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Qualcomm's Paul Jacobs joins Dropbox board

The file-sharing company has faced declining valuation amid a fast-changing market and needs help navigating the tougher times.

In a high-profile appointment, Dropbox said it has added Qualcomm executive chairman Paul Jacobs to its board. The addition is an important one for the San Francisco-based file storage and sharing company, which has been under pressure as competition from huge rivals such as Google and Amazon has increased, even as its valuation has decreased.

Dropbox CEO Drew Houston touched on the need to have some additional experience in battling big companies. “As the executive chairman and former CEO of Qualcomm, he helped lead the mobile revolution in the early 2000s, creating many of the foundational technologies that made the smartphone possible and set the stage for a connected world,” wrote Houston in a blog post. “We admire Paul’s accomplishments and tenacity. During his tenure as CEO, Paul successfully challenged big, established companies time and again.”

Jacobs is most definitely a big prize as a director. As former CEO of chipmaker Qualcomm, he has deep experience in the mobile sector and in up-and-down cycles, too. The pair began talking about a role for Jacob after spending time together at — wait for it — the Davos conference in Europe. (Who says fancy boondoggles aren’t useful?)

“I was very impressed with the very, very good engineers and a culture that was similar to Qualcomm,” said Jacobs, who stepped down as CEO in 2014 after nearly a decade as leader there. He took over the company from his legendary father, Irwin Jacobs, and essentially tripled profit, revenue and employees over that time, as it also shifted its business in a bruising sector.

“I know a lot about growing a founder-led startup and how you grow that in a tough market,” said Jacobs in an interview with Re/code. “I felt I could contribute.”

Such experience will be needed. It’s a tough year for Dropbox, which has had larger aspirations of growing beyond its file-sharing roots. But despite 500 million registered users, it has been buffeted by intense competition that has made consumer file-sharing more of a commodity offering. It dumped two of its ambitious consumer offerings — Mailbox and its Carousel photo services — late last year as part of that retrenchment.

Now Dropbox has shifted its focus to enterprise, aiming for the more lucrative market where companies like Box and many others also compete. Houston said Dropbox now has about 150,000 business customers, up from 100,000 earlier this year. “The economics of that business is working nicely,” he said. “Our bread and butter are small- and medium-sized business, and there is a lot of headroom there.”

As to investors’ worries about its prospects, he noted that it was a normal part of the growth cycle. “We were the first unicorn to get a big valuation, so we have gotten the first hits with concerns about the market,” Houston said. “We can’t focus on the valuation.”

Others do, but Jacobs agreed that it’s counterproductive. “The noise is high, but the company has done strong work and has great products,” he said. “That is what is going to matter.”

Houston said the company was not focused on an IPO in the near term and is not in need of more funding. “We are trying to build a company of scale and that will be an eventual bridge we will cross,” he said. “Paul moved from being a successful engineer to a global CEO and has been through a lot of what we are going through, and that is going to help.”

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