Previously, Dropbox raised a seed round led by Sequoia that was $1.2 million in convertible debt, with Amidzad Partners also participating. They also raised money through the Y Combinator program.

Aside from the not-so-recent funding, Dropbox has been killing it lately. Houston tells us their membership numbers were up 25% in October, spurred in part by their new iPhone app. And the company also managed to gain control over Dropbox.com (previously their service was hosted on the domain getdropbox.com). They’ve also recently hit 3 million users, only two months after they passed the 2 million user milestone.

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It’s hard to gauge just how important a good domain name is to a startup’s success — after all, we’ve seen plenty of companies with meaningless names do very well for themselves. But there’s a difference between a name that’s gibberish and one that’s very easy to confuse with something else, which is a test that Dropbox failed with its GetDropbox domain. As the service has grown, so too has the amount of traffic heading to Dropbox.com, which has just featured a placeholder page full of ads. According to Compete, Dropbox.com had nearly 60,000 unique visitors last month. It’s impossible to know how many of them eventually made it to the correct domain, but there’s no doubt Dropbox has been losing out on plenty of traffic and customers. This is a big win for the startup.

Dropbox declined to comment on this story, but Justia has very recent records of a trademark dispute between Evenflow (Dropbox’s parent company) and Domains by Proxy, Inc., which was apparently operating the old domain. And it’s highly unlikely that the redirect is an accident. Update: You can see a copy of Dropbox’s complaint below. Domains By Proxy handed control over the domain back to the individual who was squatting it after Dropbox began to take legal action. The defendant had apparently begun to serve not just ads, but ads for Dropbox competitors on the page.

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Here’s a sad truth: a lot of reporters really are quite lazy. Not in the sense that they don’t want to find and cover a cool new company (in which case they should consider a new career path), but in that they don’t like to spend time wading through marketing material trying to figure out what your company actually does. After all, we’ve got inboxes stuffed with pitches from companies vying for coverage. If it takes more than a minute or two to figure out what problem you’re trying to solve, we’re probably more likely to simply skip to the next message than to try to make sense of your feature set.

Consumers are even lazier. If you don’t have some kind of bite-sized hook that introduces them to your product, there’s a good chance they’ll stare quizzically at the screen, shrug their shoulders, and head back to Google to find something else that fixes their problem. Walls of descriptive text definitely are not the answer. Images can help, but they can also become overwhelming. Video, especially in an age when people are so used to consuming it online, is often a good solution.

But just making a video isn’t enough – you need to make sure that the video actually conveys what the hell you actually do. This is apparently much harder than it sounds, because I’ve seen plenty of video demos loaded with screenshots, walkthroughs, and pretty graphics but still leave me scratching my head. The truth is, you don’t need a single screenshot to make an effective video. You just need to show how people will actually use what you’ve built, not a sales pitch.

Take Dropbox for example. I use the service every day and love it, but every time I try to describe it in a sentence I’m left with something that makes me retch a bit — “intuitive and deeply integrated file synchronization service” just doesn’t come close to capturing just how damn cool Dropbox really is. Apparently the Dropbox team didn’t have much luck describing themselves in text either, so they’ve gone another route: visit their homepage, and you’ll see a polished, easy-to-follow video demo front and center that perfectly describes what the service actually does.

Dropbox has made one mistake though: they don’t offer a way to embed their great demo video anywhere else (someone else did upload it to YouTube though, so I’ve embedded it below). Some bloggers, including myself, are more than happy to embed a video walkthrough in posts, provided it isn’t overly self promotional.

There are plenty of other examples of companies using video demos to great effect. Head over to Apple’s iPhone site and you’ll notice that they offer video walkthroughs for basically everything the phone can do. Google now regularly uses video walkthroughs to introduce many of their new products and features, though they don’t always do a great job — this video demo created by a third party did a better job explaining Wave than anything Google has made.

