Today’s episode, well — it’s a ride. I’m talking to Intuit CEO Sasan Goodarzi, who’s built Intuit into a juggernaut business software company in part through a series of major acquisitions: TurboTax, MailChimp, CreditKarma, and loads more. There’s a lot of good Decoder material there, and we get into it. But it’s TurboTax, and the company’s tax lobbying efforts to protect it, that really drives a major narrative about Intuit, for better and worse. So you can bet I asked Sasan about all this, and it got a bit contentious. In fact, the company's chief communications officer even demanded we delete a portion of this interview over an exchange with Sasan on TurboTax. Don’t worry — we don’t do that here at The Verge. So expect to hear that section right up top, with the rest of the interview following after. Links: Inside TurboTax’s 20-year fight to stop Americans from filing taxes for free| ProPublica TurboTax deliberately hid free file page from Google Search | ProPublica TurboTax maker Intuit spent millions in record lobbying blitz | OpenSecrets FTC: Intuit’s “free” TurboTax ads misled consumers | The Verge TurboTax isn’t allowed to say it’s ‘free’ anymore | The Verge Intuit owes you money if it made you pay for TurboTax “free” | The Verge IRS extends its Free File tax program for five more years | The Verge IRS Direct File set to expand availability in a dozen new states | IRS Mint is shutting down, and it’s pushing users toward Credit Karma | The Verge Intuit Mailchimp CEO Rania Succar on Decoder | Decoder Ethics Statement | The Verge Transcript: https://www.theverge.com/e/24037861 Credits: Decoder is a production of The Verge and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Statt. Our editor is Callie Wright. Our supervising producer is Liam James. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Support for this episode comes from AWS. AWS Generative AI gives you the tools to power your business forward with the security and speed of the world's most experienced cloud.
Hello and welcome to Decoder. I'm Nilay Patel, Editor-in-Chief of The Verge, and Decoder is my show about big ideas and other problems. Today's episode, it's a ride. I'm talking to Intuit CEO Sasan Ghadarzi, who's built Intuit into a juggernaut business software company through a series of major acquisitions.
You're probably familiar with Quicken and QuickBooks, which are incredibly well-known as personal finance and small business accounting software, but nearly everything else, TurboTax, MailChimp, Credit Karma, loads more, were acquisitions of some kind along the way. That leads to a lot of challenging structure questions that Sasan and I really got into.
Integrating all of those companies and their different approaches to software requires big decisions, and Intuit made a big decision of handling it all by betting on interoperability that I found fascinating. So far, that sounds like normal decoder stuff, right? Here's where it got weird. I couldn't have the CEO of Intuit on the show without asking about tax reform in the United States.
Individual income taxes are more complicated in the US than in almost any other developed economy, and Intuit has been lobbying hard since the 1990s to keep it that way in order to protect TurboTax. The company spent nearly $3.8 million lobbying in 2023 alone. There's extensive reporting about all this. We'll link to it in the show notes. That lobbying has had mixed results.
Truly free online direct filing with the IRS began as a pilot program this year, and it's expanding to be available for more than half of the US population in 2025. But it's not just lobbying.
In 2022, a coalition of all 50 states got Intuit to agree to a $141 million settlement that required the company to refund low-income Americans who were eligible for free filing, but were redirected to Intuit's paid products. And in 2023, the FTC found that TurboTax's, quote, free marketing was willfully deceptive.
And after the agency won an appeal earlier this year, Intuit was ordered to stop doing it. So I asked about taxes, and Sasan disagreed with me, and we went back and forth for a few minutes on it. It's Decoder. We have exchanges like this on the show all the time, and in the moment, I didn't think anything of it.
But then I got a note from Rick Heineman, the chief communications officer into it, who called that line of questioning, and my tone, inappropriate, egregious, and disappointing, and demanded that we delete that entire section of the recording. I mean, literally, he wrote a long email that ended with, quote, at the very least, the end portion of your interview should be deleted.
We don't do that here at The Verge. As many of our listeners and readers know, we have a very explicit and very strict ethics policy. We'll link to it in the show notes. The most important thing here is that we never allow anyone to preview or approve our interview questions, and we certainly do not allow anyone to review or alter the work that we publish.
I told this to Rick, and he came back and asked that we, quote, delete that which takes away from the conversation, which he defined as raised voices, or us speaking over each other. So, quote, listeners can understand your question and the answer Sasan gave. I gotta be honest with you, that is one of the weirdest requests I've ever gotten. So here's what we're going to do.
In the spirit of fairness, we're going to run that whole part of the interview first, unedited, so you all can tell me. It's about five minutes long, and you can decide for yourself. Then we'll come out of it, and we'll run the rest of the interview, which, like I said, is an otherwise fascinating episode of Decoder. Okay, so here I am talking about taxes with Sasonga Darzi, the CEO of Intuit.
Intuit is legendary for running TurboTax, also legendary for lobbying against free direct federal e-filing. How much of your budget is allocated to lobbyists?
Fundamentally, that's a wrong premise, and it's not accurate. In our lobbying, we spend a couple of million dollars fighting for simplified taxes. We don't lobby against free. And by the way, free is available to all Americans now, which is if you choose to do your taxes for free, if every American chooses to do their taxes for free, it's available today.
through private industry, we have heavily been focused on making taxes simpler. Just the tens of millions of lines of tax code makes it very difficult for a customer to understand taxes, much less companies like us that are trying to create.
