Evernote: 2011 Company of the Year
The Company of the Year is rejecting industry trends, getting customers to pay for something that's free, and reinventing the way we remember.
Cody Pickens
Evernote has achieved cult status in Tokyo. There are 32 Japanese books on the company.
Jonathon Rosen
Reason To Smile A graph of how people use Evernote over time shows that customers who abandon the service often return.
Phil Libin remembers the moment he left childhood behind. It was nearly four years ago, when the funding for his Internet start-up fell through. He was 35.
It had all been so much fun until then. But at 3 a.m., out of cash and having waited in vain for a venture capitalist or angel or CEO or anyone at all to return his increasingly desperate calls, Libin knew that he would have to pull the plug on Evernote, a software application that helps people remember things. "I realized I was going to have to wake up tomorrow and lay off everyone in the company," he says.
Exhausted and demoralized, he was reaching for the light switch when his e-mail dinged. A momentary blast of hope—but no, just a message from a fan, something he had been getting more and more of lately. This one was from some guy in Sweden, a fellow software entrepreneur, and it was the usual "Evernote has changed my life" sort of thing. Libin almost missed the last line: "If you ever need any money let me know."
Feeling more awake, Libin typed back: "It just so happens we could use some cash. How much did you have in mind?"
The answer came right back: "Would half a million dollars be enough?"
Today, the company is swimming in tens of millions of dollars in cash from both VCs and profits. Evernote is buying companies, tripling in size each year, and drawing 40,000 new users a day. If you live in Silicon Valley or Tokyo, where Evernote has reached cult status, none of this probably surprises you. Otherwise, you must be wondering: What the hell is Evernote?
Libin has different ways of explaining it: It's your brain offloaded to a server. It's Google for the Web of your life. It's a spotlight on the dark matter of your universe. It's a tool for converting your smartphone from a time killer to a time saver.
OK, so Evernote is a little hard to explain—you have to get to know it to appreciate how subversively effective it is. You could say pretty much the same about Libin, as well as about the team of fellow managers—many of whom have stuck together through multiple start-ups—and the company they have built around memory. It's a company whose employees romp in spacious offices ringed with conference rooms named after video games. (So much for adulthood.) Whose customers are so dedicated that many eventually choose to pay for the service, even though they can use it for free. That's starting to change the way children learn in schools. And that has set its sights on affecting the lives of a billion people—a goal that's looking less fanciful every day.
Such lofty ambitions might have seemed absurd when Libin's family moved to the Bronx, New York, from the Soviet Union in 1979. Libin was 8 years old. Fourteen years later, he had managed to effect a trifecta of ancestral shame when he left Boston University one course short of his bachelor's degree, in a fit of pique over a questionable charge on a school bill. "I was the first one in my family for 200 years who had no degree, didn't play an instrument, and wasn't a chessmaster," says Libin, who, whatever his limitations, has raised acerbic self-effacement to an art form.
Degree, schmegree—Libin could code. He had been a computer whiz at New York's prestigious Bronx High School of Science and had been making good money at it on the side since age 16. After dropping out of college, Libin was snatched up by ATG, a company in Cambridge, Massachusetts, with a corps of brilliant coders who were helping invent much of what would become standard e-commerce technology. "It was the first time I had ever felt average," says Libin. After three years, in 1997, he left ATG along with a few of his fellow laid-back but hard-hacking pals and launched Engine 5, a company in Boston, developing e-commerce software. "I was the least productive programmer, so I got stuck with the management job," Libin says. Knowing nothing about raising money, the group didn't bother and simply started programming. In 2000, it sold the company for $26 million.
The following year, Libin began pulling together the core Engine 5 team to launch another company. Joining up with MIT computer scientist Silvio Micali, Libin aimed the venture, called CoreStreet, at producing high-tech security systems for government agencies and large financial institutions. But having cut his teeth on the Mach-speed, make-it-up-as-you-go world of the Web, Libin found the byzantine, multiyear cycles of government procurement maddeningly inefficient and—even worse—boring. In 2006, he left the company, which was sold three years later for $20 million. Though the experience wasn't an entirely satisfying one, it had convinced Libin that he and his team were the perfect solution in search of the right problem. Micali, who returned to academia after CoreStreet, thought the same. "It's an incredibly talented group, creative and fun to work with," he says. "And you have to love Phil. He's not only brilliantly original in his thinking; he can find humor in anything. You laugh all the time around him."
Libin immediately started casting about for inspiration for a third company. Given his experience with his first two ventures, Libin knew two things: He didn't want to be bored, and he didn't want to merely make money. "A billion dollars isn't cool," says Libin, contradicting the speech Sean Parker supposedly delivered to Facebook's Mark Zuckerberg. "What's cool is impacting a billion people. Whatever I ended up doing, I wanted people to get excited about it. I wanted long lines forming for it."
An idea had been brewing for some time in the back of his mind: How do we remember something, like the name of a restaurant? It's largely through the associations we have with it in our heads. The trigger might be thinking about whom you were with when you heard about it, where you were, what else you were doing at the time, or a related word or image. From these bits and pieces, we can often dredge up a forgotten but important thought. But not always. Our brains have limited memory capacity, which is why no matter what you do, you still forget most things you come across. And that's a growing problem in an age in which information in all forms comes flying at us at ever-faster rates and you're not sure which of it will prove useful. Plus, aging baby boomers are finding themselves with less and less memory to work with. "No one is happy with their meat brain," says Libin. "It's overloaded by the time we're in high school. It's as universal a problem as you can get."