Of course, a video demo isn’t absolutely essential to your site’s success. Just look at Mint, which was just acquired for $170 million by Intuit. There’s nary a video in sight, and — at the risking of sounding like a complete fool given its huge acquisition price — I find Mint’s 20+ pages outlining its feature set and why people should use the service to be positively daunting. Twitter’s page doesn’t include a video (though I think it badly needs one). And Facebook just says that it’s a service that “helps you connect and share with the people in your life”, which would set my bullshit meter off the charts if it appeared in any startup pitch.

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One of Dropbox’s core features is sharing your files and folders stored in the cloud with anyone else who has a Dropbox account, and the iPhone is no exception. Users can easily share their Dropbox files and folders from their iPhone to any other Dropbox user by putting in their email address, just like on the web. The app allows users to upload photos for 3G users, and videos if you have an iPhone 3GS.

What’s really cool about Dropbox’s iPhone app is that you can even stream music and movies from your Dropbox straight to your iPhone, without any noticeable delay. Dropbox’s app is also heavily integrated into Apple’s camera API with straight photo and video uploading available too.

Just a few days ago, Dropbox reached 2 million users. Dropbox was a finalist at the 2008 TechCrunch50 conference.

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Just earlier this month, Dropbox rolled out a brand new redesign of its web interface, and new search as well as many other features. Dropbox has been very secretive about numbers, especially financials, but these figures indicate that it is definitely gaining traction.

Dropbox submitted its iPhone application in the middle of August. It still has not been approved. According to CEO Drew Houston, Apple rejected the application two weeks after submitting to the App Store, but since then they have fixed all the bugs, and re-submitted the app.

Dropbox was one of the finalists for TechCrunch50 one year ago. The company is based in San Francisco and has raised $1.5 million from Sequoia Capital.

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Among the new features are the ability to select multiple files in the file browser and perform bulk operations on them. You can also select multiple files and have them placed into a new Zip file, which will make it easy to send multiple files at once. Other new improvements include a search feature, Gmail-style keyboard shortcuts, and a version of the site that’s been optimized for mobile phones. Of course, many people primarily use Dropbox through its desktop clients that integrate quite nicely with your operating system, but these are welcome additions for anyone who has to access their files when they’re away from their primary computer.

For those iPhone users looking to get their fix, Dropbox submitted an iPhone application to the App Store about four weeks ago which still has not been approved by Apple. This is just one of the many iPhone developers that has been waiting for more then the usual two week waiting period to get their app approved.

Dropbox launched almost exactly one year ago at TechCrunch50, and has grown quite a bit over the last year with over 1,000,000 users. Dropbox is based in San Francisco and has raised $1.5 million from Sequoia Capital.

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Dropbox, the Y Combinator and Sequoia-funded file synchronization startup that makes it easy to share files across multiple computers at once, just hit a major milestone: it now has over 1 million members. And as the graph below shows, much of that growth has come in the last few months, with over 900,000 signups since the product’s public debut at TechCrunch50 last September.

We don’t hear about Dropbox too often (it seems that they’re a bit too secretive for their own good at times), but their product rocks, and is gaining fans quickly. We’ve been using it around the TechCrunch office for over a year now to collaborate on group projects and keep key files handy regardless of which computer we’re using. And we’re not alone – I often hear about other startups that are using Dropbox for their own projects, including Facebook’s Dave Morin.

Dropbox is going to be introducing a few key features soon, too. One of them is Peer to Peer sharing, which will allow users on the same network to share their files directly through their routers, without having to first upload them to Dropbox’s servers. The service’s web interface also just got a UI refresh, though many people simply use the folders that the Dropbox application integrates directly into your desktop.

CEO Drew Houston wouldn’t talk about how many of Dropbox’s users are paid (the service offers a free version with a limited amount of storage), but he says that the site’s referral program has been driving signups, with the service seeing around 22-25% growth month over month since launch.

