>> Voiceover: Live from San Jose, California, in the heart of Silicon Valley, it's the Cube. Covering QuickBooks Connect 2016, sponsored by Intuit QuickBooks. Now, here are your hosts, Jeff Frick and John Walls. >> Welcome back here on the Cube as we continue our coverage here at Quickbooks Connect 2016 live from San Jose at the Convention Center. 5,000 attendees, the third year of this event, more than ever, and certainly that explosive growth is personified in what's happening here. On this floor and the key note station, and of course at home, if you're a small business owner you know exactly what we're talking about. Along with Jeff Frick, I'm John Walls and we're joined now by probably one of the most popular authors, most widely read authors in America today. Malcolm Gladwell, five times New York Times Bestseller Author. Congratulations on that. And the Revisionist History Podcast, which we love. I love the Wilt Chamberlain podcast, Big Man Can't Shoot. Thanks for joining us. Great to have you. >> Delighted to be here. >> So, first off, tell us about, and the whole spirit of this show is about the entrepreneurial capabilities of so many people in the workplace today. What's your thought about entrepreneurism if you will, and what does it take to be a good outside the box thinker? Like so many of these folks are. >> Well there ... The explosion ... Here we are in the middle of Silicon Valley and what this part of the country has done to change the culture of the entire world's economy in the last 20 years, 25 years is nothing short of incredible. Entrepreneurship has gone from something that people thought of as the province of wackos and weirdos and strange people to a kind of thing that kids aspire to do and be. That's an amazing transformation. And I think when we ... What's happened over the course of that transformation is we've discovered that the definition of what it takes to be good is a lot broader than we thought. That many different kinds of people using many different kinds of strategies can be effective at starting businesses and achieving. I think that's been the great take home lesson of this entrepreneurial explosion of the last generation. >> I think probably in all of your works, there are pieces of it that you could extract and apply to this world, but what really struck me I think about David and Goliath, about advantages, disadvantages and making the most of your strengths basically, how do you see that translating or how would you want to communicate that to somebody, a small business owner, who thinks "Man, I'm up against the wall"? "How am I going to cut through the clutter?" "How am I going to get there?" All this sweat equity. But yet, there are advantages that they have. >> Yeah. Yeah, because this goes to this issue of learning strategies that there's a kind of learning called compensation learning, where you are learning out of weakness, not out of strength. You're learning from your failures and that kind of learning is a lot harder to do, but it's a lot more powerful. So the task of the small business owner, who is facing a whole series of disadvantages and weaknesses relative to much larger competitors, there's no question, it's a harder way to go. But, if you can pull it off, you'll end up in a much stronger position. If you can be one of those people who can do compensation learning, and in that book I talk, for example, about how many entrepreneurs are dyslexic, and that's a beautiful example of that. Some portion of people who suffer from quite a serious learning disorder, not all of them, some portion of them manage to turn that around into an advantage. To take something, to take a basic inability to read, and turn that into developing skills or delegation and leadership and problem solving and developing an incredible resilience, the ability to cope with failure. They turn a weakness into a strength and they end up being far more powerful than they would be as a result. And when I interviewed all these successful, dyslexic entrepreneurs for that book, what was amazing was that all of them said, "I did not succeed despite my disability, I succeeded because of it." And that's the crux of it. And so I think there is a silver lining to many of the clouds that small business owners face. >> It's a really powerful statement because so often, people are using drugs and medication and other things to kind of normalize people that are maybe not in the mean, that are on the fringe. But in fact, it's their ability to put a different lens, and see things differently that opens up an opportunity that the regular person just trucking down the road didn't see right in front of them. >> That's what I meant when I said earlier, talking about how our kind of definition of what it takes to be a successful entrepreneur is expanding. I think we're beginning to understand that lots of traits that we once thought of as just problematic have unexpected benefits. Like I remember once reading someone who was putting out that basically, most of the great research scientists in the world have OCD. And you kind of have to have OCD if you want to be ... 'Cause what are you doing? You're spending hours and hours in the lab doing the same incredibly precise experiment over and over and over again, and measuring your results to the slightest. That's OCD behavior that has found a beautiful home. Right? Has found a world where you need to be that way, right? And I read that as like, "That's lovely." These are people who we drugged up and pushed off to the fringes two generations ago, and now we've found a home for them in labs where they're doing incredibly productive and satisfying work. >> Yeah, I think you profiled in one of the podcasts, a cancer researcher who you said nobody really likes the guy, he's kind of an ordinary guy, but he was just so laser focused on the very specific problem that he was trying to solve. He didn't really care. That's what he was all about. >> Yeah, no, this has been a lovely development in our understanding of human capacity. >> So where do the ideas come from? I'm one of the many fans and I've read, and every time I read one of your books, it never ceases to amaze me how much you make me think. Which is, I think, why we're all so attracted to it. Because it seems so obvious, right? After you present this beautiful, elegant case, like "I never thought of that." Where do those ideas come from? What motivates you to say "I'm going to write blank. I'm going to do tipping point." >> I wish I had a system, 'cause right now I'm planning the next season of my podcast, so I need 10 more ideas for that, and I'm starting to write a new book so I need 80,000 words for that. And I'm wondering, I wish I had a big bucket full of ideas. (laughter) So I'm running around with my head cut off talking to