As Evernote’s Cult Grows, the Business Market Beckons – Businessweek

It happens gradually, devoted fans insist. Once you get it, they say, you live and die by Evernote, the five-year-old, everything-in-one-place personal organization application that is hyped by its creators as your “external brain.”

Joshua Zerkel has seen it happen again and again—and he’s lived it to some degree, too. The 37-year-old San Franciscan came across Evernote a few years ago and was attracted to its ability to work across platforms more cleanly than the note-taking software he’d been using. Today he’s one of several dozen “Evernote Ambassadors”—power users who volunteer to spread the word about its wonders. Zerkel is a productivity consultant for businesses and individuals, and he recommends Evernote to almost all his clients; leads Evernote training sessions; and just published his second e-book about best Evernote practices, Evernote @ Work. The company pays him nothing, yet even he finds some users a little over the top. “There are definitely Evernote junkies,” he says.

Ted Barnett is one of them. A serial entrepreneur who now works as chief operating officer of digital publisher Byliner, Barnett answered questions about his Evernote usage before they could be asked, with a crisp outline he’d created in Evernote. He heard of the app from a friend in 2009 and was attracted to the idea that he could enter and access his data, stored in the cloud, from any smartphone, tablet, or computer. His first entry recorded vital health statistics he entered via his phone during a doctor visit.

“I have a terrible memory,” Barnett says, explaining that he used to rely largely on physical notebooks to keep track of ideas, until he started adding those to Evernote. Then he added a cheat sheet of parents’ names at his daughter’s school. Now, at the end of a work meeting, he’ll photograph the whiteboard, store that picture in Evernote, add some thoughts and questions, and send it around to his team. On his recent vacation in Istanbul, he used Evernote to create a one-man Fodor’s guide to the city for friends. Basically, the more Barnett used Evernote, the more he thought of new ways to use it.

Evernote says it has 50 million users around the world (a third in the U.S.) and is adding 100,000 a day. Operating on a “freemium” model, the company makes money primarily from the sliver of that user base that pays $45 a year, or $5 a month, for a souped-up version with more storage capacity. It has been profitable, and though it’s investing heavily now, it expects to be profitable again soon. But with $251 million in venture backing and a valuation estimated at $1 billion, Evernote has greater ambitions. Chief Executive Officer Phil Libin talks about reaching a billion users; others at the company freely throw around the phrase “the Evernote lifestyle.”

That’s a lot of expectations for an experience that boils down to three columns in a browser window. You type, or clip or upload a new “note” (an image, a recording, or a Web page) into the right-hand column; store it in a “notebook” listed on the left-hand side; and browse or search in the middle. The promise is that Evernote saves your ideas, documents your meetings, archives articles, reminds you what your kid wants for Christmas, and coughs up the business card of Plaid Jacket Guy from that conference in Scottsdale. In addition to segregating such material into notebooks, users can organize it with tags, but don’t have to. Evernote’s search function, with optical character recognition that even picks up words within pictures, is impressively accurate and speedy. The effectiveness of this function is crucial, because the willingness to dump work and personal material in one place is central to Evernote’s worldview.

“I always hated the term life/work balance,” Libin, 41, declares during an interview at Evernote’s offices in Redwood City, Calif. “I never had a distinction between work and personal life. I had a BlackBerry (BBRY) from Day One, and people would say, ‘This is terrible, now you check your e-mail at 11 o’clock at night.’ Yeah, but that’s great! I love that I can check my e-mail at 11 o’clock at night.”

Libin argues that everybody has spent time at work shopping on (AMZN) or making dinner plans with Yelp (YELP), and Silicon Valley companies coddle “knowledge workers” with top-notch food and other joie de vivre amenities. (Evernote is emphatically such an outfit, with unlimited vacation days, company bikes for the borrowing, and so on; the interview with Libin was partly broken up by “sushi day” festivities.) This societal shift has been under way for years but exploded in the smartphone era: It’s routine to store work e-mail and pictures of the dog in one device that you carry everywhere. “I used to say in the beginning that the person we were after with Evernote has a very poor understanding of work/life balance,” Libin continues, but these days that’s becoming, basically, everybody. “Now it’s about work/life integration: How do you elegantly do both all the time?”

