Houston credits the inception of the idea for Dropbox to the time when he left his thumb drive behind while on a bus. Frustrated, he set about finding a solution for it, by writing down code with no idea of what he was going to build.
He had a tough time explaining to investors the concept of Dropbox without an MVP. Which, given the tech-heavy nature of Dropbox, would have required years to develop. Houston then had the brilliant idea of creating a video - the video was a simple 3-min demonstration of the technology as it was meant to work. He targeted it at a community of tech-savvy early adopters. When he applied for Y Combinator, he got rejected by Paul Graham due to the lack of a Co-Founder. "Paul wanted Co-Founders...because it's kind of a an emotional roller-coaster, and so having a partner makes it so you can offset each other's...ups and downs, which I've certainly found to be true", he says.
Luckily, Houston found his co-founder at MIT - Arash Ferdowski, who reached out to him after watching the MVP video. After a 2-hour conversation, Ferdowski agreed to drop out of MIT to work with him. Together, they successfully entered Y Combinator and met their first investor - Sequoia Capital, who agreed to invest $1.2 million. Building the product took some time, since, in Houston's words, "it's a product you really have to get right". Dropbox publicly launched in 2008, and got to a hundred thousand users very fast owing to some great marketing tactics like viral demonstration videos and referral programs.