people, but I spent the summer ... I probably read 40 books this summer to do with ... Apart from, I'm not talking about novels and fillers, and serious books that I'm trying to get. And I've been going around talking to people, just talking to interesting people trying to work out what I'm interested in. And trying to just uncover interesting things that will prompt me to go in cool new directions. There is a kind of, you have to let your mind ... It's like, the farmer lets his field go fallow for a while. You've got to have a fallow period where you just let everything regenerate and then you plant the crop again. >> But somehow reading 40 books doesn't sound like, to me, you're letting your mind go fallow. >> Well I didn't have a ... I was literally just lying around reading books. It seemed pretty fallow to me. >> What was your favorite one out of that read? Or the most enlightening one out of that read? >> I got on these weird side tracks this summer. I became obsessed with Churchill's Best Friend. Churchill had a best friend who betrays him. And it's this incredibly moving story. And I don't know how it fits in what I want to do, but I want to try and make it fit, 'cause it's such a weird and troubling story about this, I mean a truly transcendent figure in history who has a best friend who stabs him in the back with consequences for the world. Anyway, so I read like seven bizarre, weird, obscure books about this guy. And I was like "There's something there I think." >> He's out there, yeah. >> Alright, so we'll pick something that was a little more topical. Last night, they had a drink making robot machine over in the corner making drinks. And it just brings up, as we get into more automation, more connected systems. We had the huge knockout of the web last week from the East coast. As you look at the future, there's the happy future, where the machines do all the hard work and we get to sit around and read books like you did, which is fantastic. And then there's the darker potential future, where the machines take everyone's jobs. What are people going to do? And if it can make drinks and it can diagnose disease and read every manual that came out. How do people fit? And then there's the middle ground, right? The best chess player is the best chess player and a machine, not either or. So I'm just curious to get your thoughts as we look to the next big wave of AI and machine learning and automation, how you see that shaking out. >> I think it's important not to overstate how much of our lives we will be willing to let machines take over. So it's been very interesting for me as a writer, to observe, for example, what happened with eBooks over the last 10 years. So eBooks come along and everyone says, "The printed book is over. It's going to all going to be on ... Why would you go and lug around a big, heavy book when you can get for a fraction of the cost something that'll be ..." And so there were all these gloom and doom, and expectations, and what happens? Well, it turns out that eBooks are still a fairly sizeable portion of the market place. But it turns out that most people actually want to read a book, a physical object, that that's more pleasurable somehow, that the interaction with this thing, this pages and paper, is pleasing. It's part of the experience. And I think that's a useful ... No, that's not a robot and that's not AI, but it's an important reminder that the interactions and the activities that make up our lives are not just functional activities. They are opportunities for enjoyment and engagement, and part of the reason you go to a restaurant is not just to eat the food, but to engage with the people in the restaurant. Part of the pleasure is the person who brings you the wine bottle and gives you a little spiel. Now, I can replace that person with a robot, but the question is do you want to? Now, you can do it. And I can imagine a future where the robot brings you the best wine in the world and does some algorithm and gives you the finest wine. But I don't know, if I'm having a nice night out and I'm paying 60 dollars a plate for my dinner, I kind of want the human interaction. I mean, it's part of the pleasure. Same thing with self-driving cars. It baffles me as a kind of car guy how everyone assumes that "Oh, well, by 2020, it'll all be self-driving cars." Wait a minute, what if I enjoy driving a car? We've forgotten this. It's actually quite a pleasant thing to go and to make decisions unconsciously and consciously and drive down the road. And I like a manual transmission, I like the feel of driving a car. I don't want to give that up. Why should I have to give that up? So it's like, we can't get ahead of ourselves. You mentioned the chess thing, which is a great example of this. Can you make a machine that will beat a person at chess? Yes, you can. But it's not chess. Chess is a gameplay between two people. That's why it's interesting. If it's played between two machines no one will watch it! So it's this absurd thing. I can also make a machine that can run faster than Usain Bolt. It's called a car. Do I want to watch a race between a car and Usain Bolt? No. Why? Because what's pleasurable is watching human beings race. >> But Jeff hit on something, and then you touched on it with the car, and I think about GPS. And how it wasn't that long ago, and I kind of sound like my grandfather now or my father, that we just drove around, right? And if you came to the traffic, "Oh God, I've hit traffic." But now we use applications that take us, and they're using their intelligence. Is it possible, can you see with this generation of kids coming up now, that artificial intelligence kind of makes our personal thinking obsolete? And we don't process like we do, we don't evaluate, we don't analyze, and so we're raising a whole different kind of human, because of the interaction with technology or what we can sign to technology, because we give up on it. >> Well it'd be different. I think that, so let's stick with cars for a moment. I think now we have a world where a whole class of people drive their car to work in the morning. And when they're driving their car, the number of things they can do with their imagination and mind is limited. They can listen to music or the news or a podcast, or they can just sit there, but they can't ... They can maybe talk on a phone even though they shouldn't, but they can't do work and they can't lie in the back and take a nap, and they can't daydream, and they can't have a meaningful interaction with more than one person. What we're going to move to is a world where some people will give up whatever kind of pleasure or interaction that came from driving a car, and replace it with another kind of interaction. So driving a car becomes ... The time that you're in a car becomes a place