Wait, the simplest version of taxes is the government just sends you a return and it's done. Yeah. And Intuit has lobbied against that. Would you support the government just doing the taxes for people and then sending the refunds?
At the end of the day, you have to change.
Many countries in the world do that.
Yeah, but you have to change the tax system. It's not about software.
So if we change the tax system, we're going to – Are you going to lobby to change the tax system to let the government do the filing for you and send people checks?
If the government wants to change the tax system – But I'm asking you.
You're spending the dollars. Would you lobby for it?
Lobby for the government using the tax system?
The simplest version of the tax system would be to just have the government do it and send people their refunds or ask people for money.
I have more important things to do than to lobby the government to send a tax bill.
But you have lobbied against that. That's what I'm saying. That reporting is clear. Intuit has lobbied against that very specifically.
Well, I am into it, right? And so it's okay to put me into it in the same verse. We have very much focused on simplifying taxes. That's what we lobbied for. Simplified the tax code. That's simply what we've lobbied for.
When you see free direct federal e-filing arrive, I think today, literally today, just before we started speaking, the government announced it would be available in half the states, which is about 60% of the population. Does that have a revenue impact on you? Do you get an email saying we project TurboTax revenue will go down by X?
We do not. free is available to all consumers today. And so it really is not relevant to our business. And in fact, proof points are always important. You know, in the last five years, two pretty formidable companies got into providing free tax software. One was Credit Karma before we acquired them, 100 million members. They provided free tax software. No impact in the tax industry.
And then we sold that to another formidable company. And there's really been no formidable impact to the structure of the tax industry because free is already available. And so our view, by the way, very strongly, and we've been on the record, This is a solution looking for a problem. Free already exists. And by the way, what the government is providing is not free. You're paying.
Your tax dollars are going towards building a software that already exists for Americans. So that's something that we've been on the record that from our perspective and private industry has been on the record. It doesn't make sense. Free already exists. So why build another one?
I'm going to ask you this question. I can already tell you that you're going to tell me you disagree with my premise, but I ask it anyway. Broadly speaking, I would say the criticism of Intuit's free products when it comes to taxes is that it says it's free, and then somewhere along the line, they slide you into paying. The government has complained about this.
That is a reputation damager for the company. Again, I get the emails from Decoder listeners asking me what questions to ask you. And it's that. It's that sort of dark pattern feeling inside of, in particular, the free tax product. Is that something you want to fix? Do you worry about that damage to the reputation?
Yeah, I love your question. Let me answer it in two ways. One is there are over 100 million customers that we've served for completely free. It's more than the entire industry combined. So we're... very, very sort of intentional about making sure that we are a big player when it comes to free tax software.
On the other hand, any time we see something that needs to be improved, we take it very seriously. We take our reputation very seriously. So I can tell you, you know, in the last several years, we've been very, very intentional about going through our advertising all the way through the product top to bottom.
to really improve where we need to improve to ensure that customers really understand what they're eligible for and what they're not eligible for. In fact, last year, one of our advertisements that we ran on TV, we said, hey, 37% of the population is eligible for free. And these are the qualifications, just so we could be very clear and transparent.
And that's from what we've learned, where we can improve. So although I'm proud of the number of customers that we've served for free, To me, there's always something you can learn and always something you can get better at.
And this has been an area where we've improved our end-to-end experience from advertising all the way to checkout to make sure customers are very, very clear what they're eligible for. That's very important to me, very important to the company because our reputation matters.
All right, so what do you think? Was that contentious? Should we have deleted it? You let me know. I'm open to the feedback. Right now, I'm mostly just amused and a little befuddled. Here's the rest of that episode, which, as I keep saying, was a good episode of Decoder, with some very interesting ideas about how to integrate big acquisitions into a single tech platform inside of it.
Also, I asked why Sasan shut down Mint, which honestly is a thing I should have been the most outraged about. Okay, Sasan Ghadarzi, the CEO of Intuit. Sasan Guzarzi, you are the CEO of Intuit. Welcome to Decoder.
Thank you for having me.
I am very excited to talk to you. You just announced a bunch of AI products that are interesting. You've been changing the company around. Let's start at the very beginning. Intuit is 40 years old. A lot of people are familiar with your various products like TurboTax or MailChimp. What is Intuit now? What do you think of what the company is?
Yeah, well, first of all, with our 40 years young, I've been with the company for half that time. And when I stepped into this role, the decision we made was to play a far more meaningful role in the lives of consumers and businesses. So we really started on a path to shift the company from a tax and accounting platform
to a platform company that businesses in essence can rely on us to be able to grow and run their business and consumers can power their financial prosperity. So that's the path that we started down about five plus years ago. But most importantly, I would say that we said, hey, we have to create experiences that in essence are done for customers rather than creating workflows where
People have to do the work to run their business and manage their cash flow or manage their personal financial life. We need to create done-for-you experiences where we deliver benefits and insights, like marketing is done for you. We manage your cash flow, quote to cash for you. Books, accounting, taxes are done for you.
And really, in order to do that, we bet very early, almost six years ago, on data and AI. And frankly, we did it for very practical reasons, because in order... to do what I just articulated, which is we focus on your bottom line, your revenue and profitability as a business or your financial household savings as a consumer.
