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Scott Cook - Founder and Chairman of the Executive Committee, Intuit

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- All right, I think we're ready to start. Anyone else wants to join us for the talk with Scott Cook, Founder of Intuit. I'll just start for everyone here at Khan Academy who doesn't know, both Scott and Signe Cook are some of the earliest believers in Khan Academy, and supporters. And to a large degree, Khan Academy wouldn't be where it is right now without a lot of their help. And so I just feel like I owe you guys. But with that out of the way. - We're just fans. We cheer from the stands. The players who win the game are in the room. - Very nice, well, thank you. (audience laughs) The point of having you here, and whenever we have people of your stature come to the office, we think it's just a valuable learning experience to have a conversation with you, and then to see what's going on in your mind. The place I like to start, before we open it up to the rest of the team, is you see a lot of folks who've done big things, like start Intuit. When I was a kid, I always wondered, how does that happen? How do you go from being, having a normal job, and one day you start a company, and that company becomes a really big company? Tell us a little bit about that story. How did Intuit get started? - I think for you it was your niece, was it? - My cousin. - Cousin. - Cousin, yes. - For me it was my wife. - [Sal] Very good. - She was struggling with her math problem, no. (Sal and audience laughing) She had to do, she does our joint checkbook, and she was complaining about doing it. She was very good at it. She's diligent and mathematical, but it was a hassle because she had to pay the bills, and you had to rewrite it in the check register, reconcile. And she complained, and I thought, huh? This was in 1982, when PCs were just starting to explode. I said, wait a minute, this sounds like the kind of problem everybody might have, 'cause everyone's gotta have a checkbook. Everyone has to pay bills. And PCs are now going into homes, and this is very solvable on a computer. This is the kind of task that computers are very good at. I thought, oh, maybe I'll write this software just for fun. But I hadn't programmed in a decade, so I figured maybe I should get somebody who actually knew what they were doing. And so I found a student at Stanford, Tom Proulx, and he and I co-founded the company. And with the goal of building a simple piece of software that would allow people to eliminate the hassles of managing their daily, monthly finances. - And how do you go from that? Because what you see a lot of in Silicon Valley, and other places is, you saw a need, you were able to build a prototype to do it. But then there's a big jump between that and actually getting traction, actually people using it. How did you make that leap? - Yeah, for us that leap between launching it, and actually getting a lot users was not a leap, it was a chasm. (Sal laughs) It was a crevasse. (Sal and audience laughing) Software at the time was sold in stores in boxes, and you took money, and we tried to get VCs to invest two million dollars to give us the marketing money to convince stores to carry it, and then convince people to buy it. And no VC said yes. They all said no, including VC firms run by classmates. Shows you how unpopular this idea was. That was a big problem. Yeah, we borrowed some money. We got a little bit of seed money from some relatives. We stumbled along. We spent that. We ran out of money. We had to give back the rented furniture and rented computers. We stopped paying salaries. It was pretty ugly. - And why didn't you just, I mean, it was stressful. - Yeah, our marriage almost broke up. - And, I mean, given that, why didn't you just cut your losses and? - I think cutting losses would've been the rational thing, actually. It did look so hopeless. But I felt I was kind of boxed in because we'd borrowed this money from some people. I had taken my father's retirement money, most of it. We had the two relatives who'd invested equity as kind of angel money. But I felt I had to pay that back. You looked at the amount of money I'd have to pay back through honest work if I had quit the business, so I felt trapped that I can't give up because then I gotta pay all this stuff back, so we just kept working. We just kept working at it. - And at some point, how are you living? How are you paying your bills? - Fortunately, Signe had a very good job. In fact, in either this building, or in one of the adjacent ones. - [Sal] Next door. - Yeah, she worked in a software company, software publishing corp that had a bunch of these buildings. She in VP marketing, so she had a very good job. It was her income that paid the bills. - How long did this, I guess this crevasse, how long was this period? And then what was the moment where actually all of the sudden you saw the light at the end of the tunnel? - Well, and it's actually even worse than one crevasse, there were two. Something we tried started to work, and then it crapped out. And so that's even worse when you get let down. Let's see, we launched the product with great hope in October of '84. And it was the time when I finally felt the