employees. Forbes estimates his net worth at $2.2 billion. Houston ― pronounced “How-ston” ― was back in Cambridge this month to announce a $10 million gift to MIT, which will endow a new professorship within the Schwarzman College of Computing. (This interview has been edited for length.)
Q. When you were at MIT, what were you most engaged with?
A. I loved studying computer science, and I loved things like distributed systems and operating systems and algorithms. Those were my favorite classes. I had grown up tinkering under the hood of my computer, trying to figure out how it worked.
Q. What kind of computer did you have growing up?
A. My first computer was an [IBM] PCjr. It was fun being able to figure out how the disk worked. Or, can I cheat in this video game and give myself 30,000 lives, or extra ammo? That has a surprisingly direct tie to then studying a lot of these things formally at MIT. And that has a pretty direct tie to Dropbox, where we’re cloud-enabling the consumer operating system, [and] making it so that your desktop can be in the cloud.
Q. Were you part of any clubs or extracurricular things?at MIT?
A. They have an entrepreneurship club. And that was a great first community to be part of, and learn about startups. [In the January period between semesters,] they had a bunch of [classes on things like] how to write a business plan.
I was really active in my college fraternity, so I think I learned a lot [there as well.]I developed the left side of my brain in classes, but how do you relate to people and lead people? A lot of my first management training was actually in organizations like my fraternity, where you have to like get all these unpaid volunteers to cooperate.
Q. I remember being at the Y Combinator [startup] demo day in 2007, at the old candy factory outside of Harvard Square. You were very funny – your presentation was like a stand-up comedy act. But then I remember talking to a couple of the investors in the room and like they were like, “Oh, clearly this is a feature Microsoft could build.” What do you remember about that demo day — and what happened afterward?
A. They had two demo days — the East Coast one and the West Coast one. At the West Coast one, [the investors in the audience] come running up to you with checks. But the East Coast one was first. The reactions were like, “Cool thing, but you know, Microsoft’s gonna do this and Google is gonna do this.” Funnily enough, I wasn’t even like, “Yes, we will beat them.” I’m just like, “Yeah, but they haven’t, for whatever reason. This is actually not that easy to do; if it were, they would have done it already.”
Q. You were kind of alluding to this, but is that where some of the first investment came — at the West Coast demo day [in Silicon Valley?]
A. Yeah. We had this angel investor come running up to my co-founder [Arash Ferdowsi.] This guy, Pejman [Nozad], was speaking to my co-founder, in Farsi, immediately after our demo ended. He’s very persistent. He invites us to the Medallion Rug Gallery in Palo Alto, [where Nozad had started out as a salesman, then began making small investments in startup companies.] He introduced us to [the venture capital firm] Sequoia Capital. And that was how that all started.
We hit it off. That whole thing was nuts. We went [in to meet with Sequoia] on a Friday. Mike Moritz, [a senior partner at the firm,] came to our apartment on Saturday. They had a partners meeting on Monday, and we had a handshake deal that night. So it was like, a one-business-day turnaround. We had just moved out to San Francisco.
Q. If you look back at that time, how do you feel now that you have this public company, and you’re still running it?
A. It feels very short, and it feels very long. What feels short is it has been a whirlwind. When I was first started working on it, I never would have thought it would become any kind of profitable thing, let alone a public company. What feels long is that there have been many chapters of the story. In the early days, there was this crazy hyper growth period, and there was a time when we had to focus and pare back some of the things we were doing. We took the company to the gym and got in better shape and went public. Then a pandemic happens. Now, we have a whole new way of working, and this new working model needs new tools. There’s an infinite demand for a better experience on our screen, where we’re working.
Q. Can you talk about the stressor, of suddenly having to run the company remotely?
A. It feels like the world was hit by an asteroid, and overnight everything was different. First, [my priority] was helping make sure that everybody is safe and we can support them.
But then it was pretty clear that this might be one of the most kind of fundamental changes to knowledge work since that term was invented 60 years ago. It was very clear that 2020 would be the year that the world permanently shifted from knowledge workers primarily working in an office, to primarily working out of a screen. We could see this with our customers very literally. I was talking to a customer last week — they’re a creative services firm in Australia. [They] were all in the office the day before lockdown, [and] all their servers were in there. They needed a way to migrate all of their stuff into the cloud, because they went from three physical sites to 100 physical sites, as people were all working from home. Dropbox was like instrumental in making that happen.
We were very happy to hear that doctors were using us to coordinate medical responses, or people were using HelloSign, [an e-signature service owned by Dropbox] to sign PPP loans.
