Scott Cook - Founder and Chairman of the Executive Committee, Intuit

WEBVTT
Kind: captions
Language: en

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- All right, I think we're ready to start.

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Anyone else wants to join us

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for the talk with Scott
Cook, Founder of Intuit.

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I'll just start for everyone
here at Khan Academy

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who doesn't know,

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both Scott and Signe Cook
are some of the earliest

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believers in Khan Academy, and supporters.

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And to a large degree, Khan
Academy wouldn't be where it is

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right now without a lot of their help.

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And so I just feel like I owe you guys.

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But with that out of the way.
- We're just fans.

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We cheer from the stands.

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The players who win the
game are in the room.

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- Very nice, well, thank you.

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(audience laughs)

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The point of having you here,

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and whenever we have
people of your stature

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come to the office,

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we think it's just a
valuable learning experience

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to have a conversation with you,

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and then to see what's
going on in your mind.

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The place I like to start,

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before we open it up to
the rest of the team,

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is you see a lot of folks

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who've done big things, like start Intuit.

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When I was a kid, I always wondered,

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how does that happen?

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How do you go from being,

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having a normal job, and
one day you start a company,

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and that company becomes
a really big company?

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Tell us a little bit about that story.

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How did Intuit get started?

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- I think for you it
was your niece, was it?

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- My cousin.

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- Cousin.

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- Cousin, yes.
- For me it was my wife.

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- [Sal] Very good.

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- She was struggling with
her math problem, no.

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(Sal and audience laughing)

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She had to do, she does
our joint checkbook,

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and she was complaining about doing it.

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She was very good at it.

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She's diligent and mathematical,

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but it was a hassle

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because she had to pay the bills,

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and you had to rewrite it in
the check register, reconcile.

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And she complained, and I thought, huh?

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This was in 1982, when PCs
were just starting to explode.

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I said, wait a minute, this
sounds like the kind of problem

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everybody might have,

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'cause everyone's gotta have a checkbook.

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Everyone has to pay bills.

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And PCs are now going into homes,

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and this is very solvable on a computer.

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This is the kind of task that
computers are very good at.

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I thought, oh, maybe I'll write
this software just for fun.

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But I hadn't programmed in a decade,

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so I figured maybe I should get somebody

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who actually knew what they were doing.

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And so I found a student
at Stanford, Tom Proulx,

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and he and I co-founded the company.

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And with the goal of building
a simple piece of software

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that would allow people
to eliminate the hassles

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of managing their daily, monthly finances.

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- And how do you go from that?

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Because what you see a
lot of in Silicon Valley,

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and other places is, you saw a need,

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you were able to build
a prototype to do it.

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But then there's a big jump between that

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and actually getting traction,

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actually people using it.

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How did you make that leap?

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- Yeah, for us that leap
between launching it,

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and actually getting a
lot users was not a leap,

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it was a chasm.

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(Sal laughs)

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It was a crevasse.

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(Sal and audience laughing)

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Software at the time was
sold in stores in boxes,

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and you took money,
and we tried to get VCs

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to invest two million dollars
to give us the marketing money

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to convince stores to carry it,

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and then convince people to buy it.

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And no VC said yes.

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They all said no,

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including VC firms run by classmates.

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Shows you how unpopular this idea was.

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That was a big problem.

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Yeah, we borrowed some money.

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We got a little bit of seed
money from some relatives.

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We stumbled along.

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We spent that.

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We ran out of money.

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We had to give back the rented furniture

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and rented computers.

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We stopped paying salaries.

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It was pretty ugly.

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- And why didn't you just,
I mean, it was stressful.

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- Yeah, our marriage almost broke up.

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- And, I mean, given that,

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why didn't you just cut your losses and?

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- I think cutting losses

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would've been the
rational thing, actually.

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It did look so hopeless.

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But I felt I was kind of boxed in

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because we'd borrowed this
money from some people.

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I had taken my father's
retirement money, most of it.

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We had the two relatives
who'd invested equity

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as kind of angel money.

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But I felt I had to pay that back.

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You looked at the amount of
money I'd have to pay back

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through honest work if
I had quit the business,

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so I felt trapped that I can't give up

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because then I gotta
pay all this stuff back,

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so we just kept working.

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We just kept working at it.

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- And at some point, how are you living?

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How are you paying your bills?

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- Fortunately, Signe had a very good job.

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In fact, in either this building,

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or in one of the adjacent ones.

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- [Sal] Next door.

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- Yeah, she worked in a software company,

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software publishing corp that had

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a bunch of these buildings.

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She in VP marketing, so
she had a very good job.

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It was her income that paid the bills.

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- How long did this,
I guess this crevasse,

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how long was this period?

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And then what was the moment where

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actually all of the
sudden you saw the light

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at the end of the tunnel?

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- Well, and it's actually
even worse than one crevasse,

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there were two.

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Something we tried started to work,

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and then it crapped out.

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And so that's even worse
when you get let down.

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Let's see, we launched the
product with great hope

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in October of '84.

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And it was the time when
I finally felt the thing

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was doing well enough
that I could buy something

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that wasn't a necessity,
something optional,

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that I could splurge on,

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which turned out to be a CD player.

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When I finally could afford
a CD player was in late '87.

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- Wow.

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That still was, this was a story,

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it was still, it wasn't like
a hockey stick at this point.

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- No.

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- It was still a slow and steady.

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- And so, the question you
asked, let me answer it

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directly the question you asked.

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What actually did turn
the business around?

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It turns out it was word of mouth.

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Because the way we built the product

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was different than others had.

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Nobody up till that point.

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Software was an industrial
product, sold to corporations.

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The big software success was VisiCalc,

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which was sold to finance
people in corporations.

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And the UI sucked.

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You couldn't figure it
out without training

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or reading a book.

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But that's the way software was.

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We were the first people
to do consumer testing,

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usability, we didn't call it
that, but usability testing.

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We brought housewives in
from the Junior League

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because at the time,
there were all these women

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who didn't work during the day.

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And they didn't use computers.

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We put them in front of computers.

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We gave them our stuff, and said, okay,

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use it to pay a bill.

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And they'd fumble and goof,
and we'd look at 'em and say,

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oh, shit, we didn't.

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Oh, oh, yeah, now I see.

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We'd go back and redesign
it, and we'd try it again.

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And refine it, and have people
who didn't know the product,

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no manual, try it by hand.

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We had done more cycles
of usability refinement.

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Nobody had ever done that before.

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So our product was actually usable,

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and fast compared to the,

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and we're selling to people in homes.

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No executive's telling them
to use it, they gotta want it.

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And so people starting using it

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from earlier and feeble marketing,

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and then they'd start
telling their friends,

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and they'd start telling their friends.

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And there started to be demand, pull,

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and it was the word of mouth
that ultimately took off.

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- And then it just is, the rest is--

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- Yeah, we started tripling.
Every year we'd triple in size.

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Triple, triple, triple.

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- You went into the most
obvious adjacent spaces,

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taxes, and?

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- Well, it was, I've learned
something about surprise.

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In fact, the first question
we talked about today was,

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what's been surprising?

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- [Sal] I told him about
our burglary situation

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when he asked that.

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(audience laughs)

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- Yeah, yeah.

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- [Sal] The upside and
downside to surprises. (laughs)

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- There's learning in surprises.

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We had, we were in our first,

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we launched Quicken, and
even before it took off,

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and was just failing and bumbling along,

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we did a little survey
of the few users we had.

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And you ask them all these questions.

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And one question made no sense.

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At the end of the questions,

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where we were asking
about how do they use it,

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what do they like, not like, et cetera.

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At the end there was a demographic set.

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You ask age, location, income.

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And we asked a question,

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where are you using the product?

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Home, office, or both?

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And half the people claimed
to using it in an office.

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Well, this was a home product,

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so we thought, well, maybe they
don't have a home computer.

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I mean, this was 1984, 1985.

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Maybe they're taking their stuff
to work and doing it there,

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so we ignored it.

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Every subsequent survey, the same answer.

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Half the people were
using it in an office.

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Well, we ignored it.

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It didn't make any sense.

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Finally, it started bugging me.

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Why are people answering
this question wrong?

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(audience laughs)

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I said, well, let's go ask
those people what they're doing,

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instead of ignoring it.

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This was years later.

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We went and actually
called some of them up,

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and asked them to interview them.

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Went to visit them, see
what they were doing.

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And by God, a lot of them
weren't doing their home stuff,

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they were running a business on it.

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We'd built this as a checkbook manager,

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not business accounting.

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And the mindset everyone had
is that business accounting.

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Talk to any, who's took accounting?

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Who's an accountant here, any accountants?

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Okay, very good.

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Now, what's the system
by which you keep books

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for a business in accounting?

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- Double entry.

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- Double entry accounting with debits

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and credits and journals and ledgers.

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Any expert will tell you,
that is the only way,

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and we assumed that.

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Here we found these
businesses using a tool

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that had none of that,
no debits, no credits,

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no double entry of anything.

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And, what?

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But they're using it, they are
running their business on it.

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It's where all the expenses
and the income flows through.

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It's their accounting system.

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And then we tried to find out, why?

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Why are they doing this unexpected thing?

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Now it's obvious in hindsight,

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but of those of you who
took accounting in school.

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Raise your hand if you
took accounting in school.

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Okay, how many of you
liked accounting in school?

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- I actually did like it.

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(audience laughs)
- Yeah, yeah, I got it.

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You and I, we're both weird.
But the rest of you are normal.

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Most people hate accounting.

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And the people who keep the
books in a small business,

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tend to be owner, the owner's spouse,

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an unlucky clerk or
assistant, office manager.

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Nine times out of 10, they
do not know accounting,

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and they do not wanna learn.

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To them, general ledger,

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which is a feature of
all accounting systems,

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is a World War II hero.

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(audience laughs)

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That's why they were using our product

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because we were in English,

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and they didn't have to learn anything.

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Where all the others, was
a massive learning curve.

00:10:38.530 --> 00:10:40.260
We finally said, whoa, what would happen

00:10:40.260 --> 00:10:42.603
if we actually built a
product for businesses?

00:10:43.810 --> 00:10:45.050
But made it on the same promise,

00:10:45.050 --> 00:10:46.700
with no debits, no credits,
no journals, no ledgers.

00:10:46.700 --> 00:10:47.580
Put it in plain English.

00:10:47.580 --> 00:10:48.840
You see an invoice, you fill it in.

00:10:48.840 --> 00:10:50.240
You see a check, you fill it in.

00:10:50.240 --> 00:10:52.700
So we worked for that,
on that, launched that.

00:10:52.700 --> 00:10:54.940
It all came because of a surprise.

00:10:54.940 --> 00:10:57.797
Today, that business, which is QuickBooks,

00:10:57.797 --> 00:11:01.981
is in total about 10 times
larger than the Quicken business.

00:11:01.981 --> 00:11:05.690
That surprise, which we ignored for years,

00:11:05.690 --> 00:11:06.690
has created a business.

00:11:06.690 --> 00:11:08.360
And if you add all of
our small business stuff.

00:11:08.360 --> 00:11:10.030
We've added payroll and
payments and all that,

00:11:10.030 --> 00:11:12.743
it's about 15 times the size
of the Quicken business.

00:11:13.645 --> 00:11:15.650
I didn't recognize it at the time,

00:11:15.650 --> 00:11:18.699
but there was a pattern about
when there are surprises,

00:11:18.699 --> 00:11:23.540
big upside or downside,
savor the surprise.

00:11:23.540 --> 00:11:24.740
What's really going?

00:11:24.740 --> 00:11:25.630
What explains it?

00:11:25.630 --> 00:11:27.040
That's not what we expected.

00:11:27.040 --> 00:11:28.110
Stop and savor it.

00:11:28.110 --> 00:11:29.920
It's too easy to just keep going.

00:11:29.920 --> 00:11:33.000
Anyway, I've learned multiple times.

00:11:33.000 --> 00:11:35.140
That's the story on some of
our subsequent businesses.

00:11:35.140 --> 00:11:36.720
- Now I know, when you ask me questions,

00:11:36.720 --> 00:11:38.880
that there's like an
underpinning philosophy.

