Priests on Evernote and dinner party productivity: we chat with CEO Phil Libin

Evernote is cool — ask any one of its 15-million monthly active users. True to the company’s slogan, “Remember Everything”, the suite of applications designed for note taking and archiving is on top of the world.

The more successful it gets, the more headlines it grabs — like the recent password reset due to a security breach, which caused some commotion among users. But that’s not keeping the company down. Users are growing with India and the UK hitting one million and two million respectively.

Founded in 2008 by serial entrepreneur Phil Libin, the company has managed to raise funding to the tune of US$225-million in four rounds mostly led by Silicon Valley Venture Capitalists Sequoia Capital, with participation from Morgenthaler Ventures and Meritech Capital. With the launch of Evernote Business the company is stepping into the enterprise game and getting ready to make productivity in the work place better.

On a recent trip to Silicon Valley, we sat down with Libin to unpack some the company’s secrets to success, what exactly goes into building a 100-year startup and how and where Evernote is making its money.

For Libin, as his third company, Evernote is not for sale but his to keep. He reckons that if he can keep momentum and continue building the right products the company will be around for 100 years and keeping a startup culture is key to that.

Memeburn: Has the push into China been worth the difficulties?

Phil Libin: It’s definitely been worth it so far. China is a really long-term investment so it’s hard to really say how much it’s worth for another three, four, five, 10 years. But it’s a good start. We’re having a lot of fun in China. There’s a lot of innovation over there. We don’t look at countries as markets — we’re not in China because we want to sell stuff to the Chinese, we’re in China because it’s one of the top centres of innovation worldwide and we want to make Evernote better for everyone in the world and it’s hard to do that if you’re nowhere in big centres of innovation.

Memeburn: What are some of the most innovative ways people are using Evernote?

PL: There’s so many. We get so many stories. We publish a lot of them on our blogs. Probably the first one — this was a while ago — the first really unexpected use case that we heard was this guy who has a traumatic brain injury (so he has no short-term memory) who was using Evernote as his short-term memory, to remember stuff so it could be in his life. He wrote to us saying that he was doing this and explained how, and he also started a programme to help returning veterans — because a lot of people are coming back with injuries from concussions to brain injuries — so he’s actually now helping people with this kind of injury to learn how to get back into life using Evernote.

I think we heard about this in 2008 — it was one of the first stories we heard that really made us pause. We laugh about this and say we’re making an app, but it is substantive, it’s not frivolous. There are real people whose lives are being improved by this. Since then we’ve heard of tons of business owners who use it for everything.

There was one point a few years ago when I first knew we were on to something. Back in 2008, 2009, I used to monitor it — every time someone said the word “Evernote” on Twitter I would see it. Now, you couldn’t do it, but back then, a few times a day did someone say “Evernote” on Twitter. One day I saw one guy tweet who was a priest. He said he loves Evernote, he uses it every week to research and put together his sermon. I thought that was kinda cool — I mean, we don’t set out to make something that can be used by the clergy but I guess it kinda makes sense. Every week, you have to come up with something, you’re clipping and putting it together… that makes sense.

Then three hours later, a totally different unrelated person — they weren’t talking to each other, I only saw it because they happened to say “Evernote” — tweets that he uses Evernote to write down all the sins to make it easier to confess on Sunday. We got both ends of the spectrum. We got the priests, we got the sinners, we got a broad-based product.

MB: Evernote is practically available on everything from mobile to desktop. What has been the most difficult platform to build for?

PL: Symbian is the only one we ever abandoned. That was tough. We never released a Symbian version. A lot of people were asking for it and we worked on it for a year and a half but we just couldn’t get it to be a decent experience so we just walked away from it. That was the toughest technically and we failed at it, we never released anything.

