Wednesday, April 24, 2013

Story of a 30 year old Startup

Intuit, a company which many of us know as the Turbo-tax and Quick books maker is one of the few companies in the software industry that have sustained itself since past 3 decades. Intuit was started in 1983 by Scott cook and Tom Prolux with a vision to simplify the way in which people manage their finances.

Their first product, Quicken became an instant hit and caught the eyes of Industry behemoths such as Microsoft. There was nothing unique about the technology, algorithm and solution that they discovered. So, what leverage did they have except first mover advantage? What strategies did they adopt to gain market shares? How did they averted danger from deep pocket competitors? How did they kept re-inventing themselves?
In my opinion, these are several reason which led them to become market leader in personal finance space -

  1. Vision led acquisitions: The company strength has always been identifying the key problems and assessing them to make sure that solution for those problems align with their long term vision. Company acquired San Diego based Chipsoft in 1993 which brought Turbotax in company's portfolio.  In their 30 yrs, they have made more than 20 acquisitions which either aimed at consolidating their existing business or opening a new revenue stream for them.
  2. Intuit versus Microsoft: In 1991, Microsoft released Microsoft Money and it was targeted at cannibalizing the sales of Quicken. Microsoft was strategically much better positioned than Intuit in terms of money, influence, resources, technology and subscriber base. But Intuit beat Microsoft in this battle of packaged software on their home turf due to their aggressive consumer marketing. They introduced 15$ rebate on their software which was all new strategy for software products in those days. Once they won this battle, it was evident to whole world that Intuit is the best at what they do.
  3. Aggressive marketing strategy: Scott cook had a vision that Quicken will be a household name as any shampoo or a soap bottle and he spent outrageous dollars to achieve that. Once Quicken became an household name, it was easy to create an ecosystem around it with products like Turbotax, Quickbooks and hence, revenue model got stabilized with locked-in customers.
  4. New products and versions: They have adopted a very customer focused strategy in both product development and product marketing. Over the past 3 years, they have launched more than 50 products which contributes more than 100 million$ to their revenues. The company has adopted to new technologies very quickly such as cloud computing, mobile etc.
  5. Excellent Leadership: The guidance and vision of great leaders like Bill Campbell, Scott was unparalleled by any other company in the tech world.

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