thing was doing well enough that I could buy something that wasn't a necessity, something optional, that I could splurge on, which turned out to be a CD player. When I finally could afford a CD player was in late '87. - Wow. That still was, this was a story, it was still, it wasn't like a hockey stick at this point. - No. - It was still a slow and steady. - And so, the question you asked, let me answer it directly the question you asked. What actually did turn the business around? It turns out it was word of mouth. Because the way we built the product was different than others had. Nobody up till that point. Software was an industrial product, sold to corporations. The big software success was VisiCalc, which was sold to finance people in corporations. And the UI sucked. You couldn't figure it out without training or reading a book. But that's the way software was. We were the first people to do consumer testing, usability, we didn't call it that, but usability testing. We brought housewives in from the Junior League because at the time, there were all these women who didn't work during the day. And they didn't use computers. We put them in front of computers. We gave them our stuff, and said, okay, use it to pay a bill. And they'd fumble and goof, and we'd look at 'em and say, oh, shit, we didn't. Oh, oh, yeah, now I see. We'd go back and redesign it, and we'd try it again. And refine it, and have people who didn't know the product, no manual, try it by hand. We had done more cycles of usability refinement. Nobody had ever done that before. So our product was actually usable, and fast compared to the, and we're selling to people in homes. No executive's telling them to use it, they gotta want it. And so people starting using it from earlier and feeble marketing, and then they'd start telling their friends, and they'd start telling their friends. And there started to be demand, pull, and it was the word of mouth that ultimately took off. - And then it just is, the rest is-- - Yeah, we started tripling. Every year we'd triple in size. Triple, triple, triple. - You went into the most obvious adjacent spaces, taxes, and? - Well, it was, I've learned something about surprise. In fact, the first question we talked about today was, what's been surprising? - [Sal] I told him about our burglary situation when he asked that. (audience laughs) - Yeah, yeah. - [Sal] The upside and downside to surprises. (laughs) - There's learning in surprises. We had, we were in our first, we launched Quicken, and even before it took off, and was just failing and bumbling along, we did a little survey of the few users we had. And you ask them all these questions. And one question made no sense. At the end of the questions, where we were asking about how do they use it, what do they like, not like, et cetera. At the end there was a demographic set. You ask age, location, income. And we asked a question, where are you using the product? Home, office, or both? And half the people claimed to using it in an office. Well, this was a home product, so we thought, well, maybe they don't have a home computer. I mean, this was 1984, 1985. Maybe they're taking their stuff to work and doing it there, so we ignored it. Every subsequent survey, the same answer. Half the people were using it in an office. Well, we ignored it. It didn't make any sense. Finally, it started bugging me. Why are people answering this question wrong? (audience laughs) I said, well, let's go ask those people what they're doing, instead of ignoring it. This was years later. We went and actually called some of them up, and asked them to interview them. Went to visit them, see what they were doing. And by God, a lot of them weren't doing their home stuff, they were running a business on it. We'd built this as a checkbook manager, not business accounting. And the mindset everyone had is that business accounting. Talk to any, who's took accounting? Who's an accountant here, any accountants? Okay, very good. Now, what's the system by which you keep books for a business in accounting? - Double entry. - Double entry accounting with debits and credits and journals and ledgers. Any expert will tell you, that is the only way, and we assumed that. Here we found these businesses using a tool that had none of that, no debits, no credits, no double entry of anything. And, what? But they're using it, they are running their business on it. It's where all the expenses and the income flows through. It's their accounting system. And then we tried to find out, why? Why are they doing this unexpected thing? Now it's obvious in hindsight, but of those of you who took accounting in school. Raise your hand if you took accounting in school. Okay, how many of you liked accounting in school? - I actually did like it. (audience laughs) - Yeah, yeah, I got it. You and I, we're both weird. But the rest of you are normal. Most people hate accounting. And the people who keep the books in a small business, tend to be owner, the owner's spouse, an unlucky clerk or assistant, office manager. Nine times out of 10, they do not know accounting, and they do not wanna learn. To them, general ledger, which is a feature of all accounting systems, is a World War II hero. (audience laughs) That's why they were using our