where an infinite number of things can happen, as opposed to five things can happen. And I sort of think that's what the world looks like, is we get this incredibly complicated mix. Medicine becomes some mixture of the computer is going to do all the easy stuff, but half of medicine is about being reassured. It's about your personal fears. It's not about the diagnosis, or which drug you take. And for that stuff, I imagine that we're going to have much longer, deeper, more meaningful conversations with our doctors 15 years from now, when the computer has taken all the easy stuff off the table, or the AI, the robot. So in many ways, that world allows for much richer, personal interactions than the one we're in now. The doctor really will have ... My doctor has no time for me now. He's like "I got to move around." >> "Got to go." >> In ten years, it's possible my doctor will be able to sit down with me for half an hour or 45 minutes twice a year and really talk about what's going on with me and that's the promise of the future. I don't think we're going to have a situation where everything's done by the robot. >> Well this is one of those occasions where I truly wish we had tons of more time, but you have a busy schedule and so we're going to allow you to go on, but thank you so much ... >> Thank you. It was super fun. >> John: For sharing this time with us. We've thoroughly enjoyed it. >> Jeff: Look forward to the KeyNote later this afternoon as well. >> And we look forward to the next 80,000 words, so good luck with that too! >> Thank you. >> Malcolm Gladwell, joining us here on the Cube. Back with more from San Jose right after this. (upbeat music)

>> Narrator: 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. >> Welcome back to San Jose, California. We 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 of the executive committee at Intuit. Scott, thank you for being with us. We really appreciate the time and have been looking forward to this for quite some time once we knew you were going to be on theCube. It's good to have you. >> Good to be here. >> 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. (laughter) And then we hit bad times and the things ... We just couldn't get money. 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! (laughter) >> How do I manage all this? >> Yeah, yeah. >> Well a quote that we've heard a couple of times today. We 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. Cause you 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. You gave a great example in that Khan Academy talk about there's really only 1 1/2 things that you should really be focusing on to really move the ship forward. And that was a very great insight. >> Yeah, you know all of of us have the desire to do too many things. You get groups. You've 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 and say what's the 1 1/2 most important? And stay relentlessly focused on that. >> And then how is your role changed? 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 Goodarzi 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's changed a ton. I work really on two areas now which is strategy and coaching our entrepreneurs. So strategy over to 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 helping grow our entrepreneurs and then grow the culture around them to allow great entrepreneurs to invent things to change the world and do that from within Intuit 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, they haven't all been home runs. >> Scott: Oh yeah. >> 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. >> Scott: Yeah. >> So what did you learn you think maybe through your attempts about that culture of trying basically. >> I think maybe the most important thing really dovetails with what you just said. 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 of it 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 kind of lost some of that dedication to running experiments. And it became whose opinion? And you'd build, and it was the loudest opinion in the room. Or the boss' opinion. And that produced a number of failures. Things that just didn't work. Customers didn't buy it. Or they bought it and it didn't 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. That very thing you were talking about. If you got an idea, figure out, okay, what's a leap of faith assumption, let's go try it. And don't debate it. Try it. And then we learned from trying. Oh, a bunch of those don't work. And then we learned from the things. Why didn't it work? And that teaches us something we didn't know before. That maybe the fulcrum, the pivot, to a new idea. And some of those do work or most of it worked. But other pieces didn't. And we learned by doing. Not by debating in a conference room. So to set up your company so that people throughout the company can take their idea and run the experiment. That produces great entrepreneurs and great learning. A continuous stream of learning. I guess the learning begins when you first get real people trying your idea for real. >> Let me follow up. Cause the other thing you talk about is that often comes from the youngest and the newest employees. Which is completely antithesis to a kind of 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, whose got the least clout? Whose ideas are the least listened to? It'd be the new person, the young person. >> Jeff: Right. >> 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' idea. The CEO's idea. And the person that's new. We should be testing each of those. Except in a crisis where you got to 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 that. Ooh, okay. I thought it was going to 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 thread? 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. >> 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 marketer or a finance person. So let's set that aside. Let's cover the commonalities. I think there's a few things. 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're we going to solve that problem? And then there's people who are there to serve. Where it's not all about them. 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 front P&L? Job one is you got to serve who you're serving. The customer or the person of 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 kind of the lessons to say fresh? This started as a checkbook register and now the future of payments and mobile and the options are just tremendous. Bitcoin, 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. 