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Last night we released the finalist names for the Crunchies Awards. Vote here for who you think should win. We’ve set up a site that is pretty self-explanatory, with all of the names of each finalist for every category, along with links to their Websites and Crunchbase profiles where you can learn more about each one before voting. The Crunchies represents the best the Web had to offer in 2008, and you get to help choose who will win. Below is a voter’s guide for two of the major categories to get you started.

Best Overall
Amazon Web Services
Facebook
Android
hulu
Twitter

Best Overall is the big prize. Amazon Web Services makes it as a finalist this year because of the sheer number of startups that are built on top of its cloud computing infrastructure. Facebook won last year, but makes a return as a nominee due to popular demand. Facebook continued to gain massive mainstream adoption in 2008 (with 140 million members now) and launched some major initiatives to extend its social computing platform beyond its site, most notably Facebook Connect (which by itself is a finalist for Best Technology Innovation, going up against Google Friend Connect). But does Facebook deserve to win again?

This was also the year that Google launched its Android phone, bringing the unadulterated Web to mobile devices beyond the iPhone (which won Best Gadget last year for its 2G version). Hulu emerged as a rarity in the Web video world, a popular site with a serious revenue model. And Twitter broke out as the service everyone can’t stop talking (or Tweeting) about. As with any new communication technology, people keep finding novel ways to use Twitter’s public instant-messaging service.

Best New Startup of 2008
Dropbox
FriendFeed
GoodGuide
Tapulous
Topspin Media
Yammer

This category recognizes the best startup to launch publicly in 2008. Dropbox makes it dead-simple to transfer files between computers. It creates a Dropbox folder on your computer that you just drag files into, and then they become available to anyone else with access to that folder. FriendFeed sparked the whole lifestreaming movement this year, and kept adding improvements that makes it easier to filter the Web through the actions of everyone in your various social networks. GoodGuide has created an impressive product database (and iPhone app) that tells you at a glance how green or safe that baby cream or toy is that you just put in your shopping cart.

Tapulous created some of the most popular iPhone apps with Tap Tap Revenge, Tap Tap Dance, and Twinkle (a Twitter client, of course), despite some internal turmoil. Topspin Media, founded by former Yahoo Music chief Ian Rogers, is trying to help bring the music industry into the 21st Century by embracing the Internet as a marketing vehicle instead of a necessary evil. And Yammer is an enterprise version of Twitter which won the top prize at this year’s TechCrunch50.

Here are the finalists for some of the other categories. To see a complete list, go to the Crunchies site and vote for who you think should win. Voting ends January 5.

Best Technology Innovation
Facebook Connect
Google Friend Connect
Google Chrome
Windows Live Mesh
Swype
Yahoo BOSS

Best New Gadget
Android G1
Asus 1000 Netbook Computer
Flip MinoHD video camera
iPhone 3G
SlingCatcher

Best App
Get Satisfaction
Google Reader
Minted
meebo
MySpace Music
Yelp

Best Mobile App
Google Mobile (for iPhone)
Imeem Mobile (for Android)
Pandora Radio (for iPhone)
rolando (for iPhone)
ShopSavvy (for Android)
Ocarina (for iPhone)

Most Likely To Make the World a Better Place
Akoha
Better Place
Causes
CO2Stats
GoodGuide
Kiva

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It looks like Sequoia was on them fast though. Last September, we’ve learned, the company raised a small $1.2 million round of financing from the fund, making it Sequoia’s second known investment in a YCombinator company (the other is Loopt).

Expect more news on Dropbox in the next week or two.

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Dropbox was one of the most impressive startups I saw at Y Combinator’s demo day this past August, not because they’ve built anything terribly prescient or awe-inspiring, but because they’ve come up with an online storage product that I might actually use regularly.

