dropbox presentation

Startup Nation StrategyProposal by:

Bentley Tang, Cambria Sawyer, Yanusha Yogarajah, Justin Hartzler

November 15, 2014

McCombs Case Competition

TEAM TALL

Introduction

Introduction Solution Financials & Risks

Conclusion

Appendices

Problem: Which market should be the highest priority for Dropbox for Business? For the market your team chooses, what strategy should Dropbox for

Business take to ensure maximum profit? Solution:

Dropbox should prioritize Brazil’s market. ~53% of Brazil’s population are Internet users and thus are potential

consumers. The company should focus on startups and small businesses because new

companies have an influential presence in Brazil. Most startups network with each other and build their businesses together.

The Startup Nation Strategy will lead Dropbox to maximize their short and long term profits.

Solution

Introduction Solution Financials & Risks

Conclusion

Appendices

Dropbox for Business Priority: BRAZIL

Maximize Profit and ROI: Target Brazilian STARTUPS

Where Dropbox covers . . .

Introduction Solution Financials & Risks

Conclusion

Appendices

Economic Situation

Introduction Solution Financials & Risks

Conclusion

Appendices

GDP Growth 2.5% 7th Largest Economy 6th Largest Population 200 Million Citizens SMB 96% Brazilian Jobs Government funded programs encourage entrepreneurial

efforts

Startup-Targeting Strategy

Introduction Solution Financials & Risks

Conclusion

Appendices

High start-up rank and culture Major start-up

investment Investments in

internet penetration The 8.5 billion dollar

plan aims to “take 11.9 million households online.”

– [it] decisions, 2014 Infrastructure for

Dropbox diffusion Positioning of Dropbox

‘personality’

“Last year, the Brazilian government created and invested up to $78 million in the Start-Up Brazil program for local and foreign startups.” – TECH Cocktail, 2014

Startup Culture Boom in Small/Medium entrepreneurial enterprises SME’s main focus

Introduction Solution Financials & Risks

Conclusion

Appendices

Startup Culture & Needs

Introduction Solution Financials & Risks

Conclusion

Appendices

Entrepreneurial job creation peaking

Entrepreneurially-related unemployment decreasing

Inherent needs for successful startups

Positioning Dropbox

Introduction Solution Financials & Risks

Conclusion

Appendices

Verifying a market for the product Does it meet a need?

3 Key Needs of a Startup: Organization Communication Security

Dropbox meets those needs Value gained > $15 per

month Position Dropbox as

consistent with their goals

Enhancing brand dominance: Consideration (evoked) Set

Minimize distance Aspirational and

Associative reference groups

Organic Diffusion 84% of Brazil’s internet users in

urban setting Issue of such massively spread

population Maximize ROI by impacting dense,

technologically literate population Investments in internet penetration

The 8.5 billion dollar plan aims to “take 11.9 million households online.”

[it] decisions, 2014 Infrastructure for Dropbox diffusion

Potential for exposure and diffusion into Business to Consumer market as well

Introduction Solution Financials & Risks

Conclusion

Appendices

Internet Use in Brazil

Introduction Solution Financials & Risks

Conclusion

Appendices

Risk:Wireless Internet

Connection Penetration

Key Takeaway:Over 88 million Internet Users, 45.6% Penetration

Rate, Accelerating Growth

Dropbox Infrastructure

Introduction Solution Financials & Risks

Conclusion

Appendices

Risk:Infrastructure Investments

Key Takeaway:Amazon Datacenter in Sao Paolo with Services

Dropbox Uses.

Dropbox Infrastructure

Introduction Solution Financials & Risks

Conclusion

Appendices

Operationally, the average monthly wholesale cost for high-bandwidth Internet data delivery has fallen from $75 in 2005 to $5 in 2010. Although additional storage is required for each SMB product, the company would benefit by greater margins due to lower data costs. (International Data Corporation, IDC)

Financial Analysis

Introduction Solution Financials & Risks

Conclusion

Appendices

See Appendix 1 for Baseline Customer Assumptions

Risk:Capital Flow from Startups vs. Large

Firms

Key Takeaway:7,602 Dropbox for Business Customers needed to

break even.

To Reach and Exceed Breakeven Point:

Introduction Solution Financials & Risks

Conclusion

Appendices

Two-Way Business Referral Program Accelerate growth Maintain customer satisfaction

Simplify and Emphasize Transition from Individual to Business Users Organic Marketing

Social Media Presence in Brazil Inside-Out Implementation

Timeline of Implementation

Introduction Solution Financials & Risks

Conclusion

Appendices

Month 1 - 6: Market research of startups and small businesses in Brazil

Month 6 – 12: Network with startups in São Paolo and Rio de Janeiro; organic marketing

Month 12: Expand Referral Program

Month 6 – 18: Establish connection with consumers and further integrate Dropbox into Brazil

Forever: Maximum Profit (indication at Month 24)

Where we are now . . .

Where we want to go . . .

How to get there . . .

Conclusion

Introduction Solution Financials & Risks

Conclusion

Appendices

Which market should be the highest priority for Dropbox for Business? Brazil

For the market your team chooses, what strategy should Dropbox for Business take to ensure maximum profit? Target Brazilian startups and small businesses

As Brazil’s startup and small business market grows, startups will generally have a need for organizational infrastructure. And they will turn to Dropbox. Meet the need/consumer demand Low financial costs Organization, Communication, Security Aspirational and Associative reference groups

References

Introduction Solution Financials & Risks

Conclusion

Appendices

World Bank Harvard Business Journal

Thomas Eisenmann, Michael Pao, Lauren Barley Dropbox Brazil Amazon Cloud Storage Forbes Entrepreneurship.org http://www.keepeek.com/Digital-Asset-Management/oecd/industry-and-

services/entrepreneurship-at-a-glance-2014_entrepreneur_aag-2014-en#page39

http://www.internetlivestats.com/internet-users/ http://www.startupranking.com/countries

Appendix 1

Introduction Solution Financials & Risks

Conclusion

Appendices