00:11:38.880 --> 00:11:39.713
- They're not random.
- That's interesting.

00:11:39.713 --> 00:11:40.546
- They may seem random. (laughs)

00:11:40.546 --> 00:11:42.760
- No, that's very good, you're
having more thought than me.

00:11:42.760 --> 00:11:45.120
Now, before I open it up,

00:11:45.120 --> 00:11:47.120
where do you see Intuit going?

00:11:47.120 --> 00:11:49.636
It's a much larger company now.

00:11:49.636 --> 00:11:52.910
How do you as the leader, or the manager,

00:11:52.910 --> 00:11:54.630
how do you try to navigate that?

00:11:54.630 --> 00:11:58.140
Where do you see as the big
opportunities and the pitfalls?

00:11:58.140 --> 00:11:59.800
- Oh, the pitfalls are clear.

00:11:59.800 --> 00:12:03.400
It is amazing how success
and scale make you dumb

00:12:04.290 --> 00:12:05.150
in an organization.

00:12:05.150 --> 00:12:08.240
It is just stunning the degree to which

00:12:08.240 --> 00:12:12.093
the creative, inspiring,
innovation, invention,

00:12:13.870 --> 00:12:17.190
suddenly starts disappearing
as you grow, you add layers.

00:12:17.190 --> 00:12:20.814
Decision makers, managers,
try to get rigorous,

00:12:20.814 --> 00:12:24.010
and do all the stuff
that you have to do to be

00:12:24.010 --> 00:12:26.206
both efficient and to be reliable.

00:12:26.206 --> 00:12:27.374
People don't want their,

00:12:27.374 --> 00:12:30.160
I mean, we did launch
a version of QuickBooks

00:12:30.160 --> 00:12:31.602
where your data disappeared.

00:12:31.602 --> 00:12:32.435
(Sal laughs)

00:12:32.435 --> 00:12:34.125
Randomly after, all your data disappeared.

00:12:34.125 --> 00:12:34.960
(audience laughs)

00:12:34.960 --> 00:12:35.793
Yeah, this is a problem.

00:12:35.793 --> 00:12:37.010
You don't really wanna do this.

00:12:37.010 --> 00:12:38.640
Don't try this at home, kids.

00:12:38.640 --> 00:12:43.210
You gotta get rigorous,
but something happens.

00:12:43.210 --> 00:12:45.140
Without continued innovation,
without continued,

00:12:45.140 --> 00:12:46.220
how do we make the current thing better?

00:12:46.220 --> 00:12:49.120
How do we find the next problem to solve?

00:12:49.120 --> 00:12:51.400
You eventually get stale and die.

00:12:51.400 --> 00:12:55.300
How do you be both rigorous and inventive?

00:12:55.300 --> 00:12:56.160
And most importantly,

00:12:56.160 --> 00:13:00.460
how do you free your
most inventive people?

00:13:00.460 --> 00:13:02.280
Who are often quite new to the company,

00:13:02.280 --> 00:13:06.890
could be quite young,
likely are renegades.

00:13:06.890 --> 00:13:10.303
How do you free them to
invent without the Borg,

00:13:10.303 --> 00:13:12.143
the organization borging them?

00:13:13.120 --> 00:13:15.077
We're redoing how we work

00:13:15.077 --> 00:13:18.170
along the lines of lean experimentation.

00:13:18.170 --> 00:13:19.003
The thing I've learned is

00:13:19.003 --> 00:13:21.029
if you allow normal hierarchal decisions,

00:13:21.029 --> 00:13:24.540
you have the problem,
all the problems happen.

00:13:24.540 --> 00:13:28.140
Well meaning, middle
managers, it just slows down.

00:13:28.140 --> 00:13:29.290
But what if you tell the middle managers,

00:13:29.290 --> 00:13:30.770
your job isn't to make that decision?

00:13:30.770 --> 00:13:33.600
We'll let the experiments
make the decision.

00:13:33.600 --> 00:13:35.531
Middle, your goal is to
put in systems that allow

00:13:35.531 --> 00:13:39.109
your teams and your brand new employees

00:13:39.109 --> 00:13:42.480
to be able to take their best
idea to solve your mission,

00:13:42.480 --> 00:13:44.680
and run it as an
experiment, fast and cheap.

00:13:45.520 --> 00:13:46.780
The internet now allows us

00:13:46.780 --> 00:13:49.087
to run these fast, cheap experiments,

00:13:49.087 --> 00:13:51.250
so there's this whole wave of change

00:13:51.250 --> 00:13:54.659
called the Lean Startup
that Eric Ries has founded.

00:13:54.659 --> 00:13:58.710
I've not seen any idea
enter the common parlance

00:13:58.710 --> 00:14:01.390
of business as fast as the Lean Startup.

00:14:01.390 --> 00:14:06.330
His concept of Pivot went from
novel to tried in two years.

00:14:06.330 --> 00:14:07.163
I've never seen it.

00:14:07.163 --> 00:14:10.033
It's been absorbed, at
least as language, so fast.

00:14:10.930 --> 00:14:13.270
But he wrote the book about startups.

00:14:13.270 --> 00:14:15.360
I believe there's two groups
who need the Lean Startup

00:14:15.360 --> 00:14:17.650
even more than startups,

00:14:17.650 --> 00:14:19.690
this concept of lean experimentation.

00:14:19.690 --> 00:14:23.690
And those are large
companies and nonprofits,

00:14:23.690 --> 00:14:25.647
will benefit even more than startups.

00:14:25.647 --> 00:14:28.340
We're trying to operate as a
network of startups inside,

00:14:28.340 --> 00:14:29.660
where people can try their ideas.

00:14:29.660 --> 00:14:31.660
And we've got coaches, teams, systems.

00:14:31.660 --> 00:14:34.280
We put people through a two-day experience

00:14:34.280 --> 00:14:36.340
where people just sign up, and
by the end of the first day,

00:14:36.340 --> 00:14:39.227
they have their idea up and
running in some sort of test,

00:14:39.227 --> 00:14:41.803
to test their leap of faith assumption.

00:14:41.803 --> 00:14:44.680
All to uncork that inventive power that is

00:14:44.680 --> 00:14:47.978
what has created all great
enterprises in Silicon Valley.

00:14:47.978 --> 00:14:48.811
- [Sal] Yeah.

00:14:48.811 --> 00:14:50.918
- So that's kind of,
and if we do that right,

00:14:50.918 --> 00:14:53.160
then I won't have to pick a direction.

00:14:53.160 --> 00:14:55.939
Our people will invent the
directions far better than I can.

00:14:55.939 --> 00:14:57.890
- Yeah, absolutely.

00:14:57.890 --> 00:14:59.330
I mean, on that note,

00:14:59.330 --> 00:15:01.320
I'd love to take questions.

00:15:01.320 --> 00:15:02.809
Anyone have questions?

00:15:02.809 --> 00:15:05.153
I have a bunch more if anyone.

00:15:09.220 --> 00:15:11.634
- We started the company
with a bunch of surveys.

00:15:11.634 --> 00:15:15.010
I had described one that
helped us get the surprise

00:15:15.010 --> 00:15:17.000
that led to QuickBooks.

00:15:18.730 --> 00:15:22.010
But I have become a skeptic on surveys.

00:15:22.010 --> 00:15:24.940
I actually don't guide
teams to run surveys.

00:15:24.940 --> 00:15:26.440
I tell them, avoid the survey.

00:15:28.110 --> 00:15:29.770
We've found there's
not a high correlation,

00:15:29.770 --> 00:15:32.310
particularly if you're looking
at inventing new ideas,

00:15:32.310 --> 00:15:33.930
and new businesses, new products.

00:15:33.930 --> 00:15:35.750
There's not much of a correlation between

00:15:35.750 --> 00:15:38.583
what people say they will do
and what they actually do.

00:15:39.870 --> 00:15:42.933
What they say they will do,
they'll do about half the time.

00:15:43.920 --> 00:15:45.520
So that means, it's a coin flip.

00:15:46.790 --> 00:15:51.790
We've had, oh, we did a product
in India, which we have,

00:15:51.830 --> 00:15:55.503
which we surveyed users.

00:15:57.102 --> 00:15:58.330
We were trying to figure
out how to monetize it,

00:15:58.330 --> 00:15:59.310
so we surveyed.

00:15:59.310 --> 00:16:01.987
We expected 20% would pay for it,

00:16:01.987 --> 00:16:03.910
because we'd been giving it away for free.

00:16:03.910 --> 00:16:07.160
We surveyed users and 40% said they'd pay.

00:16:07.160 --> 00:16:08.057
And then we actually did the test,

00:16:08.057 --> 00:16:11.693
and took existing users and
added a charge, and 2% paid.

00:16:13.880 --> 00:16:15.240
There's another example.

00:16:15.240 --> 00:16:17.450
A team working in payroll division

00:16:17.450 --> 00:16:20.277
had a new way for a business
to start up payroll.

00:16:20.277 --> 00:16:22.250
They mocked it up in screens,

00:16:22.250 --> 00:16:25.380
showed it to 20 payroll customers.

00:16:25.380 --> 00:16:26.540
These are employers.

00:16:26.540 --> 00:16:29.608
Someone here runs a system
to write your paychecks.

00:16:29.608 --> 00:16:31.530
It'd be that person.

00:16:31.530 --> 00:16:33.883
Zero of the 20 said they'd use it.

00:16:34.960 --> 00:16:35.793
Zero.

00:16:38.970 --> 00:16:40.160
Amazingly, they didn't stop there.

00:16:40.160 --> 00:16:41.883
Thank God, they didn't stop there.

00:16:43.160 --> 00:16:45.370
But because of our system
of experimentation,

00:16:45.370 --> 00:16:46.630
they then got coached.

00:16:46.630 --> 00:16:49.200
We actually had Eric Ries in coaching.

00:16:49.200 --> 00:16:51.571
He figured out a way you could
run an experiment in 24 hours

00:16:51.571 --> 00:16:54.140
to actually see what people would do,

00:16:54.140 --> 00:16:56.400
not what they say they would do.

00:16:56.400 --> 00:16:59.853
They ran the experiment, and
58% of real customers did it.

00:17:01.156 --> 00:17:02.520
If they'd listened to the survey,

00:17:02.520 --> 00:17:03.640
we never would've done this thing.

00:17:03.640 --> 00:17:05.730
Because they could take it to a test,

00:17:05.730 --> 00:17:07.292
a test of just a slice of it,

00:17:07.292 --> 00:17:09.730
they then learned that
the customers would.

00:17:09.730 --> 00:17:11.240
We fleshed out and built the rest of it,

00:17:11.240 --> 00:17:14.320
and we got the fastest
customer growth in 10 years

00:17:14.320 --> 00:17:15.170
in that business.

00:17:16.900 --> 00:17:21.900
What I've learned is trust
behaviors, don't trust surveys.

00:17:22.500 --> 00:17:24.720
Measure and monitor their behaviors,

00:17:24.720 --> 00:17:26.600
and then right after behavior,
you can ask somebody,

00:17:26.600 --> 00:17:28.080
why'd you do that, or why not?

00:17:28.080 --> 00:17:30.313
Then you might get
something close to truth.

00:17:31.828 --> 00:17:33.700
And do it more as an in-depth interview

00:17:33.700 --> 00:17:35.600
of the people who just did something,

00:17:35.600 --> 00:17:38.310
or in a test just didn't do something.

00:17:38.310 --> 00:17:40.390
And then you might learn something useful

00:17:40.390 --> 00:17:41.340
from the interview.

00:17:45.950 --> 00:17:47.020
When we go out and talk to customers,

00:17:47.880 --> 00:17:48.880
and interview and observe,

00:17:48.880 --> 00:17:50.720
one thing we'll do is
go and watch customers.

00:17:50.720 --> 00:17:52.330
I find it's much more reliable

00:17:52.330 --> 00:17:54.760
to watch people in what they do.

00:17:54.760 --> 00:17:55.593
And you've got an opportunity.

