The Breaker Times

Today’s episode of Decoder, well — it’s a ride. I’m talking to Intuit CEO Sasan Goodarzi, who’s built Intuit into a juggernaut business software company through a series of major acquisitions. Quicken and QuickBooks are incredibly well known as personal finance and small business accounting software, but nearly everything else — TurboTax, Mailchimp, Credit Karma, and loads more — were acquisitions of some kind along the way.

That leads to a lot of challenging structure questions that Sasan and I really got into — integrating all those companies and their different approaches to software requires big decisions, and Intuit made a big decision handling it all by betting on interoperability that I found fascinating.

So far, that sounds like normal Decoder stuff, right? Here’s where it got weird. I couldn’t have the CEO of Intuit on without asking about tax reform in the United States. Individual income taxes are more complicated in the US than in almost any other developed economy, and Intuit has been lobbying hard since the late 1990s to keep it that way to protect TurboTax, spending nearly $3.8 million in lobbying in 2023 alone. There’s been extensive reporting about it. This lobbying has had mixed results: truly free online direct filing with the IRS began as a pilot program this year and is expanding to be available for more than half the US population in 2025.

It’s also not just lobbying: in 2022, a coalition of attorneys general from all 50 states got Intuit to agree to a $141 million settlement that required Intuit to refund low-income Americans who were eligible for free filing but were redirected to paid products. In 2023, the FTC found that TurboTax’s “free” marketing was willfully deceptive, and after the agency won an appeal early this year, Intuit was ordered to stop doing it.

I asked about that, and Sasan disagreed with me, and we went back and forth for a few minutes on it. It’s Decoder; we have exchanges like this all the time, and I didn’t think anything of it.

But then I got a note from Rick Heineman, the chief communications officer at Intuit, who called the line of questioning and my tone “inappropriate,” “egregious,” and “disappointing” and demanded that we delete that entire section of the recording. I mean, literally — he wrote a long email that ended with “at the very least the end portion of your interview should be deleted.”

We don’t do that here at The Verge. As many of our listeners and readers know, we have a very explicit and very strict ethics policy. The most important thing to note is that we never allow anyone to preview or approve interview questions, and we certainly do not allow anyone to review or alter the work that we publish. I told this to Rick, and he came back and asked that we “delete that which takes away from the conversation,” which he defined as “raised voices” or us “speaking over each other,” so that “listeners understand your question and the answer Sasan gave.”

I have to be honest with you — that’s one of the weirdest requests I’ve ever gotten. So here’s what we’re going to do: we’re going to run that whole part of the interview first, unedited, so you can tell me. It’s about five minutes long, and you can decide for yourself. Then we’ll come out of it, and we’ll run the rest of the interview, which, like I said, is an otherwise fascinating episode of Decoder. Okay, here’s that bit:

All right, let’s talk about taxes. You brought it up. Intuit is legendary for running TurboTax and also legendary for lobbying against free direct federal e-filing. How much of your budget is allocated to lobbyists?

Fundamentally, that’s a wrong premise, and it’s not accurate. In our lobbying, we spend a couple of million dollars fighting for simplified taxes. We don’t lobby against free. And by the way, free is available to all Americans now, which is, if you choose to do your taxes for free, if every American chooses to do their taxes for free, it’s available today through private industry. We have heavily been focused on making taxes simpler. Just tens of millions of lines of tax code makes it very difficult for a customer to understand taxes, much less companies like us that are trying to create —

Wait. The simplest version of taxes is the government just sends you a return and it’s done, and Intuit has lobbied against that. Would you support the government just doing the taxes for people and sending the refunds?

At the end of the day, you have —

Many countries in the world do that.

Yeah, but you have to change the tax system. It’s not about software. So if we change the tax system, where —

Are you going to lobby to change the tax system to let the government do a filing for you and send people checks?

If government wants to change the tax system —

But I’m asking you, you’re spending the dollars, would you lobby for it?

Lobby for the government changing the tax system?

The simplest version of the tax system would be to just have the government do it and send people their refunds or ask people for money.

I have more important things to do than to lobby the government to send a tax bill.

But you have lobbied against that. That’s what I’m saying. That reporting is clear. You’ve lobbied against… Intuit, it is not you. Intuit has lobbied against that very specifically.

Well, I am Intuit, right? And so it’s okay to put me and Intuit in the same verse. We have very much focused on simplifying taxes. That’s what we lobbied for: simplify the tax code. That’s simply what we’ve lobbied for.

When you see free direct federal e-filing arrive, I think today, literally today, just before we started speaking, the government announced it will be available in half the states, which is about 60 percent of the population. Does that have a revenue impact on you? Do you get an email saying, “We project TurboTax revenue will go down by X?”

We do not. Free is available to all consumers today. And so it really is not relevant to our business. And in fact, proof points are always important. In the last five years, two pretty formidable companies got into providing free tax software. One was Credit Karma, before we acquired them, 100 million members. They provided free tax software — no impact in the tax industry. And then we sold that to another formidable company, and there’s really been no formidable impact to the structure of the tax industry because free is already available. 

