How Zoom Created An $18 Billion Juggernaut

This week, I attended Zoom’s annual conference in San Jose. A big takeaway: The company remains laser-focused on pushing the boundaries of innovation. During the past year, Zoom has added over 300 features to its platform. The company is also making a bold play for the massive phone market. The vision is to develop a true unified communications system.

As a result, Zoom has become one of the world’s most valuable cloud companies (it came public in April). In the latest quarter, revenues soared by 96% to $145.8 million and net income came to $5.5 million (yes, this is one of the few newly minted IPOs that is profitable!) There are now about 66,300 customers with more than ten employees, up 78% on a year-over-year basis, and 466 contribute more than $100,000 on an annual basis. 

But getting to this point was not easy. After all, when CEO Eric Yuan founded the Zoom in 2011, the market for web conferencing appeared to be mature and was dominated by large tech companies.

One of the early investors–Emergence Capital’s Santi Subotovsky–said to me that Zoom was the toughest deal to get follow-on financing for. “There was the issue of the Silicon Valley echo chamber,” he said. “But if you looked to other countries, you could see there was much opportunity to make web conferencing better. Not everyone has high-speed Internet access.”

Another key to Zoom’s success was that Eric built a video-first platform that worked seamlessly with mobile. Keep in mind that the legacy solutions were mostly for screen sharing. What’s more, they often required frustrating configuration and setup. Zoom, on the other hand, was about making the experience as friction-less as possible.

There was also much investment in making the platform highly reliable. “Our software adjusts for network challenges,” said Kelly Steckleber, who is the CFO of Zoom. “You can have 40% of packet loss and still have a great video experience. But with other solutions, you’ll typically see degradation at about 15%.”

As for Eric, he had the advantage of being a pioneer of the web conferencing industry. In 1997 he jointed the engineering team at WebEx and stayed with the company after the sale to Cisco. But he felt stifled as his ideas for making the product better fell on deaf ears.

So when he started Zoom, Eric would strive for absolute excellence. It was not about putting together a flimsy MVP (minimally viable product).  Consider that he spent about two years creating Zoom before commercializing it. And in this process, he created small teams that had much responsibility for making decisions (let’s face it, committee’s can be killers for software development).

Now all this is not to imply that Eric is only concerned about technical details and data. From the inception of Zoom, he has been focused on building a culture that brings “happiness” to customers and employees. For example, Zoom has an NPS (Net Promoter Score) of 70, which compares to the average among the company’s peers of a mere 20 (Apple’s is 73).

One of the happy customers is Five9, which is a top cloud-based call center operator. “In our evaluation of vendors, it was clear that Zoom was the highest quality software out there,” said Rowan Trollope, who is the CEO. “But it’s backed up with a deep commitment to the customer. When I had some initial issues with Zoom, Eric gave me his phone number and he said he’d get it done over the weekend.”

Schwab’s Zero Commission Bombshell: So What’s Next For Fintech?

In 1971, Charles Schwab launched a traditional brokerage firm. But the business did not take off until 1975, when the SEC ended fixed-rate commissions. Schwab knew that the future would be about the discount brokerage model.

To pull this off, he needed to invest heavily in technology, such as with online brokerage systems. Over the years, as the platforms changed–such as from proprietary services like AOL to the Internet to mobile apps–Schwab somehow found ways to adapt.

And yes, even though he is now 82, he still seems to be far from finished. This week his firm announced that commissions on US stock, options and ETFs will be $0.

“It’s encouraging in the broader context of corporate purpose and sustainability to see a firm stay true to its purpose and passion of making investing more affordable,” said Geoff Cole, who is the fintech senior manager with Grant Thornton.

Now for the traditional brokerage industry, the impact is certainly ominous. There will need to be a way to make up for the lost revenues, such as by innovating new services. There will also likely be more layoffs.

“Online brokers are already under pressure due to this year’s interest rate cuts,” said Arielle O’Shea, who is the investing and retirement specialist at NerdWallet. “Many generate revenue from banking divisions, or from interest earned on idle cash. Schwab is likely hoping this move will attract enough new assets to make up for that narrowing margin as well as the lost revenue from commissions.”

