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Cook, Scott - Overview, Personal Life, Career Details, Chronology: Scott Cook, Social and Economic Impact

intuit software online financial

(1952-)
Intuit Inc.

Overview

Scott Cook, along with Tom Proulx, founded Intuit Inc., the company best known for the personal finance software Quicken. Intuit was one of the first companies to develop user-friendly programs with manuals written in “plain English,” and revolutionized online bill-paying and home banking. Intuit has also developed web sites for various financial services, through which customers can compare mortgage rates and buy car insurance.

Personal Life

Scott Cook was born in Glendale, California, in 1952. He obtained his bachelor of arts degree in economics and mathematics from the University of Southern California, and then received his MBA from Harvard University. He is on the board of directors for Broderbund Software, the Asia Foundation, and the Intuit Scholarship Foundation, as well as the online bookseller Amazon.com, which he joined in 1997. He is also a member of the Young Presidents Organization, an international association of corporate executives dedicated to promoting education.

Career Details

Cook began his career at Proctor & Gamble, a huge manufacturer of household products, where he worked as a brand manager and in other marketing positions. He then went to Bain & Company, a corporate strategy consulting firm, where he managed consulting assignments in the banking and technology areas. After watching his wife tediously write out bills one day, Cook figured that there must be a way to use technology to streamline the process. With the marketing savvy he had picked up at Proctor & Gamble, and his knowledge of banking and technology, he set out to find a solution. Teaming up with Tom Proulx, a computer programming student still in college at Stanford University, he began work on a new software program that would allow users to organize their finances by computer.

Although about 30 different accounting products had already been introduced for home computers, they took longer to use than doing everything by hand—and they were expensive. Moonlighting while still at his consulting job, Cook fine-tuned his idea, getting feedback from potential customers by conducting surveys and initiating product tests. He discovered that customers did want software for organizing their personal finances, but it had to be easy to use.

Cook and Proulx formed the company Intuit, Inc. in 1983, named as a shorthand version of the word “intuitive,” which indicated that their products would be just that. Cook was named president, CEO, and chairman of the board for the new firm. Intuit released the first version of Quicken software in 1984. The program cut in half the time it took the average person to pay bills and balance checkbooks.

Cook strengthened Intuit with his strong marketing skills. It was one of the first firms to actively seek market input for software. Intuit hired product developers to watch people—not product testers—use the products in the “real world” of their own homes (this was called the “follow-me-home” program). The company was also a leader in writing simple-to-read software manuals at a time when technical jargon was rampant.

After launching Quicken, Intuit later offered a similar accounting program for small businesses, called QuickBooks, which it introduced in 1992. Intuit also merged with Chipsoft, maker of TurboTax, in 1993, which allowed users to prepare their own income tax returns on their home computer. Soon, Intuit was the leading manufacturer of personal financial software.

Quicken took a couple of years to fully catch on, but Cook relied on an old technique to sell his new product. Intuit was the first to run television commercials for directly ordering the new product from the company. Cook also placed advertisements in magazines such as PC Magazine and Byte, raising revenues to $33 million by 1990. With sales soaring, Cook decided that Intuit needed savvy businesspeople to help lead its growth. Instead of recruiting consultants, he sought venture capitalists to invest in the firm and join the board. “You get a lot of attention from people when you have a few million bucks of theirs,” Cook noted in Fortune. Four such venture capitalists then joined Intuit, purchasing 20 percent of the company. In 1994, Cook stepped down as president and CEO of Intuit but remained chairman of the board.

By 1995, Intuit and software giant Microsoft were flirting with a merger. Quicken held 70 percent of the personal financial software market in mid-1995, whereas Microsoft Money, the number two package, had only 22 percent. Cook’s vision was to expand into electronic banking, allowing customers to access their accounts 24 hours a day. However, he found out that banks were interested in teaming with Intuit with or without Microsoft, and then the antitrust division of the Justice Department blocked the merger, which would have led to a potentially lengthy trial. Microsoft bowed out and paid Intuit $46.3 million to end the deal.