We have to actually leverage data, your data, and leverage AI to deliver these insights and experiences. So today, to answer your question, we have become a platform company. And what that means from the lens of a consumer and a business is
Consumers can use our platform all in one place to be able to build their credit, be able to manage their money, get financial products that they need, like credit cards, loans, insurance, a mortgage for their homes, and also be able to get their taxes done. And then we help them with what should you do with your refund.
So we now do all of that gamut because we wanted to play a meaningful role in the life of consumers. And for businesses, now in one place, you can... In essence, manage your customers, market to your customers, be able to really manage your quote to cash, your cash flow, and make sure your books are right for tax time. So now we have all those capabilities.
And really the future for us is now how do we create everything in a way that it's done for you versus you having to do the work.
That's really interesting that you mentioned you started with AI six years ago. Obviously, Transformers only really burst on the scene a couple years ago in the way that they are now, and that's really accelerating a lot of stuff. So I want to spend some time talking about the differences between the AI technologies you were betting on before and what's happening now.
But before we get to that, I just want to talk about how the company is structured and built individually. This is a company that is kind of built through acquisitions, maybe entirely built through acquisitions, starting with buying TurboTax in 1993. And then it's a combined, I think, $19 billion on MailChimp and Credit Karma just in the last four years.
How do you think about integrating all those disparate parts? The example of TurboTax for me is particularly interesting. That became the company. You acquired a company that sort of became the company. Are you thinking that way with MailChimp and Credit Karma as well?
Well, by the way, I love actually where you started because most people don't know what you just articulated, which is this whole company has been, in essence, it started with Scott Cook, our founder, creating Quicken and realized the way people are using it, they're small businesses trying to manage their money. And that's what gave birth to what today is our QuickBooks platform. But TurboTax...
even our payroll offering, MailChimp, Credit Karma, they're all acquisitions. But to answer your question, particularly in the last five years, a lot of our platform play and where we are today has been based on a lot of organic innovation and investment.
But also we bought these two sort of big brands, two number ones in their space, Credit Karma and MailChimp, because one, they come with a lot of data And a lot of sort of AI capabilities, particularly Credit Karma has a lot of machine learning and really AI capabilities that we've coined as Lightbox, which I can get into at some point down the road if you're interested.
And really the intent of all of this is to create one platform. It's to really integrate the products.
customer back so that customers in one place can grow their business run their business and as a consumer be able to manage your personal life so i think five years from now we're going to look back and go wow the addition of all the things you had plus what you did with credit karma and mailchimp were just really the key to ignite the next chapter of the company but the answer to your question is yes we're stitching it all together to create one seamless platform
So let me ask about that for a little bit. Everyone says they can do that. Most companies, they succeed and they fail, right? That's an inconsistent process. MailChimp in particular was a big company. It had its own culture. That integration was a little messy. We had the new CEO of MailChimp, Rania, on a while back.
We talked about that integration, how's it going, how she's changing the culture because she's Intuit's CEO. She's not the founder CEO that they had before. You're the CEO of the Umbrella Corporation. How do you think about having all these companies and all of their CEOs under you?
Yeah, well, first of all, the way we run the company, we're very intentional about goal setting, sort of the three, four things that really are key artifacts that create who we are today. It's our True North goals, which is how we set goals for the company. Two, it's our mission. And third, it's our values. And then last but not least is sort of our strategy and the five bets of the company.
Those four things are the way we run the company. And the reason I started there is we have very specific leaders that, you know, lead parts of the company and But the expectation, the goals are about how we are creating a platform. And so, for instance, in the case of MailChimp, the charter of MailChimp is not to be run standalone.
It has two charters, just like payments, payroll, our accounting team. The charter is one. It's about how we integrate across the platform because we win as a platform. That's a lot of what's ignited our growth over the years.
But then too, on a standalone basis, whether it's MailChimp, whether it's payments, whether it's payroll, whether it's TurboTax, they have to be good products and they have to perform on a standalone basis. So the expectations are such that we win as a platform. and how we integrate our products to be able to win. And that's how I measure every leader.
And so if you were to spend a week in the company, what you'd really get a sense for is what we're trying to do to win with our business platform, what we're trying to do to win with our consumer platform versus There's a bunch of pieces and parts and everybody is working towards their own true north. There's really one true north that we really work towards. And that's how we run the company.
It's our leadership expectations. It's the mechanisms of the company and how we measure success.
So one of the things that's really interesting there is these component platforms are still divisions, right? MailChimp has a CEO. Credit Karma was a big company that you acquired. Usually when companies like Intuit acquire something like Credit Karma, you promise the people who work there a measure of independence. But you're talking about stitching it together into a platform.
There's some technical stuff there that I definitely want to talk about, but there is just the operational side of saying, okay, now you're part of a bigger thing while still keeping the walls up and still saying, okay, we have different CEOs. That's very different than most other tech companies. How have you made that choice, and is that durable over the long term?
Let me be clear. Ronnie is no longer the CEO of MailChimp. She is the segment leader, senior vice president that runs our grow segment. MailChimp is a part of it. And we did that very intentionally at the beginning just from a cultural integration. But we don't have CEOs within the company. Even Joe Kaufman that runs our Credit Karma business, he is –
reporting now to Mark Norturani that owns our consumer business. And he is the head of Credit Karma, a senior vice president that runs Credit Karma. So the first thing I wanted to sort of start with is that CEO element was just a cultural transition. We have leaders that at the end of the day, when they look at their paycheck, it's Intuit, and their expectation is to serve our customers.