00:17:55.593 --> 00:17:57.450
You've got people at home,
studying or whatever,

00:17:57.450 --> 00:18:00.480
where you could go watch
and see actual behaviors.

00:18:00.480 --> 00:18:02.100
Don't say anything, just watch,

00:18:02.100 --> 00:18:04.473
and you'll see things they
would never comment about.

00:18:07.769 --> 00:18:09.080
I'm on the board of the
Procter & Gamble company.

00:18:09.080 --> 00:18:12.052
They make soap, Tide, and
Pampers and other things.

00:18:12.052 --> 00:18:13.890
In trying to figure out
how to improve Tide,

00:18:13.890 --> 00:18:14.742
they'd run surveys.

00:18:14.742 --> 00:18:16.510
One of the many, obviously,

00:18:16.510 --> 00:18:18.170
you've got many things you ask about,

00:18:18.170 --> 00:18:19.860
one of which was the box, the packaging.

00:18:19.860 --> 00:18:20.890
They asked, is it easy?

00:18:20.890 --> 00:18:22.250
And the answers in the survey were,

00:18:22.250 --> 00:18:23.450
yeah, it's easy to open.

00:18:24.400 --> 00:18:28.050
Well, years later, they did
some in-home observation.

00:18:28.050 --> 00:18:32.170
They followed some homemakers
around watching what they did.

00:18:32.170 --> 00:18:34.880
And they then did observe
a few people opening

00:18:34.880 --> 00:18:36.860
a brand new box of Tide,
and they found it was easy

00:18:36.860 --> 00:18:39.875
if you kept a knife or a
screwdriver next to your,

00:18:39.875 --> 00:18:42.130
and 'cause women have nails,

00:18:42.130 --> 00:18:43.840
and they couldn't open those things,

00:18:43.840 --> 00:18:45.360
so they were hacking at it.

00:18:45.360 --> 00:18:48.360
But it had never come up in a
survey, but they could see it.

00:18:50.000 --> 00:18:53.170
The thing I'd recommend is to
understand customers deeply,

00:18:53.170 --> 00:18:54.270
go out and watch them.

00:18:55.440 --> 00:18:56.910
We call it follow-me-home testing

00:18:56.910 --> 00:18:58.752
because we used to follow
customers home from the store.

00:18:58.752 --> 00:19:00.855
Not exactly, we'd ask
for permission. (laughs)

00:19:00.855 --> 00:19:02.200
(Sal and audience laughing)

00:19:02.200 --> 00:19:03.800
So we could watch them start up.

00:19:08.400 --> 00:19:10.820
Well, let me answer that in two parts.

00:19:10.820 --> 00:19:12.850
One, the story of how
we got into payments,

00:19:12.850 --> 00:19:14.823
and then the crystal ball gazing.

00:19:16.180 --> 00:19:18.494
There was actually one guy, an engineer,

00:19:18.494 --> 00:19:20.683
an African immigrant,

00:19:21.930 --> 00:19:23.570
who looking at our QuickBooks users said,

00:19:23.570 --> 00:19:25.595
huh, they really could use payments.

00:19:25.595 --> 00:19:26.933
In fact, what they need's different

00:19:26.933 --> 00:19:29.070
than what everyone else is selling.

00:19:29.070 --> 00:19:30.810
He got a product manager to work with him.

00:19:30.810 --> 00:19:33.410
And the two of them cooked up this scheme,

00:19:33.410 --> 00:19:37.380
and inserted it into the product.

00:19:37.380 --> 00:19:38.500
And, by God, it took off.

00:19:38.500 --> 00:19:41.790
'Cause they'd found a
problem for businesses

00:19:41.790 --> 00:19:44.910
who accept payments when
there's no card present.

00:19:44.910 --> 00:19:46.368
Because QuickBooks is typically
used in the back office

00:19:46.368 --> 00:19:49.010
around invoices, and some customers wanted

00:19:49.010 --> 00:19:51.260
to pay with a credit card over the phone,

00:19:51.260 --> 00:19:52.396
but there was no card present.

00:19:52.396 --> 00:19:55.330
The whole payments industry
had been rooted around

00:19:55.330 --> 00:19:57.070
that card being the key.

00:19:57.070 --> 00:19:58.490
They invented a different economics

00:19:58.490 --> 00:20:01.140
and a different approach, and
embedded it in QuickBooks.

00:20:01.140 --> 00:20:02.645
And so now we have a payments business

00:20:02.645 --> 00:20:05.841
that's 400 million in revenue, sizable.

00:20:05.841 --> 00:20:10.130
All because they found a
problem nobody else had solved,

00:20:10.130 --> 00:20:11.903
and figured out how we could solve it.

00:20:16.960 --> 00:20:21.493
Now, on gazing about the future.

00:20:25.090 --> 00:20:26.460
Right now, you're seeing a hotbed

00:20:26.460 --> 00:20:28.131
of innovation around payments.

00:20:28.131 --> 00:20:30.030
Things are becoming dramatically easier

00:20:30.030 --> 00:20:31.580
to send money person to person.

00:20:34.586 --> 00:20:35.540
Send money for businesses,

00:20:35.540 --> 00:20:37.790
for businesses to set
up and accept payments.

00:20:39.150 --> 00:20:41.410
It's long been, payments,
a kind of monopolized

00:20:41.410 --> 00:20:44.210
or cartelized business with a
few major payment utilities,

00:20:44.210 --> 00:20:45.969
such as Visa and Mastercard,

00:20:45.969 --> 00:20:48.360
or one central bank run system

00:20:48.360 --> 00:20:50.160
called the Automated Clearing House.

00:20:51.260 --> 00:20:53.920
And now this rampant
innovations happening around it.

00:20:53.920 --> 00:20:55.680
It's so much innovation, and most of it,

00:20:55.680 --> 00:20:57.170
I can't tell you how it's gonna turn out.

00:20:57.170 --> 00:20:59.470
But it's gonna get a lot easier
and cheaper for everyone.

00:20:59.470 --> 00:21:02.120
The place we're focused on
is still in the back office

00:21:02.120 --> 00:21:04.550
because everyone else
tends to be focused heavily

00:21:04.550 --> 00:21:06.070
on the point of sale,

00:21:06.070 --> 00:21:08.010
but the place that's still being ignored

00:21:08.010 --> 00:21:11.473
is that business that sends
bills or invoices out.

00:21:11.473 --> 00:21:13.820
And, for example, in rent payments here.

00:21:13.820 --> 00:21:15.749
How many of you pay rent?

00:21:15.749 --> 00:21:17.180
Raise your hand, okay.

00:21:17.180 --> 00:21:19.610
How many of you pay that electronically?

00:21:19.610 --> 00:21:21.640
Most of the hands went, right, yeah.

00:21:21.640 --> 00:21:23.780
Especially small landlords are not set up

00:21:23.780 --> 00:21:25.510
to accept electronic payments.

00:21:25.510 --> 00:21:28.340
And it's a royal pain,
for you, and for them.

00:21:28.340 --> 00:21:29.640
They gotta hang around the mailbox,

00:21:29.640 --> 00:21:30.970
waiting for the money to come in.

00:21:30.970 --> 00:21:32.309
'Cause if it doesn't, they gotta bug you.

00:21:32.309 --> 00:21:37.010
So a small team, how many people?

00:21:37.010 --> 00:21:39.908
Yumi, how many people was
that team when they started?

00:21:39.908 --> 00:21:41.300
- [Yumi] About two or three.

00:21:41.300 --> 00:21:42.133
- Two or three?

00:21:42.133 --> 00:21:45.690
Two or three folks said,
we can fix that problem.

00:21:45.690 --> 00:21:47.820
And so they invented a
system called Spark Rent,

00:21:47.820 --> 00:21:49.378
which allows the merchant to,

00:21:49.378 --> 00:21:52.250
not the merchant, the landlord to sign up,

00:21:52.250 --> 00:21:55.050
and then the tenants can pay
electronically really quickly.

00:21:55.050 --> 00:21:56.800
The landlord can be anywhere, on vacation,

00:21:56.800 --> 00:21:57.680
and they know everything.

00:21:57.680 --> 00:21:58.752
It sends reminders out.

00:21:58.752 --> 00:21:59.993
It's cheap.

00:22:01.450 --> 00:22:02.283
It's had some hiccups,

00:22:02.283 --> 00:22:03.980
but it's now the most popular way

00:22:03.980 --> 00:22:07.580
that small landlords can
get paid electronically,

00:22:07.580 --> 00:22:09.330
and tenants can pay electronically.

00:22:10.847 --> 00:22:13.610
That's just the beginning
of the kind of innovation.

00:22:13.610 --> 00:22:15.370
From that, what we wanna
do is develop a way

00:22:15.370 --> 00:22:17.918
so that our system will know
that you pay your rent on time,

00:22:17.918 --> 00:22:21.730
so when you try to get that
next apartment in San Francisco,

00:22:21.730 --> 00:22:23.680
and there's five people
trying to get that apartment,

00:22:23.680 --> 00:22:25.830
you've got a track
record that you can say,

00:22:27.620 --> 00:22:28.453
you can trust me.

00:22:28.453 --> 00:22:30.350
Here's my Spark Rent track record.

00:22:30.350 --> 00:22:32.140
We think we can then take the data,

00:22:32.140 --> 00:22:34.143
and make it useful to both sides.

00:22:39.450 --> 00:22:42.630
When we're at our best,
yes, we can pull that off.

00:22:42.630 --> 00:22:43.980
But that's a real, I'll admit,

00:22:43.980 --> 00:22:45.563
we're far from perfect on that.

00:22:48.090 --> 00:22:50.310
In our payments group, again,

00:22:50.310 --> 00:22:52.447
we've had a group that came in
at a much lower price point.

00:22:52.447 --> 00:22:54.953
Within our tax group,
a group was working on.

00:22:54.953 --> 00:22:56.820
Right now, you go to TurboTax,

00:22:56.820 --> 00:22:59.490
and you've gotta pay
your taxes on a computer.

00:22:59.490 --> 00:23:00.323
But this group said,

00:23:00.323 --> 00:23:01.820
why don't we use the phone?

00:23:01.820 --> 00:23:03.810
And why don't we use the
phone to snap pictures

00:23:03.810 --> 00:23:04.860
of those tax documents,

00:23:04.860 --> 00:23:06.586
so you don't have to type it in?

00:23:06.586 --> 00:23:08.990
Well, management thought
this idea wouldn't work,

00:23:08.990 --> 00:23:11.170
and outside experts said it wouldn't work,

00:23:11.170 --> 00:23:12.003
but they kept at it.

00:23:12.003 --> 00:23:14.940
And they've built something
called SnapTax that works.

00:23:14.940 --> 00:23:16.379
It's an app on your phone.

00:23:16.379 --> 00:23:20.582
And you snap pictures of your W-2s,

00:23:20.582 --> 00:23:23.350
and if your taxes are simple,
and a lot of you guys are,

00:23:23.350 --> 00:23:26.153
it asks like nine more
questions, and you're done.

00:23:27.060 --> 00:23:28.840
Nothing we have done in,

00:23:28.840 --> 00:23:31.620
and it's at a lower price
point, and it's easier.

00:23:31.620 --> 00:23:33.210
Nothing we've done in
our company's history

00:23:33.210 --> 00:23:34.835
has gotten as high of
ratings from customers.

00:23:34.835 --> 00:23:37.633
It's five stars in the app stores.

00:23:37.633 --> 00:23:40.763
And we get reviews like you can't believe.

00:23:41.750 --> 00:23:44.840
One person wrote in that
she was in the recovery room

00:23:44.840 --> 00:23:46.680
after surgery doing her taxes,

00:23:46.680 --> 00:23:47.592
and so happy about it.

00:23:47.592 --> 00:23:49.450
(audience laughs)

00:23:49.450 --> 00:23:51.580
Another guy wrote in the
review, in the app store,

00:23:51.580 --> 00:23:54.850
that it was February 14th,
he just finished his taxes

00:23:54.850 --> 00:23:56.930
in bed with his girlfriend,
and she's so stoked,

00:23:56.930 --> 00:23:59.034
she might even wear the
gift he just gave her.

