Box CEO fires back at Dropbox boss by comparing their relationship to Netflix and Blockbuster
Dropbox CEO Drew Houston first took a swipe on Monday when he was asked to name one thing his company did before Box.
"Generating cash," Houston responded, in clear dig at Box's historically money-losing business. Dropbox disclosed last month that it's now free cash flow positive, an impressive feat given its annual revenue is reported to be over $500 million.
So on Tuesday, when it was Box CEO Aaron Levie's turn to take the stage, he returned the favor, saying, "I recall Blockbuster was cash flow positive before Netflix."
Levie's comment was in reference to the fact that Netflix still remains operating cash flow negative despite basically running video-rental chain Blockbuster out of business. Blockbuster used to have a massive cash cow business before Netflix's rise, but largely missed the online boom and ended up filing for bankruptcy in 2010.
Without seeing Dropbox's actual financial statement, it's hard to make anything out of the two CEO's trash talking. Although cash is generally considered one of the most important aspects of the business, fast growth companies, especially those in tech, often remain cash flow negative, as long as they're able to keep up their fast pace of growth.
Box was ridiculed for spending almost twice its revenue on sales and marketing at one point, but it's continued to keep a robust growth rate and has publicly said it's on pace to reach cash flow positive by early next year. Dropbox, which is privately-held, remains mum on its financials.
Levie and Houston's war of words dates back to last year, when Houston joked about Box's high sales and marketing cost at its big annual event. Levie followed up with a jab belittling Dropbox as being for small businesses.
Perhaps, we'll be able to put this argument to rest once Dropbox files to go public. Houston didn't say anything about Dropbox's IPO timeline on Monday, but said he's done raising private funding.