Our view, by the way, very strongly, and we’ve been on the record, is that this is a solution looking for a problem. Free already exists. And by the way, what the government is providing is not free. You’re paying. Your tax dollars are going toward building software that already exists for Americans. That’s something that we’ve been on the record and private industry has been on the record, that from our perspective, it doesn’t make sense. Free already exists, so why build another one?

I’m going to ask you this question. I can already tell that you’re going to tell me you disagree with my premise. I am going to ask it anyway. Broadly speaking, I would say the criticism of Intuit’s free products, when it comes to taxes, is that it says it’s free and then, somewhere along the line, they slide you into paying. The government has complained about this. That is a reputation damager for the company. 

Again, I get emails from Decoder listeners asking me what questions to ask you. And it’s that, it’s that dark pattern feeling inside of, in particular, the free tax product. Is that something you want to fix? Do you worry about that damage to the reputation?

Yeah, I love your question. Let me answer it in two ways. One is there are over 100 million customers that we’ve served for completely free. It’s more than the entire industry combined. So we’re very intentional about making sure that we are a big player when it comes to free tax software. On the other hand, anytime we see something that needs to be improved, we take it very seriously. We take our reputation very seriously. So I can tell you, in the last several years, we’ve been very intentional about going through our advertising, all the way through the product, top to bottom, to really improve where we need to improve, to ensure that customers really understand what they’re eligible for and what they’re not eligible for.

In fact, last year, one of our advertisements that we ran on TV said, “Hey, 37 percent of the population is eligible for free, and these are the qualifications,” just so we could be very clear and transparent. And that’s from what we’ve learned where we can improve. So although I’m proud of the number of customers that we’ve served for free, to me, there’s always something you can learn and always something you can get better at. And this has been an area where we’ve improved our end-to-end experience, from advertising all the way to checkout, to make sure customers are very clear what they’re eligible for. That’s very important to me and very important to the company because our reputation matters.

All right, what do you think? Was that contentious? Should we have deleted it? You let me know — I’m open to the feedback. Right now, I’m mostly just amused and a little befuddled.

Here’s the rest of the episode, with some very interesting ideas about how to integrate big acquisitions into a single tech platform inside of it. Also, I asked why Intuit shut down Mint, which honestly, is the thing I should have been the most outraged about.

Okay, Sasan Goodarzi, CEO of Intuit, the rest of Decoder. 

This transcript has been lightly edited for length and clarity.

Sasan Goodarzi, you are the CEO of Intuit. Welcome to Decoder.

I am very excited to talk to you. You just announced a bunch of AI products that are interesting. You’ve been changing the company around. Let’s start at the very beginning: Intuit is 40 years old. A lot of people are familiar with your various products like TurboTax or MailChimp. What is Intuit now? 

First of all, with our 40 years young, I’ve been with the company for half that time, and when I stepped into this role, the decision we made was to play a far more meaningful role in the lives of consumers and businesses. So we really started on a path to shift the company from a tax and accounting platform to a platform company. Businesses, in essence, can rely on us to be able to grow and run their business, and consumers can power their financial prosperity. So that’s the path that we started down about five-plus years ago. 

But most importantly, we said, “Hey, we have to create experiences that, in essence, are done for customers, rather than creating workflows where people have to do the work to run their business, and manage their cash flow, or manage their personal financial life.” We need to create done-for-you experiences where we deliver benefits and insights. Like marketing is done for you, we manage your cash flow, quote-to-cash for you; books, accounting, taxes are done for you.

In order to do that, we bet very early — almost six years ago — on data and AI. Frankly, we did it for very practical reasons because in order to do what I just articulated, which is focus on your bottom line, your revenue and profitability as a business, or your financial household savings as a consumer, we have to actually leverage data, your data, and leverage AI to deliver these insights and experiences. 

Today, to answer your question, we have become a platform company. What that means from the lens of a consumer and a business is that consumers can use our platform all in one place to be able to build their credit, manage their money, get financial products that they need, like credit cards, loans, insurance, a mortgage for their homes, and also be able to get their taxes done. Then, we help them with, “What should you do with your refund?” We now do all of the gamut because we wanted to play a meaningful role in the life of consumers.

For businesses, you can manage your customers, market to your customers, be able to really manage your quote-to-cash, your cash flow, and make sure your books are right for tax time. So now we have all those capabilities. The future for us is how do we create everything in a way that it’s done for you versus you having to do the work.

It’s really interesting that you mentioned starting with AI six years ago. Obviously transformers only really burst on the scene a couple years ago and now that’s really accelerating. So I want to spend some time talking about the differences between the AI technologies you were betting on before and what’s happening now. 

 But before we get to that, I want to talk about how the company is structured and built. This is a company that is kind of built through acquisitions, maybe entirely built through acquisitions, starting with buying TurboTax in 1993. You spent a combined $19 billion on MailChimp and Credit Karma just in the last four years. How do you think about integrating all those disparate parts? The example of TurboTax for me is particularly interesting, because that became the company. You acquired a company that became the company. Are you thinking that way with MailChimp and Credit Karma as well?

