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Kevin Garber: [0:07] It is Friday, the 18th of January. You are listening to the "It's a Monkey" podcast, episode number 11. 2013, first episode in 2013. It is a super-special episode. We have a fantastic interview coming up. James, welcome to 2013.

James Peter: [0:26] Yep.

Kevin: [0:27] Whole brand new year to get excited about. Lucky 13.

James: [0:30] Yeah, sure is.

Kevin: [0:31] You feeling fresh and energized?

James: [0:33] Yeah, actually, I am quite more energized than last year. New year always bring new perspectives.

Kevin: [0:39] It's interesting psychologically to start off on a clean slate. There's definitely something to it.

James: [0:45] Yeah, definitely, yeah. Very invigorating.

Kevin: [0:48] Coming up on this week's episode, we will be playing an interview with Phil Libin. Phil Libin is the CEO and founder of Evernote. Evernote is a product that you have probably heard of. You probably even use it, and it is a good chance that you love it. Phil not only has created a terrific company that has built a terrific product, he is a fantastically smart and interesting and original guy.

[1:14] So, hang around. We're going to bring that interview to you very shortly we're going to keep the news section shorter than usual this week because we want to get straight to that interview. Of course, James, the big story this week is Facebook's search application, search functionality.

James: [1:32] Yep, their graph search system, which has just been released. I think it's pretty big. I've been looking through it a little bit. I'd almost say it's probably one of the biggest technological advances I think I've probably seen in the past year, actually. What do you think of it?

Kevin: [1:55] Well, let's just take a step back. Essentially, the way that I understand it, it's a search layer around your Facebook account or the dialer in your Facebook account, one for using natural language search and things like, a bit of smarts behind it.

James: [2:11] Yeah, definitely. It's not something, I think, that has very much...there's no metaphor or anything you can tie it to that exists. If you could ask a question to all of your friends all at once, collate all their results very quickly, and pull the top answers to the top, that's kind of what it aims to do.

[2:33] It tries to pull that information that your friends have posted on Facebook and collect that all into one big result in the ways that make sense in the context of Facebook. Things like photos of certain areas, what dentist or what business or what restaurants you might like in a certain location, which of your friends work at which company, which of your friends in certain companies like skiing, those kind of examples.

[3:00] Those kinds of queries are the kind of things that you can definitely see people wanting to know, but it's really hard to get that kind of information currently. I really do think this is opening some interesting new doors. It'll be interesting to see what happens when it goes public and when people actually start using it in real-world situations.

Kevin: [3:23] The quantity of Facebook data, though, is it that good? Having this fantastic search layer, but if you're searching for a terrific dentist in Sydney, do you and your friends...have you actually populated high quality data? Because there's a lot of distortions. For instance, Coca-Cola, American Express, some of the really big brands have a massive amount of likes, but those likes have come from competitions and sweepstakes and things like that.

James: [3:54] Yeah. That is an interesting question. I do wonder, because Facebook are obviously developing this, and they're obviously using it themselves and understanding how it works, and just inevitably use within Facebook is obviously going to be really high. They're going to be liking, liking a lot of things. It's going to actually have probably a lot of high-quality data.

[4:18] When that moves into the real world, I do wonder, just from my own social graph, I know a lot of my friends don't necessarily use Facebook just for liking random things. If they go to the dentist, they're not going to like it just because they like the dentist.

[4:35] My own social group, currently I don't think that activity happens, but when something like this becomes released and if people do actually start using it actively, it could actually motivate people to actually use Facebook more for that type of stuff. Currently, if you like something on Facebook, it's just a vanity thing.

Kevin: [4:57] It's bit of an arbitrary...

James: [4:59] There's no value. You're not providing anything. You're not getting anything out of it, whereas now that this graph search thing exists, there's actually real value. If you find a really good business, a really good restaurant and you like it, that means that any of your friends, anybody who've got a close connection to you, if they're searching for something related to that, they're going to find that product.

[5:19] Certainly to me, it would actually make using Facebook's features much more...it would give me much more incentive to, and I really would see that as being a motivating factor.

Kevin: [5:28] Hence the stickiness of Facebook will yet increase even further, just when you thought Facebook couldn't get any stickier...

James: [5:36] It's both ends to me. It's both the information they're revealing and the way it may change the way people use Facebook that I think are most interesting. It's obviously very early. It's not released, so these things could fall on their face and not get any adoption, but just on the face of it, it does look like quite a new technology and something we haven't really seen before. I find it exciting.

Kevin: [6:00] They admittedly say it's beta, and it's very early days, and they're getting it to rate and they're rolling it out slowly. But I agree with you. I think they're in an echo chamber, where people obviously use Facebook a lot and a lot of life casting, so to speak, happens on Facebook, and they're dealing with a lot of high-quality data.

[6:18] But the same with my friends on Facebook, they don't check in necessarily a lot. Their Facebook profile is not a particularly good analogue of their real life necessarily. It's a much looser type of relationship with their life.

