Evernote's Phil Libin on The Pros and Cons Of Moving To VC

Thank you. Really happy to to talk to you.

I kind of, specifically refused to think about what I would do after Evernote. So while I was at Evernote, I decided, you know, I was gonna replace myself as a CEO and kind of in that whole process of looking for for someone else to leave the company, I scrupulously said I don’t wanna start making plans for afterwards because, you know, it’s kind of a giant time suck. Didn’t wanna check out early. So it was only after we had we had gotten Chris O’Neill on board, and I started thinking about, okay.

What would I do next? And I announced that I was stepping down, and I got contacted by a bunch of VC firms. And up until that point, I’d never really thought about being a VC, but I thought, you know, I’ve been around VCs my whole life, but always from the other side of the table, I didn’t actually know much about about what made them tick. So I thought this seems like a good opportunity to, to learn about VCs. So took a few meetings and kind of came away with it with two things.

A, it was really fascinating, sort of seemed like an amazing job, and b, that I it wasn’t for me. I wasn’t really interested in it because I I didn’t really see myself primarily as an investor. I still wanted to to to to build stuff, to tinker with stuff. I still wanted to start companies. Although, I was pretty sure I didn’t wanna run any more companies. By the time I I left Evernote, I had been a CEO of my Evernote and my previous two companies for about nineteen years straight.

So I kind of worked it out of my system. So what I decided to do is I was gonna make an incubator. A bunch of my friends had various incubators at the time, and I thought that that seems like a good idea. Get some friends together, work on a few different projects, you know, recruit teams, see what sticks. And that was my plan. And then General Catalyst reached out. It was a a Hemant. And I thought, well, I’ll take one more one more meeting. Their pitch to me was, know, come here and do both.

If you wanna patch and incubate and start things, you can do that because GC does that. If you wanna invest, do that. Do it as part of a big platform with partners. And it honestly it was sort of like a too good to be true type of pitch. And my firm policy on things that seem too good to be true is to jump in and not ask any questions, and so that’s what I did, and, that’s why I’m here.

Well, I decided, I think, to to kinda structure my life now so that people wouldn’t have to tell me to, to focus. So, like, I get to tell other people to focus, and and I could work on on a basket of things. And that was kind of the biggest eye opening thing was, you know, when you’re running a company, it really is all about focus. And so people were constantly telling me to focus, you know, investors, board members, everyone else.

I always I was always doing a lot of stuff, and there was a lot of interesting stuff, but I always felt vaguely guilty about, you know, just going off and learning about something cool or meeting great entrepreneurs because I always had to tie everything back to what was best for the company. And when I when I did focus, that’s when when things went great. You know, when I worked on things that were interesting but not directly a 100% in line with with what was right for the company, know, things went kind of sideways.

And it’s pretty, pretty great to be in a position where, you know, I get to tell other people, boy, you really need to focus now, And and I can kinda do what I want. So the realization of that was a big, big takeaway.

Oh, so much sitting around, so much email. I sort of, like I kind of stopped sitting, and I stopped doing email almost entirely. Like, for the past few years of my life, like, I had very, very slight contact with email. You know? I’m kinda surrounded by the circle of people that I work with, so there’s a lot of in person communication, a lot of messaging, and it was just kind of like a shock, like, how much how much sitting in meetings and how much going through email there was at at VC.

That was probably my biggest my biggest and a negative surprise. The biggest positive surprise is, like, how amazing all of the big picture things are, how I can how it’s my job to learn about really cool things and and how, you know, people that are building amazing things wanna talk to me and wanna tell me what they’re working on. All of the really important things are 10 times better than I imagined they would be, and a lot a bunch of the minor things are frustrating. But small stuff’s frustrating, big stuff’s amazing.

So on balance, it’s much better than expected.

Well, I think the hype cycle and the excitement isn’t really the same as as important progress. And so it’s hard for me to predict when when things get hyped, what that cycle is like. I don’t really focus too much on that. I do think there’s a lot of genuinely really important work being done, in the bot space. I think the reason that that it’s happening is, you know, we have a package, kind of a a basket of fundamental technologies that have each gone from being early and academic to just getting good enough, where now they could be combined in commercial ways.

And I think this is this is kind of always how technology works. You know, you the the things that make up bot ecosystem are advances in natural language processing, in AI, in messaging, in voice, both text to speech and speech to text. And all of these things have been around for decades. But just in the past, let’s say, eighteen months, they kind of all crossed over to the point where they’re now good enough, where you can combine them. Like, a good general purpose engineering team can now combine these fundamental technologies into new products, and so you see exponential growth, what people are working on.

And I I think it’s the same exact thing that happened with apps, you know, back when we started Evernote in 2007, 2008. Same kind of thing. You know, the fundamental technologies that that made apps so explosive in o eight were, you know, smartphones, mobile application deployments, you know, touch screens, social media, cloud. All of this stuff had been around for a few years, but it was but right towards the beginning of 2008, it all kind of snapped into focus, and, like, five or six things got good enough.