I love where you started because most people don’t know what you just articulated. In essence, this company started with Scott Cook, our founder, creating Quicken and realizing the way people are using it, they’re small businesses trying to manage their money. That’s what gave birth to what today is our QuickBooks platform. But TurboTax, our payroll offering, MailChimp, Credit Karma, they’re all acquisitions. Particularly, in the last five years, a lot of our platform play and where we are today has been based on a lot of organic innovation and investment. But also, we bought these two big brands, two number ones in their space — Credit Karma and MailChimp — because they come with a lot of data and a lot of AI capabilities. In particular, Credit Karma has a lot of machine learning and AI capabilities that we’ve coined Lightbox.

The intent of all of this is to create one platform. It’s to really integrate the products so that customers in one place can grow their business, run their business, and be able to manage their personal life. I think five years from now, we’re going to look back and go, “Wow, the addition of all the things you had, plus what you did with Credit Karma and MailChimp, were the key to ignite the next chapter of the company.” But the answer to your question is: yes, we’re stitching it all together to create one seamless platform.

Everyone says they can do that. Most companies succeed and fail, right? That’s an inconsistent process. MailChimp, in particular, was a big company with its own culture, and that integration was a little messy. We had the new CEO of MailChimp, Rania Succar, on the show a while back, and we talked about that integration. How is Rania changing the culture because she’s Intuit’s CEO, she’s not the founder CEO that they had before. You’re the CEO of the umbrella corporation. How do you think about having all these companies and all of their CEOs under you?

The way we run the company, we’re very intentional about goal setting. There are four things that are key artifacts that create who we are today. There’s our true north goal, which is how we set goals for the company. Two, it’s our mission. Third, it’s our values. Then, last but not least is our strategy in the five bets of the company. Those four things are the way we run the company. The reason I started there is we have very specific leaders that lead parts of the company, but the expectation, the goals, are about how we are creating a platform. 

For instance, in the case of MailChimp, the charter of MailChimp is not to be run standalone. It has two charters, just like Payments, Payroll, our accounting team. It’s about how we integrate across the platform because we win as a platform. That’s a lot of what’s ignited our growth over the years. But then two, whether it’s MailChimp, Payments, Payroll, or TurboTax, they have to be good products, and they have to perform on a standalone basis.

So the expectations are that we win as a platform and how we integrate our products to be able to win. That’s how I measure every leader. So if you were to spend a week in the company, what you’d really get a sense for is what we’re trying to do to win with our business platform, what we’re trying to do to win with our consumer platform, versus there’s a bunch of pieces and parts and everybody is working towards their own true north. There’s really one true north that we really work towards, and that’s how we run the company. It’s our leadership expectations, it’s the mechanisms of the company and how we measure success.

One of the things that’s really interesting here is these component platforms are still divisions, right? MailChimp has a CEO. Credit Karma was a big company that you acquired. Usually when companies like Intuit acquire something like Credit Karma, you promise the people who work there a measure of independence, but you’re talking about stitching it together into a platform. 

There’s some technical stuff there that I definitely want to talk about, but there is just the operational side of saying, “Now you’re part of a bigger thing,” while still keeping the walls up and still saying, “We have different CEOs.” That’s very different from most other tech companies. How did you make that choice, and is that durable over the long term?

Yeah, first of all, I love the nature of your question. Let me be clear, Rania is no longer the CEO of MailChimp. She is the segment leader and senior vice president that runs our growth segment, and MailChimp is a part of it. We did that very intentionally at the beginning, just from a cultural integration. But we don’t have CEOs within the company. Even Joe Kauffman, who runs our Credit Karma business, is now reporting to Mark Notarainni, who owns our consumer business, and he is the head of Credit Karma, as a senior vice president who runs Credit Karma. 

That CEO element was just a cultural transition. We have leaders who, when they look at their paycheck, it’s Intuit, and their expectation is to serve our customers. It goes back to the way I answered the question earlier. If you were within the company, what you’d get a sense for is really two things. One, we have mission-based teams because in order for teams to have a cause to fight for, they have to know they’re fighting to create the best payment capabilities, bill pay capability, accounting capability. And that’s what we term “mission-based teams.” They have a mission and their focus is that mission: Payments, MailChimp, TurboTax, whatever it may be. 

The other element is the leader’s job: the mission, the platform, and to win as a platform. So, our discipline, our rigor, and how we run the company is actually our strength. From the outside looking in, it may seem like they are parts and pieces, but within, we’re all solving for the same thing, which is how do you win as a platform?

Rania hinted that that change was coming when she was on the show, so I wanted to ask you about it.

That change came and went.

One of the things I always ask everybody is how they make decisions. Tell me about that decision. Obviously she knew it was coming when she was on the show. You’ve since made that call. What does that look like to walk up to someone and say, “Hey, you were the CEO, we’re changing it. We’re not doing this anymore”? How did that unfold for you?