James: [6:34] Yeah, I mean, that's definitely the challenge. It's going to be, if that data isn't at a high enough quality to get people to use it from the get-go, then it's not going to have those other...you know, if not enough people are using it, it's not going to encourage people to actually fill in that information. So that could be dead before it starts, but, yeah, just have to wait and see.

Kevin: [6:55] An interesting one of the lead developers on that is the ex-Google Maps ex-Google Wave Danish-born Australian citizen Lars Rasmussen, I think?

James: [7:06] Lars, yeah. Yeah, something like that, yeah. Yeah, actually, I was quite surprised. I saw him in the video, I'm like, "Oh, well, that's where he ended up."

Kevin: [7:13] Yeah. I remember when he moved out of Sydney and to the Valley, and he said he's really going to miss living on Sydney Harbor and he's going to miss the lifestyle in Sydney, but it was an offer he couldn't refuse.

James: [7:24] Well, yeah, and I can see why he did it. It makes a lot of sense. So with that kind of intelligence and foresight behind it as well, it gives me a lot of faith in the project.

Kevin: [7:35] Speaking of Google Wave, though, why have Facebook...and I think we've mentioned it on the podcast before...boosting need, why don't they come up with a Gmail killer, James?

James: [7:47] That's a good question.

Kevin: [7:48] Everyone, if you're listening to this podcast, you might not know it, but you have an email address that anyone can email you outside of Facebook. So if your Facebook is Facebook.com/Joe.Blogs, your email address is joe.blogs@facebook.com. So essentially, you have an email address, you have a unified messaging system with chat, and messages go into the same box; I think they could come up with a Gmail killer very, very quickly.

James: [8:23] Yeah, yeah. I mean, it's hard to understand why they haven't. I think maybe they believe that what they put out so far was their best attempt. You know, I don't think it is that I can think of lots of ways to improve it, and I'm surprised they haven't focused more on it. As you say, I think it's a lost opportunity.

Kevin: [8:42] Maybe. It's interesting that even a company with the massive resources, watching some of the videos around this search, they talk about their resource challenges and focus challenges. It's even a company that's growing and has got no funding issues. It is very difficult to seriously tackle deep projects on multiple fronts.

James: [9:06] Yeah. Absolutely. I guess, it's very easy to sit from the outside and say why aren't they doing this. But, I guess, they're putting their eggs in certain baskets for now and seeing how it plays out.

Kevin: [9:17] You're listening to James Peter and Kevin Garber. We are the co-founders of a company of called 89n. We have a few products. One of them is ManageFlitter, which hopefully you have tried out. ManageFlitter has had over 1.3 million users. Give it a go. We love feedback.

[9:35] We love feedback on this podcast. Please tweet us back at Monkey Podcast on Twitter. We also have a Facebook account. You can also email us at podcast@itsamonkey.com You can also leave a comment. If you're listening on the web leave a comment on any of the stories. We love your feedback. We know you're out there, we know you're listening. Tell us who you are.

[10:01] Coming up shortly after the break we'll be chatting to the CEO and founder of Evernote, Phil Libin. A fantastic interview. You will not be disappointed. Stay with us. After the break the CEO and founder of Evernote, Phil Libin.

Woman 1: [10:21] The "It's a Monkey" podcast is brought to you by ManageFlitter. With ManageFlitter you can easily find out who isn't following you back, find new people to follow, track keywords on Twitter and schedule tweets for the most appropriate times. Tweet code "Monkey" to @ManageFlitter to receive a one month free budgie account.

Kevin: [10:45] You're back with Kevin Garber on the "It's a Monkey" podcast. Beautiful day here in Sydney, Australia. I have a very special guest live on the line. He has been called "the most underrated Silicon Valley star." He has managed to build a company...I can hear him laughing in the background. [laughs]

[11:06] He's managed to build a company that's raised over $250 million. The company is four years old. It has more than 45 million users, over 200 employees. Its valuation is between $1 billion and $2 billion. He has fascinating things to say, fascinating insight into the start-up industry, into entrepreneurship. I'm lucky enough to have him at the end of the line in Silicon Valley.

Phil Libin: [11:31] from Evernote, thanks very much for joining us on "It's a Monkey" podcast.

Phil Libin: [11:36] Thank you. It's a real pleasure to be here.

Kevin: [11:39] Phil, have you ever been to Australia?

Phil: [11:41] No. It's one of the great injustices in my life. One of the things that I'm most ashamed of is that I've never been to Australia. There's really no good reason. I need to come and I need to do it relatively quickly.

Kevin: [11:52] It's only one flight away from the Bay Area.

Phil: [11:55] It is. And it's a short flight. It's only 20 hours or something. It's easy to do.

[12:01] It's crazy, with all the traveling I do. I've been just about everywhere and that I haven't been to Australia it's unsettling to me. I need to make it down there very soon.

