It’s rare to get a glimpse at the financial numbers behind tech start-ups; especially, if they are VC-funded with a total $25m raised over the past few years.
Evernote’s CEO Phil Libin exchanged an email dialogue with Tod Sattersten, in a recent interview, which provides a peek at their math and subscriber base.
Evernote’s numbers for January 2010 -
- Active Users – 2,335,676 total users.
- 30-40% of users use the service (are active) any given month.
- Premium Users – 41,958. That means 1.78% of people using the service are actual customers.
- Actual customers (the premium users) pay $5 a month.
- You can sugarcoat it any way you like – the rest are non-customers.
It gets even scarier when you look at revenue and profits -
- Revenue from premium users - $145,000 (January 2010).
- Total Expenses – $68,641. This includes hardware, software, hosting, network, operations staff, and support staff.
- Gross Margin of 53%.
- There are other sources of revenue and fixed costs (fundraising, team building, product development, marketing, execution, lunch). However, Evernote say Gross Margin is the important number.
Revenue of $145,000 in January with expenses of $68,641 and a gross margin of $76,359 seems quite good.
Until you look at the context.
Putting Evernote’s numbers in Context
EverNote puts in a lot of effort and resources into getting their $76,359 a month profits.
- EverNote has 30 employees. That’s $2,545 of gross margin per employee.
- Evernote has received $25.5 million in funding – starting in 2006 (March 1st).
- 1.78% of people who use the service are paying customers.
Is this what a successful Internet company looks like?
Read more about the numbers, as discussed by Evernote CEO Phil Libin.