A Reckoning For Fintech Too?

Schwab’s move is a validation of the fintech industry, especially with the impact from the fast-growing Robinhood. The startups in the space have advantages like starting from a bank slate as well as having access to enormous amounts of venture capital.

“We’ve certainly seen that the rise of customer-centric fintech companies has pushed the industry in a more client-friendly direction, and part of that is lower fees,” said Adam Grealish, who is the Director of Investing at Betterment. “Fintech companies use technology to achieve lower operating costs and are able to pass the savings on to customers. This has forced incumbents to follow suit.”

Yet this is not to imply that fintechs are immune from challenges. Let’s face it, traditional brokers have inherent advantages, such as strong infrastructures, diverse service offerings and trusted brands. And besides, millions of people like talking to experts when it comes to their wealth.

“Unfortunately, I think in the short-term you will certainly see some attrition and consolidation among the start-ups whose sole selling point was free trading,” said Anthony Denier, who is the CEO of Webull. “There is more to investing than cost.”

The zero-commission strategy may actually be a tipping point, giving traditional brokers an edge in customer acquisition. According to a J.D. Power survey of self-directed (DIY) investors, the No. 1 reason for selecting a firm was “low fees.”

“This creates a challenge for fintechs,” said Mike Foy, who is a Senior Director of Wealth Management Practice at J.D. Power. “They will need to work harder to differentiate themselves from incumbents to continue to attract new investors seeking a low-cost provider.”

While fintechs have been innovators– such as with compelling UIs–there will probably need to be much more. For the most part, the history of financial services is about relentless commoditization. And it’s been firms with massive scale, like Schwab, that have been able to thrive. This will likely be the case with fintechs as well.

Yet despite all this, the ultimate impact should positive, encouraging more and more competition. “In the end, the consumer wins,” said Steven Nuckols, who is the president and founder of Wealth Compass Financial.

H. Ross Perot: His Lessons For Entrepreneurs

H. Ross Perot, who died this week at age 89, was a take-action person. While growing up in Texarkana, Texas, he ran a successful paper route (riding his beloved pony), was an Eagle Scout (after only 13 months) and helped his father with his business (he was a cotton broker). He would then go on to the Naval Academy.

But of course, as for his career, he would be best known for his run for the 1992 presidential election.  He got 19% of the vote, which was the most successful performance as a third-party candidate since Teddy Roosevelt’s run in 1912.

Yet before his foray into politics, he had been a highly successful entrepreneur. Keep in mind that he was the first tech billionaire, having achieved this milestone in the early 1970s before Bill Gates and Steve Jobs launched the PC revolution.

Now Perot didn’t start his business out of his garage.  Rather he got his tech chops while working for IBM during the 1950s.  The timing was certainly spot-on as the computer industry was accelerating – and Big Blue was the dominant player.

The experience was transformative for Perot. He wanted to learn everything he could about technology but also spent lots of time networking. As a result, Perot quickly became one of IBM’s top salesmen, having hit his quota during the first month of 1962. Yet the company really did not recognize his accomplishments.

What gave him inspiration was reading about Henry David Thoreau’s “Walden.  One quote stood out: “The mass of men lead lives of quiet desperation.”

So on his birthday – June 27th, 1962 – he started his own company, Electronic Data Systems (EDS). The initial capital was $1,000. And yes, it would be one of the best investments ever. In 1984, Perot would sell EDS to GM for a cool $2.5 billion.

It was an incredible journey and chockful of lessons. Here are just a few:

Have A Clear Vision: Through his experiences at IBM, he realized there were major pain points with customers. They would spend huge amounts on computers but not have the internal resources to use them properly. This often led to lackluster performance, losses and delays.

Perot thought there was a better way. EDS would essentially mange the computer processing for companies and for this, would get lucrative long-term contracts. It was a classic win-win. The irony is that Perot pitched this idea to IBM but the company saw the market as a meaningless niche.

