Dropbox Chief to Join Elite Ranks of Idea-to-I.P.O. Founders

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Whether or not Mr. Houston efficiently takes Dropbox public shall be carefully watched, with different privately held tech corporations like Uber and Airbnb additionally edging towards an I.P.O. Dropbox, which is predicated in San Francisco, is unprofitable, and Mr. Houston now has to navigate by a difficult time, each guiding his firm across the tech giants which might be squeezing into its area and adapting his frat man persona to a altering tradition.

“He’s perhaps one of many final ones of a really un-C.E.O.-like C.E.O.,” mentioned Jeffrey Mann, a vp at analysis agency Gartner, who follows the file-sharing and collaboration business. “He was technical. He began out by coding. Most start-ups now after they get to that measurement, founders like him get pushed apart for somebody with a finance or administration background. However he managed to remain there.”

Dropbox mentioned Mr. Houston was unavailable for remark, citing the quiet interval earlier than an I.P.O. However based on interviews with greater than a dozen individuals, Mr. Houston — a personal man with a love of 1990s rock and enterprise books — constructed his firm with an easygoing administration fashion and a dry humorousness, which helped him cope with the bumps alongside the way in which.

Mr. Houston grew up in Acton, a suburb exterior Boston, the oldest of three youngsters. His father, an engineer, and his mom, a librarian, observed early on that Mr. Houston was precocious and inspired him to discover his curiosity in computer systems, however didn’t need him skipping grades.

“His mother and father wished him to remain in first grade for socialization, they usually didn’t need to use the time period gifted,” mentioned Claudia Couto, who taught at Mr. Houston’s elementary faculty and tutored him privately. She is now retired.

As a center schooler, Mr. Houston beta-tested pc video games in search of safety flaws. He labored for a robotics start-up as an adolescent and repaired computer systems for neighbors. He bought an ideal rating on the SAT and attended the Massachusetts Institute of Expertise in 2001.

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“He’s perhaps one of many final ones of a really un-C.E.O.-like C.E.O.,” one tech analyst mentioned of Mr. Houston, heart, at an occasion in San Francisco.

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David Paul Morris/Bloomberg

At M.I.T., he joined the Phi Delta Theta fraternity, which he has mentioned helped him learn to construct a company tradition.

“My first administration expertise was being rush chairman for my fraternity, and I realized a bunch of issues,” Mr. Houston mentioned in a New York Occasions interview in 2016. “You cope with a variety of the identical broad questions — who can we need to be as a company, what sort of tradition do we would like, what sort of persons are we in search of? — that you just do while you’re beginning an organization.”

After his sophomore 12 months, he took a 12 months off and began an SAT prep firm known as Accolade with one in all his former highschool lecturers, Andrew Crick. Upon returning to M.I.T., Mr. Houston determined to study as a lot about enterprise as he might, plowing by enterprise books from a chair he arrange on the roof of his fraternity, he has mentioned.

A Pearl Jam fan, Mr. Houston in 2005 fashioned a 1990s cowl band known as Indignant Flannel, which performed at venues round Boston.

On a bus someday from Boston to New York, Mr. Houston forgot his USB flash stick. Annoyed, he began coding what can be the inspiration of Dropbox. He turned much less occupied with Accolade, which closed.

“He was actually occupied with entrepreneurship, which was not a typical trajectory for M.I.T. college students,” mentioned Kyle Vogt, 32, chief government of the self-driving automotive firm Cruise Automation, who met Mr. Houston at an M.I.T. entrepreneurship membership occasion. “The default again then was to remain in Boston or go to New York and work for a hedge fund.”

In 2007, Mr. Houston entered Dropbox into the Boston program of Y Combinator, the Silicon Valley start-up incubator. Paul Graham, who was working Y Combinator, mentioned Mr. Houston wanted a co-founder quick. Mr. Vogt referred Mr. Houston to Arash Ferdowsi, an M.I.T. pupil. Inside two weeks, Mr. Ferdowsi turned Dropbox’s co-founder; he owns a 10 % stake of the corporate.