product because we were in English, and they didn't have to learn anything. Where all the others, was a massive learning curve. We finally said, whoa, what would happen if we actually built a product for businesses? But made it on the same promise, with no debits, no credits, no journals, no ledgers. Put it in plain English. You see an invoice, you fill it in. You see a check, you fill it in. So we worked for that, on that, launched that. It all came because of a surprise. Today, that business, which is QuickBooks, is in total about 10 times larger than the Quicken business. That surprise, which we ignored for years, has created a business. And if you add all of our small business stuff. We've added payroll and payments and all that, it's about 15 times the size of the Quicken business. I didn't recognize it at the time, but there was a pattern about when there are surprises, big upside or downside, savor the surprise. What's really going? What explains it? That's not what we expected. Stop and savor it. It's too easy to just keep going. Anyway, I've learned multiple times. That's the story on some of our subsequent businesses. - Now I know, when you ask me questions, that there's like an underpinning philosophy. - They're not random. - That's interesting. - They may seem random. (laughs) - No, that's very good, you're having more thought than me. Now, before I open it up, where do you see Intuit going? It's a much larger company now. How do you as the leader, or the manager, how do you try to navigate that? Where do you see as the big opportunities and the pitfalls? - Oh, the pitfalls are clear. It is amazing how success and scale make you dumb in an organization. It is just stunning the degree to which the creative, inspiring, innovation, invention, suddenly starts disappearing as you grow, you add layers. Decision makers, managers, try to get rigorous, and do all the stuff that you have to do to be both efficient and to be reliable. People don't want their, I mean, we did launch a version of QuickBooks where your data disappeared. (Sal laughs) Randomly after, all your data disappeared. (audience laughs) Yeah, this is a problem. You don't really wanna do this. Don't try this at home, kids. You gotta get rigorous, but something happens. Without continued innovation, without continued, how do we make the current thing better? How do we find the next problem to solve? You eventually get stale and die. How do you be both rigorous and inventive? And most importantly, how do you free your most inventive people? Who are often quite new to the company, could be quite young, likely are renegades. How do you free them to invent without the Borg, the organization borging them? We're redoing how we work along the lines of lean experimentation. The thing I've learned is if you allow normal hierarchal decisions, you have the problem, all the problems happen. Well meaning, middle managers, it just slows down. But what if you tell the middle managers, your job isn't to make that decision? We'll let the experiments make the decision. Middle, your goal is to put in systems that allow your teams and your brand new employees to be able to take their best idea to solve your mission, and run it as an experiment, fast and cheap. The internet now allows us to run these fast, cheap experiments, so there's this whole wave of change called the Lean Startup that Eric Ries has founded. I've not seen any idea enter the common parlance of business as fast as the Lean Startup. His concept of Pivot went from novel to tried in two years. I've never seen it. It's been absorbed, at least as language, so fast. But he wrote the book about startups. I believe there's two groups who need the Lean Startup even more than startups, this concept of lean experimentation. And those are large companies and nonprofits, will benefit even more than startups. We're trying to operate as a network of startups inside, where people can try their ideas. And we've got coaches, teams, systems. We put people through a two-day experience where people just sign up, and by the end of the first day, they have their idea up and running in some sort of test, to test their leap of faith assumption. All to uncork that inventive power that is what has created all great enterprises in Silicon Valley. - [Sal] Yeah. - So that's kind of, and if we do that right, then I won't have to pick a direction. Our people will invent the directions far better than I can. - Yeah, absolutely. I mean, on that note, I'd love to take questions. Anyone have questions? I have a bunch more if anyone. - We started the company with a bunch of surveys. I had described one that helped us get the surprise that led to QuickBooks. But I have become a skeptic on surveys. I actually don't guide teams to run surveys. I tell them, avoid the survey. We've found there's not a high correlation, particularly if you're looking at inventing new ideas, and new businesses, new products. There's not much of a correlation between what people say they will do and what they actually do. What they say they will do, they'll do about half the time. So that means, it's a coin flip. We've had, oh, we did a product in India, which we have, which we surveyed users. We were trying to figure out how to monetize it, so we surveyed. We