Intuit had been offering Quicken users the option of paying bills electronically since 1990, after forging a deal with CheckFree, but fewer than 10 percent of the customers used the service. In 1994, the company purchased National Payment Clearinghouse (renamed Intuit Services Corporation) as part of its plan to spearhead its own electronic banking service, and later teamed with various institutions to let consumers do their banking online. As of July, 1995, 17 banks in addition to Smith-Barney and American Express had joined Intuit’s program to offer online banking to Quicken users, allowing people to pay their bills online without writing checks, to transfer money, and to keep track of balances. BankNow was a joint venture with the online service provider America Online (AOL).

Chronology: Scott Cook

1952: Born.

1983: Cofounded Intuit Inc.

1983: Began serving as Intuit president, CEO, and chairman of the board.

1984: Shipped first release of Quicken software.

1995: Intuit and Microsoft called off expected merger.

1997: Intuit introduced online bazaar of financial services.

1998: Opened Online Financial Exchange.

1998: Became chairman of the Executive Committee of the Board.

Though Intuit’s online banking operation failed and was sold to CheckFree in September of 1996, Cook continued to pioneer home banking with the introduction in 1998 of Open Financial Exchange (OFX), a computer language that became the technical standard in online banking. Microsoft and Checkfree became partners in the venture, which connects home financial software users with their bank computer systems, allowing them to pay bills and make investments. In 1997, Cook also made plans to branch out from software to institute an online variety of financial services on the web. “Just like booksellers and CD stores, Intuit would get a cut of every product sold through its site,” explained Kourosh Karimkhany for Reuters Business Report. “But Intuit’s line of work would be much more lucrative: the commission on a $500,000 life insurance policy is much bigger than the cut on a $10 paperback.” Cook told Karimkhany, “We believe there’s a huge business opportunity in providing the marketplace where buyers can meet sellers of financial services.”

Intuit continued to expand its business with its purchase of 19 percent of the search engine Excite, and its establishment of a financial news site, CNNfn, within the CNN web site. In August of 1998 Cook stepped down from his duties as chairman of the board to become chairman of the Executive Committee. He remains active in the firm full-time, and his ideas and guidance continue to be a valuable asset to Intuit.

Social and Economic Impact

Intuit’s introduction of Quicken, TurboTax, QuickBooks, and other software revolutionized the way people manage their personal finances. These products have helped millions of users streamline their home and office bookkeeping, and made it much easier for people to do their own taxes. Its OFX program may revolutionize the way banking services are conducted in the future. After all, it took 15 years for consumers to get comfortable with automatic tellers, or ATM bank machines.

With Intuit’s entry into online financial services, the company’s goal is to be a “middleman” offering a broad array of product choices. The site will enable buyers to apply for mortgages, health insurance, life insurance, auto insurance, and home insurance online, making it possible to shop around for these services at all hours. Previously, calls and visits to sales offices had to be done during office hours: precisely when most people were on the job themselves. Intuit, by opening up this area of commerce to online shoppers, is a major player in a new era of convenience and flexibility.

At the end of their fiscal year in July of 1997, Intuit had sales of $598.9 million, up 11 percent from 1996, with a net income of $68.3 million. In 1998, the CNN web site (http://cnn.com) cited an Associated Press report that claimed Intuit held 82 percent of the $225 million personal software market, whereas Microsoft only held less than 3 percent. A Business Wire article in June of 1998 also reported that Intuit held 80 percent of small business accounting software, with 2 million people using its QuickBooks product. With the past success of Intuit’s product line and the continuing involvement of the visionary Cook, chances are good that the company will continue to grow and stay at the forefront of new services and products in the area of personal finance.

Cook, Will Marion(1869–1944) - Composer, violinist, conductor, Vows Never to Play Violin Again, Chronology [next] [back] Cook, John, Sr.(1810–1855) - Educator, minister, Chronology

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