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Similaire à Yola Intuit Homestead Strategy(2)
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Yola Intuit Homestead Strategy(2)
- 1. Every David has a Goliath Intuit and its Homestead Strategy Yola Board of Directors Meeting Monday November 16, 2009 Vinny Lingham CEO
- 2. Intuit’s Growth Catalysts Demographic Shift Technological Shift Increasingly Open Environment Global Expansion
- 4. Intuit Small Business Group Payment Solutions Employee Management Solutions Financial Management Solutions
- 6. So what about Homestead?
- 12. How to Win MUST MOVE QUICKLY Viral Growth Increase ARPU Analytics Mobile Web Acquire Customers Ease of Use/ UX Partnerships Advertising/ Social Media
Notes de l'éditeur
- 1) Intuit: Revenues 3.2 Billion in FY09 revenue growth of 4% Year on Year (good year but not great) aiming for 4-8% in FY10 non-GAAP operating income growth of 9% Responded quickly to the challenging macroeconomic environment (Streamlined cost structure, active in M&A, invested in innovation, aggressively Acquired New Customers) Invested $187 million on the strategic acquisitions including Mint and Paycycle Continued its evolution to become an increasingly connected services company . Over 56% of company's revenue comes from these services and they grew 14% in fiscal year '09. Sources: 1. Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1) 2. Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- Growth Catalysts 1) Demographic Shift Next generation of customers are generation y (20 something do-it-yourselfers, mompreneurs, immigrants, careerpreneurs) Grew up with technology as a part of their lives and typically look first to software, services and web to address the kinds of problems Intuit solves. Fueling growth in the categories Intuit participates in. Many of the five million new tax filers entering the market each year are younger, first time filers, and they tend to turn to the web to solve most of their problems. That's one of the primary reasons why the tax software category has grown four times faster than the next closest alternative for the past five years. 2) Technology shift to more connected services: End users expect to work on desktop, over the web and using mobile devices Leadership position in both desktop and online and recent expansion into mobile devices positions them well to navigate transition. Lineup of software as a service offering which now accounts for about $900 million of our company's revenue, grew 22% this past year, much faster than the company average. 3. Increasingly open environment Push towards more open platforms and services 40 million end users of customers and more value is created as user base grow Example: Live Community support and 11 of our flagship offerings, enabled millions of questions to be answered by other customers in ways that Intuit could not have never delivered on their own. Global Expansion Economy becoming more global and ability to localize products becomes easier using hosted technologies. Ability to move into new markets more opportunistic and more compelling End market test and new product launches in India and Southeast Asia in coming fiscal year Sources: 1. Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1) 2. Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- Intuit’s Current Strategy Continue to Drive growth in Core businesses: Deliver the Customer Benefit (Better money outcomes) Execute E2E for delight (Focus 1st use and 1st year experience) Increase Revenue/user (cross-sell, up-sell, beyond user paid) Many of Intuit’s flagship products are category leaders but have low penetration relative to the overall market opportunity. Has continued to grow core business units despite economy The timing is right as it is a good time to help customers manage their financial lives 1 billion dollar potential between FY10-FY12. If they only get $100-150m…3.5 incremental growth/yr 2. Build Adjacent businesses and enter new Geographies Adjacencies (i.e. customer mgt, employee mgt, consumer savings) Healthcare (consumer/small biz financial mgt and payments) Emerging Markets (focus India and SE Asia) Will still focus on core business, helping customers save and make more money Seeking to repeat past successes in Small Business Payrolls, or Small payments by finding related areas that help users save and make money. Example: GOpayment which helps customers use their mobile device to accept and make payments Expanding into new markets such as India and Southeast Asia $60-120M Opportunity between FY10-12. Potential of 1-2 points of incremental growth/yr 3. Continue transformation into connected services company Services (open new front doors and increase attach services) SaaS ( hosted applications, data in the cloud, and mobile devices) PaaS (open to end user and 3rd party contribution) Connected Services already transforming Intuit, accounting for 56% of revenues. Double digit Growth potential! (48%). 