Evernote CEO Phil Libin is in many ways the archetype of a startup founder: product-over-revenue, hyper intelligent, confident. But it must be a rare few who are this committed to building something meaningful – and Evernote, five years in, with about 50 million users and a growing ecosystem of spin-off and third-party products, is rapidly leaving startup status.
“Do something that’s worth spending the rest of your life on – first,” Libin told a 100-strong crowd of developers, entrepreneurs and startup employees at popular coworking space Betahaus in Berlin last night.
He’s been to Berlin several times and is a particular fan of the Berlin entrepreneurial scene, he tells the crowd. “It has a lot of energy; a lot of potential.”
Phil Libin’s top tip for life and business – “No tricks”
Libin and colleagues are in town to cement a new partnership with Deutsche Telekom. The headline is a deal to give the telco’s customers a complimentary year of Evernote Premium – a souped-up version of the company’s free web clipping, note-taking, digital diary and personal organisation service. The partnership also includes new Evernote features and a collaboration on a major hackathon in Berlin in April.
“It’s not about distribution; it’s not about marketing; it’s not about getting more people to know about us,” Libin explains. “It’s about getting a better experience.”
For a few CEOs, that might come across as spin. For Libin, who says his top tip for life and business is “no tricks – nothing clever, nothing weird, nothing where we try to sell to you”, it comes across as very genuine.
Speaking for half an hour, somewhere halfway between a TED talk and a ramble over a beer with friends, Libin ran through Evernote’s guiding principles: build for the long-term; no tricks (which in part stems from a childhood passion for magic); focus everything on making the product better; and, last and most important, make sure it’s an “epic quest that’s worthy of the rest of our lives”.
“I figured out important stuff about life fairly late”
That last point took him a while to figure out, he told us before the meetup talk. “I feel like I figured out important stuff about life fairly late,” he says. “As a child, I was always reading comic books and thinking about how I was going to have this big impact on the world. But as you get older, you’re taught not to really think about it like that – to think about, you know, having a normal life, getting a job, having a career path…
“I followed that for probably the first 15 years of my professional life. It wasn’t until much later, really just before Evernote, that I thought ‘maybe I had it right when I was eight’.”
He was about eight when he moved with his parents – professional classical musicians – from Russia to the US. There, he studied computer science at Boston University and worked as a software engineer and architect before the entrepreneurship bug hit.
The two companies he founded – Engine 5 and CoreStreet – weren’t really products for him personally, he says. By the time he joined Evernote, after it started but before the product launched, he was ready for a grand-scale commercial passion project. So was the rest of the team: “Almost everyone had started companies before,” he says.
So what is Evernote’s epic quest? “The goal of Evernote is to make people a little bit smarter in every way,” Libin says. “We’ve always talked about Evernote as building an external brain – something that will help you think better, remember, something that will present info to you and help you make decisions.”
The stakes are higher – for society and for the planet – than they were 100 years ago, he adds: “The amount of info we have to process right now to make decisions is far higher than it’s ever been and the cost of getting it wrong is higher than it’s ever been… We need to be in a constant struggle against people making bad decisions…
“It’s such a big mission that the most we can ever do is play a tiny, tiny part of it. We know that.”
Building Evernote – and that time it came very close to failure
It wasn’t easy to get Evernote off the ground – especially, he says, because they had “the world’s worst VC pitch” and were trying to raise funds just after the financial crisis.
“At one point in 2008, we’d just had a big round of financing collapse and we had about three weeks cashflow in the bank,” he says. “I’d stopped paying myself, we were trying to raise money but nobody was returning my calls… One night, at 3am, I decided ‘this is it’ – I’m going to sleep, I’m going to wake up tomorrow and I’m going to go to the office and lay everyone off and shut the company down.”
He received an email that night from a user in Sweden who said he loved Evernote and wanted to invest. “Forty minutes later I was on a Skype call with him. Two weeks after that, maybe three weeks, he sent us half a million dollars.”
Since then, Evernote has raised about $251m in venture capital, most recently a giant $85m Series E round in November 2012.
What’s next? Gadgets, breakeven – and The Incredible Hulk
Today, Evernote is sitting at about 50 million users and has expanded out from its core web clipping and digital notebook service to tools for contacts, flashcards, recipes, real-world products (including a collaboration with premium paper notebook makers Moleskine) as well as thousands of third-party apps drawing on its API.
What does the next year hold? “At this point I’d say 80 per cent of our efforts are going into making our existing products a little bit better,” Libin says.
There are a few new things coming out: “We’re going to do a lot more stuff with gadgets, wearable devices, Google Glass, all that kind of stuff… And we’ll do a lot more stuff to make people smarter. We want the experience of using Evernote to make it feel like it’s completing your thoughts. We want it to really start feeling more like a second brain, not just a better memory.”
“All we have to do is just stop hiring every person we can hire and then six months later we’ll be profitable because of the way revenue is growing,” he says. “The current plan is for that to happen next year. So we should get to cashflow breakeven in 2014.”
And himself, outside of Evernote? “I’m teaching myself to play the piano,” he says – to be specific, the Lonely Man theme from The Incredible Hulk.
“It’s going extremely slowly and painfully but it’s cool – it’s fun, you can feel the synapses forming,” he says – as you’d expect, from someone with a quest in business and life to help people extend themselves. “You can feel like something in those hours, like your brain physically changed.”
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