He believes that each of these tools changed the way the whole world thinks and acts. In his emporium of such tools, Libin includes Google's (GOOG) search engine, Wikipedia, and Twitter. Libin's vision for Evernote is that it will become a tool that changes the way people think and act. If Evernote can keep its variable costs per user at or below six cents per user per month and it generates 30 cents in revenue per user per month, it will be able to generate positive cash flow. While salaries represent Evernote's biggest cost, electricity is number two. And the company needs designers, engineers, product managers, quality assurance people, and community managers. Evernote is hiring as demand grows, tax breaks do not influence his decision about whether to hire. And by the end of 2012, Libin expects that number to triple to 390. It ended 2010 with 45 people, had 102 as of August 2011 and expects to end 2011 with 130. The reason is that Libin "does not want a crazy person as a boss."Įvernote's headcount is growing rapidly. Libin has concluded that it is better to accept a lower bid from a rational investor than an extremely high price from an irrational one. Instead, a price results from the negotiation between a startup's management team and a group of interested investors. One of the challenges of this approach is that the price of a private company's shares are not set by the public markets. As a result, capital providers can generate returns for their limited partners without putting pressure on portfolio companies to exit. This new way to realize investment gains is good for investors and for companies that prefer to operate over the long-run without the pressures and costs of being publicly-traded. While Libin is not a fan of the likes of Second Market, he points out that there are many venture capital firms that are interested in paying cash for other investors' equity stakes in startups. The reason for the change is the emergence of a variety of secondary markets for stock in startups. According to Libin, the venture capital model has changed substantially in the last decade so there are now VCs who are willing to invest without a short-term exit (in the form of an IPO or acquisition).