The founder of the cloud-based note-taking application Evernote has a vision to build a company with staying power that within a few years will be ready to go public.
Phil Libin's rapidly developing company is on a course that this week took it to Germany to sign a deal with Deutsche Telekom. In an interview with dpa, the Evernote chief executive said the company's mission was to create a lasting service that will be around for a century or more.
"From the beginning we decided that we want to make Evernote a 100 years company," Libin told dpa. "In order to do this I think we have a moral obligation to be public at some point."
An initial public offering (IPO), however, is still two or three years away. That is at least in part due to his determination to avoid allowing long-term investors to capitalize on the IPO.
"My goal is, everyone who wants to sell at the IPO, I want them to have sold their stake a year before," he said. Evernote has received about 250 million dollars from investors since it started about five years ago.
If he achieves that, then he reckons the investors who are on board from the time of the IPO will want to stay with the company for 20 or 30 years.
Evernote makes it possible to save data - whether a text, photo, internet link or a fragment of a website - in the cloud, which makes the data accessible from any device connected to the internet.
The service currently has about 50 million users worldwide and is adding users at a rate of about 100,000 per day. The basic service is free, but there is a premium service that includes more storage space and better search functions.
Evernote this week announced a deal with Germany's Deutsche Telekom under which customers of the telecommunications giant will receive a year's subscription to Evernote's premium service for free. The company hopes the move will help it push even further into the German market, Libin said. It currently has about 1.3 million users in Germany.
Evernote's premium service costs 45 dollars for a year in the US. In Germany it costs 40 euro (51 dollars).
Libin stressed that Evernote fundamentally rejects the idea of using the stored data for advertising or data analysis. It is not up for discussion now and won't be in the future even if Evernote could make a lot of money off the data, Libin said. The company doesn't want to gamble with the trust of its users.
"We're asking the world to trust us with their most important memories," Libin said, adding that the company earns money only when people like the service so much that they are willing to pay for it.
In addition to income from premium customers, the company's other pillar is a knowledge platform for companies.
Currently about 5 per cent of Evernote users pay for a premium account, Libin said. Though that proportion isn't impressive, Libin said the longer someone uses the service the more likely he or she is to pay for it.
In the first month only about 0.5 per cent of users sign up for premium service, he said. That number rises to 6 per cent and after four years of using the basic free service about one-quarter of users upgrade. Based on that statistic the number of premium users could go up considerably given the number of current newcomers to the free service.
Libin also believes that Evernote will profit from Google's recent entry into the cloud-based note-taking and data-saving business segment because it raises knowledge of such services. He also commented that Google undermined the trust of users when it announced that it would suspend its Rich Site Summary (RSS) service Google Reader in July.
The RSS service collects news reports from various websites and presents them at one internet site. Many users were irritated when Google announced it would pull the plug on the service. The company cited declining usage as its reason for suspending it.
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
SEPTEMBER 2, 2014
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