But Perot was convinced that there was a large market.  Although, in the early days, it was tough convincing customers of his vision.  Why trust tiny EDS with their strategic technology assets? Consider that Perot got rejected 77 times before he was able to land his first contract.

But eventually the momentum would build.  After 1964, EDS would more than double revenues every year through the rest of the decade.

Commitment To The Team: It’s true that some of Perot’s policies were questionable (at least by today’s standards). He had strict requirements for women skirts and prohibited men from having beards.

But there was little doubt that he had deep respect for his employees. After all, during the late 1970s, he put together a commando team – which included executives — to rescue EDS employees from Iran (the amazing story is chronicled in Ken Follett’s book, On Wings of Eagles: The Inspiring True Story of One Man’s Patriotic Spirit–and His Heroic Mission to Save His Countrymen).

Trend-Watching: Perot was hyper-aware of emerging inflection points in business and society. This ability not only allowed for robust growth for EDS  but helped align his team on what was important. For example, while Perot was skeptical of big government, he did not allow this belief to get in the way of recognizing opportunities, such as when Lyndon Baines Johnson launched the “Great Society.”  Perot knew this would be a boon for technology outsourcing. So he struck major contracts for the massive Medicare program. Ironically Perot would sometimes be referred to as America’s first welfare billionaire.

Clear Communication: Perot knew how to explain complex subjects (just imagine how tough it was during the 1950s and 1960s to talk to customers about computers). He liked to say that a puzzle should have only one piece. But Perot also would add a good dose of common sense and humor.

And some of his quotes are gems:

“Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.”

“Spend a lot of time talking to customers face to face. You’d be amazed how many companies don’t listen to their customers.”

“Life is never more fun than when you’re the underdog competing against the giants.”

“If someone as blessed as I am is not willing to clean out the barn, who will?”

Okta Co-Founder: Lessons In Creating A $13 Billion Juggernaut

Okta, which operates a cloud platform for identity management, announced another standout quarterly report this week. Revenues jumped by 50% to $125.2 million and cash flows came to $21.3 million. The company also added 450 new customers, for a total of over 6,550.

On the news, Okta stock rose by 6% to $113, putting the market cap at close to $13 billion. Keep in mind that – since the company came public in April 2017 – the return for investors has been a sizzling 566%.

So why all the success? What are some of the lessons here? Well, I had a chance to talk to the co-founder and COO, Frederic Kerrest, to get some answers. Interestingly enough, when he is not running Okta, he spends time helping out early-stage companies, such as through the MIT Trust Center for Entrepreneurship and Stanford StartX Accelerator programs. Frederic also has a popular podcast, called Zero to IPO, where he has interviewed tech veterans like Marc Andreessen, Aaron Levie and Patty McCord.

As for Okta, Frederic started the company, along with Todd McKinnon, during the depths of the financial crisis in 2009. Before this, both were employees at where they saw first-hand the megatrend of the cloud and how it would transform the market for enterprise software.

But Frederic and McKinnon did not rush to create a product. The first step was to identify a painful customer problem. “I spent time talking to many potential customers,” said Frederic. “I didn’t want to invent a product in an ivory tower.”

At first, he had basic wireframes of the app and then as he got more feedback, he developed static html pages. During the process, Frederic would focus on asking open-ended questions so as to understand the broad customer challenges, not just a looking for features or point solutions.

The end result: Okta would help solve the problem that customers were having with adopting, managing and securing the growing number of cloud apps.

At this stage, there was the temptation to offer a free pilot. But Frederic resisted this strategy. “If you give away a product,” he said, “there is a perception of a lack of value. But when you get a check from a customer, this shows commitment and starts real conversations. It may feel uncomfortable asking for money when you have an early-stage product but I think you need to.”

Yes, the timing for Okta was spot-on. But the company would need to find a way to scale the business. “At,” said Frederic, “I learned the importance of establishing a strong culture from day one, which allowed for the rapid growth.”

Let’s face it, as a company gets larger, the founders will not be involved in most of the decisions. So the culture will be essential in guiding the workforce in the right direction.