And then people, know, companies like Evernote could come along and combine them in ways and actually make amazing technology. So I I think that’s how the technology cycle is driven.

It doesn’t really concern me. I think it’s one of the things one of many things that that, you know, the industry will need to figure out. One thing that I actually think is is much less concerned than a lot of other people seem to be is this idea of distribution. I I hear all the time, like, well, apps are broken because app stores don’t work anymore because there’s, you know, there’s millions and millions of apps. And so it’s impossible for a new app to get noticed and get distributed, and, you know, yeah, it worked well for early apps like Evernote, but now it’s, like, almost impossible for new apps to get noticed, and bots are gonna be even worse.

Because, you know, if there’s if there’s 2,000,000 apps, there’s gonna be a 100,000,000 bots within a couple of years just because it’s so easy to make a bit a bot. Like, making an average bot, you know, you can do in a few hours compared to making even an average app, which is a few days of work. I’ve never cared about discovery and about distribution. I think, like, the best stuff gets discovered automatically.

I mean, when, you know, when Pokemon GO came out, like, for a year before that, people were saying that, you know, apps are never gonna be big because, you know, they’re so overcrowded, and yet, like, Pokemon GO had no problem being downloaded at an infinite number of times in the first hour just because it was good and people talked about it. The same thing with bots. I don’t care about the long tail of a 100,000,000 crappy bots. I really care about the 20 or 30 that are gonna be really meaningful.

And they’re gonna be discovered the same way that people are discovered. Like, there’s gonna be a couple of 100 famous bots in the world, and everyone’s gonna know them, and everyone’s gonna be able to interact with them. And they’re not gonna be it’s not gonna matter what directories are listed in. They’re just gonna become well known because they’re high quality. And actual distribution is infinite at this point because, you know, anyone can just go and start using these bots. Don’t even need to install anything. So it’ll be, moving more and more towards a meritocracy of product.

You

about meaningful bots

Well, I think the same thing that make a meaningful person. You know, you should be doing something. You should have a an opinion, a point of view. You should be helpful in actually, helping somebody achieve something meaningful. I think, you know, and that meaningful thing could be to, you know, to make people smile. It could be, you know, it could be entertainment based, but it could also be very specifically about information, about productivity. You know, I think bots are gonna be judged somewhere halfway between how apps are judged and how people are judged.

They should be they should be helpful and useful and not annoying or obnoxious, and they should stand for something. Do you think all software could be botified? Well, all probably could be. I think the question is, you know, should they be? And and no, I don’t think all software should be botified. I think I kinda think there’s gonna be two classes of things. There’s gonna be authoring and creation tools, like the stuff that you use to actually make things and author things. And those will probably still be, you know, bespoke rich UXs.

So they’ll still be, you know, Photoshop. Like, I don’t think I don’t think photographers or illustrators aren’t gonna be like illustrating their next design by telling a bot what they wanted in natural language. They’re still gonna be CAD tools. They’re still gonna be Excel or something like Excel for financial modeling. When you’re actually creating these, you know, complex ideas and thoughts and entities, you’ll still be authoring them in authoring tools. But I think almost everything else, at least in business, will go will become conversational, will become a bot.

So my guess is about 50% of what we use as consumers will will become conversational, botified, and about 80% of what we do at work. And I think that’s the opportunity.

Well, I think, there just haven’t been very many good ones shipped. You know, this is I I kinda compare this to the early days of apps. You know, I remember in 2008, I would go to all these panels and shows for app makers because it was, like, starting to be a really popular thing. And I remember I was on this panel in New York City for, like, top apps, and there was three apps on the panel. It was me, it was the guy who made iFart, and it was the guy who made the Obama 2008 campaign app.

And like that was the spectrum of apps. It was like the Fart app, Evernote, and the Obama app. And, like, all three of us were, you know, taking questions about making apps and kind of what it was like. This was very, very early days. Most of the stuff was frankly low quality, but there were already people who, like, saw the potential and who were doing really kind of amazing things. And think bots are the same way. It’s like right now, most bots are, you know, they’re just gimmicks or toys, they’re developers playing around, or even worse, they’re just app ideas that have been potified for no good reason.

But you’ll start to see native bots coming out in the next few months. I think you’re already starting to see them. These are experiences that could only happen conversationally, that that aren’t app replacements, actually do something meaningful. And just like with apps, you know, it took a year or two to get real ones. I think it’ll take a year or two to get real bots, and I think we’re coming up on that period, you know, right about now.

So I think I generally have a bias against overly clever business models. I think your business model ought to be make something that good enough that people wanna pay for it and let people pay for it. And I I think, you know, that that applies perfectly well to bots. The stuff that we’re working on, the stuff that I’m investing in or or helping to build, it’s all like the these are bots that do specific functions that people pay for. So I don’t think we need to get overly clever about how it’s gonna work.

I kinda hope that there won’t be much of an ad model for bots. I sort of hate ads in general, and I’m I’m optimistic that it won’t dilute, conversational experiences, but but maybe it will.

