As I mentioned in my post about you, there's this weird sort of mini Drew Houston cult. I think I've sat next to you at the Crunchies like two or three times when I worked at TechCrunch, and anytime your name was mentioned, people would go crazy. And file sharing, not the world's most exciting category. You're pretty subdued. Why is that? Is it the Y Combinator effect?
Well, I think the not the last Crunchies, but the one before, we rigged it a little bit. We had some good attendance from team Dropbox.
Okay, so you had droopies.
And the thing, droopies. We should call them droopies. Yeah, and the cult thing. My purple robe's back in the green room. So if anyone wants to join the cult.
But you were the first big Y Combinator hit, right? Because you guys were before Airbnb.
I think there are things like, well Reddit, there are a bunch of other notable Y Combinator companies, but yeah, I mean things have gone really well.
Were you the first to get a billion-dollar valuation?
So what do you think it was? And we'll get to sort of the whole story, but just off the top, it's fascinating to me that Y Combinator has funded so many companies and you guys and Airbnb, who we had last month, make up such a disproportionate value of the portfolio. And I guess it shouldn't be that surprising because it is the nature of venture capital. But you spend a lot of time with that class, you see a lot of these ideas, you meet a lot of these kids. What do you think it was about you guys and Airbnb that made those two such breakout hits comparatively?
Well, I think your first point about it's kind of the nature of venture capital or startups in general is they have this big power law kind of distribution where you have a couple outsized companies and then it kind of trails off from there. It was never really our goal to do that, but you look at any of these companies that get really big really fast, and usually it's some confluence of a big market, often the company's fortunate with the timing, there's an element of team, there's all these different things that have to line up and some of them are in your control and some aren't.
How much of it do you think is luck?
I think a lot of it. I mean, you know, the Dropbox story or probably any company's story could have been very different. And in our case, we look at the Googles of the world — if they had launched their product back in 2007, 2008, that would have put us in a really different position. So I look back at a lot of the inflection points that we had, and even just finding my co-founder, Arash — and I only knew, we didn't know each other, we went to the same school but we didn't know each other, and we hung out for like two hours together.
Well, let's — yeah, the story is more interesting than the question about luck. So let's start with the story. First of all, where did you grow up? Were you an East Coast guy? And then you went to MIT, is that right?
And did you, like a lot of founders, did you grow up coding, loving computers? Were you a big nerd?
Totally. I was a little kid.
What did you love about them?
So I started out playing — I mean, when my parents got our first computer, I was like two or three. And so it was like this thing with the cool buttons and made noises and if you smash your hand on the keyboard, it would beep at you. So it was kind of love at first sight from there. But probably like a lot of people in this audience, you start out by playing games and then I was really curious about how they worked. And the probably the first line of code I wrote was with my dad.
And was your dad an engineer?
My dad's an engineer, yeah.
And so I had my Legos, I had my Tinker Toys, but then I also had a BASIC manual in my room. So I had this PC Junior and one of these really early PCs and, you know, really amazing accomplishments such as asking like what's your favorite color or how old are you — some of my first programs. I did one that could quiz you on the capitals of the 50 states.
Well, that's very practical.
That was my one and only BASIC coding experience. No, there's nothing redeeming about what I created when I was that age.
Well, you made up for it since, that's good.
But it was great. You know, I fell in love with it. And it turns out like when you're a little kid, you have a lot of free time. The only challenge is I have a little brother and little sister, and my little brother and I would fight or have to take turns. He didn't like coding as much, but we both played computer games and that was kind of our introduction to this whole world. He's actually a software engineer now.
So what kind of engineer was your dad and did he kind of nudge you towards that at all?
He's an electrical engineer. He's a staff engineer at Draper Lab in Cambridge, which is a spin-off from MIT, and they do a bunch of defense stuff and other things. He's more on the electrical engineering side, and I got acquainted with the computer science side when I was little and I sort of stayed on that side of the fence.
So a lot of the kind of generation older founders, they always got into a lot of trouble. There was a very fine line between hacking and coding and playing with computers. And I think some of the younger founders coming up, because computers were so ubiquitous — I feel like in the early generation of computers, almost everything you did had so many illegal lines along it because there wasn't as much fun stuff to do. So you're kind of between those two age groups. Did you do anything bad or illegal? Did you crack game codes?
That's how I got my first job.
I don't know if it was illegal, but one, how I got my first programming job. So I was babysitting before that. I was a wonderful babysitter, but I was kind of tired of babysitting because you can only watch so many Jean-Claude Van Damme movies. And so I started out by beta testing this game online, and they were just getting started and it was really frustrating because they were taking forever to make this thing and they kept promising they'd release new features and all this stuff. And eventually I just had nothing else to do, I was just bored and started poking around to try to see how the game worked and I found all these security problems. And there was a little bit of bad behavior — I started screwing around and jumping in, and I could set myself as one of the administrators of the game. But then I emailed the guys. I'm like, hey, you know, you guys should really take a look at this because it's broken and here are the six things you should do to fix it. And they're like, great, we'd love some help with this. Do you want to work here? And I'm like, yeah, yeah, totally, sounds awesome.
I was 14. And I tried to leave that — and they're like, yeah, well, here's what we think as far. So it was going to be remote. These guys were in Colorado, I was in a suburb of Boston, so there's no way I could physically be there, but they needed all the help they could get. They weren't discriminating at all. And so I'm getting them to email me all the paperwork and I kind of sneak it in. I'm like, you might need to change the name on it, I need my dad to sign it, like I'm 14. And we've stayed in touch since then. We've actually never met in real life.
But you did work for them.
