Evernoteβs new CEO Chris OβNeill celebrated his one-year work anniversary last month. Heβs a Valley veteran who drove by the Evernote offices on his way to work at Google and still keeps a bottle of wine in his cellar from a summer internship at Wine.com.
Evernote was one of the first so-called unicorns before US$1 billion valuations were being thrown around like confetti. Always one to enjoy a challenge, Chris is stepping into stride as he prepares the elephant β once the champion of the freemium model β for its next stage: profitability.
Tough road
Chris says it has been difficult to see people with passion for Evernote move on or let go of old team members who were no longer a good fit. He wants to reembed a quality obsessed culture and has brought on new management to guide the company to maturity as well as make self-sustainability the top priority.
βWorking through transitions is never easy,β he remarks.
βThere is also a tension between some of our power users versus the challenge of getting people to engage with the product on a regular basis.β The new focus is less on features and more on Evernoteβs core strengths. βCompetition is too ferocious in this world to be mediocre at any one thing.β
βThe big things are in place,β highlights Chris. βBuilding a brand, a company with 200 million registered users β thatβs hard.β
Updated playbook
βI think Philβs and the companyβs overall strategy was really anchored on remembering things,β says Chris, referencing Phil Libin, Evernoteβs CEO from the appβs launch to 2015. βAnd there were early attempts to branch into a workspace. Our strategy is a continuation of really delivering on that potential.β
35 percent of Evernoteβs users are in Asia.
Future app updates may look to remove distractions and create an environment to get work done. The team has been working on AI, or augmented intelligence as it is referred to internally. βAI will hopefully enable Evernote to become a workspace βhubβ β the single place knowledge workers can go to get things done,β explains Ken Inoue, general manager of Asia-Pacific and Japan operations.
This all connects to a larger concept of βdeep workβ which Evernote is exploring β although Ken and Chris admit itβs not a huge part of strategy yet.
βWhat we do is cool,β says Chris. βBut what people do with us is even cooler. Itβs far more epic than what we do.β He would like to see more users pass the βtoothbrush testβ β have people use the app two or more times a day.
βThatβs a real struggle. We have a slice that does, but itβs still growing.β Chris looks disappointed. βI would love to see companies created, breakthroughs solved, billions of dollars saved because workflows are more creative, less sucky.β
A new billion
Asia will play a growing role in Evernoteβs new strategy. Partnerships and device pre-installs in Japan have pushed Evernote to nine million users in the country, or what Ken estimates to be 12 percent of the smartphone population.
βWeβd obviously like to penetrate more, but a narrower focus for us is βknowledge workers,ββ he says. βWe think there is huge growth opportunity in the corporate market.β
Thatβs why the company will focus more on gaining ground among Japanese companies by using resellers. Those are needed because, as Ken interjects, βcorporations in Asia tend to be much more risk averse and conservative in terms of switching to the cloud.β
With the discontinuation of the Evernote Market and line of physical goods, revenue is now split 80 percent from individual subscriptions and 20 percent from businesses. Ken would like that to be better balanced out.
At the moment, 35 percent of Evernoteβs users are from Asia-Pacific, with 10 percent in China and 5 percent in Japan. Half of the companyβs top ten money making countries are from the region.
The team has been working on βaugmented intelligence,β as it is referred to internally.
The strategy appears to be working as the company is on its way to being consistently cash-flow positive.
Phil Libin used to famously say that, βthe easiest way to get one million people paying is to get one billion people using.β Evernote was supposedly designed to be successful with only one percent of the users converting to premium. Yet, the company has been pinned as the first dead unicorn β and with that title, the dreams of other freemium companies have fallen with it.
Chris doesnβt believe freemium is dead. βI think it has a role when you are building and removing friction, especially in the early days,β he says. βBut you do need to figure out how to monetize.β
βWe worked really hard on this; we should charge for it,β he emphasizes. βWe will always have a free layer to our product, but we are always experimenting with how to monetize that is really tied with what users value.β
His billion comes in the form of time. Chris would like to see the collective amount of time spent in the app over a 12-month period to be over one billion hours. The company hit 600 million this June.
I⦠I feel so alive
If you look at App Annie or Google trends, interest in Evernote has been steadily declining these past few years. New users may be decreasing, but Evernote has ranked around 250 as one of the top grossing apps on the iOS store since 2013.
If Evernote is dying, it has great health care.
It has raised nearly US$300 million. Assuming that user costs have not significantly increased and we use the US$0.25 gross revenue per user revealed in this old Fast Company article, then Evernote is pulling in at least US$50 million per year. If conversation rates are still around three to five percent and we take US$40 per premium user, that number jumps to between US$240 million and US$400 million per year.
The company did lay off 47 people and close three offices at the end of last year, but even at US$50 million in yearly revenue, using a believable 20 times multiple, Evernote still keeps its unicorn status with plenty of runway left. Elephants have been known to live for well over 80 years β so donβt give up on them yet.
βNow itβs an executing game,β says Chris. βIβll take that all day long.β
Evernote
Evernote is the place you write free from distraction, collect information, find what you need, and present your ideas to the world.
- Location
- United States
- Founded
- 2007
- Employees
- 201 β 500
- Website
- evernote.com
- Latest Funding
- US$20M / Series E
- Hiring
- 0 positions
Recommended reads
- EFishery employee denies entire company commits fraud
- Nykaaβs financial health in 5 charts
- These funds have not invested in SEA in the past year
- Grab to freeze hiring, forego merit increases for senior positions
- Monkβs Hill leads $5m series A of healthtech firm
- Oyo lays off 600 people amid restructuring plans
- Telkomselβs investment arm injects $1.9m into Indonesian health app
- Indonesian conglomerate to take on Carro, Carsome with new platform
- Zoomcar names ex-Grab head as chief tech and product officer
- Alipay-backed Chope lays off 65 employees
Editing by Steven Millward and Michael Tegos
(And yes, weβre serious about ethics and transparency. More information here.)