And it goes back to the way I answered the question earlier. If you were within the company, what you'd get a sense for is really two things. One, we have mission-based teams because in order for teams to have a cause to fight for, they have to know they're fighting for creating the best sort of payments capabilities, bill pay capability, accounting capability.
And that's what we term mission-based teams. They have a mission. And their focus is that mission, payments, MailChimp, TurboTax, whatever it may be. But the other element is the leader's job is the mission is the platform and to win as a platform. And so it's really our discipline and our rigor and how we run the company is actually our strength.
And from the outside looking in, it may seem like there are sort of parts and pieces, but within we're all solving for the same thing, which is how do you win as a platform? Yeah.
Rania hinted that that change was coming when she was on the show. So I wanted to ask you about it. Tell me about that. One of the things I always ask everybody is how they make decisions. Tell me about that decision. Right. Obviously, she knew it was coming when she was on the show. You've since made that call. What does that look like to walk up to someone and say, hey, you were the CEO.
We're changing it. We're not doing this anymore. How did that unfold for you?
Well, when we make an acquisition, whether it's Credit Karma and or MailChimp, before we make the acquisition, we create jointly with the founder of the company, but really our broad leadership team that's informed of the potential acquisition. We create a six-pager. And this six-pager really lays out what are we going to do together? Why are we buying, in this case, MailChimp?
What's the vision of what we're trying to create? And the vision is integrate to create one platform. What are the key priorities? And particularly, we focus on acceleration, not integration. Although everything we do in the product is integration, in a company of our scale and size, clarity matters a lot. And so even basic things like,
what we will do in the first 90 days, what we will do in the first six months. And clearly as important, what we're not gonna do is all part, not only the six pager, but sort of the playbook. So to answer your question, part of the playbook all along was we're gonna create one platform.
And when I spoke to Rania years ago to take on this role, it was very clear at the end of the day, she would take on the CEO role and that would be the title for really an interim period from a cultural transformation, but her charter is the same. And at one point, that title, it's more about the SVP of the category. And so it's important to have those conversations upfront
We're, you know, very big on, we're not interested in leaders that are pursuing titles. Even when we recruit from the outside, we're interested in folks that want to really fight for the same cause. They're in love with our mission. And, of course, everybody has to be thoughtful about what's right for me as an individual. So we take all those things into consideration.
But we have these conversations, you know, up front, and it was just sort of part of the transition.
Tell me how Intuit is structured now then. How is the company broadly organized?
We're really structured as a platform. What that means is we have a leader that runs our consumer platform. We have a leader that runs our business platform. We actually have a leader that looks at the network effect and the ecosystem effect between consumer and businesses.
And then we have a CTO that is really responsible for all of our technology in the company, all of the spend in technology and... The segment leaders, the consumer segment leader, the business segment leader, they decide what's most important to drive growth and deliver for customers.
It's our CTO that owns all the technology that then decides, how do I need to ensure that I allocate the dollars, the people to achieve what we want to achieve across the platform? And then we have a customer success platform leader that owns all of customer success across the company. And of course, then really very important roles around M&A, people and places, legal and finance.
But we run the company as a platform and the leaders in the case of the consumer and the business leader.
the business segment leader, they're responsible for the outcomes of the segment, but I also hold them accountable for how the company performs because I want to make sure we're making trade-offs to win as a company for customers and not just have blinders on in our segment, but we're in essence organized around being a platform.
If you've got the two platform leaders, I'm assuming they report to you, and then you've got a CTO who's making technology decisions, I'm assuming you tie-break a lot there, right?
If you're responsible for the success of the consumer platform, for example, and you really think you need some technology built or built in a different way than the company currently has, and the answer is no, I'm guessing that comes to you.
I don't tie break enough. And sometimes I talk to the team about is enough stuff getting to me. So I don't play a huge tie breaker role. It's actually even better today than it was three to four years ago. And the reason is Mariana and Mark. Mariana runs our business segment. Mark runs our consumer segment. Mariana used to be our CTO.
She was heading up all of technology for the company before this role. And Mark was actually leading all of our customer success before stepping into running the consumer platform. We, in essence, promoted both of their proteges. And so my point is, there is a very, I would say, thoughtful collaboration between the team, because we're very clear about our strategy. We're very clear about
the deliverables for both the year and the next three years out. A lot of the discussions and tie-breaking happens between the team. Of course, I get involved particularly very deeply in our one and three-year mechanism. That's a mechanism where not only do we review priorities, but we actually review very specific, what are the deliverables for this year?
What are the deliverables for the next three years? What's resource, what's not, and why? And Sandeep and I, our CFO and I, will get involved if we feel like there are certain areas where the team has made all of the resource allocation trade-offs, but we have an opportunity to fund even more opportunities and we'll get involved in those types of decisions.
But I have a lot of gratitude for my team because of the mobility that we've had. They've seen all parts of the company. There's a lot of just natural debate and sort of trade-off decisions that's made within the team without an escalation to me. But once in a while, maybe once every couple of months, there's something I have to get involved with just to break a tie or make a resource decision.
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Welcome back. I'm talking to Intuit CEO Sasan Godarzi about the big decoder question, how he makes decisions. When we left off, he was talking about building a company through acquisitions. The other challenge of building a company through acquisitions that you then have to integrate is the technical foundations of all those companies are different.