expected 20% would pay for it, because we'd been giving it away for free. We surveyed users and 40% said they'd pay. And then we actually did the test, and took existing users and added a charge, and 2% paid. There's another example. A team working in payroll division had a new way for a business to start up payroll. They mocked it up in screens, showed it to 20 payroll customers. These are employers. Someone here runs a system to write your paychecks. It'd be that person. Zero of the 20 said they'd use it. Zero. Amazingly, they didn't stop there. Thank God, they didn't stop there. But because of our system of experimentation, they then got coached. We actually had Eric Ries in coaching. He figured out a way you could run an experiment in 24 hours to actually see what people would do, not what they say they would do. They ran the experiment, and 58% of real customers did it. If they'd listened to the survey, we never would've done this thing. Because they could take it to a test, a test of just a slice of it, they then learned that the customers would. We fleshed out and built the rest of it, and we got the fastest customer growth in 10 years in that business. What I've learned is trust behaviors, don't trust surveys. Measure and monitor their behaviors, and then right after behavior, you can ask somebody, why'd you do that, or why not? Then you might get something close to truth. And do it more as an in-depth interview of the people who just did something, or in a test just didn't do something. And then you might learn something useful from the interview. When we go out and talk to customers, and interview and observe, one thing we'll do is go and watch customers. I find it's much more reliable to watch people in what they do. And you've got an opportunity. You've got people at home, studying or whatever, where you could go watch and see actual behaviors. Don't say anything, just watch, and you'll see things they would never comment about. I'm on the board of the Procter & Gamble company. They make soap, Tide, and Pampers and other things. In trying to figure out how to improve Tide, they'd run surveys. One of the many, obviously, you've got many things you ask about, one of which was the box, the packaging. They asked, is it easy? And the answers in the survey were, yeah, it's easy to open. Well, years later, they did some in-home observation. They followed some homemakers around watching what they did. And they then did observe a few people opening a brand new box of Tide, and they found it was easy if you kept a knife or a screwdriver next to your, and 'cause women have nails, and they couldn't open those things, so they were hacking at it. But it had never come up in a survey, but they could see it. The thing I'd recommend is to understand customers deeply, go out and watch them. We call it follow-me-home testing because we used to follow customers home from the store. Not exactly, we'd ask for permission. (laughs) (Sal and audience laughing) So we could watch them start up. Well, let me answer that in two parts. One, the story of how we got into payments, and then the crystal ball gazing. There was actually one guy, an engineer, an African immigrant, who looking at our QuickBooks users said, huh, they really could use payments. In fact, what they need's different than what everyone else is selling. He got a product manager to work with him. And the two of them cooked up this scheme, and inserted it into the product. And, by God, it took off. 'Cause they'd found a problem for businesses who accept payments when there's no card present. Because QuickBooks is typically used in the back office around invoices, and some customers wanted to pay with a credit card over the phone, but there was no card present. The whole payments industry had been rooted around that card being the key. They invented a different economics and a different approach, and embedded it in QuickBooks. And so now we have a payments business that's 400 million in revenue, sizable. All because they found a problem nobody else had solved, and figured out how we could solve it. Now, on gazing about the future. Right now, you're seeing a hotbed of innovation around payments. Things are becoming dramatically easier to send money person to person. Send money for businesses, for businesses to set up and accept payments. It's long been, payments, a kind of monopolized or cartelized business with a few major payment utilities, such as Visa and Mastercard, or one central bank run system called the Automated Clearing House. And now this rampant innovations happening around it. It's so much innovation, and most of it, I can't tell you how it's gonna turn out. But it's gonna get a lot easier and cheaper for everyone. The place we're focused on is still in the back office because everyone else tends to be focused heavily on the point of sale, but the place that's still being ignored is that business that sends bills or invoices out. And, for example, in rent payments here. How many of you pay rent? Raise your hand, okay. How many of you pay that electronically? Most of the hands went, right, yeah. Especially small landlords are not set up to accept electronic payments. And it's a royal pain, for you, and for them. They gotta hang around the mailbox, waiting for the money to come in. 