What is Obsidian — Having a "Second Brain" with Local Text Files
Obsidian is, in a word, a note-taking and thinking app designed to build "another brain outside your own head." It ingests all manner of information — daily reading notes, meeting minutes, paper summaries, fragments of ideas, diary entries, recipes, project plans — links them together, and makes them retrievable whenever you need them. This concept is known as "Personal Knowledge Management" (PKM) or the "Second Brain," and over the past few years it has quietly taken the knowledge-worker world by storm.
Let's picture a concrete use case. Say you're reading a book and jot down the note "compound interest is humanity's greatest invention." In Obsidian, simply wrapping a word in double square brackets — [[Compound Interest]] — automatically creates a link to a separate note with that title. Later, when you're writing another note about investing and type [[Compound Interest]] again, the two notes are automatically connected through that shared node. In this way, notes weave together into a web, and on screen a "Graph View" unfolds like the synapses of a brain. Just as human memory is connected through association, the distinguishing feature is that information grows as a network rather than a hierarchy of folders.
The idea itself is not new. Vannevar Bush's 1945 conceptual machine the "Memex"; the "Zettelkasten" of German sociologist Niklas Luhmann, who cross-referenced 90,000 index cards over 45 years to produce more than 70 books; Roam Research, which won a passionate following around 2020 with its bidirectional links; and Tiago Forte's *Building a Second Brain*, a global bestseller in 2022 — Obsidian is the latest entry in this lineage of "tools for thought." As one PKM commentator put it, "If Roam Research turned bidirectional links into a cult, Obsidian took that cult off the grid."
What sets Obsidian decisively apart from other services is how it stores your data. Whereas Notion and Google Docs entrust your information to their own cloud servers, Obsidian saves every note on the user's own computer or smartphone as plain Markdown text files. Markdown is a simple format that uses symbols to represent headings and bullet points — readable by both humans and machines. Obsidian is therefore nothing more than "a window for viewing and editing"; the actual content lives in a folder on your own device. The philosophy the CEO returns to again and again is called "File over app," and in the words of his essay: "apps are ephemeral, but your files have a chance to last."
This "local-first" design yields several concrete advantages. First, ownership and privacy: your notes are on your own device and never seen by Obsidian's staff — there is no analytics or behavioral tracking whatsoever. Second, permanence: even if the Obsidian app disappears someday, the plain-text files remain and can be opened in any other editor. The CEO goes so far as to say, "If you want to be able to read your writing on computers in the 2060s or 2160s, it must be readable on computers from the 1960s." Third, extensibility: the core is kept simple, yet more than 2,000 community plugins created by developers around the world let you add as much functionality as you like — calendars, task management, AI integration, and more. Features such as "Canvas" (for spatially arranging cards), "Bases" (for browsing and filtering notes like a database), and "Web Clipper" (for importing web articles) all began as community plugins and were later incorporated into the core app after proving popular.
The pricing model is equally distinctive. Obsidian is free for both personal and commercial use, and in 2025 the company introduced "Free for Work," eliminating fees for business use entirely. Revenue comes from optional add-on services: "Obsidian Sync" for encrypted multi-device synchronization (roughly $4–5/month), "Obsidian Publish" for one-click web publishing of notes (roughly $8–10/month), the donation-style "Catalyst" license for early beta access (a one-time fee of roughly $25), and commercial licenses for large enterprises (roughly $50 per person per year). This is the polar opposite of the modern SaaS playbook of "hook users for free, monetize their data." In broad terms, Notion is the choice for teams that need collaborative editing and an all-in-one business platform; Tana or Mem for those who want to try the new AI-native generation; and Obsidian is the go-to for individual power users who want to keep their data in their own hands and build up a body of thought in a form that will still be readable twenty years from now.
