Inside Intuit:  How the Makers of Quicken Beat Microsoft

and Revolutionized an Entire Industry


Intuit Success Factors
Intuit Photos
Bonus Materials
The Making of Inside Intuit
About the Authors

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Bonus Materials

Below are two original documents which you may find as interesting supplemental materials to the book.

* Intuit's Business Plan (1984):  This document reproduces key excerpts from the original business plan presented to venture capitalists and other prospective investors in 1984.  It makes a business case for the Quicken and supplies businesses by covering industry trends, customer research, competitive activity, and growth plans.

* History of Intuit-Microsoft Relationship:   This timeline shows the key events that have transpired over the years in the complicated relationship between Intuit and Microsoft, from wary partners to fierce competitors to an almost-merger to competitors yet again.


Intuit Software, Inc. Business Plan

May, 1984

I.                    Executive Summary

Corporate Strategy

Intuit is focused on dominating the consumer productivity software market.  Our strategy meshes two technologies:

bulletProcter & Gamble consumer products techniques
bulletOur process for developing software that works the way consumers think.  We call this intuitive software design.  It improves learning time and speed-in-use by up to 10-fold versus existing software products.

Market Size and Growth

Consumer productivity software is currently a $260 million market.  It is growing at the fastest rate of any major software category, +75% annually.  This growth traces to the explosion in sales of powerful computers (64K+ RAM) into homes.  Homes now buy more 64K+ RAM computers than businesses buy.  They also buy consumer productivity software: 3 of the top 10 best-selling software titles are consumer productivity products.


Existing competitors are smaller companies such as Arrays, Inc. who have not erected strong barriers to entry.  No top ten software company has a significant product in this market.  The current leaders lack in-house software development capability, which slows their reaction time to competitive entries.  Advertising levels are still low.  Consumers are dissatisfied with existing products, particularly in the home finance area.  Existing finance products, while technically competent, miss the needs of most consumers.

Product Plan

We have applied our approach to the broadest area where consumers use and record quantitative data: handling their finances.

Procter & Gamble type market research indicates consumers want one benefit in this area above all others: saving time in doing routine financial chores, such as paying bills.

We have developed a core of software that automates financial transactions.  It is the first personal computer software that handles routine financial tasks faster than by hand.  Test results indicate that our software is 40% faster than hand and 50% faster than the major competition. 

Our intuitive design process makes our software much easier to learn and use.  Tests indicate new users successfully produce work with our software in as little as 5 minutes.  That is 12 times faster than the fastest time we’ve clocked for the market leader.

We are applying this technology in four related markets.

-         mass market home finance software

-         home banking

-         very small business accounting software

-         sophisticated home finance software

Introduction Plan

We will enter the market with the help of joint marketing with major companies.   For example, we are close to an agreement with a top 20 bank to market and distribute our products.

Establishing Barriers to Entry

After entry we will erect multiple barriers to further entry.  Examples are locking up bank distribution and planned product improvements that enable us to extend product superiority.

Financial Needs

Initial funding of $1,000,000 followed by an additional $1,500,000 over eight months.

Target Company in Year Five

Intuit’s target size in five years is $58 million in sales and $5.7 million in net income.

II.                 Market Overview

Consumer productivity software products help the mass market of average people do useful work better.  Examples include helping consumers manage finances, execute transactions, handle paperwork, do taxes, find information, and make decisions.

  1. Demand for consumer productivity software is high.  The best-selling consumer productivity software ships at the rates of the very best selling business software, as shown below.

Top Ten Best-Selling Software Products

All Categories Except Games



Average Rank                          Product

1                                                                    Lotus 1-2-3

2                                                                    PFS: File

3                                                                    dBase II

4                                                                    Bank Street Writer (consumer)

5                                                                    Home Accountant (consumer)

6                                                                    WordStar

7                                                                    PFS: Report

8                                                                    Multiplan

9                                                                    Dollars & Sense (consumer)

10                                                                PFS: Write

Source: Computer Retail News composite poll

  1. The market is large due to the explosion in shipments of truly powerful computers into the home.  Homes now buy more powerful (64K+) computers than any other group, including corporations.  Productivity software typically requires at least 64K of power.