The data storage requirements of those companies are different. databases, the customer databases, all that stuff has to be integrated at technical level. How are you managing that? I mean, that seems like the biggest problem you have to buy a company the size of MailChimp and say, okay, we're plugging you into QuickBooks. Those are very different products. How does that work?
do a lot of diligence before we make an acquisition. Let me be clear, no matter how good you are at due diligence, there are things you're going to get surprised with on the upside once it's done, and there are things you're going to get surprised with to the downside. But the three areas where we spend a lot of time on due diligence is one, just cultural fit.
because I have a very strong belief that no matter how great of a strategic fit something is, if you got two cultures that may clash, it's just not going to work. So we do a culture, deep culture assessment, and I personally get involved depending on the size of the deal to really assess the culture for myself as well. We, of course, do a very deep strategic assessment.
Then we do a very deep capability assessment. So this goes to your question, you know, we will assess like, What's their compensation schemes? What are the systems they have? But most importantly, we really thoroughly assess both their data and technology capabilities. And we have come a long ways, and so has technology in terms of integration.
So to specifically answer your question, one of the wonderful things about Credit Karma and MailChimp, and I'll just use Credit Karma in this case as an example, is the amount of consumer data that they have and the amount of consumer data that we have within TurboTax. And the reason it's a very attractive acquisition is then what we can do with customers' consent to
to use their data to deliver benefits to them that otherwise nobody else can, because we know a 360 view of their information. But rather than having to take their data lake and our data lake and the cloud that they sit on, which is Google Cloud, the rest of the company is on AWS, rather than integrating,
we actually innovated across the technologies where we built a data pipe where data is shared without all the data having to be all integrated, for instance. We've actually built bridges in terms of how Google Cloud and AWS work together. A lot of our technology innovation, because we're API-oriented services-based, is actually about connection versus integration.
That's really what has propelled what's possible because Credit Karma is a great platform, data platform, AI platform. We didn't have to replace it or create sort of one integration of a platform, but we built, in essence, pipes where we can achieve the product innovation for our customers. So that's the approach that we've been taking.
And that's what we do in the due diligence, just to make sure that we can, in fact, do that. Because of a platform of this scale, if you have to rewrite the entire code or integrate the stacks, it just becomes too much work and not worth it.
Yeah. That is a strategy, right? That is an acquisition strategy. We're going to depend on technical interoperability. We can build data pipes between different cloud providers. It seems like that strategy has been working. There have to be downsides of that strategy. What are the downsides?
The big downsides is what I mentioned earlier, which is anytime you do due diligence, there's things you're going to be surprised to the upside. There's going to be things that you are surprised on the downside. And the devil is in the details. For instance, in one of the acquisitions, it wasn't on any cloud, and we've been working on getting all of it on AWS.
And that's taken about six months longer than what we thought. And so that's an element of an example of where you get surprised, where you assume it's going to take a six-month period to do something, but it takes a year. And we sort of bake that into our thinking that we're going to be wrong in certain instances.
There are things that's okay to be wrong in, and there are things that's not okay to be wrong in. So the areas where it's not okay to be wrong is the assumption that you can actually build a data bridge and a data pipe between the platforms. If you're wrong about that, that blows up the whole premise of what you thought you could do in what time frame.
Now, the great news is, knock on wood, we've proved that out across our acquisitions. The things that is okay to get wrong and most of the time you're not going to get perfectly right is, how long is it going to take to do something?
The example I just articulated earlier in the case of transforming one of the acquisitions to be entirely Cloud-based, it's taking about six months longer than what we thought. that's okay because it's just an element of time versus an element of doability.
Do you ever have broader questions about the strategy overall? Do you ever have, I'm guessing the person who goes and negotiates with AWS would love a little bit more demand from whatever's on Google Cloud to say, look, we've got more scale, lower the rate, right? I mean, those are the kinds of trade-offs that are made.
Do you ever have those conversations where actually increasing scale or concentrating further would be the benefit versus interoperability?
We do have those conversations. First of all, I had the pleasure of being our CIO for a couple of years, and I was deeply involved in shifting the company from all of our own data centers to shifting the company at that time to AWS. So I worked very closely with the Amazon team and Andy to really drive their road back, but get us prepared to go to the Cloud.
One of the reasons I started there is one of the decisions that we made very early on is to build our capabilities, our apps, and the way we built Cloud-ready apps was so we would never get married to or stuck only with one platform. We wanted the interoperability.
And we actually like the fact that we're on multiple clouds because, and with the age of AI, we've built our own large language models, but we also experiment using about nine, 10 other large language models externally. And I actually think that's very healthy to understand
what works and what situation, what doesn't work, and multiple clouds in this case, multiple LLMs is actually quite healthy because you learn faster, you pivot faster. But we have these conversations all the time. We believe, and I would just tell you that probably the most heated debate that we had five years ago when I stepped into this role with my staff was whether or not we would bet on AI.
Because AI wasn't popular then. It wasn't the buzzword that it is today. And I bring that up as an example of we debate technology bets. We debate interoperability versus do you go all in with a partner all the time? Because it's actually critical. They're critical forks in the road and critical decisions for the future. So I'm definitely involved in those key discussions.
Interoperability is really interesting, especially for a company built through acquisition. Regulators around the world right now, not so hot on acquisitions. I'm assuming you have some thoughts about that. But the other thing they're really into is interoperability, right?
They are saying to various companies, you have to make your products and services interoperable with each other so you can lower switching costs so consumers and businesses can go have a vibrant market to pick and choose their vendors from. If you've built the company through acquisition and interoperability,
Do you think some regulator is going to come to you and say, okay, all of the interop that you built for Credit Karma and QuickBooks, you got to open that up to another financial accounting vendor?