Background and Education — The Story of a Boy Who Dreamed of Becoming a Biologist Until He Discovered "Design"
Steph Ango, who leads Obsidian, once went by the name "Stephan Ango." Business databases such as Crunchbase record his full name as "Stéphane Angoulvant," a name that hints at French roots. "Ango" is a shortened professional name derived from this surname. Rather than using his own photograph, he has adopted an abstract avatar as his icon, and has built a career as a "multi-hyphenate" creator spanning software, furniture, woodworking, color, music, and cooking.
Surprisingly, his starting point was not design but biology. As he shared on the podcast *Dialectic*, he devoted himself to physics, chemistry, and biology in high school and dreamed of pursuing a path in zoology or evolutionary biology. He majored in biology at university and, according to various profiles, earned a bachelor's degree in ecology and evolutionary biology from Colorado College around 2007. This training in observing how nature selects for form became the foundation of his later design philosophy — that tools, like organisms under natural selection, are used, refined, and optimized over time. Viewing artifacts through the lens of biology is precisely the perspective that connects to Obsidian's minimal design ethos, which strips away everything but functional beauty.
What definitively changed his course was a single unremarkable moment. Around 2005, inside a MUJI store in Singapore, he picked up a pencil and felt as though struck by lightning. "Someone intentionally decided the diameter of this pencil." It was the moment he realized that behind the dimensions and texture of every man-made object lies a human judgment — that design is both a profession and a way of life. From that point on, he abandoned the path of biologist and plunged into the world of industrial design. By his own account, he received industrial design training in the Netherlands and worked at a design studio there during this period (some profiles also note that he studied industrial and product design at the prestigious ArtCenter College of Design in the United States).
There is one more "interesting episode" that cannot be omitted when speaking of Ango's student years: his passionate creation of skins (visual themes) for the music player Winamp in the early 2000s, when he was a teenager. Winamp skins required every control button to be expressed within a limited pixel count, and through this pastime he learned firsthand that tight constraints are precisely what generate creativity. His conviction that "constraints arise naturally from the medium itself" informed the sensibility with which he later designed the Obsidian theme "Minimal" and the original color palette "Flexoki" — a direct extension of his boyhood craft as a skin maker.
Also worth noting is that he has aphantasia — the inability to visualize mental imagery — yet possesses exceptionally strong auditory memory. He can replay an entire song in his head, yet sees no pictures. This neurological particularity has shaped his commitment to information design that does not over-rely on visuals, and to building tools that anyone can handle with ease. Biology, industrial design, self-made skins, and a singular cognitive profile — the convergence of these fragments within one person offers a glimpse into the source of Obsidian's later "simple yet deep" design. No formal public record of his academic performance survives, but there is no doubt that his quality as an autodidact — honing skills across multiple disciplines through self-directed learning — was consistent from his student days onward.
Career and Personal Profile — Inkodye, Lumi, and a Commitment to "Tools You Use Yourself"
Before reaching Obsidian, Anго's professional career passed through two companies, both co-founded with his close ally Jesse Genet — a collaboration spanning roughly 13 years.
The first was Inkodye. Launched around 2009–2010, the company's core was a photosensitive dye that reacted to sunlight. By placing objects on fabric and exposing it to sunlight, images could be burned in like photographs. The venture raised funds on Kickstarter and gained wider attention when it appeared on Season 6 of the popular American TV show *Shark Tank* (aired 2014). Anго served as Head of Design.
The second was Lumi, which according to his personal website he co-founded with Jesse Genet in 2015 — "our second company together." Lumi grew out of a personal itch: the difficulty he experienced trying to build his own supply chain for Inkodye, and the frustration of learning "just how hard it is to build your own supply network." The business itself was a B2B packaging and manufacturing platform helping brands find and work with factories. Lumi participated in Y Combinator's Winter 2015 batch (W15) and raised approximately $9 million in a Series A round in 2018. In December 2021, it was acquired by Narvar, a post-purchase experience platform. Following the acquisition, Jesse became VP of Narvar's packaging division, while Anго became VP of Product Development — a role he held until leaving Narvar in January 2023. The following month, he became CEO of Obsidian.