All the platforms are different. We take an approach — and we have from the beginning — that we’re not going for consistency. Evernote looks different on every device. We’re not using any lowest common denominator approaches, we’re not building anything in HTML 5, we’re not using any of these cross-compilers, everything we do is native for the particular device. It’s not just the code that’s native, they’re not ports — it’s not like the Android version is a port of the iOS version — they’re totally designed from scratch for that platform by designers who are great at that platform.

We’re not aiming for consistency. If you make consistency a specific goal, you achieve it through mediocrity. You achieve consistency by making everything equally crappy. Instead we said we’re not looking for consistency we’re looking for excellence. We want Evernote to be great on every platform. If we succeed at that then it should feel consistent because your brain will fill in the gaps. Your brain will be like ‘I use it on Android and it feels like the perfect Android app and I use it on the iPad and it’s the perfect iPad app’ and even though the two are different it won’t feel weird because they’ll be good. We haven’t achieved that, but that’s the goal.

Every platform is difficult because we develop for every platform from the beginning trying to make the best possible version for that platform. There’s nothing easy about it. But I don’t think it’s my job to make life easier for our developers, I think it’s my job to make life better for our users. So we’re happy to make that trade-off.

MB: Everyone is talking about Google Glass. How do you think technology like that will affect productivity apps like Evernote?

PL: I’m very optimistic about it. It’s very hard to say what exact product will catch on, but I’m a really big believer in it and I think that within a few years, I’m not going to be sitting here wearing glasses that aren’t projecting things into my eyeballs. It’s going to seem stupid and barbaric. It already kinda does to me.

The use case of having information just always be layered on top of the real world is really powerful. It’s going to change the world more than smartphones changed the world. You think smartphones as a big revolution because all of a sudden you had all the information you wanted and all you had to do was go onto your pocket. The difference between having to pull it out of your pocket and having it right there when you need it is so tremendous that I think it’s basically going to change everything.

We’re really excited. We’re participating in as many of these programmes as possible. You will see Evernote on all of these devices. In the beginning it’s going to be clunky and kinda awkward and then it’ll get better and better. Within a few years it’s going to be great.

MB: What productivity techniques do you use at Evernote?

PL: We hire really great people which is easy to do if everyone who works here knows that their work will have an immediate impact. There shouldn’t be anyone at Evernote who is doing a job and they don’t know why they’re doing it and they think it’s kinda stupid but they’re doing it because someone told them to. Everyone here should feel that the work they’re doing, within months, will impact tens of millions of people and make their lives better. Once you have that motivation, that’s what attracts the best people.

We’ve experimented a lot with how we’ve structured those people. The way that works really well for us now is having a large number of really small teams — like 19 or 20 developer teams that are all five to eight people. So we don’t have bigger teams. We couldn’t build a product that you would need 50 people to work on. But we’re really good at building a product that five really smart people work on for nine months. Many things in the app world happen to just fit well into that.

The ideal size of the team we realised is about the same as the number of people you’d like to have over for dinner at your house. You can have six or eight people around the table and it’s still one conversation. You can’t really have more. If you have 10 people around the table it’s no longer a single conversation. There are already too many people — there’s someone off on the side talking to somebody else. It kinda breaks down. Building a great product is basically an extended dinner conversation. It’s the same number of people who are having this passionate, engaged conversation — but not for two hours, for nine months.

MB: Is there an IPO in Evernote’s future?

PL: I hope so. I think so. We want to build a hundred year startup. We’ve always said that the goal is a hundred year startup. So I think it’s kinda morally correct for us to be a public organisation at some point. If we’re going to ask the world to trust us with their most important memories, we should reciprocate. We should be transparent and we should let anyone who wants to become a shareholder become a shareholder.

I think eventually we should be public. But it’s not a goal, it’s not an end, it’s just a step we have to take. It’s a pretty risky step so we want to be really thoughtful about it. We’ve been doing IPO preparation for a couple of years and we’ve got a couple more years to go. We’ve done multiple rounds of funding, we’ve been structuring our investors in a particular way to minimise the disruption at IPO. I think we will go public. It’s not going to happen soon — it’s not going to happen this year or next year, but in two to three years at the earliest. It’s not something that we’re rushing towards. It’s not an exit, but it is an almost inevitable step for us to succeed on the road to being a hundred year old company.

