Aaron Levie on Box's $1 Billion Valuation and Solving the World's 'Unsexy' Problems
Enter the Project Grow Challenge presented by Entrepreneur and Canon USA for a chance to win up to $25,000 in funding for your business. Deadline is Sept. 15 2015. Click here to enter.
If the billion-dollar-startup club was a high-school football team, Aaron Levie would have lettered as a freshman.
Though hardly built like a linebacker, the slight 28-year-old CEO with wild locks of curly, salt-and-pepper hair is something of an authority figure in Silicon Valley. Up and comers and flagging founders alike have long looked for guidance from Levie, who started up Box (formerly Box.net) in 2005 at the ripe old age of 20.
"You have no idea how much gray hair I have," says Levie who took a leave of absence during his junior year at University of Southern California to launch the data-storage company with co-founder Dylan Smith, 27. "We've been through a lot building Box, and I have the battle scars to prove it."
Over the past eight years, the young entrepreneurs have attracted roughly $300 million in funding from venture capital firms and angel investors the likes of Andreessen Horowitz and Mark Cuban. The company, which grew its sales by 150 percent last year and now sports a valuation of around $1 billion, boasts a customer base of roughly 15 million users and 150,000 businesses.
Not bad for a college dropout, right? We sat down with Levie to find out how the young trep dealt with early challenges and his top advice for fellow young founders. Here is an edited version of that conversation:
Q: You always hear about how important a business name is, why Box.com? And why did you change your name from Box.net?
A: It's actually not a very interesting story. We had to make sure that it was very clear that we were '.net' or else you'd go to a page that sold cardboard boxes. So we finally were able to acquire Box.com and officially rebrand the company.
From a naming standpoint, we wanted to have a brand that was incredibly simple. Something that everybody could feel like they could understand immediately and the idea of having this Box in the sky where all of your data goes was one of the core beliefs. Everything about the product -- everything about the way we serve customers to how our brand is represented needs to be as simple as possible.
Q: When you were just starting up, do you think you would have appeared on Shark Tank if you had the opportunity? Why or why not?
A: We probably wouldn't have gone on Shark Tank, but I have nothing against the concept. Anything that either highlights or inspires entrepreneurship is generally a good thing. And certainly any time you have the opportunity to pitch Mark Cuban is also a good thing. But I think we're a little bit too geeky for live television.
Q: Mark Cuban was an early investor in Box, and you bought him out. Was working with him a mistake?
A: No, not at all. He might say otherwise, but we had a great experience. The interesting thing about extremely experienced and entrepreneurial investors -- guys like Cuban and Peter Thiel -- is they'll often have pretty strong opinions about what you should be working on. And rightly so, because they have a lot of experience.
The only challenge is that sometimes on the actual business side, you can differ with some of those strategies and opinions. In our case, we ended up going down a slightly different path than I think Cuban was interested in. Ultimately, we ended up doing many of the things that he suggested. We were just very early in our cycle, and we saw the world a bit differently.
Did you have credibility issues when you were first getting started?
A: Definitely. My co-founder has always trailed in me in terms of aging by about five years. So when we were 19 and 20, he looked like he was 12. The funny part was that he was our CFO. Generally your chief financial officer does not look like he's 12 to 15 years old. So I think investors thought we were going to run off to Disney Land with the money.
That wasn't such a problem once we moved to the Bay Area, which is a lot more familiar with this idea of college dropouts starting a company. There was, however, an experience bias when we talked about going into enterprise. Granted, we were a little ahead of our experience in becoming an enterprise-software company. The general solution to this problem is one) you learn as much as you humanly can from every possible source you can and two) you surround yourself with the experience and the talent you need to be successful.
Q: Box's $1 billion valuation is causing quite a stir in the media. Can you respond to the conjecture, and whether you're weighing an initial public offering?
A: I can say we are definitely valued in that kind of range. It's one of those things that you don't pay attention to because it has nothing with the day-to-day running of your business. Our focus is on building a long-term, independent and sustainable company. We've raised capital in such a way that lets us be very competitive. We're making a lot of big investments and a lot of big bets, and I think many of those things lead to us becoming a public company.
Q: Best advice for fellow young entrepreneurs?
A: For us, attacking unsexy problems tended to have disproportionate rewards. There's so much attention given to glamorous concepts like photo sharing, video, social media. Instead, go and solve a really hard problem that not a lot of people are paying attention to -- whether that's in health care or manufacturing. We have so many unsexy problems that still have yet to be solved.