Can Evernote Succeed as a Lifestyle Company Selling Physical Goods?

I like the idea of Evernote expanding into the physical goods business, and The Verge has a very good overview of what the CEO of Evernote, Phil Libin, has in mind about the direction of the 330-employee company.

Today, at its third annual conference in San Francisco, Evernote is unveiling a marketplace for high-end physical goods carrying the company’s brand. There’s the Evernote ScanSnap, a high-end scanner that integrates deeply with its note-taking software. There’s a fine-tipped stylus for writing on tablets and smartphones with added precision. There’s a partnership with 3M to brand its iconic Post-Its with Evernote’s logo and encourage people to digitize them using new features in the company’s software. Then there are lifestyle goods, selected for their “smartness,” including a triangle-shaped messenger bag that sits flat when you set it on the ground; a wallet as slim as a money clip, built from a single piece of fine-grained leather; and a laptop sleeve that fits perfectly even though it has no zipper.

 All told, Evernote Market reflects the company’s enthusiasm for products that make you smarter. But it also represents an important evolution of the company’s business model. Evernote has long been the poster child for “freemium” software, in which a small fraction of its customers pay for added features while the rest use it without paying. Lately, the company has embraced a more old-fashioned business model: selling goods for money. Evernote sold hundreds of thousands of the Moleskine Smart Notebooks, giving the company hope that its customers will buy other physical goods. Libin sees Evernote as the ultimate brand for the knowledge worker, and says there’s no reason that has to begin and end with software.

Libin’s idea for Evernote Market is to go beyond the stores you find at most tech companies and begin to sell the company itself as a lifestyle brand. It’s not that Libin thinks his users are clamoring for Evernote-branded gear. He thinks they’re clamoring for great gear, period — and Evernote wants to sell it to them, sharing the revenue with its partners. If his plan succeeds, other tech companies might be inspired to start selling physical goods — Dropbox hard drives, say, or Pinterest scrapbooks. On the other hand, if it fails, “Evernote backpack” could become synonymous with wild-eyed Silicon Valley overreach.

Libin is prepared for the criticism. “There’s always this trade-off perceptually in the public space between focus and stagnation,” he says. “And which of those two things you wind up being accused of depends on how successful the products are. If you make different products and they’re great, people are like, ‘That’s genius! Clearly, the right thing to do.’ And if you focus on one product and it fails, people are like, ‘That company is no longer capable of innovating.'”

“Everything we do is about staying a startup,” he continues. “How do we keep innovating, how do we keep creative, how do we keep inspiring new ideas?” Pushing a vision of smart objects in the real world will lead to innovations in the company’s software, he says. Designing a scanner, a stylus, and other goods have already led to new features in the product, and more are on the way. “I’m trying to find a way to keep the app innovative for the next decade. Doing this is the way to do that. This is how we make Evernote better.”

Browsing the online store, the company is clearly not targeting college students but someone with deep discretionary cash. I, for one, think spending $242 on a rucksack is too much (you can buy a racksack on Amazon for $18!). And don’t even get me started on the $75 stylus.

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