The idea behind Dropbox, which officially enters into private beta today (with 200 invitations available for TechCrunch readers, each of which provides a free 5GB of storage), is that little to no effort should be put into keeping your desktop files synced with “the cloud”. So the three founders have built a Python-based desktop client (available for both PCs and Macs) that acts like a regular folder on your machine. You can manage files within this folder just like elsewhere on your machine (add, edit, copy, and delete them) and changes will be automatically synced to Dropbox’s Amazon S3-backed storage, and very quickly at that. See a screencast here.

At the very least, you can use Dropbox to automatically backup a subset of your files, and to access them when traveling. You can also use the service to easily share files with friends and coworkers. Just right click on a folder and select “Share”. You’ll be taken to a webpage where you can enter the email addresses of who you want to share the folder with. When your friends add files to that shared folder, they will automatically get downloaded to your machine in addition to getting backed up online. If you have Growl installed on the Mac, it’s quite impressive to see your friends’ files magically show up.

This should sound a lot like Microsoft FolderShare, which had it own set of minor announcements yesterday. That’s because FolderShare has been providing a desktop client that syncs local folders to online storage across computers for years now. But it’s a bit like comparing Vista to MacOS; both get the job done but only the latter is actually pleasurable to use and appears designed for maximum customer satisfaction. (Update: As a commenter points out, FolderShare doesn’t actually back up your files online, just facilitates syncing between computers, so this is a big difference too).

Dropbox tops FolderShare in a number of ways beyond simple ease of use matters. You can access your files through the web browser in addition to the desktop client. All files are version controlled so you can revert to an earlier version of a document, or restore it completely when lost. There are also two special folders within the local Dropbox folder: one for publicly sharing files (via distinct URL) and one for sharing photos (which also get distinct URLs for particular galleries, which have been formatted online for easy viewing).

Dropbox is obviously just breaking into a market with other well-established and competent players like Box.net and Mozy, among several others. But I can’t help but feel as though Dropbox has finally come up with a solution that the casual consumer will enjoy using on a daily basis.

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Paul Graham started off the event briskly after an initial mixer, encouraging investors to close deals fast on the 11 week old companies.

Here’s a look at the presenters (note, some of the 19 companies declined mention in this roundup):

Anywhere.FM

We announced Anywhere.FM’s launch earlier last week. They compete in the online music locker space. However, I find a lot of these sites are more a niche segment of the storage market than a full application.

Anywhere.fm is a more consumer friendly music storage solution and has set dead aim at being an online version of iTunes. Anywhere.FM’s site lets you upload your music collection onto their site, create playlists, and play them back anywhere from the web. You can even listen to your friend’s music on a “Buddy radio station”. You can easily start your library with an iTunes uploader.

Over the past two weeks, they have received over 125,000 visits and had over a million songs uploaded to the site.

Today they expanded on their monetization plans, which include advertising, affiliate sales, and premium accounts. They plan on inserting audio ads into your music stream and are in talks with TargetSpot to supply local audio ads. The player’s Buddy radio feature will serve as a discovery engine, which they can sell music through and generate affiliate fees. Finally, a paid premium account will provide higher quality bit rates and other TBA features.

ClickPass

ClickPass is making OpenID one-click consumer friendly. They declined to state greater details for now.

DropBox

DropBox is another entrant into the online storage market. They are creating a transparent file management system (Mac/Win) that aims to: sync your desktop files on the web, back up files, provide access anywhere, and make files easy to share.

Although they are still in private beta, they showed an example of their product for the Mac. For the demo they showed how files stored in their desktop Dropbox folder were accessible and synced online. Your Dropbox files are backed up online, with a version history to provide easy rollback, and recovery in case you delete them from your desktop system. The files can also be shared via a permalink.

The demo looked slick although they were not able to disclose any details about the scalability of their backend in the short 7 minute presentation. See our previous coverage of the online storage gang.

Versionate

Versionate is taking on Microsoft Sharepoint, online offices, and the wiki market with their new collaborative document editing application. We covered their launch earlier.

