Dropbox's CEO says a challenging time at the startup taught him a valuable lesson about 'getting your head right'

• Drew Houston, the CEO of Dropbox, said he changed his approach to mental health after navigating a challenging time.
• He said a combination of self-knowledge and a support system helped him regain his focus.
• The CEO advises founders to avoid burnout and develop coping mechanisms so that challenges don't lead to suffering.

A decade ago, Dropbox CEO Drew Houston learned a valuable lesson about the importance of mental health.

It was 2015, a challenging time for the startup. Morale was low, he said, so low that even the CEO didn't feel like wearing the company's merch.

It had been years since, according to Houston, Steve Jobs vowed to kill Dropbox with iCloud after the Dropbox CEO declined his acquisition offer, and the startup faced competition from all sides. Major companies like Google and Microsoft, along with a collection of smaller startups, scrambled for a piece of the file-sharing and storage pie.

"You're just in this situation — you've started this company, it's been super successful, and then suddenly, you know, your employees don't want to wear your T-shirt anymore," Houston said on a recent episode of "Lenny's Podcast." "And, frankly, you don't even want to wear your T-shirt anymore."

Houston said Dropbox was also facing internal challenges at the time, including struggling to hire the personnel and build the infrastructure necessary to support its growth. The company also faced backlash from some within the company.

"I'd start to hear kind of a louder set of critics inside and outside the company," Houston said. "And I'd been thinking for a long time, 'Man, we're really fighting wars on all these very disparate fronts.'"

Going from a company that seemingly "could do no wrong" to one that "could do no right" took a mental toll, Houston said. His identity had become "fused" with his company, the CEO said — and his emotions tied up in its performance.

"It's pretty tough when everybody's looking to you as the founder and CEO, looking for quick fixes and answers, and also just wondering, 'How the hell did you get us in this situation?'" Houston said.

Burnout among startup founders is common, though it's not always openly discussed. OpenAI's Sam Altman once said he worked so hard on building his first startup that he developed scurvy.

To break out of that cycle of negative feedback, Houston said he turned inwards. Picking up a meditation practice, along with leaning on his founder friends and mentors, helped him stop seeing challenges as always negative.

"Most of the entrepreneurs that are my heroes had various periods of wandering in the desert," Houston said. "Those things, instead of just being problems, were probably the crucible that forged who they became."

The CEO said mindfulness also allowed him to escape the myopic day-to-day view of putting out fires as they came up, and address larger questions about Dropbox's focus.

"I was too busy firing to aim," Houston said. "And then I thought I would do my aiming on vacations and things like that, but no. I really need to get off the treadmill now and then, and make space to address some of these bigger questions."

A big part of resetting Dropbox's approach — which Houston said is now focused on streamlining productivity — was taking full accountability for the struggles the company was facing.

"I could look at this and say, 'Oh, Microsoft is mean,' or 'Google was mean,' or 'Apple was mean,' but I drove the ship towards these rocks." Houston said. "That's the downside of being a founder, a CEO. You can't blame the last guy."

Armed with increased self-awareness, Houston said he worked to snap himself out of a funk by taking an unflinching look at his own strengths and weaknesses. It changed the way he communicated with his employees and helped him think more clearly about what he wanted to produce, the CEO said.

"First it's getting out of this delusional state where you think you're great, just sort of splashing cold water on everyone," he said. If the last thing customers have seen from the company in recent years is a price increase, then 'What the hell are we doing?" Houston said.

Three years later, Dropbox went public. Today, the company has a market cap of around $9.5 billion.

Houston also had some words of advice for founders about protecting against burnout.

"I think burnout is the biggest thing that will sort of kill you," he said. "And so that's why I think these coping methods and getting your own head right is important. But if you do that, it's also this amazing experience."

"Challenge is not optional," he added. "You're going to be challenged, but the suffering is optional."