CEO of Dropbox: the pandemic caused “the death of the office as we knew it”

Houston, who grew up in Acton, was not deterred. Today, his company, Dropbox, is publicly traded with a market capitalization of over $ 11 billion and approximately 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 donation to MIT, which will endow a new chair at the Schwartzman College of Computing. (This interview has been edited for length.)

Q. When you were at MIT, what were you most involved with?

A. I loved studying computer science, and I loved things like distributed systems, operating systems, and algorithms. These were my favorite classes. I had grown up tinkering under the hood of my computer, trying to figure out how it worked.

The Dropbox app appears in the App Store.Andrew Harrer / Bloomberg

Q. I remember being at the Y Combinator [startup] demonstration day in 2007, at the Old Candy Factory outside of Harvard Square. You were very funny – your presentation sounded like a stand-up comedy act. But then I remember talking to a few investors in the room and like they were like, “Oh, this is clearly a feature that Microsoft could develop. What do you remember from that demo day – and what happened next?

A. They had two days of demonstration – the one on the east coast and the one on the west coast. On the West Coast, [the investors in the audience] come running to you with checks. But the one on the east coast was the first. The reactions were like, “It’s cool, but you know Microsoft is going to do it and Google is going to do it. Oddly enough, I didn’t even say to myself, “Yeah, we’re going to beat them.” I’m just like, “Yeah, but they didn’t, for some reason.” It’s actually not that easy to do; if that was the case, they would have done it already.

Q. You were alluding to it a little bit, but is that where some of the first investments took place – on the West Coast Demonstration Day? [in Silicon Valley?]

A. Yes. We brought this angel investor to my co-founder [Arash Ferdowsi.] This guy, Pejman [Nozad], spoke to my co-founder, in Farsi, immediately after our demo ended. He is 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 [the venture capital firm] Capital of Sequoia. And that’s how it all started.

We hit it off. It was all crazy. 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 that evening. So it was like a one working day delay. We had just moved to San Francisco.

Q. If you look back, how do you feel now that you have this open company and still run it?

A. It feels very short, and it feels very long. What seems short is that it has been a whirlwind. When I started working there, I never thought it would turn into a profitable business, let alone a public business. What seems long is that there have been many chapters in history. At first there was this crazy period of hyper growth, and there was a time when we had to focus and cut back on some of the things we were doing. We took the company to the gym and got better and went public. A pandemic then occurs. Now we have a whole new way of working, and this new model of working needs new tools. There is an endless demand for a better experience on our screen, where we work.

Q. Can you talk about the stressor of suddenly having to run the business from a distance?

A. Looks like the world was hit by an asteroid, and overnight everything was different. First of all, [my priority] was helping to make sure everyone was safe and that we could support them.

But it was then pretty clear that this could be one of the most fundamental changes in knowledge work since the term was coined 60 years ago. It was very clear that 2020 would be the year the world would definitely shift from knowledge workers working primarily in an office to those working primarily on a screen. We could see this with our clients very literally. I was talking to a client last week – it’s a creative services company in Australia. [They] were all in the office the day before confinement, [and] all their servers were in there. They needed a way to move all of their business to the cloud as they went from three physical sites to 100 physical sites as people were all working from home. Dropbox was instrumental in making this happen.

We were very happy to hear that doctors were using us to coordinate medical responses, or that people were using HelloSign, [an e-signature service owned by Dropbox] sign PPP loans.

If we all work in digital environments, what you see on your screen is much more important than the design of the physical environment. [office] space, and I don’t think it got that much attention.

Q. One thing you talk about is improving the base product over time. In terms of new products or new capabilities, what did you talk about the most in 2021?

A. We have [Spaces, which is] a better way to organize all your content across meetings and projects. Why can’t I click on a meeting and see what we just presented? How do you bring all these different types of content together in one container?

We just launched a product called Capture, which basically lets you take a video of your screen or of yourself. If you want to tell something and make a little two minute video of the kinds of things you do in a short presentation, or a quick status update – there [provides] a substitute for the previous experience of looking over someone’s shoulder or saying, “Hey, come to my office. What do you think about this?”

Q. What did you say now about using the office? I was talking to Google executives who do the three days at the office and two days at home.

A. Scientists would have predicted, yes, there will be a pandemic at some point. But I don’t think they would say then that it follows then that there is going to be the death of the office as we have known it for 100 years.

Q. I’m assuming your company probably has a few 10-year leases in different cities.

A. We made a crazy bet about a year ago – suppose this is actually one of the most significant changes to knowledge work ever. Suppose it totally rips the floor off the way the work goes. We don’t have to ask them, and maybe we won’t be able to ask them as before.

We want to give people the best of both worlds. We want to give people the flexibility of virtual or remote experience. But nothing replaces the in-person connection. You can have a relationship on Zoom, but I think it’s very difficult to build a relationship on Zoom, a human relationship. So how should you rethink the work week or year to achieve this?

We definitely want to avoid the worst of both worlds, and I think that’s what a lot of hybrid models fall towards, which is to revert to [to the office] for two or three days a week. With that you have no flexibility, because you still have to [live] within commuting distance of the office, and you still spend hours a week commuting. You also lose part of the community part, where you walk into the office and it’s half empty.

If you are going to hang out [employees] in the office, better to have a good reason. You’re not going to force someone to commute two and a half hours each way [if they have moved farther from big cities] show up for a half-hour state meeting.

Q. So, are you leaning in the sense of not having a certain number of days to be in the office?

A. No. Our model is first of all virtual. Individual work is done at home. We have transformed the office into this friendly and collaborative space. We tore up all the individual desks. We have reduced our [real estate] 80 percent footprint, globally. The office is really just this collaborative space.

Left to right, Dropbox CEO and Co-Founder Drew Houston and Daniel Huttenlocher, Dean of MIT Schwarzman College of Computing, in an interview at MIT's Samberg Conference Center.
Left to right, Dropbox CEO and Co-Founder Drew Houston and Daniel Huttenlocher, Dean of MIT Schwarzman College of Computing, in an interview at MIT’s Samberg Conference Center. Josh Reynolds for the Boston Globe

Q. Do you see teams that say, “Well, we’d like quarterly or twice a year, get everyone to San Francisco?” “

A. Absolutely. This is not a remote control only model. You definitely want each quarter to have meaningful points of contact over several days with other humans, because that’s how you build a relationship, a team, and a culture. I don’t think we’re going to find a technical substitute for this.

Q. Have you used the office at all in the past two months or have you been 100% virtual?

A. Very sparingly. I would like. But given Delta and all, we’re not totally out of the woods on the pandemic just yet. We didn’t have a mandatory in-person experience, nor did most of the other companies.

Q. There is a profusion of productivity tools that have emerged. Some of them, like Slack and Zoom, people use for several hours a day. They still see Dropbox as a utility, a place to store files. It’s still a thing behind the scenes, as we’ve seen new productivity tools become a thing on the scene over the past 18 months.

A. Zoom and Slack are great for your team’s short-term memory, but you also need long-term memory, and they’re not exactly the same. We think the long-term memory part is pretty broken, compared to what it could be.

Scott Kirsner can be contacted at [email protected] Follow him on twitter @ScottKirsner.

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