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Evernote Founder Phil Libin Says These 2 Numbers Are Key to Growing Your Company Without Killing It

How not to break your company. Plus: The art of soliciting fantastic advice in Silicon Valley.

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BY Christine Lagorio-Chafkin - 05 Mar 2019

Phil Libin.

Phil Libin. CREDIT: Marc Bertrand/R?edux

Entrepreneur and investor Phil Libin had already founded a small handful of companies when he began his best-known role, as chief executive of Evernote. He'd networked his way into Silicon Valley by asking smart questions of successful people, including founders of such companies as Salesforce and Yahoo. Inc. asked several entrepreneurial luminaries like Libin to share a piece of early career (or life) advice that changed everything. Here's one piece of advice so specific--and reliable--that Libin has come back to it many times throughout his career. --As told to Christine Lagorio-Chafkin

Probably the best advice I got for running a business came from Hiroshi Mikitani, who is the founder and CEO of Rakuten, which is a big Japanese internet company. Boy, he said a lot of stuff that was really amazing. A really incredible thing he advises is to pay attention to what he calls the rule of 3 and 10, which basically says that every time your company triples in size, everything breaks.

When you have one person, just you, you figure out how things work and then you hire a partner and things are OK, but then when you hire a third person, everything's broken. You've got to redo it. Then you get that working and it works until you're 10 people and then everything breaks. Then you figure that out and it works until you're 30 people and then 100 and then 300 and then 1,000.

There's this idea that with a tripling in size--and I think it refers to anything, not just people but your revenue, customers, when you triple something--everything else breaks. Startups often get into trouble because they're growing so quickly that they miss a few of these triplings.

At Evernote, sometimes we would look and be like, "Oh, wow. We haven't revamped our expenses system. We set up our expenses system when we were 10 people and now we're 300, so we actually skipped a few of these steps and so of course it's broken." The way you communicate, the way you have meetings--the way you do everything needs to get looked at with every tripling.

If you want advice, find the people you want to talk to, and ask good questions. In my experience, every single person I've ever approached with actual good questions, no matter how amazing and legendary they were, always took the time to answer them and was super generous with their time and their insights. The accessibility, in Silicon Valley especially, was the most delightful thing.

I had great mentorship from Marc Benioff, from Jerry Yang, from lots of these amazing people I never thought would talk to me. It turns out, if you come with good questions, they're actually very generous. People love giving advice to people who are actually paying attention.

 

From the March/April 2019 issue of Inc. Magazine

 

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