Dropbox is the perfect example of a digital business that began as a simple startup and became one of the most famous tech companies in the world. More curious than this is the fact that they spent very little on paid advertising. So what are the things that made them famous? How did they achieve big numbers? By using what can be coined as the “Dropbox product strategy” we will try to detail below.
Before trying to answer all these questions, let’s take a look at some stats:
- Revenue reached: about $116 million in 2012 and $200 million in 2013.
- In January 2014, Dropbox raised $250 million at a $10 billion valuation.
- Nearly 96 percent of its users use it for free.
- 1 billion files are saved to Dropbox every 24 hours.
- Over 500 employees
- Installed on 250 million devices.
This post is actually part of a series of three blog posts that are trying to give you a different perspective on Dropbox’s growth by analysing its product, its business strategy and its content marketing strategy. In fact, the main reason for analysing their working process it is to see if and how they used relevant content and figure out how it all helped them succeed.
First of all, Dropbox created a damn good product.
There is a very simple rule in the running of a startup. If you don’t have a good functionable product that your users need and use, there is no point in trying to develop a business. It is a waste of time to create something nobody wants. The best strategy is to launch the Minimum Viable Product (not wait for the perfect one), constantly ask your users for feedback and make improvements. If you are interested in reading more on the subject, here is an article that you may find it useful. It is mostly about how creating business models helps tech startups. Based on Seth Godin and Ash Maurya`s theories, we came up with pretty useful insights that can be used throughout product development processes.
Why do we say that Dropbox has a damn good product?
There’s one simple answer: a lot of people were looking for a solution to the following problem – they wanted to access their stuff anywhere, from any device, and confidently share different types of documents. And Dropbox was the company that came with a clean, clear and easy to use reliable product that solves all those things. No surprise they got 70, 000 users overnight just by creating an explanatory video for it.
As Zach Bulygo, blogger at KISSMetrics, highlights in his article The 7 Ways Dropbox Hacked Growth to Become a $4 Billion Company, there are some smart techniques they integrated into their product, such as:
A clear and simple homepage
The screenshots above highlight one of most important components in Dropbox’s strategy: simplicity. Despite the fact that they launched the product with one demo video, from the very beginning the company had a very good start. How did they do that? By clearly presenting what their product does and by showing potential customers what they have to do after they land on the page: Download Dropbox.
Easy Signup Process
The signup process was not complicated at all. Potential users could easily sign up and install Dropbox by filling up this form:
After a while, when people showed more and more interest in their product, the signing up process was simplified. They didn’t have to explain who they were and what they did anymore. So here is how the form looks at the moment:
Once prospects decide to use Dropbox, they have all the support they need: a “photos” folder and a “Getting Started” text file to help them begin.
Word of mouth
Friend referrals brought Dropbox an impressive number of users. The company encouraged them to spread the word by giving incentives. For example, when an existing user recommended the product to a friend, they both got 500MB for free. How was this possible? Simple. Via email:
Social Media channels
Having a different approach is way better for your startup than deciding to go for old tactics. Social Media has a lot of potential and it can be a lead generator if you put enough effort into it.
Dropbox chose not to be pushy. They didn’t just ask for likes and followers on social media, they came up with a good treat. With each follow on different channels, users got 125MB increase.
Going viral takes a lot of time, but the Dropbox product strategy took this into account. Let’s say you are willing to invest amounts of time and money into a marketing strategy. This effort has a big potential to bring you good results. But if you don’t keep doing this, the market will forget about you in less time than you expect. As you always say, a marketing strategy can’t make you successful if you don’t have a good product.
Dropbox got both. Sharing files with simplicity is the first thing that has to be mentioned when we take a look at its product. Having the possibility to share pieces of content with their friends is a smart way to engage customers and attract new users. Actually, it’s good advertising.
How it works: Users who shared pictures with non-users were actually promoting Dropbox for free. Here’s the message that appears the moment they see the folder their friend sent them:
So there’s no successful startup without a good product .
Multiple devices and platforms
In fact, the key for Dropbox is its availability on multiple devices and platforms. Nowadays people want to access their photos and documents from anywhere. So if a startup pays attention to this need, the chances to build trust and credibility will be bigger.
Nobody says that Dropbox should be your main example. They found a pretty important need and came with a right and smart solution. We wanted to emphasize the importance of a well-done product in the context of a complex marketing strategy:
- A successful startup requires a good functionable product.
- Build trust by making users’ life easier: find out what their needs are and offer them the solution! Always keep it simple!
- Use a different approach and challenge your potential customers! When you want something, offer them a profitable treat in return!
- Don’t forget to focus on making your product viral. You could have an awesome product, but if nobody knows about it, it’s useless.
So what are the things that make your product a damn good product?