Outside the Box: Why Aaron Levie Is Betting on Independence


Aaron Levie and his co-founders at Box have lived the full hype cycle of Silicon Valley legend. They dropped out of college to pursue their passion, driving their mini-van to the promised land of the Bay Area, living rent free at an Uncle’s house. Levie himself slept on a yoga mat for nine months, as the team found early traction with a product they created mostly to solve their own technology problem (managing files across different computers).

True to the Valley myth, they pivoted the company to a new market (enterprise), grew like crazy, rebuffed a rich buyout offer that would have made them all generationally wealthy, filed for an IPO, were brutalized by the press as the IPO failed to materialize, then triumphed, after ten years of hard work, with a successful public offering early last year.

Since that offering, Box, like many Valley “unicorns,” has traded well below its opening price. But despite the market’s skepticism, Levie remains confident that the company’s best years lay ahead. His reasoning lies in a fundamental belief that large companies — the enterprise firms who comprise his best customers — are early in their shift to cloud-based solutions. Box’s revenues — in the high $300 millions — represent less than 2% of enterprise spend on storage and workflow solutions.

Large cloud competitors — which include Microsoft, Oracle, Amazon, Salesforce, IBM and Google — are peddling vertically integrated platforms with an ultimate goal of providing corporate customers one-stop shopping for IT services. Levie is convinced that big companies will require independence and inter-connectivity from their IT partners — a position he staked out for Box nearly a decade ago.

I spoke with Levie for our sixth Shift Dialogs, which returns this week after an August hiatus. And the timing is good: Box’s annual developer event will fill San Francisco’s massive Moscone center is this week. Levie is a fast-paced but thoughtful conversant, and he’s armed with a quick and self-deprecating wit (his Twitter feed is a must follow — the guy has a fallback career as in stand up if Box doesn’t work out). Below is the video interview, which is edited for length, and the full transcript, edited for clarity.

John Battelle: I’m always interested in creation myths. You’re now a public company. How did you get the idea for Box?

Aaron Levie: My co-founder and I were sophomores in college. It was over 11 years ago — 2004. This was at a time where your average day (meant) jumping between lots of different computers — a classroom computer, a library machine, your personal laptop.

I had an internship at the time, so I was also jumping onto a corporate computer. I was trying to access and share files from all those different devices — you would email yourself files, you’d try to store your files on the thumb drive.

In the corporate environment where I worked, they were using some very old enterprise technology to help people communicate, share and collaborate. It became incredibly obvious that the way that we worked with our information was just far too complex.

Given where the Internet was going, you should be able to store large amounts of information online, securely, and be able to get to it from anywhere. We got really lucky — it was the first moment in time where Internet speeds were improving pretty dramatically. People were starting to work on more and more devices. The cost of storage was dropping precipitously. That led to us being able to build a new kind of application that would let people store their files on the Internet securely, and get to them from anywhere and be able to share with anyone. That was the original idea now — about 11 and a half years ago.

You left college to pursue this?


Many celebrated entrepreneurs have done that, but success is rare. What gave you the sense that this was that big an opportunity that you were willing to forego the completion of your college degree?

If we’re going to stick to the truth versus the myth, my grades were really bad in college. It was pretty easy to decide to drop out, first and foremost. Second of all, Mark Cuban actually wrote us a check while we were in college — it was about $300,000 — to invest in Box.

My grades were really bad in college. It was pretty easy to decide to drop out.

We basically did the calculus, which was “OK, Mark’s investing hundreds of thousands of dollars.” We were spending far more time on the business and far more time working with customers and building the software than we were in class.

My grades were pretty bad, and all of these factors came together, and we realized that we could safely take a leave of absence, and try running the business full time. We decided to move to the Bay area, where all of the technology companies obviously go, and build up the company and see if we could give it a shot as an independent business.

Our parents freaked out. They got really upset initially, but eventually got over it. We hopped in a minivan, drove from Seattle to Berkeley. We were on our own, building up the company.

Why Berkeley?

My uncle actually gave us free rent in an extra place that he had. We had a few hundred thousand dollars in the bank, but we were paying ourselves maybe $500 a month, so we had to live in extreme conditions.

