The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:12:42 · Harry Stebbings, Federico Simionato
[00:12:42] S1: Thirty day fitness, you mentioned that, still being like a a business. How much of a money does a business like that make years afterwards? [00:12:49] S2: I'm not sure what it what it makes today. I think it's still in the several millions a year. [00:12:55] S1: Is that a paid marketing machine? [00:12:57] S2: There's also a lot of organic traffic going into it because people do look for this kind of product. There is a push. People want to be fit, you know? And so they do things organically. But yes, I think that most of the traffic for thirty Day Fitness was paid. [00:13:13] S1: Yes. Got it, totally. We're gonna get to kind of paid and how we think about that. I do just wanna go back to, we were talking about ideas, testing new ideas internally. When we think about like, okay, impact on top line, can you take me to a product decision where the impact on top line has not been significant, but it was still important for you to do? And how did you think about that?
00:13:13 · Harry Stebbings, Federico Simionato
[00:13:13] S1: Yes. Got it, totally. We're gonna get to kind of paid and how we think about that. I do just wanna go back to, we were talking about ideas, testing new ideas internally. When we think about like, okay, impact on top line, can you take me to a product decision where the impact on top line has not been significant, but it was still important for you to do? And how did you think about that? [00:13:35] S2: I think Evernote is the best example of this. Many of the things that we do on Evernote are not because we want to increase revenue, but it's because we want to make the product more useful. And in a very unquantifiable way, we just trust that by making the product more useful, people will keep choosing to stay on Evernote. Evernote is is an archetype, is a is a kind of a product that that has great inherent retention because people pour their working hours into it, and so they they build their content. They get familiar with the with the product. But really what we do is we try to make Evernote more useful every day even though we cannot, for each individual feature that we build, analyze its financial performance. But it's still something that I would still choose to do every day because it's just so important to people. Even though we can't demonstrate that the ability to collapse sections on a note, for instance, leads to higher retention, the bulk of it, the long tail of features that you build that make the product more useful have to matter in your choice to keep using Evernote every day.
00:13:35 · Federico Simionato, Harry Stebbings
[00:13:35] S2: I think Evernote is the best example of this. Many of the things that we do on Evernote are not because we want to increase revenue, but it's because we want to make the product more useful. And in a very unquantifiable way, we just trust that by making the product more useful, people will keep choosing to stay on Evernote. Evernote is is an archetype, is a is a kind of a product that that has great inherent retention because people pour their working hours into it, and so they they build their content. They get familiar with the with the product. But really what we do is we try to make Evernote more useful every day even though we cannot, for each individual feature that we build, analyze its financial performance. But it's still something that I would still choose to do every day because it's just so important to people. Even though we can't demonstrate that the ability to collapse sections on a note, for instance, leads to higher retention, the bulk of it, the long tail of features that you build that make the product more useful have to matter in your choice to keep using Evernote every day. [00:14:38] S1: How many people still use Evernote? Millions. Millions? Millions. Like, how many million?
00:14:38 · Harry Stebbings, Federico Simionato
[00:14:38] S1: How many people still use Evernote? Millions. Millions? Millions. Like, how many million? [00:14:44] S2: I'm not sure I can share, but but millions of people. Yes. Wow. Yes. Yes. And and every day, hours a day, there are people running their business on Evernote. It's just that for us working in tech, this looks weird because Evernote was popular once, and it's not as relevant today in in, like, tech pop culture. But if you run, like, a real estate agency, you might have everything on Evernote. What metric do you [00:15:08] S1: use to guide product success in Evernote? Is it DAU to MAU? Is it hours spent in Evernote? [00:15:15] S2: Retention. Subscriber retention is the most important thing on Evernote. Making sure that everything we are doing is either not touching or improving the the churn rate and especially the level at which you are you are retained as a customer. The way I think about retention is it's the percentage of your life that you choose to spend together with a product. Right? So for instance, I am subscribed to Spotify, and I've been for, I don't know, ten, twelve years, something like that. And I'm... I plan on being a subscriber for as many years or even more. And so it means that Spotify is very useful to me because I spend... I I choose to spend decades of my life, so, like, half my life on Spotify. And there are people for which Evernote is as useful as Spotify is to me, and so they choose to be subscribed to that product for decades of their life. And we absolutely must do everything we can to to not mess it up.
00:15:15 · Federico Simionato, Harry Stebbings
[00:15:15] S2: Retention. Subscriber retention is the most important thing on Evernote. Making sure that everything we are doing is either not touching or improving the the churn rate and especially the level at which you are you are retained as a customer. The way I think about retention is it's the percentage of your life that you choose to spend together with a product. Right? So for instance, I am subscribed to Spotify, and I've been for, I don't know, ten, twelve years, something like that. And I'm... I plan on being a subscriber for as many years or even more. And so it means that Spotify is very useful to me because I spend... I I choose to spend decades of my life, so, like, half my life on Spotify. And there are people for which Evernote is as useful as Spotify is to me, and so they choose to be subscribed to that product for decades of their life. And we absolutely must do everything we can to to not mess it up. [00:16:06] S1: I love that in terms of, like, the commitment attached to periods of your life. What product decision has led to the greatest churn, and what did you learn from that?
00:16:06 · Harry Stebbings, Federico Simionato
[00:16:06] S1: I love that in terms of, like, the commitment attached to periods of your life. What product decision has led to the greatest churn, and what did you learn from that? [00:16:16] S2: The thing we did on Evernote that produced the biggest churn was when we raised prices in 2023, which is something that we thoroughly analyzed and we ultimately made the decision to do it nonetheless. The reason being we believed, and and we still believe it, that Evernote provides a great deal of value to people that use it and that we could optimize pricing. At the time, we thought we could increase prices and people would still consider it a great deal. Not all of them, of course. There is a small amount of people who thought Evernote was either already too expensive or kind of at their threshold. It's it's like when you are subscribed to Netflix, and you see that every year or two, they increase your subscription. And when you receive the email, you're like, is this still a good deal for me? It's either yes or no, and then you make a decision based on am I getting enough out of this product and subscription that I'm accepting to stay subscribed to it. And similarly, on Evernote, we thought, let's increase prices in a way that still it's a no brainer for the vast, vast majority of people accepting that some people will... This will be over their threshold and will have to to let them go. The most, like, unmotivated people, the the least advanced ones, maybe the ones that were... Maybe we're already thinking about unsubscribing.