There’s a saying in mergers & acquisitions circles: companies are bought, not sold. This could not be more apparent in the case of much ballyhooed mobile email startup Mailbox. It was only a few months old, funded by Marc Andreessen from blue-clip VC firm Andreessen Horowitz, when it was wooed by and sold to Dropbox for, reportedly, over $50 million in cash, and with stock options, potentially valued at $100 million. With the Dropbox IPO looking uncertain, especially since Box is valued in the public market at $1.66 billion, much less than the $10 billion Dropbox was reportedly last privately valued at, much of this valuation was on paper. Yet, $50 million in cash is some heckuva lot of cash.
Dropbox announced today that they have shut down Mailbox. And the reason is “As we’ve increased our focus on collaboration, we realized there’s only so much an email app can do to fundamentally improve email. We’ve come to believe that the best way for us to improve people’s productivity going forward is to streamline the workflows that generate so much email in the first place.” Here’s the email that I received from Dropbox an hour ago:
There are of course reasons by Mailbox didn’t work; but that doesn’t mean that Dropbox was wrong in its instincts. They were just so early in their thinking about collaboration that they didn’t make the right choice. But it learnt a lot along the way, and is now poised to address the problem again. Note they said:
…to streamline the workflows that generate so much email in the first place.
To understand why Dropbox faltered with the acquisition, understand what product guys know for a fact:
The world rarely needs another new product. One reason new products fail is that they try to change the behavior of the buyer. Remember the Segway – the self-propelled human driving machine? Or the Roomba, the self-propelled vacuum cleaner? There are plenty of early adopter buyers for these machines – I own a Roomba and it is collecting dust in my house (no, it is not cleaning up the dust, it is sitting in the corner collecting dust). The reason is – these machines required an unnatural change in behavior. I couldn’t just turn on the Roomba and leave the house and expect that it would do its job properly. I knew from experience that it would get caught in wires, or get stuck under the couch, or go round and round in circles. I ended up changing my behavior to use it – I would have to turn on the Roomba, then babysit it as it went around the home. I ended up doing much less physical work than vacuuming the house myself, but a lot more mental work watching the machine. In the end, I stopped using it and now use it only rarely.
The business world rarely needs another new application. This is at the heart of our company, Dossier. Our product helps businesses talk to their customers faster than anything they could do themselves. But when we built it, we wanted to make sure that Dossier worked beautifully with all applications that were already in use by sales, marketing and customer success teams. So if you use any of these products at your company – Gmail, Outlook, Salesforce, Zendesk, and even your own web site, or your own custom app like a sales quoting application, or a packaged application like Netsuite – you don’t have to learn how to use Dossier. You get trained on how to set it up and refine it, and then, you just use email to talk to your customers, Salesforce to manage the system of record, Zendesk to handle customer service requests. Dossier acts like the marshall, sending information from one group of people to others, helping customers talk to your employees, employees talk to each other, application users talk to IT teams, and so on. We make IT click.
In my previous life, I made 17 acquisitions for a public company, and our last deal was to sell our company for $400 million. Many of these acquisitions did not pan out the way that we expected. So the Dropbox team didn’t really make a mistake that was different than many mistakes that all companies make. Hindsight is 20-20, as they say.
What is important is foresight. As entrepreneurs around the world build the next great mousetrap, they should think hard, as we had to do – whether we’re making it really easy for the product to be adopted in today’s business environment. And that environment requires that whatever you build fits into the hearts and hands of the people that will use the product every day. Build with foresight, and your hindsight will be 20-20. Build without it, and the myopia will have far-reaching consequences. For Dropbox/Mailbox, some people have with $50 million more and the others, less. At least Dropbox understood what makes enterprise users tick and made the right decision. And now it really has their work cut out for them. Companies like Slack are streamlining the workflows that cause employees to generate email. Companies like Dossier are streamlining the workflows that cause customers to generate email. Email is dozens of years old, but it won’t just go away. Reimagine the problem that customers, partners and employees face in collaborating with each other.
Build with foresight, and your hindsight will be 20-20.