Most start-up entrepreneurs talk about exiting the company within five to seven years, but not Phil Libin, CEO of Evernote.
“We’re creating the 100-year start-up,” Libin said. He also calls it “The Forever Start-up.”
Evernote explicitly does not have an exit strategy, Libin said. He doesn’t want to sell the company or take it public or merge with someone else. He’s building something that he loves and he wants his customers and employees and everyone else to love it too.
That’s a pretty bold strategy for a Silicon Valley-based technology company. But the 100-year startup appears to resonate with the least likely crowd, the venture capitalists, which have given Evernote $100 million. Investors include Sequoia Capital, Morgenthaler Ventures, Troika Dialog and DOCOMO Capital.
“I may not be the CEO 100 years from now but I would like to be involved in the company,” Libin said. “There’s no exit strategy. That permeates everything we do.”
Libin spoke at the official opening of its first U.S. satellite office in Austin on Thursday.
“Austin is the ideal place to try this first,” Libin said. “Austin is a great place to build things. Austin is a crappy place to raise money.”
But Evernote already has its money in the bank and now it needs talent to create and expand its product line. That’s why Austin and Evernote make the perfect fit, Libin said.
Evernote also has offices in Tokyo and Moscow. And in the next few months, Evernote will open additional offices in Europe, Beijing and Singapore. Libin believes in going where the most talented people live. He wants to keep the “studio” offices small and nimble like start-ups but connected to each other as part of a larger mission. That mission is to put Evernote in the hands of everyone on the planet.
A Japanophil, Libin explained that Japan has many companies that are 100 years old. The country and its people believe in long term planning. He wants to combine that business longevity and ethics with a start-up’s ability to quickly change and adapt to the marketplace.
Evernote’s business model is not “clever” or “complex,” Libin said. Its model is to build something great that people will pay for, he said.
“We want Evernote to be a tool, like a hammer is a tool,” Libin said. “The right tools change your brain.”
“With Evernote, we want you to know you’ll never have to forget anything again,” Libin said.
Evernote is a free application that lets people take and save notes. It also offers a premium version that costs $5 a month or $45 per year. Its paid product offers bigger upload capacity, greater sharing options, a note history, better search tools and no ads. Evernote has more than 17 million customers worldwide and of those about 800,000 pay to use the product.
“Our product becomes more valuable over time,” Libin said. “People hate to be forced to pay for things. But people love to pay for things they love.”
In the first month, less than 1 percent of Evernote users pay for the product, but by the third year, more than 20 percent are paying, Libin said.
“We want people to use this for the rest of their life,” he said.
Evernote has more than 17 million users worldwide.
“This is all organic growth,” Libin said. “This is word of mouth growth in a little over 3 years.”
Evernote, founded in 2007, has never taken out ads or done traditional marketing. Its never appeared during the half time of the Superbowl like some other technology start-ups.
“Everything we do – all of our efforts – are put into making the best possible products,” Libin said. “We want the first time you hear about Evernote not to come from us, but to come from a buddy in a bar.”
Evernote also recently acquired Skitch, a free app that allows people to draw pictures to communicate ideas. Skitch takes communications back to the stick in the sand concept, Libin said. E-mail has become a frustrating way for many people to communicate, especially visual ideas, he said. Skitch makes it easy, he said. Anyone, who works with their hands, in the blue or white collar industries will like Skitch, Libin said.
The Evernote family of products now includes Evernote, Evernote Peak for education, Skitch and Evernote Clearly, which creates a better reading experience online. Evernote plans to add two more “super-secret mystery” products this winter, Libin said.
Evernote has 115 employees, tripling in the last year, Libin said.
“We’re hiring like crazy,” he said.
The Austin Evernote office hopes to have 25 employees by the end of year and has space to hold up to 60 employees, Libin said. It’s mostly looking for product designers, artists, engineers and product managers, but it also hires writers, marketers and others. Libin worked in Austin more than 10 years ago. He lived in Boston and commuted to Austin to head up a company called Engine 5, which he sold to Vignette in 2000.
“We’re really happy to be here,” Libin said. “I really developed a huge sense of respect for Austin and building things.”