This hardware creates a $1 billion dollar market for home software in 1984.  The ‘home productivity/ home business’ segment is estimated at 26% of the total of $260 million in 1984.  Sources: Creative Strategies International, Future Computing.

  1. The consumer productivity market is very fast growing, even relative to other software markets.  Consumer productivity software and education software tie as the fastest growing major software categories, growing at 75% per year.

This growth is forecast to continue.  For example, Future Computing forecasts home productivity software for IBM-type machines to grow at a 105% annual rate through 1988.  By 1988 home productivity software will outsell education and game software combined.

This market growth results from fundamental economic and consumer trends.

  1. Consumers are dissatisfied with existing consumer productivity software.  While hundreds of products exist, their usefulness for average consumers is questionable.

For example, interviews with computer dealers indicate that well over half the buyers of consumer finance software stop using it within two months of purchase.  This is corroborated by the results of survey research conducted among computer industry executives.  70% of the executives have tried at least one brand of finance software.  Only 4% become regular users.  The reason is that existing products are technically competent but miss the needs of consumers.

Further evidence are the comments of Don Estridge, the head of IBM’s PC division.   Far from extolling the benefits of computers for consumers, he publicly admits:

“For the average person, the excitement of buying a PC evaporates very quickly.  The same question keeps coming up, like waves on a beach: What do I use it for?”

“My wife can’t think of any reason at all she’d use a PC.”

“Our industry is consumer-driven…that’s really hard when we can’t answer the question: ‘What do I use it for?’”

III.               Strategy

  1. Objective

Intuit’s objective is to dominate the consumer productivity software market.  True mass market consumer software requires:

bulletreal usefulness so products deliver real benefits wanted by big segments of consumers
bulletease because the mass user market is much bigger than the ‘techie’ user market
bulletpersuasive marketing to get established and be low cost in marketing, software’s major cost component

We deliver these via a strategy that couples proven Procter & Gamble marketing techniques with our ‘intuitive’ software design process.

Usefulness.  Consumer productivity software to date has focused on doing jobs on the computer.  Our focus is on doing the job better; the computer is only a tool, not the end.  Useful products are those that are better in the way the consumer wants.  The difficulty is finding which is the better way consumers most want.

For example, in home finance which better way is most desired:  more accuracy, more control, more information, more understanding, saving time, saving money?  We apply sophisticated consumer research techniques to find out.  Product development does not begin until we know which better way consumers find most useful.

Ease.  Our objective is software that works the way consumers do, so they already know how it works.  We call this ‘intuitive’ software.  To build intuitive software we have developed a unique programming process and culture.  The result is a company with an intimate devotion to the habits and foibles of average people.  Here are two examples, one large and one small.

bulletOur user testing indicates the single most important factor driving ease of use is habit.  We base our designs on an intimate knowledge and faithful replication of consumer habit patterns.
bulletExisting software uses beeps to indicate errors or problems.  Our testing indicates beeps make users less comfortable as they tell others the user has goofed.  Instead, we use large on-screen messages to indicate the problem and its solution.

Persuasive marketing.  Marketing is software’s largest cost.  We use P&G techniques to squeeze more sales from fewer marketing dollars.  These include techniques to increase ad credibility and persuasiveness.  Others directly incent consumer trial and purchase.

  1. Process 

Intuit’s approach is as follows:

bulletFocus on a fundamental and broad consumer usage area and benefit
bulletDevelop a position of superior knowledge about the consumer in that area
bulletUse that knowledge and our intuitive design techniques to build a superior delivery technology
bulletCommercialize that technology, focusing on the largest markets first
bulletExtend product superiority via product improvement and segmentation
bulletConvert position of product advantage into a position of long-lived market advantage


  1. Results

We have applied this approach in the broadest area in which consumers use and record quantitative data: handling their finances.  This includes writing checks, bill paying, transaction recording and reconciling, and transaction tracking.

