The Tim Ferriss Show Transcripts: Drew Houston

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Please enjoy this transcript of my interview with Drew Houston (@DrewHouston), co-founder and CEO of Dropbox, one of the world’s leading business collaboration platforms, with 500 million users, 11 million paying subscribers and 1,800 employees across 12 global offices. It was transcribed and therefore might contain a few typos. With some episodes lasting 2+ hours, it’s difficult to catch some minor errors. Enjoy!

Listen to the interview here or by selecting any of the options below.

#334: Drew Houston — The Billionaire Founder of Dropbox
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Tim Ferriss: Hello, boys and girls, this is Tim Ferriss, and welcome to another episode of the Tim Ferris show where it is my job to deconstruct world-class performers, people who are exceptionally good at what they do to tease out the routines, habits, favorite books, and so on that you can hopefully test and apply to your own lives. And my guest today is none other than Drew Houston, H-O-U-S-T-O-N, @drewhouston on Twitter and elsewhere. He’s the co-founder and CEO of Dropbox. Since founding the company in 2007 with Arash Ferdowsi, Drew has led the company’s growth from a simple idea to a service used by 500 million people around the world. You can let that number sink in. Drew received his bachelor’s degree in electrical engineering and computer science from MIT in 2006. I think I’ve heard of that place. After graduating, he turned his frustration with carrying USB drives and emailing files to himself into a demo for what then became Dropbox.

Today, Dropbox is one of the world’s leading business collaboration platforms with 11 million paying subscribers and 1,800 plus employees across 12 global offices. Drew, welcome to the show. 

Drew Houston: Thank you.

Tim Ferriss: You know, I ‘ve wanted to have an excuse to ask you for your life story and all these details because we’ve known each other quite a while, but it’s super weird to sit down with a glass of wine at a dinner table or something like that and just start asking you for your Dr. Evil story. So, this is a fun opportunity for me to dig in. So, I appreciate you taking the time.

Drew Houston: Awesome, me too. It’s great to be here.

Tim Ferriss: I thought we would start with some of the backstory that I do not know, and that is your childhood. Perhaps you could just begin by telling us how you would describe yourself as a kid. Let’s just call it 3rd to 6th grade or anytime, really. What type of kid were you?

Drew Houston: So, yeah, going way back, well, first I was definitely that kid who was on computers. I just remember tottering into the living room and seeing this glowing orb and all these buttons, and those were two things I really liked when I was three. I guess I still do. So, for sure I was super interested in computers and technology, and it started out by playing computer or video games, basically. That was like the first interest, and then I wanted to make my own computer games. I thought that my career was going to be starting a computer game company, and I thought that there would be nothing better than that.

But I was that kid. I learned programming at an early age. I grew up just outside of Boston. So, I grew up in New England, and then on my way to MIT, I really liked math, science, so kind of out Central Casting in terms of being a computer science student. Then my first career was babysitting, but then I discovered that you could be paid to program. And then that caused a bit of a career shift, which we can talk about. As much as I enjoyed the babysitting lifestyle, you get like $3.00, eat some Pringles, watch some HBO, it’s not that bad. But programming is even better. Anyway, in middle school and in high school I ended up getting a bunch of programming internships or summer jobs at what were startups, basically. One of them was remote. Most of them were local, but then that got me on a path of starting companies and being involved in startups. But I would say those were the biggest. When it comes to Dropbox and everything that kind of followed after from my childhood, it was happy childhood and I’d say it was still pretty balanced, but programming and engineering were for sure my first love.

Tim Ferriss: And were you a shy kid, an extroverted kid? Played sports? Kind of kept to yourself at recess? How would your third-grade teacher describe you in that capacity?

Drew Houston: Yeah, I think somewhere in the middle. So, I wasn’t reclusive. I had a really great group of friends. I wasn’t the captain of the soccer team either. I did academic decathlon, which is just a fascinating that it exists, but more of a mathlete.

Tim Ferriss: Right. Than an athlete.

Drew Houston: Yeah, I was not like super social, but I had a good group of friends. And then for sure as I went into college, I became a lot more social and just curious about humans and human behavior. But otherwise, I think I would have been known in class as, I think there were like those superlatives in yearbooks, I was most likely to start a company or found something to be.

Tim Ferriss: So, they pegged it pretty early?

Drew Houston: Yeah.

Tim Ferriss: I was doing homework for this, which I always enjoy doing when it’s someone I know because I dig up all these bits and pieces that I then want to ferret out and explore a bit. I came across this line that described a folding chair on top of a fraternity at MIT and that you would go up there with piles of books and read these books. So, can you place us when that was in your undergrad career and how you chose the books and why you did that?

Drew Houston: Yeah. So, it was about my junior of undergrad. I took a leave of absence because I had an idea for a startup that I wanted to pursue. So, I took a year off to do that. This was back in 2004. I was maybe 21, and the SAT was changing. I started an online SAT prep company because the opportunity was the SAT was changing in 2004, 2005 from 1600 to 2400 points. So, suddenly, all of the course material overnight was gonna be obsolete. I saw an opportunity to maybe develop not just a course for the new SAT but an online course, and I teamed up with a former teacher from my high school who had his own little cottage SAT prep company. And I’m like, hey, if we come together, we can put this thing online, and we’ll be on an even playing field because all those 800-page books that have been printed about it are now obsolete. And who really wants to go to some classroom at 8:00 on Saturday anyway? We can build a much better experience if we do it online.

I was really excited about starting a company, and we jumped into it. And I think we met in a Chili’s and were planning world domination and figuring out, okay, how do you incorporate a company? And so it was a really great introduction to the world of starting companies. And then the more I learned about the mechanics of starting a company, the more I realized I didn’t know about business. And I knew a lot about engineering and programming, and I had worked at startups. But there was a fog beyond just like building the product. And so I was like, all right, I know sales and marketing strategy. These are all things, and all I know is I don’t know a lot about them. So, I had the highly scientific method of I’m just going to go on Amazon, type in sales, buy the top three or four books, and just do that for every category. And then I had a couple book recommendations from one of the founders of one of the companies where I worked as well.

But it was great, and it was an important combination. One was actually starting the company gave me motivation to really learn the stuff because I think a lot of times when you’re reading it can just be like entertainment basically. It’s like where you just read the book. You’re like that’s interesting but then don’t use the knowledge. But when you’re actually starting a company, then you really have an excuse to internalize and really study the material. So, there’s a big difference between reading the material and studying it, but I was pretty systematic about it. I’m like, okay, here’s all the stuff that I don’t know, and then reading’s going to be a good way to get me introduced to all these topics. Maybe the first instance of that was when I went through my high school, and there are a lot of great books that you read as part of your high school curriculum. Then I stumbled across a book, Emotional Intelligence, by Daniel Goleman, and I was like, oh my god. I mean, it’s nonfiction, but it spelled out something that I just didn’t know you could kind of break down in a logical way.

And, suddenly, I had this understanding about the world that I didn’t have before, and so that was important because it was sort of one of a bunch of early examples that anything is trainable. It got me on a path to developing what we’d now call a growth mindset and realizing that it’s possible to learn about these things where you have no experience or where it’ easy to be like, oh, I don’t know about that, or I’m just the engineer. I’m not a business person and kind of shatter that misconception.

Tim Ferriss: Do you think that you were open to all these different categories of learning because of the necessity vis a vis starting the company? The reason I ask that is that it’s not across the board, but some people with engineering chops seem to have a learned or intrinsic disdain for sales, marketing, these different bits and pieces of businesses that are a little softer, let’s say, less quantifiable in some respects. Was it simply the motivation in building this company where you had to wear all those hats that kind of drove you into these different categories? Or were you intrinsically – using that word quite a bit – interested in learning more about these different buckets through these different books?

Drew Houston: I think it was a little of both. So, certainly, starting the company made it a necessity and created a lot of additional motivation, but I also found these other topics just as interesting as the engineering. And I think it’s a big cultural thing when engineers start off by being dismissive or defensive about, oh, the technology is all that matters or if it doesn’t have a triple integral and Greek letters, it doesn’t count. That’d certainly be like a cultural meme at MIT, and I think it just creates a huge blind spot for people both because it makes them less effective but the stuff is actually really interesting. But I kept having experiences like that, and that Emotional Intelligence was just one example. But I took a class on negotiation at MIT, which sort of opened my eyes a notch further on this kind of thing where I’m like, all right, negotiation.

I go into that class. I don’t know a lot about it. I’m like whoever yells louder, lies more, smacks the table harder, I guess that’s what makes you a good negotiator. And then this class, I mean, those are tactics, but the class has these frameworks where like, okay, smart people have thought about this. And they have broken it down, and it turns out that there’s a whole process of uncovering mutual interests and figuring out what your leverage is and your best alternative, da-da-da, and spelling it out in a way where I was like, actually, this is a lot more straightforward than some of the theoretical math classes I have to take. And it’s a lot more applicable to my daily life. So, I really appreciated learning a little bit about a lot of different disciplines and just putting up a folding chair on my roof was the first thing that came to mind as far as how I could actually do that.

Tim Ferriss: Were there any other books besides Emotional Intelligence during that period that really had an impact on you?

