Nov. 5--Driving down Interstate 101 from San Francisco a few months back, I noticed a billboard that said: "Box.net vs. Sharepoint." The former, a Palo Alto startup, was inviting users of a popular Microsoft collaboration tool to try an alternative.

Sometime later, the billboard had morphed into a smart-alecky valentine. Now Box.net was proclaiming its affection for Sharepoint, with the jaunty note: Thanks for all the customers!

In an era known for the flash and buzz of YouTube, Facebook and Twitter, Box.net -- or just Box, to be less formal -- has quietly emerged as a case study of Web 2.0 entrepreneurship. Tweaking Microsoft is one illustration of its remarkable progress since I first encountered Box in summer 2007.

Then, founders Aaron Levie and Dylan Smith were, respectively, 22 and 21 years old. They were high school buddies from Mercer Island, Wash., who'd parted ways for college -- Levie to USC, Smith to Duke University -- but reunited over an idea Levie hatched during a research project as a sophomore business major.

Some online data storage companies, Levie realized, had recently gone out of business. But suddenly storage costs were plummeting at a time when consumers were creating more digital data than ever and growing comfortable with online payments. Smith was so enthusiastic that he put $11,000 worth of Internet poker winnings into the

project.

After landing $80,000 in angel funding, they recruited two other high school friends, suspended their studies and relocated their startup to a Berkeley apartment owned by Levie's uncle. By the time I met them in summer 2007, they had landed a relatively modest $1.5 million in venture funding from Draper Fisher Jurvetson and had grown to a staff of a dozen, all working in a live-work space in Palo Alto. Their "freemium" business model, which offered the first gigabyte of storage for free, had been a hit.

My understanding then was that the kitchen and showers enabled employees to stay overnight if work kept them late. Only later did I learn that Levie, Box's CEO, and his cohorts were still living there full time, the better to work marathon hours.

Today -- just over two years later, including a profound recession -- Box has grown to 60 employees and moved into larger quarters. Many businesses, Levie said, saw Box as a cost-effective means of sharing data during the downturn.

The service now has more than 3 million users, including 50,000 businesses, Levie said. In a strong endorsement of its prospects, DFJ and U.S.