Evernote CEO: We're OK with no profits in China

This marketing strategy might increase the possibility of Evernote’s success and help it break the "spell" of failure in China.

In last week’s Global Mobile Internet Conference, Evernote CEO Phil Libin announced that the company is about to enter the Chinese market. Interviewed by ZDNet China,  Libin  said it would be OK if  Evernote made no profit in China for a period of time, as long as good products would be created.

Libin said: “If we got just one dollar from each Chinese, it would be easy for us to collect a billion dollars in a short time. Yet making money is not our priority right now. Our primary concern is to attract China’s talents to our company, to come up with great designs, with which we would be glad even if we made no profit in five or ten years.”

This marketing strategy might increase the possibility of Evernote’s success and help it break the “spell” of failure in China. There is a long list of the thwarted transnational Internet companies, including eBay and Groupon. One reason for their failure was the pressure from their headquarters’ performance, which impaired their long-term growth.

Evernote’s products-rather-than-profit strategy should help the company better focus on its long-term development.  Libin  doesn't worry much whether they would make it or not in China. He said, “Entering the Chinese market is a significant step in our company’s century-long plan. We may fail yet we still hope for the best.”  Libin  is also well aware of the challenge they will meet in the near future. “We've thought a lot before we made this decision. China will surely be a major battlefield if Evernote is striving to be a century-old corporation. If Apple hadn't stepped into China, it wouldn't have been so successful today.”

Another reason for Evernote’s capability to break the “spell” is that its newly released “Evernote (Memory Notes)”, as a non-published application, will not undergo strict censorship. Compared with overseas markets, China has relatively rigorous censorship, which has contributed to the toughness facing other transnational Internet groups.  Libin believes that Evernote will be in conformity with the local laws of China. He said, “It’s not a platform for socializing or publishing, so the censorship won’t be a problem for us.”

Whether Evernote’s journey to China will be a success depends greatly on Tian Suning, Chairman of China Broadband Capital. Just a few days ago, together with Meritech Capital, CBC Capital invested $70 million in Evernote.

Tian Suning, who has been the CEO of China Netcom Corporation (CNC), is experienced in dealing with governmental issues.   Libin  said, “CBC has provided us with a lot of knowledge as to how to run business in China, and Dr. Tian Suning has been a great teacher for us.”

“Even if we fail, our failure can be studied and avoided in the future,” said  Libin.

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