 Live from San Jose, California, in the heart of Silicon Valley, it's theCUBE, covering QuickBooks Connect 2016, sponsored by Intuit QuickBooks. Now, here are your hosts, Jeff Frick and John Walls. Well, welcome back to San Jose, California, but continue here on theCUBE, our coverage of QuickBooks Connect 2016. Of course theCUBE is the flagship broadcast here on SiliconANGLE TV, where we extract the signal from the noise, and I tell you what, with our next guest, we have a lot of signal to bring you. Scott Cook, the founder and the chairman, the executive committed into it. Scott, thank you for being with us. We really appreciate the time, and I've been looking forward to this for quite some time, once we knew you were going to be on theCUBE. So, good to have you. Good to be here. Well, let's talk about, just first off, look at where you are now, right? 30 some odd years. It's been quite a ride, I would assume, for you. Yeah, it started, you know, Tom and I got together, and then there were two of us, and then we eventually had seven of us in a basement. Well, they called it the garden level, but the only part of the garden you could see would be the roots and the gophers. And then we hit bad times, and the things, we just, we couldn't get money, and we couldn't get sales, so we shrunk down to four people. Couldn't pay salaries, it was pretty ugly. And from that, to look at 5,000 people here today, 8,000 employees in the company. When I started, the biggest PC software company was 160 employees. And they were huge, oh, these giants. So, how do we manage all this? Yeah, yeah, yeah. Well, a quote that we've heard a couple of times today, heard on the keynote stage, about the corporate philosophy of, we fall in love with your problems, not our solutions. And is that the driving force, you think? I mean, why you've made it through 33 years? I think, yeah. Yeah, I actually think that's pretty important, not just to the success of Intuit and QuickBooks and Mint and TurboTax, but to business in general. My theory is what great entrepreneurs do is they find the intersection of two circles. So think of a Venn diagram and the intersection. One circle is, what are people's biggest, most important, unsolved problems? Not the problems that are already solved by someone else. Find the ones that aren't solved yet. And then look for the ones that we can solve. Because we can't solve everything. But look where we can apply the best technologies in the world, what's in that intersection? And focus there. And in some of the research to get ready for this, you've talked about really focusing on the important stuff. And you gave a great example in that Khan Academy talk about, there's really only one and a half things that you should really be focusing on to really move the ship forward. That was a very great insight. Yeah, you know, all of us have the desire to do too many things. You get groups, you got 10 people in a room. They each have their ideas and it's tempting to shoot at too many targets. And those 10 targets are not of equal importance. You got to go through and kind of rigorously and be disciplined to say, what's the one and a half most important? And stay relentlessly focused on that. And then how has your role changed? You know, as time has passed and you're no longer the CEO, now you're chairman, head of the executive board. How have you kind of learned to still keep your hands on it? But in kind of a little bit more of a distant role. Well, first of all, thank goodness for leaders like Brad Smith, Sasan Gagarzi who heads up our small business group that's really the host of this show. Thank goodness for great leaders like that. So my role has changed a ton. Well, I work really in two areas now which is strategy and then coaching our entrepreneurs. So strategy, I work with Brad and our other leaders. I'm trying to help our leaders see the future and make the big strategic calls. What's really most important? How do we know? And then work with our entrepreneurs. We're a collection of entrepreneurs, basically we've got a couple hundred entrepreneurial projects going on inside the company at any one time. And each one of those is like a little startup. I mean, they've got a customer in mind. They've got a problem they're trying to solve to improve people's lives so fundamentally. And there are challenges. So help and grow our entrepreneurs and then grow the culture around them to allow great entrepreneurs to invent things that change the world and do that from within into it with a huge reach to be able to get the inventions out in the hands of millions and change the lives of tens of millions of people. So over the course of the run of the company, haven't all been home runs, right? So how have you learned from those swings and misses and applied them to the small businesses that you're serving who are swinging and missing on a regular basis and you're trying to narrow that margin, right? Trying to make them more successful. So what did you learn? You think maybe through your attempts about that culture of trying basically. Yeah, I think maybe the most important thing really dovetails with what you just said. We, early on when the company was, before we even had our first product out, we'd build a version of it and then we would bring in test audiences and have them test it to see if they could figure it out without us saying anything. And they couldn't, so then we'd redesign it and then we'd test again and then we'd redesign it and test again. Over time we kind of lost some of that dedication to running experiments and it became who's opinion and you'd build and it was the loudest opinion in the room or the boss's opinion. And that produced a number of failures. Things that just didn't work. Customers didn't buy or they bought and it didn't produce the desired effect when they bought it. So the thing I've learned about life and companies is to set up a culture where you make decisions based on fast, cheap experiments, the very thing you were talking about. If you've got an idea, figure out, okay, what's the leap of faith assumption? Let's go try it. And don't debate it, try it. And then we learn from trying. A bunch of those don't work. Then we learn from the things, why didn't it work? And that teaches us something we didn't know before that may be the fulcrum, the pivot to a new idea. And some of those do work or most of it work but other pieces didn't and we learn by doing not by debating in a conference room. So they set up your company so that people throughout the company take their idea and run the experiment. That produces great entrepreneurs and great learning. Continuous stream of learning. Because I guess the learning begins when you first get real people trying your idea for real. So let me follow up, I was gonna say because