For Okta, a key principle was focusing on the success of the customer. A big part of this was using the SaaS model that requires a strong value proposition (if not, there will be churn). And of course, there was constant innovation.

“When you have a great product and service,” said Frederic, “your customers become your marketing.” Take a look at the testimonial page for Okta, which is chock-full of customer videos.

OK then, but isn’t today’s market different than it was when Okta first started? This is true. Yet the market for enterprise cloud solutions still appears to be in the early innings.

On the Okta earnings call, CEO Todd McKinnon noted: “The market tailwinds contributing to our momentum are the rapid growth of cloud and hybrid IT, digital transformation and security.”

Consider that — according to Gartner — total IT spending came to about $3.77 trillion last year but the cloud computing segment represented only about $214 billion. In other words, there is still enormous opportunity for entrepreneurs. @ 20: Secrets To Its $125 Billion Success

It was during the heyday of the Internet boom, in March 1999, that tech veterans Marc Benioff, Parker Harris, Frank Dominguez, and Dave Moellenhoff launched In true startup fashion, it was located in a one-bedroom apartment.

Up until this time, the enterprise software market was stuck in its crusty ways. Vendors would sell on-premise solutions and charge hefty up-front licensing fees, with ongoing maintenance charges. There were usually hard-sell tactics for upgrades. And yes, it was far from clear how many employees really used the software. had the bold ambition to turn this model upside down. Fees instead would be charged on a subscription basis. The software would be accessed via the Internet, which meant seamless upgrades as well as access to data in real-time.

Yet this vision had to be evangelized. Let’s face it, many companies did not want to place their data in the cloud. Would it be scalable? What about security?

These were legitimate issues but CEO Benioff worked tirelessly to promote his vision – and over time, it started to take hold in a big way.

Now the company generates over $13 billion in annual revenues and is growing at 26%.

Yes, it’s been an incredible journey. So then, what are some of the lessons? Well, there are really too many to count. In fact, Benioff wrote a book called Behind the Cloud: The Untold Story of How Went from Idea to Billion-Dollar Company-and Revolutionized an Industry, which highlights 111 of them!

But recently, I talked to a variety of former employees and got their takeaways. Here’s a look:

Tien Tzuo, who is the founder and CEO of Zuora:

I worked for Marc Benioff for nine years. Being at his side as we built Salesforce from the ground up was an amazing experience. After a month of working for Marc, I quickly realized that he has a relentless consistency with his storytelling. Once Salesforce started to scale, as we had new launch events, my team and I would work proudly to come up with a brand new message, an exciting new angle, a different kind of presentation. Then we would take our shiny new deck in to show Marc, and he would toss it. Then he would take us back to our fundamental ideas. He would return to the kinds of questions we were asking ourselves when we were just starting the company, like “How does the Internet change software delivery?” or “What if CRM was as simple and intuitive as buying a book on Amazon?” As it turns out, those messages were still relevant! Marc never lost focus of first principles. Marc taught me the discipline of giving the same message day after day, month after month, year after year. I’m not talking about rote recitation. The trick is delivering the same message in a thousand different ways. That’s how you change the world.

Judy Loehr, who is the founder of Bayla Ventures:

In the early days of we had to figure out how to make every part of this new company and business model work: prove an online CRM product could be widely accepted, prove customers would continue to pay month after month, and prove that a subscription model could work for software. I remember lots of knock-down arguments, but ultimately everyone was fighting for what was best for customers and how to make this new business model successful.

Shawna Wolverton, who is the head of product at Zendesk:

When I joined salesforce we were still inventing cloud software as we went. There were no playbooks or best practices for how to build or scale, our only option was to innovate and figure things out ourselves. Those early pioneering days created a pervasive culture of innovation that has clearly served the company very well over the past 20 years.

Jenny Cheng, who is a VP PayPal:There was a sense of urgency in the early days of Salesforce that you don’t see at every company. In both product and sales, we treated every month like it was both our first and last month. There was an urgency to get every new feature and release right and out to customers as soon as possible, an urgency to get new products into the hands of customers quickly, and always a focus on both short and long-term customer success.

