♪ >> he is an uncommon breed in the world of enterprise technology. aaron levie is known for his colorful sneakers, his magic tricks, and ironic tweets. but there is no underestimating his ambition to dominate the flight of business to the cloud. he started building websites when he was 13, and met the kids who would become his cofounders as far back as middle school. but unlike places like facebook and twitter where early infighting is legend, all four of box's cofounders still work there a decade later. joining me on "studio 1.0" is

box ceo and cofounder aaron levie. blue sneakers. what are the socks? >> cloud socks. for the enterprise software industry. >> you grew up in seattle. what kind of kid were you? -- artainly a typical typical. i spent far too long on the internet. not a large volume of friends. most of those that were my friends i founded box with. we were growing up in the shadow of microsoft. >> did you idolize jeff bezos and bill gates? >> everybody knew the bill gates story by heart. what's cool about microsoft, you could go and they would let you be a product tester. a lot of people in high school would go to microsoft, and they would give you a free mouse.

>> you met your cofounders in middle school. tell me about that. >> dylan smith, the first cofounder of box, who is now our chief financial officer. we played trumpet together in middle school. neither of us were any good at that. throughout middle school and high school, i did things on the internet with jeff, and later in high school with sam. >> tell me how box began. >> 10 years ago, not a lot of innovation was happening. it was hard to do basic things. share files, access data from anywhere, collaborate and work with other people. i was in college at the time, and the idea was, what if you could have hard drives in the cloud where you put all your files, then access it from the internet and any device you wanted to be able to work from. >> tell me about the early days, fondest memories. >> mark cuban was an angel investor in box. that was done by a cold e-mail we sent to mark in 2005.

he sent us a $350,000 check to people he never met. that gave dylan and myself the idea, maybe we should pursue this full-time, which led to us proposing the idea to our parents that we would drop out of college. they got freaked out, but we had to do it and pursue this mission. we dropped out, then we convinced our other two friends to also drop out of college. we all huddled together in berkeley -- >> this is when you moved to the garage. >> we moved to this garage -- a renovated garage in berkeley that my uncle had built. i'm not sure it was legal at all. we would spend 17 hours a day just working on the software, the business model, marketing. just four of us living, working, eating, sleeping in the same places. pretty disgusting, actually. [laughter] probably more akin to a sweatshop. but this is how you build companies. >> you tweeted a picture of the garage saying, "box's first

office eight years ago, where we slept, worked, built." what was each of the cofounder'' roles? >> we each bring different skills. we had the software skills, the hardware and networking skill. the finance administration, legal, business operation skills, and i focused on the product side. >> when you say you fought in those early days, what did you fight about? >> the fighting, the bickering as founders -- the nice thing is it all fell back on that trusted relationship that let us work through it. we didn't have the same kind of early founding battles other companies ran into, because we had been friends for in some cases a decade before we even started the company. >> at facebook, you have lawsuits. twitter, tales of infighting and backstabbing.

what makes box different? >> when you play trumpet with your cofounder at the ripe age of 11, you have a rooted friendship that bickering and frustrations from building a company tend to not be able to break. >> has keeping the team together been a priority? >> we spend a lot of time together still. once a year, we do our own off-site, just the four of us. >> have any of you ever thought, i don't know if i want to keep doing this, maybe i want to move on? it has been 10 years. >> it has been 10 years. i have no idea if my cofounders have those moments, but none that i have been told about. >> what is it like, becoming a ceo at the age of 19, when your peers are in college partying, not starting businesses? >> it is generally just worse than what your peers are doing. [laughter] it's not very illustrious to be a ceo of a two-person company. it got me excluded from a lot of

parties at the time. people from a distance looked like they were having a lot more fun. it is generally more fun to go out than to be on your computer 14 hours a day during college. >> what is the myth of aaron levie, and what is the reality? >> i am early with myths. i don't know what will emerge. but the reality is that it is a simple idea. our job is to build software that previously enterprises didn't think was possible to create. >> how is aaron levie sitting in front of me today different from the 19-year-old ceo? >> i think as the 19-year-old ceo, i would be grabbing my hair a lot more. i had a lot more issues with add and stuff. >> you are on the road a lot. how do you structure your time? >> i spend about 50% of my time on the road. it turns out that enterprises are everywhere. you go out to a farm using drones to manage agriculture. you don't know how these

technologies will intersect with the real world, so you have to go out to actually understand the customers. the view is that it is silicon valley versus the rest of the world, when it's actually silicon valley being integrated into the rest of the world. ♪

