(2019-04-11) Shah Ahead Of Its Time Behind The Curve Why Evernote Failed To Realize Its Potential

Hiten Shah: Ahead of Its Time, Behind the Curve: Why Evernote Failed to Realize Its Potential. To Pachikov, Evernote wasn’t just another app or a way to capitalize on Silicon Valley’s burgeoning obsession with personal productivity. It was an extension of the human mind itself that would let users remember everything.

Evernote was and remains one of the best examples of what a freemium product can be. Despite this, Evernote has been plagued by a series of managerial missteps and failed product launches, and the company’s future is far from certain.

2008-2011: Creating an Impossible Vision

Stepan Pachikov saw computers as a means of not only preserving individual and cultural memories, but also as a way to empower children growing up in the political and social turmoil of Russia in the 1980s.

In 2006, on the other side of the United States in Boston, serial entrepreneur Phil Libin was planning his next move.

Libin was researching the possibilities of augmenting human memory electronically. His third venture, which Libin called Ribbon, would be an organizational tool that would help people save and access the information they needed, when they needed it.

Upon the merging of the two companies, Libin set to work. One of Libin’s first tasks was to streamline the various internal projects that Pachikov and his team had been working on, and he insisted that the company focus the entirety of its efforts on refining the idea behind their product: empowering users to capture, search, and store any and all information, wherever they were.

However, Libin’s most significant contribution to the growing company came very early on, when Libin steered Evernote away from Windows towards a bold new frontier––mobile.

When the iPhone launched in 2007, Evernote was ready. The product looked and felt completely different from its earlier incarnation. Evernote’s aesthetic was sleek, clean, and stylish, and it felt fantastic to use on mobile.

Evernote’s engineers worked tirelessly to ensure that Evernote would be available as each new app marketplace launched, each of which expanded Evernote’s footprint considerably.

Evernote treated every piece of information—from actual handwritten notes to saved URLs—as a “note,” which are organized into thematic “notebooks.”

Users could save all kinds of information within seconds.

However, the real brilliance of Evernote was its search functionality, what Libin described as “the electronic version of having something at the tip of your tongue.”

users only had to recall a single detail to start a search, much like the way our memories work

This sense of fun and satisfaction was critical in Libin’s view.

“Evernote finds the way your mind works and gives you more and more hooks into your memories.” — Andrew Sinkov, former VP of Marketing for Evernote

To Libin, the experience of using Evernote would be its competitive advantage

As Evernote doubled down on native storage, every other service provider was focusing on the cloud.

Evernote launched as a freemium product. This was vitally important to Libin. He believed that Evernote would become increasingly valuable to users the longer they used the product and the more they captured and stored within it.

Libin’s attitudes toward freemium software may have been popular with Evernote’s growing userbase, but it was repellent to investors.

After struggling to secure institutional investment, Evernote entered into an agreement with a European VC that would have seen the company receive $10M in funding. On the morning in October 2008 when the two parties were due to meet to sign the papers, the investor canceled.

the mysterious Swedish Evernote evangelist offered to front the company $500,000, whose identity remains a secret to this day.

Evernote kicked off a series of funding rounds over the next two years that propelled the company to new heights of growth.

Evernote had gone from venture capital pariah to Silicon Valley darling in less than three years, raising a total of more than $100M in the process

In early 2011, just three years after launching, Evernote became profitable. Evernote had 80 employees, more than 10M users, and annual sales of approximately $16M.

the future looked bright for Evernote––until the company began to lose its way in 2011 with a series of failed product launches

2011-2015: New Products, New Markets, New Problems

attempt to diversify its revenue streams

The first Smart Cover app for Apple’s newly released iPad 2, Peek was a simple trivia application

Essentially a simplified, specialized version of the main Evernote app, Evernote Food allowed users to record and log their meals in digital notebooks

The only real differences between Food and the main Evernote app were the integrations with Facebook and Twitter. Customers could use these integrations to share details of their last amazing meal with their networks

Evernote Hello was an even stranger app than Evernote Food. The purpose of Hello was ostensibly to make it easier for users to remember people. Users could create contact listings within Hello in a similar way as adding a new contact in their phone.