Well, when we make an acquisition, whether it’s Credit Karma or MailChimp, before we make the acquisition, we jointly create — with the founder of the company and our broad leadership team that’s informed of the potential acquisition — a six-pager. And this six-pager lays out: What are we going to do together? Why are we buying? What’s the vision of what we’re trying to create? And the vision is to integrate to create one platform. 

What are the key priorities? Particularly, we focus on acceleration, not integration — although everything we do in the product is integration. In a company of our scale and size, clarity matters a lot. Even basic things like what we will do in the first 90 days, what we’ll do in the first six months, and, clearly as important, what we’re not going to do, is all part of not only the six-pager, but the playbook.

Part of the playbook all along was that we’re going to create one platform. When I spoke to Rania years ago to take on this role, it was very clear that at the end of the day, she would take on the CEO role, and that would be the title for an interim period for a cultural transformation. But her charter is the same. It’s more about the SVP of the category. And so it’s important to have those conversations upfront. 

We’re not interested in leaders who are pursuing titles. Even when we recruit from the outside, we’re interested in folks who want to really fight for the same cause. They’re in love with our mission. Of course, everybody has to be thoughtful about what’s right for them as individuals. So we take all those things into consideration. But we have these conversations upfront, and it was just part of the transition.

Tell me how Intuit is structured now, then. How is the company broadly organized?

We’re really structured as a platform. What that means is we have a leader who runs our consumer platform, and a leader that runs our business platform. We actually have a leader who looks at the network effect and ecosystem effect between consumer and businesses. Then, we have a CTO who is responsible for all of our technology in the company, all of the spend in technology. 

The segment leaders — the consumer segment leader, the business segment leader — decide what’s most important to drive growth and deliver for customers. It’s our CTO that owns all the technology that then decides: how do I need to ensure that I allocate the dollars and the people to achieve what we want to achieve across the platform? And then we have a customer success platform leader that owns all of customer success across the company. Of course, then we have very important roles around M&A, people and places, legal and finance. 

But we run the company as a platform, and the leaders, in the case of the consumer and the business segment leader, they’re responsible for the outcomes of the segment. I also hold them accountable for how the company performs because I want to make sure we’re making trade-offs to win as a company for customers and not just have blinders on in our segment. We’re, in essence, organized around being a platform.

If you’ve got the two platform leaders — I’m assuming they report to you — and then you’ve got a CTO who’s making technology decisions, I’m assuming you tie-break a lot there. If you’re responsible for the success of the consumer platform, for example, and you really think you need some technology built or built in a different way than the company currently has, and the answer is no, I’m guessing that comes to you.

I don’t tie-break enough, and sometimes I talk to the team about if enough stuff is getting to me. So I don’t play a huge tie-breaker role. It’s actually even better today than it was  three or four years ago. And the reason is [Marianna Tessel] and [Mark Notarainni], Mariana runs our business segment; Mark runs our consumer segment. Mariana used to be our CTO; she was heading up all of technology for the company before this role. Mark was actually leading all of our customer success before stepping into running the consumer platform. And we promoted both of their proteges. 

My point is there is a very thoughtful collaboration between the team because we’re very clear about our strategy. We’re very clear about the deliverables for both the year and the next three years out. And a lot of the discussions and tie-breaking happens between the team.

I get involved particularly, and very deeply in our one- and three-year mechanism. That’s a mechanism where not only do we review priorities, but we actually review: What are the deliverables for this year? What are the deliverables for the next three years? What’s resource, what’s not, and why? Our CFO Sandeep Singh Aujla and I will get involved if we feel like there are certain areas where the team has made all of the resource allocation trade-offs but we have an opportunity to fund even more opportunities. We’ll get involved in those types of decisions. 

I have a lot of gratitude for my team. Because of the mobility that we’ve had, they’ve seen all parts of the company. There’s a lot of natural debate and trade-off decisions that are made within the team without an escalation to me. But once in a while, maybe once every couple of months, there’s something I have to get involved with just to break a tie or make a resource decision.

The other challenge of building a company through acquisitions that you then have to integrate is the technical foundations of all those companies are different. The data storage requirements of those companies are different. The databases, the customer databases, all that has to be integrated at technical level. How are you managing that? That seems like the biggest problem you have, to buy a company the size of MailChimp and say, “OK, we’re plugging you into QuickBooks.” Those are very different products. How does that work?

We do a lot of diligence before we make an acquisition. Let me be clear, no matter how good you are at due diligence, there are things you’re going to get surprised with.  But the three areas where we spend a lot of time on due diligence is, one, just culture fit. I have a very strong belief that no matter how great of a strategic fit something is, if you’ve got two cultures that may clash, then it’s just not going to work. So we do a deep culture assessment, and I personally get involved, depending on the size of the deal, to really assess the culture for myself as well. We, of course, do a very deep strategic assessment. Then we do a very deep capability assessment.

So this goes to your question. We will assess. What are their compensation schemes? What are the systems they have? But most importantly, we really thoroughly assess both their data and technology capabilities. We have come a long way and so has technology in terms of integration. 

