So Evernote is doing $18M a year on 750K paid users with 20 million free users. It has just turned profitable - company of the year?
Let's not forget they've taken nearly $100M of investment at a nearly billion dollar valuation. Perhaps this is my east coast conservatism, but in the average case I just can't see how this works out well for the investors.
To get a respectable exit of perhaps $4B in a few years they would have to get their revenue up to something closer to $200M/year assuming you gave them a generous valuation on 20x revenue and completely neglect profitability. Given that Evernote primarily makes money from paid users they will need to dramatically improve conversion, or somehow figure how to get 10x more users. 200 million users strikes me as unlikely, and doubling conversion while also getting 100 million users does too. It's not to say it can't happen, but I just don't see it for a paid consumer service.
Not only are they currently growing quickly, their rate of growth is increasing.
They grew from ~2M at the start of 2010 to ~6M at the start of 2011 to ~20M at the end of 2011[1]. Growth in paid customer looks to be similar.
In September they stated they are getting 40,000 new users a day[2].
200 million users strikes me as unlikely, and doubling conversion while also getting 100 million users does too. It's not to say it can't happen, but I just don't see it for a paid consumer service.
Why do you think this? The market of "everyone who has a smartphone and needs to remember things" seems pretty large to me.
I think a big part of the "company of the year" bit is because they've done something most people thought wasn't possible-- build a big business charging consumers. It's refreshing!
I don't know much about their business, but I'm guessing they are sacrificing a lot of revenue/profit for growth.
They could probably double their conversion by slowly dialing down the awesomeness of the free version in favor of the paid version. Could they do advertising/leadgen to their massive free audience? I'm skeptical, but it's a big/untapped asset. Is the data asset interesting? You never know.
They are clearly onto something-- I saw a comment here was someone said, "it's as important to me as email."
Shouldn't you narrow down "build a big business charging consumers"?
Even in just digital goods, there are general software companies (Microsoft, Intuit, McAfee), gaming companies (Zynga, EA, Valve), online dating companies (Match, Eharmony), geneology (Ancestry), health (Weight Watchers Online) that make 1+ orders of magnitude more money than Evernote.
Most of them also have freemium models. What's special here?
The interesting thing with these "freemium" companies is that there's generally a long conversion time. For many, it will take a year or more before free users covert. Each is a bit different, but last time I saw, Evernote fit that profile.
So a good way of projecting future performance here is looking at how many free users they have, and what the conversion rate has been in the past (as well as average time to convert). If they've recently picked up a lot of new free users, we should expect a significant bump in paid accounts in about a year (or whatever their average time to convert is). The freemium businesses just have a significantly different business model, and looking at the current paid accounts is often a poor indicator of future profitability. I don't know that their valuation is justified (personally, I think most valuations are high right now), but the fact that they're only "barely" profitable now probably isn't a good indicator of future profitability.
Considering the failure rate of young companies, you have a strange definition of the word "common".
Even taking failures into account, multiple-hundred percent per year is still probably pretty common. If a company doubles its revenue in a year that's a 100% increase, and that's not exactly uncommon.
Strangely, investors attempt to pick the winners, not invest in random small companies.
They look at metrics like growth rate, earnings, and cost of customer acquisition to decide what to invest in.
Google's P/E ratio is ~21 at the moment, and their share price is ~$620.
They floated at a P/E ratio of ~100, and a share price of $85. Their share price would have to drop to below $85 for it not to be good value as an investment, and they would have to drop revenue to around 1/10 the current level for them to be earning less.
Even if I accept the likelyhood that there will be some kind of recession in Europe are you really saying that Google will drop revenues by 10 times? (I'd point out that during the 2008 financial crisis it reduced their revenue by a couple of percent).
Ha, I sent Phil an email last week congratulating him on making one of my favorite products of all time. Turns out that might not be such a special email to him, but as I said, I'm thinking of going premium, not because I need to, but because it's just such an obscenely good product.
The fact that they've got the database open for nevernote[1] is also freakin' incredible, as it means I'm synced across android/windows/Linux seamlessly.
I looked at Evernote a couple of times and it just seemed like overkill for my needs. But a couple of months ago I got one of those tiny portable Fujitsu Scansnap duplex scanners and started scanning and shredding every scrap of paper that passes my way. Now I get it.
I have no idea what options there are for a non-iOS user, but ...