Kevin: [12:11] I saw your comments about the European start-up industry that it's got a couple of elements being smart, creative people, hardworking people, but the early stage ecosystem is still not quite there. I think Australia is in a very similar position to that.

Phil: [12:28] Yeah. What we'll do is we'll probably go over there and start doing some Hackathons and doing some outreach to the local developers, local designers. We really just want the most creative and energetic people to do stuff with Evernote. We'll come to Australia and do that.

Kevin: [12:45] I look forward to it.

Phil: [12:46] I think I should just make news on this podcast and just go out and say that I will commit to being in Australia at some point in 2013. I think it's going to be a New Year's resolution that I make. I'm not let another year go by without going to Australia. You can check in with me in a year and see if I've lied about this.

Kevin: [13:05] We'll definitely hold you to that. But please try and come in summer because in summer it sounds like it's a mixture between the Bay Area and Hawaii, not that I've been to Hawaii.

Phil: [13:19] That sounds good. That sounds like a plan. Summer is now, right, over there?

Kevin: [13:24] Summer is now.

Phil: [13:25] OK.

Kevin: [13:26] It goes from about December until about February, March. It's probably the best time of the year head to at least Sydney. It's the best time for Sydney.

Phil: [13:35] Neat. I'll make it out sometime in 2013. I'm really looking forward to it.

Kevin: [13:40] Terrific. Phil, you've called Evernote the global human memory extension or the cognitive prosthesis. What I like about that description is that you're not talking about tech, you're not talking about features, you're not talking about bells and whistles, you're actually focusing on the value and the impact it actually has on people's lives. I feel that that sometimes gets lost in particularly the echo chamber of the tech industry.

Phil: [14:06] Yeah. I never really saw us as a technology company. I'm a nerd. I'm a computer programmer. Many of the early people at Evernote were. But we never really saw this as making something that differentiated itself based on the technology. We really just wanted to make a product that we could use for the rest of our lives. We want Evernote to be a lifetime product.

Kevin: [14:31] You guys have the claim to fame of being the oldest app in the Apple Store as well as for the iPad. The first apps released.

Phil: [14:42] Yeah. We were in the first cohort, we were there on day one. There's only a few apps that were there on day one that are still around. That was our strategy early on. We basically said we're going to kill ourselves to get on all of the major new platforms on the day that they're released so that we can piggyback on all of the massive marketing money that the vendors and manufacturers and platform companies are going to spend promoting all their new stuff.

[15:11] You know, we didn't have any money back then. We didn't have any advertising or marketing budget, so we thought all right, let's just kill ourselves to get on there on day one, and hopefully that'll mean a whole lot of publicity and promotion. And it worked really well, so I'm glad we did that.

Kevin: [15:26] So you guys are really famous for having presence on nearly every single platform; how do you organize the development teams internally, as a matter of interest? Are they split by platform? Is there an R&D team that sort of wraps around all the teams?

Phil: [15:42] Well, "organize" is probably too generous a word for it. I think we definitely have a barely managed creative chaos here. And it is multiple teams, so we have a few principles that we we try to adhere to. But the most important one is really that we don't, like we know that we don't know how to do any of this perfectly.

[16:07] So everything is an experimentation, we're not dogmatic about stuff, we don't have any particular methodology that we say is the right way to do things. We try to be as flexible as possible in our approach and measure the success of things and adapt.

[16:21] So there's a few things that seem to be working out pretty well, and that's having small teams. So we kind of think that the ideal number of people working on a product team is the same as the ideal number of people you want to have over at your house for dinner.

Kevin: [16:36] Right.

Phil: [16:38] It's like six people, maybe six to eight people. Like if you have if you have eight people sitting around the dinner table, you could still have one conversation. But sometimes you have more, like once you have 10 people sitting around a dinner table, it's not really one conversation anymore. There's just too many people, so like somebody's off on the side having a little side conversation, that kind of stuff.

[16:54] And product development really is, it's like a six-month dinner party. It's an extended, spirited, energetic conversation among a small group of people who are working together on something. So we have maybe 19, 20 teams, each one is five to maybe eight people, and they build all the products. And they compete with each other for good ideas, for bragging rights they kind of leapfrog each other in terms of functionality.

[17:25] The other thing that we've figured out works pretty well for us is we never strive for consistency. I kind of think that consistency's not a goal, the goal should be excellence. Because I think if you strive for consistency, what you wind up getting is you wind up getting everything being consistently mediocre, like everything kind of becomes consistent because it's all sort of sucky, especially if you're building cross-platform, you know.

[17:50] So we don't use any lowest common denominator technology, we don't care about code reuse if any of you...to the extent that some of your listeners are developers or manager developers code reuse is like this big Holy Grail. We just, we couldn't care less about it. We don't try to optimize reuse of any kind.

[18:08] We really just try to strive for every single app being the best it could possibly be, and then motivating the teams that way. And when the iPhone team comes up with something that's better than the Android team, then the Android team is motivated to leapfrog over that and come up with something even better in the next release.