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 are not very far. So for example, and I define 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 paying bills has gotten worse. It used to be all bills came in the mail. So you had a little physical reminder. Some come in the mail, some you get by e-mail with invoices from some people. Some you go online and find a website. You pay some at a bank website. Maybe you go to the biller, 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. The overdraft rate in the country is around 30% of households have a late payment during the year from which they get fees. And the overdraft rates, the overdraft charges can be $30, $35. We have not solved that yet. We got to look and say with all that we've done, that's what we should have done. So we've got a team working on that right now. Because we got re-focused on it. So we'll be coming out in December with stuff in there. 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? (laughter) No. There's not an accountant, there's not a consumer. We haven't solved that yet guys. There are still a hundred million people in the country typing stuff in to systems to do taxes every February, March and April. That's where we want to be. Is ultimately there is no typing in. All that information 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 of 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 that 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. And you got a question, boop boop, there's the answer. >> So you mentioned the phone. Is that the next big growth opportunity? Mobile this is top priority with so many different sectors right now. >> Yeah, yeah. It's the growth today. In fact, every new feature and new benefit that Sasan Goodarzi showed today in his keynote address. Every one of 'em, he showed it on a mobile phone. Every one. It's the fastest growing. 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, say, okay, yep, do it. >> Right, right. >> Yeah, so that's where we're aiming a lot of our innovation. And these are amazing platforms. 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 someone like that. People who work as consultants, contractors, they work for themselves. They've got to keep track of all 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 money right out of their pocket. Thousands of dollars they don't get. They should get that they deserve. 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 stop light 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 then mileage. There's lots of software out there that'll track your mileage but it does by pinging the GPS. GPS takes battery. You ping the GPS all day long, what happens? Zhoom. >> 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've patented now. And it tracks your location without pinging your GPS all day long. So it doesn't drain your battery. So now you had 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. >> And you're taking advantage of the platform. You're taking advantage of the accelerometer. >> Yes. >> More importantly I think. The thing about mobile that most people don't maybe consciously think of is the way we interact with it as you said is little bits of time here, there, and everywhere. >> Scott: Yes. >> It's not the 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 size business. And getting business done. >> Scott: Yes. >> And letting people do those dreams like the gal that was on the keynote. >> Scott: Yes. >> Letting her build her company and her franchise. And not have to worry about am I getting all the right deductions. >> That's right. I think the technology is the enabler. But it's all to enable what? What are we trying to deliver? And you saw it, in the kind of lead of slides. We're trying to fuel the success of small business. This is all about success. The technology's an 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 a, and I know from starting Intuit, 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. If 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, it's your report card on yourself. And we can help make those report cards much better. 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 that 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're being commended for. It's just a great example of all 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 was a pleasure. >> Jeff: Thank you. >> You bet. Back with more from San Jose in just a bit. You're watching theCube here on SiliconANGLE TV. (techno music)

>> Narrator: 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. >> And welcome back here to San Jose, the Convention Center. We're on theCUBE to continue our coverage of QuickBooks Connect 2016. We're here for the rest of today and onto tomorrow for two days at this great event, third year event, that is now going on with 5,000 attendees. So record attendance, great keynotes this morning, another keynote session coming up, by the way, in just about a half hour or so. We'll have some guests after that and then continue our coverage here tomorrow on theCUBE. Along with Jeff Frick, I am John Walls. We're joined by Yumi Clark who's the SVP of product development at Capital One. And Yumi, thank you for being with us here on theCUBE. >> Thank you very much. >> First time, right? >> Yes. >> On theCUBE. >> Yes, first time. >> So Capital One, what are you doing here? In a good way, of course. But what do you find of interest from a professional standpoint with the small business crowd? >> Yes, so Capital One is here because we want to meet our customers where they are today, and many of our customers are actually here at the show, QuickBooks Connect. Whether they be accountants or small business owners themselves, we are looking to build products for them and solutions for them based off of the pains that they have and the problems that they're having. So we're here to do much of a data gathering exercise and see what we can provide to our users. >> So I assume this is an ongoing process, right? This isn't just a one-time hit. Generally speaking, what do you hear from the people with whom you work or that you're supporting, in terms of their pain points for the services you provide and what you can do from a solutions standpoint? >> Yes, well actually here at QuickBooks Connect we have been doing some informal polls with the people that have been attending, and we often hear these types of things also as we're leading the businesses within the product development space. We're seeing a lot of the people talk about the passions that they have with regards to the business, and oftentimes they start the business because of their passion. They're actually not starting it because they want to start a business itself. Because oftentimes those businesses have a lot of administrivia tied to them in process. That's not what they're doing to start that business. They want to make sure that they're creating something that really speaks to them and speaks to their passions, and because of that, they've created a small business. >> But then, unfortunately, they have to tasks