This is the sixth interview in this series and I’m excited to announce that Sam Lessin, Co-Founder of Drop.io is participating. I’ve known Sam for a bit as we’re both participating in the New York entrepreneurial scene and apparently, our circles are fairly close together. His company is picking up some buzz here and there in the marketplace and I’m looking forward to what the future holds for his company, Drop.io.

Please welcome Sam Lessin…

1. State your name, title , years at current company/position:
Sam Lessin, Co-Founder, Drop.io. (Since August 2007, when my partner Darshan Somashekar and I started drop.io)

2. What are you currently up to?
Drop.io is a solution for simple private exchange (and Input/Output if you will). Take any type of media (pictures, video, audio, documents) through almost any digital input (web, email, mms, phone, fax) put it in a ‘discrete‘ location online, share it privately with exactly who you want, and no one else. No network, no search, kind of like an improved multi-channel FTP.
The ‘web 2.0’ community has been churning out great stuff for a long time for public sharing, where personal media and information is widely diffused across networks through social-, search-, tagging- etc. the thrust of the whole movement has been to let technology push your content out across different networks…

Drop.io takes a very different tack. We allow users to create simple private exchange points called ‘drops.’ Drops can be created in as little as two clicks, and users can optionally set things like passwords and self-destruction parameters. The service has no email signup and no “accounts.” Each drop is private, and only as accessible as you choose to deliberately make it. There is no network and no search function, drops are just floating points for private exchange. You can create multiple drops, add any type of media, and share/subscribe/zip download the originals as you want.

The solution has an incredibly broad base of use, largely because there is incredibly broad demand for simple private sharing. There are thousands of people who use drop.io every day to privately share baby photos with family members, or party pictures with friends. At the same time, we have a ton of freelancers and SMBs using drop.io to collaborate on projects, and schools using drop.io as a simple platform for privately communicating with students.

3. Why are you doing this? You could be doing so many other things in the world, what about this particular idea strikes you?
There are a few reasons – some which are business and some which are personal. At the highest level, it is wonderfully gratifying and fun to build something from the ground up you care about.

Business wise, there is an enormous and extremely broad demand for private sharing online and it is not being met by anyone in the market. Social networks and search engines are great, but the concept of simple private sharing is being left out in the cold. We want to fix that, because it is fun and important to build something that people want.

Personally, I really believe in this service on both functional and theoretical levels. Functionally, when Darshan and I set out to build drop.io we both maintained FTP sites just to move stuff around. We were constantly personally inconvenienced by the lack of a viable private sharing option for both work and personal uses. So, first and foremost, we built a service that we really wanted and needed ourselves.
On a theoretical level, I believe that it is important for people to have an option for simple privacy online. Lots of people like to talk about whether ‘privacy is dead’, that is just plain wrong. What has gone on is that for lots of reasons the internet has made it far easier to be public than to be private. People online have traded privacy for ease and functionality. This is the inverse of the historical norm, where privacy was easier and cheaper the publicity. The trade away from privacy fundamentally doesn’t have to be made online anymore. We are highly enticed by the opportunity to help return the internet to the historical norm by making digital privacy easy.

4. All startups should be addressing a problem in the market. What is that exact problem and how are you solving it?
See above… the ‘problem’ is the #1 thing we care about.
5. Have you thought about your business model yet? I’m assuming so, so tell us a bit about it.
We have thought about the business model extensively. In my opinion, if you don’t have a tight business case you can’t really do anything of long-term significance because your service is unsustainable. So, we didn’t do anything until we were really confident in our model as much as our service.
We are a ‘freemium’ play, in that we give away a basic level of service and then make money when users want to upgrade for more storage capacity. Over time we are going to be rolling in other upgrade options around our various services (phone, fax, etc.) all of which have been proven already by different players in related markets.

6a. If you’re looking at an ad-supported model, how are you going about it? Do you have in-house ad sales? Using a rep firm? What are the challenges that you’re facing with getting ad dollars?
We don’t believe in the ad market for a service like ours anytime soon

6b. If you’re selling a product/service/subscription, how is that coming along? What are the challenges? Are you using the freemium model?
It is coming quite nicely. We are very happy with the rates at which users are upgrading. For us it was very important to quickly staring to sell some premium services off the bat, less for the immediate revenue, and more so we could start the process of test and learn around the fuller offering we are going to be opening up over the next several months.
The challenge is to be giving people what they want and allow them to buy it in the way they want to buy it. I think often people don’t do enough testing around how they are selling things/how people want to buy things.

7. As an entrepreneur or investor, what are your thoughts on competition? How do you view competition?
Competition is good. Competition is clarifying. It is great to push the envelope in a new direction, which we very much believe we are doing, but if people aren’t trying to compete with you or even straight up ‘rip off’ your service within a matter of several months you should start to get worried.
One of the very early questions you have to ask is why hasn’t someone already done this? We have some very compelling answers.

8. If your competitor called you up to have coffee and discuss shop, what would you do? Would you go? What would you divulge?
We play a relatively open hand of cards. I love speaking with ‘competitors’ or people generally in the space, it is a great way to find out how they are thinking about problems and helps you figure out where the market is going. I wouldn’t divulge anything technical that they couldn’t easily guess on their own, but beyond that we are quite open about what we are doing.
In most cases there are technical, legacy, or even HR reasons your competitors are not doing exactly what you are (that is, if what you are doing is good) – so, I generally believe you can be quite open about what you are up to and not risk all that much.

9. Is the current state of the economic market playing to your favor? If so, why? If not, why? What is your forecast of the market throughout 2008 and do you see affects? Macro and Micro economic theory would be interesting to hear about.
We are not too concerned with the US economy at large for a whole bunch of reasons. But, to single out one central idea, despite the fact that we have only been online since November, we are already highly internationally diversified in terms of our user base and our development is domestic… so, we love a weak dollar.

10. How much of your time is spent working? How much is spent with family? Have you found the entrepreneurial quality of life yet?
My girlfriend works way more than I do. On Valentine’s Day this year neither of us wanted to leave our blackberries at home, so she came up with a great solution – we swapped, I took hers and she took mine. That was a hugely trusting step on both our parts and took the relationship to a whole other level (kidding, sort of).
The cool part about drop.io is that I really love it and love working on it. I love working with the team, I love thinking about the problems. So, the line between work and play is highly blurred. In my mind, that makes the quality of life superb. Maybe a few less ski days and a bit more stress, but net-net I feel way ahead of where I was pre-venture.

Especially in NYC you are going to work a ton of hours no matter what you do – you should be working on something you care about and have equity participation.

If you have any questions or comments for Sam Lessin based on this interview, please leave them below and we’ll answer.