Kevin: [18:25] So the majority of your 200 or so employees, are they developers, engineers?

Phil: [18:32] Yeah. Well, I think we're up to about 280, I think, maybe closer to 300.

Kevin: [18:36] Right.

Phil: [18:38] And I think something like 60 or 70 percent are product, so they're developers, designers, QAs people making the product in some way. Really, like almost everyone does. There's relatively few people that don't do anything that's like...There's me, there's a couple of other of the higher management, so the dead weight is isolated. You know, I'm grandfathered in. There's a few other people, but for the most part, everyone's actually building products.

Kevin: [19:07] Do you still code at all? Do you cut code?

Phil: [19:10] I do a little bit. They don't let me into the source control system very much, so they don't let me write production code, but I do write. They let me play around with the reporting system and the stats, because they figure what's the worst I can do? I do wind up writing a bunch of the reports.

I write a lot of SQL queries and spend a lot of time with pivot tables and analytics, and I produced most of the analytics that we put out over the past few years in the early days. Now, we do have teams of people that are actual professionals at analytics that are doing a lot of that stuff. I still write a bunch of SQL from time to time, if you consider that code, which I do because it's [inaudible 00: [19:29] 19:53] . It's the last thing that they'll let me actually program.

Kevin: [19:57] Tell us about Evernote for Business. You guys have launched something earlier this month, and I guess it's based very much on the fact that your stats are showing at 60 percent, over 60 percent of your users actually use Evernote at work. Most of those people are actually doing it on their own back, and they actually bought it themselves and bringing it into work.

Phil: [20:18] Yeah. We just did a survey a few weeks ago. It was two-thirds, 66 percent use Evernote at work for both work stuff and personal stuff. The vast majority of those, I think 85 percent of them, are bringing it in themselves. It's not something that's sanctioned by the company. It's something that they bring in because they like it.

[20:37] We just thought, well, that's how everyone at Evernote uses it. We all have Evernote accounts, and we all use it. It's not really officially mandated, but we use it to run the whole company. We just wanted to make that a better experience. Like everything else, we're really just building for ourselves. We said now that we are close to a 300-person company, we still want to use Evernote to run everything.

[20:57] How do we make a great experience for us? We set out to do that. We talked to a bunch of users, a bunch of companies, and I think we came up with some things, a very good start for Evernote Business. The main idea is it's Evernote. It's just Evernote that plays well at work. It make your experience of using technology at the office as good as it is outside the office.

Kevin: [21:21] I first heard you talk, I think it was on Jason Calacanis' regular show. Good old Jason, he's done great things for the start-up industry. I just love his energy.

Phil: [21:32] Yeah, absolutely.

Kevin: [21:34] His podcast, I just want to start another company after listening to him. What strikes me about most of the talks I've listened to, you sound incredibly relaxed for someone who is running a business that's having high impact and raising money and staff, and all those things that's part of an entrepreneurial roller coaster. Are you a relaxed person or do you just sound relaxed?

Phil: [22:00] I think maybe you've just mistaken exhaustion for relaxation. I think maybe you're just picking up on extreme levels of sleep deprivation and maybe that's coming across as being mellow. Yeah, it's definitely a very, very intense process being at Evernote. Everyone works really hard, the stakes are incredibly high.

[22:24] It turns out it's far more stressful to be at this stage of the company now that we've had a little bit of success. This is actually far more stressful than when we were tiny and about to fail at any given day. So there's quite a lot of pressure here. I think I probably respond to that in my best Spock-like manner and try to de-emotionalize everything and be relatively even keeled just because there is so much stuff going on.

[22:48] I see the job of the CEO to be a "drama sponge." I need to soak up all the drama, I need to soak up all the risk and you try to shield the rest of the team from as much of it as possible, to just let brilliant people focus on being productive and not stress out. So I just try to soak up all of that up. I wouldn't be doing a very good job of that if I was always running around with my hair on fire.

Kevin: [23:12] Do you have any strategy for down time, just getting a little bit of inside into yourself? How do you decompress and get the "yang to the ying," so to speak?

Phil: [23:25] I made a big breakthrough myself when I realized that I was just going to stop trying to adverse not work. This is not generally necessarily good advice for everyone else but I'm the type of person that I would hate it. Whenever I would go on vacation or whatever people would always tell me, "Oh, you got to relax. You just got to turn off. You got to decompress. You can't work so hard."

[23:48] What I realized was like, "Bullshit. No, I don't." It's actually more stressful for me to be trying to please other people's...live up to other people's expectations of down time. I'm actually never more relaxed than when I'm being productive and I'm getting something done. Being away from work is deeply stressful to me because I don't know what's going on when I'm not there.

[24:13] I think I suffered quite a bit. I think probably a lot of people do where you're forced to unplug. Then a couple of years ago I just realized, "Screw that. I don't have to do this. I don't have to ever be off. If I want to go on vacation and still be on email six hours a day no one's going to tell me not to."