Eventually two other friends also dropped out of college, so there were four of us. Three of us lived and slept in one room. I slept on a yoga mat for about nine months. One of our other co-founders slept on a roll-out couch. For some reason, Dylan, our CFO, had his own bedroom. It’s unclear how he won that.

He was the guy in charge of the money.

That was the leverage that he had on all of us. He controlled the bank account. He had his own bedroom. Three of us slept in a different room, very hostile conditions. We lived there for 9 or 10 months.

Just building, sleeping, building, sleeping, and then eventually, we raised a Series A, moved to Palo Alto. We had slightly larger and more improved living conditions.

Was that the moment, the Series A, that you realized you had a tiger by the tail? That you were on this journey that could possibly end up with a public company and a big valuation?

Probably not. It wasn’t probably until, realistically, many years later, when we realized the magnitude of the opportunity. When we first started out, we were solving our own problem around how do you share files, how do you work from anywhere, how do we build really simple software that can just make it way easier to be able to do our work.

I don’t think we fully recognized how big of a problem this was for the rest of the world until a couple of years in, when we decided to pivot and focus entirely on the enterprise market. We decided that we had to really double down on one focus area. We either had to be a consumer company — be the best place to back up your photos and back up your music, be able to communicate with friends and family. Or we had to be the world’s best place for businesses to be able to store and manage their information securely. We really decided that we could not do both simultaneously. It was going to have to be one or the other.

As we studied the market, we realized that enterprises were spending millions and millions of dollars on legacy technology, on very archaic solutions, very cumbersome, very complicated, that actually slowed down the workforce. If you were a marketer at Procter & Gamble, it was just hard to share your marketing campaigns. If you were a doctor at Kaiser, it was hard to get access to medical images.

We have some customers in the federal government. If you are in the federal government and trying to work on pretty critical operations, it’s just very hard to collaborate. No matter what industry you’re in, especially in that time frame, the technology was getting in your way.

We (asked ourselves), “What if we built a different kind of enterprise software company that made it easier and simpler to get work done, so you could stay secure, so you could actually meet the difficult, complex requirements that large enterprises have, but where end users got really, really simple tools?”

That’s why we decided to focus on the enterprise. A couple of years later, as more and more businesses moved to our approach, that’s when we realized we did have a big opportunity in front of us.

You made a good call on that, but I’m curious, at that point, you were 24 or 25?


You had never worked in an enterprise.

Correct. I was an intern.

Were there ever night sweats when you said, “I actually don’t know what the hell I’m doing”? Or “I’m going after a huge market that I’ve never worked in that market.”

There tends to be an over-confidence problem with entrepreneurs, so not so much night sweats. Obviously, any technology company, any business, any startup is just driven by its people. I was very fortunate, not only to have great co-founders but a team.

Especially at that stage, when we were 40, 50, 60 people, when we were really going after the enterprise, that we brought on lots of people that had years of experience going after enterprises, building up large scale businesses, reaching hundreds of millions of dollars in revenue, at least at that time. That gave us the confidence and the credibility and the real capacity to go execute on our business.

There was a moment where you were looking at a very big offer from a company, Citrix, that would have made you and your co-founders generationally wealthy, but you turned it down. Do you ever look back on that moment and go, “Maybe I should have done that, because then I could have possibly started several other companies and explored other things?” Or even gone back and finished your degree?

I think my mom wanted me to do that still. The answer’s no, only because what’s cool about when we started Box and why we started it, we were just in college, we never said, “Hey, we really want to build the world’s biggest business, we really want to go public.” Those weren’t goals.

What we had was a goal of, “Let’s build software that makes it really easy for people to be able to share and collaborate and get their work done.” Our only motivation was, “Could we bring that software to as many people as possible? Could we actually go and impact how the world worked and how it shared and how it collaborated?”

When we decided to turn down the offer that you’re referring to, it was because the scale that we were at and the stage we were at as a business was dramatically smaller and earlier than we thought that the full potential was of this market.

When we looked at the business, we had maybe 5,000 or 10,000 customers total on the platform, and we saw the potential for our product to be used in millions of businesses all around the world and the ability to actually impact billions of people. Not necessarily billions of users of Box, but actually the products and the services that all of our customers go and create and their impact on the world. We just thought we were so early and we had so many more things we wanted to accomplish, and we had a lot good things going for us.

