BOX, which Levie launched out of his dorm room at the University of Southern California in 2005, is a golden child among Silicon Valley tech companies.
The company has more than doubled its revenue every year and is on pace to reach $100 million by the end of 2013. Box has more than 900 employees, spread out in offices in Los Altos, San Francisco, London, Paris, and Munich. Next year, Levie and his co-founder and chief financial officer (and boyhood friend), Dylan Smith, plan to take the company public.
Investors, who have poured $300 million into the start-up, are valuing the business at $1.2 billion—a sign both of their belief in Box and their confidence that cloud computing has finally matured. In one recent survey of IT buyers, researchers noted a “whopping 65.6% of respondents indicated cloud as a top investment area for 2013.”
Even these numbers, however, don’t explain why Aaron Levie is Inc.’s Entrepreneur of the Year. That has more to do with his anticipation of change and his boldness in doing what looks crazy in the short term but in time looks revolutionary. Cloud storage is basically a commodity. Levie recognized this early on and changed Box’s orientation from consumers to enterprise customers, where his relentless focus on great design was particularly striking—and thus he put some distance between Box and the pressures of the commodity marketplace. He moved quickly into mobile. He got out in front of fears about security. He was, and is, unencumbered by legacy ideas and models, and he keeps making good decisions.
Levie likes to say that fundamental shifts in technology come around only every 10 to 15 years, and much the same could be said about an entrepreneur like him. He possesses the sort of wisdom and focus you’d expect of an industry guru, but he acts with the 24/7 obsession of a scrappy startup founder. Give him 10 minutes, and he will make you a believer. Scott Weiss, a partner at Andreessen Horowitz, one of the venture firms that have invested in Box, describes Levie as a “glow-in-the-dark” entrepreneur. “He’s unmistakable,” Weiss says. “You talk with him for five minutes, and he says something funny and something smart and something insightful. He’s a larger-than-life character.”
He’s also only 28. Levie stands a little under 6 feet tall and has a slim, wiry frame. His hair sprouts in a graying forest above his forehead. His eyes, deep-set and bluish-gray, are each covered by a thin wisp of a brow. Like a lot of young tech entrepreneurs, he has a uniform; his is a slim-cut J. Crew suit, a pressed button-down shirt, and red sneakers.
Levie’s routine over the past several years has been stringent. He wakes at around 10. He showers quickly, and arrives at the office by 11 a.m. He downs two coffees, sometimes holding two cups at once. He rarely eats breakfast or, for that matter, lunch. He spends 90 percent of his daylight hours in meetings or interviews, to which he walks very quickly or even runs. He is almost never at his desk. At around 7:30 p.m., he takes a nap for about an hour, and when he wakes up, he gets really, really productive. Each night, he probably sends a couple of hundred emails, and by 2 a.m. or 3 a.m., he’s finally done. Levie does not take weekends off, and, in the last handful of years, he has taken one vacation, a three-day trip to Mexico with his girlfriend.
For all his decisiveness, he is a somewhat uneasy man—self-deprecating, certainly less cocksure than your average 28-year-old centimillionaire—and as he talks about Box’s competitors in a crowded market, I begin to understand why he drives himself so hard.
“My hair’s gotten grayer,” says Levie. “I was gray before Obama was.”
Box’s daily battles are with Accellion, Citrix, Huddle, Google, Hightail, IBM, and Oracle—and the biggest of them, Microsoft. Microsoft’s SharePoint collaboration tool is a behemoth that generates nearly $2 billion in revenue from 65,000 companies, which manage a total of 125 million SharePoint licenses.
And, as with Facebook, many of Box’s early users were driven to the platform because their friends or colleagues were using it. It had a viral network effect because it was different, better. Using Box makes sending files easier and makes collaborating with co-workers faster. In some small way, it makes work more fun.
“I’ve just seen the future… and there’s no longer any paper in it.”
Technically speaking, building a mobile platform on which to send company files isn’t all that challenging. The real difficulty is proving that the information will be secure. The idea of being able to share any file with anyone at any time is alluring, but it also introduces a massive security risk, especially for businesses dealing with sensitive customer information such as credit card numbers and health care records. Among IT professionals and their employers, there is tremendous unease. Levie saw that as an opportunity.
“The idea is, ‘How do we make Box become the enabler for them to be able to move to the cloud—the solution for their security in the cloud,’” Levie says. “So not that it’s a check box that allows them to adopt Box; it’s actually the reason they put documents in the cloud.”
Box is able to provide this service to companies like drchrono because, as of April 2013, Box was certified as Health Insurance Portability and Accountability Act, or HIPAA, compliant, the industry standard for protecting electronic health records. Getting HIPAA certification is the official way to assure patients a provider is taking all the right steps to protect their medical information online. But becoming HIPAA compliant is a notoriously lengthy and expensive process. (Share-Point is HIPAA compliant; some other Box competitors are not.) HIPAA compliance is proving valuable: In 2013, Box’s sales in the health care industry grew more than 81 percent.
When Levie first announced that he was building an enterprise software company for the modern age, he was 23. He had no idea what the conventions of the game were. He had never used any of the software he hoped to disrupt. Not knowing the conventions—or simply refusing to acknowledge them—appears to have become Levie’s best asset. And the fact that he feels the odds are against him and against Box—that isn’t a reason to stop; it’s a reason to continue.
ERIC MARKOWITZ is a reporter for Vocativ.com.