How Dropbox went from 0 to 500 million users

little-known insights that you can apply to your marketing as well

Dropbox was founded in 2007 and is a file hosting service that offers personal cloud storage and file sharing.

While that may not sound overly exciting to the average internet user, it became one of the fastest growing startups in history and was Y Combinator’s first startup which filed for an IPO.

Interestingly, the founder Drew Houston was rejected 2 years earlier by Y Combinator for a different startup. He didn’t give up though and came up with the idea for Dropbox.

At the time in 2007, there was an abundance of cloud storage companies - most of which have vanished since then or still have a small user base.

Only Dropbox managed to grow to 500 million users with more than a billion dollars in annual revenue.

Photo by Monstera Production on pexels

What’s its secret superpower?

Marketing!

Throw away your USB drive

Dropbox used several smart growth hacks to boost their initial traction and get their first users:

• clear value proposition targeted to a relevant audience

• positioning focused on users over product

• win-win incentive referral program

• embedded virality

Houston’s first genius move was to publish a post on Hacker News (Y Combinator’s co-founder had built it and it’s run by YC), where a lot of tech people can be found.

His first post included a simple demo video of Dropbox with the title “My YC app: Dropbox - Throw away your USB drive.“.

This video brought in the first users of Dropbox and more importantly convinced the founders of YC to seed fund Dropbox and to get it into their exclusive startup program.

To stay in the program they had to prove they can fulfill certain growth criteria though.

They had 5,000 users at the time and needed at least 10,000 users in the beta list.

So Houston applied the same approach again: know where your target audience hangs out and give them a taste of your product.

But only after realizing that the things that startups were “supposed“ to do didn’t work out. At the time, it was on vogue to:

• buy ads on Google’s search results

• hire a public relations company

Their costs of aqcuiring new users ranged from $233-388, which is way too high for a product that costs $99/year.

Their main problem with search advertising was that no one was searching for a document syncing product. The problem was real, but people just weren’t aware yet.

So they did what had already worked in the beginning: they made another demo video and this time, they posted it on Digg and Reddit.

The title they used was “Google Drive killer coming from MIT startup“.

The video got 1,506 Reddit upvotes and 12,000 Diggs which catapulted the video to the first page.

Over night, the beta list went from 5,000 to 75,000.

By the end of the year 2008, they had grown to a mind-blowing 200,000 registered users. Their first users were tech-savvy and now the time came where the rest of the world started to be aware of Dropbox.

So they made a third video.

This time though, they posted a story about a guy who travels Africa and shared in the video what the user can do with the product.

The nuance made all the difference here: they didn’t share what the product does, but what the user can do with it.

Referral Magic

Even more successful than the initial videos was Dropbox’s built-in referral program.

If users brought in new users, they would get more free space - both the new user and the current one.

This genius idea brought 2 million invitations to Dropbox sent out in just one month.

To make things go even more viral, they even integrated the referral program into their last step of their onboarding.

Another genius move was to reframe the referral program as “Get more space“. Other popular products on the market at the time used a “Invite your friends“ CTA.

Dropbox had done it again: focusing on the value the user receives instead of describing the product.

These growth tactics has turned Dropbox into one of the fastest growing startups in history:

• 1 million users in Spring 2009

• 4 million users at the end of 2009

• 25 million users in early 2010

• 50 million in 2011

• 100 million in 2012

• 200 million in 2013

• 500 million users in 2018

• and over 700 million users in 2024

Your Action Plan

Time to journal about your product or service:

• how can you improve your marketing in a way so that you communicate what the user can do with your product instead of what the product does

• where is your target audience? How can you get in touch with them?

• how can you embed virality into your product? Is there an easy way so that people can refer it and be rewarded?

Hope this helps.

Cheers,

Mira

PS: if your target audience is on twitter, there’s a simple way to get in touch with them: create a list with potential clients and start engaging with them.

If you don’t have time to do this manually: TweetHustler can now auto engage with your twitter lists too since this week.