Intuit’s razor

I’m beginning to think there’s a lot to be learned about the future of technology by looking more closely at how we’ve gotten to where we are. My story about how WordPerfect lost out to Word prompted many insights from readers, including some with inside knowledge of what happened back then. Now my recent story about some of the games Intuit plays with Quicken customers prompted some interesting observations from an old Intuit hand.

The reader writes:

“I used to work for Intuit, starting in 1988 in tech support, and leaving in 1999, having been a tech writer, engineer, and web developer. Throughout the 90’s, a continuing theme that popped up in discussions of the future of the product was that you can only put so many new features in before you run out — and then how would you get people to upgrade? I heard that sometimes features were left out specifically so there would be features left to put in a new version. That’s when you started to see all those expert videos and investment guides — only available in the new version, of course. They were pretty spiffy, but they were considered to only delay the inevitable.”

“You see, and I’m sure you already know this, Scott Cook’s original business idea was all about razors and razor blades. Quicken would be the razor, with checks being the blades that you always need to buy more of. Check sales were 40 percent of the business for a long time. But the Fed or the Treasury or somebody had made predictions that processing the ever-growing number of checks flowing through the U.S. banking system would soon clog it up, and recommended increasing the role of electronic transactions. Intuit responded by looking into how they could help that happen/capitalize on it. One of the first ideas was to do electronic payments. (Interestingly, when no method of electronic payment could be found, the payment center would cut a paper check to send out. Eventually they sold the business because it wasn’t working out as hoped.) When the web caught on in the mid to late 90’s, we started to see all the add-ons for managing your investments with live updates.”

“I’ve heard many tales of woe from friends who stayed at Intuit. A lot of people don’t like their new policies, but what can you do? When Scott Cook was running the company, he used to say that Intuit was data-driven, meaning that marketing took a lead in finding out what people want, and we acted to provide the product or solution they wanted. It’s pretty clear that they don’t think much about the customer anymore. It’s all about getting you hooked, and then forcing you to upgrade.”

“Frankly, I thought the last DOS version was one of the best Quickens — fast, easy to use, reliable — and I think it was the second or third Windows version that was the best of the newer generation. Funny thing: I had a hard drive crash in the late 90’s. When I recovered everything, it turned out my Quicken backup disk was bad — just a coincidence — and I lost years worth of data. Rather than recreate it or start new, I never got around to putting my data back into Quicken. Can’t tell you why, but I never missed it.”

“I think what Quicken has lost is humility and gratitude, which I believe both came from that hungry and broke time, schlepping Quicken 1 to magazines and banks — their first outlet — and trying to generate some interest. The people who run it now know a sleek money machine when they see it, and hire management to keep it sleek, which doesn’t necessarily mean keeping customers happy. As long as enough customers keep upgrading, and few enough customers get screwed, well … And I thought that kind of logic was reserved for sending troops into battle.”

Indeed, I do remember hearing Scott Cook’s razorblade idea — in fact, I was at Personal Computing back in about in 1984 when they were doing that schlepping. (As long as we’re talking about how software companies went wrong, is there anything to be learned from why defunct computer publications bit the dust? If so, I’d have a few stories to tell.) Of course, I thought the whole idea was crazy, which shows what I know.

But what do you think? Is it inevitable that technology companies that start out with great ideas and a desire to help their customers follow the path that Intuit has? Post your comments below or write Ed Foster at Foster@gripe2ed.com.