His time at Lumi left a decisive mark on how Anго thinks about work. He later reflected that "at Lumi, we weren't using the product we were building ourselves" — a lesson he speaks of with some bitterness. The B2B supply chain tool simply wasn't something he used in his daily life. This sense of disconnect between maker and user gave rise to a philosophy he has carried ever since: only build tools you use every day. True to this, even as CEO he spends one to eight hours inside Obsidian each day — writing essays, developing projects, building plugins. "If I weren't using it myself," he says flatly, "Obsidian wouldn't be as good a tool as it is."
As a person, Anго stands at the opposite end of the spectrum from the archetypal Silicon Valley executive. His mantra is "I just want to have fun building stuff." He limits his essays to 500 words or fewer, writes them as letters to his younger self, and returns repeatedly to old pieces to strip out unnecessary connective tissue. His "Buy Wisely" recommendation list features only products he has used himself for five or more years. A long-termism runs through everything he does — sowing seeds of creation generously, then waiting patiently for them to grow. A CEO who still commits his own CSS fixes to Obsidian's themes, he is a builder to the core. The assessment offered by colleagues and fellow founders converges on exactly this point: what he brought to the table was the design sensibility and product aesthetic that engineer-founders lacked, along with the ability to distill the essence of a product into a single sentence.
Founding Story — From "Super Fan" to CEO
The story of Obsidian as a company begins apart from Ango's personal history. The founders are two engineers who met at the University of Waterloo in Canada: Shida Li and Erica Xu. Before Obsidian, the two had co-developed an outliner (hierarchical note-taking) tool called "Dynalist," and its operating company, Dynalist Inc., released the beta version of Obsidian on March 30, 2020. This was a period when the excitement around "networked thinking" — ignited by Roam Research — was growing, and Obsidian quickly captured the hearts of core knowledge workers as a counterproposal: "do it with your own local files, without entrusting anything to the cloud."
This is where Ango enters the picture. When Obsidian appeared in 2020, he began using it as an ordinary user. He eventually shared with the community a theme he had created for himself called "Minimal," along with several plugins, and they became explosively popular. Through his design and product sensibility, he brought a kind of value that the engineering-minded founders lacked. After selling Lumi, he approached the founders himself about joining Obsidian, and initially worked as a contractor to design version 1.0, released on October 13, 2022. When the American tech podcast "Decoder" (The Verge) titled an episode "from superfan to CEO," it was referring to precisely this unconventional path.
Then on February 6, 2023, Ango announced his appointment as CEO on Obsidian's official blog. The founders framed this transition not as a step backward but as a step forward, stating that "Shida and Erica will be able to spend more time doing what they do best — building a great product." At this time, Ango reaffirmed the company's non-negotiable principles: "free to use," "a permanent and open file format with no lock-in," "privacy-focused, offline-first, and end-to-end encrypted," "unlimited customizability through APIs and plugins," and the declaration that "Obsidian is 100% supported by its users, and there are no investors who can make us compromise these values."
This organizational philosophy is itself at the heart of the founding story. Obsidian's official website describes the team as "a small team of 9" — Shida Li (Co-founder & CTO), Erica Xu (Co-founder & COO), Steph Ango (CEO), engineers Liam Cain, Johannes Theiner, Matthew Myers, Tony Grosinger, customer success's Rebecca Bishop, and even "Sandy the office cat" are dutifully listed in a row. The company's guiding principles are distilled into five words: Yours, Durable, Private, Malleable, Independent. They hold meetings only "once a year," handling day-to-day communication through asynchronous chat on Discord. Because everyone on the team is a heavy user of the product, their sense of "what is right" naturally aligns. Ango describes this small-team philosophy with a movie analogy: "I love the 'Ocean's Eleven' model the most." A small group of elites, each bringing their specialized skills, brilliantly accomplishes a single job together. In today's world, even a small team can build something ambitious.
