Box CEO: Tackling unsexy problems is good business

Krystal Peak · February 2, 2012 · Short URL:

Aaron Levie, founder and CEO of Box explains how they made enterprise software sexy

At this year's Vator Splash in San Francisco, Box's Aaron Levie shared his experience improving the enterprise software world.

Levie originally created Box as a college business project with the goal of helping people easily access their information from anywhere in the world at anytime. Launched in a dorm room in 2005 with the help of CFO Dylan Smith, Box has grown to become a major player in the cloud sharing space both with individuals and enterprises. And Box continues to grow, now with the addition of a recent Series-D investment from Bessemer Venture Partners, NEA, SAP Ventures and, Box has raised $162 million.

As of the end of 2011, Box had seven million individual users and 100,000 businesses, with 250,000 new people joining each month. 

Levie shared with the crowd that building a software company that doesn't suck.

Here are some highlights from the discussion:

~ After some opening jokes about what an honor it would be to have Mark Zuckerberg swipe your idea and make billions, Levie spoke about how making enterprise software a sexy technology has really kept them on the wave of adoption and innovation.

~ While many don't find the excitement in enterprise and data-storing software, when Levie started Box, the concept was very simple: to be able to go anywhere and have your data.  

~ While in 2004, the Internet was a pretty barren landscape that had weathered through the initial tech bubble pop, the year 2005 showed a lot of promise of starting a new generation of tech companies -- and that is when Box made its strong move into the data-storage space. 

~ Staring the company on a lark, Box seemed to gain traction really fast and showed the founders just how much people want data access from everywhere. Levie and the founders built the first product and people started signing up immediately. "This product was being funded and kept up by my co-founder's poker winnings," Levie told the crowd. "But when the poker winnings dried up we had to . . . raise venture capital."

~ One of the challenges in ganging that capital was that the founders looked so young that there could be a risk that they might run off to Disneyland with the capital.

~ In the early days, there was so much excitement in the expanse possibilities was that pretty much every single night they would change our business model and pivot for a new focus.

~ Once Box offering a free version became part of the model, the traffic went up but the issue was that there was no obvious path of what the business would become over the next three years. 

~ After gaining 100,000's of users, Levie realized that they we're underserving the enterprises using Box and over serving the consumers. 

~ Then the Box founders did something crazy, they asked the customers what they thought.

~ One enterprise company was paying $8.99 a month compared to thousands of dollars monthly and the vision became clear: to narrow the focus on helping enterprise but then the challenge became selling the service since enterprise software just isn't that sexy.

~ "If we are going to do this then we are going to build a very different enterprise software system."

~ In the consumer space you have speed and virility but in the enterprise you have security and space issues. We still wanted the sweet spot where it is simple enough for the consumer even when catering to the enterprise needs.  But the best of the enterprise model is the freemium focus. 

~ Tackle ignored or unsexy problems  if you want to stand out. When Levie was pitching the VC firms in 2007, there were a lot of people that didn't think that a smaller group could compete with the IBMs and Microsofts.

~ Don't ever compromise -- and sweat the small stuff. Many people choose low friction in running a company, but one of the besets values is that you get to make your decisions and work hard to get it right and that doesn't come without friction.

~ Every 18 months there is a new tech cycle that changes everything. Think about how the iPad changes how much people had to adapt to mobile once that wave hit the tech world. If you are doing something that was possible three years ago then you aren't riding the tornado that will change the space and keep you relevant. 

~ Don't compete head-on. You shouldn't be able to say that you are better than 'X,' you should be so different from 'X' that there is no comparison. 

~ It is critical to follow you customers and change your product on what their needs are. Find out where they want you to be going.

~ If all else fails, Box is currently hiring.


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Aaron Levie

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CO-Founder and CEO of Box.