All of our decisions are based on delivering for our customers and winning in the marketplace and driving growth for the future. We don't make decisions that really are in the context of, well, what will a regulator think about something? We have very... solid governance in the company. We have data, privacy, and security principles, which we abide by, all focused on our customers.
And so to your question, I don't spend, and we don't spend a lot of time worrying about, well, now that we've built the company in this way to win and deliver for customers, what could a regulator do? Because at the end of the day, a regulator, generally, they want to do the right thing. Generally, it's not politically driven. Sometimes it is.
But our view is that they always want to do the right thing and we always want to do the right thing. And, you know, we would always have a conversation in the construct of if there's any areas they have questions on. But our focus is our compass is very clear.
Would you let your competitors use the interoperability hooks that you've built for your own company to interface with theirs?
We live in a world of competition only because when we think about our, especially our businesses that we serve, what we really care about is our businesses are transacting on our platform. You know, but sometimes... They will use Square Payments. Sometimes they will use PayPal. Sometimes they will use other payroll providers.
And we provide the capability to integrate those capabilities on our platform because we want the customer to be able to serve their customer the way they want. And so that's sort of when you look at our AI-driven expert platform strategy, a very important element of it is that it's open. And it's open because it helps us deliver for our customers and win.
Let me ask you the key decoder question, which we have been circling around this whole time. How do you make decisions? You've been there a long time, you've grown with the company, you've made a bunch of big decisions. What's your framework?
Probably one of our largest advantages in the company is what we term our Intuit operating system. It's the mechanisms in which we run the company. And this is important context to answer your question. If you look at our mechanisms, We have a set of mechanisms around how we set expectations and set strategy. We have a set of mechanisms in terms of execution.
And then we have a set of mechanisms in terms of how we galvanize the leaders at all levels and all of our employees. And so, therefore, we have mechanisms like six-year plan. And it's not a financial plan. It's actually just looking way into the future and looking back to consider what has to change. We have three- and one-year plan mechanisms.
I won't bore you with all the mechanisms, but that's important to context to answer your question. Our six-year mechanism is really structured such that we question everything that we do. One of the things that we believe in strongly, I believe in strongly is never to fall in love with what you've declared and always fall in love with the customer and the trends and how the world is moving.
So our mechanisms are set up for certain outcomes and decisions. Our six-year mechanism, the decision is, does anything change in our strategy and bets? And if so, what is it? So the output of it, the decision is, what changed and why?
Our three- and one-year plan mechanism is all structured around not only the key priorities, but the actual deliverables, what we call input goals, which is a best practice we borrowed from Amazon. where every input goal has a leader assigned to it, has success measures, and we ensure that it's resourced, and we also know what's below the line.
Those are all decisions that our teams make, but the decisions that I make are capital allocation, because not everything is created equal, and where do we put our dollars and capital? And then the last one is we spend a lot of time on culture and people. And those are decisions I'm involved with.
Like just last week, we had an all day, which we have it four times a year, all day session focused on people and succession planning. Those are decisions, right? Who's potential successor for key roles. And a principle that we have is teams can propose who the successors are, but if it's a direct report, to the CEO one day, I decide if they're actual schedules. So those are decisions.
So every mechanism is set up for an output and a set of decisions. And we're generally pretty clear, are those decisions I get to make? Are there decisions the team gets to make? But net net, we try to push as many decisions as we can into the org because most decisions are, they're two-way doors. You can always reverse them, but that's the structure and framework that we use.
It's our Intuit operating system.
There's one key decision I have to ask you about since we're here, and you mentioned things fitting into the Intuit operating system. I was a very loyal Mint user. You decided to shut that whole service down. What was your thinking there?
There was a very small cohort of customers that were using Mint. We decided that in order truly to have a platform that we can serve millions of customers that we would port most, not all, of the capabilities in the Credit Karma. And so we... I can't remember the exact percentage, but I think 30 to 40% of the Mint customers are now on Credit Karma. By the way, happier than before.
And I think there's 20% of customers that we can't serve today with Credit Karma. But we're okay with that because there's a very small cohort of customers that we could serve on Mint. And we ultimately made the decision to be one platform. So by the way, if there's anything we can do to help you, send me an email. My email address is available on our website.
Anything I can do to help you, we will. But we can't replace Mint exactly the way it was.
We need to stop for another quick break. We'll be back in just a minute. Welcome back. I'm talking with Intuit CEO Sasan Ghadarzi. Before the break, we started to get into one of the harder decisions that CEOs have to make, layoffs. When Intuit fired 10% of its workforce earlier this year, Sasan sent a memo saying the majority of the folks let go were underperforming.
So I really wanted to know, how did he measure that? How many people are working at Intuit today?
We're about 17,000 strong and growing.
And growing. So the interesting thing about growing is you just laid off about 10% of your folks this year, 1,800 people. You said you're going to hire another 1,800 people to focus on AI. Inside of that decision, and this is the one I really want to press on, inside of that decision, I think the company announced 1,000 plus of those 1,800 people were low performers.
How did you decide which one of 18 people was a low performer?
First of all, when I look back at the last five years, there are big decisions that I've made, and then there are really, really tough decisions that we've made, that I've made. And this is one of them, because at the end of the day, everyone we have in the company, we believe, is very talented. And when you make a decision like this, you're impacting people's lives. And so one...