We had more and more large enterprises that were adopting our solution. We felt like the culture of our company was quite unique. We had just raised additional venture capital, so we had the cash to run the business. Those things gave us again, that over-confidence which was, “We’re going to go out there, do this on our own, and build this up as an independent company.” I think every day back to that decision and I’m extremely happy we made that call.

The business is now maybe 15 times larger in terms of revenue. The amount of customers that we’re able to work with is grown by an order of magnitude. We power General Electric and Toyota and Eli Lilly and Proctor & Gamble, how they do their work and how they share and collaborate.

We would have made a far smaller dent, in Steve Jobs’ words, on the universe. We still have so much more that we want to do.

You have some significant competition, but before we get to that, I want to talk about the path to IPO. You talked about confidence. You prepared an S-1, you filed it, and then a year passed. That must have been really difficult.

Not a best practice. Usually you file, and then go public thereafter.

You managed to get out. It was a rocky road, you had to endure a lot of skeptical analysis and press.

We were in a quiet period, so we couldn’t respond … we really had our high ends tied behind our back.

Worse yet, while we were in a quiet period and we couldn’t respond to it. That was the brutal part. We’re fine with skepticism. I mean, actually it’s great to have lots of different views on your business and lots of different perspectives. We’re not shy or strangers to that.

The issue was we were in a quiet period, so we couldn’t respond to it. That’s the part where we really had our high ends tied behind our back, when we really needed to be explaining our business, explaining what we were trying to do, and why we were building the business that we were, and we were funding it the way that we were.

That quiet period, particularly if it gets extended, is a pain in the ass.

We really kind of took it to the max.

Let’s talk about being public. I don’t know many CEOs who are just stoked about earnings calls, right? The script, the preparation…

We just listen to the Rocky soundtrack and just get pumped up.

Did you ever consider staying private? A lot of firms are doing that.

Yes, but time horizons are really important things. Staying, private, most of the firms that are doing that are doing that still with the ultimate outcome where they expect to go public. We were actually private for nine or 10 years.

We filed about nine years in, we ultimately went public at 10 years in. I think we stayed private for a pretty healthy amount of time. It just got to a point where the durability of the business, the predictability of the business model, the scale of the sort of revenue. The amount of venture capital we had taken on — investors eventually want to be able to get some liquidity. All of those things came together and we felt comfortable that we could run a strong independent company as a public company and we didn’t have to remain private to be able to do that.

I think we pushed the limits on how long it makes sense to stay private and we’re very happy that we ultimately went out public when we did.

As a public company now, you’re still losing money, but less so every quarter-on-quarter. There are a lot of very big public companies directly in your space.

Yes. Well, maybe not a lot, but there are a couple.

Of the big five tech companies, three of them — Apple, Microsoft, Google — have offerings that one could say are pretty close to yours. Does your ease of use differentiate you?

It’s really the enterprise side. Again, it’s Google or Apple, they’re ease of use leaders, so that’s not the real issue there. It’s more that if you’re a large life sciences company or an energy company or a bank or a government, it’s not just ease of use that you need.

It’s the security and compliance and controls and the scalability of the platform. We don’t really compete with iCloud from Apple or Google Drive from Google. Those are products that are very easy to use for people, but they don’t scale well for the size of organizations that we serve.

That’s actually why we have such strong partnerships with Apple and Google and even Microsoft, who is a little more competitive in this market, but even with Microsoft, we end up doing something quite different than them.

I want to ask you one last question about public companies. The true north of being a public company, particularly in the last 30 or 40 years, has been maximization of shareholder value. It seems to be that that’s what they teach you in CEO school.

I took that online course.

Your job is to take capital from your business and put it in the pockets of shareholders. That’s the maximization of shareholder value concept. It’s reflected in Wall Street’s relatively short-term outlook and their desire to see a stock price that is always going up. I think that maxim is being questioned. I’m curious what your point of view about is, and have you felt that pressure?

I think the pressure that we felt is a healthy pressure which is you want to build a sustainable, robust business that has great economics, that doesn’t need to raise more capital from the capital markets, and do so with a very strong growth rate.

That’s what, certainly, we signed up for. I think to your point, the underlying unknown and where there isn’t consensus is the time horizon on which that shareholder value was maximized. There’s a very big difference.