MB: Why do you feel Evernote should be a hundred year startup?

PL: I don’t know why you’d build a company that shouldn’t be. Evernote is my third company and we sold the first two. That was fine, but you put your whole life into it for years and then it winds up not being for you. After two exits (which were fine, it’s nice to have exits) we kinda said ‘Well, let’s make the third one for us. Let’s only build something that we want’.

It takes as much work. It’s much easier to come into work every morning and to get great people if you’re on this quest together. A quest to build something that you sell is not a particularly interesting quest. There’s nothing wrong with selling it if that’s the best outcome at that point, but certainly if that’s your goal, that’s a very strange goal.

MB: Do you think apps like Evernote will allow us to eventually remember everything for our whole lives?

PL: I think what used to be hard is becoming really easy. The important stuff is shifting. You just have to have to worry about how you remember something, how you capture and store something, and that’s becoming even easier. That’ll basically get to a point where you won’t have to do anything.

Search used to be difficult. Now it’s becoming easier. But there is just so much stuff that even search is becoming not enough. If you have to search for something, there’s already a failure somewhere because if the system you’re using was successful, it would have shown you the information before you had to search for it. That has to be the vision. You want to have any information that you need forever, but you don’t want to have to think about how to organise it, how to file it or how to search for it.

Google is the company that basically told everyone to forget about organising and just search. I think the next step is to forget about search, and just do. It should just happen. We’re very much in that boat. With Evernote, you can always search and find things, but we want the experience of using Evernote to feel like it’s completing your thought. You have an idea, and Evernote completes that idea for you. It should know what you want, it should know why you want it and it should be able to give you the stuff that you need to make whatever it is you’re trying to do a more beautiful experience. I think that’s the future of technology and I hope we’re one of the companies that makes that real.

MB: There are lots of productivity apps. What do you think has made Evernote become so successful?

PL: I don’t think there’s a single answer to that. I certainly don’t think that we’re done with that. There’s no silver bullet. It’s just a thousand small things. Anything we’ve done up until now is not sufficient to guarantee this in the future. We can’t just say ‘Well, somehow we did this combination of things correctly and managed to create a service that people fell in love with, now I guess we can rest’. If we stay slow, we’ll fall out of love just as quickly. We have to continuously improve.

We’ve developed some guideposts to help us with that. We think great products aren’t neutral — they have a point of view. Our point of view is we always stand on the side of the user. Everything we do, we do for you, to make your experience better. We only have one customer. We don’t have anything that conflicts with that. We don’t have ads, we’re not data mining, we don’t have affiliate stuff. We’re not trying to please anyone but the end-user.

Even in Evernote Business, we focus on the end user. Most enterprise software companies are horrible. They barely care about the end-user because the end-user doesn’t matter to them. So they go to the CIOs and they say ‘What are your requirements?’ and the CIOs give them a giant list of requirements and they build them and you get this abomination of enterprise software. They try to build the best possible product for their customers who are the buyers (who are the CIOs) and the minimum final problem for the end users.

We flip that around. We’re building the best possible product for the employees and the minimum final product for the administrators. Of course we need to talk to the CIOs and the admins and understand what’s going to get them to say no and how to overcome that. The real passion has to come from individual employees saying ‘I love this and it makes me happy and more productive’. It’s our philosophy.

The carrier is not our customer. We deal with a lot of carriers but if they want something that in any way that is different from what the end users want, we always go with the users. The investors aren’t the customers, the customers’ employers aren’t the customers, the advertisers aren’t the customers — it’s only the end users. That kind of focus doesn’t guarantee that we can do something great, but it makes it a lot easier because it makes things a lot less confusing about who we’re serving.

