How Dropbox turned down the almighty Apple and took off

Dropbox founders Drew Houston and Arash Ferdowsi didn’t take the money and ran. Would you reject an $800 million acquisition offer from Apple if you had a hot cloud storage startup?

Forbes throws its weight behind a recent rumor that implied Apple had made an attempt to acquire the hot cloud storage startup Dropbox. Author Victoria Barret opens the lengthy profile with an interesting anecdote:

Jobs had been tracking a young software developer named Drew Houston, who blasted his way onto Apple’s radar screen when he reverse-engineered Apple’s file system so that his startup’s logo, an unfolding box, appeared elegantly tucked inside. Not even an Apple SWAT team had been able to do that.

In December 2009 Jobs invited Houston and his partner, Arash Ferdowsi, for a meeting at his Cupertino office. Both men had already established names for themselves in Silicon Valley, thanks to their hot storage startup named Dropbox. Despite considering Jobs his hero, Houston was clear upfront about not wanting to sell out the company to anyone, even to Apple.

It basically came down to the world’s biggest startup – as Jobs half-jokingly called Apple during a chat with Walt Mossberg at last year’s D conference – throwing a nine-figure amount (reportedly $800 million) at the feet of an up and running storage startup. The little guy rejects a once-in-a-lifetime opportunity to be acquired by Apple, stubbornly choosing to pursue own ambitious goals. Talk about David versus Goliath. Here’s to the crazy ones:

Jobs smiled warmly as he told them he was going after their market. “He said we were a feature, not a product,” says Houston. Courteously, Jobs spent the next half hour waxing on over tea about his return to Apple, and why not to trust investors, as the duo—or more accurately, Houston, who plays Penn to Ferdowsi’s mute Teller—peppered him with questions. […] When Jobs later followed up with a suggestion to meet at Dropbox’s San Francisco office, Houston proposed that they instead meet in Silicon Valley. “Why let the enemy get a taste?” he now shrugs cockily. Instead, Jobs went dark on the subject, resurfacing only this June, at his final keynote speech, where he unveiled iCloud, and specifically knocked Dropbox as a half-attempt to solve the Internet’s messiest dilemma: How do you get all your files, from all your devices, into one place? […] Houston’s reaction was less cocky: “Oh, s–t.” The next day he shot a missive to his staff: “We have one of the fastest-growing companies in the world,” it began. Then it featured a list of one-time meteors that fell to Earth: MySpace, Netscape, Palm, Yahoo.

It’s a shame they couldn’t come to terms and here’s why…

[youtube=http://www.youtube.com/?v=mHrnCQls0Vc]

Dropbox would have been an awesome fit for iCloud. Dropbox takes care of keeping and translating all platform-specific file metadata. For example, a Photoshop file created on a Mac and synced to a Linux box via Dropbox lacks the Mac OS X-specific data such as the creator ID and thumbnail. This metadata is invisible to the Linux machine, but it automagically re-appears when the file is synced back to the Mac OS X – the cloud takes care of translating for platform differences. The service works flawlessly across platforms (Mac OS X, Windows and Linux). I myself have been a user since the onset. Sure, they had a nightmare-ish security incident, but overall Dropbox is by far the most convenient solution to keep your files in perfect sync across various mobile and desktop devices and operating system. Can you say that about iCloud?