Evernote’s CEO Phil Libin shared some revealing insights…
![“Evernote’s CEO Phil Libin shared some revealing insights about how the company turns non-paying users into revenue generating ones.[xxiii] In 2011, Libin published a chart now known as the “smile graph.” With the percentage of sign-ups represented on the Y-axis and time spent on the service on the…” quote by Nir Eyal](https://sms4smile.com/q/img-quotes/42c/nir-eyal-1258_business_evernote-s-ceo-phil-libin-shared-some-re_2578762.jpg)
““Evernote’s CEO Phil Libin shared some revealing insights about how the company turns non-paying users into revenue generating ones.[xxiii] In 2011, Libin published a chart now known as the “smile graph.” With the percentage of sign-ups represented on the Y-axis and time spent on the service on the X-axis, the chart showed that, although usage plummeted at first, it rocketed upward as people formed a habit of using the service. The resulting down and up curve gave the chart its emblematic smile shape (and Evernote’s CEO a matching grin). In addition, as usage increased over time, so did customers’ willingness to pay. Libin noted that after the first month, only 0.5 percent of users paid for the service; however, this rate gradually increased. By month 33, 11 percent of users had started paying. At month 42, a remarkable 26 percent of customers were paying for something they had previously used for free.””
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
The “smile graph” illustrates that user engagement often dips before rising as habits form, and that higher usage eventually translates into willingness to pay.
In simple terms: Users may initially abandon a product, but habit formation can boost engagement and revenue.
Key Takeaway
Focus on habit loops to convert free users into paying customers.
Themes
product
growth
habits
revenue
behavioral economics
Mood
optimistic
analytical
Type
business
motivational
When to use this quote
- product launches
- user onboarding
- subscription models
- marketing campaigns
Key Concepts
habit formation
customer lifecycle
pricing strategy
Questions to Reflect On
- What habit‑building tactics can you implement early?
- How can you measure when a user is ready to pay?
A Different Perspective
Not all users will become paying customers despite habit formation.