00:23:59.034 --> 00:24:02.340
(audience and Sal laughing)

00:24:02.340 --> 00:24:03.310
Again, it was a small team

00:24:03.310 --> 00:24:05.840
who had the freedom to
experiment and invent something,

00:24:05.840 --> 00:24:09.160
which is just, that the
mothership wasn't working on.

00:24:09.160 --> 00:24:10.360
At our best, we do that.

00:24:10.360 --> 00:24:12.573
There's other times when
I wish we were better.

00:24:17.090 --> 00:24:19.409
This is the eternal
priority setting question.

00:24:19.409 --> 00:24:20.242
(audience laughs)

00:24:20.242 --> 00:24:21.950
No matter what size you're in.

00:24:21.950 --> 00:24:24.240
Before we launched, we had
more features we wanted

00:24:24.240 --> 00:24:25.500
to put in than we could fit in.

00:24:25.500 --> 00:24:26.400
After we launched,

00:24:26.400 --> 00:24:31.060
and now as a 4 1/2 billion dollar company,

00:24:31.060 --> 00:24:32.718
there's much more stuff we wanna get to,

00:24:32.718 --> 00:24:34.768
and that people wanna get to than we can.

00:24:40.300 --> 00:24:44.190
I have two thoughts on that,

00:24:44.190 --> 00:24:45.560
and they are kind of opposing thoughts.

00:24:45.560 --> 00:24:48.500
One is, make it fast and
cheap to run experiments,

00:24:48.500 --> 00:24:49.863
so you can try more things.

00:24:50.750 --> 00:24:52.800
If it's big and expensive
to try something,

00:24:52.800 --> 00:24:54.200
then you've gotta be choosy.

00:24:55.410 --> 00:24:58.290
If you can make it fast and cheap to test

00:24:58.290 --> 00:25:02.250
the leap of faith assumption
on which a decision depends,

00:25:02.250 --> 00:25:04.100
then you can try a lot more things.

00:25:04.100 --> 00:25:05.971
Eric Ries' Lean Startup,

00:25:05.971 --> 00:25:07.990
we were already running experimentation.

00:25:07.990 --> 00:25:10.940
And then I discovered Eric
Ries on an online video,

00:25:10.940 --> 00:25:12.655
and I said, my God, that's our idea,

00:25:12.655 --> 00:25:14.452
but he explains it a lot better,

00:25:14.452 --> 00:25:15.725
and he took it a lot farther.

00:25:15.725 --> 00:25:18.950
I'd circulate the Lean Startup,

00:25:18.950 --> 00:25:20.000
and look at some of his videos.

00:25:20.000 --> 00:25:21.488
It's really, it makes sense.

00:25:21.488 --> 00:25:25.570
That increases your
capacity to try new things,

00:25:25.570 --> 00:25:26.910
and to try new radical things.

00:25:26.910 --> 00:25:29.213
'Cause if it's fast and
cheap, it can be radical.

00:25:30.560 --> 00:25:35.390
The other, the principle is
that the actual important things

00:25:39.120 --> 00:25:42.150
is a small subset of all the
things you're working on,

00:25:42.150 --> 00:25:43.880
what's truly important.

00:25:43.880 --> 00:25:45.030
Here's an example.

00:25:45.030 --> 00:25:48.010
I learned this technique from another CEO,

00:25:48.010 --> 00:25:49.810
to run a thing called a town hall meeting.

00:25:49.810 --> 00:25:52.350
We'll get a group of
important customers together,

00:25:52.350 --> 00:25:53.635
let's say accountants,

00:25:53.635 --> 00:25:55.467
because we sell a lot of
things to accountants.

00:25:55.467 --> 00:25:58.053
We'll get a group of 12 of
them together in a room,

00:25:58.970 --> 00:26:00.400
and I'll stand up at the whiteboard,

00:26:00.400 --> 00:26:03.025
and I'll ask them two main questions.

00:26:03.025 --> 00:26:05.593
What do you love about
dealing with Intuit?

00:26:06.520 --> 00:26:09.050
And each person write
down, private, silent work,

00:26:09.050 --> 00:26:10.299
write down a list of what you love about

00:26:10.299 --> 00:26:11.463
working with Intuit.

00:26:12.308 --> 00:26:16.730
Second question, what do you
hate about working with Intuit?

00:26:16.730 --> 00:26:17.563
What's wrong?

00:26:17.563 --> 00:26:18.640
Where do we piss you off?

00:26:18.640 --> 00:26:20.570
What are we just missing the boat?

00:26:20.570 --> 00:26:22.970
Okay, silently, each
person write your own list.

00:26:24.417 --> 00:26:25.897
Okay, then once they have lists,

00:26:25.897 --> 00:26:26.980
I stand up in front, and say,

00:26:26.980 --> 00:26:28.840
okay, let's read off list number one.

00:26:28.840 --> 00:26:29.930
And everyone read their list one,

00:26:29.930 --> 00:26:30.830
and I'm up at the whiteboard.

00:26:30.830 --> 00:26:34.220
And I fill out the whiteboard
with all the great stuff.

00:26:34.220 --> 00:26:36.800
I said, thank you, that's
great, that's awesome.

00:26:36.800 --> 00:26:38.350
Now, let's go to question two.

00:26:38.350 --> 00:26:40.800
Everyone tell me the lousy stuff.

00:26:40.800 --> 00:26:42.800
And I write all those ideas down.

00:26:42.800 --> 00:26:45.680
People will have real passion
about the stuff that's wrong,

00:26:45.680 --> 00:26:48.023
that needs to be fixed,
and needs to be changed.

00:26:49.360 --> 00:26:53.763
You'll get 30 items up there,
real passion from folks.

00:26:53.763 --> 00:26:55.710
Then I'll say, okay,
let's forget list one.

00:26:55.710 --> 00:26:56.543
Thank you for that.

00:26:56.543 --> 00:26:57.580
Let's focus on list two.

00:26:57.580 --> 00:27:00.660
I'm gonna give each of
you five colored stickers.

00:27:00.660 --> 00:27:03.824
Go up to this whiteboard and
put those colored stickers

00:27:03.824 --> 00:27:07.080
by the things that you
find most important.

00:27:07.080 --> 00:27:08.679
You can put all five on one.

00:27:08.679 --> 00:27:11.320
You can put one sticker on each of five.

00:27:11.320 --> 00:27:12.370
You can split 'em up.

00:27:13.690 --> 00:27:16.940
What amazingly happens,
out of the 30 or 35 items

00:27:16.940 --> 00:27:18.320
that'll be on the board,

00:27:18.320 --> 00:27:21.390
most get no votes at all,

00:27:21.390 --> 00:27:25.736
not even from the person
who was advocating it.

00:27:25.736 --> 00:27:29.180
The votes uniformly are
incredibly lopsided.

00:27:29.180 --> 00:27:30.360
Now, they're not
collaborating to each other.

00:27:30.360 --> 00:27:31.370
They're not comparing notes.

00:27:31.370 --> 00:27:32.910
They're doing this as individual work.

00:27:32.910 --> 00:27:35.540
The votes, there's one always,
every time I've done this,

00:27:35.540 --> 00:27:36.583
one big one.

00:27:37.620 --> 00:27:40.034
And then there'll be a second
that gets half as many votes.

00:27:40.034 --> 00:27:42.660
And then maybe a third
that gets half as many,

00:27:42.660 --> 00:27:43.660
and then it's noise.

00:27:44.760 --> 00:27:45.888
Then what we do in the
meeting is say, okay,

00:27:45.888 --> 00:27:48.520
let's dive into number one.

00:27:48.520 --> 00:27:49.480
Okay, what's the problem?

00:27:49.480 --> 00:27:50.313
What's the issue?

00:27:50.313 --> 00:27:51.146
When does it happen?

00:27:51.146 --> 00:27:51.979
How does it happen?

00:27:51.979 --> 00:27:52.812
Tell us more.

00:27:52.812 --> 00:27:53.645
What's the root cause?

00:27:53.645 --> 00:27:54.780
Blah, blah, blah, how do
we go about fixing it?

00:27:54.780 --> 00:27:56.420
And dive into number one.

00:27:56.420 --> 00:27:58.640
Basically, you should work
with most of your effort

00:27:58.640 --> 00:28:01.270
on number one, small effort on number two,

00:28:01.270 --> 00:28:03.019
and forget the rest.

00:28:03.019 --> 00:28:04.970
Organizations can't do that.

00:28:04.970 --> 00:28:07.400
Organizations will work on 12.

00:28:07.400 --> 00:28:08.840
Oh, Susie wants to work on this,

00:28:08.840 --> 00:28:10.021
and boy that's a good idea from them.

00:28:10.021 --> 00:28:11.646
That customer was so passionate.

00:28:11.646 --> 00:28:14.870
So you'll get 12, and you'll
underwhelm the important ones.

00:28:14.870 --> 00:28:16.580
And you'll spend much too
much time on the stuff

00:28:16.580 --> 00:28:18.204
that just isn't.

00:28:18.204 --> 00:28:20.290
This is the best example I've ever seen

00:28:20.290 --> 00:28:22.540
how customers actually
are much more focused

00:28:22.540 --> 00:28:24.523
on what's important than companies are.

00:28:26.090 --> 00:28:27.500
And there's one big one.

00:28:27.500 --> 00:28:29.640
I tell folks, what's the 1 1/2 things

00:28:29.640 --> 00:28:30.692
you should be working on?

00:28:30.692 --> 00:28:31.537
(audience laughs)

00:28:31.537 --> 00:28:32.860
And then run cheap experiments,

00:28:32.860 --> 00:28:33.919
so you keep the idea creation.

00:28:33.919 --> 00:28:36.600
'Cause you'll get surprised
out of the cheap experiments.

00:28:36.600 --> 00:28:38.773
That's your safety
valve, to get surprised.

00:28:38.773 --> 00:28:41.683
That might be helpful.

00:28:46.401 --> 00:28:47.560
(audience member speaking faintly)

00:28:47.560 --> 00:28:48.900
Let's do a little show of hands.

00:28:48.900 --> 00:28:49.733
How many people wanna understand

00:28:49.733 --> 00:28:51.910
all the words in the tax law?

00:28:51.910 --> 00:28:52.743
Raise your hand.

00:28:52.743 --> 00:28:53.870
(Sal laughs)

00:28:53.870 --> 00:28:55.660
How many people just wanna
get their taxes filed

00:28:55.660 --> 00:28:56.814
and get their money?

00:28:56.814 --> 00:28:57.800
(audience laughs)

00:28:57.800 --> 00:28:59.274
Yeah, we're not in the education business.

00:28:59.274 --> 00:29:00.459
That's your business.

00:29:00.459 --> 00:29:02.090
(audience laughs)

00:29:02.090 --> 00:29:03.690
We have found, at least
when it comes to finance,

00:29:03.690 --> 00:29:05.289
most people are exactly like you.

00:29:05.289 --> 00:29:08.461
They just wanna get it
over, and get the work done.

00:29:08.461 --> 00:29:10.560
If they occasionally wanna learn more,

00:29:10.560 --> 00:29:12.480
we've got a lot of what we
call point-of-need help,

00:29:12.480 --> 00:29:13.313
where you can just click.

00:29:13.313 --> 00:29:15.020
There's a little blue
underlined thing saying,

00:29:15.020 --> 00:29:15.853
what is this?

00:29:15.853 --> 00:29:16.860
Or, tell me more.

00:29:16.860 --> 00:29:18.990
And people can click and learn more.

00:29:18.990 --> 00:29:19.823
When they do that,

00:29:19.823 --> 00:29:20.961
it's typically not
because they wanna learn,

00:29:20.961 --> 00:29:23.700
it's because they wanna
make the decision right.

00:29:23.700 --> 00:29:25.186
Even when they're quote, learning more,

00:29:25.186 --> 00:29:27.743
it's only to make the
decision, and then move on.

00:29:29.870 --> 00:29:31.890
What you're doing is
noble and really important

00:29:31.890 --> 00:29:33.357
and crucial to the world,

00:29:33.357 --> 00:29:36.183
but it's not why people tend
to buy or use our stuff.