[24:31] That actually helps quite a bit. Now I'm not operating under any delusions that I need to have anything other than productive time at work. That's pretty much what I do. I'm always on, I'm always doing something. But I love doing it. It's my life's work. Why would I ever want time away from it?

Kevin: [24:51] You've spoken a lot about how you're vision is to have a 100-year company, and look at the long term, and any technology company, you noted, really is not a short term play. But then you also talk about that in a few years you would like to list. How do you plan on consolidating those two tensions, because the short term, the stock market is incredibly fickle and incredibly myopic, and yet you still want to have your hundred-year company vision. Are they going to be sympathetic to that?

Phil: [25:27] I hope so. That's definitely one of the big risks and unknowns. I do think that I want to be a public company at some point, and I really think about that almost in moral terms. I think it's morally correct for us to be a public company at some point, because we're asking the whole world to trust us with their memories. We're asking people to build up this fundamental level of trust in Evernote, and I think it's only fair.

Kevin: [25:57] So you want that accountability just wrapped around you as much as possible, as tight as possible.

Phil: [26:02] Yeah, and frankly, if we ask everyone in the world to trust us with their memory, I want everyone in the world who feels like it to have the opportunity to be an owner of the company. I think it's morally correct to be a public company, and I want to do the right thing. I just don't want to do it right now. I want to put off the day of going public for a reasonable amount of time, because we're just having so much fun right now.

[26:27] This is the most fun time in a company. This is the time where we can really innovate. We can really take risks. We can fail a few times. You can't really do that when you're small. When you're just a tiny startup, you can't afford to take risks. Other than the one massive risk that you're taking by being a startup, you can't really do anything else. Then when you're a big public company, you get punished pretty severely for failure.

[26:52] So I think the Goldilocks moment for us is right now. Big enough to have resources to take some risks, do some crazy things, to fail a few times, and not get crushed by public markets. I'd like to do this for a few years, really be very innovative, be very friendly towards risk-taking. Once we've figured out a few more things, in three or four years, maybe we'll go public at that point.

Kevin: [27:20] What type of crazy risks are you thinking of? Is it the type of companies that you'll acquire? Is it just pushing the envelope in terms of the product?

Phil: [27:30] Yeah, everything we do. Evernote Business, the fact that we've said, "Hey, now we're going to sell business software, but we're going to do it with the same exact point of view as we've always done it with the consumer software. We are building business software, but we stand completely and 100 percent on the side of the end users. We are taking a public position about how companies ought to use it.

[27:57] We have a point of view about what the right way is to run a company. That point of view is directly reflected by our software. It's not going to be a good fit for companies that have a fundamentally different point of view about how much you should trust your employees or how to motivate people.

[28:16] I think if we were a large public company, once we started selling something, I think there'd be this tremendous pressure to sell as much of it as possible regardless of whether or not it comports to our general philosophy of how the world ought to be structured.

[28:29] Right now we don't. Right now we can still afford to make something and we can try to make it really great and say, "Hey, if 50 percent of the companies in the world don't want to buy it because it's just not a good fit," then that's fine with us. We don't have any pressure to accommodate that. There's international stuff. We opened up offices in several countries this year. We're going to do more next year. That's always a big risk. That's always a big unknown.

[28:55] I don't think we do anything that's reckless. We very carefully consider everything but we are willing to do things where we expect that...Roughly the quarter or roughly 25 percent of things that we do we expect to fail, and we expect to fail pretty spectacularly. Because if we're not failing in a quarter of things we're doing then we're probably not being ambitious enough.

[29:19] Once you're a big public company can you really afford to have big public flame-outs in the quarter of the things you do? You probably can't.

Kevin: [29:27] Dick Costolo, the current CEO of Twitter made some interesting comments about the tension between focus and taking risks. As a CEO just trying to get that balance right to taking these two approaches, whereas Amazon, in a way, just took risks. But other companies have chosen to focus deep and hard on their specific product.

Phil: [29:48] Yeah. Dick and Jeff, they're both genius, visionary people. They've done pretty amazing things. Obviously, Jeff Bezos and Amazon has been willing to...he's been willing to walk in the desert. As a public company he's willing to go and tell investors we're going to do this thing and it's not going to bring us any money for years and we're just going to do it.

[30:14] He just barrels through it and he does amazing things and the result that no one would have expected. Things totally not obviously in line with the core strengths originally. All of the cloud services that they've invented, where did that come from? What does that have to do with selling books? Yet they do it. They do it and they changed the world. That's a really inspiring thing.

[30:35] I think Amazon's performance, Apple's performance, a few of these companies really are the exceptions to what I'm talking about, the exceptions to when I say that big public companies are little to take risk there's obviously great ones that aren't afraid at all, they take big risks all the time. But it's one thing to say that Tim Cook and Steve Jobs and Jeff Bezos can do it but it's very much another thing to say that I can.