Obsidian vs Other PKM/RAG/OSS — Strengths and Weaknesses of the Local-First Camp
To accurately gauge Obsidian's position, it helps to place it on the vast map of knowledge management tools. Broadly speaking, there are three camps: the cloud-based all-in-one players, the AI-native newcomers, and the "local-first / open" camp to which Obsidian belongs.
The flagship of the cloud-based camp is Notion, which has reached a valuation of $10 billion. Its ability to bundle collaborative editing, databases, documents, and wikis into a single experience is overwhelming, and for an additional $10–20/month, "Notion AI" handles text generation, summarization, and question-answering against databases. It is unmatched in ease of use and collaboration, but data lives on the company's own servers, and users are structurally kept in the role of "tenants."
Among the AI-native players are Mem (backed by a16z) and Tana, which raised a total of $25 million (including a Series A at a $100 million valuation) in February 2025. They are betting on a future where "AI agents organize your knowledge for you." However, Mem has struggled despite massive investment and has been called "a $40 million second-brain failure" by some media outlets, laying bare the difficulty of the AI-native approach.
Then there is the open / local-first camp where Obsidian resides — a world with many open-source allies. Logseq, an outliner-style tool, is an OSS project that raised roughly $4.1 million in seed funding from Stripe co-founder Patrick Collison, Shopify founder Tobias Lütke, and others. Anytype (which emphasizes encryption and local storage), the familiar Joplin, and AppFlowy (positioning itself as a Notion alternative) all share the philosophy of "owning your own data." Obsidian itself is not strictly OSS — it uses a proprietary license — but because its data format is fully open Markdown and it hosts a massive plugin ecosystem, it is effectively regarded as the standard-bearer of this camp.
Here it is worth clarifying Obsidian's relationship with RAG (Retrieval-Augmented Generation) / AI, which is the topic users care about most. Obsidian's core features deliberately include no AI whatsoever — all AI is delegated to community plugins. For example, "Smart Connections" vectorizes (embeds) notes to find semantically similar ones, and when combined with a local LLM via Ollama (such as Llama 3.3 or Mistral), it can run an "air-gapped" RAG chat across your entire note vault without sending any data outside. "Copilot for Obsidian" excels at RAG-based conversation across the entire vault, while "Text Generator" is suited for text generation. In other words, Obsidian takes the opposite approach from Notion or Tana, which place AI "at the center of the product" — instead, it adopts a design philosophy where "the notes themselves decide what to show the AI next." It is a rare foundation on which you can build RAG without surrendering any privacy.
Let us summarize the strengths and weaknesses. Obsidian's strengths come down to complete data ownership, thorough privacy (zero tracking), the permanence and lack of lock-in that Markdown affords, the fact that it is free, and limitless customizability. Its weaknesses are the clear flip side of those same qualities. First, there is the learning curve and setup effort — the freedom to assemble plugins and tailor the tool to your liking means it is not an "out-of-the-box, ready-to-use" experience. Second, it is fundamentally ill-suited for real-time collaborative editing and team workflows, where Notion reigns supreme. Third, because AI is not built in, it leaves power users seeking the latest AI experiences wanting more, and the reliance on plugins inevitably brings fragmentation and uneven quality. Fourth, sync and mobile experience are not as seamless as those of cloud-native rivals. The right way to understand Obsidian is not as "a finished product for everyone," but as "a robust material with room to grow into something your own."
Silicon Valley VC Perspective: How to View the "Honor Student You Can't Invest In"
This brings us to the heart of this piece: how Silicon Valley venture capitalists view Obsidian. To cut to the conclusion, their gaze is an extraordinarily complex mix of "admiration" and "frustration."
First, some background. In 2020–2021, knowledge management apps experienced an unprecedented influx of VC money. Roam Research raised $9 million in 2020 from True Ventures and Lux Capital at a valuation of $200 million — roughly 25 times the median seed valuation — prompting The Information to write about "investor mania over note-taking apps." Notion raised $275 million in October 2021, led by Coatue and Sequoia, reaching a $10 billion valuation. Mem raised $5.6 million from a16z, then $23.5 million from the OpenAI Startup Fund at a $110 million valuation. PKM was unambiguously a "hot investment theme."
