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Opening Dropbox

MIT alumnus Drew Houston took Dropbox from conception to a multibillion-dollar business.
Drew Houston ’05, co-founder and CEO of Dropbox
Drew Houston ’05, co-founder and CEO of Dropbox
Photo: Chad Riley

If you walk the halls at MIT, you may notice a lot of students wearing T-shirts bearing the Dropbox logo. It’s a simple design — an opened box — but one that carries outsize significance at the Institute: Alumnus Drew Houston ’05 grew Dropbox from conception to a multibillion-dollar business.

Houston, now the company’s CEO, conceived of Dropbox about a year after graduating from MIT: After repeatedly losing his flash drives, he developed a computer program to store his personal files. Soon, however, he realized the program’s commercial potential, so he co-founded Dropbox with former classmate Arash Ferdowsi, who is now Dropbox’s chief technology officer.

In 2007, they set up shop in the Y-Combinator — a startup incubator then housed in Cambridge — to further develop the technology and company, eventually moving operations to San Francisco. Six years later, the company is worth an estimated $4 billion, with more than 100 million users worldwide.

Today, Dropbox is a free web service that offers cloud storage, allowing users to add photos, documents and videos to a folder on their computer. The folder is then accessible online from any computer or portable device, such as smartphones and tablets.

Many top publications — including The Economist, The New York Times, PC Magazine and The Washington Post — have praised Dropbox’s technology. In 2011, Business Insider called the company the world’s fifth-most-valuable web startup — trailing only Facebook, Twitter, Zynga and Groupon.

As for Houston: In 2010, he was named one of the best young tech entrepreneurs by Business Week; in 2011, he and Ferdowsi were named among’s top 30 entrepreneurs under the age of 30.  

Houston attributes Dropbox’s rapid rise to several things. One is the development of novel technology that filled a market gap: When Dropbox burst onto the scene, Houston says, many file-hosting services were slow, contained bugs or had other issues. Another is recruiting a good team, which started with about a dozen engineers — all of whom had connections to MIT — and has since grown to about 200 employees.

“I think the recipe is usually the same: You solve a problem that matters to a lot of people and then you build a great team,” he says. “That’s what it boils down to.”

MIT: a ‘boot camp’ for entrepreneurs

But some of the credit goes to early development at MIT, where Houston says he refined his engineering skills and found entrepreneurial mentors and leadership opportunities. “MIT has a very pro-entrepreneurship attitude,” he says. “It’s a great boot camp for all these entrepreneurial and other skills you’ll need later on in life.”

First and foremost, MIT gave Dropbox its intellectual capital: The first 10 or 15 people recruited to work at Dropbox were MIT engineering classmates. Some still work there today.

“When it came time to build out the team, MIT was the first place that we went,” Houston says. “The amazing thing about MIT is this unbelievable collection of talent. And one of the most important things you have to do as a company is recognize talent and be able to build the business together.”

A variety of courses — such those offered during MIT’s Independent Activities Period, in January — introduced Houston to the ins and outs of entrepreneurship. He also found mentors among the many seasoned entrepreneurs who regularly visit the Institute. Yet another source of inspiration was MIT’s Entrepreneurship Club (or E-Club), which Houston frequented to interact with like-minded student entrepreneurs. “Probably the most important thing was just meeting a lot of other students who were interested in building companies,” he says.

The E-Club, now in its 25th year, helps students and affiliates of MIT, Wellesley College and Harvard University develop science, engineering and technology businesses through courses, meetings and other activities.

While it’s important to learn the nuts and bolts of starting a company, Houston says there’s one thing that’s often overlooked when talking about tech-based entrepreneurship: “It’s important to understand how necessary it is to become a good engineer.”

Engineering skill — which Houston refined at MIT — is the backbone of Dropbox’s technology, Houston says. “If you’re not a good engineer, it’s hard to get good engineers to follow you,” he adds.

Just get started

For many hopeful tech entrepreneurs, starting a company may be intimidating, especially when hearing today’s successful tech moguls “talk about their sweeping ideas of how they’re going to change the world,” Houston says.

But, Houston says, it’s important to remember that Dropbox, and most successful tech companies — such as Google and Facebook — started as pet projects before exploding into multibillion-dollar businesses. So it’s critical for entrepreneurs to just get started with their companies and build them diligently from the ground up, he says.

That’s one bit of knowledge Houston imparted to MIT students when he returned to campus recently as a guest speaker in 6.933 (The Founder’s Journey), which introduces engineering students to the basics of entrepreneurship — a course Houston calls “a great resource for students looking to start companies.”

“You can read about business, but until you actually get started it’s a completely different type of learning,” he says. “Putting that into practice was critical in learning all this stuff quickly.”

In fact, prior to starting Dropbox — and while studying at MIT — Houston founded Accolade, an online SAT-prep startup. Among other things, it helped him hone his entrepreneurial skills and introduced him to the Boston business community. “Starting the clock at [age] 21 really gave me a boost,” he says.

Houston, 30, returns to his alma mater tomorrow as MIT’s Commencement speaker. “I’m excited to help all the graduates with whatever it is they want to do, whether starting a company or something else,” Houston says. “For me, Dropbox has been an adventure, and so has MIT.”

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