The strategy you will employ will be very different whether you are maximizing shareholder value over a quarter, over a year, over 10 years, or even 20 years. If you look at Google strategy with Alphabet and the structure they’ve created. What they’ve, essentially, said is, “Some businesses are going to maximize shareholder value right now, so our search business is going to be all about profitability. But other businesses, we’re going to fund to lose lots of money because the upside of their long-term value is so much more dramatic than if we constrain them with small amounts of capital and small losses.”

Self-driving cars, Google Fiber with high-speed Internet everywhere. These are areas that take large amounts of capital investment upfront. They lose lots of money upfront, but the upside is that, now, Google can be a portfolio, or Alphabet can be a portfolio, of companies that are each $100 billion companies under one roof.

I think what happens is shareholders get to decide which companies that they want to be a part of. Some shareholders that understand that Google is taking a mixed portfolio approach. If Google wanted to be maximally profitable right now, they would cut out all of those side businesses. They’d only run search and ad words, and they would be probably the most profitable company on the planet.

What they’ve decided is they want to be invested in the long run. In 50 years from now, have businesses that are as large as their search business, or their advertising business, but the only way to do that is to start that today.

I would say that investors get to determine and get to decide which of those do they want to be a part of. Obviously, quite a few investors have said…Actually, Amazon’s model, which we like quite a bit as well: no profit today, but continuing to build for large scale. Because in 5, 10, 20 years from now, there will be such a dominant marketplace, such a dominant platform, that there are so many profit pools that they can generate cash from. That it doesn’t even really matter.

What is your time frame? Who is the ideal Box investor?

I think the ideal Box investor is an investor that has an appetite for some risk because we’re going after a very large market. We’re still a small company relative to the size of that market. (That investor has) some understanding of the underlying tectonic shifts happening in IT. That we’re moving away from legacy systems, legacy servers, legacy infrastructure, to the Cloud. Probably an investor that’s a part of companies like Salesforce, Workday, ServiceNow, and others, and understands that we’re going after an incredibly large market.

We wouldn’t want to trade off the ability to build a leadership position in that market for near-term profitability. That’s the kind of investor that we’ve brought onto the stock, but it’s also the kind of investor that we need to make sure we’re educating and communicating to more of those. That’s, obviously, what drives a lot of the intra-quarter volatility in the stock price.

We wouldn’t want to trade off the ability to build a leadership position in the market for near-term profitability.

If you could go back 11 years to your 20-year-old self, 21-year-old self, or however old you were — your sophomore self — what would you tell yourself that would help you now that you’ve learned along the way?

I think there are things that I would probably just double down on earlier. (And) ensuring that you stay as focused as possible on whatever your company’s true north is, focusing deeply on culture.

Making sure that you can balance listening to customers and understanding where the world is going, and making thoughtful product decisions about where you see those trends. There were actually a couple of years in the first stage of Box — when we were 20, 21, 22, 23 — where we took far too long to just listen to our customers and make a bet on where the world was going. We meandered a little bit because we didn’t know how long it was going to take for all these enterprises to move to the Cloud, if our approach was going to work in the enterprise.

We should have and could have made that bet even sooner in our company’s life cycle, so those are the things we’ve learned from today. Today, we operate the business with a set of values and a set of philosophies that allow us to, hopefully, maintain the unique differentiation that we have.

You mentioned employees, and you mentioned culture. I think that the world has been looking to the Valley in terms of the way that companies are run. Not just the innovation of technology or disruption, but the way that they are run. How much time did you spend on that early, and how much time do you spend on that now?

Not a lot time early. A little bit more time now. Fortunately, not too much time now because I think we’ve made some fortunate, purely lucky decisions early on about how we wanted to run things that have scaled reasonably well, but your point is really important.

It’s a nuance that not everyone really understands because you have so much talk of disruption. Uber’s going after the car industry. 23andMe is going after life sciences. Airbnb is going after hospitality.

What immediately happens in board rooms and in executive teams of incumbent companies — traditional businesses — is they say, “OK, we got to have a digital strategy. We have to have a lab. We have to invest…”

We’re going to put a guy in charge of that.