Once you upload your documents to Versionate, you can search your content, control access rights, and edit them in the browser. Currently only Word documents are editable online. Every version of your changes is saved in wiki style. They support viewing for Word, Excel, PDF, OpenOffice, Powerpoint.

Versionate will also be offering a self-hosted version for customers concerned about data security and are pursuing desktop/web integration.

Adpinion

Adpinion is looking to fix banner advertising. To do this, they are helping ad networks target advertising by allowing visitors vote on the advertising preferences. Through the voting, Adpinion can determine what groups of ads go with what groups of users and sites. Since launch, they have been approached by over 180 businesses considering integrating Adpinion into their networks, including CBS.

Reble Music Sharing

File sharing is very popular (13 million users connected to eDonkey at any time). However, it’s also very illegal. Reble music is looking to make file sharing legal by avoiding a lot of the legal issues that got a lot of other startups sued into oblivion (unless you’re in Russia). To ensure this, they’ve been talking with the music industry from the very beginning.

The biggest legal complication Reble will avoid on their P2P network is downloading. Instead, users will use their desktop application to stream music to their computers from their friends. Streaming from friends computers also avoids the internet radio limitations imposed on other legal streaming solutions. Yet it still leaves recording artists open to piracy because stream capturing software is available for people who know what they’re doing.

Their end goal is to use the service as a music discovery engine and drive affiliate sales.

Disqus

One of the most championed features of blogs is the conversation. However, commenting systems on a lot of blogs are still somewhat lacking. Disqus is another startup looking to fix this by enhancing the comments. Disqus supports full moderation, spam and troll filtering, voting, threading, and more importantly a forum. For each post made on your blog, Disqus will generate a forum on their server, where users can continue the conversation in depth. They plan on monetizing through a business class version of the product.

As more blogs add the feature, Disqus will also be able to connect the conversation across blogs. Their plugin is currently live on Fred Wilson’s blog. We expect to see more when they officially launch.

Fauxto

Fauxto is an online version of Photoshop made in flash. The functionality is pretty amazing and includes layering, all sorts of tools, and effects. For the demo they live edited a photo of Steve Ballmer from the web by adding a Google logo to his forehead and changing his eyes to a nice baby blue. You can save the edited photos to your desktop or the web.

Over the past three months they’ve been live the site has grown to 56,000 registered users without any promotion. Their initial plans for monetization include licensing their technology.

Fuzzwich

Fuzzwich is one of my latest internet addictions. It’s a a dead simple way creating and publishing animated shorts out of a pre-generated cast of characters and backgrounds. They add more and more each day. Since launch users have viewed over 50,000 animations and added a new cast of animated characters.

Today they’ve previewed a new advertising engine through customizing their characters through branded goods. For instance, you can dress your character up in Gap, or pimp your ride with the latest web bling. Because they control all the content that goes into the videos, it seems like a more effective way of incorporating advertising into user generated content than with social video. New creatives can easily be added and hyperlinked to connect to purchase points. Lately indie music labels have contacted also them about possible music promotions.

Cloudant

The Slapvid guys have changed their startup and come back as a hardware startup, Cloudant. Their router promises to take full advantage of your bandwidth by simultaneously downloading multiple parts of a file. They say this is possible for a large number of the files you download online because of the range request abilities built into the HTTP spec. This means that your router can open multiple connections to a site and download multiple chunks of a file in parallel.

The router will also have other advanced features, such as network security out of the box, creating a peer to peer content distribution network amongst the routers, and embedded applications pre-installed on the box. For the demo, they showed their router download a large high-quality image file in about 16 minutes, compared to the Y Combinators old router taking an hour.

They plan on releasing a beta in May of 2008 and are seeking a 500K investment to get the production going.

Mark Hendrickson took some photos of the event with the help of Babak Nivi’s (Venture Hacks) iPhone. Click the image below for more.

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