To specifically answer your question, one of the wonderful things about Credit Karma and Mailchimp (but I’ll just use Credit Karma in this case as an example), is the amount of consumer data that they have and the amount of consumer data that we have within TurboTax. The reason it was a very attractive acquisition is then what we can do, with customers’ consent, to use their data to deliver benefits to them that otherwise nobody else can. Because we have a 360-degree view of their information. Rather than having to take their data lake, our data lake, and the cloud that they sit on, which is Google Cloud (the rest of the company is on AWS); rather than integrating, we actually innovated across the technologies, where we built a data pipe where the data is shared without all the data having to be all integrated. 

We’ve actually built bridges in terms of how Google Cloud and AWS work together. So a lot of our technology innovation, because we’re API-oriented and services-based, is actually about connection vs. integration. That’s really what has propelled what’s possible. Credit Karma has great platform — data platform, AI platform — we didn’t have to replace it or create one integration of a platform. We built pipes where we can achieve the product innovation for our customers. So that’s the approach that we’ve been taking, and that’s what we do in the due diligence just to make sure that we can in fact do that. With a platform of this scale, if you have to rewrite the entire code or integrate the stacks, it just becomes too much work and not worth it.

That is an acquisition strategy. We’re going to depend on technical interoperability, and we can build data pipes between different cloud providers. It seems like that strategy has been working. There have to be downsides of that strategy. What are the downsides?

Well, the big downside is what I mentioned earlier, which is anytime you do due diligence, there are things you’re going to be surprised at with the upside; there are going to be things that you are surprised on the downside. The devil is in the details. For instance, in one of the acquisitions, it wasn’t on any cloud, and we’ve been working on getting all of it on AWS. That’s taken about six months longer than what we thought. That’s an example of where you get surprised, where you assume it’s going to take a six-month period to do something, but it takes a year. 

We sort of baked that into our thinking, that we’re going to be wrong in certain instances. There are things that’s OK to be wrong in, and there are things that’s not OK to be wrong in. So the areas where it’s not OK to be wrong is the assumption that you can actually build a data bridge and a data pipe between the platforms. If you’re wrong about that, then that sort of blows up the whole premise of what you thought you could do in that timeframe. 

Now, the great news is — knock on wood — we’ve proved that out across our acquisitions. The things that are OK to get wrong, and most of the time you’re not going to get perfectly right, is: how long is it going to take to do something? And the example I just articulated, in the case of transforming one of the acquisitions to be entirely cloud based, it’s taking about six months longer than what we thought. That’s OK. It’s just an element of time versus an element of doability.

Do you ever have broader questions about the strategy overall? I’m guessing the person who goes and negotiates with AWS would love a little bit more demand from whatever’s on Google Cloud to say, “Look, we’ve got more scale, lower the rate.” Those are the kinds of trade-offs that are made. Do you ever have those conversations where actually increasing scale or concentrating further would be the benefit versus interoperability?

We do have those conversations. First of all, I had the pleasure of being our CIO for a couple of years, and I was deeply involved in shifting the company from all of our own data centers to AWS. I worked very closely with the Amazon team and [CEO Andy Jassy] to really drive their roadmap, but get us prepared to go to the cloud. One of the reasons I started there is that one of the decisions we made very early on is to build our capabilities, our apps, and the way we built cloud-ready apps was so we would never get married to or stuck only with one platform. We wanted interoperability. 

We actually like the fact that we’re on multiple clouds. With the age of AI, we’ve built our own large language models, but we also experiment using about nine, 10 other large language models externally. I actually think it’s very healthy to understand what works in what situation and what doesn’t work. Multiple clouds, or in this case multiple LLMs, are actually quite healthy because you learn faster, you pivot faster. 

But we have these conversations all the time. Probably that most heated debate that we had five years ago, when I stepped into this role, was whether or not we would bet on AI. Because AI wasn’t popular then; it wasn’t the buzzword that it is today. We debate technology bets. We debate interoperability versus going all in with a partner all the time. Because it’s actually critical; they’re critical forks in the road and critical decisions for the future. So I’m definitely involved in those key discussions.

Interoperability is really interesting, especially for a company built through acquisition. Regulators around the world right now? Not so hot on acquisitions. I’m assuming you have some thoughts about that. 

But the other thing they’re really into is interoperability. They are saying to various companies, “You have to make your products and services interoperable with each other, so you can lower switching costs, and consumers and businesses can have a vibrant market to pick and choose their vendors from.” If you’ve built the company through acquisition and interoperability, do you think some regulator’s going to come to you and say, “All of the interoperability that you built for Credit Karma and QuickBooks, you got to open that up to another financial accounting vendor?”

All of our decisions are based on delivering for our customers, winning in the marketplace, and driving growth for the future. We don’t make decisions that are in the context of: what will a regulator think about something? We have very solid governance in the company. We have data, privacy, and security principles, which we abide by, all focused on our customers. 

