Evernote Founder Phil Libin Won’t Touch This Business Model


When they were creating the app that would become Evernote in 2004, Phil Libin and his co-founders followed a simple-if-counterintuitive philosophy: Don’t listen to your users.

Instead, they unlocked what Libin describes as a “cheat code” for innovation. They’d design something they wanted, use it privately for a few minutes, decide whether it worked, and re-iterate on it. That strategy meant that instead of undergoing lengthy customer-feedback sessions and soliciting other input, they could bring cycles of innovation down from weeks to minutes. But, Libin said on Inc.’s What I Know podcast, while it helped Evernote’s popularity, it ultimately may have also hindered its growth.

“Making something for ourselves … is dangerous. It’s a shortcut, but it’s dangerous,” he said. “After a while we never built anything for new users, because we were all power users at that point. If we were just building for ourselves, we were just building for people who were power users.”

The company took too long to embark on the changes to make it accessible to new users, Libin said. That’s one of the lessons he took when building Mmhmm, a video-communications platform that launched in November.

Libin also works with several companies in his investment and incubation firm, All Turtles–where he has a strict rule that prohibits a particularly modern business model.

“Indirect revenue is a fundamentally lazy business model,” Libin said. “It relies on keeping your users in a heightened emotional state so they can hang around your platform for as many hours as possible. So they can click on stuff so eventually I can see an ad. Simple as that.”

He’s referring to an algorithmically enhanced ad-based business model relied on by social sites such as Facebook. He said the problems these sites have birthed are plain to diagnose–though far more difficult to remedy.

“We as the tech industry built a model that we make money when we piss people off. And everyone’s pissed off now, and we’ve made a lot of money and people are like, ‘Well, what went wrong?'” he said. “Well, it actually went exactly as planned.”

Listen to the full episode in the player below, or subscribe to What I Know on iTunes or wherever you get your podcasts.

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