Dropping in on the Intuit-Demandforce deal

In May, back-office colossus Intuit said it would acquire front-office star Demandforce. In November, the companies began integrating their products. I checked in with Patrick Barry to find out how it's looking from the inside.
Written by Andrew Nusca, Contributor

It was only a matter of time.

When Intuit -- the back-office stalwart known for its Quickbooks accounting software and TurboTax preparation software -- announced in May that it was acquiring Demandforce, the startup specializing in customer retention and marketing, it was clear that the larger company wanted to connect the back of the office to the front, and it said as much.

In November, those promises began to materialize: Demandforce's platform got access to the trove of data that Quickbooks assembles about a business' customers. In a very short period of time, two disparate products were integrated.

Were the teams as quickly and seamlessly combined, too? I spoke with Intuit vice president of product management (and former Demandforce CMO) Patrick Barry.

ZD: Simple question: so, how's it going?

PB: For us, it's a big important milestone. The acquisition was just closed in May. The fact that we're launching so quickly with this shows that the acquisition is really successful. The teams are working in harmony. That feels really good.

It was always the plan [to launch quickly]. We feel like we're ahead of schedule with commercial integration.

ZD: What helped this along? Many acquisitions don't go very smoothly, to put it diplomatically.

PB: There are a couple of key things that put us on this track. One is the technology component. Intuit has something called ITP -- Intuit Partner Platform, a set of APIs that allow third-party developers to integrate with QuickBooks. We leveraged that just like we were a third-party developer. It was a heck of a lot easier than we realized to get that done.

Internally, organizationally, M&A ["Mergers and acquisitions" --Ed.] can take a long time. But when the technology stack is right, things can go really quickly. It gave us really good time to market and access to technology and features that made this really powerful.

The culture fit is really good. We're all pulling in the same direction. Demandforce represents a really strategic move for Intuit to move into the front office. QuickBooks is a major back-office function. Demandforce really automates the process of relating to your customer in a positive way so that you can shore up and grow your business in a methodical and sustainable way. That move into the front-office space, because it's so complementary, we've had total goal congruence.

Plus, we worked our butts off.

ZD: Is there concern that Demandforce will feel neglected under a larger umbrella? The startup-stalwart dynamic often is such that the startup no longer feels as nimble inside the larger organization.

PB: We're bringing a startup mentality to a big established company. That's helping everybody with a sense of urgency and mission.

Demandforce, over the last five or six years, our product has changed dramatically and expanded its features. We see our mission as a broad one: helping businesses succeed in a connected economy. That's a really broad mandate. First it was e-mail marketing, then search, then social. That will keep happening; we will have to adapt. And QuickBooks is constantly evolving. We have to move along with the roadmaps of that team.

ZD: How about getting access to Intuit's data? Is corporate giving you access to their customer rolls yet?

PB: We are absolutely a data company. We were before, and we even moreso now. Our applications are basically a skin or view to that data.

Here, we feel like kids in a candy store. When you're a small company, you're scrapping to find data -- that can help you get better, access markets, provide a more compelling product. As we've gotten access to Intuit's data, it's blown our mind in terms of what we can now offer to customers.

I mean, there are four million QuickBooks users. It's been a kick. The next several years are going to be a lot of fun.

ZD: How about scale? Demandforce has distinguished itself for keeping a careful focus on what it can and can't do. Now you're part of a bigger organization with different goals, and you're tasked with growth. How do you make sure you don't go in five different directions?

PB: We're very focused on delivering a product into vertical markets. About 80 percent of the [Demandforce] platform was for everyone, but 20 percent was customized for spas, shops, dentists. We use those services as guardrails for who to go after. If there are 80,000 dentists in the United States, we're going to go after them in a very methodical way.

Now in the world of small business -- those QuickBooks customers -- we're looking for guardrails to get to the right customers. We've identified another of factors that indicate a business can benefit from Demandforce software, based on the type of business and the way they use QuickBooks software. Those criteria will expand over time to include every QuickBooks customer, but we're starting small.

We're applying a startup mentality to it -- achieve short-term goals. We're not trying to boil the ocean every day. We're doing that with disciplined data analysis.

Kiran's dictate to his team was, 'Do no harm. Demandforce is great, and let's support them, but let's not get in their way.'

In terms of challenges, Intuit has a lot of stuff going on. It has to deliver revenue, profitability and growth. It's been important for us to recognize that. How do we focus on things that really move the needle and not get distracted on things that are less important? If we can manage to get some of the QuickBooks team's time, we'll do that. But we'll stick to what we do best.

We were a very high-growth, profitable company. I think that's what made us successful. We've managed to keep customer experience and profitability in our head together at the same time. It's a challenge in any business, but successful businesses do it well.

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