Drew Houston: Yeah, in that negotiation class there’s a book called Getting the Yes, which is about principled negotiation, and I still think about and apply a lot of those concepts today. So, part of it was just like kind of doing a random walk on Amazon, but I also became friends with the founders of the companies where I worked. And during lunch breaks or at other times, I’d go like chase them down and bug them and ask them questions about like, hey, how do you start a company? Do you have any book recommendations? Just taking advantage of being the bright-eyed, bushy-tailed intern and shaking down my boss or the founder or my mentors for advice. And so two of the books that were really instrumental, the first one is Innovator’s Dilemma by Clay Christensen. It’s a book about how businesses get disrupted, and a lot of those themes are why startups can succeed and thrive even when there are big competitors who you would think would just wipe ’em out and so how that cycle works. And then there’s a book called Crossing the Chasm, which is another classic. It’s a book on marketing, technology in marketing. It’s like how do technology products make their way from early adopters t the mainstream.

Tim Ferriss: And have you found yourself revisiting those books, or were they a point in time during that rooftop, Amazon education period?

Drew Houston: I have. You read a lot of books. Not all of them are as good as the Innovator’s Dilemma, but then, yeah, it also helps to revisit some of the classics. Innovator’s Dilemma, actually both of those books, are good examples. So, yeah, I do revisit them because, again, when you’re 21 and you’ve never had a real job, you’re reading this book, and you sort of get a general sense for things. But you don’t really deeply understand the concepts, and then coming back five years later, ten years later, you can really absorb a lot more of the material. So, I read a lot of books in general, and then when I’m reading a book, I’ll triage them. Like, okay, is this something I need to study? Is it something that’s like interesting or that I might need to know something about, or is it just fun? And if you study it, if I’m like, oh, I need to study this book, then I approach it pretty differently than if it’s just like entertainment.

Tim Ferriss: And for those people who haven’t read Getting to Yes, when you were leading into that with some of the concepts from the class, I thought to myself I bet that was part of the class or one of the books you read because you had the best alternative. And there’s a term I do recommend, also, if people read Getting the Yes – BATNA: Best Alternative to Negotiated Agreement, which is a really important concept to grasp. And there’s another book that I might recommend to people. I think it was written later by one of the coauthors of Getting to Yes called Getting Past No, and I think they go together really, really nicely. We’re just gonna stick on books for a little bit because I know you read so much. If you were teaching, say, a freshman class or senior class undergrad to smart but nontechnical people and you were assigning books to read. And they could be part of the class or things that could be read in advance. If you were to pick – I’m just pulling this out of thin air – three to five books that would be sort of the core of your reading list, do any come of mind that we haven’t talked about?

Drew Houston: Yeah. If the subject of the class were starting a company or evolving from being an engineer to being a business person, I have a handful of books I really love and the concepts that I use and think about every day. Probably my two favorites are High Output Management by Andy Grove, which Andy Grove was the CEO of Intel, which was kind of the Google of its time back in the ’80s and early ’90s. Andy was an engineer, one of the founding engineers, and then rose the ranks at Intel and became CEO. So, he’s lived this path, and when I heard about this book, it was introduced to me as the best book on management ever written. And I agree, and it just breaks down all the mechanics of, okay, how do you run a team? How do you break down a goal into sub-goals? Just the 101 of running a team and running an organization and a focus on output and results, and how do you measure people and a lot of nuts and bolts things, challenges that you encounter when you’re running a team, whether that’s a company or a team within a company.

The second is The Effective Executive by Peter Drucker, and the central core of that book is really about it’s very easy to mistake effort for effectiveness. There are a lot of different phrases for this – to confuse motion for progress – but it’s really about that idea. How do you know if you’re being effective? There’s a bunch of practices you can adopt that make you more effective, and then how do you avoid the sand traps of things that feel productive but aren’t actually? How do you unpack the case where we all have the same number of hours in a day, but some of us seem to accomplish a lot more than others? Why is that, and what can you do instead? So, The Effective Executive covers a lot of that ground. Those two I think of as kind of like textbooks. Like, you want to study them. You want to take notes. You want to really chew on the material.

Then I think there’s a lot of other tactical things about starting a company. I’d say a favorite book that’s more about the experience of running a company is Ben Horowitz’s book, The Hard Thing About Hard Things, which kind of just shows you kind of a mess and adventure and a lot of the crazy highs and lows and what the human experience is of actually having to do this. Then I’d probably zoom out and get a little more philosophical. So, a couple favorite books are Poor Charlie’s Almanac by Charlie Munger. So, Charlie Munger is Warren Buffett’s longtime business partner. This book is really interesting because one of the things about being a CEO or taking on big responsibility for anything is you have to make a lot of decisions about a lot of different things and do it quickly and be right.

And so how do you be right about tons of different things, especially if you don’t have a lot of life experience? Like, how do you train up that skill quickly? That’s really called wisdom or judgment. So, it’s like how do you grow wisdom or grow judgment quickly? Poor Charlie’s Almanac is a great example of that. It talks about how, actually, a lot of what you need to know to be successful in life, conceptually, you learn it in middle school or in high school. You just don’t apply it, or you don’t really internalize the concepts. He argues that a lot of really wise and effective people basically build a catalog of mental models and concepts and basically assemble all the best ideas from all the different disciplines and then figure out how do you apply them in life.

For example, the concept of BATNA and leverage, that might be a concept that can be applied in all kinds of different situations or comparative advantage from economics, or you could go on about these different concepts. But then figuring out how do you internalize them so well that you’re able to figure out, okay, these are what matter in these situations, and then how do particularly avoid terrible decisions. But really how do you build enough of these? He calls it a latticework. How do you build enough of a network of these mental models so that you know which ones to apply when and that you find yourself most the time being able to make good, quick decisions? And then you also on the philosophical front Zen and the Art of Motorcycle Maintenance.

Tim Ferriss: Yeah, Pirsig.

Drew Houston: Yep. You talked about engineers who like dismiss all these things that can’t be fit into an algorithm or that don’t have some kind of mathematical rigor underpinning them, Zen and the Art of Motorcycle Maintenance is about that question. You have this whole rational world, which can explain a bunch of stuff, but then you have the whole aesthetic world, which can’t be boiled down to a formula. And they both exist, and they are both useful in different cases. But they don’t tend to get along, and so what’s up with that? It’s a really great book about those concepts, and I think developing an appreciation for or developing both your left and right brain to use that analogy, I think, is really important if you’re running a team or growing a company because there’s a lot of stuff where it’s a lot about technique and data and a lot of things like strategy or the engineering or kind of fall into these if, this, then, that kind of reasoning. But then a lot of the hard part of the job is really about people and what motivates people. How do you paint a vision of the world that’s exciting for people? How do you build good relationships? How do you develop products with taste? Those are things where you’re not able to reach as much into the more rational or kind of engineering bag of tricks. So, I think developing both of those, developing both sides of your brain or developing an appreciation for both, is really valuable.

Maybe one more, so, Principles by Ray Dalio, who I know was a recent guest, I think he sketched really concise and good thoughts for like, all right, how do you approach life? So, I would include a mix of different kinds of things. I’d have like more instructional books, like more philosophical books, more story and history kind of books.

Tim Ferriss: Man, I want to take your class.

Drew Houston: Yeah, that sounds pretty good.

Tim Ferriss: Number one. So, consider me preregistered or pre-applied. I want to make a couple comments on these books that you mentioned because I am very fond of all of these books. I’ll just add a couple of notes because they tie together also really nicely. So, High Output Management by Grove was out of print at one point and then became so popular in Silicon Valley that a new edition was printed, and the forward, I believe, was from Ben Horowitz, who wrote another book that you had mentioned. What is it? The Hard Thing About Hard things?

Drew Houston: Hard Thing About Hard Things.

Tim Ferriss: Right. Ben Horowitz of Andreessen Horowitz and many other things prior to that. There’s, of course, a selection bias here since I have a limited data set, but the startups that I’ve been involved with that have done best – have kind of returned the fund many, many, many times over – almost without exception have all read High Output Management and have a copy of it in their offices. Now, I’m sure there are many unsuccessful CEOs who also have that book but nonetheless. The Effective Executive, actually, I’m gonna leave that one for last. Poor Charlie’s Almanac is a great book, and I want to underscore something that you said somewhat in passing, which is really important. And I know you know it’s really important, which is the avoiding of making really bad mistakes, and one thing that Munger emphasizes a lot, you know, the right hand of Warren Buffett. Warren Buffett has said he has the best 60-second mind he’s ever met.

And I’m going to butcher this I’m sure, but it’s something I think of a lot because I have some tendencies that are unhelpful in trying to be really smart and come up with clever solutions. So, I revisit this quote. Somebody could find the right version, but it’s Munger who says it’s amazing how successful you can become if you just consistently avoid being stupid versus trying to outsmart everybody else. I think a lot about that because it’s so true. It’s like, God, yeah, if you just kind of watch your chips and know your downside and consistently make rational decisions with these latticeworks and these heuristics that you mention, it’s super, super helpful.

The Effective Executive. So, The Effective Executive I want to come back to for a second, and you mentioned nuts and bolts. So, The Effective Executive I’ve read probably 10 or 12 times. I love this book, and it’s very short too. It’s easy to read, and you mentioned the sort of nuts and bolts. So, I’m gonna use this, and then we’ll probably jump around chronologically. You, if I’m remembering correctly, have a label in your email called OPP. Could you explain to people what this means?