Kevin: [30:59] Well, I think others would disagree. You seem to be doing terrific things with your company. You're API, not as many people that I thought of are actually aware that you guys have a very open API and people are developing around it.

Phil: [31:22] Yeah. It's something that we're going to be much more vocal about in the next year. We haven't got 20,000 third-party developers, it's a pretty good community. But we're not fundamentally social. I think in general we aren't a viral company. We don't do things that spread virally, we don't there's not a lot of hype around what we do, so everything at Evernote is about very steady, measured growth, which gets some pretty big numbers like 20,000 API developers I think is pretty good.

[31:58] But we are going to be making a big deal about it this year. I think one of the unique things about our platform...well, really about our business model. I mean, this is the thing about the Evernote business model which I think is really kind of magical, which is it's no conflict, no tricks. We have a direct business model, which means that we only have to please one party, which is our customers, our users.

[32:24] We don't have to please advertisers, we don't have to please partners, we don't drive affiliate traffic, we don't do data mining, we're not a big data company. We don't have to monetize data in any way, we don't have to monetize eyeballs, all we have to do is make a product that people like so much that they pay money for it when they don't have to.

[32:42] And what that does is it really lets us focus, because we have no conflict of interest. We just focus on making the best possible user experience of the Evernote service. And I think one way that that's reflected in the developer community is I think we have no conflict. We have no conflict of interest with our developers. You know, somebody writes an app an app that uses the Evernote API, that uses Evernote accounts, that takes people's eyeballs away from Evernote apps, that's fine with us.

[33:10] Like we have no conflict, we're not losing any money, which isn't true for some of the some of the bigger companies with successful public APIs. As great as they are, they have a fundamental conflict of interest. You know, Twitter, if somebody makes a Twitter app that takes away a large number of people from Twitter's official apps, their ability to monetize is decreased.

Kevin: [33:32] What do you think about the whole...you know, Michael Arrington wrote a piece recently that the promise of Web 2.0 and open APIs and mashups is failing, everything seems to be contracting inwards, and the user is now losing out?

Phil: [33:48] No, what's failing are advertising-supported business models, because the big lie of advertising is that 'oh, no, no, it's going to be so well-directed and so good that it's going to be a positive experience people are going to seek out,' and that's just not the case.

[34:05] That's why whenever you have advertising business models, even though there's plenty of companies that make a lot of money on it, there's fundamentally a conflict of interest, and it's fundamentally there's a finite pie. It's like whoever has the eyeballs is going to be making the money. And so in that sense, there's a conflict between the platforms, the developers, the advertisers, the users, that they don't all want the same thing, and we don't have that.

[34:27] So when we actually look at our revenue per user, which all comes from premium subscriptions or a freemium model, our most profitable users are ones that use our third-party API apps. So even though they're using apps that take their attention away from official Evernote apps, they're still using Evernote, and we make more money from them, because they're more engaged, they're more active, they're more likely to get value out of the premium subscription.

[34:51] So I think we have this we have this model, which is very simple, and it lets us completely avoid conflicts of interest. You know, the downside of it is that it's slower to grow, because there are no tricks in it, there's no little viral or social hooks. But the upside is there's also no conflict. So it's just a model that I prefer.

Kevin: [35:13] Phil, I really appreciate your time. I know you push for time and you do need to head soon. I'll just end on one of your comments when someone asked you what your main competition to Evernote is. You said, "The main alternative to Evernote is leading a miserable, unproductive life and being sad all the time."


Phil: [35:35] Yes. That was me before I started using it. I stand by that statement.

Kevin: [35:41] Phil, I really appreciate your time. I look forward to showing you around Sydney sometime. Thanks for joining us on the podcast. It was really great to talk to you.

Phil: [35:51] Yeah. Thank you. I'm going to take you up on that offer. When I decide when I'm going to be in Australia I'm going to need people take me to all the best eating and drinking spots. I'll look you up.

Kevin: [36:03] It will be an absolute pleasure. Thanks and have a good day.

Phil: [36:06] Take care. Bye.

Kevin: [36:07] Bye.

Woman 1: [36:08] The "It's a Monkey" podcast is brought to you by ManageFlitter. With Manage Flitter you can easily find out who isn't following you back, find new people to follow, track keywords on Twitter and schedule tweets for the most appropriate times. Tweet code "Monkey" to @ManageFlitter to receive a one month free budgie account.

Kevin: [36:32] James, there are so many awesome sound bites in that interview. I don't know where to start. Evidently, a super-smart guy.

James: [36:43] Absolutely, yeah. We do have some news. He promised to come to Australia.

Kevin: [36:48] That's terrific.

James: [36:49] That's an announcement.

Kevin: [36:51] An announcement, he's on the record, he's going to make it to Australia within the year. I can hold him to it. We're going to take him around to all the pizza places and the bars.

James: [37:01] Yeah. Absolutely.