and they have to do accounting and they have to do payroll, they have to pay the vendors, and they have to get up from making whatever they're making and selling whatever they're selling to deal with the reality, and that's really where the opportunity at QuickBooks has done. But part of the thing they're trying to do is build this ecosystem not only to provide the tools, but really to provide other services to enable these folks to be successful. So within the Capital One world, as you look at small businesses as kind of a category, what are some of the unique challenges that they have that you guys are trying to help them with? How do you see the small business world as an opportunity? >> Yes, so in the same way, Capital One is also looking at that ecosystem. First and foremost what we do as a financial institution is provide very competitive savings and checkings and credit cards as part of our plethora of products that we offer. From a savings perspective, we have a 1% cash back, and from a credit card perspective we have a 2% cash back rate so that we're truly competitive from that perspective. In our recent surveys and the research that we've done, we've also seen that many of these small businesses, whether they're here or somewhere else, they have more than two bank accounts in order to run their small business. Also what we see is that they have anywhere between 10 to 12 different applications that they are stitching together to get their financial health of their small business right. Knowing that that's the problem, what we're doing at Capital One is helping them stitch that together. Not only do we have a competitive checking and savings accounts so that they can actually pay their bills and do the invoicing and the payroll, we are also looking at things to help them in future. And most recently in August what we did as Capital One is launch the Spark 401k service. 50% of all Americans either own or work for a small business so it's a huge crowd that needs to be addressed. Even though it's 50%, only 13% of those small businesses are offering some type of retirement benefit. And because of that we saw that as an opportunity and challenge that we can help resolve, and that's why we've launched the Spark 401k service this past August, which is specifically targeted to those small businesses so they can help not only themselves but the employees that work for them think about the future. >> So how has this changed the way you do business? Because you're looking for new products, you're looking for new services, you're looking to be more expansive in the kinds of things that you're offering, right? >> Yumi: Yes. >> But I'm sure the migration has... sometimes it's not natural. You're introducing new concepts to your workforce and to your people and so how's this impacted what Capital One does, in terms of looking to stretch yourself? Basically to create new opportunities for your clients. >> Right. Well, there's two ways that we're addressing the client relationship. One is that we're definitely seeing that digital transformation happen. Most recently in a poll that we took there was about 30% of small businesses were using some type of mobile device, but in the most recent study that we've seen it's about 60%, it's more than doubled in terms of the mobile banking and the mobile device that they're using to run their small business. And because of it we're leaning in to many of the mobile solutions that Capital One can provide so that small businesses can do things anytime, anywhere and any place as they're trying to run their business. 'Cause the reality is is that they're not just sitting in one place nine to five running their business. They're running off, doing other things, they're doing it at home. Also we're exploring different experiments so that if we're meeting the small businesses where they are, trying out different devices and different technologies, I don't know if you've seen some of the announcements that we've made but we're also looking at IoT and some of the Alexa form factors by which you can test and see how is my daily balance, what are the transactions going through and the sort of thing as well. So we're marrying a lot of the technologies that we are seeing and helping small businesses make that transformation themselves where they are today. If they're using one type of device, we'll be helping them with that mobile device. We're helping them with Alexa, for example, as well. And the helping them make that transition. >> So many choices. >> Go ahead, Jeff. >> I was just going to say and then there's now the gig economy, right? >> Yes. >> I wonder if you guys are, I'm sure you're looking at it, how do you see that as being fundamentally different? We were at a thing at the Stanford graduate school the other day and we were talking about the gig economy. At least a small business are thinking about things like retirement and setting aside money for taxes and potentially there's all types of retirement options if you're a small, self-employed person. But then you think of the gig economy, it's a guy doing four hours of week before class to run its Uber, or Postmates or all these kind of little bits and pieces. It doesn't appear from the outside looking in, I have no data, that they're really thinking through what is their total cost? Not only for the insurance and the wear and tear on the car, but then to set aside for taxes, and then are they putting some aside for insurance? Are they putting some aside for retirement? It just feels like that's a whole different kind of category of work and yet it's the one that's growing the most rapidly. >> It is and it isn't, actually. I think that oftentimes financial institutions have been geared more towards companies, business entities and that sort of thing. If we think about the most recent Spark 401k launch that we did, we're looking at companies of one, which are actually gig economy workers, if you really think about it. And then we are able to support those types of employees or businesses as well. The second thing that we're doing in terms of the gig economy is the reality is a lot of these people are, in the same way as I was mentioning before, stitching together their work life. And stitching together their work life means that they're using multiple applications and multiple revenue streams in order to be financially stable. And because of that, one of the pain points that we wanted to address was can we make it easy for these people to stitch together? And that's why we have the aggregation of the top 12 financial institutions within Spark Business so that they can get a complete financial health history of where they are today. >> We've been speaking with different folks from Intuit today and one of the striking conversations we had was about adoption