Drew Houston: Yes. Originally, it stood for Other People’s Problems, although I made it nicer a little later: Other People’s Priorities. I have a vendetta against email, which we can dig into, but I’ve had this experience. I imagine anyone listening has had this experience. Like, all right, your inbox is overflowing. You’re like I’m finally gonna deal with this thing. You plow through hundreds of emails, and your reward is more emails. But then to the OPP thing, I’m like wait, then what are these things? Like, what am I doing? You realize that you’re basically checking off items on other people’s to-do lists. In the abstract, there’s nothing wrong with that, and it’s important to be helpful. And we all have been helped by and help other people, but you can end up in a situation where, basically, your to-do list is a composite of other people’s to-do lists. And your calendar and email can often reflect that.

One of the most important concepts is focus. Everybody understands, like, yeah, yeah, focus. And I imagine this is something we’ll probably talk more about here, but there are so many forces. People love the idea of focus. It was interesting just going back to Warren Buffett. So, Warren Buffett and Bill Gates did an interview. I think it’s on Netflix. There’s like a Warren Buffett documentary, which is great. I also recommend, but the interviewer was interviewing both Warren and Bill and was like, all right, in a word what has made you most successful? And they both at the same time without missing a beat both said focus. It like seems so obvious. We all know why focus is. We don’t need to be told why focus is important, but one of the things that The Effective Executive highlights is that the default for pretty much anything is to un-focus you.

And that’s true of your inbox. Your inbox is not prioritized. You basically get all these requests that are other people’s priorities. If you’re working within an organization, pretty much everybody will be pulling on you to kind of feed the beast of the organization. So, it becomes very hard to do a few things well. There are a lot of great things about that book, but, yeah, I do have an OPP folder, which I try to keep manageable. I think the best is if you can find ways to be helpful and involve other people in actually helping. I have a whole team of people who can help me respond to those kinds of requests.

Tim Ferriss: So, the OPP folder, it’s not necessarily a black hole. It’s not an indefinite archive, necessarily, but it’s when I’ll get around to it? Do you have a set schedule for looking in the OPP folder or having other people do that for you, and what are the criteria, right? Is it that anything that doesn’t come from, say, a direct report or an investor or a family member goes into OPP? What are the guidelines?

Drew Houston: Yeah. I think some people would say it’s feeling clinical even when I help. So, I’m not great at responding to these things. If it’s something that’s not a priority, then I’ll try to respond in days, but sometimes it’s weeks. Sometimes it’s months. Sometimes you’ll get a response that’s like, oh, yeah, it’s seven months later. Do you still need this? If it is something from a person you have a relationship with and there are probably other factors, but it’s like, okay, is this someone who I know where I personally would be really helpful and they have done their homework? I think there are certain first pass filters like that. I would say there is no commandment from God that you have to respond to every email you receive. So, if it’s like a cold email, if it’s from someone I don’t know, or it’s like a sales thing or whatever, then it just goes in the black hole.

There’s a lot of folks who are like, hey, I need a mentor, or how do I raise money? You can often tell by the question. Many if not most of the requests will be something where the person could just do a little bit of homework and get a good answer. That’s troubling because at first you try to help people with those kinds of things. You’re like, oh, well, go to this blog post or do this thing, and then you don’t hear back from them. And it turns out they just never followed up or just didn’t do it. So, after you get burned by spending a much of time trying to be helpful to people who don’t do their homework, who don’t help themselves, you realize that’s like not how you want to spend your life. So, I don’t think there’s a magic formula, but what you want to do is just keep that budget of your time constrained to something small. Or small or big you should at least be mindful of it. A lot of people just find themselves hopelessly busy and on this treadmill responding to other people’s to-do lists, and no one is doing the things on their to-do list.

Tim Ferriss: Right. One thing you said about people doing their homework reminded me of this quote from Maria Popova, who writes Brain Pickings, which is this incredible site, millions and millions of readers and really long form, smart writing. And at some time I think she changed it to be a little more maybe sunny seeming, but she had a quote I’m pretty sure on her Facebook page as the graphic as the header at one point that said: If someone hasn’t done the homework to determine whether it’s a fit or not, it doesn’t warrant the energy to explain why it isn’t a fit. Or something like that, you know? Which I think is a great commandment or sort of guideline to use because so much of it when you reinforce that type of behavior by trying to be helpful, people tend to come back with equally nebulous or un-thought-through questions. Do you have any other best practices or dos or do nots when it comes to managing email or not using emailing?

Drew Houston: Yeah, I try not to use a lot of email. I think email is good for quick, discrete tasks where you’re holding someone up by not doing them. Then I think it’s also useful for broadcast. Like if you have some long-form, written direction that you want to give a group of people, then that’s a good use of it. But often when people get into these long email threads, it’s sometimes actually fun and indulgent to get into these big, like flame wars. If you get a long email, often the best response is to talk to them in person. And if you’re getting a lot of little requests, it’s better to just batch them up and have some kind of weekly cadence where you can deal with a lot of quick requests without having the overhead of email. Email’s just one example of a lot of different forces that can kind of shatter your attention or take away your time. I think one of the most valuable concepts from The Effective Executive is measuring your time or like understanding where your time goes.

And it is kind of shocking and hilarious but really tragic that we all think we know exactly where our time goes, but then when you measure it, you’re not usually just like slightly wrong. You’re like totally upside down. So, this is a really valuable exercise for anyone. But actually like keeping a log of where you spend your time and categorizing it, I remember the first time I did this. I was like, all right, I’m running the company. Things are going well. What do I spend my time on? Oh, back then, I was like, oh, I spend my time on the product and recruiting and da-da-da. Um, and when I actually did the inventory, I was spending like no time on those things. There was a lot of OPP back then, just like following up on favors or speaking engagements that didn’t really do anything for the company. There wasn’t like a lot of total fat like that, but what you find is you write down your priorities. And you look at your time, and you find that things are totally mismatched.

And so any mechanism you can to first understand where your time goes and then make sure your priorities actually match it, I think at the end of the day that’s conceptually what you want to do. And then just understand that you also want to offset the tendency to be in this permanently reactive state, whether that’s ’cause you’re getting emails that are other people’s requests or your calendar says one thing. Usually when your to-do list gets too long, you just sort of do things randomly or just sort of do whatever. You just respond to whatever showed up most recently in your inbox or what blinked at you or what yelled at you loudest in the last hour. That’s not effective compared to setting your own priorities and measuring yourself against them. This is a separate topic, but I think technology needs to do a lot better job of helping us do that because it’s really hard. And then especially as you’re in any kind of organization. The fires will get dealt with first, and that’s not a bad thing. That’s necessary. You have to put out the fires, but then the important stuff, I’d say Eisenhower had this concept: important versus urgent.

Tim Ferriss: Yeah, the matrix or the quadrants. I guess it was four.

Drew Houston: The two by two. It’s important and urgent and eliminating the stuff that’s not important, not urgent, but really the biggest crisis of prioritization is like how do you make sure that you elbow out time for the important, not urgent, stuff? Because the important and urgent stuff will get taken care of but then you end up with a lot of stuff that’s not important; urgent, not important; or not important, not urgent. And you really want to cut those down as much as possible because otherwise a lot of the fires if you actually do a root cause analysis, think about like why was this a fire in the first place, and you kind of climb that ladder a couple of rungs, like, why did this happen? Why did this happen, or why did this happen? Because of that. Well, why did that happen? Because of that. You find that just a little bit of planning would have eliminated the need to fight that fire.

And it’s really easy to spend your days kind of doing the equivalent of paying down like a lot of high-interest credit card debt with your time by just fighting all these fires and not actually putting them out at their root. So, something I do on that front now is there’s a concept called No Meeting Wednesday, which I think is popular around the valley, or maybe it originated in Facebook. I’m not sure, but we sort of halfheartedly adopted that, and I halfheartedly adopted that for a while. But I remember I’m like I really want to do this because there’s all this planning and all these things that are important that were the cost of me not creating clarity for my team is super high, And I sat down with my assistant at the time, and I was like, hey, please don’t schedule stuff on Wednesday. It’s really important that I work on this particular project, and it’s just not gonna get done unless I have like a full day or many hours of uninterrupted time. And she’s like but blah, blah, blah has this, and it’s important. And blah, blah has this, and it’s important. And blah, blah has this, and it’s important. And I’m like there will never be a day where there isn’t something – quote – important, you know, coming up.

So, it dawned on me in that conversation. I’m like this is all important, but it’s not. I was like, look, if it is important, just schedule it on Saturday. I’ll come into the office. I’ll do all those things. And then, miraculously, those things kind of ended up doing themselves, and adopting No Meeting Wednesday was utterly transformative in terms of actually being able to think and make progress on the most important things because otherwise you just lift up your head. And you find that six months has passed on some, quote, important priority of yours, and there’s been no progress. So, think about how do you develop systems, and how do you build in time for reflection and elbow out the time for you to think and set direction. That’s one of the biggest mistakes that people make, and one of the concepts from Effective Executive is like that stuff doesn’t make progress with a half hour slot in a day of ten hours or half-hour meetings. There’s a minimum quantum of time for deep thought or deep work that you need. And so, anyway, there’s a lot of great, conceptual foundations in Effective Executive about your time and effectiveness and in disambiguating business from effectiveness and then the concept of leverage in High Output Management and a focus on output. So, those two books have pretty much conceptually everything you need, but then implementing it in practice is a lot harder.

