We all got EverNote math wrong

February 9, 2010

A while ago I did a post, showing how EverNote was bleeding money at an astonishing rate. Turned out their CEO Phil Libin gave confusing data, so it was not just me falling into wrong conclusion. You can find updated math here. In short – they do have operating profit, and things are not as bleaky as they seemed two months ago.

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Posted by Oleg Kokorin

Evernote reveals their usage finances

December 7, 2009

I just found this beautiful article. In short, the figures are as follows:

May 2009: 900,000 users total; 12,000 paying users.

Nov 2009: 2,000,000 users total; 31,000 paying users.

The cost a user incurs is $0.09 per month.

A few observations:

  1. The user base growth is very solid. Going from 900K to 2000K in just 6 months is cool.
  2. Their conversion percentage is up from 1.33% to 1.50%. This is insanely important (unless the numbers were just rounded this way).
  3. They are loosing money: $4.50 * 12 * 31,000 = $1,674,000 income. $0.09 * 2,000,000 * 12 = $2,160,000 costs of serving the users. Total is ($486,000) annually.
  4. Those were just the costs of providing the service to the users. They also have user acquiring costs as well as development costs (to improve the service and to extend to other platforms). These costs are easily into $2-3M a year.

Note: I used $4.50 per month fee because it is $5.00 if you pay for a month. If you pay for a year, it’s $45/12 = $3.75 per month. Plus, payment processing is not free, especially for small transactions.

A few questions:

  1. Is Evernote a good business? Not yet. Even if they stop all development, their operating costs give them a fat red number.
  2. Will it become a good business? The trend is still not in their favor. However, even making losses, they might be eventually bought out by someone like Google, making a happy exit for the founders and VCs. It seems to be their strategy.
  3. How does MobileNoter compare to Evernote? I won’t share any hard numbers, but if we stop the development, we’ll be cash positive.

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Posted by Oleg Kokorin

Evernote just got $10m more to burn

November 18, 2009

It’s all over the high-tech news, so I guess I can’t ignore this one. Evernote is kind of our competitor. Not exactly a competitor, because we are tiny (yet) and Evernote is probably #1 online note-taking software. Indeed, the main competitor for Evernote is Microsoft OneNote. OneNote is huge, but it’s totally locked into Windows platform. Even their upcoming clouded Office 2010 release won’t change that much. Microsoft stuff just doesn’t run well in other browsers. Sharepoint pages still don’t render anywhere except for MSIE. And when we take mobile devices, the browsers is not the best choice for good user experience. iPhone proves that – everyone creates native apps, because browser experience just isn’t that good.

So what we are going to do is to ride on the back of OneNote’s success and expand its reach into all other platforms that are not Windows. We are going to stick to this strategy and eventually displace Evernote as the #1 mobile and online note-taking software. What we don’t want to do is to burn money to embrace the platforms that are past their prime or just never going to be there, like Palm Pre. I won’t name some others to avoid controversy. So good luck to Evernote with burning more cash on the obscure platforms.

I will be posting more about Evernote and other competitors. Let’s consider this post as a disclaimer: we develop MobileNoter, which is a competitor to Evernote and other note-taking software. Thus, whenever I write on the topic, don’t forget that I’m biased.

 

1 Comment | Competition, OneNote on iPhone, Startups | Tagged: , , | Permalink
Posted by Oleg Kokorin