Exactly. We have to have somebody who’s a head of innovation and running that unit. “OK. We need a ride-sharing start-up in our company. We need a software team.”

What you’re missing is the fundamental way that a software company and a start-up is built, and the way it operates is the reason that it can be so disruptive. The idea is quite malleable. It’s underlying that, is the team, the way the company runs, the way it makes decisions…

If you have a business that’s operating at $50 billion in revenue, there’s a lot of machinery to make that happen that can’t be agile.

What are some of the things that you think are unique to that culture that incumbents can either learn from or possibly can’t?

There are some limitations to what incumbents can do because if you have a business that’s operating at $50 billion in revenue, there’s a lot of machinery to make that happen that can’t be agile, that can’t be flexible, that can’t be elastic.

You have to book that revenue every single day. You have to feed your suppliers, your vendors, your customers, your partners, and your clients, and you can’t — while all of that is happening — go and retool your culture to be faster, to be more nimble, and to be more agile. There’s a lot of challenges with being able to do that.

In general, I think the things that you learn from the Valley are flatness of corporate structure, where what you want is the best ideas to win. Whether that best idea is from an intern, whether that’s from somebody that just joined your company a week ago, who’s 22, or if it’s from somebody that’s been there for 30 years, the best idea should win.

The only way the best idea can win is if you have an easy way for the best idea to crop up to the right people who can make that ultimate decision. It’s not that everyone can make decisions, like holacracy proposes.

You should have access to the best information to make decisions. You should attempt to create as much pseudo-modularity in your structure as possible.

What does that mean, pseudo-modularity?

I just made the pseudo part up. You want to be able to have teams that have autonomy, that can work quickly, but where you understand the contract between different teams and different organizations. This is how Amazon is so disruptive.

The infrastructure team built Amazon Web services, and they give APIs to the e-commerce team. Instead of everybody having to move at the exact same speed and the exact same pace, what you did is have completely different speeds that different teams and different parts of the organization can run at.

That’s the challenge with a lot of industrial companies is they run at one speed, and it’s a slow speed. It’s a speed that the traditional manufacturing process — or the traditional industrial mechanics of the business — run at.

It’s very oriented toward risk mitigation. It’s very oriented toward protecting downside, so if you’re doing Six Sigma, it’s about defect reduction. The entire business runs at that speed. When what you really need is the software team to run at a different speed.

You need the people team, the HR team, to run at a different speed. Maybe, you need your manufacturing team to run at a little bit of a slower and a more methodical speed, but what you want to be able to do is unlock the pace that each of those organizations can move at.

Then, sometimes, it’s as subtle as the technology that the company runs on.

This is where Box comes in on it.

This is certainly our corporate pitch, but the ability to unlock the knowledge and the way that people can work together — whether that’s through products like Box, Slack, or any online or cloud solution — those things have massive, double-digit improvements in productivity.

They take silos of information, they take people who are closed off from one another, and they reduce all of the friction to people being able to share, collaborate. They reduce the time it takes to get work done, and all of this has the net impact of accelerating companies into the future.

This is why companies like Uber, Airbnb, Pinterest, or LinkedIn are running on cloud solutions for their business. They’re not running on legacy technologies, and that allows them to then be much quicker and be able to execute much more effectively.

It’s one thing to have a CEO mandate “we’ve got to get a digital strategy.” It’s another to have a CEO and C-suite, or board mandate that says, “I’m giving you permission to have a different kind of culture.”


I’ve talked with CEOs of large Fortune 50 or 500 companies, who say they want to do that, but they don’t know how.

That’s why it’s interesting. Is that it’s not something that you can mandate. I’ve never met a CEO of a Fortune 500 company that wouldn’t just want to mandate it. Everyone agrees, like, “Why are we so slow? Why does it take so long to make decisions?”

They’re mortified when they get into the weeds of their business, and they see how long things take and how much time is wasted on the front lines of the business. Where you’re taking potentially 10, 12 hours a day where people could make really thoughtful decisions and do their best work.

You’re just shaving off probably 50 to 70 percent of (productivity) in bureaucracy, in process, in technical issues, and just the slowness and the morass of the organization.