They were not cut off by you.
Oh yeah. This is the more typical startup story. I owned some percentage of some company that was eventually worth nothing. So I was thrilled. I've never — we've always meant to get together, but he had to change his plans last minute or he was in San Francisco and I wasn't in town. But just pages and pages of chat and email and working. I was involved with that company for probably about a year. And no, we've never met in person.
So what ended up happening to that company?
Oh, it totally cratered. Big dreams, not a lot of — I mean it was hard. It was a team of maybe two or three people and they were kind of building it out of their house. They were trying to build one of these massively multiplayer online games before there was ever a World of Warcraft. So it was a little ahead of its time. They didn't really raise money or have a lot of resources. And so it didn't exactly work out, but then that was my stepping stone to getting other local programming jobs and going from there. That was my first kind of startup experience.
So did that experience make you think you wanted to do this when you got older, or did you just think oh these poor guys?
Oh it was awesome. Being in like biology class in eighth or ninth grade and being like, you know, I think our game's going to get a publisher, it's going to be pretty sweet. It gave me a lot to talk about and more importantly it was an excuse to learn all this stuff. And they actually had some pretty experienced people on the team where I got to learn how software is built in real life and kind of started the clock on that at 14 instead of after high school or college.
Mhm. So then you decided to go to MIT. Was that some daddy pressure or you wanted to go to MIT?
No. My dad was actually a Harvard alum. He studied engineering at Harvard but he's like, look, I was like one of three people studying engineering at Harvard. You should go somewhere — if you want to study computer science, go to the best place for that.
And did you see it as I'm going to go in and study and then I'm gonna go to Silicon Valley and build a company? Was it that direct?
No, I knew when I was a little kid that I wanted to start a company, but I didn't really know what that was. And it probably started — I wanted to make computer games. I then learned it's kind of hard and playing computer games is often a lot more fun than making them. But I knew I wanted to study computer science. I knew I wanted to be at MIT or somewhere like that. I ended up at MIT because they had this thing where you could apply to multiple schools early, and I was procrastinating on my Stanford application. And I was really lucky because the Stanford application was due the day that the MIT results arrived. So I didn't have to finish that last essay. I was pretty happy about that. But no, there was never really a plan. When I applied to college I was working at another startup and so I started to get some understanding. It wasn't a game startup but I had just as much fun, so I was like okay, there's more to do beyond just games.
Were you tempted at all to not go to school?
No. All the people I talked to who were in college were like, this is a pretty good time. So no, definitely not.
What do you think about the whole debate about college is overpriced and do people really need to go, and a lot of these outsized stars dropped out or didn't graduate?
So there's no one optimal path. I don't think it really matters that much. I think on average for someone who's an engineer and wants to start a company, it's better to go to school. Studying computer science formally made me a much better engineer, made me a much better judge of talent, gave me a network of people that I still keep in touch with today. And usually you don't decide like, okay, I'm going to drop out and then come up with an idea. Usually that's not a great way to go. Usually when you drop out of school it's because you're getting pulled out of school. If you look at Facebook or some of these other examples, you're furiously trying to balance your school work which doesn't just stop because you have this other thing going on, and then you hit this crossroads where it's just not possible to do both of these things at once. Often they'll start as a hiatus or taking a leave, which I actually took a year off of school, but Arash is the one who gets all the credit because he actually dropped out. But it was something like that. He wasn't planning to drop out of school. He had a friend who did and it ended up being a good situation for him.
So there's this whole iconic story about Dropbox being started because you were on the bus and you didn't have your thumb drive. Is that really true or is that one of those Pez dispenser things?
No, no, it's actually true. There were hundreds of other things before that where I'd just driven myself nuts by emailing myself stuff, carrying around the thumb drive, all these things that people used to do. But the first lines of code were written in South Station. I get on the bus and I was living in Boston after school. I just graduated and I was going to visit a bunch of my friends in New York for the weekend. And I did this elaborate mental justification, being like, I'm going to hang out and have a good time in New York this weekend, but it's okay because I'm going to have these two four-and-a-half-hour bus rides where I'm going to get all this stuff done. So I made this checklist of things I was going to do and I felt better about it. I was fully rationalized. And then I'm running late and I jump in the cab and get to the station, and I sit down on the bus and I open up my laptop and I get this feeling in the pit of my stomach. I'm sure many of you have experienced at one point or another. Something has gone terribly wrong. And I knew what it was. I could just vividly see in my mind's eye my thumb drive sitting on my desk at home. The company I started before, all of our crown jewels were on that little thing. It was like my little leash. And I'd forgotten it. I did the TSA self-pat-down thing and maybe it's in my bag, maybe it's my back pocket. But it wasn't there. So now I have a new problem. Do I have any Family Guy episodes on my laptop I haven't seen yet? And I didn't. So what do you do in these situations? You're like, God, I'm such an idiot. I keep doing this. Why can't I be more organized? You're never like, oh, I wish the technology were better. You're like, I'm an idiot.
So it was really that. How long are we going to live like this? As we would later say to investors, look, Tom Cruise in Minority Report is not logging into his Gmail to pick up the email he sent himself or carrying around a little thumb drive, but that's what everybody does. And I'm like, this is crazy. So it had been something on my mind. It wasn't like — I think a lot of other experiences kind of led to that, but then I'm like, god damn it, I'm going to fix this for myself. But then it was clear this was something that a lot of other people could use.
So I love that — how much of your story just has to do with had you been slightly more organized, like you would have gone to Stanford perhaps had you been slightly more organized and not created a company worth $4 billion. It's just a model for procrastination.
Sometimes these things have a way of working out.
