Business Quote by Nir Eyal
![“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/quotes/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
Source Book: Hooked: How to Build Habit‑Forming Products, 2014
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.
![“Instead of asking ‘what problem should I solve?’ ask ‘what problem do I wish someone else would solve for me?’”[cxxxi]” quote by Nir Eyal](https://sms4smile.com/quotes/img-quotes/805/nir-eyal-1258_problem-solving_instead-of-asking-what-problem-should-i_78727.jpg)
![“[S]ometimes, when you are a food person, the possible irrelevance of what you are doing doesn’t cross your mind until it’s too late. (Once, for example, when I was just starting out in the food business, I was hired by the caper people to develop a lot of recipes using capers, and it was weeks of…” quote by Nora Ephron](https://sms4smile.com/quotes/img-quotes/d79/nora-ephron-1217_business_s-ometimes-when-you-are-a-food-person-th_980.jpg)
![“If the State does not acquire supremacy over [vast private] enterprises, it becomes their puppet, and they become the real State.” quote by Bertrand Russell](https://sms4smile.com/quotes/img-quotes/bad/bertrand-russell-69_acquire_if-the-state-does-not-acquire-supremacy_1379.jpg)