the other thing you talked about is that often comes from the youngest and the newest employees. Which is completely, and this is the kind of a hierarchical structure where these are the people that you should be listening and giving them the opportunity within this comfortable framework to do these experiments. Absolutely, sometimes the very freshest ideas come from the people farthest from the boss. Newest in the company, closest to the customer. But typically in a hierarchy, who's got the least clout? Whose ideas are the least listened to? They'd be the new person, the young person. And so part of the genius of running a company of decision by experiment is that everyone's ideas can be run as an experiment. The boss's idea, the CEO's idea, and the person that's new. We should be testing each of those. Except in a crisis where you gotta make snap decisions. And hopefully those aren't very often. You should run the company so that each good idea can be tested regardless of where it comes from. And then the great thing is then you get the best ideas from all your folks and they learn from doing. If their idea doesn't work, now they learn from it. Ooh, okay, I thought it was gonna do X, it did Y. Why, what didn't I know? That's where learning comes from. Learning doesn't tend to come from the successes. Learning comes from the things that didn't work. So, I think we've all seen good executives how they operate, they hire good people, right? That's, you have a vision and then you hire people who surround that and amplify that vision. So when you're looking for people or when you've been looking for people to work with you, what's that common threat? Or what are the traits that you've looked for the most to think that's a good fit or this is the person that I want on my team? In order to carry on this vision to where it's expanded to where it is today. Well, let me break that into two buckets. There are a set of things which are unique to particular career paths. So certain things from engineers might be different than certain things from a salesperson or a market or a finance person. So let's set that aside. Let's cover the commonalities. You know, I think there's a few things that when you think about the people you've most loved working with or for, there are people who are great creative problem solvers. Instead of seeing a problem or barrier and giving up or being unglued by it, can figure out, okay, how are we going to solve that problem? Kind of. And then there's people who are there to serve where it's not all about them. You know, I've got a thing that I tell our folks that others won't care how much you know until they first know how much you care. So if one of our speakers today said it, if your first job is to serve yourself, you're not going to go very far because who wants to work with someone who's self-serving? Who wants to buy from a company that's only looking after its own PROT P&L? Right. The job one is you've got to serve who you're serving. The customer or the person in the company who you serve. So we look for people who are really motivated by the outside to try to do right by the customer. I think you look for people who are achievement-oriented, who get stuff done, who make things happen. Do you want to work with somebody who always needs to be dragged along? No, you want to work with somebody who's pulling you along, who's getting a lot done. So you go, wow, that person gets a lot done. So I think those are pretty core, solve the creative problems, have the passion and energy to serve, do what's right for the customer, and then get a lot done. And then you've talked about the curse of success and avoiding the curse of success, and you guys have done that, obviously. So what are the lessons to stay fresh? I mean, this started as a checkbook register, and now the future of payments and mobile and the options are just tremendous. Bitpoint, who knows where that's going? So as the future keeps evolving, how do you stay fresh? How do you keep the team fresh? How do you not rest on your laurels even though you have 5,000 fans walking around San Jose Convention Center today? This is a real challenge for companies because success turns organizations. It makes them dumb and slow. You know, it's tempting. The thing I would avoid is it's tempting to look at your achievements, to look through the rear view mirror and look at boy, how much we've achieved. But that only makes you self-satisfied. In fact, with an organization, you need to do the opposite. Look to where we want to be. Look to where we should be. And we're here and then say, well, shoot, we're not very far. So for example, and I've defined these in customer terms. For example, we started our first product, helped somebody manage a checkbook and pay bills. If you look at it really, the problem of managing, of paying bills has gotten worse. It used to be bills all came in the mail. So you had a little physical reminder. Some come in the mail, some are, you get by email with invoices from some people. Some you go online and find a website. You pay some in a bank website, maybe you go to the bill or you pay some, you write checks for some. It's much harder now. We have not actually got to the point when our nirvana is you never worry about a bill and you're never late. And you're never overdraft. You know, the overdraft rate in the country is around 30% of households have an, excuse me, have a late payment during the year from which they get fees. And the overdraft rates, overdraft charges can be 30, 35 bucks. We have not solved that yet. We've got to look there and say, with all that we've done, that's what we should have done. And so we've got a team working on that right now and stuff because we got refocused on it. So we've got, we'll be coming out in December with stuff in there and look at tax. Tax many people would say is one of our best businesses and it is, look at all we've achieved. But look at the reality, people are still spending a lot of time on tax. Who wants to be spending time typing stuff into tax software? Does anybody? No. There's not an accountant, there's not a, we haven't solved that yet, guys. There are still 100 million people in the country typing stuff in to systems to do taxes every February, March, and April. That's what we want to be is ultimately, there is no typing it. All that information that you have that goes in your tax return goes in automatically. And if you're an accountant, it all goes in for your clients automatically so that you can focus on the high level stuff and not the drudgery. So viewed from the lens of really what life should be, what's our aspiration, our ideal? Keep people focused on that and it sure has helped motivate us. I mean, we should be finding a lot of money for small businesses and we're launching, announcing