Tim Ferriss: Yeah, we’re going to talk about the practice quite a bit, I think, also in this conversation. I want to sort of go back to a few things you mentioned because I think they’re really important. The first is the Eisenhower Matrix, I think it might be referred to as, which people can look up on their own time. But the correlating, in some respects, maybe exercise that I think Drucker brings up in the Effective Executive is the jar or mason jar. People can visualize this very easily, but if you have a mason jar and next to the mason jar you have a handful of large rocks that can fit into the jar, then you have a bunch of smaller pebbles, then you have a pile of sand, all of which has come out of the jar, if you put in the big rocks first – i.e. your most critical tasks, which may or may not be urgent, then you can fit in the pebbles. Then you can fit in the sand, and screw on the top. And it’s nice and neat, but if you put in the sand first, the whole thing falls apart. You cannot take the same volume of rocks and pebbles and sand and get it into the jar, which visually from an imagery standpoint is very easy to understand. The time audit though, as you described, is so important for people to do because very often even your calendar is not a good reflection of how you, in fact, spend your time. If you look at, say, self-reporting in dietary studies where they’re observational and people are going home and then coming back and reporting every two weeks or something like that, if you ask people to estimate their caloric consumption, it’s almost always like 30 to 40 percent off. It’s not a small difference, and I think the same thing happens with time really, really routinely.

I’m going to make a reading recommendation, and then I’m going to come back to this name, which, of course, you’re going to be very familiar with. But for people who really want to also get a teaser for what you’ll read more about the Effective Executive. There’s an essay. I might be getting the headline slightly off, but you’ll be able to find it: Maker’s Schedule, Manager’s Schedule

Drew Houston: Yep.

Tim Ferriss: By Paul Graham.

Drew Houston: Paul Graham.

Tim Ferriss: And the legendary PG, who we’re gonna come back to, is a good place to start. But I want to rewind the clock for a second and ask you why did you stop the SAT online prep company?

Drew Houston: So, I started the SAT prep company in 2004, and then I went back to school, finished my undergrad. And then a couple of things happened. After graduation, I started working as an engineer at a network security company, and I was still moonlighting on this, on Accolade, the SAT prep company. But I found myself in a situation where it was like it was just harder and harder to make progress on the SAT prep company. And I wasn’t really sure what was going on because I just felt like it took more and more willpower to peddle. I don’t know whether it was because I felt like I was peddling harder but not getting anywhere or one way or another, but over time it took a lot more willpower to work on it. And so I found myself procrastinating with all these like side projects. And now I recognize all this is burnout. There aren’t a lot of good things about burnout, but sometimes it can steer you.

The positive element is it can steer your attention to things that are more worthwhile. But then I was worried because I’m like oh my god. I’m so unproductive. And I’m wallowing in this like guilt. I was raised Catholic so like this Catholic guilt of I’m not working hard enough. This company’s not successful enough, da-da-da-da-da and just like totally not helpful. So, I’m like, oh my god, am I broken? Am I not capable of working hard? What’s wrong with me? But then one good news, I started working on this like poker bot that started, and it played with real money. I got past the security on the poker client. This is 2006. So, I figured out how to like make all that work and then watched kind of my Frankenstein moment as the bot comes to life and starts playing on real poker tables. And so this idea that you can’t have poker bots was like totally false. But I was possessed.

Tim Ferriss: Were you winning? Was Frankenstein’s monster winning?

Drew Houston: Well, Frankenstein was not too smart in the beginning. The thing starts moving the mouse and playing the hand then gets confused because there’s some like obscure, multiple split pot or something that I just didn’t write the code to handle that situation. So, the thing crashes and folds your aces, and you’re like, okay, awesome, this is what AI looks like. But it was scaring my family because I was living in Boston, but then we have a little summer place in New Hampshire. And my family was like, okay, you know, come up this weekend. We’re all gonna be at the lake. And I’m like, okay, and then I get to the lake. And I start unpacking my trunk, and I had like three monitors and like all these computers. And I’m like – I mean, this is like a little cottage on a pond. It’s not set up to be like mission control. I’m like putting monitors on the stove on like thing, and my parents are like what are you doing? They were kind of used to me having all these side projects. So, they’re just like I hope it’s not illegal. Unfortunately, that side project had to stop because of that.

In the fall of 2006, it went from like kind of borderline to very illegal to do online poker. So, that project ended. So, what’s that about? What I took from that was like, well, first I’m like I’m not broken. I’m super capable of working hard. It’s just like I need to find something that I’m really motivated by. And so that was a relief. And then along the way, I continued to work on the SAT prep thing, but then the founding story of Dropbox starts with forgetting my thumb drive and going on the Chinatown bus, which I’ll get to. But before that, I kept having these problems working with my co-founder or collaborating with him. We bootstrapped the company, so we didn’t raise any money. And we didn’t have an office. We didn’t work out of the same place, and we didn’t have servers. We didn’t have anything. So, we would just email stuff back and forth, and I had to work on multiple computers. I kept carrying around this thumb drive and having these elaborate scripts that would back up the SAT prep company, kind of all of our files, to a server. And then eventually I was like, all right. I had graduated from college. This was about 2006, late 2006.

A lot of my friends had lived in New York, and they’re like you got to come out. It’s a lot of fun here. Just come out for the weekend, and I have a dilemma because I’m like, well, I need to get some stuff done for my company. But I also want to go to New York, and I’m like maybe if I take the Chinatown bus or if I ride the bus I can have four and a half hours each way. So, then I’ll have ten hours. Ten hours should be enough time to do what I need to do, you know, all the elaborate rationalizations we come up with. So, I’m like, okay, if I take the bus, I’m greenlit to go to New York. Then I get on the bus, and I’ve forgotten my thumb drive.

Tim Ferriss: Problem, yeah.

Drew Houston: Yeah, back to self-flagellation. I’m like I can’t. I keep doing this. I suck. I’m not like I hate my thumb drive. I’m like I hate me, but I’m like, oh my god, I just cannot deal with this problem. This is so stupid. I’m so sick of emailing myself a file. There is no question for which that’s the right answer. Think of the physical equivalent of that, like, taking an envelope, putting something in it, putting your own name in the to and from, putting it in the mailbox, and getting it back. I’m like this is what we do to like manage our files, that, carrying around a thumb drive, all the things we used to have to do. I’m like I never want to have this problem again. So, on the bus, I opened up the editor and started writing some code in Python that basically was a seed that sprouted into Dropbox. And I was just like totally possessed with that problem because I’m an engineer by upbringing. My favorite classes at school other than some of the stuff we’ve talked about are like algorithms, distribute systems.

And I found myself at a crossroads where I’m like, look, I love standardized tests as much as any human possibly can, I guess, but a couple things happened. So, one, is I pause. I’m like, okay, I’m working on this company. I’m kind of burning out. Part of why is because I thought about, okay, even if all my dreams come through and like everything we hope for happens with this SAT prep company, then what? And I’m like king of SAT prep. I think that’s fine, and people need help with these things. But that’s not what I want to do. I’m just picturing this kind of cardboard crown, and that’s only if everything goes well. That’s like if all of our dreams come true. So, I’m like I need to do something else, and so I ended up with these side projects and then found myself getting totally obsessed with first the poker bot but then even more so with Dropbox. So, sometimes it’s hard. How do you deal with burnout? How do you know if you’re doing the right thing? These are really hard questions. For me sort of listening, sometimes a lot of procrastination is unhealthy, but sometimes that little voice is leading you in a much better direction.

Tim Ferriss: I want to bring this back to the dot, dot, dot that I left after Paul Graham, and we can certainly go in any possible direction that you want to take. But for people who don’t know Paul Graham, maybe you could describe Paul Graham, certainly as close to a demigod as one can probably get among many, many young entrepreneurs and older entrepreneurs in Silicon Valley. Who is Paul Graham? What is Y Combinator, and can you describe your first meeting with Paul Graham?

Drew Houston: Yes. So, Paul Graham is best known as one of the founders of Y Combinator, which is an incubator for startups. And they were our first investors, and they also invested in a lot of great companies including Airbnb, Stripe, a lot of them. And Paul, before starting Y Combinator, he was an entrepreneur himself. He started a company called Viaweb back in the first dotcom boom and sold it, and then he had a lot of really provocative and insightful essays on startups that gained a big following. And he was also one of the creators or at least was very early in the conversation around using Bayesian methods using this kind of math to do spam filtering.

So, he’s also one of the originals, one of the architects or at least involved in that community of people who have figured out how to get rid of spam. And that’s actually how I’d first heard about him, but then he started writing about startups and then ran this experiment that became Y Combinator. But it was actually called the Summer Founders Program when I was digging through some old email about it because this was the precursor to Y Combinator. I applied with my SAT prep company to that and was rejected but then managed to get into Y Combinator a couple years later. So, I guess the first virtual meeting of applying to be funded didn’t go well. The first in-person meeting was probably –

Tim Ferriss: Hold on. Pause. Why didn’t the virtual meeting go well?