4-7 points of incremental growth/yr Intuit is third largest cloud computing software company in terms of revenue Expanding into new technologies such as mobile devices Evolving from a products oriented company into a more services oriented one 1. Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1) 2. Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- SMG only grew 4% in FY09. Likely due to Macroeconomic Conditions In the fourth quarter, Intuit aligned Small Business Group into three operating segments: Financial Management Solutions (formerly known as QuickBooks and where Homestead is) Employee Management Solutions (formerly known as Payroll) Payment Solutions 3) Financial Management Solution segment: Finished the fourth quarter with $135 million in revenue or 5% decline over a very strong quarter a year ago. Homestead not reported as it was purchased in Q4’09 as it was purchased Q2’08. In the fourth quarter found sweet spot between price promotions and unit lift As a result, 12% unit growth, better performance from a revenue perspective. More optimistic from FY10 Onward. 4) Employee Management Solution segment: Had revenue of $91 million in the fourth quarter or 5% growth. Organic customer growth was flat, up 9% with the addition of PayCycle. Completed the acquisition of PayCycle in the fourth quarter, expanding our online Payroll capabilities, and strengthening our position as a leader and small business tasks. The acquisition is expected to be neutral to FY10 earnings. 5) Intuit is still counting on sales of small-business products to bolster its results when the tax season ends and sales of its best-selling TurboTax tax-preparation software hit the skids. Sources: 1. Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1) 2. Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- Drive Grow in Core Business Acquire and retain Customers (Online bookkeeping and accounting software, embedding payment solution in other software, online payroll offering If first year retention 10% it makes intuit $40M) Maximize LTV (initial software purchase + add-ons = 3X the software purchase = 5 yr rev/customer ) Cross Sell, Up-sell Potential of 3-5 incremental growth points/year 2. Build Adjacent Businesses/Enter New Geographies Employee Management. $18.5 Billion opportunity. Number of additional services being launched such as workers comp and retirment Payments Expansion Plan. $30 Billion opportunity. Launched GoPayment, ACH processing, Healthcare payments, Global B2B payments Get and keep customers. Front office a $35 Billion opportunity. Homestead is a front office product Potential of 2-4 incremental growth points/year 3. Accelerate Transition to Connected Services About Liberating data from the desktop. Anytime/Anywhere access, user/developer contribution, easu to start and use Number of different connected services included in QB and a number of Mobile offerings. Partner platforms let 3 rd parties develop products. ++ incremental growth/year potential FY10 Revenue Guidance Range 4-8% Sources: 1. Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1) 2. Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- 1) Homestead’s synergies with Intuit’s M&A strategy: Homestead’s technology can capitalize on Intuit’s existing user base Established player in website builder space so time to market faster than Intuit can build on its own Brought in skills and capabilities that will accelerate growth rate and increase innovation 2) In Addition Intuit’s due diligence proved Homestead had: Largest Market Share Scored highest on both Net promoter and willingness to recommend Same Focus as Intuit (i.e. ease of use, superior solution at lowest cost possible) Sources: Intuit Expands Reach Into SMB Market. Inc Magazine (http://www.inc.com//news/articles/200711/1127intuit.html) Message chain with with Intuit Employee Intuit Acquires Homestead For $170 Million . Tech Crunch (http://www.techcrunch.com/2007/11/26/intuit-acquires-homestead-for-170-million/)