I think it’s a major point of disruption. I think the the single biggest change is gonna be for the for the past few decades, almost all of our interactions with technology have been one person interacting with some system. So it’s been like you using Microsoft Word, or you using Twitter, or like you pushing the buttons in your VCR. It’s been like one person, one technology. I think what the real future of bots is that whole paradigm gets broken. And now it’s gonna be more about you and I having a conversation.

You’re talking to other humans, and there’s bots that participate in the conversation and add structure to it. And this is like, I it’s hard to imagine a more fundamental change in in how we deal with technology, where instead of having this, like, custom bespoke paradigm where, like, I’m poking at something, the technology is there, it’s present, and it participates in a in a in a conversation among multiple humans. Yeah. It’s hard for me to see how that isn’t completely, like, completely disruptive of a lot of current things.

Oh, well, currently, it’s, the Three Body Problem trilogy, which is, amazing. Everyone should read. It is, the most popular Chinese big budget sci fi. Third book was just translated into English. So, you know, it’s a trilogy. It’s done. It’s amazing. Read the Three Body Problem books.

You know, I’ve actually never thought about my career. This is this is really when I first had an inkling that I probably shouldn’t be the CEO of Evernote. Like, we’re when we when we got too big, it’s when I started having, like, constant career talk with with employees, and I just, like, I didn’t know what they were saying. It’s it’s sort of an alien concept to me that you kind of think about, well, first, I’ll do this, and then I’ll do this, and then I’ll gonna get promoted this way.

It’s a very important thing, and there needs to be people who are really good at that. And, obviously, running a big company, that needs to be your primary skill. But I don’t think about it like that. I’ve always just been on this quest, and, that’s what I still see myself on now.

I’ve been really lucky with with with mentors. People have been really generous with their time. Hard to isolate a single person, but, you know, Marc Benioff has been a really amazing mentor to me. Reid Hoffman has been great. Hiroshi Mikitani, who is the the CEO of Rakuten, the big Japanese company, has been maybe the most influential kind of mentor and thinker on on on how I structure things. And, of course, the people I work with every day, you know, Hemant, Niko, the rest of the partners at g c, have been really pretty amazing.

Thank you. Boy, I’ve got lots of things that I’ve just kinda started that I’ve been doing for years that really help out. A really quick one is I don’t work on airplanes. I made this arbitrary rule where I will not work on an airplane. You know, I sleep, I read, I play video games, I watch movies, but I I refuse to work. And that makes me, like, look forward to long flights. Like, I’ve got a thirteen hour flight coming up in a couple of days, and I’m, like, giddy with excitement because I know I’m gonna spend that thirteen hours, like, reading sci fi and and and watching movies, and, like, I never get a chance to do that.

It makes me look forward to travel.

And even if I do have Wi Fi, I just still spend it. I just I just won’t work on an airplane. It’s like it’s a great role.

You know, I’m really eclectic, with my reading habits. I read, like I basically, like, wake up in the morning. I read, some of the major publications. I read the New York Times every day, and I read the Economist. It’s important for me to be seen reading the Economist. So particularly, like, I’m on an airplane, like, it’s important that I have an Economist near near me so I can, you know, pretend to be an adult. Absolutely. In terms of the

Yeah. Exactly. But in terms of, like, actual what I see online, it’s just like, like, it’s wherever that takes me. You know, I I’ll I’ll I’ll open my email in my various streams, and as much time as I have, I’ll just be following links and see what people say.

Oh, well, so we announced one this morning. It was Sunflower Labs, which is a really amazing company. They basically make home security and home awareness drones. So it’s a new system that is a network of sensors that are smart lights that you kinda put around around your yard, the outside of your property. They figure out what’s going on and deploy autonomous flying camera too to kinda go and inspect things. And I said yes because well, the founders, Alex Pachikov, was one of my cofounders at Evernote.

I’ve known him forever, and he’s then put together an amazing team, but also because it’s just a ridiculously cool thing. So people should check out Sunflower Labs. It just launched, today.

Yeah. Well and, like, security cameras ought to fly. Like, it’s stupid that cameras don’t fly. You would like, you mount a security camera somewhere, and you’re just gonna get exactly the wrong angle on everything. It just it really just doesn’t make any sense. My entire long term investment hypothesis is really straightforward. Like, I think the world has two possible futures. Like, there’s two directions that the world can go in. The world could become more like Star Trek, or the world could become more like Mad Max.

Either we’re in a, you know, post scarcity, science based, we’re all, you know, flying around, you know, carrying clipboards and, like, relatively happy, or we’re, like, you know, punching each other in the face over, like, oil resources. Like, those are our two options. My entire job is to, like, nudge the world towards the Star Trek future. So when I look at a deal, I just the first question I ask, literally, is, like, does this get us closer to Star Trek? And if if it does, then I’m interested.

And if it doesn’t, like, if it’s indifferent or it takes us the other way, then then I won’t invest.