About Me 0003: Making Money Without

Editor’s note: The following guest post is written by Phil Libin, CEO of Evernote, which is currently the No. 5 app in the Mac App Store. It also didn’t hurt that the app has been prominently featured by Apple.

We just finished our first week on the Mac App Store and it might have been the most important week in Evernote’s history. Here’s how it went and what we learned:

1. Meritocracy is sweet

I remember one of the first computer articles that I ever read (maybe it was in Byte Magazine in the early 80s while I was in junior high). It had a little survey aimed at my fellow nerds. “Do you buy software for your computer?”, was the first question. The choices were, “A) Yes, frequently. B) Yes, sometimes. and C) Rarely, I prefer to write my own.” The fact that C was a viable choice pretty much sums up the early euphoria of the consumer software industry. You just had to make something great and the rest would follow. That was a long time ago.

The following twenty or thirty years brought us monopolies and barriers to entry and this happy state of affairs became a dim memory. Then came the mobile app explosion.

Over the past year, about 70% of Evernote’s new users came from mobile app stores, mostly iOS and Android. This led us to the understandable conclusion that mobile was the crucial thing that made a platform attractive to independent developers. Last week made us realize that the reality is a little bit more nuanced. It isn’t mobile that’s overwhelmingly important, it’s the app store. Until a week ago, all the good app stores just happened to be on mobile devices, but someone with a shiny new Macbook is just as eager to get the best apps as someone with a shiny new iPhone.

A platform without a well-formed app store presents a huge challenge to developers. To succeed on such a platform, the developer has to spend as much time and money on channels, logistics, partnerships and advertising as on actually making a great product. Once an app store takes hold, the software market on a platform starts moving towards a meritocracy. This is imperfect, of course, but focusing on building a great product is the best strategy for succeeding on an app store. This is a huge boon for software nerds of all types, and has resulted in the explosion of mobile apps and services in the past two years. It’s about time that desktops joined the party.

2. Desktop software is viable again

It took a few weeks of non-trivial effort to get our existing Mac application ready for the app store. There’s never a convenient time to take a few weeks out of a busy development schedule, and December is as inconvenient as it gets, but Apple’s developer relations folks were helpful and the approval process itself worked reasonably well once we’d worked out the kinks.

The results speak for themselves. About 320,000 people downloaded Evernote in the first week of the Mac App Store. Of this number, about 120,000 had never used Evernote before, and created new accounts. This represents more than 50% of all the new Evernote accounts created last week. The Mac platform—which used to be in fourth place for new user registrations behind iOS, Android and Windows—has now jumped to first.

It’s obvious in hindsight, but the presence of a well-formed app store is the single most important factor for the viability of a platform for third party developers. If you want to take this a step further and say that a robust third-party software market is the most important factor for the success of the platform overall, well…

I hope Windows gets a good app store soon.

3. Multi-platform users are the best kind

Not only is the Mac App Store getting us new users, it’s making our existing users more valuable. Neat, but how?

So 320,000 people downloaded Evernote in the first week and 120,000 of them became new users. What happened to the rest? Well, about 80,000 people were either switching their Mac client from our direct-download version to the app store version or had simply downloaded the app and didn’t complete registration. Another 100,000 people were existing users who had previously used Evernote from other platforms (mostly the iPhone) and added the Mac version for the first time.

This is both interesting and important. Interesting because the vast majority of these people must have (1) already had Macs, and (2) known about our Mac version from previous interactions with Evernote but hadn’t bothered to install it until the Mac App Store appeared. Important because people who use Evernote from multiple devices are much more likely to stick around and to eventually pay for the premium version. This makes intuitive sense and the data is clear: in a Freemium model, people choose to pay for what they love and the more devices they use Evernote from, the more likely they are to fall in love with it.

The Mac App Store effect works the other way as well: many of the new users who first found us on the Mac App Store went on to also download Evernote on their mobile devices. Our iTunes downloads for iOS devices were up by 54% during the same week that the Mac App Store came out and that’s without any new versions or noticeable change in iOS app visibility.

4. A strike against lowest common denominator

If Evernote’s desktop clients were written in Adobe AIR, I’d be worried right now. The immediate popularity of the Mac App Store, and the iPhone App Store before it, reinforces my belief that in a world of infinite software choice, people gravitate towards the products with the best overall user experience. It’s very hard for something developed in a cross-platform, lowest-common-denominator technology to provide as nice an experience as a similar native app.

As the CEO of a software company, I wish this weren’t true. I’d love to build one version of our App that could work everywhere. Instead, we develop separate native versions for Windows, Mac, Desktop Web, iOS, Android, BlackBerry, HP WebOS and (coming soon) Windows Phone 7. We do it because the results are better and, frankly, that’s all-important. We could probably save 70% of our development budget by switching to a single, cross-platform client, but we would probably lose 80% of our users. And we’d be shut out of most app stores and go back to worrying about distribution.

Does this mean that web apps are doomed? Not at all, but the most successful web apps will be the ones that emphasize unique benefits—sharing, communications, integrations—that are better implemented on the web than in native code. This is the main design goal for the next version of the Evernote web client, by the way.

Lost among all the gloomy economic news of the past few years is the fact that there’s never been a better time to be in software. Sure, the emergence and inevitable dominance of app stores will permanently disrupt existing industry practices—I’m glad we’re not in the business of preventing people from making copies of bits, shipping shrink-wrapped boxes or charging people for periodic upgrades—but a company like Evernote simply could not have attained a fraction of our current momentum even three years ago. App stores, cloud services, cross-platform users and Freemium economics made it all possible. The download numbers are certain to decline a bit as the excitement of the first week finds a sustainable steady-state, but the launch of the Mac App Store will have a major, and permanent, positive impact on developers.