>> you drink a lot of coffee. >> i do. >> you take a nap every day. what is this, spain? >> you forgot the three months of vacation. >> but really, you take a nap and you work more in the evening. tell me about that. >> it is really just a best practice. right around 7:00 p.m. or so you take a 25-minute power nap, then you wake up fully recharged, and that lasts another five hours or so. that is me time. that's where i get to go design what we are going to do next, what are we behind on, what do we need to think about next? that is generally when everybody gets inundated by e-mails from

me. >> and you have a diary -- >> a diary. >> a aaron levie only diary. >> the range of industries, what you have to learn is that it is -- learn from their technology is very vast. you have to keep track of it somewhere. >> this is something only you see. >> yes, i would not want you to see it. these are my personal things. >> how big is box today? >> we have about 1100 employees, we have 240,000 businesses that actively use the product. about 39,000 companies paying for the enterprise edition. 27 million users. >> you recently rolled out box for industries, for health care, retail, entertainment. how is that going? >> what we started to see happening, in every industry we were serving, there was some edge of our product or use cases that was far more advanced and innovative than we ever imagined that could be done without platform.

a month ago we had box for industry, which today covers health care, media, retail. but we will be announcing other industries over the next months that will take box into more regulated industries that we think are very ripe for change. it will serve every major industry. >> you see so much change and disruption in enterprise technology right now. larry ellison stepping down as ceo of oracle. hp splitting up, ibm struggling. when it comes to incumbents versus startups, how does it play out? >> every couple decades you have this changing of the guard, as it were. startups that are really optimized for disruption have the opportunity to take advantage of that and potentially build the next era of ibm and hp and microsoft. at the same time, you have incumbents that have a lot of cash.

they are led by incredibly smart and astute leaders who understand the change. the changes you are seeing are specifically because they are being disrupted. >> peter thiel said that hp is not a technology company anymore, it is a bet against innovation. >> it is certainly a provocative statement. in terms of relevance, you have leaders of these companies that are recognizing that their previous strategy would have led to irrelevance, and they have to change that. we have the view that everything is zero-sum. ibm doesn't have to lose for apple to win or for salesforce to win. >> what about a company like microsoft, a company you grew up with? >> i think there are specific product areas that could potentially lose or be harmed by this transition, but them as an entire company at the macro level doesn't necessarily have to lose. >> so, companies like microsoft, google, amazon are dropping the price of cloud storage.

how much of a threat is that to box? >> we love that. the same unit of storage is a 40th of the price it was 10 years ago on the supply side of our business. the cheaper storage gets, the more data we can store for a customer and the more we can deliver unique experiences around their content. >> you recently took on $150 million of funding. the company is now valued at $2.4 billion. why did you take that money? >> as you may have seen, we filed to go public at the end of march this year. basically, about a week after we filed to go public, there was a bit of a market correction in the tech stock space. so, you saw a bit of volatility, and a lot of high-growth technology companies. we decided it wasn't the best time to bring a new company to market. we had amazing support from some late stage investors that were willing to support the company

as a private company, so we took that money on to allow us to continue to invest in the growth and business model and building out box without necessarily going public. >> how much have you wondered did we make the, did we file to mistake, did we file to soon? >> what is obvious is we should not have filed. we certainly dealt with a lot of distraction because of that filing. i think that, whether that was -- a lot of the news reports and cycle that had to happen around the business, obviously we brought on because of the filing. that was a distraction to our core focus, which has been execution and building the business. but life is too short to have specific regret. we have remained in full execution mode. >> i'm curious what that moment

was like for you. you open up to the world. someone can see your finances. they called it an "house of horrors." >> we are competing against the planet innies on the the technology industry. to do that, you have to make a pretty significant investment. in our case, that is an investment in research and development, infrastructure, our sales team, our ability to go to market and reach these customers. >> the criticism was you are spending more on sales and marketing, acquiring customers then you are making. how are you changing that? how has that changed? >> i think the thing the skill gives you is because we are recurring revenue business model, and that was lost in the mix a little bit -- for every dollar we acquire of revenue, it is a dollar that is recurring annually. our job is to be customers happy and successful and compound that dollar overtime. we were at a point when new investments had outpaced the revenue scale. and now i think we are more in

the stage where the revenue is we're focused of growing out, of course, and that is compounding. we have done a lot of the international expansion. we have built out a lot of the enterprise salesforce, so you are starting to see that efficiency play out. >> how much of the thought about selling box versus going public? >> we want to sell our software, to a lot of companies, but the company itself, we have spent about 0% of our time thinking about selling. >> china is a critical market, that a lot of the u.s. technology businesses have trouble getting into. what is your strategy on china? >> absent learning chinese, mandarin, my challenge is how to explore working in that market in a big way. what you will see is us partnering over time with key players in the space. i would not expect us doing anything really big in china in

