Box Looks to New York, Boston, and Seattle for Innovation and Collaboration

At a time when new rivals are emerging in the file-sharing industry, Box in Palo Alto, CA, is looking to New York and other markets as potential destinations for opening new offices and finding talent. Box is a venture-backed startup that has made name for itself in Silicon Valley. In recent weeks, however, the company visited New York as a sponsor of the NY Tech Day fair and hosted its own events in the city to connect with the local tech community. CEO and co-founder Aaron Levie says Box is not doing this purely for promotion’s sake but because it wants to expand geographically. “It is inevitable that we will have a physical east coast presence,” he says.

Box is a seven-year-old company that offers a file-sharing platform via the cloud, mostly to enterprises and small-to-midsize businesses. Its clients include Clear Channel, Pandora, LinkedIn, and MTV. Box has raised $162 million since its founding in 2005, and its backers include Andreesen Horowitz, Draper Fisher Jurvetson, and Meritech Capital Partners. The company has been reaching out to developers in recent months to get the word out about its file sharing service. Now Box is exploring its options to establish offices in New York possibly later this year or early 2013.

Levie says the company already has about half dozen personnel working in the New York and Philadelphia greater metropolitan areas. “That will scale up over the next year,” he says. It is too early to talk specifics but he says setting up shop in New York would give Box closer connections with customers in financial services, pharmaceuticals, media, and entertainment. It would also let his company reach out to the emerging technology community in the city. For example, at a New York event on April 25, the company introduced a new application programming interface for developers to use.

“We think it’s critical that we work with as many companies as possible to build products on the Box platform,” says Chris Yeh, Box’s vice president of platform. That includes building relationships with the developer community to find new technology that can work with Box’s service. “There are great tech communities outside Silicon Valley that we want to engage,” he says.

Yeh says the growth in New York among startups and investors made it attractive for Box. Programs such as General Assembly and NYC TechStars helped Box tap into the innovation community in New York. General Assembly, a campus for entrepreneurs and startups, asked Box to consider potential candidates from its programs for new hires. “The war for talent is crazy out here [in Silicon Valley],” Yeh says. “If we can tap into new sources of talent in New York, that would be great.”

Box wants to build relationships, he says, with local innovators such as Producteev, which developed software that lets users manage projects and tasks, and Lua Technologies, a member of this spring’s NYC TechStars class. Lua’s cloud-based platform is used to schedule crews for entertainment production companies. “We have an entertainment launch coming up in the next few months,” Yeh says. “They fit into part of what we want to accomplish from a go-to-market point of view.”

Box is looking to other innovation hubs beyond New York for technology development, talent, and potential new offices. Yeh says the company spent time in Boston as sponsor of the angelHack hackathon in March. “We like that community,” he says, “There are a lot of interesting companies that come out of there.” Box’s first four employees are natives of Seattle and the company may recruit technical personnel from that city as well. “Eventually I could see another engineering office as you have seen from Zynga, Facebook, Google and others,” Levie says. “That’s a bit further out in the timeline.” The company is also looking overseas to London for a possible European beachhead.

While Box is exploring these potential opportunities, the file-sharing market is seeing new heavyweights get in on the action. Google introduced its file-sharing service called Google Drive on April 24, which stirred some question of how a growing company such as Box could survive in the face of rival with near-bottomless pockets.

Levie maintained his cool reserve. “We’re flattered that Google decided to come into our space after us doing this for seven years,” he says. The growth of such competition, Levie says, validates the technology, but his company differentiates itself with its focus on enterprise. While Google Drive and other rivals such as Dropbox lean toward small-to-midsize businesses and individual users, Box aims for everything from small businesses to enterprise customers. “Ultimately, our competition is going to come from products like [Microsoft’s] SharePoint and on-premise infrastructure companies,” Levie says.

Upheaval is nothing new for this market. Levie notes that the players in the file-sharing space have changed significantly since Box launched. “The two primary incumbents in 2005 were Yahoo Briefcase and [AOL’s] Xdrive,” he says. The status quo did not last long. In 2009, Yahoo shut down Briefcase and AOL also pulled the plug on Xdrive. “We’ve moved to a market where Microsoft, Google, and Apple all have significant plays in this space,” Levie says.

Levie says part of his goal is to call more attention to the innovation happening in his sector. “It takes events, education, and partnerships with incubators to highlight how much disruption and value creation there is going to be in the enterprise software world,” he says. Box believes that push will increase general awareness about markets that are gradually developing their enterprise software ecosystems. “New York is primarily known for its consumer tech and media tech,” Levie says. “We want to put a spotlight on the development going on [in enterprise software] in New York. There is a lot.”

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