- The CEO of Box was gracious and funny in welcoming Dropbox, his highest-profile competitor, to the ranks of the publicly-traded tech companies.
- But Box CEO Aaron Levie, who’s been known to smack-talk Dropbox, did have a funny bit of advice for Dropbox CEO Drew Houston: Watch out for gray hairs.
On Friday, Dropbox filed for its long-anticipated IPO and it looks like it could be a doozy. It shows revenues of $1.1 billion and losses of $111 million — with revenue climbing and loses narrowing.
One of the first to congratulate Dropbox’s 34-year-old founder CEO Drew Houston was 32-year old Box CEO Aaron Levie, his competitor and sometimes-rival.
Levie immediately tweeted “Congrats on the filing
@drewhouston and @dropbox. Go cloud!”
That’s a far cry from how Levie used to talk about Dropbox. When Box was a startup, he loved a little trash talking. Even in November 2015, after Box had been public for almost a year, Levie tweeted, “Any time you ever want to see what Dropbox will do next, look for what we did 3-5 years ago.”
Now that Box’s biggest direct competitor is going public, and Levie is a more seasoned CEO, he tells Business Insider he’s not concerned about getting compared to Dropbox (even though it’s clear that he is).
He graciously says, “It’s self evident that Dropbox and Drew produced a very strong business. It’s very efficient on a lot of key metrics, the growth rate is strong, cash generation is strong, the margin is not enterprise SaaS grade, but it’s still a strong gross margin.” SaaS refers to “software as a service,” the market for selling cloud software to deep-pocketed businesses, as opposed to apps for often-stingy consumers.
Still, Levie says Box will still be able to woo investors after the Dropbox IPO with strengths including “average contract value, retention rates of customers and gross margin.”
Despite being about the same age and in the same industry, Levie and Houston are not close buddies. But they aren’t mortal enemies, either.
It’s worth noting, too, that Levie’s route to an IPO was more than a little bumpy. Box was bleeding money on sales and marketing, its SEC documents showed. The company timed its initial attempt at an IPO poorly, right when public investors were starting to cool on high-priced cloud companies, and started freaking out over things like cash flow.
Box wound up putting its IPO on pause for a year, improving its financials, and trying again. Investors loved the stock on the day of its debut, but instead of raising the hoped-for $300 million, Box raised $150 million in that tougher climate.
Levy has been pushing hard to grow his company out from under the Street’s short-term and capricious financial focus ever since and, for the most part, succeeding. Box brought in just under $400 million of revenue for its fiscal 2017, and is cash-flow positive, though it’s still spending a lot on its sales and marketing.
So Levie, known as one of the funniest CEOs in the Valley, did offer a piece of friendly advice to Houston about how to prepare to be a public CEO.
“Watch out for the gray hairs. They come fast and furious. So get a good hairstylist,” he deadpanned.
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