within the accountant community and the cloud migrations, and people with very traditional perspectives or very regimented viewpoints about this is how I do things and the reluctance to change. What are you seeing in terms of digital adoption, what businesses are doing, how willing are they to accept some of these new products, or understanding this is a better mousetrap? And how do you grow that to make them understand this is maximize your efficiency and lower your cost, it's all good. But it's hard to get 'em there. >> Yes. One of the things that we actually see is not solving for the sake of creating a new feature. In the same way that I would feel if I were a small business, just because there's something out there doesn't necessarily mean I want to use it. You have to show the benefit to that small business owner. And if you think about where small businesses have been, they have been going to the bank, but they become more technologically savvy using, for example, mobile deposit capture because that saves them time, and all they have to do is take a picture of the check and it just works to deposit those moneys into a financial institution. And that's what we're providing as part of Capital One. If you show the benefit first, rather than the solution first, I suspect that more people will say, I'll give it a try. And that's what we're seeing in our base as well. We're seeing people saying, I'll give it a try, I am technologically savvy, I am using my mobile device more than I was before, sure, why not, and I'll give it a try. >> John: And that works? >> It has been working for us and we're seeing definitely more people going towards our Spark ecosystem solution, and they're stitching together all of the different applications because they are definitely feeling the pain of trying to do it themselves. And it's really hard to figure out themselves. >> So what's your biggest challenge, then? In terms of, it sounds like adoption, you're working and making progress on that front, you're here surveying your customer base, trying to understand what their needs are. It sounds like everything's great, everything's good, but that isn't always the case, obviously. There are challenges. In your perspective, from your viewpoint, what is it? What's the big hurdle you think that is keeping in the way a progress for you as Capital One and for the small business owner? >> I think really honing in, I think a lot of people often talk about small business owners trying to manage their financial health and their cashflow. That's the reality of running a small business. The question is how you solve that. Is it thinking about the savings and the checking accounts? Is it about thinking about the 401k in the future? Is it about that balance? Is it about tying savings and efficiency? And there's quite a fine line between thinking about just the actual solutions themselves and really offering the benefit. And so that, for us, is kind of the biggest challenge. Meaning that as we test into all these different applications, we need to make sure that we are improving their cashflow and showing them transparency around their financial health. >> It's funny you talk about whether there's a benefit or not and I just think from your customers' point of view, the small businesses, just all these different ways to pay. They want to take that money in and put it in and put it in their Capital One account. Whether it's Google Pay or Apple Pay or they even have Samsung Pay, I don't know why I'd ever want Samsung Pay, and who knows what tomorrow pay is going to be. From your customers' point of view, what do they think of this wave of options that their customers, the end customers, want to have, they think they want to have? They got people pushing these different alternatives down their throat. Are they really necessary? Do we need Samsung Pay along with Apple Pay and Google Pay and I already have credit cards and ATM cards and chip cards and god help us if I pull the 20 out. I went to one restaurant, they wouldn't even take cash. Like, we don't take cash. What, you don't take cash? It's so much more complicated now. There's just so many options coming out. I think of driving through a snowstorm at night with your headlights on. It's just like-- What do you tell 'em? How do they navigate this way? Oh, by the way, I'm still trying to just run my business. >> Right, actually, that's one of the things that we want to do at Capital One. We wanted to give small business owners the personalized delivery of data and looking at what would help them as they're running their small business. Because there are so many choices there, we want to help them make the choices by showing them the data that nudges them towards perhaps you might want this rather than this. That's what we're doing from a short term perspective, and more longer term, what we're also looking at, what is the benefit that we can actually provide? And showing those benefits clearly and transparently to the small business owner. There are a lot of choices out there. >> A lot of choices. Well, Yumi, we've asked you a lot of questions. The one that I think we don't have to ask is what's in your wallet, right? (laughs) We know what's in your wallet. >> Yes, a Venture credit card. (laughs) >> Yumi Clark from Capital One, thank you for joining us here on theCUBE. We appreciate the time. And good luck with the rest of the surveying. I'm sure this is a pretty fertile territory for you in terms of finding out what your customers need, what they want, and what you can do for 'em. >> Thank you so much for having me. >> Thanks. >> Thank you. Back with more on theCUBE here form San Jose in just a minute. (elecronic music)

(upbeat pop music) >> Announcer: Live from San Jose, California. In the heart of Silicon Valley. It's theCUBE, covering QuickBooks Connect 2016! Sponsored by Intuit QuickBooks. (upbeat pop music) Now, here are your hosts, Jeff Frick and John Walls. >> Welcome back here on theCUBE. Along with Jeff Frick, I'm John Walls. As we continue our coverage here at QuickBooks Connect 2016. Gathering here in San Jose at the Convention Center. Third annual gathering with a record crowd of more than 5,000 attendees. (crowd noise) So the show continues to show explosive growth. Which is, I guess you can say a lot about what Intuit's doing, in terms of how it's growing its portfolio, in terms of how it serves the business ... The small business and the medium-size business communities. With us now is Sasan Goodarzi, who is the EVP of the small business group at Intuit. Sasan, good to have you with us-- >> Thank you. >> We appreciate the time. >> Thank you for having me. >> What are the keynote stars today? You were talking about some key things, big things about the company about how we're going to help save