How a Simple Video Skyrocketed Dropbox’s Success

Before the 50 million customers, before being offered in five languages, before the billions of file uploads and before the $257.2 million in funding, Dropbox was two guys coding in their boxers thanks to a busted A/C. Despite being a major name and a beacon of hope for startups everywhere, Dropbox had its humble beginnings like the rest of us. But with one billion files uploaded every 48 hours and a new signup every second, we all want to know: What made Dropbox the success it is today?

Would you believe us if we said it all boils down to a short explainer video? We can’t forget Drew Houston and Arash Ferdowsi’s incredible innovation and entrepreneurial talents, but a simple explainer video had a lot to do with early-stage (and continued) success.

 1. Investor Interest

When approaching investors, Dropbox used the explainer video to pitch the idea. As an innovative solution, it was often difficult to explain. Videos simplify what companies do, making the high-level benefits and functionalities easy to digest. That’s the brain science Dropbox was banking on (literally). After inviting seven of the top venture firms in the Valley to visit Dropbox and watch the video, Houston received a response from every single firm.

With over $257 million in funding from big players like Benchmark Capital, Goldman Sachs, Valiant Capital Partners and Sequoia Capital, it’s obvious that the video worked out pretty well. Without it, Dropbox as we know it might not exist.

2. Millions of Customers

The math behind the video is incredibly compelling. Consider that Dropbox has approximately 50 million customers. Now, the explainer video increased the number of Dropbox customers by 10%. It might seem like a small amount of growth, but when you look a little closer, you realize that it’s the equivalent of 5 million new customers! And 5 million customers don’t lie.

 3. Increased Conversions

Where there are 5 million new customers, there’s increased conversions. The video increased the conversion rate from 30% to 33.2%. Again, it’s a seemingly insignificant change. The math reveals, however, a 10% overall increase in conversions. Of course, that’s no small feat for a 120-second explainer video.

 4. Millions in Revenue

5 million new customers? A 10% increase in conversions? Millions of dollars in new revenue is next. Dropbox estimates $4.80 of revenue per customer. That means the video was responsible for $24 million in revenue in 2011. Who wouldn’t want to have an extra $24 million gracing their bottom line?

The explainer video was responsible for $24 million in revenue in 2011.

Here’s the kicker. The video cost less than $50,000. Yes, you read that right. A < $50,000 investment led to a 10% increase in conversions, 5 million new customers and $24 million in revenue – in just one year. Without that explainer video, not only might Dropbox have fallen short with the venture firms, but it would have grown at a much slower pace as well. And a slower pace? Well, that would have left the door wide open for competitors and closed the door on tons of press coverage.

From the moment they told Steve Jobs that they weren’t selling Dropbox, no matter who the bidder might be (including Jobs himself), Houston and Ferdowsi were determined to either go big or go home. A cliche? Maybe, but they were determined to prove Jobs, who claimed Dropbox was “a feature, not a product”, and other critics wrong.

Who would have thought that such a simple video could have such a huge impact? Sure, the idea would be alive and well today without Dropbox. Just ask the teams behind iCloud, SpiderOak, SugarSync, Wuala – the list goes on. And we’d like to think that Dropbox would still be around too.

But what if Dropbox didn’t have the 50 million customers, the five language capabilities, the billions of uploads or the $257.2 million in funding? You can’t argue with the facts. A lot of Dropbox’s successes boil down to that 120-second video that’s ever so proudly displayed on their homepage.

Since we at Switch Video are known for creating high converting explainer videos as well, let us help you achieve the same success as Dropbox. Click Here to speak to a sales representative today!


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