These decisions never come easy. The second is we were very clear across five areas, particularly our five bets. We've seen so much progress that as we thought about, this is part of our six-year and three-year mechanism. As we thought about the next two years, three years, and five years, we felt that it was important to accelerate investments in five key areas.
Majority of them are around our big bets. And we also felt that in order to do that, there was an opportunity to reallocate dollars from within while we, by the way, continue to add to our overall investment portfolio. So this was all driven by acceleration, momentum and growth. To answer your question in terms of how we picked those folks, it was all bottoms up.
We have a performance management system where, in essence, managers will go in and they will rate their employees. Generally, 10% of the company is what we call trajectory changing. About 20% exceeds expectations. So about 30% of the company exceeds or trajectory changing. And generally, about 60% to 65% are achieved expectations, which is, by the way,
We have very bold goals and to achieve expectations is actually really strong performance. And generally five to 10% that does not meet expectations. And that's a process that we go through once a year where managers will put into the system their ratings. And so this was done bottoms up at every layer of the organization. It was not a top-down decision.
But the decision that we made this year was that in order to move with the velocity that we need to move to reallocate the resources and the dollars, is that we would, in essence, lay off the 10% that fell into, it was actually more like 8% that fell into the bucket of does not meet expectations.
So that's the very bottoms up, very disciplined and rigorous, although very tough in terms of how we made the decision.
I feel like a lot of people spend some time every year using enterprise software to rate their employees. I certainly do it. My bosses do it to me. Do you feel like that data is good? Do you feel like that data was actually telling you something? Because various companies that I've worked with, I can tell you that data meant nothing. And at some companies, it means a lot.
Yeah, for us, it's everything. And what I mean by everything is for us, it's about, first of all, goal setting. Because goal setting is about what does great look like. And performance management for us is performance management at all levels. We need to performance manage our trajectory changing so that they can become a better version of themselves.
And we need the performance management that does not meet expectations. So performance management for us is about... It's like coaching a basketball team, right? You're focused on making every person on the team great. There's somebody that never comes off the bench. There's somebody that's the star of the team. That's what we try to become great at.
So sort of goal setting for us, discussions on a monthly basis, and then the rating at the end of the year. It's about the system. And I would say the system for us is very, very important. And I would also tell you that, you know, it's a conversation I had with the whole company this year. We need to up our game in this area.
When I look at the last several years, we have not been as great as we need to be in terms of really being great at setting goals for every individual that's meaningful goal with very clear success measures and then having conversations because it's a two-way street in terms of how you become a better version of yourself.
And so we actually take the end-to-end approach to goal setting to performance management very, very seriously.
Do you think that shows up in the products? I will tell you, a lot of Decoder listeners have asked to have you on the show, basically for feature requests and bug reports. And then there's other stuff that a lot of people ask us to ask you about. But in particular, right, the software isn't as good as it should be.
You're moving me from my desktop client to a web client because that's where the platform is. And the web client is not nearly feature complete for things like keyboard commands. Do you think that this process is going to make the products better?
Everything that we do around goal setting, performance management is about delivering for customers. I mean, that's the whole sole purpose of why I exist, why our team exists is all about the product. So the short answer is yes. I would also separate what I just said from the sort of premise of your question, which is desktop to the cloud. I mean, the reality is we were born 40 years ago.
We were born in the era of DOS and we were born as a desktop company. Frankly, our desktop customers, both on the consumer side and on the business side, built who we are today. At the same time, the workflows, the features, the functionality of desktop is not intended to be translated to the Cloud.
If we did that, we would not be able to continue to grow with most of our customers or acquire new customers. particularly as we're trying to create done-for-you experiences versus features. So I would say a lot of our focus is, how do we make the transition for our desktop customers as easy as possible to the Cloud?
With that said, if you look at any company that's had to go from server to Cloud or desktop to Cloud or on-premise to Cloud, there's always a lot of growing pains because Cloud platforms are not a replication. of desktop platforms.
And so we're really solving for as much as possible the ease of migration for our desktop customers, but we're truly building a cloud platform that's built for new customers and customers that have embraced the cloud platform from 10 years ago. And I say all that just to say,
We aim to make our desktop customers as happy as possible, but really it's impossible to replicate what they want in the cloud because then our cloud offering would be very old-aged and workflow-based, which is not what our customers of today want.
Do you anticipate supporting the desktop clients forever?
I mean, we have for many, many years. And many of our desktop services are actually now on the cloud. And we've built it in such a way where there will be a seamless transition to the cloud one day. At this point, we've not declared.
Your goal is to move everybody to the cloud.
The goal is eventually move everybody to the cloud. We're not going to force customers that, like, for instance, the workflow is not going to be the same in the cloud. But if you have a need for a particular module that we absolutely don't have in the cloud, we're not going to force you to move to the cloud.
Eventually, that could be two years from now, five years from now, I think everybody's going to end up being in the cloud.
All right, let's talk about AI, and then I'm not going to let you get out of here unless we talk about tax filing. You know it's coming. Are the AI features going to be in the cloud only, or are they going to come to the desktop platform as well?
Primarily only in the cloud. Only in the cloud. In fact, everything that we're building in the cloud and have building in the cloud is just powered by our data and AI platform capabilities.
