Dropbox: a case in lean startup strategy

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Find out how Dropbox adopted a lean startup approach to grow from 100,000 users to 4m in the space of 18 months. Operating in a hostile environment with low barriers to entry, entrepreneurs Arash Ferdowsi and Drew Houston adopted a lean startup approach in the crowded cloud storage market.

Dropbox decided that waiting to have the perfect product to launch was not an option, they had to get to market fast to ‘learn early, learn often’ through constant contact with their customers. They put the idea out there through a working prototype shown on a 3 minute walk through video shown on Hacker News and listened to the comments from as they say, ‘really smart people’. It was as if they’d put the code into the hands of potential users and in doing so, captured their attention.

The video demo turned in a guerilla marketing strategy to reach early adopters. Within minutes of posting the video on digg they had 200 people on the waiting list to use their video, arriving at 12,000 diggs. In one day the waiting list for their product shot up from 5,000 to 75,000 achieving the critical mass that most startups dream of.

The feedback they received enabled them to enter into iterations that developed the product to the point where they could start generating revenues, even though converting high usage into revenues was problematic.

By engaging in this customer development process, they ensured they’d made something the customer really wanted; they’d learned a lot about exactly who their customer was and had put the product directly in their hands; they’d also found where their target market hung out and had communicated with them in an authentic way.

This was the lean launch pad that formed the basis of the company’s subsequent fast growth, at the heart of which was an elegant, simple product that worked really well. Check out Drew Houston’s full explanation of the startup’s experiences so far.

By Christopher Kennett.

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