'Cause if it doesn't, they gotta bug you. So a small team, how many people? Yumi, how many people was that team when they started? - [Yumi] About two or three. - Two or three? Two or three folks said, we can fix that problem. And so they invented a system called Spark Rent, which allows the merchant to, not the merchant, the landlord to sign up, and then the tenants can pay electronically really quickly. The landlord can be anywhere, on vacation, and they know everything. It sends reminders out. It's cheap. It's had some hiccups, but it's now the most popular way that small landlords can get paid electronically, and tenants can pay electronically. That's just the beginning of the kind of innovation. From that, what we wanna do is develop a way so that our system will know that you pay your rent on time, so when you try to get that next apartment in San Francisco, and there's five people trying to get that apartment, you've got a track record that you can say, you can trust me. Here's my Spark Rent track record. We think we can then take the data, and make it useful to both sides. When we're at our best, yes, we can pull that off. But that's a real, I'll admit, we're far from perfect on that. In our payments group, again, we've had a group that came in at a much lower price point. Within our tax group, a group was working on. Right now, you go to TurboTax, and you've gotta pay your taxes on a computer. But this group said, why don't we use the phone? And why don't we use the phone to snap pictures of those tax documents, so you don't have to type it in? Well, management thought this idea wouldn't work, and outside experts said it wouldn't work, but they kept at it. And they've built something called SnapTax that works. It's an app on your phone. And you snap pictures of your W-2s, and if your taxes are simple, and a lot of you guys are, it asks like nine more questions, and you're done. Nothing we have done in, and it's at a lower price point, and it's easier. Nothing we've done in our company's history has gotten as high of ratings from customers. It's five stars in the app stores. And we get reviews like you can't believe. One person wrote in that she was in the recovery room after surgery doing her taxes, and so happy about it. (audience laughs) Another guy wrote in the review, in the app store, that it was February 14th, he just finished his taxes in bed with his girlfriend, and she's so stoked, she might even wear the gift he just gave her. (audience and Sal laughing) Again, it was a small team who had the freedom to experiment and invent something, which is just, that the mothership wasn't working on. At our best, we do that. There's other times when I wish we were better. This is the eternal priority setting question. (audience laughs) No matter what size you're in. Before we launched, we had more features we wanted to put in than we could fit in. After we launched, and now as a 4 1/2 billion dollar company, there's much more stuff we wanna get to, and that people wanna get to than we can. I have two thoughts on that, and they are kind of opposing thoughts. One is, make it fast and cheap to run experiments, so you can try more things. If it's big and expensive to try something, then you've gotta be choosy. If you can make it fast and cheap to test the leap of faith assumption on which a decision depends, then you can try a lot more things. Eric Ries' Lean Startup, we were already running experimentation. And then I discovered Eric Ries on an online video, and I said, my God, that's our idea, but he explains it a lot better, and he took it a lot farther. I'd circulate the Lean Startup, and look at some of his videos. It's really, it makes sense. That increases your capacity to try new things, and to try new radical things. 'Cause if it's fast and cheap, it can be radical. The other, the principle is that the actual important things is a small subset of all the things you're working on, what's truly important. Here's an example. I learned this technique from another CEO, to run a thing called a town hall meeting. We'll get a group of important customers together, let's say accountants, because we sell a lot of things to accountants. We'll get a group of 12 of them together in a room, and I'll stand up at the whiteboard, and I'll ask them two main questions. What do you love about dealing with Intuit? And each person write down, private, silent work, write down a list of what you love about working with Intuit. Second question, what do you hate about working with Intuit? What's wrong? Where do we piss you off? What are we just missing the boat? Okay, silently, each person write your own list. Okay, then once they have lists, I stand up in front, and say, okay, let's read off list number one. And everyone read their list one, and I'm up at the whiteboard. And I fill out the whiteboard with all the great stuff. I said, thank you, that's great, that's awesome. Now, let's go to question two. Everyone tell me the lousy stuff. And I write all those ideas down. People will have real passion about the stuff that's wrong, that needs to be fixed, and needs to be changed. You'll get 30 items up there, real passion from folks. Then I'll say, okay, let's forget list one. Thank you for that. Let's focus