today ways that we help small businesses find more money. We should be eliminating the drudgery running a small business. Nobody wants to do the book work. Instead, they want to do what they love to do in business. It could be working with clients. It could be the craft of doing the business. It could be selling new business. Every business person has something they love to do. And it's not doing the books. And yet, people still have to do it. We want to have it on your phone so you don't have to do the books. It's done automatically. You got a question? There's the answer. You mentioned the phone. I mean, is that the next big growth opportunity? I mean, mobile this is top priority with so many different sectors right now. It's the growth today. It's the growth today. In fact, every new feature and new benefit that Sasan Goudarzi showed today in his keynote address, every one of them, he showed it on a mobile phone. Every one. It's the fastest growing, you know, in TurboTax, the great consumer business. It's the fastest growing platform by far. So yeah, if you can take stuff off a desktop and put it so automatically that you can just get on your phone and say, okay, yep, do it. Right, right. That's, yeah. So that's where we're aiming a lot of our innovation. These are amazing platforms. They, you know, a simple example. The fastest growing form of employment in the United States and in fact in the world is self-employed. Where you think of an Uber driver or something like that, people who work as consultants, contractors, they work for themselves. They've got to keep track of all of their business expenses or they lose that money on their tax returns, money out of their pocket. They got to keep track of every individual business expense which of course they co-mingle with their personal checking, personal credit card. And they got to keep track of every mile they drive for business and keep it separate with contemporaneous records that the IRS requires with the starting odometer reading, the ending odometer reading and the destination and what it was for. Well, you can imagine. That's such a pain in the butt. So many independent business people, freelancers fail or they do some but not others. And that's the money right out of their pocket. Thousands of dollars they don't get. They should get to their reserve. So we've devised and a team really creative work. QuickBooks self-employed. It sits on your phone in your pocket. It reads what's coming from your bank and your credit cards. And anytime you're stopped at a stoplight or you've got two minutes before a meeting starts, you can go through and say, oh, that was a business expense, business, business. That was personal, personal. It's that fast. And then you get complete records for your taxes. Oh, and mileage. There's lots of software out there that'll track your mileage but it does it by pinging the GPS, right? When GPS takes battery, you ping the GPS all day long, what happens? Goodbye phone. Bye-bye phone. So it's worthless. Our guys, we launched that, quickly found out that people stopped using it because it drained their battery just like everyone else. So three clever engineers together with a couple others came up with a really clever idea which we're patented now. And it tracks your location without pinging your GPS all day long so it doesn't drain your battery. So now you get complete records. It can detect when you're driving and where you started, where you finished, how many miles, keeps perfect record just as the IRS requires. And then you just have to tell it which are business, which are personal, and then it learns, which one are business trips. So that over time it knows when you're driving on business and you don't have to do anything. You get complete tax records. We've got businesses using it who get on average $7,000 of tax deductions. $7,000 of tax deductions because of the way it tracks your miles. And you're taking advantage of the platform. You're taking advantage of the accelerometer. More importantly, I think that the thing about mobile that most people don't maybe consciously think of is the way we interact with it, as you just said, is little bits of time here, there, and everywhere. It's not to sit down thing. But I think what I think is most exciting about this show is it's a lot of talk about technology but at the end of the day it's really more about business and small business and small, medium-sized business and getting business done and letting people do those dreams like the guy that was on the keynote. Letting her build her company and her franchise and not have to worry about like getting all the right deductions. That's right, I think technology is the enabler but it's all to enable what? What are we trying to deliver? And you saw it in all the kind of lead-off slides. We're trying to fuel the success of small business. This is all about success. The technology's the enabler but that's not the center, the star of the show. The star of the show are small businesses and how they succeed and how the suite of things that hundreds of developers and hundreds of software entrepreneurs who all build for the QuickBooks ecosystem, the new methods and new ways to drive small business success. And at the end of the day, we don't measure ourselves with software. We measure ourselves with how much more money did we make small businesses? How much time did we save them so they could do what they love? How did we help them grow their business? Running a small business is that and I know from starting into it, it absorbs who you are. You identify with that business. It is your representation to the world, to your spouse, to your in-laws. And if that business is successful, it's something about you that's irreplaceably positive. That business is struggling. It strikes to the core. I mean, you feel bad, you look bad. So helping businesses succeed and move them from mediocrity to success is such a home run for the psychology of this growing part of our economy. For each individual, I mean, it's your report card on yourself and we can help make those report cards much better and that's our mission. That's how we're going to change the world so, so dramatically. People can't imagine going back. I'd say you've already changed it dramatically and it is exciting to hear about the next steps but this whole blend of strategy and execution and culture you'd be commended for. It's just a great example of all of those factors coming together and make great things happen for a lot of people around the globe. So congratulations for that and thank you for being with us. Scott, we appreciate the time here on theCUBE. Jeff, John, thank you very much. This is fun. You bet, back with more from San Jose and just a bit, you're watching theCUBE here on SiliconANGLE TV.