Westminster Business School Blog Inspiring digital business innovation: Why consumers adopted Dropbox so fast

Inspiring digital business innovation: Why consumers adopted Dropbox so fast

March 13, 2014
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Dropbox is what we can call a successful innovation as they achieved to fill a gap in the market. Since the company started in 2007 more than 200 million people have adopted it. By making ways of sharing/saving easier and faster, Dropbox has managed to save time for the users. In this article, Louise Gravgaard, a WBS student, explains why Dropbox is a successful innovation.

Dropbox is a freemium business model, e.g. a business model which has a free version and a paid version with more advantages, which has introduced new ways of saving and sharing documents, photos, videos etc. on computers and other devices. The main advantage of Dropbox is to save time for both individuals and companies.

Indeed, Dropbox has many characteristics which make it a successful business innovation, as explained below in details.

Relative advantage to other innovations

Dropbox is relatively better than the idea it supersedes. By making a simple and easy way for users to save and share stuff on their computer, Dropbox managed to be preferable to old ways of doing the same thing. For example before people were using e-mails and USB’s to save and share. On Dropbox you can share a whole folder which makes the saving and sharing process both faster and easier. A successful innovation is therefore; making the innovation as preferable as possible in relation to older innovations, which satisfy the same basic needs.

Compatible with old innovations

Dropbox eliminated the sunk cost of consumers, by making it possible for consumers to use the same way of saving and sharing. For example if a person used time and energy on learning how to save stuff on their computer Dropbox choose to make a similar folder on the computer. Therefore people were not afraid of losing the time and effort they had invested in their current ways, as the know-how could be used in Dropbox as well. Therefore Dropbox succeeded in breaking some of the barriers for potential adopters. If you want people to adopt your innovation faster, it is important to make the innovation compatible with the ways of doing the same thing today.

Limited complexity

For new innovations people’s switching costs are time among others. For example the process of getting Dropbox was really easy and quick. Also as mentioned earlier Dropbox made the innovation compatible with old ways of sharing and saving, which made the process of learning to use Dropbox faster. By making the service easy and simple, people wouldn’t use that much time and effort. This made Dropbox’ adopting process faster by breaking the barriers of fear for complication. Therefore it is a good idea to make an innovation easy and simple in the beginning, as one should think about peoples’ fear of complexity.

Period of trial

In the beginning Andrew Houston (CEO of Dropbox) made the innovation for himself and simultaneously experimented with it. Because of the fact that Houston was experimenting with the product himself and therefore was learning by doing, the uncertainty was limited for potential adopters. To make the rate of adoption bigger, one should use time and effort on experimenting with the product before launching it to others.

Large observability

Dropbox gave people extra MB for referrals and made itself visible by the sharing component. Dropbox’ way of marketing themselves helped them being visible to others very fast. For marketing new innovations it has been seen in the case of Dropbox, that it helps to give people a reason to spread the word and a reason for users to make their friends engage with the innovation by a type of sharing component.

To sum up, if one wants to make the adoption process for an innovation faster, one must consider including the following 5 elements: make the innovation relatively better than others on the market, make the innovation compatible with the ways of doing today, ensuring the complexity of the innovation is limited for new users, remember to try experimenting with the innovation on a limited basis and last but not least ensure the observability by giving people a reason to spread the word. Dropbox ticks all this boxes, thus being an inspiring digital business innovation.

About the author
Louise Gravgaard is a Westminster Business School exchange student, currently studying her BSc in Economics and Business Administration at Copenhagen Business School. Louise Gravgaard has plans to study her masters in Finance and Strategic management at Copenhagen Business School.

About the Course Business Innovation in Digital Economies (BBIM510, level 5).

Westminster Business School started in 2013 a new module, Business Innovation in Digital Economies (BBIM510, level 5). The module has been a success, and students have been very inspired to learn more on digital technologies which are used in business innovation processes. Westminster Business School wants our students to become better entrepreneurs who have more information and skills to succeed in business innovation, using digital technology for that.

In order to motivate students to get more involved, we invited them to write articles for the series Inspiring Digital Business Innovation, to be published in our Westminster Business School blog. In this series, students choose the company or innovation which has inspired them to better understand the possibilities of business innovation in the digital economy.

You can follow the series here in the blog. We hope you get inspired as well.