on list two. I'm gonna give each of you five colored stickers. Go up to this whiteboard and put those colored stickers by the things that you find most important. You can put all five on one. You can put one sticker on each of five. You can split 'em up. What amazingly happens, out of the 30 or 35 items that'll be on the board, most get no votes at all, not even from the person who was advocating it. The votes uniformly are incredibly lopsided. Now, they're not collaborating to each other. They're not comparing notes. They're doing this as individual work. The votes, there's one always, every time I've done this, one big one. And then there'll be a second that gets half as many votes. And then maybe a third that gets half as many, and then it's noise. Then what we do in the meeting is say, okay, let's dive into number one. Okay, what's the problem? What's the issue? When does it happen? How does it happen? Tell us more. What's the root cause? Blah, blah, blah, how do we go about fixing it? And dive into number one. Basically, you should work with most of your effort on number one, small effort on number two, and forget the rest. Organizations can't do that. Organizations will work on 12. Oh, Susie wants to work on this, and boy that's a good idea from them. That customer was so passionate. So you'll get 12, and you'll underwhelm the important ones. And you'll spend much too much time on the stuff that just isn't. This is the best example I've ever seen how customers actually are much more focused on what's important than companies are. And there's one big one. I tell folks, what's the 1 1/2 things you should be working on? (audience laughs) And then run cheap experiments, so you keep the idea creation. 'Cause you'll get surprised out of the cheap experiments. That's your safety valve, to get surprised. That might be helpful. (audience member speaking faintly) Let's do a little show of hands. How many people wanna understand all the words in the tax law? Raise your hand. (Sal laughs) How many people just wanna get their taxes filed and get their money? (audience laughs) Yeah, we're not in the education business. That's your business. (audience laughs) We have found, at least when it comes to finance, most people are exactly like you. They just wanna get it over, and get the work done. If they occasionally wanna learn more, we've got a lot of what we call point-of-need help, where you can just click. There's a little blue underlined thing saying, what is this? Or, tell me more. And people can click and learn more. When they do that, it's typically not because they wanna learn, it's because they wanna make the decision right. Even when they're quote, learning more, it's only to make the decision, and then move on. What you're doing is noble and really important and crucial to the world, but it's not why people tend to buy or use our stuff. Yeah, so, why did we acquire Mint, given our passion for internal innovation? It came way, we acquired Mint before we had wrapped up a lot of the experimentation work. We're not as good as we want now, but we were much less good then. Also, I'm very eclectic. We want innovation and innovative teams from both sources. We both acquire and we teach and coach our internal, and enable our internal entrepreneurs. We do both. We certainly don't, I think it was Bill Joy of Sun who once said, almost all the smart people in the world don't work for your company. (audience laughs) We wanna be where almost all the smart people are, which is, we're only one slice of the smart people. In this case, with Mint, we had an internal effort to do Quicken online. Mint and some other competitors were pursuing similar things, and Mint just outrun the whole field. They produced a better solution that had a different business model and was just better than what we were doing. We said, why fight a losing battle? Let's go get the top team and the top approach. Since we've acquired them, their business has tripled or quadrupled in size. Their ideas have infused much of the rest of Intuit. That was one thing we were hoping to have, their ideas change the direction of other businesses. We've had them run the Quicken business, so we could take their learning, and we gave them the Quicken business to run. We really tried to maximize the wisdom transfer. Now we're building a Mint product for small businesses. Figuring they have such a good thing for consumers. Plus, we're adding much more to the Mint data and what Mint can do for you. But we're also saying, can we take that same magic and solve problems for small businesses as well? That's some of the story on Mint. Your premise is exactly right. When you do your finances with any system, it accumulates the data. We've got a very large repository of data on people's taxes, investments, spending, business, at a transactional level. The first thing to recognize is in my view, that's not our data, it's our customers' data. They allow us to be the stewards of their data only if we earn that. We can only do things that the customer wants and gives us permission to do. If we break that trust, people will run from us, and they deserve to. The next thing is Mint was, another piece of the Mint DNA we wanted was they were making better use of the data than anything we've