Drew Houston: Finding Your Way as an Entrepreneur [Entire Talk]

Key ideas

Houston argues founders learn by starting, get distribution from a product users spread rather than ads, and should fear lost focus and hiring standards more than rivals.

From a machine transcript of the audio. Quotes link to the moment they are said.

1. 1

   Start before you feel qualified

   Houston rejects the idea that a founder should first collect degrees and big-company jobs, and says working at startups prepared him best. He points out that Amazon, Google, Facebook and Apple were started by first- or second-time founders figuring it out as they went. To cover his gaps he bought the highest-rated book on each discipline, while noting that a book alone won't make you good at sales.

2. 2

   Set criteria, then chase your own frustration

   After what he describes as something like burnout on his SAT prep company, Houston decided the next idea had to be deeply technical, explainable to normal people in a bar, and backed by a working business model. Online storage was already a startup cliche, but he says he tried the products on offer and none solved his problem. Forgetting his thumb drive before a bus trip was the last straw, and he started writing code during the ride.

3. 3

   Reach people who aren't searching for you

   Houston says AdWords cost $500 to $1,000 to win a user who would pay $100, and that early deals to pre-install Dropbox on PCs went nowhere because the company had no leverage. What worked was a demo video full of in-jokes for Digg's early adopters, which he says took the beta waiting list from 5,000 to 75,000 overnight. After that a two-sided referral program and shared folders let users spread the product, and he credits those two with the vast majority of sign-ups.

4. 4

   Remove friction before adding options

   Houston describes bringing in five people off the street, watching none of them discover the tray or menu bar icon, and then working through a list of dozens of fixes. He says the single-folder model began as a shortcut but stayed, despite being the top power-user complaint, because one magic folder is easier to explain than folder mappings. His estimate is that even 10% more friction might cut an audience in half.

5. 5

   Guard hiring and focus over watching rivals

   Asked about Google Drive and SkyDrive, Houston says founders tend to overestimate competition, that Dropbox's roadmap barely changed, and that companies more often fail through lost focus or a falling talent bar. He ties this to the co-founder choice: pick someone whose judgment you respect and who complements you, because that pair seeds the first ten people, who seed the next hundred. He admits Dropbox made painful hiring mistakes in functions he couldn't judge, and says talking to many people in a field is how he built that context.

In Drew’s words

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