The tech industry as a whole has had a pretty strong year. Mobile devices are everywhere, the apps that run on them are flourishing, and the experience of using the web is becoming more personalized to individual tastes than ever before. And as it turns out, all of these trends have been especially beneficial to Evernote, the company that makes note-taking and personal archiving software.
“On one hand, I’m really proud of that, and I’m really proud of our team. But on the other hand, 20 million users is a tiny fraction of what our overall goal is. There are still about 7 billion people out there on the planet who aren’t using Evernote. We want to improve everyone’s life, and we won’t be satisfied until we’ve gotten there.”
It seems that Evernote’s success is tied to the fact that its management is concerned with longevity above all else, rather than a near-term sale or IPO. Libin often says that he is building Evernote to be a 100-year company, and according to him this mentality affects everything:
“It really impacts how we approach our pricing, our business model, who we want on our board, who we hire as employees. For a lot of us at Evernote, this is our second or third or fourth company we’ve built in our careers. Those first few companies, maybe, we were in the mindset of doing something for a few years to flip it — sell the business and move on. That mentality is not that interesting to us anymore.”
Evernote is not the only web company that is thinking longer term. According to Libin, this is largely attributable to a recent shift in the venture capital industry (Evernote itself has taken on nearly $100 million in funding, its most recent outside investment being a $50 million Series D round led by Sequoia Capital this past summer). The impact of recent changes in how VC funding rounds are structured that allow early investors and founders to cash out parts of their company holdings before a larger “exit” cannot be understated, Libin says:
“The conventional wisdom used to be that there was no money for early investors or founders until either you sold or went public. That meant that people at startups were strongly discouraged from long-term planning and long-term thinking, because no one had any liquidity until the very end.
What Yuri Milner and Sequoia and other people have done recently is conduct investment rounds that break that model. Now, people can buy and sell their shares: Early investors can get out, founders can make a little bit of money but still stay with the company. I think this separation of liquidity and exit is maybe the most important thing to happen in business in the past decade. It’s what’s made the growth of companies like Facebook and Evernote and Twitter possible.”
However, despite the fact that it plans to be around for more than a century, Evernote still wants to retain the energy of its early startup days. That’s going to be a big focus in 2012, since the company has grown significantly in the past 12 months: Evernote began 2011 with 40 employees, and is closing the year with a staff of 130. Libin says he will direct a lot of his personal attention to fighting off the negative side effects of such growth:
“I have to go on a really active battle against encroaching corporate bureaucracy, and the stupidity that inevitably seeps into companies when they get past 100 people. I need to be on a mission to make sure that we don’t get to the point where we have stupid looking corporate clip art hanging in our offices, that we don’t have unnecessary procedures, that we don’t adopt passive-aggressive policies.
Naturally I’m very hands-off as a CEO — I’m not normally one of those people that obsesses about corporate culture. But now that we’ve hit that 100-person threshold, I feel that I have to be much more conscious of it going into 2012.”
That seems like a worthy goal — albeit a challenging one. But then again, New Year’s resolutions are not meant to be easy.