If we’re all working out of digital environments, what you see on your screen is a lot more important than the design of the physical [office] space, and I don’t think it’s gotten nearly as much attention.
Q. One thing you talk about is improving the core product over time. In terms of new products or new capabilities, what have you been talking about most in 2021?
A. We have [Spaces, which is] a better way of organizing all your content across meetings and projects. Why can’t I click a meeting and see the stuff that we were just presenting? How do I bring together all these different kinds of content in one container?
We just launched a product called Capture, which basically lets you take video of your screen or yourself. If you want to narrate something and do a little two-minute video of the kinds of things you do in a short presentation, or a quick status update — it [provides] some substitute for the prior experience of looking over someone’s shoulder, or saying, “Hey, come to my desk. What do you think about this?”
Q. What have you guys said now about what the office is going to be used for? I was talking to some leaders from Google who are doing the three days in the office and two days at home schedule.
A. Scientists would have predicted, yeah, there’ll be a pandemic at some point. But I don’t think they would then said that it therefore follows that the there’s going to be the death of the office as we’ve known it for the last 100 years.
Q. I’m guessing your company has probably a few 10-year leases in different cities.
A. We made a crazy bet about a year ago ― Assume this is actually one of the largest changes to knowledge work, ever. Assume this totally rips off the floorboards of how work happens. We don’t have to put them down, and maybe we won’t be able to put them down, the same way they were before.
We want to give people the best of both worlds. We want to give people the flexibility of the virtual or remote experience. But there’s no substitute for the in-person connection. You can maintain a relationship on Zoom, but I think it’s very difficult to build a relationship on Zoom, a human relationship. So how should you redesign the work week or work year to do that?
We certainly want to avoid the worst of both worlds, and I think that’s what a lot of the hybrid models are falling into, which is, come back [to the office] for two or three days a week. With that, you don’t have flexibility, because you still have to [live] within commuting distance the office, and you’re still spending hours a week commuting. You also lose some of the community part, where you go into the office and it’s half empty.
If you’re going to drag [employees] to the office, you better have a good reason for it. You’re not going to make someone commute two-and-a-half hours each way [if they have moved farther from big cities] to show up for a half-hour status meeting.
Q. So are you leaning in the direction of not having a certain number of days that you have to be in the office?
A. No. Our model is virtual first. Individual work happens at home. We’ve turned the office into this convening, collaborative space. We’ve ripped out all the individual desks. We’ve scaled back our [real estate] footprint by 80 percent, globally. The office is really just this collaborative space.
Q. Do you see some teams who are saying, “Gee, we would like to once a quarter or twice a year, bring everybody to San Francisco?”
A. Absolutely. It’s not a remote-only model. You certainly want every quarter to have meaningful, multi-day touchpoints with other humans, because that’s how you build a relationship and team and culture. I don’t think we’re going to find some technical substitute for that.
Q. Have you been using the office at all over the last couple months or you’ve been 100 percent virtual?
A. Very sparingly. I’d like to. But given Delta and everything, we’re not totally out of the woods yet on the pandemic. We have not had any kind of mandatory in-person experience, nor have most other companies.
Q. Are you doing some other travel — whether customer travel or travel to different Dropbox offices?sites?
A. I’ve certainly been putting the “virtual first” model through its paces myself. I was in California, Texas, and Hawaii. I was in New Hampshire last year. I spent months at a time in each of those places, which would never have been possible before. And it works great. I just have my same setup in all these places.
Q. What’s the New Hampshire connection?
A. My family, growing up, had couple little camps on a pond in Francestown. New Hampshire. Every company has moved their headquarters to the cloud, right? Where I am physically is a lot less relevant, as long as we all come together for, you know, a week every quarter or whatever. I think that’s going to be the new normal for the median company. There will be fits and starts, where they try to make the hybrid thing work. But I think people will discover, over time, that that’s not really solving for anyone’s needs. And then I think we’ll move to models like this. The world will be running many millions of interesting experiments [in new approaches to working.]
Q. There’s a profusion of productivity tools that have popped up. Some of them, like Slack and Zoom, people are using for multiple hours a day. They still they look at Dropbox as utilitarian, a place to store files. It’s still a backstage thing, whereas we have seen some new productivity tools become an onstage thing in the last 18 months.
A. Zoom and Slack are great for your team’s short-term memory, but you also need a long-term memory, and they’re not really the same thing. We think the long-term memory part is pretty broken, compared to what it could be.