Evernote, the digital locker software, is an unlikely success story in Silicon Valley. Last week at the Evernote Trunk Conference, its annual developer lovefest in San Francisco, the company announced that it has around 40 million users. The company had about 25 million users when it announced a $70 million funding round in May 2012. That is some nifty growth.
It doesn’t have the sizzle of companies like Twitter and Instagram. It lacks the presence of Box.net. It makes up all that with a methodical approach to business that has made it a quiet success story. It has steadily grown its sales and it has boosted is user base. It has over 200 employees who are based out of its offices on Highway 101 in the heart of Silicon Valley. Evernote has its legions of fans that continue to grow despite increased competition from others. And a lot has to do with the company’s CEO – Phil Libin.
Libin, at his conference this past Friday said that he wants to have a billion users. That momentary lapse of reason from Libin aside, I remain a fan of Evernote and Libin. The software (and the service) sits on my multitude of devices and browsers — a key reason for its success — and it benefits from what I call outsourcing-not-so-important data from your cortex. If I use Instapaper as my web DVR, then Evernote is my digital research repository.
The Freemium Story
It is the poster child of the post-mobile Freemium company: like MLB and Netflix, it is available on pretty much every platform, making using Evernote frictionless. What Libin and his crew have done right: they have understood that theirs is a service and the more people use it, the more they will pay for it. And in order for getting them to use Evernote more often, they had to create end points such as apps and browser extensions in order to keep growing.
Of course, in this quest for boosting usage, the company has worked hard on attracting developers and rolling out new applications on top of Evernote. I am not sure if I care much for these new add-ons: for me their basic functionality of clip-and-store is still the key. Even the applications on iOS have started to feel bloated. But that is just a minor quibble in what I find is a useful service. (I mean how else would I keep track of dozens of iPad covers I find on the web for a future story. ;-) )
I spent time with Libin when he took over as the CEO of the company – long before the company had raised millions of dollars and had found fawning fans on Sandhill Road. In his forties, Libin is a programmer-turned manager and has a long history in the software business. He came across as a thoughtful fellow with a clear and concise plan. At the Startupnomics conference over the weekend, he shared with the attendees that Evernote had a six year plan and they are focusing on one thing every year.
The Six Year Plan
For instance, the company focused on growth in 2009. In 2010 it was variable cost management. A year later, it was focus on getting people to come back regularly. For 2012 the focus is on getting people to engage more with the service. Next year, the Evernote focus is on converting people to paying customers and then ratcheting up the profit machine.
So far, Evernote is humming along according to plan. The latest engagement boosting technique: a partnership with paper notebook maker Moleskine and launching a Moleskine notebook. Scribble your notes in the note book and use the phone camera to snap pages and load them to Evernote. This is actually more fun than it sounds.
More than the products, Libin has developed a great culture at his company. When I was reading his interview with the New York Times, I was struck by the similarities in our two companies, including our approach to technology. There is one little thing he said that to me is the sign of a great CEO
The most important baseline skill for any position is communication. We want you to be able to explain what you mean; we want you to be articulate. That cuts out a lot of people, because a lot of people are probably pretty good technically, but if you don’t have excellent communication skills it’s going to be very frustrating for you and for other people. Other than that, then there’s just a core set of skills for the position.
This little insight tells everything about the company – open, clear and concise communication means that you are always managing expectations, another one of Libin’s management philosophies. From those close to Libin say that those two qualities have earned him a lot of room from his investors who know that he is going to come through.
At end of 2012, the company is going to launch Evernote Business with focus on companies big and small. It would obviously allow the company to charge more money and offer more features including the all important: control to the administrators. The company desperately needs to grow its revenue base if it wants to go public. Evernote is rumored to have over a million premium customers. This corporate-market focused products can quickly add to the sales — Evernote for Business is going to be launched in December 2012 and will cost $10 per user per month. All that, is part of Libin’s plan.