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A good product needs a good business strategy. Dropbox has it.
Generally, before implementing the idea, you must define your business strategy: who are your clients, why they will pay for your product, how much they have to pay for it and so on.
During the first stages, creating a business model was Dropbox’ best shot. An important thing they thought of was strongly related to its users: How are they going to keep them close and how are they going to face the competition and develop brand awareness? Neil Patel extracted 6 lessons from Dropbox`s business strategy that can help you define your own business plan.
Based on his opinion on the subject and on the small analysis we’ve carried on, here are some strategic things that helped Dropbox in its development process:
Lesson #1: Money.
Dropbox knew exactly how it was going to make money out of its existing product. The company realized that there wouldn’t be a big number of users willing to pay for it, because people usually get this kind of stuff for free. Actually, only 4 percent of Dropbox’ users pay. And there are over 50 million of them. When you achieve huge numbers like these, there’s no need for advertising. Those people who are getting your product for free do all the work. How? Through recommandations, good reviews and so on. This situation explains how Dropbox is still profitable.
Lesson #2: Find or create the need!
The first questions you should have in mind when you have a business idea: Is my idea solving a real problem? Are there enough people who will use my top level product? By finding answers to these two questions, you will be able to see if your idea is viable or not. It can be a great idea, but if nobody needs it, there is no reason to give it a try. Besides having a good product, a big advantage that Dropbox has is the idea. They found a big common problem – the majority of people have it: people aren’t able to access their stuff from everywhere. The solution? They can store their files in Dropbox and access them from any device.
Lesson #3: Make people aware of the problem they don’t know they have!
Sometimes, people just don’t know that they have a problem. If you can find one and show them that your product can solve it, you can say that you are just about to start a successful business that will help you earn profits. As we said earlier, Dropbox found the problem and a good way to communicate it to the audience. What can be easier than a friendly video and a funny story? The formula was very simple: a stick figure losing their stuff and travelling to Africa. People quickly got the idea and realized they might have the same problem. Keep it simple and tell stories! People will love it.
Lesson #4: Spend more money staying front and center!
A great idea and a huge users’ database won’t keep you on the market for a long time. There are some competitors that you need to pay attention to in order to handle your business growth. Look at Dropbox. They spend a big amount of time and money to remain in the public eye. Constantly investing in developing your business is a must. Take advantage of Social Media, content marketing, partnerships, advertising.
Lesson #5: Users are an impressive resource.
Dropbox invested a lot of effort on the customer market. They didn’t have to hire salespeople because they put a lot of effort in convincing the audience to use Dropbox. Then, Dropbox realized that users’ referrals were its biggest source of growth. If users are satisfied with your existing product, they will recommend it to their friends. Word of mouth can grow your business and help you save some money on advertising.
Dropbox for Business, Dropbox at work.
More than 4 million businesses use Dropbox, including 97 percent of the Fortune 500. Last week, we published an article about one of the biggest Dropbox advantages: the product. As we mentioned earlier, a good product doesn’t just stand for itself. That’s why there must be a strong business strategy behind it. Besides the successful product strategies above, there are other elements that made Dropbox a trustable business. Dropbox for Business is a great example.
The company helped many businesses (from small ones to names like National Geographic and BCBG) with its top level product. Despite its incredible growth, it didn’t stop there. Improving Dropbox for Business by adding new features required a new idea, a solution to a big problem. They discovered the current issue: the majority of people work from home and they also want to have their personal files with them at the office. With only one Dropbox, people were able to put their personal stuff in their Dropbox for Business. What the company did was to build a way to help people keep their stuff well organized and to access them from everywhere. This whole effort ended up with a smart solution: from then on users were able to connect a personal Dropbox to their Dropbox for Business on all their devices.
What does this strategy demonstrate? That after years of success, Dropbox continues to look at their users’ needs and find the right solution for their problems. Despite building trust, all these tactics help the company expand onto the corporate market.
1. You can’t run a startup without having a well thought of business strategy.
2. Is your business viable? How are you going to make money out of it? The sooner you have answers to these questions, the better.
3. Does your product/ service solve a real need?
4. Communication is really important. How are you going to make your audience know about your product?
5. Take care of your users. Recommendations are the best advertising.
What other startups succeed through their business strategies? If you want to name a few, just meet us in the comments!