Competitors Had Good Products. They Lost Anyway.
Houston: Competitors built things that probably were reasonably functional. But they didn't get distribution right. And they didn't get virality right.
I'd been paying attention in 2007 when the Facebook platform started to take off. You had companies going from zero to 100. New land speed records set all the time. A lot of that was through virality.
Zero Out of Five
Houston: We brought people in off Craigslist and watched them install the product. We had the person in one room and our whole team in the other room watching in real time.
We said — just sit down, here's Dropbox, go from here to sharing a file. Zero of the five people succeeded. Zero of five even came close.
Really paying attention to all the steps — activation is just one example — and tuning the viral engine as much as possible.
Zero of the five people succeeded at sharing a file. Zero of five even came close.
Half of Signups Were Viral
Houston: We came up with the referral program — a two-sided incentive. If I tell you about Dropbox, you get free space, I get free space. That drove about 30% of our signups for a while.
Shared folders — inherently viral — another 20%. So half of our signups were viral. That was something that wasn't well understood before that time.
It was inspired by some stuff from the late '90s — PayPal had an incentive referral bonus. I had the idea for the Digg and Reddit video based on a book called Guerrilla Marketing — how do you get users when you have no money.
Half of our signups were viral. The referral program drove 30%. Shared folders drove another 20%.