As Box grows, it struggles to stay true to its roots

Box CEO Aaron Levie at the LeWeb London conference earlier this year. Credit:LeWeb 13 via Flickr

It's been nothing but good times recently for startup Box. Just today the company announced some updates to their administrative controls aimed squarely at larger and more profitable customers. Last week it was $100 million in new funding. The Wall Street Journal pegs their current value at $2 billion -- nearly double their $1.2 billion valuation after receiving $150 million in funding in July 2012. And the same article points out that revenue will top $100 million this year, doubling last year's figures.

Heady times indeed, and the business and technology press is taking notice. Box CEO Aaron Levie has become the latest cover boy, winning the Inc Magazine Entrepreneur of the Year award and a feature in MIT Technology Review.

This is all from an eight-year-old company that wasn't on the radar of many people as recently as 2009. It's easy to forget now, but four years ago, using the cloud for core business features was a fairly radical notion and companies like Box were on the fringe. Today they are very much part of the mainstream.

See also: How Box is replacing SharePoint and custom software at Scripps

Whitney Bouck, who is senior vice president for global marketing and general manager, enterprise at Box, told me "We think we have hit an inflection point with cloud adoption. It's less about if we use cloud [services] than who do I partner with and for what purpose." (Although she admitted that there are still plenty of organizations that remain cloud-wary.)

Just recently Box announced it has grown from 180,000 paying customers to over 200,000 including Pearson, Chevron, and Safeway among others, who have joined the likes of Scripps Networks, Schneider Electric and long-time customers P&G.

Seen by many as a Dropbox competitor because they both offer file sync and share capabilities, a service that Aaron Levie once called "table stakes" in this business, Box has moved far beyond the Dropbox notion of storing and sharing files to a much broader business vision.

"It's not wrong to say we compete with Dropbox," Bouck told me, "but on a very limited set of functionality." She said they tend to compete with them on smaller clients, and file sharing is only part of what they offer.

She points out that there is a collaborative piece to Box that plays well in businesses and allows people to comment on these documents they are storing and sharing, assign tasks, and go through an approval process, all of which separates Box from Dropbox.

Bouck pointed out they are not just serving customers with hundreds of users, but increasingly they are seeing ones with thousands and even tens of thousands and that's forcing them to look at ways to accommodate the needs of these larger organizations. Hence today's announcement about more advanced administrative tools.

But as they grow, they face a growing challenge on how to stay true to their roots to provide a simple interface and an easy to use product. When I spoke to Aaron Levie last year, I asked him if they would continue to offer a free version. Levie said he sees that free version as a foundational element to the business. At the same time, he told me the alternative would be selling to the CIO -- a problem, as Levie wants users to have instant access.

Yet it would seem with these new high-end tools, they will be doing just that. How can they please both parties?

Bouck says they achieve this in a couple of ways. First of all they offer tiered pricing on four levels starting with the free version and going all the way to the enterprise version with all of the extra bells and whistles that larger organizations require. There is also a starter and a business level.

She said the other thing they are doing is drawing a clear line between the user side and the administrative controls. "We are trying to keep those things separate," she said. "We aren't clogging the user experience with things that don't need to be there." She added they deliberately hide any complexity from the end user.

It would seem going public would be the next logical step for Box. Bouck couldn't address that directly, but she pointed out that Levie has said publicly there is value in maintaining their independence as long as they can. The investors who have plowed so much money into Box will probably want to see a return at some point, and a public offering is probably the only way the company will achieve the valuation multiples that make venture investors happy.

For now, Box continues to prosper. They are expanding into global markets, have added 350 employees (for a total of 950) since the beginning of 2013, and have attracted an array of diverse customers while doubling revenue in the last year. They have found a way to scale the business to deal with much larger organizations and they continue to build on the base file sharing product to please the sole user as well. As long as they can continue to do all that -- no small feat -- they should be fine.

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