Box Co-founder and CEO Aaron Levie came on the Structure Show this week to talk about his company, the competitive landscape, and some recent trials and tribulations with the public market. Levie is s smart guy and an engaging interview, so read these highlights and then listen to the whole thing to hear his thoughts on everything from the API economy to how APIs might remake the economy.
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About that IPO
“There was a little bit of a market correction that occurred that made it probably less desirable to fully go out and be public,” Levie said, noting that he’s still limited in what he can say because the company is still in a pre-IPO quiet period. Still, he added, Box was able to raise $150 million after it delayed the IPO in order to keep on growing.
For the last time, Dropbox isn’t in the same league — by design
“In reality, there’s sort of two markets. There’s the file synchronization and sharing part of the market, and we’ve obviously invested quite heavily in that part of our business — we’re often seen as an enterprise leader in that space — but the big opportunity, I think the big market that we’re going after is what used to resemble the traditional content management and enterprise collaboration market,” Levie explained.
He’s more concerned with replacing the old SharePoints and Documentums of the world with something new, that lets them manage their content in a way designed for the 21st century business lifestyle. It’s necessary, he said, because even a would-be dangerous competitor like Microsoft still hasn’t integrated SharePoint with its cloud-storage offerings, which means there’s an opportunity for a company that has a more integrated service and vision:
“What we saw pretty early on was that the economics in this space were going to be very challenging in the consumer side of the business because at some point in the curve consumers would be able to get free and infinite storage from one the big technology incumbents. But in the enterprise market, the theory was that actually the more devices, the more locations you shared from, the more people that you needed to work with, would actually introduce more and more complexity for the enterprise, and that would actually mean there was a massive opportunity to build very differentiated software to help companies manage their data.”
On turning content into a competitive advantage
Box bought a small machine learning startup called dLoop in December 2013, and began talking about how the technology could help it make more sense of metadata and generally make content-management a more intelligent experience. Here’s Levie’s take on what’s coming down the pike from Box will in this area:
“If you think about this category as hard drives in the cloud, then nothing really gets smarter about our information, nothing gets smarter about our work process. If you start to imagine, ‘Well, what could you start to do if you knew more about the user, if you you knew more about the data, if you knew more about what the user wanted to do with the data in relationship to the people you share with, or the security policies of their company,’ then you actually begin to reimagine in a way that makes business more fluid, in a way that makes people more productive. And I think more of what we’ll be talking about at BoxWorks is how you can actually begin to compete in new ways with your information, and how you can actually change and transform a lot of these processes.”
Is there a hub in the SaaS world, or just a lot of well-connected spokes?
“We used to have this notion of the hub, it was the ERP system or was kind of the main corporate database, or the Active Directory system,” Levie explained. “I think that notion is actually evolving, where if you think even about your own personal experiences with technology, less and less there’s actually a hub. There’s different services that you use for specific problems, that happen to overlap and connect to the other services that you use. So there’s not any one controlling paradigm or service for all of those experiences. … I think the enterprise is going to be more and more similar to that model. “
What that means is businesses might use Box to manage their content, so, ZenDesk for helpdesk support and something else for some other process. Each of those companies will have its own ecosystem of partners, but will also integrate with the others meaning customers no longer need to bet the farm on a single vendor’s suite of products.
“And I think that’s just the changing paradigm of enterprise software that many traditional kind od IT leaders, and especially the incumbents in the technology space, are still kind of wrapping their minds around and trying to to figure out how you adapt to that,” Levie said.
It’s a potentially revolutionary time in Silicon Valley
“The Valley is at this really interesting moment in time where if, as a snapshot, you look at what was announced at YCombinator’s demo day [recently] — you have nuclear energy, you have new genomic startups, you have new biotech emerging,” Levie said. “I think we are starting to see the viability of these new business models in sort of non-software, or at least not traditionally software-defined markets … [I]t means we have the metaphors, we have the sort of precedent for what will mean to do interesting stuff with robotics, with artificial intelligence, with new bioinformatics.”