time. How we're going to have more accessibility to money. And ultimately what we could do to deliver a better proposition to small business. So talk about that, if you would, a little about that theme on the keynote stage, and how that applies to what you're doing in general with QuickBooks. >> Sure, sure. Well one of the things that our customers have taught us is, that there are three things that are important to them. One is time, so they can actually spend running their business and the product that they're passionate about; versus all the tedious, drudgery things that it takes to run your business. The second is money. It's mind boggling the effort that goes into earning money. But how hard is it for them to actually get access to their money. And then last, but not least, is ways to help them grow their business. They're experts in their industry, but where they need help is ways in which that they can drive growth. And so everything that we do is centered around those three things. And it's what inspires us when we show up to work every single day. So a lot of, obviously, what we talked about today on stage, was just very quick, we call ESPN highlight reels of here's the innovation that's coming your way to either save you time, put more money into your pocket, or help you grow your business, or your practice. >> Sure, okay. >> What's amazing is as I say, as much as they've worked to finally get that sale, a lot of times it seems all the collection side-- >> That's right. >> For small business. A huge issue, getting paid. To do all that work, sell it, have a happy customer and then, don't necessarily get their receivables in line. >> That's right. I know we threw a lot of stats out there this morning. But first of all, 80% of small businesses have some sort of a cash flow issue. And in that context about 65% of them have invoices that are 60 days overdue. And in fact, they live and die by getting paid on time. And so, obviously, the innovations that we talked about on stage today, were how do you get access to those funds right away. >> Jeff: Right, right. >> That's one element of it. The other element is we have all the data of small businesses. And so we know what they're good for. And so we can deliver loans to them on the spot. If they have payables and they want to borrow on the payable to make payroll for the week, or they want to go buy more inventory to grow their business, we can actually fund them very quickly. Literally within minutes. And so those are examples of what we showed on stage today all in service of helping them thrive and achieve their dreams. >> I love to ding into that a little bit, because growth actually exacerbates your cash flow problem if you're not managing it well. And now suddenly you're selling more and you got to buy to fulfill those obligations. But the fact that you almost have a secondary market now for people to be able to borrow money without pulling all their paper together, and trekking down to the bank and hoping they can get it, because you actually have the real data. It's updated (chuckles)-- >> That's right. >> All the time. And it's a different set of data ... Potentially more complete set of data for a lender to actually make that decision, than the stack of paper that they bring down-- >> That's right. >> to the local bank. >> That's right. Well, you know it's interesting. You just said something that triggered a thought. When you think about startups that go out and get VC money ... There's a reason why they have board of directors, 'cause the board of directors what they're looking for is one, do you have a growth plan, but then how do you manage that growth? How do you make sure you have enough money? How much money are you burning per week? And are you going to be able to maintain that growth? Small businesses don't have that. They don't have the board of directors that are actually helping them with some of those decisions. They may not be surrounded by a CFO or a finance expert in the office. And so part of what we're trying to do is just digitize and automate everything so they don't have to worry about that. And secondarily I think to the point you made, helping them with access to money at the point in which they need it. But I think even before we get to that stage, what we're trying to do is help them by being that board of directors without having to have one. Which is to helping them manage their cash flow, their inventory. Because as they're on that growth curve ... One of the main reasons why they go out of business is 'cause they're growing fast, but they're not managing their funds, and they do not have enough money sometimes to make payroll. >> Right. Well we've heard the stat from a couple of different sources but 50% of all small businesses fail in the first five years-- >> That's right. >> of operation. And the use of accounting and accountant, what that could do to increase your odds of being in business for the long term. So certainly you could see where all that is coming in play. You mentioned payments, so we're thinking about Apply Pay. That was one of the announcements-- >> Yes. >> You had. Google Calendar, talking about time. >> Sasan: Yes. >> And then AMEX with the loans. So the power of these partnerships, I'd like to hear from you on that, because, you know, big names, right (chuckles) >> Sasan: Yes, yes. >> That I ... If Jeff or I or anybody watching ran a little mom and pop operation in Morgantown, WV, I've got Apple, and I've got Google, and I've got Intuit on my side. Talk about leveraging that power for small businesses? >> Yes, actually listening to you inspires me around what Intuit is doing for these small businesses. And it starts with our vision of having an open platform. It's less about what we innovate on that platform, but our goal is to bring all of the innovation; whether it's our engineers or engineers outside of our four walls. Bring all of that innovation on our platform, so that in fact we can digitize and automate everything with Google Calendar. So we can go in and we know all of where you spent your time, and help you easily, with one click, invoice your customers. Or, as an example you used, be able to use Apple Pay Touch where you can immediately get paid. But that's because our goal is to have an open platform where we bring all the innovation of the best companies out there to you. So that you can run your business on any device, and you don't have to worry about which application it is, but that we do it all for you. >> I just love the Google Calendar example, because so many great innovations today are basically reassembling stuff that's already out there; leveraging APIs and presenting it in a different way. And so the fact that you're taking advantage of Google Calendar, which so so many people ... You probably know