You Only Have to Be Right Once by Randall Lane Page B

tech history: IBM, Oracle, and Microsoft. If Drew Houston’s Dropbox wants to be your personal digital attic, Levie’s Box wants to be your office’s digital file cabinets. Bill Gates and Larry Ellison, take note: As Victoria Barret discovered in 2013, the man fixated on some of your most lucrative business has proven himself an adept battle commander, down to his neon Pumas, with a giant IPO in his immediate field of vision.
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    W hen Aaron Levie was twenty-six, back in 2011, he did something arguably foolish, undeniably gutsy, and entirely counter to the prevailing mood that startups should be “lean” in the Internet age. Forty-five minutes into a routine meeting with his board at his simply named company, Box, Levie blithely announced: “I want to make a small adjustment. We need to raise an extra $50 million.” An awkward pause followed. Box had previously raised $106 million, already a heady sum for a company with just $21 million in sales and no profits. Levie’s early investor and biggest booster, Josh Stein of venture firm Draper Fisher Jurvetson, piped up: “I’m sorry, but you said $15 million, right?”
    Nope. Five-oh.
    A month earlier Levie, with the board’s acquiescence, shot down a $600 million offer from virtual-computing giant Citrix. That would have given the guys in the room three to fifty times what they’d put into Box just a few years earlier. Now Levie was asking them to dilute their stake by some 15 percent. He hadn’t even told his cofounder about it.
    They should have seen it coming. Levie is on a mission, and it’s an expensive one: to be the Oracle of the next generation of enterprise applications. Box is an online storage and collaboration service that finished 2013 with $124 million in revenue, double what it did in 2012, and five times bigger than in 2011. Levie figures he can keep growing quickly, but that’s not interesting to him.
    Instead, he wants to create a transformative technology company for the mobile era, one that will become the glue connecting any big company’s myriad data and documents across all of its disparate software applications and makes them accessible securely on a tablet or phone. At that July 2011 board meeting Box already offered a better mobile experience than anything from Oracle, SAP, or Microsoft. But it had only five people selling to big companies, which put it at a crushing disadvantage to the giants.
    A two-hour cross-examination later the board gave Levie the go-ahead to raise more cash to beef up the sales force, and he had no shortage of interest: His $50 million ask turned into an $81 million round, and then he raised another $150 million, at a valuation of $1.2 billion, and then yet another $100 million around Christmas 2013, which made the company worth almost $2 billion. All necessary, given the $169 million sales-obsessed Box lost in 2013, according to pre-IPO documents filed in early 2014.
    Even Levie can’t keep track of it all. “Sorry, which round am I talking about?” he asked, nervously cracking his knuckles. Levie is perpetually fidgeting with something—his iPhone, frizzy curls, jean cuffs, sneaker laces—in between sips of endless cups of black coffee. He generally rises at 10:20 a.m. and tends to fast through the workday, taking his sole meal at dinner, after a half-hour power nap in his office lair, an 8-by-10 room with nothing but a scribble-filled whiteboard, purple couch, two orange earplugs, and an inhaler. He rarely drinks alcohol, even though he regularly schmoozes at wine-soaked business suppers, because after midnight is when he powers through e-mails before collapsing at 3:00 a.m.
    His board has been accommodating to his ambition, in part because of this work ethic and in part because he’s taking the dilution along with them, betting together that they can make more owning less of something bigger. While his frenemy in the consumer online