To your question, we don’t spend a lot of time worrying about how now that we’ve built the company in this way to win and deliver for customers, what could a regulator do. At the end of the day, regulators generally want to do the right thing. Generally, it’s not politically driven. Sometimes it is, but our view is that they always want to do the right thing, and we always want to do the right thing. We would always have a conversation if there’s any areas they have questions on. But our focus, our compass, is very clear.

Would you let your competitors use the interoperability hooks that you’ve built for your own company to interface with theirs?

We live in a world of competition. When we think about the businesses that we serve, what we really care about is the businesses that are transacting on our platform, but sometimes they will use Square payments; sometimes they will use PayPal; sometimes they will use other payroll providers. We provide the capability to integrate those capabilities on our platform because we want the customer to be able to serve their customer the way they want. When you look at our AI-driven expert platform strategy, a very important element of it is that it’s open, and it’s open because it helps us deliver for our customers and win.

Let me ask you the key Decoder question, which we have been circling around this whole time. How do you make decisions? You’ve been there a long time, you’ve grown with the company, you’ve made a bunch of big decisions. What’s your framework?

Probably one of our largest advantages in the company is, what we term our “Intuit operating system.” It’s the mechanisms in which we run the company — and this is important context to answer your question – if you look at our mechanisms, we have a set of mechanisms around how we set expectations and set strategy. We have a set of mechanisms in terms of execution, and then we have a set of mechanisms in terms of how we galvanize the leaders at all levels and all of our employees. Therefore, we have mechanisms like our six-year plan. And it’s not a financial plan. It’s actually just looking way into the future and looking back to consider what has to change. We have three- and one-year plan mechanisms. I won’t bore you with all the mechanisms, but that’s important context to answer your question. 

Our six-year mechanism is structured such that we question everything that we do. One of the things that we believe in strongly — I believe in strongly — is to never fall in love with what you’ve declared, and always fall in love with the customer, the trends, and how the world is moving. So our mechanisms are set up for certain outcomes and decisions. With our six-year mechanism, the question is: Does anything change in our strategy and bets? And if so, what is it? So the output of it is: what changed and why? Our three- and one-year plan mechanism is all structured around not only the key priorities, but the actual deliverables — what we call input goals — which is a best practice we borrowed from Amazon where every input goal has a leader assigned to it, has success measures, we ensure that it’s resourced, and we also know what’s below the line. Those are all decisions that our teams make, but the decisions that I make are capital allocation, because not everything is created equal, and where we put our dollars and capital.

The last one is we spend a lot of time on culture and people, and those are decisions I’m involved with. Just last week, we had an all-day session, which we have four times a year, focused on people and succession planning. Those are decisions: who’s a potential successor for key roles? A principle that we have is teams can propose who the successors are, but if it’s a direct report to the CEO one day, I decide if they’re actual successors. So every mechanism is set up for an output and a set of decisions, and we’re generally pretty clear: Are those decisions I get to make? Are there decisions the team gets to make? We try to push as many decisions as we can into the organization because most decisions are two-way doors. You can always reverse them. But that’s the structure and framework that we use. It’s our Intuit operating system.

There’s one key decision I have to ask you about, since we’re here, and you mentioned things fitting into the Intuit operating system. I was a very loyal Mint user. You decided to shut that whole service down. What was your thinking there?

There was a very small cohort of customers who were using Mint, and we decided that in order truly to have a platform that we can use to serve millions of customers, we would port most, if not all, of the capabilities into Credit Karma. I can’t remember the exact percentage, but I think 30–40 percent of Mint’s customers are now on Credit Karma —  by the way, happier than before —  and I think there’s 20 percent of customers who we can’t serve today with Credit Karma. 

But we’re OK with that because there was a very small cohort of customers who we could serve on Mint, and we ultimately made the decision to be one platform. By the way, if there’s anything we can do to help you, send me an email. My email address is available on our website. Anything I can do to help you, we will. But we can’t replace Mint exactly the way it was.

How many people are working at Intuit today?

We’re about 17,000 strong and growing.

So the interesting thing about growing is you just laid off about 10 percent of your folks this year; 1,800 people. You said you’re going to hire another 1,800 people to focus on AI. Inside of that decision, and this is the one I really want to press on, I think the company announced 1,000-plus of those 1,800 people were low performers. How did you decide which of those people were low performers?

When I look back at the last five years, there are big decisions that I’ve made and then there are really, really tough decisions that we’ve made — that I’ve made. And this is one of them. At the end of the day, we believe everyone we have in the company is very talented. When you make a decision like this, you’re impacting people’s lives. So, for one, these decisions never come easy.

The second is, we were very clear across five areas, particularly our five bets. We’ve seen so much progress — this is part of our six-year and three-year mechanism — that as we thought about the next two, three, and five years, we felt that it was important to accelerate investments in five key areas; the majority of them are around our big bets. We also felt that in order to do that, there was an opportunity to reallocate dollars from within while we continue to add to our overall investment portfolio.