Our research indicates that one benefit in this area is much more important than others to most consumers:  saving time and hassle doing routine financial chores, such as paying bills.  A product that saves time is useful to mass market consumers.  A product that takes more time is not.


We have developed a core of software that saves time by automating the transaction process.  Our first product, named Quicken, is the first personal computer software that handles routine financial transactions faster than by hand.  Its intuitive design makes it fast and easy to learn.  Test results show 10-fold advantages over major competitors. See below.

 Measures of Ease of Use     Quicken   Home    Dollars & Sense


Percent testers successfully

   accomplishing work               100%      10%                 50%

Learning time from start up

   through accomplishing first work (min.)

                                                      5-25       60-90             40-70


Home Accountant

Speed of Learning and Use

“We even paid $40 more and bought the checks for the printer, but it was so slow and frustrating, we only used it once of twice.”

·        Owner, Software Distributor, West Los Angeles

“I quit.  It was more trouble than it was worth. It took twice as long to input the data as to write it longhand.”

·        Salesman, Computer Store, Burlingame

“It makes it too hard. I don’t want to think, I just want to input the stuff and get out.”

·        Salesman, Computer Store, Mountain View

“I just don’t have any time for it.”

·        Owner, Software Store, Los Angeles

“It’s not worthwhile as I have to double do everything.”

·        Editor, Software Magazine

“I took it home and tried it and gave it up. It was faster to do it by hand.”

·        Owner, Computer Store, Northridge

Quicken User Comments

“It does exactly what I want to and easily.  It’s not a chore anymore.”

“Compared to the Home Accountant, or something like that, it was really logical without being forbidding.”

“I was blown away by how fast and easy it is.  It’s wonderful.  I’m sold."

“It’s so fast compared to the old-fashioned way.”

IV.              Competition

Existing competitors are smaller companies who have not erected the barriers to entry found in other major software companies.  There are no major software companies with significant entries.  The current leader lacks in-house development expertise.  Advertising levels are low.  Consumers are dissatisfied.

  1. None of the top ten software companies have significant entries in the consumer finance category:


  1. Microsoft
  2. Visicorp
  3. DRI
  4. Micropro
  5. Lotus
  6. Ashton Tate
  7. Peachtree
  8. SPC
  9. CAI/Sorcim
  10. Perfect

While any of these companies could enter at any time, our press contacts know of no significant entry about to be introduced.  They can see 3-4 months ahead.  It appears likely that we will introduce without having to fight the large software companies head on.


  1. The longtime market leader is The Home Accountant by Continental Software, a division of Arrays, Inc.  It is by far their largest product.  Another consumer finance product to sell in volume is Dollars and Sense from Monogram, a division of Softsel.  Dollars and Sense began shipping in September, 1983 and has been on the top ten since December, 1983.  This is Monogram’s only product.  Monogram’s sister division, Tronix, publishes game software—none are best sellers.  Softsel is privately held.  Little data on Monogram is available.   Softsel does carry other brands of home finance software.  At last count there were about 45 other entries in this category.


  1. Competitive advertising which can be a significant barrier to entry is low in the consumer productivity category.  Advertising budgets in consumer productivity software are only a tenth of those found in business software.


  1. In the consumer finance category, the major entrants are publishers who can only react slowly, if at all, to new competitors.  Publishers buy the software from outside programmers and, as such, do not have the in-depth understanding of the programs needed to make major improvements rapidly.  In contrast, companies integrating both publishing and development are dominating business productivity software because they are able to develop better products and make necessary improvements.

The rapid rise of integrated companies is dramatic.  Two years ago publishers, like Visicorp, dominated business productivity software.  Today, integrated companies dominate.  Publishers have been forced out of leadership as was Visicorp.