That, and the idea that we don’t chase after consistency. We don’t try to save our own time. It’s our job to work hard so you don’t have to. It’s philosophies like that that make the product more likely to succeed. None of them are sufficient, but the thousand small things that, taken together, have given us good fortune. We have to work even harder in the next four years to keep that up.

We’re a hundred year company, and we’re five years in. We’re five percent done. That’s what we tell everyone here. The best you can say is that we’re off to a good start. But that’s all it is.

MB: With Evernote Business recently launched, what do you think the workplace of the future will look like?

PL: A good product has to have a strong point of view. Evernote Business is designed to be a good experience for companies who fundamentally trust their employees, who think their employees want to be there because they want to get work done and they’re not counting hours but they want to be as productive as possible. The companies should trust their employees. For companies that don’t trust their employees, who basically have a lot of policies about saying no and protecting themselves from abuse employees, Evernote Business is not going to be a good experience. It’s not designed for that.

But for companies that are like us, that are knowledge workers, that understand that the quality and quantity of output that you get from your workers has everything to do with how happy they are, with their state of mind, with how productive they are, it is meant to be a good experience. To the extent that Evernote Business could change workplace culture a little bit, it’s nudging it more towards the way we think the world ought to work, which is companies that look at their employees and say ‘these are adults who are here because they want to be here and to do the right thing. Our job is to trust them and enable them and give them obstacles’ and move a little bit away from the older model which says time spent in the office is punishment. Therefore time spent out of the office is a reward because people don’t really want to be here and given a choice, our employees would do something else. We say given a choice our employees would be here.

Companies like us I think will proliferate. Companies that aren’t will probably diminish.

MB: Is it a startup mentality?

PL: It’s definitely a startup mentality. That’s why I said we want to be a hundred year startup. We don’t just want to be around in a hundred years, we want to still be a startup. A startup doesn’t mean small. I want to have a 100 000 employees by that time. I want to be a giant startup but I still want to be a startup.

How do you get a company with a 100 000 employees to still feel like a startup? I don’t know. It will be fun to figure out. Google doesn’t feel like that. It actually used to. It really had a great feeling, then for a couple of years it started losing it and now it’s back. The culture in Google has improved, just in the past couple of years. Hopefully Yahoo! will go though the same transformation. It was a great place to work. For almost a decade, it was kind of going downhill a little bit. I’m definitely rooting for Marissa [Mayer, Yahoo! CEO] and I think she’s got a shot at really turning it around.

We’ve spent a lot of time thinking about when a company stops being a startup and becomes something worse. I don’t know, but I don’t think it necessarily has to do with the number of employees and I don’t think it’s irreversible.

MB: Is Evernote Business a way to make money because the free version of the app is so popular?

PL: No no no. There is a lot of money to be made in it [Evernote Business] but we only expect about 10% of our revenue this year. Even after it’s fully deployed we only expect it to bring in about 30% of our revenue. The bulk of our business is from Premium, from individuals paying for it, which works great. The idea is since we have such a long retention rate (the people who really get into Evernote don’t leave) so we look at a user and we say ‘We have the rest of your life to make money from you because you’re coming back’.

We don’t try to squeeze too early, we don’t try to promote Premium too much. There’s no sale at Evernote — we don’t have a sales DNA. We just figure that we want to make something that a billion people will fall in love with and use everyday, and love so much that a significant number of them will decide to spend money on us. And spend money on real things — we have real power user features that you get with Premium and other products in the future. The financials are very strong and all the money that we’re raising we are raising on the strength of the business model. The kinds of people who are putting money into Evernote right now are not angel investors, these are very large, typically public company investors, who are making investments for a decade or more who are evaluating us strictly on our business model.

MB: So more products are coming?

PL: Definitely. They’ll all be the same vision. Evernote is trying to make you smarter. That’s the core thing.