It was worth the wait.

Beer Money. The team of Robert Roode and James Storm have been tagging together since 2008, and are currently enjoying their fourth reign as TNA World Tag Team Champions.

Each man came from a successful tag team to form perhaps the best tag team that TNA has ever seen. But where do they rank among the best of all time?

Despite fans’ many criticisms of TNA, including my own, it appears that historically the company does seem to care more about its tag team division than WWE does.

Roode’s former faction Team Canada, Storm’s former team America’s Most Wanted, along with Team 3D, LAX, The Voodoo Kin Mafia, The British Invasion, Generation Me, and The Motor City Machine Guns, have all vied for TNA tag team gold in recent years.

The division has thrived since the beginning of the company, and has been featured on TV and pay per view.

Then there’s WWE.

We all know that the current state of tag team wrestling in WWE is virtually non existent, with the championships currently held by Santino Marella and Vladimir Kozlov.

Bound together by necessity, which is a polite way of saying that WWE creative didn’t really have anything for either guy to do, Marella and Kozlov have actually looked pretty good since winning the straps.

Now, everyone calm down, I didn’t say they were The Road Warriors or anything.

But, for the WWE, we can’t really hope for much more than the tired old formula of two mix-matched guys thrown together for the sake of a lousy, half-hearted push. When it comes to their tag team division, it’s par for the course.

My, how things have changed in this business.

Once upon a time, the National Wrestling Alliance not only featured the greatest singles wrestlers in the sport, its tag team division was second to none with The Rock n Roll Express, The Road Warriors, The Russians, The Midnight Express, The Minnesota Wrecking Crew.

These guys perfected the art of tag team wrestling, and gave Ric Flair, Dusty Rhodes, and Ricky Steamboat a run for their money when it came to the best match on the card.

Man, where’s the Wayback Machine when you need it?

Of course, WWE hasn’t always neglected its tag team division.

Arguably the greatest era for tag team wrestling in WWE was 2000 to 2001. Three teams came together for a tag team war the likes of which had not been seen since the 1980’s NWA. Three teams redefined tag team wrestling in the business with three little words: tables, ladders, and chairs.

Edge and Christian. The Hardy Boyz. The Dudley Boyz. Three of the best tag teams of all time, blowing the roof off of arenas all over the country every week, each team pushing the other, bringing out the best in every man involved.

This was, without a doubt, a tag team renaissance, a great time for fans who yearned for a revival of the division.

These guys all understood their roles in the company, and fought to carve their names into wrestling history, next to the greatest teams ever. They also wanted to steal the show, and give fans something to remember.

Mission accomplished on both counts.

But with the focus shifted away from tag team wrestling in WWE, and TNA looking to grow as a company, the art of tag team wrestling now has a new pair of Rembrandts. Beer Money.

Yes, that was impossible to say without a smile.

The truth is, Beer Money works on a couple of different levels. One, because of Roode, who brings an intensity and ice-cold determination to his character and approach as a heel. Two, because of James Storm, because he’s funny as hell.

I love this guy. He is a riot, and every time he opens his mouth, or for that matter, just smiles at someone, it’s comedy gold. He makes the team, gives them a bad-boy edge that would make Jake Roberts jealous.

James Storm’s gimmick works so well because it’s so normal. He’s just a guy with a cowboy hat and dark glasses with a beer in his hand.

He looks less like a wrestler and more like the lead singer in a Lynyrd Skynyrd cover band. He plays the part so well, and is more comfortable in his gimmick than perhaps anyone in the promotion.

For me, Storm would be a star in either company, on any level.

Fortunately for fans, right now he is one half of TNA’s biggest tag team, Beer Money. I have to say, I thoroughly enjoy this team and their work in the ring.

Aside from Storm’s comedy, the guy can work, and he is a great fit with Roode. Beer Money, in a lot of ways, is a throwback to the classic heel teams of the NWA.

They have the tough streak of The Minnesota Wrecking Crew, the finesse of The Midnight Express, and the swagger of Arn Anderson and Tully Blanchard.

And much like these three teams had memorable feuds with The Rock n Roll Express, Beer Money has had a momentous run against The Motor City Machine Guns.

The pace and tempo of the Guns, matched up against the fierce ground and pound of Beer Money, have made for some great moments in TNA. Both teams are working hard to own the night, every time they set foot in the ring.

That’s what tag team wrestling is all about, and I for one am glad to see it happening again. The only question I have is, how long will Beer Money stay together, before TNA creative, such as it is, decides to split them up?

It would be a shame if their run as one of the best teams in the company lasts only three years. Beer Money deserves to have a legacy, an opportunity to be considered among the all-time greats. But perhaps that is not meant to happen in TNA?

Considering that WWE gave up on its tag team division years ago, the chances of seeing Storm and Roode work for Vince appear to be slim to none.

But, if given a chance, I have to believe that not only would Beer Money make the best of it, they would do what they continue to do every week in TNA: steal the show.

It’s an interesting bit of speculation, when it comes to debating Beer Money’s place in tag team history. Perhaps it’s too soon for that. Perhaps as Storm and Roode continue to build their reputation week in and week out, we should just sit back and enjoy the ride.

Let the renaissance begin…again.

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Monday, January 24, 2011

Making Money Without

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