  1. The biggest vulnerability in consumer finance software is bad product.  Over half the buyers of the best-selling consumer finance software stop using it within two months of purchase.  Even computer industry executives don’t use the existing home finance software.  70% have tried at least one brand.  Only 4% become regular users.

V.                 Product Plan

Our plan is to expand our software technology into a series of related markets.  The first is the mass-market home finance software market.  This market is large and currently unaddressed by competitors.  This market also presents a ‘razor and blades’ opportunity, the blades being continuous form checks.

Next, we will expand into the related markets for dedicated home banking and very small business accounting software.  Home banking is large enough to support at least two separate products.  The last financial market we will attack is for sophisticated home finance products, the most crowded market.

All products will require several versions, one for each of the leading-selling 64K+ RAM machines.

Mass Market Home Finance:  Quicken

Objective:  Become largest-selling home finance software product

Opportunity:  Fill void in market—the largest segment of households want to save time with finances.  Existing products add power, but do not save time.

In productivity software, simple and fast products outsell ‘power’ products.  Bank Street Writer outsells WordStar.  PFS:File outsells dBase II.  This concept has delivered large volume in major software categories.


-         does all routine household financial tasks: writes checks to pay bills, keeps and reconciles check register, tracks expenses

-         enables user to do these tasks faster than by hand

-         intuitively easy to use; looks and works like a checkbook

Customers:  Owners of the best-selling powerful (64K+) computers, who pay bills with checks.  Currently, those computers are IBM, Apple II, and Commodore 64.  Also, those with easy access to these computers at work.

Competitors:  No existing product addresses the mass market need.  Two sophisticated home finance software products are prominent:  Home Accountant by Continental Software and Dollars & Sense by Monogram.  Ultimately, the paper check and checkbook, that is, doing the work by hand.

Relative Performance:  Quicken is the first software product that does routine financial work faster than by hand.

Home Accountant: +22% to do routine finance vs. by hand

Dollars & Sense:  +28%

Quicken:  -40%


Relative Cost:

Home Accountant: $150 software price, $.09 price per check

Dollars & Sense:  $165 software price, $.09 price per check

Quicken: $99 software price, $.05 price per check


VI.              Introduction Plans

We are emphasizing use of well known, highly credible companies to introduce Quicken.  These will give Quicken awareness and credibility, reduce our introductory marketing spending, and accelerate our volume build.

1.      Joint marketing with banks will add distinctive credibility and provide a source of volume.  The uniqueness of having a bank endorse Quicken will deliver additional press coverage.  Bank endorsement also adds credibility to Quicken that will cut through dealer and customer skepticism and build distribution and sales.

2.      We have been developing industry analyst and press relations for the past year to assure good levels of publicity.  This has generated close relations with key editors in the computer and the general press as well as with analysts.  As a result, several others have offered to do articles on Quicken when it is introduced.  Despite having no products on the market or announced, we have already been quoted in publications such as Forbes and American Banker.

3.      Our initial distribution efforts will be to achieve distribution in computer retail chains via a special co-labeling agreement.  This special incentive can assist us in getting early retail chain attention and acceptance.  Along with this, we plan a major direct sales effort to chain headquarters supplemented with telemarketing and direct mail campaigns to retail stores.  We will also utilize a distributor such as Micro D or First Software to gain coverage of independent stores.

4.      We plan a number of trial-oriented promotions to build sales.  For superior products, trial can be the most persuasive marketing device available.  Customers can see how the product can be of benefit to them, increasing the likelihood of purchase.  One promotion in our plan is a free ‘trial’ disk ad campaign.  The ‘trial’ disk will demonstrate all the features of Quicken without being usable by eliminating its ability to print, etc.

5.      Advertising will be used in trade, computer and the general press to build retailer awareness as well as consumer awareness.  We will use the proven technique of emphasizing a product’s benefit to build advertising effectiveness.