Drew Houston: Well, we didn’t really virtually meet. It was like a college admission thing. It’s an open application. Anybody who wants to submit an application for the Summer Founders Program, which it was like the same thing as Y Combinator. You get a little bit of money and all come together. It was like sort of Y Combinator version one. But I applied and didn’t get in, and I was super disappointed. So, that didn’t go well, but then a couple years later I wanted to apply again with Dropbox. And this is skipping ahead a little bit. So, I had the idea for Dropbox, started working on it, and I wanted to do YC for many reasons. But another friend of mine, this guy Adam Smith, no relation, he was one of my friends from college, he did YC in 2006 and had an awesome experience. And I had like a front row seat to that and saw how much fun they were having, and then their company was just on like a much faster trajectory because of YC. And I’m like, oh my god, I want something like that. So, I start thinking about applying for YC with Dropbox, and one of the good things about coming from college admissions is you sort of learn how these admissions processes work.

And YC was not really that different. You have a lot of people applying for a few spots. So, in addition to getting the scores and the grades and everything, one of the things you can do is try to stand out and do something kind of unique. And so I’m like, all right, well, maybe to help me get into YC I’ll try to put a video out about how Dropbox works. And Y Combinator had just started this news site called Hacker News, which is kind of like Reddit for startup news. And I thought. I had a hunch. I’m like what does Paul do all day? I think he probably does what most of us do, which is hit refresh on Hacker News all the time. So, I’m like maybe I’ll put a video on Hacker News. Maybe I can get in front of the dean of admissions here, get Paul’s attention, and go from there. It actually worked. There’s a concept from a book that I had read on that roof called Guerilla Marketing, which is like how do you get attention and users for your product if you have no –

Tim Ferriss: Yeah. That’s like Jay Conrad Levinson or something like that.

Drew Houston: It’s something like that. It’s like how do you do that when you have no money? The tactic of putting a video on Hacker News or creating a viral video, that was a seed that was planted by reading Guerilla Marketing. But I made a screencast, or just like a three-minute demo of how Dropbox works. I wasn’t ready to ship the code, but I wanted some feedback. And I wanted to get into YC, and that video both got me into YC. And it got me a co-founder, but I didn’t know that at the time. So, coming back to what happened with this meeting with Paul. So, I put the video on Hacker News. It hits the top of Hacker News for multiple days.

Tim Ferriss: That’s a long time to be at the top of Hacker News, yeah.

Drew Houston: That can’t happen anymore because of a bunch of reasons, but I was pretty happy about that. And then I’m like, okay, so far the plan seems to be working. I just like keep hitting refresh on my inbox. I’m like I wonder if Paul has seen it. And low and behold, I get an email from Paul Graham saying, hey, it looks pretty cool, but you need a cofounder because especially at the time they didn’t like single founders applying. And I didn’t have a co-founder yet. This was before I met Arash. So, I was like, oh god. I agreed with him. The only problem was the application deadline had already passed. I had already applied, and the interviews were in like two weeks. And so I needed a co-founder in two weeks, which is like saying like, hey, I know you’re not dating anyone, but you need to get married. So, hilarity ensued, but I flew out to San Francisco. I’m trying to shake the trees for any cofounder candidates I hadn’t thought of because for one reason or another all of my close friends and people that would have been the folks that I would have leaned on, like, the timing wasn’t good.

They didn’t want to do it, whatever else, but I managed to get a friend of mine interested out in San Francisco. But he’s like, okay, I’m interested. I don’t know, but I want to know what PG thinks before I make a decision. So, I’m like, okay, great, and I’m like it’s a Tuesday at like 1:00 pm. My flight back to Boston leaves at like 10:00 or 11:00, so I’m like, oh; actually, YC has its dinners on Tuesdays. Maybe I should just like drive down to Mountain View and just like pitch Paul. So, I get in a Zip car. I fly down 101, and the plan was working pretty well. I got to YC. I went in the office. As expected, people were just chilling and kind of there was some downtime. And so I go to Paul’s office, and sure enough, he’s in there. He’s just chilling. I’m like, hey, Paul, do you have a minute? I just want to show you something I’m working on, and he’s like, nope, I’m busy. And I’m like, okay, look. I can almost see your screen. I know you’re just like reading Hacker News right now. You’re not actually busy. But it’s like awkward, so I step outside, and I talk to Jessica, who was his partner in cofounding YC together and his wife. And I talk to Jessica. I’m like, hey, look, Jessica.

And I had met Jessica before. So, I’m like, Jessica, I’m really sorry to bother you guys. I just have a co-founder who is like looking for some feedback from Paul to make his cofounder decision. I’ve got a flight back in like four hours. I swear I won’t take more than 60 seconds of Paul’s time. Do you think it’s okay if I go in there? And she’s like, oh, yeah, Drew, of course. Like, no problem. Paul’s not doing anything. It’ll be fine. So, I go back in there, and it’s like detonation. I say like three words, and Paul’s like, no. He’s like I’m not gonna see your stupid demo. The whole reason we have an application process is so that randos like you don’t just like show up here and bother us. So, like, no, please leave. And so I’m like, okay, thanks, Jessica. Thanks, Paul. I’m like this is not gonna be good. I’m like this is a rough return to San Francisco. So, needless to say, the co-founder situation did not work out.

Tim Ferriss: You were like Paul’s thinking about. Let me get back to you.

Drew Houston: Well, I did meet with the dean of admissions. He just thinks I’m an asshole.

Tim Ferriss: I think he’s coming around. Let me get back to you.

Drew Houston: That was a tough plane ride home, but it was good training. This like the new normal if you’re starting a company.

Tim Ferriss: Let me just hit pause for one second. What were you saying to yourself on the way back? Like, what was the self-talk on the plane ride back?

Drew Houston: I was like I could not have effed this up any worse if I had tried because now I don’t have a co-founder, and I’m like I might have been able to get in if I had just like hadn’t maximally pissed off Paul. Anyway, now I have no cofounder, no YC, and probably no company, and I have two weeks left to resolve this or maybe a week left to resolve. But anyway not a lot of time so it was bad. Yeah, I was like I don’t really see how this all kind of lives happily ever after here.

Tim Ferriss: So, then what happens?

Drew Houston: But my kind of shaking the trees in San Francisco did help. It turned out I met a guy named Kyle, Kyle Vogt, who I’d met at the MIT Entrepreneurs Club. So, he’s an MIT student. He dropped out. Or he had just dropped out to do JustinTV, which became Twitch, and then Kyle then later started Cruise, which did great. Kyle has done well, and then I was complaining to Kyle. I’m like, hey, Kyle, like, I need a co-founder. Is there anyone you’d recommend? It turned out that Kyle and Arash were floor mates at East Campus at MIT, and so he’s like, yo, you should talk to Arash. And then a day or two later, I got an email from Arash. He was a senior undergrad at MIT, a computer science student, and he was like, hey. I got this email from Arash, and it said like, hey, I saw your video on Hacker News, and Kyle said you’re looking for a co-founder. Maybe we should talk. And then it was kind of insane. We met in the student center. Maybe we got coffee one more time, and then he drops out of school. He’s like a senior. He drops out with a semester left.

I was figuring this is going to be like a process. I’m going to have to talk to his parents and reassure them but no. We hang out for like two hours, and then the two of us commit to spending most of our waking lives together for the foreseeable future. I don’t think either of us really understood that at the time. Fortunately, it has all worked out great, but against all odds, Arash and I team up. I think Paul forgot about his meeting with me or didn’t put the two together. So, we get our interview, and we got into YC. And it was funny because we’re doing the YC interview. We go down in the morning. We go get lunch. We come back to the car. Our car got broken into, and our laptops got stolen. But, fortunately, all of our stuff was on Dropbox. So, we were like patient zero for all of this, and then we got the happy phone call from Paul saying, hey, we want to fund you guys and da-da-da. I don’t know. It was nuts.

Tim Ferriss: I don’t know if this has changed, but for some period of time I think it’s probably still the case but you can correct me if I’m wrong, Dropbox was far and away the most successful investment that Y Combinator had ever made. Certainly, Dropbox has done incredibly well. At what point did you go to Paul’s office, knock-knock, hey, Paul – like in brackets, now we’re friends – by any chance do you remember when I came in on a Tuesday not too long ago, da-da-da-da? Did you ever bring that up with him? Or did he learn about it through some other means?

Drew Houston: I like to remind him about it every year or two. I mean, first, he’s totally embarrassed. Like, he didn’t put any of these things together. He didn’t know. He didn’t remember it. He’s like, I was so awful. So, mostly it’s just both Paul and Jessica turn bright red, and they don’t like to talk about it, which is like why I like to keep poking at it every now and then. It’s all good. I would have done the same thing if I were him.

Tim Ferriss: Of course, yeah. Well, he did tell you I’m busy, right?

Drew Houston: Yeah. I was super obnoxious.

Tim Ferriss: Was Dropbox the original name of the company?

Drew Houston: Yeah.

Tim Ferriss: It was? Wow, so just from day one, you had the name that stuck. Good for you.

Drew Houston: No, but getting the domain, it was getdropbox.com. Getting the dropbox.com domain name was, oh my god that was a journey. I’m starting to shake a little bit. I don’t know how illuminating this story is.

Tim Ferriss: No, let’s talk about. People run into this stuff. I’m sure we can pull some lessons from it. I remember getdropbox.