So this was all driven by acceleration, momentum, and growth. In terms of how we picked those folks, it was all bottoms up. We have a performance management system where managers will go in and they will rate their employees. Generally, 10 percent of the company is what we call “trajectory changing,” and about 20 percent “exceeds expectations.” So about 30 percent of the company is “exceeds” or “trajectory changing.” And generally about 60 to 65 percent are “achieved expectations.” By the way, we have very bold goals, and to achieve expectations is actually really strong performance. And generally five to 10 percent are “does not meet expectations.”

That’s a process that we go through once a year, where managers will put into the system their ratings. So this was done bottoms up at every layer of the organization. It was not a top-down decision. The decision that we made this year was that, in order to move with the velocity that we need to move to reallocate the resources and the dollars, we would, lay off the 10 percent— it was actually more like 8 percent — that fell into the bucket of “does not meet expectations.” So that’s the very bottoms up, very disciplined and rigorous [process], although very tough in terms of how we made the decision.

I feel like a lot of people spend some time every year using enterprise software to rate their employees. I certainly do it. My bosses do it to me. Do you feel like that data is good? Do you feel like that data was actually telling you something? Because at various companies that I’ve worked with, I can tell you that data meant nothing, and at some companies it means a lot.

For us, it’s everything. What I mean by everything is that for us, it’s about goal setting because goal setting is about: what does great look like? And performance management for us is performance management at all levels. We need to performance manage our trajectory changing so that they can become a better version of themselves, and we need the performance management that does not meet expectations. So performance management, for us, is like coaching a basketball team. You’re focused on making every person on the team great. There’s somebody that never comes off the bench; there’s somebody that’s the star of the team. That’s what we try to become great at.

Goal setting for us, discussions on a monthly basis, and then the rating at the end of the year: it’s about the system. I would say the system for us is very, very important. I would also tell you that it’s a conversation I had with the whole company this year. We needed to up our game in this area. When I look at the last several years, we have not been as great as we need to be in terms of really being great at setting goals for every individual — that’s meaningful goals with very clear success measures — and then having conversations because it’s a two-way street in terms of how you become a better version of yourself. So we actually take the end-to-end approach to goal setting, to performance management, very seriously.

Do you think that shows up in the products? I will tell you, a lot of Decoder listeners have asked to have you on the show basically for feature requests and bug reports. There’s other stuff that a lot of people ask us to ask you about, but in particular, the software isn’t as good as it should be. You’re moving me from my desktop client to a web client because that’s where the platform is, and the web client is not nearly feature complete for things like keyboard commands. Do you think that this process is going to make the products better?

Everything that we do around goal setting and performance management is about delivering for customers. That’s the whole, sole purpose of why I exist, why our team exists: it’s all about the product. So the short answer is yes. I would also separate what I just said from the premise of your question, which is desktop to the cloud.

The reality is we were born 40 years ago. We were born in the era of DOS, and we were born as a desktop company. Frankly, our desktop customers, both on the consumer side and on the business side, built who we are today. At the same time, the workflows, the features, and the functionality of desktop are not intended to be translated to the cloud. If we did that, we would not be able to continue to grow with most of our customers or acquire new customers, particularly as we’re trying to create done-for-you experiences versus features.

A lot of our focus is: how do we make the transition for our desktop customers as easy as possible to the cloud? That said, if you look at any company that’s had to go from server to cloud, or desktop to cloud, or on-premise to cloud, there’s always a lot of growing pains because cloud platforms are not a replication of desktop platforms. We’re really solving for, as much as possible, the ease of migration for our desktop customers. 

But we’re truly building a cloud platform that’s built for new customers, and customers who have embraced the cloud platform from 10 years ago. I say all that just to say, we aim to make our desktop customers as happy as possible, but really it’s impossible to replicate what they want in the cloud because then our cloud offering would be very old-aged and workflow-based, which is not what customers of today want.

Do you anticipate supporting the desktop clients forever?

We have for many, many years. Many of our desktop services are actually now on the cloud, and we’ve built it in such a way where there will be a seamless transition to the cloud one day. At this point, we’ve not declared —

Your goal is to move everybody to the cloud.

The goal is to eventually move everybody to the cloud. We’re not going to force customers who… For instance, the workflow is not going to be the same in the cloud, but if you have a need for a particular module that we absolutely don’t have in the cloud, we’re not going to force you to move to the cloud. Eventually — that could be two years from now, five years from now — I think everybody’s going to end up being in the cloud.

Let’s talk about AI and then I’m not going to let you get out of here unless we talk about tax filing. You know it’s coming. Are the AI features going to be in the cloud only or are they going to come to the desktop platforms as well?

No, they’re primarily only in the cloud. In fact, everything that we’re building in the cloud and have been building in the cloud is just powered by our data and AI platform capabilities.

You just announced a bunch of AI features at your investor day. It’s on the order of when people log into QuickBooks, they’re going to see a feed with new insights on cash flow and other opportunities to use AI. Let me just ask you the threshold question that I’m asking every CEO about their AI products: can the AI technology you have now do all the things you want it to do? Because I’m not 100 percent sure that LLM technology can do all the things that everybody wants it to do.

