DropBox Case Essay

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DropBox Case Essay
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  • University/College:
    University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 672

  • Pages: 3

DropBox Case

Dropbox was created in 2007 and launched to the public a year later. It was founded by Drew Houston and Arash Ferdowski; who were classmates together at MIT in the early 2000’s. The created a product that allows you to sync you computers together by using a cloud to share files between the different computers. At the time of creation there were existing products in the market but they believed that they created a product that would simplify the process as well as make it secure and reliable for the customers. Their plan was to differentiate themselves form their competitors based off these factors.

For a customer of Dropbox it allows them to easily and reliably share files between their computers or devices. They believed that the existing products were unreliable and would only allow u to share a certain amount of files. Their product would be reliable and easy to use for the customers. They would also get a free 2G worth of space or could but additional space if they needed to. This is something seen by a few competitors but not all of them. They also created a product that can be used for both business and personal use.

Dropbox will do something that also differentiates itself form their competitor. They will use Amazons server to provide the customers space the store files. This will be rented from Amazon and will drastically decrease the amount of money they spend to provide space. Owning their own servers will be costly to purchase and maintain for Dropbox. They also only hired engineers to their company in the early going to be able to continue to improve the technology they are providing. To keep improving their product they offered beta testers the opportunity to test the product and see how they like it. They also listened to their customers after the launched to see what they liked and did not like. This led them to develop a feature of the product that allows the customer to provide feedback to the company. They also observed users using the product to see if it fit the needs of a basic user, which turned out to be very beneficial to the company.

Dropbox launched their product in 2008. While the product was still in beta it began to gain customers through various websites and technological competitions for startup companies. This allowed Dropbox to get their name out there to the people who most likely are already using similar products or have the need for this product. When they launched the product they used the freemium business model where they offered free use for up to 2G of space and you could pay a premium for more space. They wanted to grow rapidly in the market to gain as big of market share as possible in the shortest amount of time. They also found great success from word of mouth referrals and viral marketing campaigns.

Dropbox’s biggest problem they needed to solve early on was their customer acquisition rate. They found that in the early going to cost about 300 dollars per customer they had pay. This was due to the amount of free space given away to the amount that people were paying for. This does not set them up to be successful financially if it didn’t improve. Dropbox was able to figure this out and lower their costs but utilizing more word of mouth referrals. Dropbox was fortunate enough to have backers that supported their company in the early going with enough money to keep the company going until they could gain the following needed to decrease costs. They have a greater opportunity for profit then most of their competitors because of their use of Amazon’s server instead of buying and maintaining their own, especially with the decreasing rate of renting server space.

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Dropbox case Essay

Facebooktwittergoogle_plusredditpinterestlinkedinmail
Dropbox case Essay
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  • University/College:
    University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Words: 806

  • Pages: 3

Dropbox case

1.
Houston is still confident with Dropbox, which is a late mover compare to other competitors because of these following reasons. First, he thinks he can make money because customers will understand either storage is a physical one or online service, they both still cost money. Second, he sees opportunity of growing market of cloud service. Furthermore, he also thinks other competitors have difficulties in transferring data across firewalls and balked with big flies or a large number of files. Thus, he was confident to create something better than other competitors. The key element of Dropbox’s is that the storage service is based on a simplistic model. This storage service is really convenient because users can access to their file over Internet instead of using hard drive or any other complicated systems. Houston knows what consumer’s problem is, that’s why Dropbox became the leader of the market.

2.
Dropbox is profitable in June 2010, because Dropbox service grows 200,000 users after ten days launching, and there are one million users by June 2009. The major reason why user number increases is word-of-mouth referrals and viral marketing, but not paid marketing. Word-of-mouth referrals and viral marketing creates the best result because it makes Dropbox increase 2.8 million users by four million users referring. Dropbox is an established company; I assume the company will become more profitable as it is ranked number 6th in the top 25 online backup company. Houston also knows how to maintain the innovations capabilities. He knows what customers want and what he should improve for Dropbox. One of the ways he improved product features was that the company launched “Votebox on the site to let the users vote and write what the think about features. This is a good way to improve the service. The company also uses A/B testing to determine if the modification yielded a significant improvement in conversion rates.

3.
The key elements of Dropbox that Houston held are subversion, trac, and rsync, and making them just work for the average individual or team. There are some issues that Dropbox still needs to solve. The company should have to create more features to compete with competitors, so they can sustain in the market. Although Dropbox have good MIT computer science major workers, they do not have good luck with business or product hires. They also spent too much money to for marking such as cost per click, or AdWords. He did not waste time/resources, because Houston already tried my ways to keep the company growing, he tried to do what he needs for the company. The better way he should do for the company is solving the problems of the company. In my opinion, the better way to test key hypothesis is that the company should offer more unique, useful, and convenient for those big corporations with high security. Or they can do the survey for those big companies to know what they want, so Dropbox can innovate better features.

4.
Google’s approach to pursing “G-Drive” have differed from the approach that Dropbox’s team followed. Unlike Google, Dropbox did not have much better funding. They needed to raise working capital to accelerate growth but they prioritizing in their features and finding right market. Sometimes if you do not have something, you can find alternative with more efficient way. Google has better fund and they did not see themselves with struggle with money, in other word their mind was more spoiled.

5.
In the beginning, Houston’s purpose to create Dropbox was just to solve his own problem, as well as other people’. It will be convenient if you can open your files or documents on any devices as long as there is Internet. Since there are a lot of competitors in the market, which offer the same service, he needs to have some other different ideas that others don’t have, in order to keep the company busy in the following years. Especially to compete with Carbonite and Mozy, Dropbox should adjust their price and their freemium business model. The company should provide more service of demand of customers want. Google Drive now gives more storage than Dropbox with the same price and searching files on Google docs is easier. Dropbox also should give an option for those who want to sync outside folders to Dropbox. They think it would be more flexible but also more difficult to use for users, but some other users might not think so. Another thing they should do is asking users for feedback so that they will know if the service is useful or not, and what should be improved.

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