Former Intuit CEO joins Web startup
Mr. Harris, 43 years old, is being named CEO today of X.com Inc., a closely held start-up that is aiming to be a full-service online financial-services company.
X.com, founded in March by entrepreneur Elon Musk and based in Palo Alto, Calif., is planning to open its Web site tomorrow with services such as online banking and discount mutual funds. Ultimately, the company plans to expand its financial offerings to brokerage services, insurance and mortgages.
In order to offer banking services, Musk says the company has agreed to acquire a small bank with a national charter in a transaction it expects regulators to approve sometime in the second quarter of next year.
Harris said he left Intuit (Nasdaq: INTU) after holding the CEO job for 14 months, because he wanted a more "hands-on" role running a small company than he was getting at Intuit, where he will remain a board member. "Intuit is now a big company, and as much as it is a great company, my role was more administrative . . . than I really wanted," he said. Intuit's revenue in the last fiscal year, which ended in July, was $847.6 million.
Harris said that in the two months since he stepped down from Intuit, he has had more than 100 offers to become CEO at start-up companies. He said he picked X.com in part because he thinks the financial arena is one that will be most drastically changed by the Internet. He added that he expects X.com to be a "blank canvas upon which to write new rules on the delivery of financial services."
Musk, 28, founded Zip2 Corp., a developer of online city guides, in 1995 and sold it earlier this year to Compaq Computer Corp. (NYSE: CPQ) for more than $307 million. To date, X.com has raised $25 million from Musk, Harris and venture-capital firm Sequoia Capital. Recruiters Heidrick & Struggles International Inc. helped place Harris with X.com.
X.com says its strategy is to compete with traditional banks by offering an easier-to-use Web site, better interest rates and lower fees. The Internet bank field is increasingly crowded but may be on the cusp of widespread customer acceptance, said Chris Musto, an analyst at Gomez Advisors, a Lincoln, Mass., market-research firm.
Although Internet-only banks have been around since 1995, Musto estimates that only 100,000 people had opened accounts at such banks through the first half of this year. But that number doubled in the third quarter of this year, in part because of publicity surrounding new entrants into the arena such as Bank One Corp.'s Wingspan offering and older players such as Telebanc Financial Corp., which brokerage firm E*Trade Group Inc. agreed to acquire this summer.