00:29:40.120 --> 00:29:42.161
Yeah, so, why did we acquire Mint,

00:29:42.161 --> 00:29:44.263
given our passion for internal innovation?

00:29:45.104 --> 00:29:47.310
It came way, we acquired
Mint before we had wrapped up

00:29:47.310 --> 00:29:49.319
a lot of the experimentation work.

00:29:49.319 --> 00:29:52.390
We're not as good as we want now,

00:29:52.390 --> 00:29:54.023
but we were much less good then.

00:29:55.250 --> 00:29:57.550
Also, I'm very eclectic.

00:29:57.550 --> 00:30:00.200
We want innovation and innovative
teams from both sources.

00:30:00.200 --> 00:30:03.920
We both acquire and we teach
and coach our internal,

00:30:03.920 --> 00:30:06.150
and enable our internal entrepreneurs.

00:30:06.150 --> 00:30:06.983
We do both.

00:30:06.983 --> 00:30:07.816
We certainly don't,

00:30:07.816 --> 00:30:10.390
I think it was Bill Joy
of Sun who once said,

00:30:10.390 --> 00:30:13.187
almost all the smart people in the world

00:30:13.187 --> 00:30:15.275
don't work for your company.

00:30:15.275 --> 00:30:17.727
(audience laughs)

00:30:17.727 --> 00:30:19.790
We wanna be where almost
all the smart people are,

00:30:19.790 --> 00:30:22.340
which is, we're only one
slice of the smart people.

00:30:23.260 --> 00:30:25.085
In this case, with Mint,
we had an internal effort

00:30:25.085 --> 00:30:27.409
to do Quicken online.

00:30:27.409 --> 00:30:28.733
Mint and some other competitors

00:30:28.733 --> 00:30:31.200
were pursuing similar things,

00:30:31.200 --> 00:30:33.460
and Mint just outrun the whole field.

00:30:33.460 --> 00:30:34.906
They produced a better solution

00:30:34.906 --> 00:30:38.630
that had a different business
model and was just better

00:30:38.630 --> 00:30:39.790
than what we were doing.

00:30:39.790 --> 00:30:41.900
We said, why fight a losing battle?

00:30:41.900 --> 00:30:44.600
Let's go get the top team
and the top approach.

00:30:44.600 --> 00:30:45.440
Since we've acquired them,

00:30:45.440 --> 00:30:48.120
their business has tripled
or quadrupled in size.

00:30:48.120 --> 00:30:51.020
Their ideas have infused
much of the rest of Intuit.

00:30:51.020 --> 00:30:52.330
That was one thing we were hoping to have,

00:30:52.330 --> 00:30:54.980
their ideas change the
direction of other businesses.

00:30:56.540 --> 00:30:58.310
We've had them run the Quicken business,

00:30:58.310 --> 00:30:59.570
so we could take their learning,

00:30:59.570 --> 00:31:01.940
and we gave them the
Quicken business to run.

00:31:01.940 --> 00:31:05.723
We really tried to maximize
the wisdom transfer.

00:31:07.058 --> 00:31:11.840
Now we're building a Mint
product for small businesses.

00:31:11.840 --> 00:31:13.730
Figuring they have such a
good thing for consumers.

00:31:13.730 --> 00:31:15.500
Plus, we're adding much
more to the Mint data

00:31:15.500 --> 00:31:17.121
and what Mint can do for you.

00:31:17.121 --> 00:31:18.494
But we're also saying,

00:31:18.494 --> 00:31:20.430
can we take that same magic

00:31:20.430 --> 00:31:23.518
and solve problems for
small businesses as well?

00:31:23.518 --> 00:31:25.520
That's some of the story on Mint.

00:31:28.571 --> 00:31:30.473
Your premise is exactly right.

00:31:31.400 --> 00:31:33.221
When you do your finances with any system,

00:31:33.221 --> 00:31:34.880
it accumulates the data.

00:31:34.880 --> 00:31:38.248
We've got a very large
repository of data on people's

00:31:38.248 --> 00:31:42.120
taxes, investments, spending, business,

00:31:42.120 --> 00:31:43.370
at a transactional level.

00:31:44.810 --> 00:31:45.910
The first thing to recognize is

00:31:45.910 --> 00:31:49.288
in my view, that's not our
data, it's our customers' data.

00:31:49.288 --> 00:31:51.650
They allow us to be the
stewards of their data

00:31:51.650 --> 00:31:53.699
only if we earn that.

00:31:53.699 --> 00:31:56.240
We can only do things
that the customer wants

00:31:56.240 --> 00:31:57.740
and gives us permission to do.

00:31:59.110 --> 00:32:02.210
If we break that trust,
people will run from us,

00:32:02.210 --> 00:32:03.210
and they deserve to.

00:32:04.900 --> 00:32:05.990
The next thing is Mint was,

00:32:05.990 --> 00:32:07.810
another piece of the
Mint DNA we wanted was

00:32:07.810 --> 00:32:09.250
they were making better use of the data

00:32:09.250 --> 00:32:10.083
than anything we've done.

00:32:10.083 --> 00:32:12.573
We've largely done nothing with big data.

00:32:13.468 --> 00:32:15.760
We've used the data to solve
your immediate problem,

00:32:15.760 --> 00:32:18.370
but we have not then, the way Mint has,

00:32:18.370 --> 00:32:19.820
said, oh, based on your data,

00:32:19.820 --> 00:32:23.680
we can see that you'd be much
better off if you did X or Y.

00:32:23.680 --> 00:32:25.524
That was another piece
that we wanted to do

00:32:25.524 --> 00:32:28.713
to cross pollinate from
the Mint acquisition.

00:32:30.680 --> 00:32:34.750
We now have a data team with a new leader.

00:32:34.750 --> 00:32:37.090
We took one of our leaders
who's very talented,

00:32:37.090 --> 00:32:40.588
and added this challenge to her.

00:32:40.588 --> 00:32:42.695
The data team was focused on

00:32:42.695 --> 00:32:44.605
how they could help Intuit with data.

00:32:44.605 --> 00:32:47.340
We said, that's nice, but
what we really wanna do is,

00:32:47.340 --> 00:32:50.320
how do we help the customers with data?

00:32:50.320 --> 00:32:52.400
How can we change their lives?

00:32:52.400 --> 00:32:54.120
We've reoriented the data team

00:32:54.120 --> 00:32:55.833
on the mission that you described,

00:32:56.950 --> 00:32:58.830
so that hopefully in a a year or two

00:32:58.830 --> 00:33:01.840
we'll have more ways
that we can help people.

00:33:01.840 --> 00:33:04.223
Here's just one that's already in action.

00:33:06.580 --> 00:33:07.890
It turns out most small businesses

00:33:07.890 --> 00:33:09.240
apply for a loan at some point.

00:33:09.240 --> 00:33:11.450
70% of our QuickBooks
customers have applied

00:33:11.450 --> 00:33:12.450
for a business loan.

00:33:13.370 --> 00:33:15.920
And most small businesses get turned down

00:33:15.920 --> 00:33:19.900
in a rather slow, long, ugly process

00:33:19.900 --> 00:33:22.100
where they wind up giving
a lot of data information

00:33:22.100 --> 00:33:25.083
and paper to some bank that
ultimately turns them down.

00:33:26.560 --> 00:33:28.290
Plus, there's a lot of
lenders who'd like to lend

00:33:28.290 --> 00:33:30.350
to customers they don't yet know.

00:33:30.350 --> 00:33:31.820
We think we can make that happen.

00:33:31.820 --> 00:33:34.020
Because of the rich data in QuickBooks.

00:33:34.020 --> 00:33:36.150
We can help figure out who
is a good lender for you,

00:33:36.150 --> 00:33:39.359
and then make it easy for you
to apply with a push button,

00:33:39.359 --> 00:33:41.370
instead of filling out all this paper.

00:33:41.370 --> 00:33:43.234
And then have the lender
be able to rapidly approve,

00:33:43.234 --> 00:33:44.642
and get higher confidence

00:33:44.642 --> 00:33:46.200
that they're lending to good people

00:33:46.200 --> 00:33:49.241
'cause we've got deeper data
on your business than anybody.

00:33:49.241 --> 00:33:51.147
But we can only use it
with your permission,

00:33:51.147 --> 00:33:54.070
but this is an area where
businesses really want someone

00:33:54.070 --> 00:33:55.940
to take advantage of their data,

00:33:55.940 --> 00:33:58.980
to give them a better
loan at a better rate.

00:33:58.980 --> 00:34:00.250
We've got a lending operation.

00:34:00.250 --> 00:34:01.083
We don't do the lending.

00:34:01.083 --> 00:34:01.916
We work with lenders,

00:34:01.916 --> 00:34:05.410
and we're trying to pioneer
this lending marketplace

00:34:05.410 --> 00:34:09.143
using QuickBooks data as the
unique asset to make it happen.

00:34:10.690 --> 00:34:11.523
That's an example,

00:34:11.523 --> 00:34:13.240
and we're getting some,

00:34:13.240 --> 00:34:15.130
a number of lenders are playing with it.

00:34:15.130 --> 00:34:17.514
Our ultimate goal is to
build a better credit score

00:34:17.514 --> 00:34:19.257
based on richer data,

00:34:19.257 --> 00:34:23.053
so that more deserving
businesses can get better loans.

00:34:25.746 --> 00:34:27.543
- I'll just finish up.

00:34:28.520 --> 00:34:33.300
Obviously, you are known
as one of the top managers

00:34:33.300 --> 00:34:34.450
in not only your industry,

00:34:34.450 --> 00:34:36.636
but in Silicon Valley or more generally.

00:34:36.636 --> 00:34:40.823
And you've known Khan Academy
since really the beginning.

00:34:42.240 --> 00:34:44.240
What thoughts do you have
about what we're doing?

00:34:44.240 --> 00:34:45.750
Where do you see the opportunities?

00:34:45.750 --> 00:34:46.990
Where do you see the pitfalls?

00:34:46.990 --> 00:34:50.783
What's your general thoughts
and advice for us as a team?

00:34:53.813 --> 00:34:56.430
- I bet some of you are better aware

00:34:56.430 --> 00:34:57.670
of the things to be afraid of.

00:34:57.670 --> 00:34:59.240
I'm not sure I'm close enough

00:34:59.240 --> 00:35:03.593
to give you a thoughtful
assessment of that.

00:35:10.370 --> 00:35:13.817
But I think one thing that I
can't say is an issue here,

00:35:13.817 --> 00:35:16.790
but has been an issue in
other fast-growth operations.

00:35:16.790 --> 00:35:20.740
You grew from about five to
six million monthly actives

00:35:20.740 --> 00:35:22.920
to about 10 million over the last year.

00:35:22.920 --> 00:35:24.013
And you're doubling.

00:35:24.013 --> 00:35:27.340
You're expecting a future like that.

00:35:27.340 --> 00:35:31.543
Your superstars,
celebrities, in the press.

00:35:36.450 --> 00:35:38.600
There is the curse of success,

00:35:38.600 --> 00:35:40.032
where things are on a roll,

00:35:40.032 --> 00:35:41.832
where everyone wants to talk to you,

00:35:43.466 --> 00:35:48.344
which somehow is a drug that causes people

00:35:48.344 --> 00:35:52.730
in other organizations to
take their eye off the ball,

00:35:52.730 --> 00:35:54.330
to stop focusing on two things.

00:35:54.330 --> 00:35:57.568
One, what really solves
the customer problem?

00:35:57.568 --> 00:35:59.020
Yeah, yeah, customers are using it,

00:35:59.020 --> 00:36:01.023
things are great, we don't
have to worry about that.

00:36:03.819 --> 00:36:05.499
Companies can persist in doing things

00:36:05.499 --> 00:36:07.450
that ultimately are second rate,

00:36:07.450 --> 00:36:08.960
just because the second
rate stuff was better

00:36:08.960 --> 00:36:11.103
than what was before. And
they don't find out the great.

