Secrets of Growth

Can Evernote's software make you smarter?

October 12, 2011: 5:00 AM ET

CEO Phil Libin has turned note-taking software Evernote into a growing business by building a tool that nontechies love to use.

FORTUNE -- Phil Libin's company Evernote is in the business of making memories.

Libin, CEO of the Mountain View-based app developer since 2007, took a haphazard mix of "memory augmentation" software developed by Russian American scientist Stepan Pachikov and channeled it into a polished note-taking app that lets users type documents, take photos, save web stories, and record voice memos. All the data are stored on the company's servers, so customers can access their digital Post-its on most desktop and mobile devices.

Born in St. Petersburg, Libin immigrated to the Bronx with his parents -- his father was a classical violinist, his mother a classical pianist -- when he was eight. He taught himself English viewing What's Happening reruns and reading Thor comics. When he was 14, he was fired from his first job with Carvel Ice Cream. ("You twirl the cone so the ice cream just twirls around the edge," he confesses. "I lacked the dexterity to work the machine and do that.")

Libin worked as a software engineer after college, though within five years, he would change gears and try his luck as a startup co-founder: first with the Java services group Engine 5 and later with CoreStreet, a security software organization that would grow too big for his liking. (Both would eventually be acquired for a collective $50 million.)

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When that happened, Libin left CoreStreet seeking the next big challenge -- he found it in Evernote. Pachikov wanted a smart, gritty executive to transform his futuristic, but not very commercial vision into a thriving company; Libin shared his fellow Russian's passion for the concept of memory-enhancing technology.

"Everyone was doing Facebook or Facebook for dogs," recalls Libin, "and this was part of our pitch: Evernote is antisocial." Libin knows a little bit about antisocial behavior, by the way: he lost a year of his life playing World of Warcraft. In his home, there's a shelf lined with Dungeons & Dragons books. And he owns a life-size robot that supervises Evernote's 110 employees when he's out on business -- it even accepted a Founders Institute entrepreneurial award in San Francisco while Libin was attending a conference in Spain.

Libin's counterintuitive approach with Evernote is working. With 15 million users, Evernote is growing fast, adding 1.2 million more a month. Priests use it for prepping sermons. Chefs plan their menus with it. Schools integrate it into their curriculums.

In Japan, a collective culture that prizes its past, Evernote is somewhat of a phenomenon. While Libin was shopping in a Tokyo bookstore, he stumbled across a poster of himself with a speech bubble plugging several works. There are more than 30 books now on the company, several of which sold out, and Libin has been asked to pen one of his own.

Indeed, it has become an app that is especially beloved among nontechies. Susan Orlean, a book author and staff writer for The New Yorker, uses Evernote in all parts of her life, from saving articles for work to storing her son's art. Now she's a proselyte. "I sound like the woman at the dinner party who first introduced it to me and was so obnoxious," she jokes.

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The longer people use Evernote, the more likely they'll pony up: 20% of longtime, active users convert to the premium plan with more storage and sharing options. Revenue is expected to climb from just $16 million this year to $150 million in 2013, and a recent $50 million funding round led by Sequoia Capital will fuel the company's plans to quadruple the staff to 400, filling offices as far-flung as Singapore. Its first acquisition, the Mac drawing app Skitch, was announced last August at Evernote's first conference. There's also talk of going public, which could happen in 2013, if as Libin says, the conditions are right.

"It's a rare beast of a company," explains PayPal co-founder Max Levchin, also an Evernote board member. He thinks the startup has what it takes to go the distance because it deals with data people want preserved. Take a photo of a restaurant menu, and it might seem frivolous now but become more important down the line. If you drummed up a particularly clever idea, tuck it away in Evernote, and you'll be reminded of it later on.

In fact, Levchin imagines a future where Evernote becomes "the heart of bequeathal," where users pass on their accounts to descendants when the time comes. Fantastical? Maybe. But not a bad idea.

That's why Libin believes Evernote is what he calls a "100-year company." Because as anyone will tell you, memories only get more valuable with time.

A shorter version of this story appeared in the October 17, 2011 issue of Fortune.


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About This Author
JP Mangalindan
JP Mangalindan
Writer, Fortune

JP Mangalindan is a San Francisco-based writer at Fortune, covering Silicon Valley. Since joining in 2010, he has written on a wide array of topics, from the turnaround of eBay to the evolution of net neutrality. A graduate of Fordham University, Mangalindan has also written for GQ, Popular Science, and Entertainment Weekly.

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