CEO Libin wants Evernote to appeal to “lazy slobs”Photograph by Jake Stangel for Bloomberg BusinessweekCEO Libin wants Evernote to appeal to “lazy slobs”

Evernote recently released a version of its software aimed at the business market. It seems like an obvious pivot: signing up new users in batches of 50 or 300 instead of one at a time. The move poses an interesting challenge, however. While there are plenty of group collaboration tools targeting organizational efficiency, Evernote has always been aimed explicitly at the individual, and that’s been a core part of its appeal in an era where every new online product seems reflexively “social.”

“What you put in Facebook (FB) isn’t who you are,” says Libin. “It’s what you want some people to see. And what you put in LinkedIn (LNKD) is certainly not who you are; it’s what you want the professional world to see.” Libin suggests that the addiction to a particular strain of “viral” growth has led to a drastic overemphasis on digital design for extroversion. As a guy who describes himself as too introverted to win over his high school chess team, Libin says that’s an oversight. “What you put in Evernote is who you are,” he continues. “We used to say in the beginning that Evernote is not social. In fact, it’s antisocial; we don’t care about your friends.”

Evernote joins a long and often lucrative tradition of tools and systems for those who dream of a more efficient, productive, successful life—not just the turn-of-the-century vogue for personal digital assistants, but stretching back to the rise of Day Runners, Filofaxes, and Franklin Planners (the last being named for productivity demigod Benjamin Franklin). It’s a category that often overlaps with our culture’s endless appetite for success advice, from Dale Carnegie to Evernote advocate and adviser Timothy Ferriss, author of The 4-Hour Workweek. Evernote’s goal is to reinvent this tradition in the age of apps. And it’s easy to find enthusiasts who will explain, at length, how Evernote has achieved this.

Carley Knobloch’s, for instance, offers online videos demonstrating how to use the latest technology to simplify domestic life. One of her first episodes was about Evernote. Someone at the company saw her video and got in touch, and today Knobloch, 38, is Evernote’s Parenting Ambassador, cheerfully explaining how thoroughly she depends on it—“like breathing.”

Knobloch doesn’t work for Evernote, but she extols its virtues in her online video series

Photographs by Nathanael Turner for Bloomberg Businessweek Knobloch doesn’t work for Evernote, but she extols its virtues in her online video series

Projecting effortless competence, Knobloch breezily describes saving loads of information in Evernote, to the point that an outsider might wonder if she’s describing some sort of information attic or even storage unit, where life and work data accumulate in unsettling hoards. She insists the search function is so good that she doesn’t even bother much with organizing her thousands of “notes” and—more crucially—that’s true even though plenty of what she squirrels away in Evernote is deeply important. Yes, that means invoices and work-related files, but the more striking examples involve her comparison of Evernote to a “modern day baby book,” filled with audio and images, scanned letters, and the various documents one associates with analog scrapbooking. “You can keep your life in here,” she explains.

If you’re going to trust vital corporate or personal information to Evernote’s cloud, it had better be safe there. Libin’s previous venture, CoreStreet, devised tech security systems for government and finance clients, so he has a few things to say about this. For starters, he points out that Evernote itself doesn’t harvest or otherwise tap into its customers’ data. (The exceptions: certain customer service and beta test scenarios, but Libin says these always involve explicit permission and limited access.) Unlike, say, Google (GOOG) or Facebook, “We don’t need any customer data,” he says. “It’s yours, not ours.” Evernote stores data in a format that is fully exportable for users who dump the product.

There’s still no bulletproof solution to being hacked, but Libin and others at Evernote who were part of CoreStreet see security as a never-ending process that’s as much about strict protocols and protecting physical data centers as encryption and password issues. “Many of us,” he says, referring to Evernote colleagues who were at CoreStreet, “have a deep security background, and we know better than to brag about security.” And he points out that “security” has multiple dimensions beyond hacking, and that plays into the company’s approach to the business market.

