Evernote Critique
Although I am aware that this is an elevator pitch there are a few issues that I need to address before I would consider investing in this product. The idea is good. It makes excellent use of cloud storage and internet access to provide what in theory is an excellent product. I do not believe that the price system is realistic. Without advertising I do not see how a free storage service could possibly be profitable, especially if the paid subscription is only 5 dollars per month. How many servers does it need? How much is the software and maintenance of the service? Bandwith? I am not sure if this is financially feasible.
As a venture capatilist I am still intrigued by the idea but would it act as a modern revolutionized PDA or will this simply be another fad that doesn’t work properly because of cumbersome software? Without smartphone support this product is useless to me and most businesses. The CEO of Evernote certainly seems confident, and provides an excellent knowledgeable pitch. In my opinion he is the best asset of the pitch. The presentation is concise and does leave me wanted to hear more, as long as my previously written concerns are addressed.
David.
Posted in: Week 03: Analyst Bootcamp
bcourey 10:35 am on September 24, 2011 Permalink | Log in to Reply
I agree that he does a good presentation..As a user of Evernote, I have not run into any software glitches (although I realize there may be some potential at the other end) My only negative so far has been the too-frequent update offers – much like iTunes – I am forever upgrading on either by blackberry or my various computers…I find that quite a pain.
David Berljawsky 8:39 am on September 28, 2011 Permalink | Log in to Reply
Ahh nothing more annoying (well maybe an overstatement) than the constant update. On a side note, what kind of glitches have you run into?
Dave
andrea 10:49 am on September 24, 2011 Permalink | Log in to Reply
“Without advertising I do not see how a free storage service could possibly be profitable, especially if the paid subscription is only 5 dollars per month.” Good point, David. It seems that on the Internet things can be “successful” but not “profitable” (I’m thinking of Skype here, and no doubt there are other examples).
David Berljawsky 8:38 am on September 28, 2011 Permalink | Log in to Reply
Couldn’t agree with you more Andrea. Profitable is not always what online ventures are about. Skype is not almost (if not is) an institution and a notable brand which I suppose it worth quite a bit. They have also expanded and sold their product to devices as well. Perhaps this is the model that Evernote should follow.
Dave
Everton Walker 12:28 pm on September 24, 2011 Permalink | Log in to Reply
David,
Very good and valid points. Probably there is a hidden agenda in the fine-print which is not presented. I too like the idea and will research it some more but I also think presenters should present the venture just the way it is rather than the high level of sensationalism.
Everton
khenry 7:13 pm on September 24, 2011 Permalink | Log in to Reply
Hi David,
Good points. I also had questions on profitability and also on partnerships and functionality. I also would have liked more information as an EVA but it made me wonder just how much and to how many target audiences one can satisfy in an elevator pitch.
Kerry-Ann
Doug Smith 8:42 pm on September 24, 2011 Permalink | Log in to Reply
David, I once saw a projected revenue breakdown for Dropbox. Although they serve vastly different services, both Dropbox and Evernote are very similar: they offer cloud storage for a monthly fee. The numbers were very interesting. By looking at the user base and knowing the current number of premium Dropbox members, the analysis was able to estimate revenues against estimated server costs. It appeared that Dropbox could be very profitable if they were able to maintain a certain (small) number of premium customers. I would expect the same to be true with Evernote. Combined with some improved branding and possible strategic partnerships with large corporations, Evernote could have significant profits.
It has been a year or two since I read the Dropbox analysis, so my memory could be distorted. I imagine it wouldn’t be too hard to find the website via google, if you are interested in finding out more about it.
cheers
Doug
David Berljawsky 8:45 am on September 28, 2011 Permalink | Log in to Reply
Doug,
thanks for the heads up. I am unfamiliar with the pricing of dropbox and cloud services. Food for though, I’ll have to give it a google look.
David.
jarvise 9:03 am on September 25, 2011 Permalink | Log in to Reply
Hey Doug,
Interesting points. It would be great to see what proportion of paid-vs-free subscriptions would be required to turn a profit. Interestingly enough, the whole foot-in-the-door strategy employed by offering free services is a well-documented psychological phenomenon. Apparently, once we take something for free, we are much more inclined to consider the next step up (paying for it plus something else) then we would be without the initial free incentive. Apparently we should remember that “there’s no such thing as a free lunch” and recall the lyrics to the 80s song, “the best things in life are free… but you can give them to the birds and bees… I want money.. that’s what I want…”
Good points about strategic partnerships. We should also remember that our info is generally up for grabs once we sign up for a free service. Even with the disclaimers, it usually says that it may be shared with some ‘approved’ third parties… hmmm.
Check out:
http://www.thesimpledollar.com/2009/06/19/how-the-foot-in-the-door-technique-costs-you-money/
Emily