This is strategy. It’s having the right people. It’s change management. It’s the right technology. There’s not one silver bullet for being able to do this. You fundamentally have to go into the core of the business and look at what are all the elements that need to be able to change. I think there’s great examples, fortunately, that you have now. You have blueprints of how companies have been able to do this. GE is an incredible example of this.

Beth Comstock is going to join us here soon.

Perfect. She and Jeff (Immelt) have totally changed that culture, where you give permission to take risk. You have such a strong position around the digital future that everyone understands that that’s the North Star.

They are saying “This is not just a marketing campaign or a marketing slogan. We are really going to get there. You’re going to invest in companies. You’re going to acquire companies. You’re going to reinvent business models. All of these things have to change for a company to really be retooled for this digital era.”

GE is a great example. Walmart is a pretty great example, what Doug McMillon is doing there. There’s maybe a few percent of the Fortune 500 that have really retooled in this way. There are a lot more that are either going to have to, or are going to get disrupted in the process.

You created a Stanford Business School course called The Industrialist’s Dilemma, where you interviewed leaders of those companies. How did you get this idea? What is the industrialist’s dilemma?

Our business model is to sell to enterprises. We work with about 60 percent of the Fortune 500. We’re in a unique position where we spend a lot of time with technology leaders as well as business executives of the Fortune 500 and beyond, GE, Procter & Gamble, Walmart, and Gap, and all of these big businesses.

It would be very hard to not notice how much change they’re all dealing with. There’s infinite literature on disruption and technology innovation. A lot of it assumes that your organization is already tooled to be able to go address that problem. The Innovator’s Dilemma is classically thought of as a technology industry issue. We think about that as, Google was a better, faster version of Excite. The iPhone was a more innovative, better version of the Blackberry.

We’re so used to thinking about this idea of the Innovator’s Dilemma and the characteristics of it in the technology domain. What happens when you take technology disruption and you apply it to entire sectors of the economy that traditionally were not digital, that were not technology businesses? When you take the approach that Uber’s taking and you say, “What if in the future, our cars are self-driving and we don’t even need to own them? What should Ford and GM and Chrysler do? What happens when 23andMe is actually much more of a data business and pharma becomes much more about data and digital approaches than it is about the traditional researcher process? What happens when hospitality is disrupted by the sharing economy?”

What we wanted to do is create a framework that industrial businesses, any kind of incumbent that’s not a digital business, could learn from in terms of how their organization and how their products need to change to be able to compete in this digital economy.

We brought in Beth Comstock from GE. We brought in the CEO of Kaiser, of Visa, of Ford, of Legendary Pictures to come and talk about how their industries are changing and how their business models are changing because of disruption.

We also brought in digital natives or digital disruptors like Nest, Stripe, and 23andMe to talk about what do they exploit in this digital economy. We attempted to reconcile those differences and come up with some common themes that we’re seeing.

Are you going to be doing it again?

We actually are going to be doing it again, next spring. As the economy continues to play out, we’ll find different issues and different patterns. It was exciting because you have a lot of companies that are in Denver, Atlanta, Minneapolis, Pennsylvania, and these places that are not Silicon Valley. They’re trying to figure out what do we do about this digital disruption. Do we invest in startups? Do we build out labs? Do we have Silicon Valley hubs?

They’re already doing all of that…

They’re already doing all that. Which ones work, which ones don’t? Why don’t they work? What kind of executive mandate? What does the CEO need to do in these organizations to create the right air cover for those initiatives?

We very quickly realized one of the biggest inhibitors to incumbents having really profound modern strategies is their traditional value network can’t necessarily go along with them.

What do you do when what you’re building necessarily is going to disrupt or compete with your traditional partner ecosystem? We didn’t go in thinking this way, but we very quickly realized one of the biggest inhibitors to incumbents having really profound modern strategies is their traditional value network can’t necessarily go along with them.

Like dealers with Ford or GM…

If you’re Ford you have this dealership network, which is your traditional business model, Uber doesn’t have to worry about dealers.

Neither does Tesla.

Neither does Tesla. If you really wanted to jump to the future, you’d almost have a dealer-free approach and mindset, but they can’t do that. That’s who’s making their money today. Everyone is somewhat shackled by their legacy value network, their supply chain, their talent…

And their legacy regulatory framework?

And the legacy regulations. You have this issue where you have all these constraints that are put on a large incumbent. You have disruptors that have none of those constraints. What does somebody do?

