Dropbox Has Whipped Itself Into Shape, but Going Public Won’t Be Easy

By 2015, eight years in, Dropbox Inc. had spread itself so thin that even staffers struggled to explain what the company did. It was also blowing cash like it was still a young startup, co-founder Drew Houston recalls: FedExing branded swag to colleges, developing standalone photo and email apps, paying mobile operators for deals that didn’t bring in paying customers. Investors such as Fidelity Investments wrote down the value of their stakes. “We had strictly been focused on growth at all costs,” says Houston, the chief executive officer. At a companywide meeting early last year, Houston asked several hundred attendees if they’d witnessed Dropbox spending money in ways they wouldn’t use their own cash. Hands were raised; heads nodded. That’s over, he told them.

The new priority? “Warren Buffett better be able to look at our business and say, ‘This lemonade stand makes money,’ ” Houston says.