Drew Houston: So, the name Dropbox, the behind the music, the story behind the name, is also probably unintuitive or like not what you’d expect. So, you ask what was I like in high school, and the answer was like basically, he’s a huge nerd who likes computer games. And that’s true. One of the things we would do is we’d all bring our computers to someone’s house, and we’d play games. So, back in the day, these things were called LAN parties. They are about as cool as they sound, and you all show up and play until the sunrise and so on. But you bring a bunch of people together, and often someone doesn’t have the right maps or the right patch or whatever. And so we had a convention. Like just create a folder called your dropbox that’s shared and writable by anyone. And that’s how we would exchange files so that people could play games. I remember this. It was like Christmas 2006. I’m trying to come up with a name for Dropbox or didn’t have a name then. The initial name, the name before, I was busy photoshopping a logo. The initial iteration of it was Folder Anywhere, which –

Tim Ferriss: Catchy, catchy.

Drew Houston: Yes. This was probably the first indication I had a brilliant future in marketing and a talent for this. And so I’m like in Photoshop trying to make a logo for Folder Anywhere, and, of course, probably the logo’s like a literal folder or something totally inane. And believe it or not, folderanywhere.com was actually available, so I for a while was the proud owner of folderanywhere.com. Then I did a search, and I found that there’s a company called Files Anywhere. And I was like no. Now I can’t name it Folder Anywhere. And so I’m on AIM talking to one of my friends from high school, and I’m like, god, I don’t know what to call this thing. You know, Folder Anywhere is taken. Maybe I should just call it Dropbox, like from high school or LAN parties. And he’s like, okay, whatever, and then dropbox.com not available so I got gedropbox.com. So, we just lived with gedropbox.com for a while.

You can sometimes look up who owns a domain and contact them, and so I actually did. I managed to give the guy a call, and I’m like, hey, are you dropbox.com? Are you using it? And the guy was like, yes, I’m using it for a project. I’m like, okay, well, you have any interest in selling it or coming up with some kind of arrangement? He’s like no. I’m like, okay, cool. So, that’s February 2007. Then we get distracted with the whole getting into YC, finding a co-founder, all that, doing YC. Then we move to San Francisco in September, and I’m like we really need to get this domain name. And, unfortunately, Arash and I had totally fallen in love with is. So, like we kind of only had one plan.

Tim Ferriss: By the way, that’s called a great negotiating position.

Drew Houston: Yeah, awesome. It went about as well as you’d expect. So, I’m like, well, since renting a Zip car and show up at someone’s house worked so well the first time, we’re gonna do it again. So, it turned out the guy lived in Pleasanton, and he was an entrepreneur. Here’s someone who’s like nearby who should be sympathetic to our cause at least to some extent, and I call him. I’m like how’s that project going because there’s obviously no project, and he’s just kind of being difficult. And so I’m like, okay, goddamn it. We get off the phone. And I’m like, all right, Arash, let’s just like show up at this guy’s house. Let’s just see what happens. So, we jump in another Zip car. We go to the corner store and get like their most expensive bottle of $20 champagne we could get. We get in the Zip car and go to his house, and it’s like 9:00 at night.

So, I don’t know. This seemed like a good idea at the time. So, we show up, and then he was kind of shocked, kind of amused, like, let’s us in. Um, we start talking. We’re like, hey, look, we’re pretty serious about this thing we’re doing. If it’s true that you’re not actually doing anything with the domain, help us understand what you’re trying to accomplish. Not in an obnoxious way but at least consider this alternative where we use dropbox.com. We’ve got some really good folks who are excited about this and involved with Y Combinator. We just got funding from Sequoia, our first venture capital investor who’s one of the best in the world.

Tim Ferriss: Oh, you told him that?

Drew Houston: Yeah.

Tim Ferriss: Nice.

Drew Houston: We’re just really building up our leverage here. So, this would be called hemorrhaging leverage. Although at the same time, the frameworks don’t completely account for everything because if you don’t actually help them understand why they should be interested and you hold all your cards to the vest, then nothing happens. And that’s what we had experienced over the last seven months. So, we’re like, okay, sketch out a case that a reasonable person would look at and be interested in. And then he’s like, cool. It’s interesting. I’ve got to talk to a friend, and why don’t’ we touch base soon? I’m like, great. It was like a Friday night, I think, and I’m like we’ll be back on Monday. And we’re in the ride back going over the Bay Bridge, and I’m like holy shit, we might actually be able to get this thing. Like, this guy’s been impenetrable and so difficult. We’re both kind of in awe and just like this is such a positive thing.

So, we go back on Monday, and he’s just like, yep, thought about it. Not interested. Thanks, bye. And we’re like is this for real? I’m like where’s this gonna go? Are you gonna bequeath this domain to your children? Like, what the hell? But he just like totally wouldn’t budge, and so that was a much sadder drive back. And then there’s just kind of nothing for a couple years or for a year. And then we launch Dropbox publicly, and then all these confused people start going to dropbox.com. They wanted to get into the beta, so this was later in the year. So, he starts getting all these emails from people, I think, probably March 2008 who are looking to get into the Dropbox beta. I’ll end this story in a reasonable amount of time, but then he kind of goes dark. He puts a privacy shield up on the domain, then puts up an AdWords landing page. So, like dropbox.com, it went from a GoDaddy parking to like a Google AdSense for Domains page, which was a problem, because then we’re like, oh my god, now this guy is like totally cashing in. You go to dropbox.com. It was basically AdWords for all of our competitors.

Tim Ferriss: Oh, god.

Drew Houston: And so I’m just thinking. I’m like what the hell are we gonna do about this? Our investors think we’re idiots for not changing the name. We’re doing all these like pointless branding exercises that did not go well to try to find an alternate name. I’m just like, oh my god, what are we gonna do? And the answer was read the federal copyright code and trademark code. And I became kind of an expert in cyber trademark law, like, an armchair expert in the stuff. And it turns out you can’t just like get a domain from someone for no reason. Like, you can’t just be like, oh, you’re not using it, so, therefore, it’s mine, any more than you can be like, oh, you’re not using that land. Give it to me. But it is also illegal for someone to intentionally confuse your costumers. So, I can’t just like sell Kleenex with three e’s to confuse people or whatever. So, intentionally confusing consumers is a problem, and we had another whole odyssey trying to get the Dropbox trademark, which that’s not as interesting.

But I’m like we had a problem. We didn’t actually have the registered trademark either, but he was not making money from infringing on our common law trademark rights. And so I’m working with this crazy trademark, like, trademark and domain attorney. And so we sue him for trademark infringement. And so that got his attention, which we would not have done. We weren’t just trying to push him around. He was trying to profit off of confusing our customers. So, we got on our high horse after that, and that was a comical whole experience. But, eventually, he’s like, okay, okay, okay, there’s no point to have this lawsuit. I’ll sell you guys the domain. I’m like, okay, well, we can offer you stock or cash. He’s just like I’ll take cash. So, we paid him $300,000, got the domain. Sending that first email from dropbox.com to Paul and Jessica was a huge triumph. We offered him stock. It would have been at the C round, which would be worth like multiple hundreds of millions of dollars today.

Tim Ferriss: Oh, man.

Drew Houston: I think what you can take away from this is like there’s just no manual for that. You’ve got to just kind of wing it, and there are a lot of things that are the equivalent, even today, of just kind of getting in the Zip car with a bottle of champagne and hoping for the best. And sometimes you’ll get really good cards. Sometimes you’ll get really bad cards, but you just got to kinda roll with it. And so between finding a co-founder, getting the domain, each of those are definitely memorable points along the journey.

Tim Ferriss: We were chatting a bit before we started recording about the psychological aspects of, say, prepping for starting a company, and I want to tie that to a company you mentioned earlier, which is Reddit. So, you mentioned that Hacker News was sort of Reddit for the computer science slash hacker subset. And I remember having Alexis, the co-founder, on this podcast, and he told me about meeting really early on with an executive at Yahoo. They were really excited. They went in, and they shared their numbers. And the executive said something along the lines of, oh my god, you’re just a rounding error for Yahoo. And it was so insulting that Alexis took you are a rounding error – I think it was – and put it on the wall in the office to motivate. But that is one of several different responses that are possible. There are certainly people who would be crushed by that and could be the end, and I don’t remember exactly where this quote is from but I want to talk about when this came out and what the self-talk was. So, there’s an article being written about Dropbox, and I think the quote was, quote, fortunately, the Dropbox founders are too stupid to know everyone’s already tried this, end quote. So, when did that happen, and how did you and anyone else involved respond to it?

Drew Houston: Yeah, so that was very early. I would say it was probably within the first year. I think even back to that first video that I put on Hacker News. Actually, a lot of the commentary was positive. People were like I would use something like this. It’s good. Like, and that was really encouraging. So, on the one hand, half the peanut gallery’s saying that. The other half is saying, like, listing all these reasons why it’s been tried before and won’t work, and then even if it does work, like, Microsoft, Google, everybody’s gonna kill us. And here’s why it’s never been a business, and here are all these other ones that have never succeeded, da-da-da-da. And the thing is I agreed with them. I was like, yeah, you’re probably right. Like, I don’t see how we survive. I mean, in 2007, I don’t see how we kind of make it through to Mount Doom, you know, as our little like plucky band of the two of us. And then, invariably, every investor we talked to would raise similar concerns.