There's an excellent iOS app called TurboScan. It's fantastic. Take a picture of your receipts and it'll convert the image to low file size, but high-quality, PDFs. You can then send those PDFs to your Evernote email and have them stored neatly in a notebook.
It's a fantastic solution for portable document scanning. And with the iPhone 4s camera being so improved over its predecessors, it makes great PDFs of receipts.
Droid Scan and Cam Scanner are decent Android alternatives. For reciepts it's ok, but for OCR it doesn't work well, which I was kind of hoping for. I'll just have to wait for camera's to improve.
I wish I could do that, but unfortunately I just can't bring myself to trust their security. I use Evernote for my classes because I use a Asus EeeNote tablet that syncs things to Evernote exclusively, but there are so many things I can't trust in the cloud. If Evernote offered a "host it yourself" option that worked with existing Evernote clients, I'd be all over it.
Although I use Evernote every single day, and it has really improved my life overall, I agree--I can't trust it with the most important of data.
I doubt they will ever offer a 'host it yourself' plan, but if only they would implement encrypted notes, it would solve this problem. Data blobs that are only decrypted on the client side, with searching possible only on the metadata (note title, tag, etc) and not the encrypted contents.
They do allow this for text--you can select text and encrypt it--but not for documents.
My workflow with Evernote is that every single piece of paper and mail (along with tons of web pages, etc) goes into it. ScanSnap is awesome, an administrative assistant feeding your paper mail through the ScanSnap even more awesome.
It is unfortunate that there isn't a real facility to keep thos most sensitive of documents safe, though. IMO this is the most significant failure of the service.
Yep, great concept. You can do this without evernote, and you can do this with apps that do a much better job of allowing you to get stuff out. Evernote did not create the ability to do this. You are very confused.
Confused in what way? Evernote didn't create the ability to do this but they offer an excellent cloud service which is seamless across multiple platforms including Android and iPhone. Their applications are stable, thoughtfully designed and constantly improving. The paid service is very reasonably priced and opens great possibilities for collaboration. If there's something better out there, please tell me.
A good example of solving a real problem people have, definitely a good approach. I'm an evernote user, I like it, but I see many possibilities for improving UI and features, it's worth trying IMHO.
I'd be very curious to hear more about how exactly people are using Evernote in their day-to-day lives. I installed it on my laptop and phone a year or two ago but I could never really figure out a use for it.
I'm doing job interviews and I take a picture of every business card I get handed. Evernote will OCR them and store them forever, so I can trash the cards and have access to the data in the future.
For flights, I store all my itinerary information, and also make a note of the parking location in a special note. Never forget that way.
I have a note for all my emergency contact information. I have a notebook for date ideas for my wife and I.
Meeting notes, shopping lists, todo lists, whiteboard photographs, names of people I've met at parties so I can remember who they are later, cigars and whiskey I've enjoyed.
Every other list maker I've ever tried has suffered from either local storage - it won't be with me after I flash my phone or if I take the idevice to the store instead of the android or if I'm at my computer and left my phone downstairs - or else poor searching. Evernote makes all my info show up everywhere I am and be very well searchable, so it's become my go-to 'jot something down' system. I particularly love that they did a great job on search.
It is an awesome list maker. Almost perfect. The auto syncing and having an app for every device are the killers.
But, as a list maker, why can't I make lists in user defined order? This is one of the most fundamental things a list maker should be able to do. It's so painful it's almost a deal breaker. There is no more natural way to sort things into priority order. I need to be able to switch to different notebooks (and tags, potentially) and immediately see what's most important, but the only way to do that now is clumsy hacks and workarounds. I can't throw stuff in and iterate over it until it's a hunk of polished gold. Instead, I have to come up with a "system" to manage it all. It's frustrating. Dragging things into order is the most low-tech way of prioritizing work. I read recently that low-tech solutions appeal to geeks, so maybe that's why it appeals to me. The fact that you can't drag stuff into order forces you to over-engineer your approach to task management.
For now, I make lists inside notes, but then I lose much of the power that makes evernote useful in the first place.
"For flights, I store all my itinerary information, and also make a note of the parking location in a special note. Never forget that way.
I have a note for all my emergency contact information. I have a notebook for date ideas for my wife and I."
Again, you could do this in simplenote /notational velocity. You're using a sledgehammer to do really simple tasks.