Kevin: [37:03] You don't have to work too hard in Sydney to help people have a good time.

[37:08] There are a few comments that he made that were really interesting. I found particularly his insight into their development process and their teams quite interesting. I laughed when he said, "Product development is like a six-month dinner party."

James: [37:24] Yeah. It's an interesting idea. An extended conversation, I think, was some of the words he used. It's quite a nice idea for it. I liked that.

Kevin: [37:32] They got about 20 teams of five to eight people each. The teams compete with each other. I really liked what he said as well about, "Don't strive for consistency, your goal should be excellence."

James: [37:44] Yeah. It's interesting. He gave that example of if the Android team does something better than the iOS team then it's going to motivate the iOS team to work harder. It's an interesting perspective. When you have people sort of siloed into those different teams, giving them some motivation to work harder and just do their sort of personal best as opposed to consistency across the product, it's an interesting approach. And I think a lot of companies follow it, but I can see it working.

Kevin: [38:13] And I mean they're one of the few companies that I know of that really do have a presence on every platform.

James: [38:22] Yeah, yeah. Well, I mean, like you said, they strive to get on the platform the day of release, which is pretty incredible, you know.

Kevin: [38:30] Pretty bold, pretty bold.

James: [38:31] Yeah.

Kevin: [38:31] Because we all know, day of release, getting on new platforms, there's all sorts of issues that need to be ironed out.

James: [38:36] Yeah, very risky. But I suppose it's paid off for them, and, I mean, you can see it, because every time a sort of a platform launches, you kind of see the Evernote icon up in the early promoted apps section. I've seen that quite a lot. And yeah, it obviously helps them, like he says, they're basically kind of piggybacking off these huge companies' budgets to kind of promote their own product through these launches. So I guess it works both ways. But yeah, quite bold.

Kevin: [39:01] What I find interesting about the Evernote users that I know, that they've succeeded hugely in appealing to not necessarily super-technical people one of my friends that uses Evernote the most is...she's in her early 20s, she's not a technical person, she's a type of massage therapist that puts together different workshops, et cetera, and she lives on Evernote.

James: [39:29] That's interesting, yeah. I mean, I don't personally know that many people who use it incredibly regularly, but yeah, I can see it definitely, I can see that use case, yeah.

Kevin: [39:38] I've been using it over the last couple of months, and it's definitely interesting. As a sort of life casting tool I read a lot, I take snapshots of quotes, I take if I need to make a copy of an invoice or receipt, and I tag things accordingly.

James: [40:00] OK, cool.

Kevin: [40:02] And the fact that it syncs across your different devices. It hasn't become part of my day-to-day use yet, but there's definitely something there, particularly moving towards a paperless environment. There's some interesting case studies online about people that have really used Evernote, as Phil says, an extension of their brain, an extension of their life.

James: [40:27] Yeah, no, it's interesting. I guess I should try it out more to get a better feel for it. I've used it here and there, but yeah, I'd like to make it more of my daily activity.

Kevin: [40:37] I always found it interesting that he said the business is far more stressful now that they've had some success than right in the early days. I guess that's a bit of a life truth, I guess, when you have something to lose, things always are harder, right?

James: [40:53] Yeah, yeah. It makes a lot of sense, yeah, yeah. When things can go wrong and you can lose your position, then yeah, it makes sense that you'd have to fight for it and struggle a little bit.

Kevin: [41:04] I think there's a saying that goes, "The most dangerous person in the world is someone with nothing to lose."

James: [41:10] Yeah, yeah, yeah. Well, it's interesting, they referred to his current position as kind of like a drama sponge, just trying to remove all of the problems within the company.

Kevin: [41:20] Yeah. And I relate to that. I mean, as a CEO, I feel that a very big part of my job is helping keep the runway clear for the team so they can actually do their job. So part of my job is just making sure there's no debris on the runway, because as long as your team is executing well, it's three-quarters of the battle won. Unfortunately, that means that half of your time is not as...you don't get to execute on your core competencies, but in a way, that is part of the core competency, if that makes sense.

[41:53] Interesting his comments about a public company as well that he said, which I've never really heard a CEO talk about before, that he says it's morally correct for them to go public.

James: [42:07] Yes, it's an interesting approach, what was the phrase he used, they're asking the whole world to trust them with their memories, and that's why they want to go public, because then if they're going to trust them with their memories, then they should be able to be shareholders in the company.

Kevin: [42:23] And accountable and transparent and all those things.

James: [42:25] Yeah. Yeah, which is a very interesting approach, you know. Often I tend to think companies do it purely for financial reasons rather than moral reasons, going public, but you can definitely see that motivation there.

Kevin: [42:39] Even though there's been so many complicated problems with the markets in recent times, there is still a level of credibility about listed companies.

James: [42:51] Yeah, absolutely, yeah.

Kevin: [42:53] At least it's a little bit more of the devil you know than private companies where really anything could be going on behind closed doors.

