Unlike most people in Silicon Valley, disruption has been a very real part of Intuit CEO Sasan Goodarzi's life for almost as long as he can remember.
He was 9 years old when he fled to the U.S. during the 1979 Islamic Revolution in his native Iran. He lived through the American hostage crisis, enduring the taunts of bullies who told him to go back where he came from, and feared actually being sent back to Iran.
Today, Goodarzi, a nearly 17-year Intuit veteran, is leading the Silicon Valley company through the fintech revolution, navigating fast-moving trends that are upending the financial services industry.
It's a revolution that, in a way, Intuit helped start when it launched in 1983, though in distinctly low-tech fashion. The company began by selling its Quicken personal finance software in shrink-wrapped boxes. (Intuit later sold Quicken, which is now an independent company.) Intuit's other products, led by TurboTax and QuickBooks, are now used by millions of consumers and small businesses to do their taxes and manage their finances, which they now access through the cloud.
"We were born in the era of DOS 38 years ago," Goodarzi, who is 52, told Protocol. "And we've had to make four significant platform shifts, multiple jumps to the cloud and now AI."
There have been big lessons along the way, he said: "The biggest is to always fall in love with the customer problem, not your solutions. If you have a desktop CD and the whole world is shifting to the cloud, but you're in love with having desktop CDs, then you're going to miss the shift. You're going to go out of business."
Life beyond TurboTax
Intuit is now in the midst of another major shift.
The company just closed an $8.1 billion acquisition of the popular personal finance site Credit Karma. The merger, which was announced in February 2020, will dramatically expand Intuit's platform. Credit Karma will also play a key role in Intuit's transformation, "from just being a tax company to a company that fundamentally can put the power of a customer's data in their hands," Goodarzi said.
"We want to leverage your data, with your permission, to be able to actually connect you to financial products that are personalized and right for you and give you choice," he said.
Intuit, with its 57 million customers, including 36 million users of TurboTax, is well-positioned to offer this service to small businesses and consumers.
"We see the pains of our customers," Goodarzi said. "We see how hard it is for them to make ends meet. … We see this through those that we serve through TurboTax. You have millions of customers that go to payday loans to get early access to their own paycheck that they've worked so hard for and who don't have access to ways to save money."
Credit Karma, which has 110 million members in the U.S., U.K. and Canada, and which Goodarzi says is "one of the few fintech companies that have reached incredible scale," will strengthen Intuit's ability to offer these financial choices, he said.
IDC analyst Kevin Permenter said the acquisition underlines how financial management platforms have become more critical in the pandemic. This is especially true for small businesses, which have been among the hardest hit in the crisis.
He cited recent similar mergers, such as American Express buying small business lender Kabbage and cloud accounting software platform Xero buying invoice lending company Waddle. "They're all [based on] this idea of how tax, accounting and credit — small business[es] need it all," he said.
"All of a sudden now, companies are being much more aggressive about monitoring every dollar, every expense, every payment," Permenter said. "And in order to do that, they're looking to leverage more software." Intuit, with its huge user base and reach, has been one of the winners in this trend, he said: "They're growing very rapidly. They're riding the wave in many ways."
Never fear disrupting yourself?
Part of the reason for Intuit's current success is Goodarzi's leadership, Permenter said: "The biggest part of a CEO's tenure is really all building culture. And from all reports that I've heard, he is doing a great job at maintaining the best parts of Intuit and working to expand and build out other aspects of Intuit's culture."
Goodarzi said it's a culture that stresses the importance of "falling in love with trends and where things are going and the customer problem" and not being enamored with your existing products. Another principle, he said, is "never to fear disrupting yourself."
"A lot of the dialogues we have internally is, 'Well, if we launch X, Y and Z, we're gonna cannibalize our revenue.' Well, if we don't do it, somebody else will," he said.
One example was Intuit's decision to offer a free version of TurboTax at a time when it was being made available to low-income Americans. "That was a $100 million decision," Goodarzi said, "because in essence the discussion was, 'Well, we're going to disrupt and cannibalize our own offerings if we just make it free for our large segment of customers.' What we talked about was, 'Let's fall in love with what matters most: the simple filers. Because by delivering a great experience, over time as their life situations change, we can grow with them and over time we can deliver other benefits beyond taxes.'"
But Intuit also found itself in hot water over free tax filing. In 2019, Intuit was hit with a class-action lawsuit which accused the company of duping some low-income consumers into paying for what should be a free service. The company had settled the lawsuit but the $40 million settlement was rejected by a federal court in December.
"Although the court has declined to approve this settlement, Intuit will continue to be clear and fair with our customers and continue delivering for them," the company said in a statement.
Asked about the legal action, Goodarzi said, "I think the facts speak for themselves. We have 70 million customers over the last six years that have absolutely paid nothing doing their taxes. That's larger than the entire industry combined. So I will tell you that the controversy was more from the perspective of a political angle versus facts and reality."
The pain of the customer
The mantra of "fall in love with the customer problem" has also been proven correct by failure on Intuit's part, too.
One example involved what he acknowledged was one of Intuit's biggest blunders: a mistake that paved the way to success for another fintech pioneer, Square.
"You know, we created the payments dongle before Square," Goodarzi said, referring to the mobile payments giant. "That's an example where we fell in love with the customer problem, and actually had the dongle before Square. But we were very slow to move. We just really moved at a snail's pace. Then came Square, and look where they are today."
That was a perfect example, he said, that you must "have the courage to disrupt yourself."
Having courage in the face of disruption was something Goodarzi learned early in life. He moved to the U.S. as a child with his mother in 1978, in order to join his two older brothers who were already in America. His parents had decided that he too should go to school in America, while his father remained in Iran, where he was a real estate investor.
But then came two major events. The Islamic Revolution erupted and Goodarzi's father died unexpectedly. "I went back [to Iran in 1979], just to visit his grave, and I got stuck because the revolution was just starting and barely was able to get out of the country," he said. He and his mother and brothers settled into their new life near Orlando, Florida.
It wasn't easy. Goodarzi recalls "days of being bullied every day because Iran took hostages. I was being told to go back home. I didn't belong here." On the other hand, he also grappled with "the fear of being sent back home."
"We lost everything because the government took everybody's money," he said. "We literally went from my dad sending checks to my brothers to pay for their schooling, [then] all of a sudden, everything stopped."
One of his older brothers got an engineering degree but couldn't get a job. He struggled to start a business with an initial investment of $5,000, and went on to become a wholesaler who imports Middle Eastern food products that are then sold to Middle Eastern-oriented stores across the U.S.
For Goodarzi, it was an early education on the struggles of small business owners, and even foreshadowed the role he's in today.
"When you first start out your business, you barely make ends meet," he said. "So these customer pain points are real for me. They're meaningful for me. They're not just something I say as a CEO of a company on how we can drive growth. I've experienced the pain."