Courtney Broadus, who is an angel investor:

It’s crazy that “move fast and break things” became a symbol of Silicon Valley when no business-oriented tech startup would have survived with that motto. Even in the earliest days of, we had a very strong culture around delivering innovation with excellence (do amazing things and DON’T break anything!). We were building a new model of cloud delivery for business software that no one understood, so our customer’s trust was sacred.

Our maniacal focus on getting each new technical capability done right – elegant, scalable, secure, iterative – created such a solid base architecture that we were able to open up our technology and share the first cloud platform for customers to build their own apps themselves.

Deepa Subramanian, who is the CEO of Wootric:

Salesforce treated people as a long-term investment even though we were in scrappy startup mode. They really invested in me and created an environment where individual contributors could be fearless about contributing to strategic discussions.

Are Most Of Your Product’s Features…Useless?

Pendo operates a platform that helps product teams with insights, user communication and user guidance. There are currently 850 customers like Salesforce, Coupa, Gainsight, BMC, and Sprinklr.

So yes, Pendo has access to an enormous data set. So putting this to work in a recent research project, the company found that about 80% of features in the typical cloud software product are rarely or never used. The conclusion: about $29.5 billion is wasted.

This is certainly an eye-opener. But then again, the results should not be too surprising. Seriously, how many features have you used in, say, Excel or Word? Probably a tiny fraction.

Now this does not mean you should go full-on minimalist with your product either.

“My personal take on this is that while I’m sure many companies are doing poor product planning and wasting R&D cycles on low-impact product features,” said Judy Loehr, who is the founder of Bayla Ventures and one of the early product managers at, “you can’t assume that a feature with low usage means low value. In many cloud products there are some features that are highly used and other features with lower usage that can be critical complements to the high-usage features. B2B cloud product strategy should never be driven solely by usage data.”

For example, a disaster recovery feature will probably never be used. But hey, you probably still want it, right?


On the other hand, there is a danger to be too aggressive with some features. This may give a false sense of engagement – even though the users could be getting annoyed and distracted.

“The excitement around AI in B2B analytics software is that it increases the signal/noise ratio,” said Deepa Subramanian, who is the CEO and co-founder of Wootric. “Instead, tell me when I need to pay attention, don’t force me to look at your charts everyday.”

Best Practices

When it comes to product development, there are often few bright-line rules. It’s really a combination of tracking usage, getting feedback from customers, using common sense and being creative.

Although, I do still think it’s a good idea to have a high burden of proof for creating new features.

“We have the advantage with working with many top consumer tech companies like Google and Facebook,” said Sam Boonin, who is the VP of product strategy at Zendesk. “We’ve learned a lot from this, which has helped with our own product. And generally, their apps are not full of features. Top companies understand that users can get overwhelmed.”

In fact, even adding a couple features can cause a stir from your customers!

But of course, for startups, your product is often the key to success. It’s your way to disrupt incumbents and find opportunities for growth.

This is why having a product-driven culture can be so critical.

“An inherent challenge in B2B is we serve two customers – the buyer vs end user,” said Clara Shih, who is the CEO and founder of Hearsay Systems. “Buyers often think they know what end users want, but sometimes they miss the mark. Looking at product usage analytics is only part of the story. What’s been game-changing for us at Hearsay Systems is having everyone in the company spend time with our end users — insurance agents and financial advisors — to first understand the ‘why’ and ‘jobs to be done.’ Especially as a vertical industry-focused company, we can go deep and the usage issues resolve themselves.”

What You Need To Know About The Low-Code Market

The low-code market tends to get drowned out with other buzzy tech trends. But it shouldn’t. According to Forrester Research, the total spending on the category is forecasted to hit $21.2 billion by 2022, representing a compound annual growth rate of roughly 40%.

Low-code is focused on making it easier and quicker to develop applications, such as with a drag-and-drop interface and integrations. By comparison, traditional code development can require thousands or even millions of lines of code.