00:36:11.103 --> 00:36:15.480
I mean, think of Overstock.com,
who then just got surpassed

00:36:15.480 --> 00:36:18.380
and crushed by Google, or by eBay.

00:36:18.380 --> 00:36:20.070
Or think of Yahoo!, which, gosh,

00:36:20.070 --> 00:36:23.560
they were the darlings,
huge, the internet company.

00:36:23.560 --> 00:36:27.183
And then Google just went
(making jet engine sound) by 'em.

00:36:27.183 --> 00:36:29.160
Because they stopped focusing on,

00:36:29.160 --> 00:36:31.190
okay, what's the major problem to solve?

00:36:31.190 --> 00:36:35.320
And how can we innovate and
solve it much, hugely better?

00:36:35.320 --> 00:36:37.106
Yahoo! always was a place people came to

00:36:37.106 --> 00:36:41.383
to go somewhere else, and
their search was not good.

00:36:43.940 --> 00:36:44.950
Stick to the knitting of,

00:36:44.950 --> 00:36:46.980
what's the fundamental
problem we're trying to solve?

00:36:46.980 --> 00:36:49.090
What do people really want us to solve?

00:36:49.090 --> 00:36:51.040
And are we the best in the world at that?

00:36:51.040 --> 00:36:52.583
From what I see, you're working on that,

00:36:52.583 --> 00:36:54.513
with the dashboard and that.

00:36:59.320 --> 00:37:00.820
The other curse of success

00:37:00.820 --> 00:37:02.670
can be the curse that Friendster had.

00:37:04.010 --> 00:37:07.313
Friendster was the social
network before Facebook,

00:37:08.450 --> 00:37:11.060
and even before, what's
the music one out of LA?

00:37:11.060 --> 00:37:11.893
- [Sal] Myspace.

00:37:11.893 --> 00:37:12.726
- Myspace.

00:37:12.726 --> 00:37:15.280
And they had taken off
as a social network,

00:37:15.280 --> 00:37:18.030
Kleiner Perkins, major VC had invested.

00:37:18.030 --> 00:37:19.790
They asked me to go down and take a look.

00:37:19.790 --> 00:37:21.666
I went and talked to the
entrepreneur, and that was good.

00:37:21.666 --> 00:37:22.871
But he talked about,

00:37:22.871 --> 00:37:26.044
they ended up talking about
some technical problems.

00:37:26.044 --> 00:37:27.797
I dove in to learn more.

00:37:27.797 --> 00:37:30.390
He wasn't getting along
with his technical founder

00:37:30.390 --> 00:37:31.890
or technical guy at all,

00:37:31.890 --> 00:37:33.200
and the system was crashing.

00:37:33.200 --> 00:37:34.550
It just couldn't keep up with demand.

00:37:34.550 --> 00:37:35.970
It was collapsing,

00:37:35.970 --> 00:37:37.870
and ultimately that killed Friendster.

00:37:39.810 --> 00:37:41.750
One of the things that Mark will say about

00:37:41.750 --> 00:37:43.497
why Facebook succeeded is he had seen

00:37:43.497 --> 00:37:46.550
the collapse of Friendster,
because of technical problems.

00:37:46.550 --> 00:37:48.617
They just couldn't scale with the volumes.

00:37:48.617 --> 00:37:52.010
And he and Dustin Moskovitz
were just determined

00:37:52.010 --> 00:37:53.870
that was not gonna stand in their way,

00:37:53.870 --> 00:37:55.746
so they limited growth early on.

00:37:55.746 --> 00:37:57.651
And then they just piled the resources

00:37:57.651 --> 00:37:59.773
to make sure they were up and reliable.

00:38:02.970 --> 00:38:03.972
Those are some of the things I've seen.

00:38:03.972 --> 00:38:06.460
Other cases of companies running afoul.

00:38:06.460 --> 00:38:07.610
I'm seeing seen good stuff here.

00:38:07.610 --> 00:38:09.530
I don't know, don't know, don't suspect

00:38:09.530 --> 00:38:10.363
that's happening here,

00:38:10.363 --> 00:38:11.642
but those would be some watch outs from

00:38:11.642 --> 00:38:14.640
the history of some
companies who, like you,

00:38:14.640 --> 00:38:15.940
have been shooting upward.

00:38:17.450 --> 00:38:18.797
- Great, no, thank you, that's--

00:38:18.797 --> 00:38:20.270
- Let me just cover one more thing,

00:38:20.270 --> 00:38:21.103
which is the other half of your question.

00:38:21.103 --> 00:38:22.210
- [Sal] Yes, yes.

00:38:22.210 --> 00:38:24.543
- Which was about, how
do I see the future?

00:38:26.140 --> 00:38:27.640
Maybe I'm not very good
at seeing the future,

00:38:27.640 --> 00:38:29.555
but I can see today.

00:38:29.555 --> 00:38:32.163
And there's a, some of
you may have seen this,

00:38:32.163 --> 00:38:34.710
there's an article that
was in Harvard Magazine

00:38:34.710 --> 00:38:37.150
about a physics teacher there,

00:38:37.150 --> 00:38:39.240
a guy named Eric Mazur.

00:38:39.240 --> 00:38:40.073
Anyone's?

00:38:40.073 --> 00:38:40.920
- Yeah, regularly.

00:38:40.920 --> 00:38:42.260
- The article was entitled something like,

00:38:42.260 --> 00:38:43.743
The Twilight of the Lecture.

00:38:45.330 --> 00:38:47.080
Eric Mazur was a well respected teacher

00:38:47.080 --> 00:38:48.340
on the physics staff there.

00:38:48.340 --> 00:38:51.023
He'd been teaching physics
for a decade, I believe.

00:38:52.020 --> 00:38:53.360
The tests that he gave showed

00:38:53.360 --> 00:38:56.096
the students learned the subject
matter, and he's all happy.

00:38:56.096 --> 00:38:57.798
Then he heard about the
University of Arizona

00:38:57.798 --> 00:39:01.254
that had invented a capstone test

00:39:01.254 --> 00:39:03.860
that tested kind of like the Common Core,

00:39:03.860 --> 00:39:05.600
do people really get this stuff?

00:39:05.600 --> 00:39:06.913
Could they apply it?

00:39:08.530 --> 00:39:10.020
The results out of
University of Arizona was

00:39:10.020 --> 00:39:12.270
after taking the semester of physics

00:39:12.270 --> 00:39:15.533
that the physics students
there just failed this,

00:39:15.533 --> 00:39:19.200
can you actually apply
it in real situations?

00:39:19.200 --> 00:39:20.866
He looked at it and said,
well, that's interesting,

00:39:20.866 --> 00:39:21.699
but those are University
of Arizona students.

00:39:21.699 --> 00:39:23.080
There are Harvard students.

00:39:23.080 --> 00:39:24.540
Almost all of his students, first of all,

00:39:24.540 --> 00:39:28.314
all got a score of one or
two in their AP Physics.

00:39:28.314 --> 00:39:30.860
He just as a lark, took the test,

00:39:30.860 --> 00:39:32.786
and gave it to his Harvard students

00:39:32.786 --> 00:39:35.086
after they'd finished
his semester of physics.

00:39:35.980 --> 00:39:38.810
And by God, they failed it.

00:39:38.810 --> 00:39:39.950
He said it was monkey level.

00:39:39.950 --> 00:39:42.630
If you had monkeys guessing randomly,

00:39:42.630 --> 00:39:44.190
you would do as well as his students did.

00:39:44.190 --> 00:39:46.214
(audience laughs)

00:39:46.214 --> 00:39:49.130
Now, Eric is an unusual professor

00:39:49.130 --> 00:39:52.373
at a research institution
because he actually cared.

00:39:53.590 --> 00:39:55.320
He didn't say, well, screw that,

00:39:55.320 --> 00:39:56.200
and back to the research.

00:39:56.200 --> 00:39:57.250
He actually said, wait a minute,

00:39:57.250 --> 00:39:58.150
what does this say about me?

00:39:58.150 --> 00:40:01.280
What am I doing wrong as a teacher?

00:40:01.280 --> 00:40:02.699
I'm failing these students.

00:40:02.699 --> 00:40:05.683
He dove in and tried to
figure out what was happening.

00:40:06.880 --> 00:40:07.910
He has evolved from that.

00:40:07.910 --> 00:40:10.060
One of my guys passed me the article,

00:40:10.060 --> 00:40:11.320
and then we reached out to him.

00:40:11.320 --> 00:40:13.757
And we actually spent some
time with him learning.

00:40:13.757 --> 00:40:15.869
And he basically found out that

00:40:15.869 --> 00:40:18.023
students don't learn from lectures,

00:40:18.023 --> 00:40:20.180
even from highly rated professors.

00:40:20.180 --> 00:40:23.250
They just don't seem
to learn from lectures.

00:40:23.250 --> 00:40:24.873
And these are Harvard students.

00:40:26.940 --> 00:40:27.850
And they don't learn to,

00:40:27.850 --> 00:40:29.950
I mean, they learn to pass the basic test,

00:40:29.950 --> 00:40:32.150
but they don't learn
to apply in a deep way.

00:40:34.630 --> 00:40:36.100
He started trying alternative ideas.

00:40:36.100 --> 00:40:37.850
He tried a very different way.

00:40:37.850 --> 00:40:39.700
He's basically flipped the classroom.

00:40:40.850 --> 00:40:43.630
And the students work on problems.

00:40:43.630 --> 00:40:45.110
And then he can figure
out through a system,

00:40:45.110 --> 00:40:47.140
which students got it and which didn't.

00:40:47.140 --> 00:40:49.392
And then he'd have the
students who got that section

00:40:49.392 --> 00:40:52.200
explain it to the students who didn't.

00:40:52.200 --> 00:40:53.109
He said they're much better at it

00:40:53.109 --> 00:40:56.127
because the student has
just tried it, didn't do it,

00:40:56.127 --> 00:40:58.790
and now they're hearing from
someone who just learned it.

00:40:58.790 --> 00:41:00.773
Who just is walking in their shoes.

00:41:01.950 --> 00:41:06.073
And he says, now his
students ace this test.

00:41:07.013 --> 00:41:11.656
I think there's a revolution in learning,

00:41:11.656 --> 00:41:13.530
from something that was done to you.

00:41:13.530 --> 00:41:14.840
Education was done to people.

00:41:14.840 --> 00:41:17.110
Lectures are done to people.

00:41:17.110 --> 00:41:19.650
To turning education on its
head, learning on its head,

00:41:19.650 --> 00:41:21.270
so people, now it's up to me.

00:41:21.270 --> 00:41:23.117
It now becomes something you do.

00:41:23.117 --> 00:41:24.335
And you learn at your speed,

00:41:24.335 --> 00:41:26.436
and you learn by doing yourself,

00:41:26.436 --> 00:41:28.460
not by being reliant on someone else

00:41:28.460 --> 00:41:30.220
to pour learning into your head.

00:41:30.220 --> 00:41:31.877
You learn by using, you learn by doing.

00:41:31.877 --> 00:41:34.790
And that's the way real
humans really learn fast.

00:41:34.790 --> 00:41:36.646
You guys are in the vanguard
of leading that globally.

00:41:36.646 --> 00:41:39.410
With the internet, with
the raw inventiveness of

00:41:39.410 --> 00:41:41.960
the dashboard, the
on-demand, the lectures,

00:41:41.960 --> 00:41:43.800
to understand how the students progress.

00:41:43.800 --> 00:41:47.110
Creating a platform so
that math and then physics

00:41:47.110 --> 00:41:49.973
and other subjects can be
taught by, learned by doing.

00:41:50.820 --> 00:41:53.723
This will change learning,
and lifelong learning.

00:41:55.130 --> 00:41:58.418
This is the invention of
printing by Gutenberg,

00:41:58.418 --> 00:42:01.190
applied to a field that
desperately needs it.

00:42:01.190 --> 00:42:04.460
And more than that, this is the,

00:42:04.460 --> 00:42:07.410
the sum total of IQ points
in the world is fixed.

00:42:07.410 --> 00:42:09.960
It's what genes have delivered to us.