- Continues Intuit’s move beyond financial management solutions into helping small businesses solve other important problems. 2) The Deal Acquired by Intuit in December 2007 for $170M. Homestead Founder Justin Kitch became Intuit’s Chief Growth Officer. Now operates under Intuit’s Financial Management Solution Segment (formerly QuickBooks) in its Small Business Unit Has grown to 350+ Employees Based in Menlo Park with satellite office in Colorado 3) Homestead is central to Intuit's future considering: The appointment of Justin Kitch to “Chief Growth Officer” Intuit is the last small-business accountant standing (Microsoft announced recently it was stepping back from its Money software line) Homestead was purchased in Q2 08 and does not accounted for in Q409
- 1) Market Homestead belongs to the Financial Management Solutions Segment and can be defined as a Front Office product (An adjacency to the Small Business Unit) Front Office represents a 35 Billion dollar market opportunity Customers are the 27 Million Small business in the US and 375 million worldwide Estimated that 50% do not have website in US market 2/3 of remaining 50% have not updated their website in over 2 years Statistics the same for Intuit’s 7m installed small business user base 2) Strategic Value Makes QuickBooks a more compelling product offering. Can sell into existing user base. New Front door to Small businesses Sources: Intuit F3Q08 (Qtr End 4/30/08) Earnings Call Transcript ( http://seekingalpha.com/article/78152-intuit-f3q08-qtr-end-4-30-08-earnings-call-transcript?page=-1 )
- Attach products like Homestead make QuickBooks a more compelling product offering for both existing and new users. 2) Attach products made Intuit 1.3 Billion in 2009 the bulk of that from the SBG at 750 million. 3) If 1/10 customers buys 1 additional product such as homestead it makes intuit 200 million 4) “Win with free” strategy with Small Business United, QuickBooks Free Simple Start: Bundling 12 months free Homestead with Simple Start free online QuickBooks Hooks customers and allows them to weather the downturn, Once they see how well the products work they will want to continue using them. Hopes to monetize by retaining customers as well as upgrades to premium versions 5) Free QB Units grew by 58% and upgrade cycle performed well (correlation with homestead)? Sources: Intuit Woos Small Firms Amid Slump. Investors Business Daily. http:// www.investors.com/NewsAndAnalysis/Article.aspx?id =473834 Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm) Intuit Inc. F4Q 2009 (Quarter End 07/31/2009) Earnings Call Transcript (http://seekingalpha.com/article/157591-intuit-inc-f4q-2009-quarter-end-07-31-2009-earnings-call-transcript?page=1)
- Historically Intuit has always led with accounting and then attach payroll and payment. 2) However some of the first problems small businesses have is: Getting customers Getting paid 3) Now Intuit can lead with websites from Homestead (why called front door) and then eventually attach QuickBooks to those customers. 4) Intuit is adding value to Homestead to attract new users and increases value for existing ones. Product launches are example of: helping them reach customers increase the odds of getting found Membership and access to a network of other users. Sources: Intuit’s Annual Investor Day Presentation (09/23/09) (http://investors.intuit.com/events.cfm)
- Interoperability means Intuit’s ability to integrate it’s products to make each of them more valuable. Justin Kitch’s latest article on the importance of having a mobile version of site. Indicator of direction of Homestead. Sources: Justin Kitch. Take Charge of Mobile Commerce (http://www.entrepreneur.com/ebusiness/ecommercesolutions/article203772.html) Intuit's Web Tool: Not as Easy as It Seems. The Street. (http://www.thestreet.com/story/10532380/2/intuits-web-tool-not-as-easy-as-it-seems.html)
- Great META strategy in place. Each of these already identified drivers will be critical to Yola’s Success. Use Analytics to make Data Driven Decisions Viral Growth Targeted Advertising as well as robust social media campaign Increase Average Revenue Per User (ARPU) Beyond website building (Mobile Websites!) Focus on Ease of Use/UX Partnerships w/ ISPs, PCs, OEMs, and retailers > Key Interest Groups > Affiliates Ramp up customer Acquisition to profitability 9. The key is developing the right micro strategies around each driver. Then implementing them quickly and well. 10. HOW? MUST HIRE THE BEST. People who can work cross functionally, set up systems, develop ideas and execute quickly, efficiently and well. (i.e time to start headhunting for Yola’s Marissa Meyer or other top notch product managers) Sources: Yola Under the Radar Presentation found on Slideshare
- Increasingly, customers expect everything — in the immortal words of Robert Wodruff, the man who made fizzy sugar water into Coke — to be "within an arm's length of desire". Every competitive product needs to be at people's fingertips, on the phone, on the web, everywhere