Not too crazy valuation. They only have 25M users, which by most web standards is not "that that" much. It is fair to say every user is worth $40.00/year. Dropbox goes mobile and becomes a default backup/sync app on Android and Iphone, add $1B. Dropbox becomes the place where I dump all my data, my own API, and lets services have access to different parts depending on settings, add $1B. Dropbox becomes mainstream and reaches 100M users, add $2B, .....
I pay, I think $10 a month? It's worth it. Many people will probably grow into paying for it. It really is a nice product. The sharing function is the killer part, not the backup. People new to it might not have discovered how easy it is to share files with it, and then your Dropbox can fill up pretty fast.
Agree that the current accounts probably aren't worth $40/each - the valuation includes the technology, brand, and growth potential of course, not just the current userbase. But a lot of people will pay. Really, sharing big files used to be a major pain point online. Dropbox makes it ridiculously easy.
Dropbox is filling a whole that Amazon and Google have failed to serve. The founders were scared of the GDrive according to their YC application. GOOG and AMZN have still failed to fill this gap however many years later. I'm guessing some of it has to do with the superb UX of Dropbox.
When will it be time to stop looking to "growth potential" as a valid reason for huge valuations? 5 years from now? 10 years from now? Seriously, when can we stop and value a company for what it is right right now, not in some dreamy future?
I love Dropbox, but I can move my data to a competing service in an afternoon. They're going to have to execute brilliantly to stay on top of this market if it's really worth that much. 10 billion puts them at 1/18th of Google.
"It is fair to say every user is worth $40.00/year"
How is it fair to say that? Is there any data that backs this up?
"Dropbox goes mobile"
They already have
"becomes a default backup/sync app on Android and iPhone"
Although this is possible, this seems like a far-fetched claim. Apple and Google already have their own backup/sync methods for their phones, it will be tough for Dropbox to become the default app.
"Dropbox becomes the place where I dump all my data, my own
API, and lets services have access to different parts depending on settings, add $1B. Dropbox becomes mainstream and reaches 100M users, add $2B, ....."
> I am a free user, but I would pay for a $5.00/month plan.
How many products have flopped because of the gap between what potential customers claimed to be willing to spend and what customers were actually willing to spend?
Huh? Why $40/year? A $10B valuation means that investors value the current 25M users $400 each, or potentially 100M future users $100 each, etc. You get the idea.
That's not what it means. Look into P/E ratios (especially when they're calculated by dividing market cap by annual earnings). A P/E of 10-17 is normal.
You're assuming that market cap is based on yearly earnings, which is simply wrong.
