How Evernote sidestepped disaster to become the go-to app for people looking to upload their memory to the cloud
Author Cristina Rouvalis Illustration Harry Campbell
PHIL LIBIN’S DESK IS about one stray paperclip away from terminally succumbing to chaos. Dungeons & Dragons rule books compete with laptops for space on a surface other wise thickly populated with miniature elephants, toy robots, stick-on googly eyes, sumo wrestler dolls, bacon mints, a tiny globe and assorted travel tchotchkes. In short, it doesn’t look like the desk of a guy who got rich helping 35 million people improve their organizational skills.
And yet it is. Libin is the CEO of Evernote, maker of the wildly popular app of the same name that allows users to upload notes, photos, sound and video clips and Web pages via computer, smartphone or tablet, and archive them in “notebooks” searchable by keywords, dates and other tags. With its slogan “Remember everything” and its elephant emblem, the Redwood City, Calif., company that helps people upload their memory to the cloud gains 60,000 new users a day and has 1.5 million paid subscribers. It’s so big in Japan that when Libin got a haircut in Tokyo, the media showed up.
Libin, 40, whose mind is as freewheeling as his desk, currently has 20 online notebooks containing more than 9,000 entries. They range from blueprints of his new house to great sushi he’s had in Tokyo. “I live on Evernote,” he says. “It’s my external brain.”
Hailing from a long line of concert musicians, chess masters and Ph.D.s, Libin has always displayed a voracious curiosity and a drive to accomplish things. After moving from the Soviet Union to the Bronx at age 8, he taught himself English by devouring Thor comic books. Day and night, he played with an Atari 800XL, a Rubik’s Cube and Dungeons & Dragons in his family’s modest apartment. But his interests went well beyond the borders of conventional geekdom. Literature was a big thing. “He would fall asleep with a book on his pillow,” says his younger brother, Mark Ayzenshtat, who recently joined Evernote as head of data products.
Following four years at the prestigious Bronx High School of Science, where Libin was considered excessively nerdy even by his brainy classmates’ standards (“The chess team wouldn’t even hang out with me”), he enrolled at Boston University. And then, to his mother’s disbelief, he quit school one course shy of graduation.
After starting and selling two successful if unsexy businesses—software firm Engine 5 and identity management company CoreStreet—Libin and his team began working on archive apps in 2007. That year, he ran into entrepreneur Stepan Pachikov, who was developing a program he called EverNote. The two merged their teams and Libin became CEO of the restructured company, whose name was tweaked to Evernote. (Pachikov is now an adviser and board member.)
Evernote launched inauspiciously on June 24, 2008, in the very depths of the Great Recession. After the collapse of Lehman Brothers caused a major investor to pull out, Libin went into panic mode. He stopped taking a salary and pumped his own money into the business, but still it hemorrhaged. Finally, one night in October 2008, he decided to throw in the towel and shut the company down the next morning.
At 3 a.m., as he was about to go to bed, Libin got an email. “I really like Evernote. It changed my life,” a Swedish man wrote. That made Libin feel better, but it wasn’t going to pay the electric bill. Then he did a double take at the words “I am writing to see if you guys need money.” Libin seized the keyboard. “As a matter of a fact …,” he typed. Over the next 40 minutes, the two brokered a deal in which the anonymous benefactor would save the company with an infusion of half a million dollars.
Though the appearance of this angel investor from Sweden makes Libin sound like the luckiest CEO ever, he had also done his analytical spadework. From the start, he insisted that Evernote be a global company. “We launched it in 20 languages in the first year and a half,” says Andrew Sinkov, vice president of marketing. “You see 10-year-old companies that haven’t done that.” Libin also predicted that the app would have 2 million users within 18 months. “He was right almost to the day,” Sinkov says.
On top of everything, Libin solved a perennial conundrum in e-commerce: how to profit from a free product. Though newspapers and other industries have struggled with the “freemium” concept, Libin had faith that a small percentage of consumers would be willing to shell out for more memory and functionality. His gamble paid off: About 1.5 million of Evernote’s 35 million users pay $45 a year for premium service.
This month the company launches Evernote Business for small and midsize companies. The app allows groups of employees to share their words, images and presentations in an account managed by a company coordinator. Another new product helps students and educators turn course materials into study questions. Evernote is also refining features that automatically call up Web clippings and notes that a user might like. “We want the experience of Evernote to feel like it’s completing your thoughts,” Libin says.
Since those rocky early days, investors have flocked to the company (among them Sequoia Capital, which has pumped in about $80 million). Libin has turned down many offers to sell Evernote, which he plans to take public in the not-too-distant future. But he maintains a belief that his company’s true worth transcends money. “I cannot imagine a possession that in 20 years will be more valuable than my Evernote account,” he says.
CRISTINA ROUVALIS, a reporter living in Pittsburgh … forgot what she was going to say.
[THIS MONTH'S AMAZING FACT]
Grammarians have long argued that people who overuse the term “awesome” need to experience more actual awe, but now there’s good reason for everyone else to look into it as well. In a recent study, people who were made to experience the emotion—which the researchers say is caused by encountering something so vast that you have to update your worldview to accommodate it—felt that they had more available time. This led the subjects to say they felt less impatient, and to choose experiential goods (such as movie tickets and massages) over physical ones (like clothes and TVs). They were also more willing to donate time to help the needy. Because these last two effects—volunteering and choosing experiences over material goods—have been shown to improve well-being, the researchers believe that having regular awe-inspiring experiences might lead to an increase in life satisfaction, which, if you’ll excuse the phrase, is pretty awesome. —JACQUELINE DETWILER