Evernote was the brainchild of Stepan Pachikov, but there isn’t much information available about his role in the company. In his LinkedIn profile, he lists he has been with the company since 2002 to the present. He also lists that he was CEO until 2007. However, on the company’s About page on its website, it specifies the company started in 2007.
As another interesting point, there is an article in the September 20, 2004 edition of the St. Louis Post-Dispatch that announces Evernote 1.0 will be available at the Sixth Annual DemoMobile show.
The company has over 200 Million subscribers to date. However, their paid subscriber base is much smaller than that, and the company is taking steps to shore up that gap. Even if you can get ¼ of those to subscribe, revenues would come in at $1.75 Billion per year. That is without raising costs substantially.
How the Company Started
When Libin met up with Pachikov about the concept, Libin assembled a team he worked with before and knew well. The team created the software with usage in mind. In other words, the team were avid users of the software. They didn’t rely on focus groups or surveys. They simply built and refined software that the team felt was useful.
Over the years, the company was able to obtain venture capital funding of around $270 Million. Phil Libin, the former CEO, has stated that the company generates revenue and has no need for additional funding efforts. It remains to be seen if the new CEO, Chris O’Neill feels the same way.
The biggest problem the company ran into can be summed up in one word: hackers. Evernote has been a victim of attacks including Denial of Service and loss of data.
People who try the product either get it and love it, or they don’t. It does take some getting used to the interface, and this is a challenge to management who want to convert naysayers to customers.
In the past couple of years, the company has been criticized for not capitalizing on its user base. It’s unclear if this was the leading cause to replace CEO, Phil Libin, with former Google exec Chris O’Neill. But, there are serious challenges ahead for the company, especially if they want to have any chance of going public.
Insiders, no longer with the company, have stated the company concentrated too much on the development of other products rather than focusing on the core product and increasing subscriptions from free to paid.
The free version seems adequate for most individual users. This is problematic for the company from a strategic standpoint. If they made some of the core features only available to paid subscribers, they might find it easier to convert those subscribers to paid.
Why it Works
Standard browser bookmarks are simply not robust enough to handle our fast-paced, information-packed lives. The company created the Evernote tool to help people get organized. By giving the solution away for free, the company has obtained a solid user base.
The software is supported on several platforms and operating systems and adopts the freemium model. Everyone can download the app for free on multiple devices. For those who would like more robust searching features (PDF, Word Files, etc.), they would need to upgrade.
The solution is both web-based and local via software or app, although the app on a smart device is not as intuitive as the desktop version. True to its motto, “Remember everything,” proponents believe in Evernote as a great productivity tool.
The company has recently expanded out into business solutions. It catered to individuals in the beginning, even if they were using it for their businesses.
The company has not needed to raise any funding in recent years. It receives funding from the proceeds of its operations. This is always an ideal means of capitalizing a firm.
The largest means of promotion is via word of mouth. When people speak of the application to their friends, those friends want to download it. This process continues and has built up a huge subscriber base upwards of 150 Million members.
Under the management of Phil Libin, the company did not participate in tricks or gimmicks to try and get people to sign up. They simply told friends about a great app that helps them be more productive. People are always looking for ways to increase their productivity. The company did offer a beta version on various tech platforms in its early days. This helped to fuel the demand.
For existing users/subscribers, the company has a captive audience for those who use the program regularly. This means that even when they raise rates (which they did in 2016), users probably won’t jump ship as they have become dependent on the service. They will, however, need to increase the base of people who are paying for the service.
It remains to be seen if O’Neill plans on increasing the marketing pipeline or if they will continue on the current path while trying to increase the paid user base. In an interview with The Verge in May 2016, he stated that the company receives 100,000 new subscribers each day. That number is staggering and could tremendously add to the bottom line if these subscribers upgrade to paid plans.
On the Google Play platform, the app receives 4.6 stars. The number of 5 stars given is the predominant rating. At over 1.4 million reviewers, that is quite good. Some of the lower ratings have to do with features or the lack thereof. Other lower ratings show there are bugs and the company updates too frequently.
On the other hand, reviewers who give it five stars state they love the app and can’t imagine living without it.
Interestingly, on Yelp, there are several bad reviews all pointing to terrible customer service. It should be noted that these reviews are over a year old.
Lessons Learned By The Business
- Try to figure out ways to keep your company as agile as a startup even as it grows. Management believes this is quite possible if you take the effort to make it happen.
- Be a customer of your own products. This will get you completely involved in the process. Otherwise, you are relying on interpreting the needs of customers. You are removed from the process when this happens.
- Create products that are long-lasting and at the same time, keep innovation as fresh as possible. This requires forward-thinking about how your products will evolve.
- Focus on core products and only expand to other product lines when your core is earning enough money and only when it fits in the company’s overall mission.
How Other Businesses Can Learn From This
Phil Libin, the former CEO of Evernote, suggests that apps have changed the landscape for developing products or solutions. When you develop something that you find useful, it’s quite likely others will find it just as useful or more. Before apps, knowing what people wanted in their software was a bit of a crapshoot.
Keep people interested in your product. In the freemium model Evernote adheres to, people will eventually upgrade the longer they use it.