Evernote Wants You To Remember Everything

Phil Libin starts with a confession. “right before going onstage, I always panic quietly,” says the slightly rumpled 41-year-old CEO of Evernote. “And I consider running away.” He is giving the opening keynote at his company’s third annual user conference in San Francisco. But much of the audience isn’t looking up. Many of the thousand or so attendees are multitasking, hunched over phones, tablets, laptops, even dead-tree notebooks. Libin isn’t fazed. They’re just practicing what he’s about to preach. The adrenaline kicks in, and Libin, goateed and good-natured, loosens up. Evernote’s goal, he says, is to serve as users’ external brain, a sort of private search engine for the information they care about most.

Dressed in his standard uniform–jeans and a company T-shirt under a sport coat–Libin begins telling the audience what it already knows: Evernote is growing rapidly. The service now has 75 million registered users, 35 million of whom have signed up since August. Evernote, Libin explains, is also partnering with 3M to let users digitize and store anything they can scribble on a Post-it note via the snap of an iPhone camera. But he isn’t done. He’s got Evernote backpacks, Evernote messenger bags and Evernote wallets to announce. These aren’t cheesy conference swag; they’re products customers can buy online. “We’re a fashion brand now,” Libin says. “Nobody saw that coming.”

Evernote, for the uninitiated, is a nine-year-old service that allows users to upload notes–text, images and audio recordings–and organize them in online notebooks. As the company’s elephant logo and “Remember everything” tagline suggest, Evernote’s mission is to help users boost their memory by capturing every scrap of information they care about and preserving it indefinitely in the cloud. The app’s search function can quickly and accurately recognize words within pictures, making it simple to turn to Evernote to find something you may have jotted down during a meeting the way people turn to Google to find Web pages.

In other words, Evernote is an attempt to address the peculiarly modern problem of self-data deluge. For all our gadgets and online services, keeping and then finding the stuff we really care about is a challenge–one that keeps getting tougher as we generate ever expanding amounts of personal information. To its fans, Evernote is a repository for the digital scraps of everyday life, whether it’s photos of receipts for an expense report or a reminder about the great bottle of wine you had at dinner.

Everyone from Microsoft to Google and a gaggle of startups is working on this problem in one way or another–pretty serious competition. Evernote thinks it can succeed by becoming ubiquitous. Its service doesn’t just run on PCs, Macs and every major smartphone and tablet. It’s also built directly into cameras, scanners, electronic pens and blood-pressure monitors. It’s also on bleeding-edge gadgets such as Samsung’s Galaxy Gear smart watch and Google Glass, the search giant’s augmented-reality glasses.

Given that digital focus, Evernote’s putting its name on pricey luggage and leather goods might seem like a branding non sequitur. To Libin, it is in line with the company’s view of itself. “Nike broke out and became the first worldwide mainstream brand for people who care about athleticism,” he says during an interview at the company’s new headquarters in Redwood City, Calif. (The offices are festooned with inspirational mottoes like “Forgetting sucks.”) “We want the same thing, to be the worldwide signature brand for people who aspire to being smart.” He says it’s all part of “a sufficiently epic quest” to keep the company busy for the next century.

For its most hardcore users, using Evernote is already the lifestyle statement Libin wants it to be. Some become Evernote ambassadors, an unpaid position that is part tech support, part missionary work. “You have to tell people how much you love Evernote,” explains Austin-based food writer Kristi Willis. She specializes in assisting freelancers like herself. Not surprisingly, organization gurus love it. David Allen (Getting Things Done) and Tim Ferriss (The 4-Hour Work Week) have rhapsodized over it. (Ferriss is an adviser to the company.) Michael Hyatt (Platform: Get Noticed in a Noisy World) was once a believer in handwritten notes but says Evernote has let him go entirely digital.

One thing Evernote is not is a classic Silicon Valley success story. The service is not a social network, and unlike Google, Facebook and Twitter, it has pledged never to mine what it knows about its users to target advertising. There are no ads at all. Instead, the company makes money chiefly from the small percentage of users–about 4%–who have paid accounts. Evernote Premium costs $5 a month and offers increased upload capacity over the free version. About 8,000 businesses pay $10 a month per user for a version geared toward working in teams. The company won’t disclose its revenue but says it is currently losing money as it expands. Venture-capital firms like its prospects, though. They’ve plowed more than $250 million into Evernote, giving it a valuation of over $1 billion.

Brain Quest

Libin talks about evernote with such exuberance that it’s easy to assume it is his creation. It isn’t. The product was the brainchild of Russian-American computer scientist Stepan Pachikov, whose previous work includes contributing to the handwriting-recognition technology used by Apple Newton devices and Microsoft tablet PCs. “I realized one of the problems I had was that I didn’t have any good tool to remember a lot of stuff and very quickly find it,” he says. Pachikov’s solution was Evernote, initially created in 2004 as PC-only software. It garnered good reviews and about 80,000 users but struggled to make money. “By the end of 2006, we had proved beyond a reasonable doubt that you couldn’t make a business out of a Windows app,” says Dmitry Stavisky, an early employee.