the numbers use ... And then have that drive your billing, have that drive your time management, and then just take advantage of the data that's there, or as Scott said, "Take advantage of the data that's in your phone." >> Sasan: That's right. >> It knows exactly how far you went on that drive to the client. It knows when you left and when you arrived-- >> That's right. >> and when you got home. So the leverage of Cloud platform with APIs, to pull that data in and drive in a seamless integration, it makes (chuckles) it makes too much sense, right? (Sasan laughs) It does, and when you think about someone like Google, where there's a billion people that use Gmail ... >> A billion. >> And most of them are using ... There's a billion people that have Gmail accounts. >> Jeff: Wow. >> And over 60% of our customers use Google Calendar to run their business. And so, it's only intuitive to figure out a way well, how do we automate all of that-- >> Jeff: Right. >> so that the customer doesn't have to use cookbooks for taxes and accounting, then go to Google Calendar to see where they spent their time so they can figure out how to invoice? >> And they type it in, right. >> Just integrate it all together so it's all in one place, yeah. >> How do you all keep focused when your market, your potential market's so big? You've got, I don't know ... I've read, was it 800 million possible businesses, right? Small businesses. >> Sasan: That's right. >> So how do you ... If you look at what would be reasonable growth trajectory and expansion, your plans ... How do you keep your eyes on the target, and how do you determine that target? >> Yeah, that's a great question. Let me start with where you just ended, which is there are 800 million self-employed and small businesses worldwide. And 97 to 8% of 'em actually are not using the Cloud to run their business, or their time. And the way we prioritize is think about the countries that are the biggest opportunity to create virility by those that are using the platform. And so we've prioritized which countries that we're going after, and really doubling down in those countries. And that's where we really are able to focus our efforts in time. 'Cause once we create this, what we call the network effect, the more small businesses and self-employed we get to use the platform, the more we get accountants to be able to see the power of the platform. The more they tell their friends. The more accountants are recommending it, you in essence create this flywheel effect of more and more going to the Cloud. And once we get that flywheel effect going, we'll think about what's that next country that we want to go into. We're not that serial about it, but our biggest focus comes from being clear which countries we're going to play in today, and which countries, for now, we're going to wait 'til we get this network effect going. >> And now you've got this whole new way to work. People that are giving up part of their house or apartment for Airbnb rentals. Or people that are driving in Uber for four hours a couple of days a week. Again, those are all based on systems that are driving that engagement. Do you see that it's just a whole new opportunity, do you see a lot of growth in ... I always forget the technical term for-- >> Sasan: The digamy ... The giga-- >> The gig. >> Sasan: The gig economy. >> The gig economy. >> That's right-- >> Which is a whole new and swelling thing. >> It is. >> And for a lot of those people, they are even less sophisticated on keeping track of their tax withdrawals than the small mom and pop store (chuckles)-- >> Sasan: That's right. >> that's at least been paying their social security for a number of years. >> Sasan: That's right. >> So another huge opportunity for you. >> It absolute is. One of the myths is most self-employed are actually not part of the gig economy. There's the photographer that you may call on to come take pictures of your family, or the landscaper that's a one-person shop. That's 90% of self-employment. About less than 10% is the Airbnbs, the Lyft, and the Ubers of the world. But that number's only going to grow over time. In fact, our view is in this day and age people will work at a company for three to four years at a time. We believe in ten years, people will work for three to four companies in a day. 'Cause they're workers, and they're outsourcing their time to different companies. >> Jeff: Three or four companies-- >> A day. >> Jeff: A day? >> A day. Because in essence, they're self-employed. Now I may work for you and do a job. I may work for you and do a job. That's actually starting to happen today. Except it's a small part of the economy. We believe ten years from now it'll be a huge part of the economy. And that creates a huge opportunity for us, 'cause they're all self-employed. >> Right. >> Before you head out, again, one of the big trend topics, artificial intelligence, machine learning. How do those come into play in your vision for the company's vision, and the products and services that you think you could develop that can be put to use? >> Yeah, in fact we think there are two core competencies that we must have. One is an open platform where we integrate all applications into the platform, whether it's ours or somebody else's. The second is being amazing at leveraging the data, whether it's data from a PayPal app, a Square app our own app. And leveraging artificial intelligence and machine learning, so we can do the work for our customers. So we believe when it comes to data and artificial intelligence, that is actually one of two or three primary core competencies that we are building as a company. And it's something we're not new at. We've been doing this for years. In fact, last year in TurboTax we've reduced the amount of time it took to do your taxes by 40%, by using machine learning. And we're now applying that within QuickBooks. >> I'd like you to reduce my tax liability by about 40%. (Jeff laughs) If we can (chuckles) take care of that and I'm yours. >> Or at least-- >> Well, listen-- >> Or at least get you to the July deadline. (John laughs) >> If you just make less income-- (Jeff laughing) >> That's right. >> I'm sure that's doable. (Sasan laughs) >> If you don't make it, you don't pay it. >> Sasan: That's right (chuckles). >> You mentioned ESPN earlier about the stage and all that. You made top plays today, no doubt about it with the keynotes address. >> Sasan: Oh, thank you-- >> Job very well done. >> Thank you very much. >> Jeff: Cute Kim's (mumbles) coming. >> Sasan: Thank you. >> And thank you (Jeff laughs) for joining us here on theCUBE. We appreciate the time-- >> Thank you, thank you for having me. >> John: You bet. Back with more-- >> Alright, thanks. QuickBooks Connect 2016 here in San Jose. You're watching theCUBE. (upbeat pop music)