done. We've largely done nothing with big data. We've used the data to solve your immediate problem, but we have not then, the way Mint has, said, oh, based on your data, we can see that you'd be much better off if you did X or Y. That was another piece that we wanted to do to cross pollinate from the Mint acquisition. We now have a data team with a new leader. We took one of our leaders who's very talented, and added this challenge to her. The data team was focused on how they could help Intuit with data. We said, that's nice, but what we really wanna do is, how do we help the customers with data? How can we change their lives? We've reoriented the data team on the mission that you described, so that hopefully in a a year or two we'll have more ways that we can help people. Here's just one that's already in action. It turns out most small businesses apply for a loan at some point. 70% of our QuickBooks customers have applied for a business loan. And most small businesses get turned down in a rather slow, long, ugly process where they wind up giving a lot of data information and paper to some bank that ultimately turns them down. Plus, there's a lot of lenders who'd like to lend to customers they don't yet know. We think we can make that happen. Because of the rich data in QuickBooks. We can help figure out who is a good lender for you, and then make it easy for you to apply with a push button, instead of filling out all this paper. And then have the lender be able to rapidly approve, and get higher confidence that they're lending to good people 'cause we've got deeper data on your business than anybody. But we can only use it with your permission, but this is an area where businesses really want someone to take advantage of their data, to give them a better loan at a better rate. We've got a lending operation. We don't do the lending. We work with lenders, and we're trying to pioneer this lending marketplace using QuickBooks data as the unique asset to make it happen. That's an example, and we're getting some, a number of lenders are playing with it. Our ultimate goal is to build a better credit score based on richer data, so that more deserving businesses can get better loans. - I'll just finish up. Obviously, you are known as one of the top managers in not only your industry, but in Silicon Valley or more generally. And you've known Khan Academy since really the beginning. What thoughts do you have about what we're doing? Where do you see the opportunities? Where do you see the pitfalls? What's your general thoughts and advice for us as a team? - I bet some of you are better aware of the things to be afraid of. I'm not sure I'm close enough to give you a thoughtful assessment of that. But I think one thing that I can't say is an issue here, but has been an issue in other fast-growth operations. You grew from about five to six million monthly actives to about 10 million over the last year. And you're doubling. You're expecting a future like that. Your superstars, celebrities, in the press. There is the curse of success, where things are on a roll, where everyone wants to talk to you, which somehow is a drug that causes people in other organizations to take their eye off the ball, to stop focusing on two things. One, what really solves the customer problem? Yeah, yeah, customers are using it, things are great, we don't have to worry about that. Companies can persist in doing things that ultimately are second rate, just because the second rate stuff was better than what was before. And they don't find out the great. I mean, think of Overstock.com, who then just got surpassed and crushed by Google, or by eBay. Or think of Yahoo!, which, gosh, they were the darlings, huge, the internet company. And then Google just went (making jet engine sound) by 'em. Because they stopped focusing on, okay, what's the major problem to solve? And how can we innovate and solve it much, hugely better? Yahoo! always was a place people came to to go somewhere else, and their search was not good. Stick to the knitting of, what's the fundamental problem we're trying to solve? What do people really want us to solve? And are we the best in the world at that? From what I see, you're working on that, with the dashboard and that. The other curse of success can be the curse that Friendster had. Friendster was the social network before Facebook, and even before, what's the music one out of LA? - [Sal] Myspace. - Myspace. And they had taken off as a social network, Kleiner Perkins, major VC had invested. They asked me to go down and take a look. I went and talked to the entrepreneur, and that was good. But he talked about, they ended up talking about some technical problems. I dove in to learn more. He wasn't getting along with his technical founder or technical guy at all, and the system was crashing. It just couldn't keep up with demand. It was collapsing, and ultimately that killed Friendster. One of the things that Mark will say about why Facebook succeeded is he had seen the collapse of Friendster, because of technical problems. They just couldn't scale with the volumes. And he and Dustin Moskovitz were just determined that was not gonna stand in their way, so they limited growth early on. And then they just piled the resources to make sure