Enter Libin, an immigrant from Russia who arrived in New York City with his family at the age of 8 in 1979. After graduating from the Bronx High School of Science and dropping out of Boston University’s computer-science program, he founded and sold two startups. They were successful but not all that spiritually fulfilling. By 2007, Libin and some collaborators were hatching plans for a more meaningful venture. “We wanted to do something permanent,” he says. “Let’s only build a product we want to use and build a company to keep.”

They toyed with a concept called Ribbon, a wearable gadget for capturing your life by recording audio and video automatically, but concluded that the idea would be better implemented as software for mobile phones. That’s when Libin found Pachikov. The two teams met in early 2007, bonding over their similar goals. Pachikov says he knew within 30 minutes that Libin should be running the show. Libin moved to the Bay Area and became CEO in May; Pachikov became a board member.

As Evernote rebooted itself, the entire technology industry was doing so on a grand scale. The iPhone ushered in an era of powerful mobile devices that were even more personal than PCs. Traditional software was beginning to be displaced by services hosted in the cloud. So the company started over. Going forward, it would create apps for as many platforms as possible and store data on its own servers, not users’ computers. When Apple launched the iPhone App Store in July 2008, Evernote was one of the first pieces of software available, and it quickly became a popular download.

Still, it wasn’t immediately clear that the new Evernote would be more viable than the last. Libin wanted to raise venture funding, but with the financial crisis in full swing, he found no takers. But eventually, the service started to take off. In May 2009, it reached a million users, a figure that doubled by the end of the year and tripled a year after that. By December 2011, the company hit 20 million users. As people stored more and more information, they found Evernote harder to live without–and more worth paying for. “Once a consumer adopted Evernote and stuck with it, the ones who stuck, stuck forever,” says chief operating officer Ken Gullicksen. Before joining the company, Gullicksen was a venture capitalist at Morgenthaler Ventures, an Evernote investor.

The service also proved to have strong international appeal. Early on, the company’s executives were surprised to discover that people in Japan were flocking to it–even before there was a Japanese-language version. That paid off in September 2009, when the country’s largest wireless carrier, NTT Docomo, invested $2 million in Evernote–before the venture capitalists back in Silicon Valley bought Libin’s pitch. Today 74% of users are outside the U.S. The company is also growing rapidly in China, where the service is known as Yinxiang Biji and runs entirely on servers located in that country. (The Great Firewall hobbles access to the version hosted outside Chinese borders.)

Evernote’s numbers aren’t stratospheric enough to make it one of the Web’s behemoths. Enormous profits will come only if it signs up lots more paying customers. How large it can grow remains to be seen. But Sequoia Capital’s Roelof Botha, who sits on the company’s board, says its long-term potential reminds him of past Sequoia blockbusters LinkedIn and PayPal. “The thing that really surprises you in the long run,” he argues, “is the upside of the winners.

Long Game

Libin has grown more obsessive about preserving Evernote’s corporate culture as the business has grown to employ 330 people. “The product is the product,” he says. “The culture is the next hundred products.” To that end, the company offers benefits ranging from a $250-per-month stipend toward the purchase or lease of an electric vehicle to covering the cost of housecleaning services. “What we strive for is to eliminate various stupid things in modern life but also to instill a sense of what we’re about,” says VP of marketing Andrew Sinkov. In other words, working at Evernote is not unlike using Evernote.

In 2011, Libin floated the possibility of going public by the end of 2013. That has been pushed off for a few years. Libin is also leery of how an IPO might change the company. “Going public is not a goal,” he says. “It’s not an exit. It’s a step on the road to being a 100-year startup.”

In the meantime, executives plan to keep evolving the service. “We all have dozens of little moments a day where we could be better prepared,” says Mark Ayzenshtat, a former Google engineer whose title–VP of augmented intelligence–conveys the company’s desire to help make people smarter. He says future versions of Evernote will “situationally prepare you for what you’re about to do. If I met you two years ago and got your business card, it should show it to me.”

Libin’s 100-year plan can sometimes sound like attention seeking. But Evernote’s very nature implies that the firm intends to be around for the long haul. After all, if Evernote tells users to treat it as an extension of their brain, their data has to be there when they need it–whether that moment comes in two weeks or 20 years.

Libin thinks Evernote and software in general are on the cusp of morphing into distributed services built into glasses, watches, refrigerators and cars, with every version working seamlessly in concert. That may come to pass, but the truth is that few technology companies have survived one such revolution.

If Libin is intimidated, he hides it well. “It’s supercool to be in an industry that’s on the very edge of that sort of apocalyptic change,” he says, musing on Evernote’s future. “You roll up your sleeves and say, ‘Someone will figure this out, and it might as well be us.'”