Aaron Levie: Why Startups Win In The AI Era

**Aaron Levie** (0:00)
You'll read a lot of press that basically says AI is coming for our jobs. Is most of the press is not inside of big companies, seeing how much time we spend on useless activities that are necessary but not strategic. There's a very, very long list of things that software never did before, that AI agents are perfectly primed to go do now. And that's basically the opportunity set. Now is the moment this window will end. In this window between a year ago and three years or so, plus or minus from now, this is when the next hundreds of great companies will get started.

**David Lieb** (0:40)
So Aaron and I go way back. I don't know if you remember this. I went and searched my old bump. So bump was my startup. I searched my old bump email for Aaron at box.net.

**Aaron Levie** (0:50)
Yes.

**David Lieb** (0:50)
And I found very old emails where we would coordinate in Mountain View, times to meet up with three founders.

**Aaron Levie** (0:56)
Yes.

**David Lieb** (0:57)
You, me, and this guy named Sam Altman.

**Aaron Levie** (0:59)
Yeah.

**David Lieb** (1:00)
And we would coordinate to try to do brunch or lunch or whatever. And then I saw emails between us saying like, oh yeah, well, Sam's going to probably not show up again. So that's how we get to know each other. No, he would always not show up. I don't know if you remember this. You started Box probably before many of the people in the audience were alive.

**Aaron Levie** (1:18)
Okay. Let me just show of hands. Who's below 20 years old?
Wow. Okay, great. Yes, then accurate.

**David Lieb** (1:27)
Very accurate. So maybe to start, we're going to talk about AI a lot, but to start, you went through another major transformation.

**Aaron Levie** (1:34)
Yes.

**David Lieb** (1:35)
See, I use the word transformation.

**Aaron Levie** (1:36)
Yes, thank you.

**David Lieb** (1:36)
Digital transformation.

**Aaron Levie** (1:37)
Yes.

**David Lieb** (1:39)
Around going to cloud. Maybe just walk us through what that looked like at a very high level, and maybe what is different or similar about the transition to AI now.

**Aaron Levie** (1:48)
We started the company in 2005, and this was a time where you have to kind of literally go back 20 years and think about a world where the Internet was much slower, browsers were way worse, we didn't have the iPhone, we didn't have Android, Chrome didn't exist, everything was just way worse on every dimension. We basically had an initial kind of idea that as the Internet got faster, as you worked on more mobile devices, you'd want to be able to access your data from anywhere. And that was the original idea of Box, where we said you'd go between different computers, you'd access your files, you'd share them, you'd collaborate. So we launched the company, it was initially focused on the consumer market, or consumers slash just kind of prosumer, anybody that wanted to sign up. We started to get a little bit of traction, and by a little bit, like we're talking like 10 people signed up like in the first week or something. So it was just very, very slow, very slow and steady growth. And what happened was we got a little bit more growth. We got some early funding from Mark Cuban and some angel investors. We then dropped out of college. We got sort of more of an upswing. We had a freemium business model, so we let people sign up for free and start to use the product. And then one day we kind of ran into this fork in the road, which was, do we stay the consumer, go down the consumer path, or do we pivot to the enterprise? And the calculus was we felt like it was going to be way too hard to compete with all of the consumer technology platforms that would give away storage for free. They'd sort of embed it into their operating system or their social network or whatnot. It would be way too hard to go in and monetize this. So we decided to pivot to the enterprise where we could be cheaper, faster, easier than a lot of the big incumbents at the time. So we pivot to the enterprise, and we got extremely lucky on the timing because we rode this growth wave of mobile and cloud that were sort of working in tandem to effectively create a new IT architecture within enterprises. And so for us, we got to ride this wave where once we had better security, you know, more functionality than a lot of the incumbent services, as companies moved to the cloud, they needed a way to share their data, access their information. And so we became an increasingly obvious choice. So that was the cloud wave, and that kind of propelled us to where we're at today. And there's a lot of similarities to the early days of cloud and the early days of AI, with maybe one big difference, which is the early days of cloud, we were having to go convince people that the cloud was going to be this big deal. We had to go tell everybody that the future is going to be cloud computing. It's totally safe to trust this with your data. A lot of people didn't believe us, and so that meant we just couldn't win deals in entire segments of customers.