00:42:09.960 --> 00:42:11.550
But how you turn those IQ points

00:42:11.550 --> 00:42:13.250
into productive human potential,

00:42:13.250 --> 00:42:15.103
into skills to be able to solve problems,

00:42:15.103 --> 00:42:16.958
to be able to see problems,

00:42:16.958 --> 00:42:20.970
that is entirely a function
of people's learning,

00:42:20.970 --> 00:42:23.360
and can be dialed up or down dramatically

00:42:23.360 --> 00:42:24.763
by the learning method.

00:42:25.640 --> 00:42:27.610
Compare when you've been in some class

00:42:27.610 --> 00:42:30.500
which was boring, badly taught,

00:42:30.500 --> 00:42:34.192
or the great research professor
didn't really know English,

00:42:34.192 --> 00:42:37.500
and you just, your
learning rate is so slow.

00:42:37.500 --> 00:42:40.410
Your love of learning
just goes into the toilet.

00:42:40.410 --> 00:42:42.860
And then compare that to
a class where the teacher

00:42:42.860 --> 00:42:44.810
was fascinating, where
you could move and learn,

00:42:44.810 --> 00:42:45.900
and try things and they worked,

00:42:45.900 --> 00:42:47.346
and you got this feeling
of accomplishment.

00:42:47.346 --> 00:42:49.770
It's night and day.

00:42:49.770 --> 00:42:54.770
Igniting the fire of learning
in billions of people

00:42:57.440 --> 00:43:02.440
is a force of power far greater
than the printing press.

00:43:02.570 --> 00:43:05.700
I believe you guys are the
world leader in doing that.

00:43:08.290 --> 00:43:09.909
- Well, that gives us a
little bit of pressure.

00:43:09.909 --> 00:43:11.638
(Scott and audience laughing)

00:43:11.638 --> 00:43:14.010
But it's exciting at the same time,

00:43:14.010 --> 00:43:15.700
and so I'll just on
behalf of the whole team,

00:43:15.700 --> 00:43:16.650
I just really thank you.

00:43:16.650 --> 00:43:18.370
That was really a special conversation.

00:43:18.370 --> 00:43:19.653
Thank you.

00:43:19.653 --> 00:43:20.544
- Thank you.

00:43:20.544 --> 00:43:23.544
(audience applauds)


Clarifying standard form rules

WEBVTT
Kind: captions
Language: en

00:00:00.320 --> 00:00:02.160
- [Instructor] We've talked about the idea

00:00:02.160 --> 00:00:06.440
of standard form of a linear
equation in other videos,

00:00:06.440 --> 00:00:10.300
and the point of this video
is to clarify something

00:00:10.300 --> 00:00:13.340
and resolve some differences
that you might see

00:00:13.340 --> 00:00:17.090
in different classes in terms
of what standard form is.

00:00:17.090 --> 00:00:20.090
So everyone agrees that standard form

00:00:20.090 --> 00:00:22.520
is generally a linear equation

00:00:22.520 --> 00:00:24.530
where you have some number times x

00:00:24.530 --> 00:00:29.530
plus some number times y
is equal to some number.

00:00:29.950 --> 00:00:34.950
So things that are in
standard form would include

00:00:35.300 --> 00:00:40.300
things like three x plus
four y is equal to 10,

00:00:42.195 --> 00:00:47.100
or two x plus five y

00:00:47.100 --> 00:00:51.010
is equal to negative 10.

00:00:51.010 --> 00:00:53.590
Everyone would agree that
these are standard form,

00:00:53.590 --> 00:00:55.970
and everyone would
agree that the following

00:00:55.970 --> 00:00:59.280
are not standard form.

00:00:59.280 --> 00:01:02.810
So if I were to write three x is equal to

00:01:02.810 --> 00:01:05.130
negative four y plus 10.

00:01:05.130 --> 00:01:07.230
Even though these are
equivalent equations,

00:01:07.230 --> 00:01:09.650
this is just not in standard form.

00:01:09.650 --> 00:01:14.650
Similarly, if I wrote that y is equal to

00:01:14.950 --> 00:01:19.950
three times x plus seven, this
is also not in standard form.

00:01:20.760 --> 00:01:23.750
Now the place where some
people might disagree

00:01:23.750 --> 00:01:26.960
is if you were to see something like

00:01:26.960 --> 00:01:31.960
six x plus eight y is equal to 20.

00:01:32.410 --> 00:01:34.170
Now why would some folks argue

00:01:34.170 --> 00:01:36.610
that this is not standard form?

00:01:36.610 --> 00:01:39.470
Well, for some folks, they
would say standard form,

00:01:39.470 --> 00:01:43.420
the coefficients on x and
y and our constant term,

00:01:43.420 --> 00:01:47.510
so our A, B and C, can't
share any common factors.

00:01:47.510 --> 00:01:52.510
Here, six, eight and 20,
they're all divisible by two,

00:01:52.570 --> 00:01:56.510
so some folks would argue that
this is not standard form,

00:01:56.510 --> 00:01:58.380
and to get it into standard form,

00:01:58.380 --> 00:02:00.390
you would divide all of these by two,

00:02:00.390 --> 00:02:02.730
and if you did, you would
get this equation here.

00:02:02.730 --> 00:02:05.090
Now that's useful because
then you only have

00:02:05.090 --> 00:02:08.140
one unique equation, but on Khan Academy,

00:02:08.140 --> 00:02:09.700
we do not restrict in that way,

00:02:09.700 --> 00:02:11.940
and that is also a very popular
way of thinking about it.

00:02:11.940 --> 00:02:14.710
We just want you to think
about it in this form,

00:02:14.710 --> 00:02:16.930
Ax plus By is equal to C.

00:02:16.930 --> 00:02:19.500
When you do the exercises
on the Khan Academy,

00:02:19.500 --> 00:02:23.870
it's not going to be checking
whether these coefficients,

00:02:23.870 --> 00:02:27.740
A, B and C are divisible,
have a common factor.

00:02:27.740 --> 00:02:30.440
So for Khan Academy purposes,

00:02:30.440 --> 00:02:33.130
this is considered standard form,

00:02:33.130 --> 00:02:35.690
although don't be surprised
if you encounter some folks

00:02:35.690 --> 00:02:40.290
who say, no, we would rather
you remove any common factors.

00:02:40.290 --> 00:02:44.330
Now another example
would be something like

00:02:44.330 --> 00:02:49.330
negative three x minus four
y is equal to negative 10.

00:02:51.110 --> 00:02:53.810
So some folks would argue
that this is not standard form

00:02:53.810 --> 00:02:56.650
because they want to see
this first coefficient

00:02:56.650 --> 00:03:00.860
right over here, the A,
being greater than zero,

00:03:00.860 --> 00:03:03.500
while here it is less than zero.

00:03:03.500 --> 00:03:05.730
For our purposes on Khan Academy,

00:03:05.730 --> 00:03:08.680
we do consider this standard form,

00:03:08.680 --> 00:03:09.760
but I'm just letting you know,

00:03:09.760 --> 00:03:12.160
because some folks might not because

00:03:12.160 --> 00:03:16.670
this leading coefficient
is not greater than zero.

00:03:16.670 --> 00:03:19.180
Now another example that
some people might be

00:03:19.180 --> 00:03:22.750
on the edge with would be something like

00:03:22.750 --> 00:03:27.677
1.25 x plus 5.50 y

00:03:29.587 --> 00:03:31.004
is equal to 10.5.

00:03:33.140 --> 00:03:35.670
The reason why some people
might not consider this

00:03:35.670 --> 00:03:40.240
standard form is that A,
B and C are not integers.

00:03:40.240 --> 00:03:41.820
Some folks would say
to be in standard form,

00:03:41.820 --> 00:03:43.840
A, B and C need to be integers,

00:03:43.840 --> 00:03:46.790
and you could multiply
both sides of the equation

00:03:46.790 --> 00:03:51.170
by some value that will give
you integers for A, B, and C,

00:03:51.170 --> 00:03:53.000
but for Khan Academy purposes,

00:03:53.000 --> 00:03:56.880
we do consider this to
be in standard form.

00:03:56.880 --> 00:03:57.940
We think this is important,

00:03:57.940 --> 00:04:00.130
actually not just being
able to have non-integers

00:04:00.130 --> 00:04:03.760
as A, B or C, but also being able to have

00:04:03.760 --> 00:04:06.410
a negative A, right over there,

00:04:06.410 --> 00:04:07.680
because negative three is our A,

00:04:07.680 --> 00:04:11.790
and also having coefficients,
having our As, Bs and Cs

00:04:11.790 --> 00:04:14.240
having shared factors, we
thing all of that's important

00:04:14.240 --> 00:04:17.330
because sometimes the
equation itself has meaning

00:04:17.330 --> 00:04:18.420
when you write it that way.

00:04:18.420 --> 00:04:22.300
We'll see that when we
do some word problems,

00:04:22.300 --> 00:04:23.870
when we actually go into some real life

00:04:23.870 --> 00:04:25.590
and we try to construct equations,

00:04:25.590 --> 00:04:28.370
and based on the
information in the equation,

00:04:28.370 --> 00:04:31.410
it's easier to understand
if you keep it in this form.

00:04:31.410 --> 00:04:34.170
So for Khan Academy purposes,
this is all standard form,

00:04:34.170 --> 00:04:36.590
but it's good to be aware
in your mathematical lives

00:04:36.590 --> 00:04:38.670
that some folks might want
to see the restriction

00:04:38.670 --> 00:04:41.390
of no common factor between A, B and C,

00:04:41.390 --> 00:04:43.330
that A is greater than zero,

00:04:43.330 --> 00:04:45.730
and that A, B and C
need to all be integers,

00:04:45.730 --> 00:04:47.880
but Khan Academy does
not hold you to that.


Strategies for eliminating variables in a system examples

WEBVTT
Kind: captions
Language: en

00:00:00.670 --> 00:00:02.540
- [Instructor] We're asked
which of these strategies

00:00:02.540 --> 00:00:03.690
would eliminate a variable

00:00:03.690 --> 00:00:04.990
in the system of equations?

00:00:04.990 --> 00:00:08.420
Choose all answers that apply.

00:00:08.420 --> 00:00:11.010
So this first one says add the equations.

00:00:11.010 --> 00:00:11.843
So pause this video.

00:00:11.843 --> 00:00:14.870
Would adding the equations
eliminate a variable

00:00:14.870 --> 00:00:16.630
in this system?

00:00:16.630 --> 00:00:18.770
All right, now let's do it together.

00:00:18.770 --> 00:00:21.630
So if we add these equations,

00:00:21.630 --> 00:00:23.190
we have, on the left hand side,

00:00:23.190 --> 00:00:24.850
we have five x plus five x,

00:00:24.850 --> 00:00:26.480
which is going to be 10 x,

00:00:26.480 --> 00:00:29.340
and then you have negative
three y plus four y

00:00:29.340 --> 00:00:32.090
which is just a positive
one y or just plus y

00:00:32.090 --> 00:00:34.360
is equal to negative three plus six,

00:00:34.360 --> 00:00:37.490
which is just going to be
equal to positive three.

00:00:37.490 --> 00:00:39.570
We haven't eliminated any variables,

00:00:39.570 --> 00:00:42.530
so choice A, I could rule out.

00:00:42.530 --> 00:00:45.550
That did not eliminate a variable.

00:00:45.550 --> 00:00:47.660
Let me cross it out and not check it.

00:00:47.660 --> 00:00:50.600
Subtract the bottom equation from the top.

00:00:50.600 --> 00:00:53.280
Well when we subtract
the bottom from the top,

00:00:53.280 --> 00:00:55.400
five x minus five x,

00:00:55.400 --> 00:00:58.970
that's going to be zero x's,
so I won't even write it down,

00:00:58.970 --> 00:01:00.890
and we've already seen
we've eliminated an x

00:01:00.890 --> 00:01:03.000
so I'm already feeling
good about choice B,

00:01:03.000 --> 00:01:05.780
but then we can see negative
three y minus four y

00:01:05.780 --> 00:01:07.340
is negative seven y.