The duo labored in Cambridge, Mass., however struggled to land extra funding.

In August 2007, Mr. Houston and Mr. Ferdowsi moved to San Francisco to get nearer to the start-up scene. A month later, they raised $1.2 million from buyers together with Sequoia Capital.

Mr. Houston and Mr. Ferdowsi moved into an residence constructing within the metropolis’s North Seashore neighborhood. It was generally known as the Y Scraper due to what number of Y Combinator firm founders lived and labored there. Mr. Houston and Mr. Vogt later turned roommates.

“To this present day, he nonetheless likes to have individuals over to his residence and do jam periods,” Mr. Vogt mentioned.

Mr. Houston additionally turned near Mark Zuckerberg of Fb. In 2013, Mr. Houston joined Mr. Zuckerberg as a co-founder of FWD.us, a bunch that mobilizes the tech business for immigration reform.

Working Dropbox, Mr. Houston was at first decided to goal its product — which lets individuals retailer and entry their recordsdata within the cloud — at shoppers slightly than companies. He spent lavishly on worker perks, totaling $25,000 a 12 months per particular person by 2016. The corporate as soon as paid $60,000 for a five-foot chrome panda for its headquarters, turning into a logo of start-up extra.

Then hurdles sprang up. In 2011, a safety researcher complained to the Federal Commerce Fee about the way in which Dropbox encrypted recordsdata. Mr. Houston known as coping with the criticism “a ceremony of passage.”

Dropbox additionally developed a repute as an unwelcoming office for girls. “A few of the issues they’ve been scuffling with are tips on how to stability Dropbox being a enjoyable place to work with accusations of getting a frat boy environment,” Mr. Mann mentioned.

Dropbox’s enterprise developed in 2014 after Mr. Houston employed Dennis Woodside, a former Google government, as chief working officer. Now its merchandise are primarily used for work, with companies paying a subscription payment for the platform. A rival firm, Field, which was geared toward companies, went public in 2015.

“From Day One, Dropbox has been an extremely user-friendly product — which is a giant cause why it unfold virally — nevertheless it additionally took the corporate too lengthy to comprehend the cash was in being a business-focused firm, not a consumer-focused one,” mentioned Ben Thompson, the analyst behind the influential tech publication Stratechery.

In 2015, buyers started questioning whether or not high-priced start-ups have been residing as much as their skyrocketing valuations. Dropbox, already privately valued at $10 billion, was marked down in worth by some massive institutional buyers.

Dropbox instilled extra monetary self-discipline. In 2016, workers misplaced many in-office perks. (The panda remained. A word posted close by mentioned it might function “a reminder” to be considerate about spending.)

Whether or not Dropbox can compete towards behemoths like Microsoft, Apple, Amazon and Google, which all present cloud storage, stays a query.

“Right here you will have someone who’s actually in competitors with all 4, besides Fb,” mentioned Hadi Partovi, an early Dropbox investor. However he added that Mr. Houston’s even-keeled demeanor had allowed the corporate to work with opponents like Microsoft and Google.

As we speak, Mr. Houston lives within the Millennium Tower, a glass high-rise within the South of Market neighborhood. His residence flooring are stone and the furnishings is minimalist and trendy. In the lounge, he has constructed a midsize stage to carry out music. He has a home in Hawaii the place he holidays.

He’s a bachelor and, his associates mentioned, lives like one.

“He by no means cooks. He’s a snack man all the way in which if that makes any sense,” Mr. Croswell mentioned. “He positively needs a household.”

On weekends, he and his associates across the nation nonetheless placed on their headsets and play video video games collectively.

“He doesn’t should do any of the hacks anymore,” Mr. Croswell mentioned. “Software program corporations all fastened that form of stuff.”

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