Friday, March 3rd, 2006

Understanding Your Business

By , co-founder and CEO

Dylan and I just got back from the Under the Radar consumer technology conference. An interesting variety of “web 2.0″ companies were present, including news sites, browsers, photo sharing sites, and calendars. I ran through a demonstration of the newly-released (but not launched) Box V2 during the “connected 2.0″ session. The judges were Michael Arrington, Jeff Clavier, and Bradley Horowitz. After the 8 minute presentation the audience as well as the panelists had an opportunity to throw their toughest or most curious questions at me. After wading through the standard comments about versioning for documents, illegal content control, and RSS feeds, the larger “who is your customer” came into the conversation. I believe the interest was ignited by Jeff’s point that Box.net would not be suitable for his mother, and Michael eventually chimed in explaining that the service would not be economical for someone storing 500GB of video/photos. Interesting to note, these two examples were on the exact opposite ends of the spectrum. On one hand we were talking about a Jeff’s Mother, who is neither computer savvy nor a producer of lots of digital content (documents/photos), and on the other hand we were discussing Michael Arrington who implied he would need a massive amount of storage for a fraction of what we were charging.

Neither of these users will be our customer, and we understand that. We see Box.net fitting somewhere in the happy medium between Michael and Jeff’s mom. This is a middle ground where consumers want to backup important documents and share family pictures, or a small business wants to collaborate on projects. And best of all, we feel this market is much stronger than the two fringe cases that were introduced. Of course there will always be a user who needs a few hundred gigabytes of storage to backup their high resolution photos and home video content. There are providers that are in the business of serving this type of user. We are very happy to send over our business to these other players when it doesn’t feel like our product will be a good fit. This is the most important thing for us to understand, because anytime we try and approach different uses and their users, we run the risk of losing our core message. If we were to have storage packages up in the hundreds of gigabytes, it is very likely that our “average consumer” customer would feel like our service is not meant for them. By clearly understanding our business and who we want to serve, our prospective customer knows exactly how we will fit in their life.

Of course I cannot make these statements in absolute terms. There may very well be a day when Box’s core offering is a 100GB plan that scales into the terabytes. I can assure you, however, that we are years away from making that our business, simply because that “middle ground” doesn’t require this kind of storage yet or even in the near future. Box.net will always remain competitive, whether it be through ease-of-use, features, customer support, reliability, or pricing. Our product will evolve with the needs of the time, but that will be forever based on the need of our customer, not someone else’s.

-Aaron

Aaron Levie

By ,

co-founder and CEO

See all of Aaron's articles.

  • http://theory.isthereason.com Kevin

    Aaron, you guys are in the tough online storage market so it vitally important to know who you’re relevant to. I agree that the abovementioned demographic (grandma and media mongul) might see your service as a good fit, then who is?

    You mentioned “relevance” a few posts back. Perhaps an idea would be to be relevant to say students, so you could present ideas in the form of case studies showing how students could create folders by classes, store PDF readings and write/edit notes (when your web-based document editor releases) and other features specific to students. You could also tie up with MySpace which has lots of students (now under Fox Interactive, did they buy you guys?) so users could offload their larger media files on Box.net. The possibilities are endless.

    Lastly, I think the honest voice you give on this blog allows us to not only understand or appreciate box.net, but to even evangelize it for you. Paul Stamatiou and I both did writeups to push box.net because you guys deserve the attention. :)

  • http://theory.isthereason.com Kevin

    Edit: I agree that the abovementioned demographic (grandma and media mongul) might NOT see your service as a good fit, then who is?

  • Aaron

    Hey Kevin,

    Students are a great market… we used to be in that market ourselves. The one difficulty is getting them to pay for things ;) We are always looking for tie-ins and partnership opportunities. The first step would probably be working with a site like facebook as they seem like a strong connection point between the student and their university/class. I could dream up about 10 ways that partnership could go. With our open API a lot of this is pretty easy for a partner to integrate… we’re just waiting for the right moment.

    Regarding your updated post, the actual “demographic” of our userbase is 18-50ish. Someone with a moderate amount of digital content, perhaps has important documents or photos, etc. You will find that most people in this range have far less than 5GB of important data they want to store.

  • http://www.treasuremytext.com Katie Lips

    Hi Aaron, I have been thinking about box.net for a while and am formulating a blog post about it – I think it’s great, but sometimes blog posts take a long time to come together. As well as generally thinking it’s useful and works well, etc, I wanted to add something more.

    Storage is a funny thing.

    It is – we talk in terms of terabytes, but the value is in the content itself. The value of the content bares no relation to its file size. For example, when we made treasuremytext a long time ago, we knew it wasn’t about storage, but about ‘keeping mobile content safe’, and most definitely keeping it private; the emotional possibilities *storage* gives you.

    I am somewhere between Michael Arrington and Jeff’s mother, and love the idea of box.net for collaborative working, for long term storage of stuff – so I can come back in 3 years and find old emails, and for peace of mind. I currently use my dotmac account for this but as a disorganised person I never find the time to organise, back up, and archive my stuff.

    The difficulty is getting people to invest their content and once they do so, thats the hook isn’t it – once my stuff is on box.net, how can I leave?

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