So let me say two things in context of your question. The first one is we’re not launching AI features. Our entire platform is fueled by data and AI. In fact, our goal is not to ship a bunch of plug-in features that do stuff for you, but to create a platform where marketing is done for you, quote-to-cash is done for you, books and taxes are all done for you. Think about it from what we’re trying to achieve, as the whole platform is fueled by data and AI. That’s the first thing.

The second thing is that when we declared AI core to our strategy, our investments were in machine learning and knowledge engineering. Knowledge engineering is very particular to us; we have patents around it. It takes rules and the relationship of rules and code, turns it into code, and the power of it is accuracy. A lot of what we do has to be accurate. That’s really been the premise of all of our AI investments: machine learning, knowledge, engineering.

About three to four years ago, we started investing in generative AI, specifically in our own Intuit financial large language models. Our models are the only models that are trained by the customer data. I set that context to say, we’re in the very, very early days of what LLMs can do. We work a lot with the majority of the companies that are out there, and the progress that’s being made month to month is incredible. 

So, will it do most of what we need at some time in the near future, medium future? Absolutely. I believe AI will one day be as smart as humans, if not smarter. I think humans are always going to be a critical part of the picture for us in our industry. But it’s still very early days. I don’t want to at all suggest that everything can be achieved with AI today. We’re at the beginning of a very long journey. It’s 1999 internet, the part of the journey we’re in now.

LLMs are somewhat notoriously bad at math. You run a financial platform for a lot of people. Do you trust it?

Not on its own. That’s why I mentioned that when you look at our AI platform that sits on our data layer and data platform, it’s the combination of machine learning, knowledge engineering, which is very good at math, and our LLMs that work in concert to deliver experiences to ensure your taxes are done right, to make sure your accounting is done right. So on its own, no, but in the combination with our other elements of our AI platform, absolutely.

Are you getting economies of scale from other AI companies investing in this space? I’m thinking particularly about Meta, which is doing a lot of open source models, and it’s  pushing far ahead on generative AI. On knowledge engineering, are you getting the same kind of economies of scale from the industry, or is everyone focused on LLMs?

We’re getting a lot of economies of scale because of our own investments, and because we were so early. We did this for very practical reasons. But we actually test and experiment across the board, with Entropik, AWS, Gemini, Llama, open source, and part of the experimentation is how it could potentially be a leverage to our LLMs. Because our LLMs have the agency and the authority. They’re the brains of delivering the experiences that I articulated. 

So, we’re not getting economies of scale from other LLMs. In fact, I would say it’s the reverse right now. I think two years or three years from now, we’re going to get economies of scale, but today the economies of scale — and it’s why we’ve been able to deliver platform leverage and margin leverage — are from all of our own investments. Over time, I think it’ll help.

You’ve got a lot of small business owners using your products. They’re looking for insight. They are probably not financial experts. The LLM — or whatever systems — you build tells them something: it’s a hallucination, it’s wrong. Have you worried about the liability of that, of giving bad financial advice to a small business owner?

So I love, by the way, the premise of your question, which is this is why we’re focused on done-for-you experiences, because a small business wants to know —

That’s a lot of responsibility to accept: “We’re going to do this for you.”

That’s right. And that’s, by the way, why the essence of our investments, which started six-plus years ago, is, one, based on the customer’s data, not ours. Everything that we provide is very specific and relevant to you. Two, it’s the combination of our machine learning capabilities, our knowledge engineering, and our LLMs that really deliver the performance accuracy and costs that we would want. And we have governance: we have technology governance and human governance internally, just to make sure what we are doing is accurate. 

I’ll just end by saying there’s a range of accuracy. We can’t generally be right when it comes to accounting and taxes. We have to be 100 percent accurate, but then there are elements of, “Hey, you can run this marketing campaign. We’ve put it together for you. We think it could deliver a range of $50,000–$100,000 in revenue.” The range is what matters, not the exact number for customers. So I think accuracy has a limit based on what it is you’re talking about. You got to get taxes exactly right; a range of revenue and what’s possible from a marketing campaign. You can have a range, and customers are totally OK with that.

Do you think over time as you integrate AI into more and more of the platform and that becomes something more customers are paying for, the free Intuit and TurboTax products will remain as big of a mix as you have today?

You have to think about the cohort of customers. There will always be customers that have a simple tax situation where free may be the right thing for them. There’s also a lot of customers that no matter what their tax situation is, they actually want somebody else to do their taxes for them because of confidence. They fear getting it wrong. They want to make sure they’re getting the largest refund. If the IRS comes after them, they want to make sure somebody is there to protect them. 

So they’ll always want to have an expert do their taxes for them. So we believe that over time we’ll still have a mix of free, we’ll have a mix of paying customers, but I think over time our largest growth will come from disrupting what today is the assisted category.

Well Sasan, I could keep talking to you forever, as you can tell. But we’ve got to wrap this up. Thank you so much for being on Decoder.

Yeah, absolutely. My pleasure. Great to see you. Talk to you soon.