Sep 19, 2018

Evernote and the folly of forever apps

Phil Libin, co-founder and former CEO of Evernote. Photo: Eric Piermont/AFP via Getty Images

Evernote, the popular note-storage app that announced layoffs on Tuesday, was supposed to be a "100-year company." Its promise, often made by former longtime CEO Phil Libin, was to provide a permanent repository for your research and your memories.

The big picture: The company turned 10 last summer and revamped its logo to celebrate. But now its users are wondering whether it will make it through another year.

Here are all the ways Evernote long signaled its intention to be a "forever company":

  • Business depended on users paying for software, not advertisers.
  • It let users export notes in different formats so they'd be comfortable stashing valuable long-term info.
  • Company leaders talked a lot about the long term.
  • The logo was an elephant and it has "ever" in its name.

Evernote launched in 2008 and took off with the iPhone as one of the first great tools to leverage cloud storage. It developed some nifty text- and image-recognition tools and seemed on its way to becoming a major platform for personal data.

  • But more recently it struggled to live up to a billion-dollar valuation and made some costly mistakes, like selling branded paper goods and pivoting to a "groupware" model supporting business teams.

Evernote never went public, which could be one reason it's hurting now.

  • But if it had pulled off an IPO, it would have been even more at the mercy of market volatility and impatient stockholders.
  • Tuesday's layoff of 54 employees is the second round initiated by current CEO Chris O'Neill, who had laid off 47 people shortly after taking over in 2015.

Layoffs aren't always the sign of a "death spiral." They can make firms more efficient.

  • Evernote is still "growing and has a healthy business," O'Neill wrote Tuesday.
  • In an email to staff — obtained by TechCrunch — he said the firm has $30 million in cash and "will exit 2018 generating more cash than we spend."

But one thing layoffs remind customers is that companies are mortal, too. That's got to hurt if your business depends on users trusting you'll be around to take care of their memories.

My thought bubble: I've got 7,998 notes stored in Evernote, collected over a decade. Tuesday night, I exported a plain-text backup. Just in case.

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