On Feb. 28, 1995, I interviewed Scott Cook, the founder of Intuit.
Intuit was originally known for products like QuickBooks, Quicken and TurboTax. Intuit was in the process of being acquired by Microsoft in what was a very hostile takeover.
Although no one would go on record, the takeover was based on the proposition that Intuit would either go broke during the next year due to Microsoft offering its customers free Windows compatible financial software or, the other choice, accept Microsoft’s cash offer.
I found Scott to be a very brilliant, thoughtful and risk-averse individual. Scott grew up in a suburb of Los Angeles.
He was accepted to attend Stanford University, however, his dad was unemployed at the time and the only good college the family could afford was the University of Southern California.
After graduating from USC, Scott was accepted into both Harvard’s and Stanford’s graduate business schools. He went on to receive an MBA from Harvard Business School.
The birth of Intuit
His first job was in consumer marketing at Procter & Gamble as the brand manager for Crisco shortening. After a few years and a long desire to move to Northern California, Scott accepted a job with the consulting firm Bain & Co. in Menlo Park, California. This is where he got the idea to start Intuit.
“There are more venture capital firms in Silicon Valley than any other place on the planet,” Cook said in the interview.
“We got the product halfway built so we could show a real working prototype. We had great market research and we went out to the venture capitalists. We absolutely struck out. We talked to over 25 venture capital firms. And no one wanted to fund us.
“When you have no funding, you go to almost any source to try and find it. I used a lot of sources. They invented this thing that banks called lines of credit (credit cards) about the same time — and I could get unsecured lines of credit, personally, and I used several of those. I borrowed money from my folks and ultimately, when no one else would … even the business had really tanked and we looked dead, my parents were the one last source where they would still loan me more money.”
Cook recalled when someone in the company had an idea that would take at least a little bit of the pressure off:
“He said, ‘Why don’t we try going to a few wealthy individuals as opposed to professional investors,’” Cook said. “And he knew two guys and they invested. Not a lot. A small amount of money that seemed like a lot to us then — a total of $151,000. And that allowed us to keep the doors open for six months.”
Soon after our interview with Scott, the Department of Justice started a serious inquiry into Microsoft’s buyout of Intuit. This action resulted in Microsoft rescinding its buyout offer. The employees at Intuit responded with a companywide cheer.
Scott is now a billionaire. ●
John McLaughlin is founder and president of the Silicon Valley Historical Association.