VII.            Establishment of Competitive Barriers

We plan to erect a series of barriers after entry to define our market position and minimize margin pressure.  Multiple barriers greatly reduce the risk of losing overall advantage to competition.  Multiple barriers also complement and reinforce one another to strengthen the advantage over competition.  We believe this is less risky than relying on a single barrier, such as a technical edge.

Below are some of the types of barriers we are erecting.

  1. Improve the product to help maintain noticeable and advertisable product superiority over competition.


  1. Improve the marketing to better reach and sell the target consumer than competition.  Examples include developing advertising with higher communication levels, enhanced advertising credibility, and tighter media targeting.


  1. Shift the basis of competition to a more protectable area.  An example is Crest’s shift of the basis of competition in toothpaste into cavity protection.  Crest’s patents and trade secrets forestalled competitive copies for five years.  While patents are rare in software, Intuit has applied for one patent and has another application in process.


  1. Move the area of profit to more protectable areas.  Kodak has moved most of its consumer profit from the camera business, which has dozens of entrants, into the film business, which has only 3 entrants.


  1. Develop exclusive distribution channels.  MCI accomplishes this with their exclusive arrangement with American Express to offer their telephone service in credit card statements.


  1. Maximize loyalty of non-exclusive channels.  Crisco does this through its trade promotion program that gets the trade to move large volumes of Crisco as a loss leader.  The trade benefits through additional volume on other items.


  1. Segment.  Understand the differing needs of segments of consumers and, for each large segment, offer a specially designed product to better meet their needs. Chrysler recently identified a large segment of consumers who want something larger than a station wagon but smaller than a van.  This resulted in their successful Dodge Caravan/ Plymouth Voyager.

Profitability Model

We have developed a cost model for managing the business based on the cost structures of other well run software companies.  In addition, we have broken out our check business because it is a higher cost of goods business than software.

                                                            Software                                  Checks

Cost of Goods                                     25%                                         70%

Marketing/ Sales

            Established Products             20%                                         5%       

            Product Introductions             15%


            Established Products             4%

            New products                          8%

G&A                                                    10%                                         5%

Income before Tax                            18%                                         20%

Tax                                                      8%                                           9%

Net Income                                         10%                                         11%

(Source:  Tom LeFevre)


History of Intuit-Microsoft Relationship


Microsoft and Intuit partner to market a promotional software bundle that includes Microsoft Works and Quicken sold through retail stores.  Jeff Raikes from Microsoft approaches Scott Cook at a Software Publishers Association meeting, asking if Intuit is interested in being acquired by Microsoft.  Cook is flattered by the inquiry, but Raikes later calls to say that Microsoft instead needs to focus on developing Windows 3.0 and LAN Manager.


Microsoft approaches Intuit again, this time to ask if they could license the Quicken brand name for a Windows financial product.  Intuit considers the offer, especially since the company has no Windows expertise, but several detractors complain Microsoft is trying to shut out Intuit of the Windows market.  Mike Maples of Microsoft calls Scott Cook to tell him that the talks are off, and that Microsoft will introduce its own personal finance software product to compete against Quicken on the Windows platform.


Intuit’s development SWAT team creates Quicken for Windows in only seven months.  Microsoft Money for Windows is introduced in the fall, shortly followed by Quicken for Windows.  Intuit successfully fends off this competition by leveraging its existing customer base.  Intuit uses a rebate coupon in its upgrade mailing to drive customers to retail stores, causing great demand and retailer support.  Intuit also prices Quicken for Windows aggressively. Quicken for Windows beats Microsoft Money in head-to-head product reviews, and the press roots for underdog Intuit.

In 1991, Microsoft’s revenues hit $1.8 billion and the company employs more than 8,200 people.  In the same year, Intuit’s revenues are $44 million with about 200 employees.


Intuit sends out free Quicken for Windows update disks with new features to registered users.   Intuit launches QuickBooks bookkeeping software for small businesses.  Both Quicken and Microsoft Money introduce 2.0 upgrade versions in the fall.  Quicken maintains a 70+% retail market share on the Windows platform, but Microsoft promotes Money aggressively in the OEM channel pre-bundled with PCs.