We have some answers. We probably ended up with more questions than answers in the process, but it’s an exciting conversation to see play out.

Since the Snowden revelations, there’s been a pretty significant lack of trust in the technology industry internationally, with customers everywhere. There’ve been a couple of really interesting news moments after Snowden. One was the Apple case and another was Microsoft recently suing the DOJ. You have come out in support of both Apple and Microsoft in those instances. Tell me what you think is at stake here and why you’re being public about this.

What’s at stake is, in your initial premise of the question, is trust in the technology that people and businesses and governments are using. In the Digital Age where either the person or the company doesn’t manage all of their own information, they trust other providers and service providers to be able to do that for them.

The currency of that relationship between a company, between a large business and their technology service provider is trust. Fundamentally, that trust is driven by, obviously, a consistent and reliable experience, but also trust in the security, the protection, the privacy of your data and your information. Not just from governments, but also from potential attackers. What we are seeing is that there is this very challenging conflict where our laws and our legislation is built for a very different industrial world. The digital world is going to look very, very different.

In the Microsoft case suing the government, there’s a great analogy that the general counsel of Microsoft introduced, which is in the paper-based analog world, a company managed its own records, its own information and the government would go to that company if they wanted subpoena information. In the Digital Age, those records are becoming digital.

They’re on box.com.

They’re on Box, they’re on Microsoft, they’re on Amazon, they’re on Google. That doesn’t mean that the control of those records should go away from the company. We’re just a conduit. We’re just creating economies of scale so we can actually lower the cost of technology, so we can drive innovation.

We don’t want to change the ultimate relationship between that company and their data. It is truly their information to be able to manage and own and protect. What the law doesn’t understand and what our legal frameworks don’t think about is that you should go to that company if you want to then get access to that information.

You shouldn’t go to the service provider. We have all of these things and it’s not particularly depressing at this stage, because the government has to figure all this out. It’s a really difficult problem. There’s going to be a lot of new precedents that are going to be set.

There’s no way that in 10 years from now, if we’re going to have a healthy Internet, a tremendous amount of trust in technology, there’s no way that our laws can’t look different, if we’re going to have those things. We know that there has to be change. We know that there has to be change that better recognizes the digital world is going to work. That’s all we’re proposing, is we need to modernize our approaches as opposed to using legacy practices for a very different world.

If we’re going to have a healthy Internet, a tremendous amount of trust in technology, there’s no way that our laws can’t look different.

We had Microsoft’s Brad Smith here three weeks ago talking about this very issue. Last thing is a related question. Independence seems important to you, obviously becoming public, not selling to Citrix. It strikes me that your positioning Box is really as an independent play.


You’re agnostic. You’re independent. You’re not a unit of a very large company that may have other agendas. Am I right in making that assumption? Is that your strategy?

As it relates to the corporate structure for just a second, we believe we’re just really early in our long-term mission and in the scale of opportunity that we have in front of us. This year, we publicly stated we’re going to do somewhere between $390, $395 million in revenue.

We’re going after a market that there’s probably $30 to $40 billion spent every year on this category of technology, the legacy version of this technology. We are one to one and a half percent of the size of this potential market.

Which just means that there’s a tremendous amount of upside in front of us, which really relates to the independence of the corporate structure. Strategically, the reason why we’re agnostic is people want to be able to get access to their data and their content from anywhere.

They want to be able to be in SAP, in Office, in Salesforce, in Workday, in Gmail and be able to get access to their content, their files, their information that they’re using for their work. Our job is to be as open as possible and connect to all of those services so you can get your work done anywhere.

Strategically for us, we just deeply believe that the future of enterprise is about openness, it’s about interoperability, and it’s about, certainly Box being agnostic to all the different platforms that people use. Importantly, you’re starting to see this from Microsoft, from Salesforce, from Apple, from…

From Apple, the place where you would never expect to see it.

Yeah, and that’s the bigger macro change that is very different from what things looked like 5, 10, 15 years ago, where it was all about everything has to be my stack, I’m building vertically integrated solutions. You either participate in this vertical integration, or we’re not going to work with other technology.

I applaud the open and integrated vision of the world. Thanks for coming in, Aaron.

Thank you.

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