the near future. >> there's a company you may have heard of called dropbox. >> yes, i have. >> your name box is in dropbox. you overlap to a certain extent in certain business. how big of an inconvenience has dropbox been for you over the last however many years? >> inconvenience is a unique word. i think they are a very innovative company. drew is an incredible leader. we obviously are a fierce competitor from a business standpoint, the business part of the market. but i think the world is better with them. >> why do you think you can offer business customers something better than they can? >> when you go after enterprise, it is hard to balance a strategy where you are world class on the consumer side and also world-class for a life sciences company or a financial services institution. those are very different problems. at box, we don't have any

distractions. we are 100% focus on the enterprise. i am sort of between peter thiel and marc andreessen in my tweet volume. ♪

>> silicon valley is sometimes criticized for being too audacious, too arrogant in thinking we can change the world. is that fair? >> it used to be that there was a cycle of disruption within silicon valley, where software companies constantly disrupted themselves. we are going through an evolution where we are having to interact with so many new markets in so many ways. first, that starts out as we can solve this problem better than anyone else. sometimes that belief is right, and sometimes it's not.

when it is not, we look ludicrous for it. we look obnoxious for it. the outside world is excited about working with silicon valley in this wave of disruption. it is something we don't necessarily get a perspective for as often as i think we could or maybe we should. >> meaning because we live in our own bubble. >> yeah, we live in our own bubble, and the view is silicon valley versus the rest of the world, when it is really silicon valley being integrated into the rest of the world. for the first time we are not in this isolated universe. there's no tech industry. there is tech-enabled everything. it is an unbelievably interesting time to be the same kind of retailer that five years ago you thought was going away because of the internet. there is a tremendous number of companies that have emerged that are trying to help you develop new experiences to get your customers. 10 years ago you thought amazon would destroy your entire industry. now you are on the upswing because we want all new experiences of how we shop.

>> so you think there is no such thing as the tech industry? or in the future, the tech industry won't be so defined? >> it will be less defined. you will still have silicon valley, it will be seen as the software layer of every other industry. >> your tweets are widely followed. semi-funny. thanks for the good material. in response to concerns you would rein in your tweets in -- after you filed to go public, you tweeted out a picture of a missouri law firm. >> i don't know how the law firm felt about it. [laughter] >> hopefully you don't get sued over it. >> they didn't sue us. i'm sure we sent them some traffic. >> tweeting as much as you do -- why do you do it? >> one myth that i can dispel is -- i generally only tweet once or twice a day. >> you are way behind marc andreessen. >> i'm sort of between peter

thiel and marc andreessen in my tweet volume. it is my one outlet that the pr team doesn't control, for me to be able to just share my thoughts on the technology industry. >> i wonder, why aren't you more scared? >> it might partly be generational. i grew up in chat rooms. i will say something stupid one day that i wake up in the morning and pull a donald trump or something, then regret the comment the rest of my life. >> how much is strategy? >> it is less strategic than you might think. my brain is all over the place, so it is very representative of the random notions i have. >> i have had the benefit of seeing you do magic. >> i am less active now as a magician. >> that's a very hard thing to learn. >> some would say impossible. >> what have you learned from that? how has that affected your career? >> the magic industry is weird. have you ever been to a magic conference? >> no. that sounds like an interesting experience.

>> do you think the tech industry has a diversity problem? there is something called the international brotherhood of magicians. i don't know if i've learned beyond what not to do, but it was a fun experience when i was a teenager. >> will box become a public company? >> that's the path we are on. i would say it is pretty likely. >> you would not say yes? >> it is the path we are on. >> would you ever start something new? is this it? >> i think if this continues to go as it is, i hope to be doing this are quite some time. >> you want to be the larry ellison of cloud storage? >> it doesn't seem like he's had a horrible life. because of what we do, it transcends industry, it transcends platforms and devices and ways you can work with information, there's really no limit to what will be possible in our market broadly. we have a wide palette to work with for many years. >> aaron levie, ceo of box. thank you so much. great to have you.

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>> he has been called tech's boy genius, a nonconformist, perhaps the only ceo who has refused to keep a schedule. david karp started tumblr before he was 20. he sold it to to yahoo! for about $1 billion before he was 30. it is now one of the most creative and social blogging platforms, all from a guy who dropped out of high school, lives in a loft, and drives a vespa. joining me today on "studio 1.0," tumblr founder and ceo david karp. thank you for joining us. thank you for having this on the schedule. >> i do have a schedule now.