Microsoft launches a Windows accounting product called Profit to compete against QuickBooks.  QuickBooks introduces a new Windows version in addition to an upgrade of its DOS version.  Both Money and Quicken develop new upgrade versions that incorporate electronic billpay functionality.


Microsoft withdraws its Profit accounting product after one year on the market.  Intuit acquires National Payments Clearinghouse, Inc., an online billpay provider which counts Microsoft as one of its clients.  Merger talks between Microsoft and Intuit start anew with an email from Bill Gates to Scott Cook that begins, ‘This really is from Bill Gates.’  After months of discussion and negotiations, the Intuit-Microsoft merger is announced in September.  The companies plan to sell the Money product to Novell.  Two months later, the Justice Department asks for more information to ensure no antitrust problems, generating concern that the merger may be in trouble.


After almost nine months in merger limbo, the Justice Department says it will sue to prevent the Intuit-Microsoft merger from going through on antitrust grounds.  Despite Scott Cook’s willingness to fight against the DOJ, Bill Gates throws in the towel on the deal.  At about the same time the merger falls through in May, both companies become more attuned to the Internet tidal wave and race to address the new technology in their product strategies.  Intuit integrates the Netscape Navigator browser and ISP connectivity into its fall Quicken release, with a direct link to the new Quicken Financial Network website.


Intuit purchases online insurance business Interactive Insurance Services, which lets people comparison shop for life insurance online. Intuit announces a distribution alliance with Excite, providing finance channel functionality for the ISP.   Microsoft launches its Microsoft Investor website with a focus on investments and portfolio management.

1997 launches, integrating functionality from Quicken Financial Network, acquired mutual fund and investment companies, and partnership content deals with CNNfn and others.  Intuit introduces to help people comparison shop for mortgages online.  Intuit and Microsoft work together to develop Open Financial Exchange, a unified specification for the electronic exchange of financial data between financial institutions, businesses and consumers via the Internet.


Intuit announces a five year deal with AOL, giving Intuit prominent site listings in several areas on AOL and its subsidiary CompuServe.  Microsoft renames its Investor website Microsoft MoneyCentral, adding tax and insurance content.  Microsoft introduces Microsoft HomeAdvisor to compete against  The QuickBooks Payroll Service launches, offering online payroll. Intuit and Excite announce the launch of TurboTax Online.


Microsoft introduces a tax preparation product called TaxSaver, directly competitive to Intuit’s TurboTax program.  However, TaxSaver only launches a federal tax version, and no state versions. 


The NASDAQ reaches an all-time high on March 10, followed by a steep downslide in the stock market.  Microsoft withdraws TaxSaver from the market only a few months after its release.  Instead Microsoft announces it will focus on partnership promotions between its Money program and MoneyCentral website and H&R Block’s TaxCut program.   A TaxSaver package is ceremoniously buried in an Intuit courtyard.  Quicken and TurboTax both have market shares over 70%.


Intuit decides to open up its QuickBooks code to encourage outside developers to build products that work with the QuickBooks product.  Microsoft acquires Great Plains Software, Inc., to provide accounting and business management software to small to mid-sized companies.  Microsoft acquires and integrates it into their MoneyCentral channel, to compete against, AOL’s Personal Finance channel and Yahoo! Finance.  Quicken boasts 15 million customers.


Intuit’s ‘right for my business’ strategy is launched, with vertical industry versions, products that extend beyond accounting tasks, and a target market shift from small businesses to mid-sized businesses up to 250 employees. 


Microsoft announces it will invest $2 billion in the next fiscal year to sell programs to small to mid-size companies with fewer than 500 workers. Microsoft estimates revenue from this market will increase from about $300 million today to $10 billion by 2010.  Intuit celebrates its 20th anniversary.







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