Silicon Valley CEO Aaron Levie dropped out of college ten years ago to start his company, Box. Providing cloud computing services, Levie’s company is currently worth $2.1 billion and services over 40,000 paying customers which includes about half of the Fortune 500. However, it is not meeting growth projections and is counting on creating an ecosystem just as Apple and Microsoft have with their products. Levie argues it can be the center of a new industry “by helping other companies and third-party consultants create applications that can quickly draw off Box’s cloud-based collaboration technology.”
Despite these ambitions, Box has lost $167 million on revenue of $216 million which is still an improvement from the year before. This year, revenue is expected to grow by another 30 percent, “a marked slowdown that Mr. Levie hopes the new developer strategy may also turn around.” These losses scare not only Box, but also the generations of young tech ventures that never experienced the massive downturn that took place between 2000-2001.
Seasoned investors worry that newcomers may not take the risks as seriously. Ultimately, the losses faced by Box and newer tech companies as they rapidly grow are starting to catch up with them, and may be the beginning of a new downward trend in Silicon Valley.