“With low-code, innovative apps can be delivered 10x faster and organizations can turn on a dime, adapting their systems at the speed of business,” said Paulo Rosado, who is the CEO at OutSystems. His firm is one of the top operators in the sector, with more than 1,000 customers.

The main use cases for low-code include the following:

  • Internal Apps: These help improve a company’s core functions like HR, sales/marketing and financial reporting.
  • Customer Facing Apps: The solutions can be quite sophisticated, such as with rich user experiences, security and mobile capabilities.
  • Legacy App Replacement: There are huge swaths of old code across many organizations. With low-code, a company can upgrade these systems for modern approaches.

But there are certainly challenges and issues with low-code development. Interestingly enough, there can be resistance from within your company as this technology may appear to be a threat. The irony is that this could lead to “shadow IT.” In other words, this means people will use low-code tools even though there hasn’t been approval from IT!  Unfortunately, there may be risks with compliance and security.

Then there is the problem of finding the right low-code tool. Consider that there are more than 100 vendors.

So here are some things to keep in mind:

  • Vendor Trust: It may be difficult if not impossible to switch vendors because of the proprietary data models. This is why its important to focus on those firms that have a history of execution and commitment to the market.
  • Understanding the Feature Sets: Low-code platforms usually cover specific areas, say small business or enterprise environments.  Given this, you need to clearly identify your goals.
  • Ease of Use: This is not just about the UI. You also want a vendor that has helpful resources – like videos and training – as well as strong customer support.
  • Collaboration: Look for a low-code platform that allows for granular sharing of permissions. Consider that these types of apps usually involve teams.
  • Integrations: Does the low-code platform connect to the apps you use in your organization?

The Future Of Low-Code

Low-code is likely to become a standard across many organizations. “Every business user at a company is generally given the same set of productivity tools: Email, Chat, Word Processor, Spreadsheet, and a Presentation tool,” said Tejas Gahdia, who is the Head Evangelist for Zoho Creator and the Zoho Developer Platform. “Low-code tools will sit alongside these applications for every employee of an organization as they will be considered a core productivity tool.” Zoho Creator, which was launched in 2006, is one of the top low-code tools on the market. It has over 1 million users and 3 million applications built.

If anything, low-code will probably be essential for being competitive in the years ahead. “Every day in the news, it seems, we hear about another company that is either being disrupted or going out of business completely as they weren’t able to adapt quickly enough,” said Paulo. “Organizations simply cannot spend years trying to get their IT shops in order so that they can compete. Low-code provides a real and proven way for organizations to develop new digital solutions much faster and leapfrog their competitors.”

How To Get Customers To Renew…And Expand Their Accounts

Tien Tzuo is one of the pioneers of the SaaS (software-as-a-service) industry. He was employee No. 11 at, where he became the Chief Marketing Officer. He would then co-found Zuora, which operates a leading subscription platform.

Yet while the SaaS model is powerful – and has transformed companies like Microsoft and Adobe – it does demand much planning and organization. This is why Tien crated the PADRE operation model, a workflow to help companies better manage the process. And an important part of this is renewals:

“Acquiring new subscribers is critical, but in the Subscription Economy the vast majority of customer transactions consist of changes to existing subscriptions: renewals, suspensions, add-ons, upgrades, terminations, etc.”

The bottom line is that implementing a strong system for renewals not only helps reduce churn but also allows for the opportunity for higher growth, in terms of expansion of existing accounts and upsells.

So what can you do to improve the process for your own company? Well, I reached out to another top player in the SaaS field, Zendesk. The company, which has a market cap of about $7 billion, provides customer service and engagement cloud services. During the latest quarter, revenues jumped by 38% to $154.8 million.

