INTUIT FOUNDER: ‘Success Makes Companies Stupid’

INTUIT FOUNDER: ‘Success Makes Companies Stupid’

Max Nisen | Feb. 25, 2013, 6:35 PM | 854 | 3

Intuit is one of the unsung success stories of Silicon Valley. The maker of software like Quicken, TurboTax, and QuickBooks has been around for 30 years and made $4.15 billion in revenue last year.

Intuit’s founder, Scott Cook, believes that success can actually be dangerous to the company. At a seminar with Harvard Business School faculty, he said that “Success is a powerful thing, it tends to make companies stupid, and they become less and less innovative.”

According to Harvard Business School Working Knowledge, Cook argues that companies need to adopt the lean startup model pioneered by Eric Ries. That means “launching as quickly as possible with a “minimum viable product,” a bare-bones creation that includes just enough features to allow for useful feedback from early adopters. The company then releases a quick succession of product upgrades, forming hypotheses and conducting experiments with each new version along the way.”

Getting feedback early and often means the product improves quickly, picking up new users along the way.

That’s the polar opposite of the way many successful companies come up with new products. They spend years developing things, many of which are only minor improvements on what already exists. Once something’s set into motion, it has a great deal of inertia and can take a long time to stop, even if it’s not working.

That’s an easy way for a company to stagnate. However, adopting something like the lean startup model takes a significant cultural shift. It’s not easy to take product teams used to taking years and get them to take ideas from birth to execution in months. It also takes creating a culture that’s OK with failure and starting again, which is the opposite of what you see in many large companies.

Some companies choose to have a small part of their company, like a skunk works, to constantly try to innovate. But when it’s a small part of the company, you see small benefits. Far more effective is forcing a whole company to constantly experiment and innovate.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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