Users and investors alike were completely baffled by Food and Hello.

In May 2012, Evernote officially earned “unicorn” status—a valuation of $1B or more—after raising $70M as part of its Series D round

Evernote didn’t need to raise any more funding. The company still had much of the $96M it had raised to date, but the company planned to use its latest round to expand further into the Chinese market.

After a series of worrisome decisions and bewildering product launches, Evernote attempted to course-correct in August 2012 with the launch of Evernote Business

Professional users could connect their business account to their personal account effortlessly. This encouraged business users to bring Evernote to work with them, in much the same way Slack had done in its early growth stage.

Evernote’s next major product launch came almost a year later in September 2013. However, this product wasn’t another specialized version of the Evernote app, it was an extensive range of physical Evernote-branded products that the company would sell via its new Evernote Market.

Evernote Market squandered almost all of the company’s brand equity for nothing.

The fact that the 2013 version of Evernote was widely considered the buggiest, most unstable version the company had released at that point added insult to injury.

The company’s fortunes went from bad to worse in 2014.

Jason Kincaid, a former TechCrunch writer, published a post on his personal blog titled “Evernote, the bug-ridden elephant.”

A little more than a year later in October 2014, Evernote unveiled its latest product, Work Chat. A simple messaging client, Work Chat was designed to complement Evernote’s Business plans.

Evernote had been designed as an organizational tool for individuals, when virtually every other productivity tool on the market emphasized team-based collaboration. Work Chat was the first small step toward solving this urgent problem.

*Unfortunately for Evernote, that ship had sailed.

As a whole, the company had been distracted by chasing the wrong revenue streams.*

In July 2015, Libin announced that he would be stepping down as Evernote’s CEO and handing the reins to former Google Glass executive, Chris O’Neill, as his successor.

*As news of O’Neill’s position as Evernote’s new CEO spread, many people expressed doubts about O’Neill’s suitability and experience––not to mention the product’s ongoing identity crisis.

Libin’s failure to hire a COO until June 2015, when the company promoted Linda Kozlowski from VP of Worldwide Operations, was seen as yet another symptom of the company’s leadership problems.*

2015-Present: Returning to Evernote’s Roots

For Evernote, the period from 2015 until the present day can be summed up in four short words: too little, too late. Evernote’s various failed experiments to diversify its products and revenue streams hadn’t just wasted millions of dollars—it wasted precious time the company didn’t have.

One of the biggest and most unpopular changes to Evernote, however, wasn’t its new pricing. It was the 60MB upload limit applied to Evernote’s free plans

For Evernote, the restructuring of its freemium product was both long overdue and urgently necessary. For Evernote’s users, however, it was a slap in the face. Not only had Evernote crippled its free version, severely limiting its utility to free users, it had also failed to fix many of the bugs that still plagued even paid versions of the product.

The company’s primary competitors—Microsoft’s OneNote and Apple’s Notes—weren’t as fully featured as Evernote, but they offered a lot more functionality free of charge, making Evernote’s new pricing even less appealing.

The next major change to Evernote under O’Neill’s leadership came a few months after the product’s pricing restructure when the company announced it was migrating from Evernote’s own proprietary data infrastructure to Google Cloud.

in February 2018, Evernote took another important step forward with the launch of Evernote Spaces, the company’s first truly collaborative team-based product.

Spaces was released about six years too late.

the brand underwent a significant overhaul in August 2018.

O’Neill’s efforts to right the ship after taking the helm were admirable and badly needed, but it’s painfully clear that Evernote will probably never be the extension of the human mind that Stepan Pachikov first imagined all those years ago.

Where Could Evernote Go From Here?

What Can We Learn from Evernote?

1. Timing is everything even if it’s accidental

2. Stay true to your convictions even in the face of overwhelming opposition.

3. Pay close attention to broader trends even if they don’t affect you right now.

Elephants Never Forget