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That 96% of nonpaying customers is throwing their stuff into Dropbox at such a pace that thousands of people each day blow through the free 2 gigabytes of storage, and upgrade to 50 gigs for $10 a month or 100 gigs for $20. Houston claims it’s already profitable but won’t reveal margins. With only 70 staffers, mostly engineers, Dropbox grosses nearly three times more per employee than even the darling of business models, Google. The 50-million-user figure is up threefold from a year ago, and it has solved the “freemium” riddle, with revenue on track to hit $240 million in 2011 despite the fact that 96% of those users pay nothing. Then it featured a list of one-time meteors that fell to Earth: MySpace, Netscape, Palm, Yahoo.ĭropbox’s ascent has been just as stunning. Houston’s reaction was less cocky: “Oh, s-t.” The next day he shot a missive to his staff: “We have one of the fastest-growing companies in the world,” it began. Instead, Jobs went dark on the subject, resurfacing only this June, at his final keynote speech, where he unveiled iCloud, and specifically knocked Dropbox as a half-attempt to solve the Internet’s messiest dilemma: How do you get all your files, from all your devices, into one place?

“Why let the enemy get a taste?” he now shrugs cockily. When Jobs later followed up with a suggestion to meet at Dropbox’s San Francisco office, Houston proposed that they instead meet in Silicon Valley.

Courteously, Jobs spent the next half hour waxing on over tea about his return to Apple, and why not to trust investors, as the duo-or more accurately, Houston, who plays Penn to Ferdowsi’s mute Teller-peppered him with questions.

“He said we were a feature, not a product,” says Houston. Jobs smiled warmly as he told them he was going after their market.