they were up and reliable. Those are some of the things I've seen. Other cases of companies running afoul. I'm seeing seen good stuff here. I don't know, don't know, don't suspect that's happening here, but those would be some watch outs from the history of some companies who, like you, have been shooting upward. - Great, no, thank you, that's-- - Let me just cover one more thing, which is the other half of your question. - [Sal] Yes, yes. - Which was about, how do I see the future? Maybe I'm not very good at seeing the future, but I can see today. And there's a, some of you may have seen this, there's an article that was in Harvard Magazine about a physics teacher there, a guy named Eric Mazur. Anyone's? - Yeah, regularly. - The article was entitled something like, The Twilight of the Lecture. Eric Mazur was a well respected teacher on the physics staff there. He'd been teaching physics for a decade, I believe. The tests that he gave showed the students learned the subject matter, and he's all happy. Then he heard about the University of Arizona that had invented a capstone test that tested kind of like the Common Core, do people really get this stuff? Could they apply it? The results out of University of Arizona was after taking the semester of physics that the physics students there just failed this, can you actually apply it in real situations? He looked at it and said, well, that's interesting, but those are University of Arizona students. There are Harvard students. Almost all of his students, first of all, all got a score of one or two in their AP Physics. He just as a lark, took the test, and gave it to his Harvard students after they'd finished his semester of physics. And by God, they failed it. He said it was monkey level. If you had monkeys guessing randomly, you would do as well as his students did. (audience laughs) Now, Eric is an unusual professor at a research institution because he actually cared. He didn't say, well, screw that, and back to the research. He actually said, wait a minute, what does this say about me? What am I doing wrong as a teacher? I'm failing these students. He dove in and tried to figure out what was happening. He has evolved from that. One of my guys passed me the article, and then we reached out to him. And we actually spent some time with him learning. And he basically found out that students don't learn from lectures, even from highly rated professors. They just don't seem to learn from lectures. And these are Harvard students. And they don't learn to, I mean, they learn to pass the basic test, but they don't learn to apply in a deep way. He started trying alternative ideas. He tried a very different way. He's basically flipped the classroom. And the students work on problems. And then he can figure out through a system, which students got it and which didn't. And then he'd have the students who got that section explain it to the students who didn't. He said they're much better at it because the student has just tried it, didn't do it, and now they're hearing from someone who just learned it. Who just is walking in their shoes. And he says, now his students ace this test. I think there's a revolution in learning, from something that was done to you. Education was done to people. Lectures are done to people. To turning education on its head, learning on its head, so people, now it's up to me. It now becomes something you do. And you learn at your speed, and you learn by doing yourself, not by being reliant on someone else to pour learning into your head. You learn by using, you learn by doing. And that's the way real humans really learn fast. You guys are in the vanguard of leading that globally. With the internet, with the raw inventiveness of the dashboard, the on-demand, the lectures, to understand how the students progress. Creating a platform so that math and then physics and other subjects can be taught by, learned by doing. This will change learning, and lifelong learning. This is the invention of printing by Gutenberg, applied to a field that desperately needs it. And more than that, this is the, the sum total of IQ points in the world is fixed. It's what genes have delivered to us. But how you turn those IQ points into productive human potential, into skills to be able to solve problems, to be able to see problems, that is entirely a function of people's learning, and can be dialed up or down dramatically by the learning method. Compare when you've been in some class which was boring, badly taught, or the great research professor didn't really know English, and you just, your learning rate is so slow. Your love of learning just goes into the toilet. And then compare that to a class where the teacher was fascinating, where you could move and learn, and try things and they worked, and you got this feeling of accomplishment. It's night and day. Igniting the fire of learning in billions of people is a force of power far greater than the printing press. I believe you guys are the world leader in doing that. - Well, that gives us a little bit of pressure. (Scott and audience laughing) But it's exciting at the same time, and so I'll just on behalf of the whole team, I just really thank you. That was really a special conversation. Thank you. - Thank you. (audience applauds)