Dropbox is public so we have a general sense — it spends ~28% of each dollar that comes in on sales and marketing:

But … averages are misleading.

A huge chunk of Dropbox’s customers are acquired free, virally. Another chunk of revenue is from upsell, acquired cheaply. And only a minority of Dropbox’s revenue is sales-driven. So that likely means the segment that is from paid acquisition has a pretty high acquisition cost, actually. Since so many customers are acquired, retained, and/or upgraded for very little cost.

Alex Clayton from Spark Captial has a nice pre-IPO analysis here, summarizing a payback period of perhaps 17 months (which sounds right): Dropbox IPO | S-1 Breakdown – Alex Clayton – Medium

Add in an ARPU of $110 or so, and Dropbox is then perhaps likely spending on a blended basis about $180 to acquire a new user. But that includes the free ones. So in reality, they are likely paying much more.

As for Slack, we’ll have to wait and see.

View original question on quora

Related Posts

Pin It on Pinterest

Share This