From Evernote CEO Philbin (via Techcrunch):
Founder Showcase - Phil Libin Keynote from Adeo Ressi on Vimeo.
Here are some of the main points Libin covered during his talk:
- Sometimes people say “The best product doesn’t always win”, and are implying that you should focus on other areas, like marketing. In the Internet age, a good product can get the rest of that stuff (marketing, etc.) for free. So focus on that. And then charge for it.
- A year ago Evernote was making most of its money from licensing its technology, but it focused on its premium plans ($5/month or $45/year) because that was more scalable. Now, premium subscriptions bring in around $300-400k a month, and licensing represents around $45k.
- Evernote has 3.1 million cumulative users, and adds around 10k a day. Around 68k paying customers.
- Users have grown more valuable over time. New users convert to premium at a rate of .5%. But of the users that signed up two years ago and are still active, 20% have become paid customers.
- This trend is important — most users quit quickly. But the ones that stay become much more likely to pay over time.
- Evernote’s cost per user is around 9 cents per active user per month. It makes around 25 cents per user per month. The site reached break even a year and a half ago.
- Entrepreneurs should aim to be making money on each new active user as soon as possible. Otherwise scaling just means you’re losing money faster, rather than earning it