Dropbox is certainly one of the most interesting SaaS case studies. It was the fastest of its generation to get to $1B in ARR.
But after that, ARR growth has slowed to 12% year-over-year as its space has matured.
5 Interesting Learnings:
But after that, ARR growth has slowed to 12% year-over-year as its space has matured.
5 Interesting Learnings:
#1. 15m+ Paying Customers and 600M+ Registered Users.
These are stunning numbers for a non-consumer app (although arguable Dropbox blurs the lines somewhat), and at some point ... you can almost run out of businesses to sell to.
These are stunning numbers for a non-consumer app (although arguable Dropbox blurs the lines somewhat), and at some point ... you can almost run out of businesses to sell to.
#2. 85% of paid teams have linked to a third-party app.
A vivid reminder of how important a partner ecosystem is as you scale. And how defensible it can be. Partners want to integrate with the #1 platform in an ecosystem first, and sometimes, only
A vivid reminder of how important a partner ecosystem is as you scale. And how defensible it can be. Partners want to integrate with the #1 platform in an ecosystem first, and sometimes, only
#3. Growth in ARPU (and increased pricing) drives 30% of growth.
This is fairly common with mature products. Q3’20 saw 12% growth overall — with 3.9% ARPU growth. That means, roughly, 30% of Dropbox’s growth comes from driving up pricing on existing and new customers.
This is fairly common with mature products. Q3’20 saw 12% growth overall — with 3.9% ARPU growth. That means, roughly, 30% of Dropbox’s growth comes from driving up pricing on existing and new customers.
#4. Gross margins are high at 79%.
So yes, you can make plenty of money in storage. One of the knocks on Dropbox, Box etc. for years was that their costs of storage would be so high, they couldn’t make money.
Well, that was wrong.
So yes, you can make plenty of money in storage. One of the knocks on Dropbox, Box etc. for years was that their costs of storage would be so high, they couldn’t make money.
Well, that was wrong.
5. Dropbox is minting cash — ~800m in free cash flow a year and $500m in operating income a year.
While growth has slowed, combine that with high gross margins lower costs … and out comes cash.
This is truly a stunning amount of cash to generate at $2B ARR.
While growth has slowed, combine that with high gross margins lower costs … and out comes cash.
This is truly a stunning amount of cash to generate at $2B ARR.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