You just announced a bunch of AI features at your investor day. It's on the order of when people log into QuickBooks, they're going to see a feed with new insights on cash flow and other opportunities to use AI. Let me just ask you a threshold question that I'm asking every CEO about their AI products. Can the AI technology you have now do all the things you want it to do?
Because I'm not 100% sure that the LLM technology can do all the things that everybody wants it to do.
Let me say two things in context of your question. The first one is we're not launching AI features. Our entire platform is fueled by data and AI. And in fact, our goal is not to ship a bunch of plugin features that do stuff for you, but to create a platform where Marketing is done for you. Quote to cash is done for you. Books, taxes are all done for you.
And please still think about it from what we're trying to achieve as the whole platform is fueled by data and AI. That's the first thing. The second thing is when we declared AI core to our strategy, our investments were in machine learning. and knowledge engineering. Knowledge engineering is very particular to us. We have patents around it.
It takes rules and the relationship of rules and code, turns it into code. And the power of it is accuracy. And a lot of what we do has to be accurate. That's really been the premise of all of our AI investments has been machine learning, knowledge engineering. About three to four years ago, we started investing in Gen AI and specifically in our own Intuit financial large language models.
Our models are the only models that are trained by the customer data. I set that context to say, to answer your question, we're in the very, very early days of what LLMs can do. I mean, I would tell you that we work a lot with the majority of the companies that are out there. And the progress that's being made month to month is incredible.
So in terms of, will it do most of what we need sometime in the near future, medium future? Absolutely. And I believe AI will one day be as smart as humans, if not smarter. But I think humans are always going to be a critical part of the picture for us in our industry. But it's still very early days. I don't want to at all suggest that Everything can be achieved with AI today.
We're at the beginning of a very long journey. It's 1999 internet, part of the journey we're in now.
LLMs are somewhat notoriously bad at math. You run a financial platform for a lot of people. Do you trust it?
not on its own. That's why I mentioned, you know, when you look at our AI platform that sits on our data layer and our data platform, it's the combination of machine learning, knowledge engineering, which is very good at math, and our LLMs that work in concert to deliver experiences to ensure your taxes are done right, to make sure your accounting is done right.
So on its own, no, but in the combination of our other elements of our AI platform, absolutely.
Are you getting economies of scale from other AI companies investing in the space? I'm thinking particularly about Meta is doing a lot of open source models, right? And they're pushing far ahead on generative AI. On knowledge engineering, are you getting the same kind of economies of scale from the industry? Or is everyone focused on LWABs?
You know, we're getting a lot of economies of scale because of our own investments. Because we were so early and we did this for very, very practical reasons. But we actually...
test and experiment whether you know across the board with entropic aws gemini llama open source uh and part of the experimentation is uh how could it potentially be a leverage uh to our llms because our llms have the agency and the authority they're the brains of delivering the experiences that i articulated and so we're not getting economies of scale from other llms in fact i would say it's the reverse right now i think two years from now
Three years from now, we're going to get economies of scale. But today, the economies of scale, and it's why we've been able to deliver platform leverage and margin leverage is from all of our own investments. Over time, I think it'll help.
You've got a lot of small business owners using your products. They're looking for insight. They are probably not financial experts. The LLM or whatever systems you build tells them something. It's a hallucination. It's wrong. Have you worried about the liability of that, of giving bad financial advice to a small business owner?
So I love, by the way, the premise of your question, which is this is why we're focused on done-for-you experiences. Because a small business wants to know how do I do it.
But that's a lot of responsibility to accept. We're going to do this for you.
That's right. And that's, by the way, why the essence of our investments that started six-plus years ago is, one, based on the customer's data, not ours. Everything that we provide is very specific and relevant to you.
And then two, it's the combination of our machine learning capabilities, our knowledge engineering, and our LLMs that really deliver the performance, accuracy, and cost that we would want. And we have governance. We have technology governance and human governance internally just to make sure what we are doing is accurate. And I'll just end by saying there's a range of accuracy, right?
We can't generally be right when it comes to accounting and taxes, right? We have to be 100% accurate. But then there are elements of, hey, you can run this marketing campaign. We've put it together for you. We think it could deliver a range of $50,000 to $100,000 in revenue. The range is what matters, not the exact number for customers.
So I think accuracy has a limit based on what it is you're talking about. You got to get taxes exactly right. A range of revenue and what's possible from a marketing campaign, you can have a range and customers are totally okay with that.
Do you think over time as you integrate AI into more and more of the platform and that becomes something more customers are paying for, the free Intuit TurboTax products will remain as big of a mix as you have today?
It's really, you have to think about the cohort of customers. There will always be customers that have a simple tax situation where free may be the right thing for them. There's also a lot of customers that no matter what their tax situation is, they actually want somebody else to do their taxes for them because of confidence. They fear getting it wrong.
They want to make sure they're getting the largest refund. If the IRS comes after them, they want to make sure somebody is there to protect them. And so they'll always want to have an expert do their taxes for them. So we believe that over time, we'll still have a mix of free, we'll have a mix of paying customers.
And I think over time, our largest growth will come from disrupting what today is the assisted category.
Well, Sasan, I could keep talking to you forever, I think, as you can tell, but we got to wrap this up. Thank you so much for being on Decoder.
Yeah, absolutely. My pleasure. Great to see you. Talk to you soon.
That's the episode. I'd like to thank Sasan Godarzi for taking the time to join me on Decoder, and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode, the deletion request at the beginning, or really anything else, drop us a line. You can email us at decoderattheverge.com. We really do read all the emails.
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