“The renewals process starts with one key question: who is responsible for the renewal?” said Jaimie Buss, who is the VP of Sales for Zendesk. “The answer depends on what type of product you sell. With top-down large enterprise sales, a more senior account manager will most likely need to handle the renewal, as the objective of those renewals will likely be to extend the contract to multiple years, products, and include contract restructuring and heavy negotiation. For the mid-market, renewal objectives are a bit more straightforward; that is, to extend the contract term, minimize contraction by selling other products, and reducing or removing the discount offered at the initial sale. In this case, renewals could be supported by the Success organization or a renewals specialist.”

Regardless, the key is that you need to be proactive.  Waiting until a few days before the contract expires can mean losing business.

Here’s what Jaimie recommends:

  • 90-61 days before the renewal: You should begin the initial engagement. First of all, you want to confirm that the primary contact is still with the organization. Next, have a discussion about pricing, discount reductions and term length options. Then once you gather all the feedback, you should evaluate the potential growth of the account and the churn risk. “Churn risks should immediately be flagged and you should have all hands on deck: sales, success and sales engineers,” says Jamie.
  • 60-31 days before the renewal: This is when you get down to brass tacks. In other words, you want to confirm the contract term, pricing, billing frequency, and payment type. You will also want to confirm the paper process and timing of signatures with the customer.
  • 30-0 days before the renewal: The order should be processed and signed. “Once closed, a hand-off back to success or sales should occur if the renewal is driven by a renewals specialist,” said Jamie.

During this process, there are definitely some potential issues to keep in mind. For example, if you have an “auto-renew” option in the terms and conditions, the renewal specialist or sales person needs to coordinate with the collections team. If not, there’s the risk that a customer may receive an invoice during the contract negotiation! No doubt, this could be a deal killer.

Finally, there needs to be a clear-cut incentive structure for those people who are responsible for renewals.  According to Jamie, it must be focused on expansion of bookings.  And even if a customer does not want to add new subscribers, there should still be incentives to increase the term length, improve the billing frequency and reduce the discounts.

What The Cloud Will Look Like In Ten Years

Ten years ago the world economy was mired in a financial crisis. But for Dan Saks, he was optimistic and launched his own startup, called AppDirect. His focus was on helping businesses leverage cloud applications.

Now the early days were not easy. Keep in mind that he spent much of his time in Europe selling his vision to telecom operators!

But of course, the effort paid off in a big way. AppDirect has gone on to raise $246 million and has amassed a large customer base, which includes biggies like Comcast, ADP, and Deutsche Telekom

Yet success can be fleeting – so this is why Dan takes a long-term view of things. Let’s face it, the cloud industry will look much different in the next ten years. There will probably be some well-known companies that will crater along the way.

“I believe there will be a recession in the next several years and in this downturn, the victims will likely be the traditional workers that don’t have skills in the knowledge economy,” said Dan. “Many will be quick to blame technology and automation. In the next 10 years, there’ll be a transition from this predicted recession to an emergence of new trends in the cloud. There’ll be a less of a focus on cloud as a hot, new technology as this technology will become commonplace. Terms like cloud and digital won’t matter because they’ll be so pervasive.”

There are already signs of this. “New applications and services are emerging based on specific verticals and geography, creating proliferation of apps everywhere,” said Dan. “What’s interesting is the intersection of technologies that’ll continue to emerge as service-enabled.”

OK, so what are some of the other trends he is counting on? How might things develop during the next ten years?

Well, here’s a look:

Vertical SaaS That’s Powered By AI

“There’ll be an emergence of smarter computers among AI companies. The way we have viewed software over the last 40 years will no longer be relevant. Meaning, the days when we used to type a query into an IBM system and get output back are far behind us. By leveraging large datasets, vertical SaaS, and workflows, software will be able to work for you. You will no longer need to click in and enter information to get information out. Instead the computer will just push information to you.”

Form Factors

“There’ll be a proliferation of devices and enhanced technologies that interact with computers (e.g. keyboard, mouse, voice controls), making the technology more sophisticated. As it becomes more advanced, you may not even have to open an application, but rather it can tell you what you need proactively.”

Extension Of IoT (Internet-of-Things)

“Connected devices will proliferate everywhere data is aggregated in mass amounts (e.g. sensors). These connected devices need a SIM card for connectivity and an identity in order to drive commerce. There will be digital channels to buy, sell and manage services in your home and work life. Proliferation of devices reinforces the use of AI and creates many more digital channels than before.”