In the midst of that frenzy, Obsidian took not a single dollar of VC money. And yet the irony — that the most beloved, most tenaciously surviving product in the space turned out to be Obsidian — is precisely the source of VCs' complicated feelings. Obsidian is a private company that discloses no financials, but third-party estimates from multiple tech media outlets (36Kr, BigGo, versaedits, and others) are broadly consistent: ARR of roughly $25 million, approximately 1.5 million monthly active users, and around 5 million cumulative downloads. The team is just nine people. By simple arithmetic, revenue per employee reaches roughly $3 million — capital efficiency that rivals top-tier VC-backed SaaS companies. China's 36Kr described this as "three engineers, zero funding, no meetings — a 'small and beautiful' $350 million company," while BigGo reported that Obsidian "redefined software startups with a zero-funding, no-meetings model." (It is worth noting that the frequently cited "$350 million valuation" is not a number arrived at through any market transaction, as befits a bootstrapped company, but rather a purely hypothetical third-party estimate.)
For VCs, Obsidian is instructive on two levels. First, it has embodied — without VC money — the very pinnacle of "capital efficiency" that VCs idealize. Second, and precisely because of that, it is not an investable asset. Obsidian's co-founder Erica Xu (Ango) has spoken plainly about why they reject VC: "Most major PKM apps have raised millions to hundreds of millions of dollars. The problem is that it ultimately distorts incentives over the long term and pushes you toward actions that run counter to your own principles." Once investors are in, pressure for growth and returns inevitably follows — pressure to abandon local-first principles, to build lock-in, to resist the temptation to monetize data — all of which is the polar opposite of what Obsidian stands for with "Yours / Private / Independent." Obsidian operates on three deliberate "won'ts": intentionally capping the team at around 10–12 people, taking no VC money, and collecting neither user data nor analytics. In the language of the VC world, Obsidian removed investors from the equation from the outset, so that investor and user interests could never collide.
So how do VCs view the weaknesses of this "exemplary student they can't invest in"? The central issue is AI. As one analyst framed it, Obsidian's AI strategy — constrained by its bootstrapped model — amounts to a bet on "delegating to community plugins" rather than "embedding AI into the platform itself." This is consistent with the philosophy that "the community will build what is needed," but it carries the risk of falling behind in the standard out-of-box experience compared to competitors like Notion and Tana, which are positioning AI at the core of their products and building it out rapidly with abundant capital. Whether AI-native newcomers will chip away at Obsidian's power-user base, or whether Obsidian will hold the line by leveraging privacy and data ownership as its weapons — this is the watershed moment VCs are watching most closely. Add to that the key-person risk inherent in a nine-person team (especially dependence on Ango and the two co-founders), and the foregone market expansion that comes from deliberately staying small — all of which looks, to growth-oriented VCs, like a waste of potential.
Looking ahead, here is a forward-looking outlook based on facts as they stand today. On the product side, "Bases" — the flagship feature introduced in 2025 that enables database-like views — continues to mature steadily into 2026, with the desktop version having progressed to roughly the v1.13 series as of mid-2026. Together with "Free for Work" (free for business use) and the "Web Clipper" for importing web articles, the near-term trajectory appears to be expanding Obsidian's reach from a personal tool into "a robust foundation that teams can use as well." The biggest question remains how AI will be handled. Will Obsidian continue to uphold the principle of "no AI in the core"? Or will it incorporate a privacy-first, locally contained AI experience into the standard product without crossing that line? This single question will concentrate Obsidian's course through 2026–2027 — and shape Silicon Valley VCs' assessment of it. One thing is certain: the odds of Obsidian announcing a VC round anytime soon are vanishingly low. For them, the absence of outside funding is not a weakness — it is the product philosophy itself.