It’s one thing to get hooked on a product by an evangelizing friend; it’s something else when it’s mandated by the boss as a companywide let’s-get-organized effort. In the business iteration of Evernote—priced at $10 per user per month, it can be used by an entire company, a department, or a team—users still make notes and store them in notebooks. What’s new is a category of “business notebooks” for storing whatever is relevant to your work, and sharing it across teams or even the entire company via multi-user “business libraries.” A single worker can thus search, edit, and add to material not just in her own notebooks, but also in certain “business” notes of colleagues. Personal notebooks are in effect partitioned off, so somebody looking for that bar chart from the big Apple (AAPL) meeting won’t stumble across your list of the best places to meet singles in New York. Should it transpire that you pursue new opportunities, as they say, you lose access to your former employer’s business folders and libraries, but you can keep your Evernote account and everything in it.

Libin maintains that Evernote’s approach to creating a version for business doesn’t contradict the original “antisocial” idea. The business version still leaves decisions about what information to store in which folder largely up to the individual. “Excellent products are not neutral; they have a strong point of view,” he says. “We have a point of view about companies that use Evernote Business and how they should relate to their employees—which is with openness and trust. Companies that don’t aren’t going to have a good experience.” Moreover, he continues, the business version extends Evernote’s point of view into the modern workplace by offering a tool that helps collaboration—yet also accommodates “employees wanting to do their own thing.”

Offering a little bit of everything to everyone is hardly a guarantee of success. In 2009, Google unveiled Wave. It was supposed to be an office-friendly, collaborative, Web-based software so revolutionary that some said it would spell the demise of e-mail. There were so many ways to use Wave that many users had no idea where to start—so they didn’t. Google abandoned Wave in 2010.

Evernote’s champions concede that there’s a tyranny-of-choice problem at its core, too. Zerkel, the productivity expert, regularly encounters clients who say: “ ‘I installed it, I looked around, I didn’t know what to do, and I forgot about it.’ ” Interestingly, he adds that these confessions often strike an almost apologetic tone: “They always end by saying, ‘But I’ve heard it’s really cool.’ ”

Pretty much everyone aspires to get things done efficiently, remember more, and stress out less. Whereas Franklin Quest and Timothy Ferriss make money even if purchasers never use their planners or finish reading their books, Evernote makes money only if people upgrade to the pay version that lets them hoard even more digital data.

The company tracks how many users simply give up and how many eventually sign on for its premium version. Most “attrition,” Libin says, happens early. But after a year, 6 percent of those who tried Evernote have converted to premium, he continues, a rate that’s been improving over time. If that keeps up, it should be more than enough to make the company profitable again by 2014.

“It’s not interesting creating productivity tools for organized, productive people,” Libin says. “It’s only interesting if you can solve this problem for, you know, lazy slobs.” By that, he clarifies, he means people like himself. “My life has always been a giant mess,” he says. “I’m a very disorganized person.” Though he’s organized enough to have founded two companies before joining Evernote.

So far, at least, most Evernote devotees appear to be people who were already highly productive—“they’re go-getters,” says Andrew Sinkov, Evernote’s vice president for marketing, “they’re doers.” In other words, it sounds like they’re not exactly the lazy slob market Libin wants to crack.

Meanwhile, the company has a number of initiatives that clearly target the hard-core “Evernote lifestyle” cohort directly, most notably in the form of physical products. There is already an Evernote tie-in version of the trendy Moleskine notebook, and there are plans for similar products in categories from scanners to bags, as well as potential all-new creations such as Evernote Century, an object meant to save your data for 100 years. The company has also moved toward encouraging others to develop add-ons and plug-ins that work with Evernote, in the hopes of making Evernote not just a product but a platform. It even hosts an annual conference for superfans and developers.

The more time you spend with Evernote, the more you can imagine spending ever more time with Evernote: mastering the spin-off apps, scanning all manner of documents, devoting yourself (as one fan put it) to “feeding” the software. Zerkel concedes that for some, this can get out of hand. Whenever he runs a how-to seminar, there’s invariably one over-the-top Evernote junkie intent on one-upping him in the total mastery of all-encompassing hyper-organization. “Maybe it’s their hobby,” he shrugs.

As Evernote’s Cult Grows, the Business Market Beckons – Businessweek.

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