Interview: Brad Smith on Transforming Intuit Into a Mobile-First Company
Intuit is best known for the TurboTax and Quicken packages that line Costco shelves or the QuickBooks program that millions of small businesses use to manage their finances.
But despite its PC software heritage, CEO Brad Smith says the company’s future lies in mobile.
“Many small businesses are running entire businesses from a mobile phone,” Smith said in an interview. “We’re having to reimagine all our products.”
By 2020, Smith imagines that the bulk of the company’s revenue will come from mobile products.
But that will require a huge shift. It’s one that Smith has been trying to lead for some time now.
Currently, Intuit gets just a fraction of its revenue — an expected $70 million this fiscal year — directly from mobile products. That doesn’t include the many products that have a mobile component.
For instance, Intuit has a $360 million-per-year business powering online banking for small and mid-tier banks. The company had been seeing a drop in revenue per user until mobile banking took off. Now banks are willing to pay more if the solution includes mobile.
The company has already created products like SnapTax, which lets people use a cellphone camera to scan in their W-2 form and, for simple returns, file straight from the device. The next challenge is figuring out how to move more complex processes onto phones and tablets.
Smith says that Intuit is in the midst of trying to figure out what the kind of small business accounting done in QuickBooks would look like when managed from a tablet.
“You’ll hear more about that in the next six months,” he said.
Mobile isn’t just an opportunity for Intuit, however, and the challenge is twofold. First off, the company has all kinds of new competitors such as Square and Groupon.
“The barriers to entry are down,” Smith said. With mobile, competitors also don’t have to take on the full breadth of Intuit’s products. There is lots of room for companies to do just one piece well and evolve from there.
To keep pace, Smith has his general managers come to him each quarter with three competitors that weren’t even on the radar screen before and talk about what they are doing well. In some cases, Intuit has adopted similar features and in other cases it has gone out and acquired the companies in question.
On the payments side, Intuit has gone after Square with GoPayment, its take on processing credit cards from mobile devices. Smith said that a growing market means that there won’t be just one winner, noting that GoPayment is doing eight times the transaction volume it was a year ago and its overall payments business grew 14 percent last quarter.
Beyond new competitors, the shift to mobile has meant sales of the company’s desktop software have slowed more quickly than it had forecasted.
“The PC is becoming a truck,” Smith said, echoing an analogy that late Apple CEO Steve Jobs used at our D8 conference. “Everybody is using a tablet and a phone.”
And while the company is rapidly adding mobile versions of its products, it isn’t always getting paid at the same rate. In some cases, the company is getting 25 cents on the dollar and has to scramble to find new opportunities to make up the difference.
“It’s been, in aggregate, good, but not every one of our product lines have figured it out,” Smith said.