The History of Intuit
The idea for Intuit (NASDAQ: INTU) began with Scott Cook. After proving his capacity to start successful businesses as a college undergraduate, Scott Cook became one of the youngest members of his class at the Harvard School of Business. His second job out of B-school was with management consulting powerhouse, Bain and Co., in Northern California. One night while doing his bills at his kitchen table with his wife, he noted that doing bills was a serious hassle and that there must be an easier way to do it through computer automation.
In 1983, that certainly was a novel idea. While looking for a good coder to help him develop this idea into a business, he met Tom Proulx at Stanford University. Tom bought into the idea and started building code in his dorm room that would eventually become the personal accounting software package, Quicken. They founded Intuit that same year.
Tom Proulx (left) and Scott Cook (right) in the early days of Intuit. (Source: pinterest)
Quicken was mature enough by 1984 to begin sales to the general public. Sales of the novel software was slow going for many years. Even with the company operating out of Tom’s basement with only seven employees, it flirted with bankruptcy many times.
Most sales channels couldn’t see the potential in Scott’s vision. However, sometimes persistence pays off and eventually sales picked up. Many credit Intuit’s success at this stage with Scott’s obsession with customer satisfaction and willingness to incorporate customer feedback to improve its products.
By 1991, Intuit’s revenue hit $55 million per year. It began introducing completely new software packages and even began acquiring other companies. In 1992, it published QuickBooks, which enabled small companies to automate their payroll processing.
Perhaps its most important acquisition came in 1993 when it purchased Chipsoft from Michael Chipman in San Diego. Chipsoft was the predecessor of today’s TurboTax software, and this software has become the company’s bread and butter product. In the years to come, Intuit made many other acquisitions that enabled the company to realize its vision of a single software or web platform that enabled users to take care of all their financial needs from one place.
This included enabling customers to not only do bookkeeping and pay their taxes from an Intuit product, but also to pay credit cards directly (Visa and Discover), apply for mortgages, buy car and home insurance, conduct all banking transactions, and even invest with the likes of Fidelity and Vanguard. It went public in 1993.
Some of Intuit’s main products. (Source: Intuit)
Today, Intuit has over 14,000 employees around the world, 20 offices in 9 countries, and annual revenues of $9.6 billion. Its TurboTax and Quicken (and its derivatives) are as popular as ever. It also has a market capitalization of nearly $124 billion.
Since the company’s IPO in 1993, the stock has split three times in 1996, 1999 and 2000. Also, as you can see in the company’s stock chart below, the stock illustrates what a great MegaTrend stock looks like. The current Russia/Ukraine conflict has slowed that growth, but that simply makes INTU a better bargain.
Intuit’s most recent acquisitions include Credit Karma in February 2020 and MailChimp in September 2021. These companies complement Intuit’s strengths and help it realize its greater corporate vision. Credit Karma is a personal e-finance company that allows users to check their credit ratings free of charge. It also allows users to effectively dispute error in their credit reporting.
Another interesting feature is that Credit Karma lets people monitor unclaimed property databases. You’d be surprised how many people forget about accounts they have at a bank or credit union, and these accounts are added to databases. MailChimp is an all-in-one marketing platform that allows its users to manage email marketing lists and create email marketing campaigns to send to current customers and leads. Mailchimp is also known for its marketing campaign strategies for companies wishing to advertise on podcasts.
Given the world circumstances, you can be sure that the current stock price does not reflect the long-term performance of Intuit. Its products are the gold standard in personal e-finance platforms. Over the long-term we expect Intuit to recover and gain value.
Inside Intuit’s new corporate headquarters in Mountain View, California. (Source: inhabitat.com)
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