So, the feedback was all pretty negative. So, it’s easy to say just ignore it all, but you kind of have to be balanced. On the one hand, we did get encouraging feedback in the beginning. So, people were like this is cool. I will use this. It sounds great. And I knew that I needed it, and then I wasn’t like trying to create a billion dollar company. I trying to just like solve a problem. And so I think setting your sights low in the beginning, ironically, can be helpful because you’re not putting so much pressure on yourself. I was just like, look, if I show a cool thing, this is just another side project in a number of side projects. Let me not suffocate it by putting all these crazy expectations on it. So, I think that’s pretty important, and then people are like, oh, when did you know it was a success? It’s like, well, it was sort of a different point. It was like the goalpost for success kept successively moving back. So, even just having a video was a big milestone, and launching the private beta was a big milestone. And there were a bunch of milestones. So, it was sort of a continuous process more than, like, oh, there’s just one moment in time.

But, yeah, there were people who had very good arguments about why this wasn’t gonna be successful, and that’s why I think you have to sort of have both thick skin and thin skin. You have to kind of get that balance right because if you just ignore all of the feedback and dismiss it all, then you’re probably going to have some kind of blind spot. And you’re going to miss some important information. But just because they came to that conclusion doesn’t mean that their assumptions were all correct. And that’s why you also need to have enough thick skin to know when to be a little bit dismissive or not listen to everything. And part of what helps with that is having conviction and conviction that comes from being able to think from first principles. And pay less attention to the outputs of people’s conclusions as much as the inputs into those conclusions. So, what does that mean? Well, people said that, okay, Dropbox is not gonna be successful because people have tried it a million times. And that is true. That’s factually true. You can’t debate that.

But that would have been true for mobile. Like, every mobile thing before the iPhone or every mobile software company, ever app was a total failure before the iPhone. World changes, suddenly it’s the right time. So, if you study the history of technology or history of business, you realize, okay, that argument is not in and of itself causal. So, what you want to answer is, well, why is that incorrect? Well, actually, there are a lot of good ideas that are bad ideas for a while because the timing is wrong, but then the timing becomes right because of some discontinuity in tech. Books like The Innovator’s Dilemma or others will illustrate that. That’s why it’s important to build these mental models because you’ll be like, all right, this is my framework for how the world works, and I keep refining it. People are missing the key conclusion from that that just because something has failed before doesn’t mean that it will always fail in the future. It can still fail, but that kind of conviction came from an understanding or a belief in a worldview and framework of like, all right, here’s how I think business works or here’s how to think about an idea like ours. That said, how do you receive advice, and how do you sort of develop first principles thinking, which we’ve talked about? But then like that doesn’t make it feel any better when people are like your idea sucks, and you’re gonna fail.

Tim Ferriss: Or even worse than that like you are stupid. It’s really super ad hominem.

Drew Houston: Right. First of all, I think you have to have a sense of this is normal. Just don’t take it too personally. Like, that’s the thing, you know. You want to receive the feedback and try to extract the kernel that’s useful from it but not feel obligated to accept the whole thing. I think more broadly you just have to, whether it’s getting criticism or just a lot of the things. I think one of the harder things about the running the company in general was I just remember in the beginning being like, oh my god, against the odds, now Sequoia has decided to invest. They’re writing us a check for $1 million. I hope they realize I haven’t like really done this before. And like, oh god, that $1 million, it’s great to kind of cash that check, but, oh, man, they’re gonna be looking for that money back at some point. What are we going to do?

There were probably a lot of things going on in my head at the time, and then like, oh my god, I’ve never really built a successful company before. I’ve never managed people really. The idea of Dropbox being a 100 person company is terrifying. This treadmill’s just gonna go faster and faster until I’m violently thrown off of it. How am I gonna deal with that? And a lot of me also thought, okay, I’ll build the company until it’s successful enough or makes enough money where I just don’t have to worry about money anymore. I don’t know. This was just like some kind of theory. I’m like as soon as I get to that level of success, I’ll just stop just so I don’t screw it up. But then, interestingly, that goalpost kept moving back and moving back and moving back.

So, I think it’s never really been about the money, but you can read in the Y Combinator application, like, that’s now public. We put that out there. If I had a million dollars after taxes for six months of work, I’d consider that a pretty good deal. But more on like what do you do when you’re like, oh my god, this is pretty uncomfortable. I’ve never done anything like this before. I might screw it up. So, your instinct will be to run away from that feeling, and what you need to learn to do is run towards it because that’s gonna just keep happening, keep happening. I’m like we’re gonna show up at this guy’s house. I don’t know. Maybe we’ll get arrested, but we’re gonna do it. I don’t think that’s the best example. There are just so many things where it’s like you just got to kind of figure out and keep going. And one of the great things that Ben wrote in his book The Hard Thing About Hard Things is the hardest part of being a CEO is managing your psychology. And I didn’t really know what that meant at the time. I think I have a much better sense now.

So, I think the first thing is getting comfortable with being uncomfortable. And you think about Principles, like Ray Dalio’s book, he’s like pain plus reflection equals progress. People love the progress part or the growth, but they don’t love the pain part. And they don’t bother to do the reflection part. So, understanding that and sort of zooming out and understanding, like, depersonalize it. It’s not really you. This is just like the process of growth. It will be painful. Think of your journey as more of an adventure rather than like a final exam where you have to get everything right and you only got one shot. I think that’s really important. And then second is, all right, everybody likes the idea of growth and pushing yourself, but you also have to take care of yourself. You have to find ways to metabolize stress and avoid burnout. And for some reason, people just use the one tool of pushing themselves harder, and then they break. You wouldn’t do that to your car, or you wouldn’t do that with like a musical instrument. So, why would you do that to yourself?

Tim Ferriss: Just to pause for a second. I recall very distinctly every time we’ve stayed at the same hotel or been at the same events and I’ve gone to the gym, I’ve almost always seen you in the gym. It seems like you have just as a component of that a physical practice to care for the machine so to speak.

Drew Houston: Yeah. I wouldn’t say I’m the best athlete by any stretch, but it’s really important. You have to do enough so that you don’t break down, and you’ve got to figure out what that is for you. And I know that’s something you really care about. The advice that you have to offer your readers is going to be much better than whatever advice I have, but you need to do something, some kind of routine, and stick to it. I think some of the dumbest advice that people get is like not sleeping or pursuing this idea that successful people somehow work like 70, 80 hour weeks and that’s the norm. There are a number of problems with that. First, it’s like usually not true. It’s usually more of an indication of the person’s either lack of awareness about where they’re spending their time or lack of effectiveness if their only tool in the shed is working more hours. Just think about that. That has a ceiling in terms of how much of an advantage that can give you.

Like, yes, you want to work hard, but if your only advantage is being able to work 20 percent more hours than someone who’s merely very committed, then you’re not gonna have outsized results. I think this meme that successful people work 100 hour weeks or something is both false and super harmful. The most successful people I know, I mean, they have crunch times where they’re super busy, but they otherwise have a workweek that looks more normal than not. And so that was something I didn’t realize when I was starting out. But the basics of sleep, eating well, self-care, exercise, putting it on your calendar, not just wishful thinking and hoping it’ll sort of happen in the spare moments. Like, if you can’t see your priorities on your calendar, if you can’t see your gym time on the calendar, it doesn’t exist. So, self-awareness, there’s probably a lot more we could talk about how to metabolize stress and avoid burnout, but I think taking care of the basics, having a good foundation and setting healthy boundaries, is pretty important in having a sustainable workload. Self-awareness is pretty important and being willing to shine a hard light on yourself and embracing that. For me, coaching has been super helpful.

Tim Ferriss: Coaching meaning you have like an executive coach?

Drew Houston: Yeah, I’ve had different ones over time, and I go through that experience. I’m like, okay, I’ll give this a shot. So, my friends have spoken positively about it, but I would say this. I remember my first coaching experience. They do the 360, and then you sit down. And you do your review of your results.

Tim Ferriss: Sorry to pause. So, 360 for people who don’t know is where you have any superiors, peers, employees, etcetera, people who know you really well, interviewed about your strengths, weaknesses, and so on. Is that fair to say?

Drew Houston: Yeah. Well, you get all this feedback from everybody you work closely with. So, it’s kind of overwhelming because you get a lot of it, and it’s not all good. And actually to this day opening those documents and reading all the 360 feedback is one of the most painful human experiences you can have. Maybe that’s a little hyperbolic, but it’s not fun. It’s at least not fun. It’s not something I look forward to, but it’s important because you need to know. It’s much better to just know and be able to do something about it. Ben’s been a great friend and mentor, and he’s like he was reflecting. He told me a quote that one of his mentors told him, which is that God gave us all weaknesses. It’s a blessing to find out about them.

Tim Ferriss: Sobering.

Drew Houston: You know? But I just remember my first coaching experience briefly. They sit you down. The first page is usually like here are your strengths, and I’m like okay. My coach was like you really care about people. You love building great relationships. And I’m like, yep, okay, yeah, that sounds good. You’re really creative. You like new ideas. I’m like all right; I’m enjoying this coaching thing so far. He’s like you’re really comfortable in chaos. It doesn’t bother you that this stuff is so crazy. I’m like, yep. He’s like okay, da-da-da, and then flipped to the next page. All right, now, it’s never weaknesses. It’s development areas.