I've stopped filing paper in a filing cabinet. Now I just scan it and throw it out. (I should be shredding it, but haven't gotten around to buying a shredder). This takes strictly less time than filing it by hand, is more enjoyable, and best of all, it's searchable.
Details: I bought a Fujitsu ScanSnap sheet fed scanner (loads paper in a hopper like a fax machine) off of Ebay for $100. It has decent Evernote integration, such that I can drop in a sheet of paper, push a button, and have it scan both sides of the sheet of paper directly to Evernote.
One of my primary use-cases is to save web pages that I wouldn't want to necessarily bookmark, which I normally do for frequently visited pages. Then, I can search saved notes (which searches page content too!) for whatever I need.
Agreed, I have it on my phone, but I never really started using it in other areas. Currently I could really use a program like this to organize my notes (rather than emailing them back and forth and having no availablility on Iphone). All this huge praise for Evernote (although apparently only in Tokyo and Silicon Valley) makes it seem like a good solution, but outside of this Company of the year business, I haven't heard much since I got the app ~6 months ago.
I have an interest in fashion and interior design, and Evernote is how I save images of looks that I like or might consider buying in the future. It's nice, it can save images, textual descriptions and the source with very little effort. With the Chrome plugin I don't even need the Evernote app to be open to save notes.
Congrats to Evernote. Evernote is my most used piece of software on every device I own (desktop/laptop/tablet/IPhone). With a Scansnap scanner it really shines. I have been a paying user for 2 years and just paid for my third year. I have also bought accounts for most of my family as gifts and got them hooked too. My parents did not really get it until I got them a Scansnap scanner. It is a indispensable piece of software that makes me much more productive at work. I have quick access to any medical paper I have read in the past two years wherever I have my phone or access to a computer. I have tried competing products like Springpad but they did not work as well across every platform I use. The Clip to Evernote app for Chrome is awesome for Internet based research. Keep up the good work Evernote team.
Congratulations to the Evernote team! A great product that I use all the time. Glad to see them being recognized. I don't even use any of the premium features/expanded limits but I still pay for it because it's just that good.
I would gladly pay four times the amount I pay now for their service. It's one of those things that has integrated itself so much into my life that I don't know what I'd replace it with if I ever had to.
I have to ask, I suppose I could just go try it again, but I'll ask. Has Evernote changed significantly over the last year+ or so? I signed up for Evernote some time ago, and while I enjoyed the concept it was clunky and kind of ugly and I was overall just indifferent to the product.
I tried Springpad some time after quitting Evernote and found it to be more fluid and easier to use. So, has there been significant changes to Evernote? Or, is it largely the same and likely just a preference issue for me?
The phone apps are pretty good (I use the iOS app on an iPhone 4, and the Android app on a Galaxy and Transformer), but the desktop apps still needs improvement (on Windows anyway).
This is what's really killing it for me. If it wasn't so slow and bloated, I'd use it much more. Instead, I usually just pull out something quick like AstridTasks or another note program. Only the big stuff I save on evernote.
What's interesting is that many people forget that Evernote is also a powerful cloud plattform with a solid API. The ability to save all your notes in a standardized way in the Cloud and then install individual apps for filtering, processing, or managing them has huge potential.
I think we've only seen the beginning of where they'll go. In comparison to Dropbox mostly because Evernote as a whole is a bit more difficult to grasp.
I was impressed by their decision to drop .NET and go C++ on MS. I use the product daily and have for the last 13 months. It's as important to me as email.
Congratulations Evernote! I remember being nervous about the leap from release 2 to a cloud integrated offering a few years ago, but that was what made Evernote something that dramatically changed the way I work. It also brought together my Mac, office PC, work BlackBerry, iPhone, and iPad together like I have never seen. I'm a paying customer and I recommend it to everyone.
Let's not forget they've taken nearly $100M of investment at a nearly billion dollar valuation. Perhaps this is my east coast conservatism, but in the average case I just can't see how this works out well for the investors.
To get a respectable exit of perhaps $4B in a few years they would have to get their revenue up to something closer to $200M/year assuming you gave them a generous valuation on 20x revenue and completely neglect profitability. Given that Evernote primarily makes money from paid users they will need to dramatically improve conversion, or somehow figure how to get 10x more users. 200 million users strikes me as unlikely, and doubling conversion while also getting 100 million users does too. It's not to say it can't happen, but I just don't see it for a paid consumer service.