Everything Will Change

Perhaps the ultimate business tool is acceptance. Everything Will Change. Many of the changes will surprise you. If that sounds exciting, you're ready for the future. A conversation with Scott Cook.

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Justin Stephens

Scott Cook has been a star of Inc.'s universe for a long time--since 1990, in fact, when his software company, Intuit, first appeared on the Inc. 500. The company went on to make the list twice more as it came to dominate the business of helping Americans manage their finances and get through April 15th. Today, Intuit is a global company with annual revenue of more than $2.3 billion. Its products--Quicken, QuickBooks,TurboTax, QuickBase, Payroll--serve individual consumers, small businesses, and, increasingly, large corporations.

Cook caught our attention again recently when Intuit commissioned the Institute of the Future, a research organization in Palo Alto, California, to study how the small-business economy was evolving. (The first two parts of what will be a three-part report are at Intuit.com.) Cook recently spoke with John Koten, CEO and editor in chief of Mansueto Ventures, Inc.'s parent company, about the results of the study and how they mesh with Cook's own views about how to run a business in 2007 and beyond.

John Koten: Intuit (NASDAQ:INTU) has been serving the small-business market for many years. What prompted you to sponsor a study of the entrepreneurial economy at this time?
Scott Cook: The major theme of the past 60 years in businesses, in my view, is the rise of entrepreneurship in our economy. I don't think this aspect of business, however, has been that well covered or that well understood. There has always been a lot of attention paid to large companies. The mainstream press simply hasn't connected all the dots and seen the bigger picture when it comes to small business.

In your view, what's missing?
The big picture is that entrepreneurship is what drives the success of economies. We think of Japan as being driven by government-organized keiretsu. But Japan's economy was rebuilt after the war by a bunch of radical entrepreneurs--people like Konosuke Matsushita, who founded a company known in the U.S. as Panasonic; Akio Morita, who built Sony (NYSE:SNE); and Soichiro Honda, who built Honda (NYSE:HMC). The business strength of Germany is the Mittelstand--middle-size entrepreneurial businesses.

The Industrial Revolution in the U.S. was propelled by entrepreneurs like Carnegie, Mellon, and Rockefeller. They are now thought of as old dead guys or as rich industrialist patrons, but they were, in fact, entrepreneurs and they created the modern age. The advantage the U.S. economy has is its ability to continually re-create our entrepreneurs.

You don't hear many U.S. politicians talking about the importance of preserving our entrepreneurial economy or our entrepreneurial society. Leaders outside the U.S. are paying attention, though.
The Chinese certainly seem to get it. So, actually, do the British. Tony Blair is a big proponent of entrepreneurship. A lot of Americans would be surprised if they visited Vietnam these days. Saigon is an entrepreneurial hotbed.

What did your study of the U.S. entrepreneurial economy uncover that you found particularly important or surprising?
The diversity of backgrounds of entrepreneurs. It will surprise some people that over half of newly formed businesses are now run by women. Some people have this view of immigrants coming in and working in factories and taking American jobs. Maybe that's what our grandparents saw, but immigrants today are highly entrepreneurial.

Some people believe the real entrepreneurial boom in the U.S. is behind us.
I disagree with that. Think about Google, Facebook, MySpace, Second Life, JetBlue, Vitaminwater, YouTube.

There's also more interest in entrepreneurship today on college campuses.
That's a palpable change. When I was a freshman at the University of Southern California, the school asked every incoming member of my class what their career ambition was. Over half picked one field--medicine. Today half the class would tell you that they hoped to run their own business someday. Younger people want to be active participants. I think one of the reasons you see a higher rate of job change among younger people is that they get into traditional job environments where they're being told to take it as it is. And they're saying, No, I want to make it the way it should be.

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