Build a Pricing Strategy for Dropbox's Cloud Storage and File Sharing Plans

Dropbox lets people and businesses store files in the cloud, keep them in sync across devices and share them with others. How would you set Dropbox's pricing? Explain the pricing model, how you would arrive at the price points and how you would know the pricing works. ```hint Find where value, cost and competition meet Work out what different kinds of customers would pay for and why, what it costs to serve them, and what comparable storage services charge. The plan structure should come from where those three meet for each kind of customer. ``` ### Clarifying Questions - Should the pricing cover only the core storage, sync and sharing product, or also the other tools Dropbox sells alongside it? - Am I designing pricing from scratch, or rethinking the plans that exist today? - Should there be one global price list, or prices that vary by country? - Am I free to choose the pricing model, such as a free tier, fixed plans, per-user prices for teams or usage-based billing, and is the goal revenue, paying users or market share? ### What a Strong Answer Covers - The pricing goal and customer segments, from individuals and families to small teams and large companies, with their different needs and willingness to pay. - The pricing model and what it charges for (storage, users or features), including the role and size of any free tier. - How cost to serve, competitor prices and willingness-to-pay research set the price points, with the arithmetic shown. - Plan packaging, billing frequency and regional pricing. - How prices would be tested and monitored, with metrics and risks such as churn and plans cannibalizing each other. ### Follow-up Questions - How large should the free tier be, and what data would tell you it is too generous? - A large rival bundles cloud storage with its other products at a low price. How do you defend Dropbox's prices? - For business customers, would you charge per user or per amount of storage, and why?