The future of evernote: from memory machine to time machine

Who uses Evernote? Anyone with a less than perfect memory who uses a computer, smartphone or tablet can appreciate Evernote. And for the luddites with the lined notepad, you can even use Evernote using Livescribe.

A priest uses Evernote to compose his weekly sermon while one man uses it to keep track of his weekly sins. A veteran suffering from traumatic brain injury uses it daily to literally remember everything and is showing other veterans with similar disabilities how to do the same. A musician uses Evernote to compose songs, tracking snippets of melodies with audio recordings and jotting down lyrics and sketches as they tap him on the shoulder. A hairdresser uses Evernote to catalog before and after shots of her clients. During the hair cut, she lets them browse through the portfolio of looks on her iPad. A tempura chef in Japan uses Evernote to store all his recipes and images of his best dishes. A wife uses it to store up all the things she wants to tell her husband before he comes home from work. A piano teacher uses audio notes to record her students, and then shares these recordings in shared notebooks with the students’ parents.

Students keep track of their notes, teachers plan lessons, shoppers create shopping lists, travelers create trip plans and photo journals and journalists write stories. The possibilities are endless, and the best part is that they’re evolving as the Evernote platform continues to grow. What currently serves 13.5 million people as an external brain, could one day, in the not-so-distant future, be a portal backwards in time. But more about parallel realities later.

In a recent Lifehacker poll, Evernote took the top spot as today’s most popular note taking application, beating out pen/cil and paper, Microsoft OneNote, Springpad and Simplenote. Evernote is currently growing at a rate of 1.2 million users per month, averaging over 40,000 signups every day, which is enough people to fill Madison Square Garden, twice.

While you can use Evernote for free, forever, out of those 13.5 million, there are approximately 600,000 paying subscribers, representing a 4.5% conversion rate of free to paying subscribers. While there are a slew of premium features (advanced collaboration features, more versatility and monthly uploads of 1GB each month) worth dishing out $5 a month/$45 a year for, founder and CEO Phil Libin believes that the best predictor of a customer converting to the paid version is how long they’ve been using the system. While you can use the full featured version for free, forever, Libin thinks as you store more of your life and your memories it will become more valuable to you the longer you use it, thus prompting you to want to pay for it.

“The conversion percentage isn’t what I really care about,” says Libin. “We can break even at 1%. If my goal is to have a million paying users, then I hope to have 100 million people using it for free. I don’t want our conversion rate to go any higher than 5%, because that means we don’t have the best free product that we should.”

Evernote currently boasts a near 100% long-term user retention rate. In his speech this past March at SXSW, Libin said that in a post-scarcity economy, the new primary driver is love, and what determines the value of your company is how much people love it. As you store more and more of your personal notes, memories and work in Evernote, essentially giving it immense personal value, how can you not grow to love it? Now, that’s a perfect business model.