Dropbox is famous for its lavish employee perks that include a Michelin star chef and open bar Fridays.
But Dropbox is in cost-cutting mode and recently canceled a number of perks, even encouraging employees to help the company save more, as Business Insider previously reported.
During an interview at the Bloomberg Technology Conference on Tuesday, Dropbox CEO Drew Houston explained why he made those changes recently. He simply believes they were necessary moves to run a smarter business and something every company should consider.
“Every business, no matter it’s boom time or a more conservative time, you have to keep an eye on your cost,” Houston said.
“We wanted to have the whole company involved in identifying areas where we can make sure our spending makes sense. It doesn’t mean we have to obsess about every cent every day, because we’re trying to grow and you don’t win by just optimising cost. But it’s an important thing for any business,” he added.
Dropbox’s cost-cutting measures drew a lot of attention because it’s one of the most richly valued and highly funded startups in the tech industry. The fact that it’s cutting back is seen as a reflection of a changing mentality among Valley startups that largely enjoyed an easy funding environment which allowed them to grow at all costs, without generating much profit or cash.
Houston didn’t mention how the recent changes would help Dropbox get to profitability faster. But he did disclose for the first time that the company’s now cash flow positive, meaning the core operating business is able to generate cash on its own, without relying on external investments.
“We’re managing our way towards profitability but cash flow positive is an important first step,” Houston said.
As for the controversial chrome panda that drew a lot of criticism for its extravagance, Houston argued it was cheap compared to the total cost of the new office.
“As far as that panda, of our total office build out, or if you divide by the 15-16000 people we have, it’s actually not that meaningful a expense,” he said. “Every office needs a chrome panda.”