“The tech industry needs to ensure that businesses and consumers can keep, delete and manage the data they want. We need policymakers to become focused on how data privacy will be regulated as more data is produced.

“In the future, the entire digital economy will be driven by SaaS, and how we regulate data privacy will be important. We also need to be able to make decisions taking into consideration the chances of being hacked.”

Incoming Intuit CEO: Think AI

At the start of next year, Sasan Goodarzi will take the helm at Intuit. And he will have some big shoes to fill. Brad Smith, the CEO for the past 11 years, has led the company through a wrenching transition from the desktop to the cloud and mobile. During his tenure, the customer base and revenues have more than doubled. The total return for shareholders has also been an impressive 600%+, handily beating the S&P 500.

So what can we now expect from Goodarzi? What are his plans? Well, I had to chance to meet with him this week at the QuickBooks Connect conference.

He certainly has an interesting background. When he was nine years old, he immigrated to the US from Iran and within nine months, his dad died. With little money, the family started a business.

Goodarzi would eventually go on to get a bachelor’s degree in electrical engineering at the University of Central Florida and an MBA at the Kellogg School of Management at Northwestern University. He then would start his own business and from there, go on to become an executive at Honeywell.

But it was in 2004 that he joined Intuit, where he would quickly rise through the ranks. Consider that he would run both the TurboTax franchise and the Small Business and Self Employed unit.

“While at Inuit, I’ve definitely learned a lot,” said Goodarzi. “First of all, it is really important to be insanely focused on the customer and to ensure that the customer guides how decisions are made. No matter what the role is, you need to know the compass. Next, I learned about the power of being clear about the vision. This gets the heartbeat of the employees going. Finally, you need to do whatever it takes to maintain and accelerate the pace of innovation. Seldom have I met a customer that is satisfied and does not want more.”

As for the vision of Intuit going forward, it is certainly clear. It includes three main parts:

  • Smart Money: This is about getting paid instantly as well as having access to capital. For small businesses, being without cash for even a few days can make a big difference.
  • Smart Decisions: Intuit has the benefit of having large amounts of data, which can lead to personalized insights.
  • Smart Connections: With this, Intuit has been building an ecosystem of experts, vendors and service providers.

The Customer

“Spending time with customers is intertwined in my day,” Goodarzi said. “My calendar is color coded for this.”

He also reviews Intuit’s Slack channel every day. This provides real-time access to ratings/comments on the app store and product feedback. “If you ever think things are doing great, then you will be quickly humbled when you start going through the feeds,” he said. “I’ll ping the team if I see issues. The focus on the customer is part of my DNA.”

The customer obsession has definitely paid off in a big way. Not only has Intuit grown its tax and accounting businesses, but the company has also launched successful offerings in areas like small business lending and payments. All these have helped keep up the growth rate, despite the company’s large scale.

The Future

Goodarzi believes that – during the past century – there have been two main platforms of innovation: electricity and the Internet. But now he thinks we are seeing the emergence of a new one — that is, AI (Artificial Intelligence). “This will ignite things we cannot think are possible,” he said.

Unlike the move to the cloud and mobile, Intuit is not playing catchup with the AI megatrend. Keep in mind that the company has been building a strong patent portfolio and has also rolled out innovative apps, such as QB Assistant. For the past year, it has processed over 1.5 million questions. “QB Assistant has not answered everything correctly,” said Goodarzi, “but it is learning quickly. This is really powerful.”

He believes that AI is still in the early days and that Intuit must not rest on its laurels. Let’s face it, there are many well-funded fintech companies that are gunning for the opportunity.

“Success is not just about the technology,” said Goodarzi. “We still need to be focused on the customer. How can AI be used to revolutionize how we engage with the customer? How can we make much better recommendations? How can we eliminate more and more clicks and data inputs from the user? All these are just some of the questions we ask – and AI will be a big help.”