Tim Ferriss: That’s right or opportunities for improvement.

Drew Houston: Yeah. So, I’m like, all right, let’s hear about some opportunities. He’s like you are really conflict-avoidant. You don’t make hard people decisions. People don’t know where they stand. I’m like okay. He’s like you’re unreliable. You drop balls. You’re not paying enough attention to things that are important. I’m like okay, and he’s like and you suck at planning. People are confused about what to do. I’m like okay, and then he’s like, look, okay, you’re good with people and you like people to be happy. So, you avoid conflict. You are creative. You like new ideas. So, you don’t pay attention to the routine stuff. You’re comfortable in chaos, so you don’t plan. Like, these strengths are all like their own weaknesses in disguise. And there’s no one who’s ten out of ten on everything, and that’s why. So, there are a lot of different philosophies on what do you do with the feedback, and do you play more to your strengths? I think you need at least to get your weaknesses to a point where they’re not like destroying the company.

But generally, you want to play to your strengths, and that’s one of the key effective executive tenants. But other than that, trying to understand yourself on all kinds of different dimensions is really valuable. I talked about the Enneagram in your book, and it’s sort of like I would call it like a useful Myers–Briggs. So, most people are familiar with Myers–Briggs. It’s a personality typing system, but then you read it. And it’s like reading a personality quiz on the internet. You remember? You had some letters, and there’s like some stuff. But you don’t actually do anything with it. I found enneagram to be similar in terms of there are a limited number of personality types, but it’s much more a theory about what fundamentally motivates people, what demotivates them. I know we don’t have a ton of time. So, I would say like check it out. Enneagram is very valuable. I do it. I was super skeptical. I was like this sounds like a cult, and it kind of is.

But it’s been very helpful both to do individually and with your team because what you learn is like, okay, here are my blind spots. It’s like I’m an Enneagram 7. These are like totally textbook strengths and weaknesses of a 7 that they like new things. They’re comfortable in chaos, but then they can become distracted and unreliable, conflict avoidant, things like that. One way or another, you always want to have an accurate map of like what do you need to work on.

Tim Ferriss: How are you introduced to Enneagram?

Drew Houston: Well, so through my co-founder, but then Arash was introduced to it through a guy named Gentry who was the founder of Mailbox who worked for us for a while. So, this was, you know, call it three or four years ago. And then Arash was like you’re gonna love this. It’s great, da-da-da, and I’m like it sounds super weird. But he was right. So, it’s been super helpful.

Tim Ferriss: Awesome. Well, I know we don’t have a ton of time left, and maybe sometime we’ll do a follow up with some wine. And I’d love to talk to you more about your cadence and so on with an executive coach. Maybe we can get to it another time, but I thought we could wrap up with another thing that you mentioned in the book, Tribe of Mentors. But I’d love to hear you talk about it, which is the tennis ball, a circle, and the number 30,000. Can you tell us where this comes from and what that means?

Drew Houston: Sure. So, I did the commencement speech for MIT back in 2013, and the whole premise was, god, I’m 30. Can I wait 20 years? I’ll say something way more insightful then. But I’m like, all right. The prompt I came up with was like, all right, what would I tell my 23-year-old self? And if I could sort of send a cheat sheet back in time, what would have on it? And what I would put on that little cheat sheet is, as you said, a tennis ball, a circle, and the number 30,000. So, the tennis ball is really about finding that thing you can become obsessed with. So, when I think about like Dropbox or even just other side projects like the poker bot, like, I am both most productive and happiest and most successful when all those things line up or when the thing you’re obsessed with overlaps with something the world really needs or values. But like don’t settle. Find something. Sorry.

Where does the tennis ball come from? I had this like really lazy, fat dog growing up, but when you showed her food or you showed her the tennis ball, she would just go nuts. And so you’d throw a tennis ball. It was like watching a ham running on twigs. It was just bizarre. It was just funny. I’m like what you want is to have like that ridiculous expression on your first and just kinda be so obsessed with something that you just don’t care about anything else. Not overdo it but the point is like find something that you’re not just passionate about but that you can become obsessed with and just really love and something you would do even if it weren’t your job. Then the circle concept is really there’s a saying by a guy named Jim Rohn that you’re an average of the five people you spend the most time with. And I found that to be super true. And the upshot is choose wisely. So, whether that’s the literal five people you spend the most time with or just the environment you’re in.

Find an environment that will pull the best out of you. And I think that’s been true for me. Going to MIT really taught me what a good engineer looks like, and it’s both inspiring in terms of watching all these people who are super capable but then also you get jealous. And you’re like, oh, I want to be that good. So, you want to harness that kind of negative energy into pushing yourself to work harder. And that was true whether at school or being in Y Combinator with other founders, like, friendly competition there or with my friends who were starting companies being in San Francisco. All of those contributed massively to us making it. And then finally 30,000 is really about humans live on average for 30,000 days. At first, I was like, okay, yes, this is like a clinical truth not terribly interesting because I think I had just moved to San Francisco and I was just like I couldn’t sleep. So, I was just like on the internet reading stuff, and I came across that. And I remember being like, huh, okay. And I opened a calculator, and I’m like, all right. I’m 24 at the time. 24 times 365, I’m like, oh my god, I’m like already 8,000 days down.

So, this idea of life unfolding infinitely in front of you is actually not really true. So, it’s really important to not just make every day count but also understand that think of life more as an adventure or a story more than how you think about life when you’re graduating college, which is life up until you graduate college is just like a series of checking off boxes and like getting ready for stuff and performing. And all of your worldly achievements are averaged into a GPA, and so every mistake brings that number down. And it’s something you have to obsess over, and then college graduation’s the first day where that’s not really true anymore. You don’t really have a GPA anymore. You’re not an average of all your successes and failures. You should change your mindset to life and also just think of it more just making a story that’s interesting not trying to be perfect because I think that’s a trap that a lot of people fall into. When I thought about if you were to play everything over again 100 times, who knows what would happen? But if I could just hand back a cheat sheet, that’s what I would put on it.

Tim Ferriss: That’s what you would put on it: tennis ball, circle, and the number 30,000. Well, Drew, I know you have a very, very busy time ahead of you, and I’m sure today’s no exception. So, I’m going to let you get back to your day, but do you have any closing comments, asks, suggestions, or anything else for people who are listening to this? Any kind of parting comments before we wrap up?

Drew Houston: Let’s see. I think just don’t forget to have fun, and I think at the end of it there’s an obsession with avoiding failure. And if you think of it more as the failures aren’t really that important. It’s more how you respond, and what you want to do is write an interesting story, not like a perfect story.

Tim Ferriss: Yes, yes. The first thing they do – I wouldn’t say this definitively – but it’s like a lot of screenwriters who are experienced will say you have to create characters, the protagonist, who on some level the audience really cares about and then torture them. And then they come out the other side, but that is one of the recipes for writing a successful screenplay. And if you’re part of the human condition, it seems like that is gonna be a component one way or the other. Well, Drew, thank you so much for the time. I always enjoy chatting, and hopefully, we get to hang in person sometime soon. But I appreciate you carving out as much time as you did to share your stories with everybody.

Drew Houston: For sure. Well, thanks, Tim. It was a lot of fun.

Tim Ferriss: And for everybody listening, we will have links to all of the books mentioned, everything else that Drew may send our way as well in terms of resources, all the things that we discussed, Hacker News, etcetera, in the show notes, which you can find as always at tim.blog/podcast with all the other episodes. And until next time, thank you for listening.

Posted on: August 29, 2018.

Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.

Who was interviewed? Here's a very partial list: tech icons (founders of Facebook, Twitter, LinkedIn, Craigslist, Pinterest, Spotify, Salesforce, Dropbox, and more), Jimmy Fallon, Arianna Huffington, Brandon Stanton (Humans of New York), Lord Rabbi Jonathan Sacks, Ayaan Hirsi Ali, Ben Stiller, Maurice Ashley (first African-American Grandmaster of chess), Brené Brown (researcher and bestselling author), Rick Rubin (legendary music producer), Temple Grandin (animal behavior expert and autism activist), Franklin Leonard (The Black List), Dara Torres (12-time Olympic medalist in swimming), David Lynch (director), Kelly Slater (surfing legend), Bozoma Saint John (Beats/Apple/Uber), Lewis Cantley (famed cancer researcher), Maria Sharapova, Chris Anderson (curator of TED), Terry Crews, Greg Norman (golf icon), Vitalik Buterin (creator of Ethereum), and nearly 100 more. Check it all out by clicking here.

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2 comments on “The Tim Ferriss Show Transcripts: Drew Houston

  1. Eres un cabronazo Tim!
    I listen you here from Mexico man.
    I really admire you. You are one of my reasons why I am learning english…
    And in some way the hope to achieve the sucess.

    I would like to invite you a “Torta Ahogada” with salsita and everything bien rico 🙂 jajaja. I am living in Guadalajara, Jalisco. I hope someday look in your eyes en say: thank you.

    Tim, cabrón, te mando un abrazo.
    Hermano mío.

    Like

  2. I really enjoyed this podcast. I listen on apple podcasts and found out about your show from you podcast on Masters of Scale with Reid Hoffman. Great stuff.

    Like