What you can learn from Dropbox

New York Mets Citi Field, Flushing, New York CLS_5315.JPG

I love Dropbox. Dropbox backs up all of my files and makes them available everywhere I work – on my iPad and on both my PC’s. No carrying around thumb drives, no forgetting to back up. Everything is everywhere all of the time. Sometimes I e-mail links to my files directly from my iPad. I’ve even I logged into Dropbox on another person’s computer and then immediately e-mailed them links to a needed file. It’s a great app.

My heart is breaking because I’m preparing to switch over to Google Drive as soon as its iPad app is ready. I’m not thrilled about this – I feel like Dropbox and I have built a friendship. Dropbox has been 100% reliable and (bonus) has ever sent me any spam. However, that friendship is hardly worth the $15/month difference between the two services. Sorry Dropbox. (Plus, I’m a longtime user of Google Docs, which is being merged into Google Drive. I’m a big fan of any program that will let several people simultaneously edit the same document.)

Anyway, Google vs. Dropbox is somewhat like the Dodgers vs. the Mets. I’m a life-long Mets fan, but when they play the Dodgers, I pretty much understand and accept that the Dodgers are probably going to win. I regret to admit that Dropbox will probably go the way of MySpace and the Commodore 64.

What can we learn from Dropbox?

  1. Dropbox has a great revenue model. People sign up and make monthly payments, unless they cancel. As long as you keep your customers happy, their constant stream of revenue keeps flowing. This can breed complacency.
  2. But whatever you do, don’t get complacent. Profits attract competition. The more profitable that you become, the more value that you must provide to keep and continue to grow your revenue base. While Dropbox has increased its features, its basic prices for storage capacity have remained the same.

Now consider Apple. Apple continues to upgrade its iPad series, even though it is already far ahead of the competition. In light of the iPad’s astronomical profits, a number of hungry competitors are licking their chops, preparing to attack. Apple is ready.

[Image: New York Mets Citi Field, Flushing, New York CLS_5315.JPG by smith_cl9, on Flickr]

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

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