I love applications that are simple, easy to use and that really solve problems. For these very reasons I love Evernote. Evernote has got simplicity, seamless multi-platform access, and the best part, it's free. In this post I am going to share with you some of the notes that I took while listening to a talk delivered by Phil Libin, CEO - Evernote (terrific guy)

1. Evernote doesn't want you to hear about Evernote from Evernote.

Now that's something. This philosophy is based on the belief that if you hear about Evernote through an ad, or a promo email, the chances of you ignoring it are far higher than if you heard about it from a friend who says "Dude! There is this cool app I found called Evernote". They want their existing users to share the goodness of the product with their friends. They believe that referred users have a higher retention rate than the ones that are not referred. Their closed Beta for the product had a tremendous response rate as the new users were recruited only through friends.

2. If the product is non scarcity based, let people use it for free.

According to Phil, "The easiest way to get 1 million people paying is to get 1 billion people using". If you are an Evernote user, you may have already observed this: there is no real barrier to be able to enjoy Evernote free, lifelong. Neither does one receive any kind of marketing push to monetise to paid version; their marketing is busy doing something else that I will share with you shortly. They want to get as many people using the product for free; of course they want to achieve a monetisation conversion rate too. Surprisingly, they don't want to see that conversion ratio increasing beyond a point, as that would mean that they are not pushing enough free users into the funnel.

3. Analysi Cohortem is the magic spell.

For subscription based business models, cohort analysis is the most important instrument at hand to gain insights into customer data and usage patterns. Cohort analysis is the analysis of monitoring behaviour of a group of users that share a common characteristic; in this case the cohort is formed of users that joined Evernote in a particular month.  For example, cohort analysis for Evernote shows: 

• consistency in the amount of software usage it takes for users to stay with the product. Once that barrier is crossed, users continue to use the product forever. This time-barrier is consistent across cohorts 
• consistency in the time after which users start to monetise 
• a pattern in reduction in variable cost/user/month 
• a pattern in increase of avg. rev./user/month 

Snapshot view of businesses like X revenue, Y unit sales, Z ARPU etc is very relevant in conventional business models. They are still relevant in SaaS business models, but due to a fundamental difference in revenue recognition in subscription based models, cohort analysis gives much deeper insights into the business, forecasts and most importantly, user behaviour.

4. We have a life time to make money from you.

Hasn't it happened to all of us that we find this amazing restaurant with an amazing dessert, however, we realise that over time it doesn't taste as nice as it tasted the first few times. Compare that with a newspaper subscription that you received in inheritance from your granddad. Unless the newspaper starts deteriorating in its quality your perceived value of the newspaper doesn't change much over time. Now imagine you are using Evernote regularly for 6 months, the perceived value of Evernote for you would change tremendously from the day you started using it, to a month of usage to 6 months worth of usage. If you are a heavy user, after 6 months you will practically have 6 months of memory in Evernote.

What we have just seen is three kinds of product/services whose perceived value changes differently with time. In Evernote's example the perceived value of the product increases the more/longer you use it. This is precisely the reason why Phil and the gang don't send me glossy marketing emails. They are happy with me using Evernote for free. So long as I am using it, they have my whole life to 'monetise' me.

5. There is no better way of spending money than spending it on the product. 

Phil says, if you make an awesome product, the sheer goodness of the product takes care of word of mouth. These guys spend most of their money building the product and packing it with a punch of absolute awesomeness, rather than spending huge amounts of money marketing it. By the way, Evernote does have a marketing team, continue reading further to know what exactly they do. 

6. You can't get it cheaper than free. 

Freemium coupled with a great product can do wonders. This is particularly important for startups, as the only way the Microsofts and the Googles of the world can compete with you is by making a better product than yours and not by undercutting you; it is difficult to be cheaper than free. Plus it is fairer to lose to a better product than to a cheaper one.

7. How big is your target market?...7 billion people?

Who doesn't want a little help with their memory. I think team Evernote have done a great job at making an application of which target market is pretty much anyone who uses a computer/smartphone/tablet, working/home maker, Mac/Windows/Android/Blackberry/Palm/Chrome/IE/Firefox user . Oh! by the way, you can even use Evernote on your conventional paper notepad using Livescribe. 

8. It can be used in more ways than you thought.

This is where it becomes clearer what do the marketing folks at Evernote do if they don't make quirky ads or glossy emails. Evernote marketing helps its users by showing how Evernote is being used by other users. Team Evernote itself was unaware of the various applications of their product and the way people were using it. So their marketing teams set out to discover the different ways in which people all over the world are using Evernote: students using it to maintain lecture notes, shoppers using it for creating shopping lists, travellers creating photo journals, chefs using it to create their recipe journal. The possibilities are endless and Evernote marketing acts as a facilitator helping users help other users.

10. Libin’s Law = Moore’s Law x Murphy’s Law

Just to end on a funny note. Here is Libin's Law, which is a blend of Murphy's Law and Moore's Law. According to Phil Libin, the number of things that will go wrong at a startup will go double every year.

While Libin's Law seems humorous, it is not distant from the truth. The company almost came down to closure due to cash crunch. Until one night a Swedish user sent a note to Phil saying that he absolutely loved the product and would be happy to help if the company needed money. $500,000 later they got back on their feet and got back to doing what they do the best - making an amazing product. And here I am writing about them in Evernote, using the notes that I had made in Evernote!