The Little Startup That Could Have Been

While Dropbox and Box command the media attention and VC investment, Yousendit – the service that helped pioneer file sharing – is still alive and, for the time being, doing well.

The Year is 2004

Let’s go back to 2004 when Yousendit was launched. Sure, there was Kazaa, Gnutella, and others offering peer-to-peer file sharing, but if you wanted to send someone that huge Powerpoint or Photoshop file (without the risk of getting a virus) you didn’t have many options other than burning and mailing a CD.

At the time, your Hotmail account allowed you up to 2MB of file storage. You had to keep deleting old emails with attachments. Google’s newly released Gmail service giving 1GB of storage wouldn’t be publicly available until later in 2007 with about 2GB of storage (which would then prompt Yahoo to give unlimited storage to their Yahoo Mail users). And businesses running Microsoft Exchange servers limited users’ inbox size as well to maybe a couple hundred megs. I still remember our IT admin kept complaining that we were emailing files to each other too often and he needed more disk space.  And I got the “your mailbox is over its size limit” message every other week.

Enter Yousendit. The service allowed you to upload a big file, then email a link to whoever needed access. It was confidential (only the recipient with the link could download the file), fast (no attachments), and pretty affordable (files up to 5MB was free). Brilliant. Usage skyrocketed. What could go wrong?

The FORGOTTEN founder

I always wondered why Dropbox and Box, to name just two services, were able to become so successful so quickly while Yousendit seemed stuck in the past. Sure, Dropbox is not focused on file sharing per se, they promote “cloud storage”, but Yousendit could have taken the market leadership position easily. And only recently (2011) did they announce a “dropbox-like” feature giving unlimited cloud storage for their users. They already had the infrastructure, the product, the users. What happened?

My answers came in the form of a recent Inc Magazine article, The Forgotten Founder. It sheds some light into the company’s story, and helps explain why such a promising service was plagued with problems. Also shows how important it is to have a great team assembled and what mistakes we all should try to avoid. Was this the reason Yousendit didn’t evolve the service until now? I can’t say for certain but I bet it has a lot to do with it. Could Yousendit have become what Dropbox is today?

The future

Box and Dropbox are the darlings, attracting hundreds of millions in capital investment. But they are not alone… and there is always someone that can jump into this game and shake up the market. Check below a short list of similar file sharing / cloud storage services, their launch dates, and total VC investment in each company to date. Let’s see what happens next! 

File Sharing and cloud storage solutions

  • 2004: Yousendit ($48.7M)
  • 2004: SugarSync ($41.5M)
  • 2005: Mozy ($1.9M, acquired by EMC in 2007 for $76M)
  • 2006: Box ($159M)
  • 2006: Carbonite ($66M)
  • 2007: Dropbox ($257M)
  • 2007: Google Docs
  • 2007: Jungle Disk (Acquired by Rackspace in 2008)
  • 2007: Windows Live skydrive
  • 2008: Syncplicity ($2.35M)
Sources for the figures are Crunchbase and Wikipedia.
For a visual representation of the funding timeline for the key players, see the image below (click to enlarge).
Cloud Storage Funding Timeline

Funding timeline for key cloud storage players


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