Dropbox has been done. Box.net is a good competitor. Going up against them as a me-too competitor is a waste of time and not very likely to succeed.

What has not been done however is a hardware box that you host at your office that provides file sharing which then backs up to the internet. So locally you have all your files available, but they are also avaialble online.

This box should also have the ability to backup to the internet using local encryption so that you can be sure your files are 100% safe as the encryption key never leaves your box.

It should also have the ability to sync some folders online that are not encrypted for file sharing purposes much like dropbox… which a similar sort of windows client.

This right here then is a killer app that should make you millions — make sure you send me a check when you make it!

You can sell the boxes for around $200 or subsidize them if you really want to drive sales. That would be actually a really good use of VC funding. To use that to build these boxes and then give them out for say $100. Say you get 10 million in VC funding and then you give them out. You can move 100,000 boxes, which is a really good customer base to start off with.

Best of luck. It’s a difficult market.