00:01:07.340 --> 00:01:10.810
Negative three minus six is
going to be negative nine

00:01:10.810 --> 00:01:15.740
and so choice B does
successfully eliminate the x's.

00:01:15.740 --> 00:01:18.073
So I will select that.

00:01:20.240 --> 00:01:23.470
Choice C, multiply the
top equation by two,

00:01:23.470 --> 00:01:25.440
then add the equations.

00:01:25.440 --> 00:01:26.273
Pause the video.

00:01:26.273 --> 00:01:28.980
Does that eliminate a variable?

00:01:28.980 --> 00:01:31.400
Well we're gonna multiply
the top equation by two

00:01:31.400 --> 00:01:36.400
so it's going to become 10 x minus six y

00:01:37.000 --> 00:01:39.420
is equal to negative six,

00:01:39.420 --> 00:01:42.140
and you could already see if
you then add the equations,

00:01:42.140 --> 00:01:43.330
10 x plus five x,

00:01:43.330 --> 00:01:44.230
you're gonna have 15 x,

00:01:44.230 --> 00:01:45.620
that's not gonna get eliminated.

00:01:45.620 --> 00:01:48.610
Negative six y plus four
y is negative two y.

00:01:48.610 --> 00:01:50.120
That's not going to be eliminated,

00:01:50.120 --> 00:01:52.550
so we can rule that out, as well.

00:01:52.550 --> 00:01:53.883
Let's do another example.

00:01:55.140 --> 00:01:56.580
One, they're asking us the same question.

00:01:56.580 --> 00:01:58.290
Which of these strategies
would eliminate a variable

00:01:58.290 --> 00:01:59.740
in the system of equations?

00:01:59.740 --> 00:02:03.270
The first choice says multiply
the bottom equation by two,

00:02:03.270 --> 00:02:05.020
then add the equations.

00:02:05.020 --> 00:02:06.863
Pause this video, does that work?

00:02:07.890 --> 00:02:11.510
All right, so if we multiply
the bottom equation by two,

00:02:11.510 --> 00:02:13.410
we are going to get,

00:02:13.410 --> 00:02:14.310
if we multiply it by two,

00:02:14.310 --> 00:02:17.950
we're gonna get two x minus
two minus four y, I should say.

00:02:17.950 --> 00:02:20.700
Two x, I'm just multiplying
everything by two,

00:02:20.700 --> 00:02:22.470
minus four y

00:02:22.470 --> 00:02:23.890
is equal to 10.

00:02:23.890 --> 00:02:25.680
And then if we were to add the equations.

00:02:25.680 --> 00:02:27.670
Four x plus two x is six x,

00:02:27.670 --> 00:02:29.530
so that doesn't get eliminated.

00:02:29.530 --> 00:02:34.530
Positive four y plus negative
four y is equal to zero y,

00:02:34.550 --> 00:02:36.650
so the y's actually do get eliminated

00:02:36.650 --> 00:02:39.370
when you add four y to negative four y.

00:02:39.370 --> 00:02:42.670
So I like choice A and
I'm gonna delete this

00:02:42.670 --> 00:02:44.760
so I have space to work
on the other choices,

00:02:44.760 --> 00:02:46.440
so I like one.

00:02:46.440 --> 00:02:47.460
What about choice B?

00:02:47.460 --> 00:02:49.123
Pause the video, does that work?

00:02:50.050 --> 00:02:52.010
Multiply the bottom equation by four,

00:02:52.010 --> 00:02:55.490
then subtract the bottom
equation from the top equation.

00:02:55.490 --> 00:02:58.500
All right, let's multiply
the bottom equation by four.

00:02:58.500 --> 00:02:59.810
What do we get?

00:02:59.810 --> 00:03:03.770
We're going to get four x minus eight y

00:03:04.760 --> 00:03:07.470
is equal to 20, yup.

00:03:07.470 --> 00:03:08.940
We multiplied it by four

00:03:08.940 --> 00:03:12.720
and then subtract the bottom
equation from the top.

00:03:12.720 --> 00:03:16.040
So we would subtract four x from four x.

00:03:16.040 --> 00:03:17.030
Well that's looking good.

00:03:17.030 --> 00:03:18.320
That would eliminate the x's,

00:03:18.320 --> 00:03:20.520
so I'm feeling good about choice B.

00:03:20.520 --> 00:03:23.670
And then we could see if we
subtract negative eight y

00:03:23.670 --> 00:03:26.720
from four y, well, subtracting
a negative's the same thing

00:03:26.720 --> 00:03:28.900
as adding a positive,

00:03:28.900 --> 00:03:30.720
so that would actually get us to 12 y

00:03:30.720 --> 00:03:34.330
if we're subtracting
negative eight y from four y.

00:03:34.330 --> 00:03:37.000
And then if we subtract
20 from negative two,

00:03:37.000 --> 00:03:38.100
we get to negative 22,

00:03:38.100 --> 00:03:40.740
but we see that four x minus four x

00:03:40.740 --> 00:03:42.470
is going to eliminate our x's,

00:03:42.470 --> 00:03:45.270
so that does definitely
eliminate a variable,

00:03:45.270 --> 00:03:47.843
so I like choice B.

00:03:48.930 --> 00:03:50.490
Now what about choice C?

00:03:50.490 --> 00:03:52.540
Multiply the top equation by 1/2,

00:03:52.540 --> 00:03:54.140
then add the equations.

00:03:54.140 --> 00:03:56.470
Let's try that out, pause the video.

00:03:56.470 --> 00:03:59.300
All right, let's just multiply times 1/2,

00:03:59.300 --> 00:04:01.360
so the left hand side times 1/2,

00:04:01.360 --> 00:04:03.370
we distribute the one half
is one way to think about it.

00:04:03.370 --> 00:04:06.210
Four x times 1/2 is going to be two x

00:04:06.210 --> 00:04:09.312
plus four y times 1/2 is two y

00:04:09.312 --> 00:04:10.890
is equal to negative two times 1/2

00:04:10.890 --> 00:04:12.690
is equal to negative one.

00:04:12.690 --> 00:04:15.570
Now and then they say add the equations.

00:04:15.570 --> 00:04:20.120
So two x plus x is going to be three x,

00:04:20.120 --> 00:04:22.760
so that's not going to eliminate the x's.

00:04:22.760 --> 00:04:26.160
Two y plus negative two y,

00:04:26.160 --> 00:04:28.350
well that's going to be no y's.

00:04:28.350 --> 00:04:30.710
So that actually will eliminate the y's,

00:04:30.710 --> 00:04:32.800
so I like this choice, as well.

00:04:32.800 --> 00:04:35.320
So actually, all three of these strategies

00:04:35.320 --> 00:04:37.510
would eliminate a variable
in the system of equations.

00:04:37.510 --> 00:04:38.480
This is useful to see

00:04:38.480 --> 00:04:41.636
'cause you can see there's
multiple ways to approach

00:04:41.636 --> 00:04:44.890
solving a system like
this through elimination.

00:04:44.890 --> 00:04:46.140
Let's do another example.

00:04:48.110 --> 00:04:50.260
Which of these strategies
would eliminate a variable

00:04:50.260 --> 00:04:51.220
in the system of equations?

00:04:51.220 --> 00:04:52.600
Same question again.

00:04:52.600 --> 00:04:53.433
So the first one,

00:04:53.433 --> 00:04:55.330
they suggest to subtract
the bottom equation

00:04:55.330 --> 00:04:56.390
from the top equation.

00:04:56.390 --> 00:04:58.053
Pause this video, does that work?

00:04:59.300 --> 00:05:02.880
Well if we subtract the
bottom from the top,

00:05:02.880 --> 00:05:05.180
so if you subtract a negative two x,

00:05:05.180 --> 00:05:07.127
that's the same thing as adding two x,

00:05:07.127 --> 00:05:09.490
'cause you're adding two x
to three x, that's five x.

00:05:09.490 --> 00:05:11.350
The x's don't get eliminated.

00:05:11.350 --> 00:05:14.430
Subtracting four y from negative
three y's just gonna get us

00:05:14.430 --> 00:05:15.900
to negative seven y.

00:05:15.900 --> 00:05:17.510
The y's don't get eliminated,

00:05:17.510 --> 00:05:18.820
so I would rule this one out.

00:05:18.820 --> 00:05:20.750
Nothing's getting eliminated there.

00:05:20.750 --> 00:05:22.940
Multiply the top equation by three,

00:05:22.940 --> 00:05:25.070
multiply the bottom equation by two,

00:05:25.070 --> 00:05:26.510
then add the equations.

00:05:26.510 --> 00:05:28.880
Pause the video, does that work?

00:05:28.880 --> 00:05:31.380
All right, so if I multiply
the top equation by three,

00:05:31.380 --> 00:05:35.180
I'm going to get nine x minus nine y

00:05:35.180 --> 00:05:36.880
is equal to 21,

00:05:36.880 --> 00:05:39.890
and then if I multiply the bottom by two,

00:05:39.890 --> 00:05:41.480
so this is times two,

00:05:41.480 --> 00:05:46.150
I'm going to get two times
negative two is negative four x

00:05:46.150 --> 00:05:50.060
plus eight y is equal to 14,

00:05:50.060 --> 00:05:52.090
and then they say add the equations.

00:05:52.090 --> 00:05:54.070
Well if I add nine x to negative four x,

00:05:54.070 --> 00:05:55.480
that doesn't eliminate the x's.

00:05:55.480 --> 00:05:57.240
That gets me to positive five x,

00:05:57.240 --> 00:06:00.610
and if I add negative nine
y to a positive eight y,

00:06:00.610 --> 00:06:02.040
that also doesn't eliminate the y's.

00:06:02.040 --> 00:06:03.740
That gets me to a negative y,

00:06:03.740 --> 00:06:08.630
so choice B, I can also rule out.

00:06:08.630 --> 00:06:09.830
Once again deleting all of this

00:06:09.830 --> 00:06:12.513
so I have space to try
to figure out choice C.

00:06:13.390 --> 00:06:15.600
Multiply the top equation by two,

00:06:15.600 --> 00:06:17.830
multiply the bottom equation by three,

00:06:17.830 --> 00:06:19.090
then add the equation.

00:06:19.090 --> 00:06:20.740
So they're telling us to
do it the other way around.

00:06:20.740 --> 00:06:23.680
Pause the video, does this work?

00:06:23.680 --> 00:06:26.600
All right, so we multiply
the top equation by two

00:06:26.600 --> 00:06:29.460
and we're gonna multiply the
bottom equation by three.

00:06:29.460 --> 00:06:30.960
So the top equation times two

00:06:30.960 --> 00:06:35.170
is going to be six x minus six y

00:06:35.170 --> 00:06:37.530
is equal to,

00:06:37.530 --> 00:06:40.210
is equal to 14.

00:06:40.210 --> 00:06:41.640
And then with this bottom equation,

00:06:41.640 --> 00:06:43.940
when you multiply it by three, both sides,

00:06:43.940 --> 00:06:45.570
that's the only way to
ensure that the equation

00:06:45.570 --> 00:06:47.320
is saying the same thing
is if you do the same thing

00:06:47.320 --> 00:06:48.153
to both sides.

00:06:48.153 --> 00:06:50.040
That's really the heart of algebra.

00:06:50.040 --> 00:06:53.790
So negative two times
three is negative six x,

00:06:53.790 --> 00:06:55.550
and I already like where this is going,

00:06:55.550 --> 00:06:56.383
'cause when I add these two,

00:06:56.383 --> 00:06:58.360
they're going to get eliminated,

00:06:58.360 --> 00:07:02.160
plus four y times three
is gonna be plus 12 y

00:07:02.160 --> 00:07:04.650
is going to be equal to 21.

00:07:04.650 --> 00:07:06.100
And then they say add the equations,

00:07:06.100 --> 00:07:09.080
well, you immediately see
when you add the x terms

00:07:09.080 --> 00:07:10.150
on the left hand side,

00:07:10.150 --> 00:07:11.770
they are going to cancel out.

00:07:11.770 --> 00:07:14.773
So I like choice C.