James: [43:01] Yeah, there's an awful lot of regulations and things you have to prove and do and report on, and it makes you much more accountable. So yeah, I guess that is a moral motivation.

[43:17] Yeah, I don't know. I'm of two minds about that, because often I feel that the system's probably a little bit broken. Some of those accounting some of the things you have to report on might be a bit onerous. And you know that diminishes the moral obligation of companies to actually go public, right? So maybe you could just do the same thing and remain private. But yeah, it's a bold position of mine.

Kevin: [43:42] But not only that, in a listed company, you sometimes get forced to make decisions that aren't necessarily moral, but they're in the shareholders' interests. So there's that hole to debate, whereas a private company, you don't have to put profits necessarily first.

James: [44:02] Yeah, or I mean, like he said if they do go public, it's going to make it much harder for them to do their experimental projects, and they can't have any sort of big, public flameouts, as he put it. If they are public that does, I guess, limit the innovation a little bit. But then again, I mean, you look at companies like Google the endlessly trying things that fail, and you know, I think...

Kevin: [44:26] Amazon's probably an even better example.

James: [44:29] True, yeah. And I think investors...

Kevin: [44:33] They're smart.

James: [44:33] Yeah, are starting to learn the DNA of certain companies and what kind of things they do and what kind of things work for them, and, yeah. It'll work, probably right for him.

Kevin: [44:44] Yeah, and he said the Goldilocks moment is right now, being that they're well-funded, they got good traction, but they in a sense only have to answer to themselves at the moment.

James: [44:56] Yeah, yeah.

Kevin: [44:58] His discussion about the failure of advertising business models was interesting, and something that I think we probably feel very aligned with as well. I mean, we're not huge lovers of the advertising business models.

James: [45:12] No, no. And it was very interesting that he pointed to that as being kind of the failure of Twitter and these big sort of media companies, that they do rely on advertising. And yeah, it was fascinating the way that they built their company entirely on that premium subscription model, and how they use that to kind of align the interest of the company with that of the users.

Kevin: [45:41] There's no conflicts, as he says.

James: [45:43] Yeah.

Kevin: [45:43] There's no conflicts of interest, where as soon as you've got advertisers. I related this very closely, not only in our world, where a lot of our users have actually said to us on ManageFlitter as well is why don't you offer an advertising model, et cetera. But even further back in my career, when I worked in a commercial talkback radio station, there were a lot of vested interests, there were advertisers and listeners, and often their needs were quite different.

[46:16] I think in the web world, one of the most powerful points that I heard someone express as well is that the fact that such terrifically innovative companies, such as Facebook, Twitter, Google are reduced to selling advertising is a real lost opportunity.

James: [46:36] That is interesting, because then they're focused on the advertising and not on something better, something for their users.

Kevin: [46:43] Exactly, so it's interesting to see that Phil is critical in a sense, and rising to the challenge of moving beyond and resisting temptation for that quick advertising hit. That being said, it all comes down to dollars and sense, so who knows? I think that's it. Did you pick up anything interesting from their talk?

James: [47:15] No, it was just still that his ongoing vibe was just all about it being a lifetime company, and you can kind of see that coming out in every single thing that he says.

Kevin: [47:23] He finds it stressful when he has to stop working. [laughs]

James: [laughs] That was a good one, yeah. [laughs] And he just gave up trying to stop working. [laughs] [47:26]

Kevin: [47:31] Because it was causing more stress. I'm sure you part relate to that. I part relate to that. I really do love my going into the Australian bush and being away for a week, but I definitely do love being plugged in and working.

James: [47:48] I used to be like that. I never used to find a need to unplug when I was on holiday. I would always just be constantly checking email. Unfortunately now my fiancée has banned that activity, and I do kind of like it, now that I'm forced to give up on it. But I think it would be quite hard if I was trying to motivate myself to do it as opposed to having somebody else motivating me, motivating it for me.

Kevin: [48:13] That's why for me going camping in areas where there's no mobile signal and I don't have a computer with me, again, forces that type of environment. I find it's useful in that it actually gives part of my brain down time so that when I come back, I actually do work better. In a way, this is a reverse psychology workaholic-type analysis, but in a way I'm working on my business when I'm unplugged.

James: [48:37] Yeah. It gives you new perspectives when you come back, because you're not stuck in the same rut as you were before.

Kevin: [48:43] Exactly, and that's our challenge, to stay fresh, to stay innovative, to stay high-energy.

[48:50] That's it for episode number 11, It's a Monkey Podcast. Please Tweet us, please email us. It's Friday the 18th of January, Sydney, Australia. I hope you enjoyed the interview with Phil Libin. We are going to aim to continue to bring you fantastic interviews. We're going to really work hard to keep at the schedule every two weeks, or as we say in Australia, every fortnight. We're going to cover everything relating to the tech economy. So thanks for joining us, and we will see you in two weeks' time.

James: [49:23] Have a good one.