On 26th September 2013, Evernote launched Evernote Market continuing the transformation from just software company to merchandising complementary products like scanners to now selling backpacks, socks, etc. Is this because money alone from software is not enough or is this to cash in till you are popular move?
Phil Libin in 2012 explained how Evernote’s 1 billion dollar valuation is based on hope to make money in future. His words were “Evernote is not valued at $1 billion because our current business is worth a billion dollars today but because there is a good chance that it will be worth $100 billion in a few years.”
Evernote today is used by 50 million users. Let’s say ratio of paying customers to users increased from 4% in 2012 to 6% in 2013 suggesting 3 million paying customers today. They each pay $45 per year translating in to revenue of $135 millions, way shy of billion dollar revenue per valuation. Remains to be seen if merchandising can help realize revenue as expected by investors.
Scary thing is how quickly software is loosing its value forcing companies to use it as a bait rather than leading with it. Is this trend going to continue even further?