How Intuit Outpaced Giants

Intuit's journey from a startup in a Palo Alto garage to a household name in financial software is a testament to Fisher's philosophy. When Scott Cook and Tom Proulx founded Intuit in 1983, they weren't aiming to be the biggest; they were focused on solving a real problem. Cook's wife had complained about the tedious process of balancing their checkbook, and this sparked the idea for Quicken, a personal finance management tool.

Think of Intuit as a nimble speedboat in a sea of ocean liners. While the big players were focused on complex, expensive software for large corporations, Intuit zeroed in on the everyday consumer and small business owner. They understood that survival in the tech world wasn't about being the biggest ship on the water, but about being the one that could navigate the changing currents of consumer needs most effectively.

Fisher wasn't dazzled by big market caps or flashy corporate headquarters. He was interested in companies that had the potential to survive and thrive, regardless of their current size. Intuit, with its laser focus on user-friendly software and customer satisfaction, fit this bill perfectly.

As Intuit grew, it faced challenges from much larger competitors. Microsoft, seeing the success of Quicken, launched Microsoft Money in 1991. Many investors might have bet on the tech giant to crush the smaller Intuit. But here's where the magic of Fisher's philosophy comes into play: Intuit's smaller size allowed it to be more responsive to customer needs and to innovate more quickly.

It's like the difference between turning a speedboat and turning an ocean liner. When customer preferences shifted or new technologies emerged, Intuit could pivot quickly, while larger companies often struggled with bureaucracy and legacy systems. This agility allowed Intuit to consistently outmaneuver its larger rivals.

For example, when the internet began to reshape the software industry, Intuit was quick to adapt. They launched TurboTax Online in 1999, well before many of their competitors had even considered web-based services. This move not only helped them survive the dot-com bubble but positioned them for explosive growth in the following years.

But Intuit's success wasn't just about being small and nimble. It was about having a deep understanding of their customers and a commitment to solving their problems. This is another key aspect of Fisher's investment philosophy. He believed in companies that had a "scuttlebutt" approach – gathering deep, firsthand knowledge about their market and customers.

Intuit took this to heart. They implemented a "follow me home" program where employees would literally follow customers home to watch them use the software. This level of customer insight allowed them to continually refine their products and stay ahead of larger competitors who were more removed from their end-users.

It's like the difference between a tailor who measures you personally and adjusts the suit to fit perfectly, versus a department store selling off-the-rack suits. Intuit's approach allowed them to create products that fit their customers' needs exactly, while larger companies often produced more generic solutions.

This customer-centric approach paid off handsomely. By 2000, Intuit had fended off challenges from Microsoft and other larger competitors, and its market cap had grown to over $10 billion. Today, it stands at over $100 billion, a testament to the power of Fisher's philosophy about survival and success not being tied to size.

Intuit's continued ability to innovate and adapt, even as it has grown into a large company itself. Unlike many companies that become complacent with size, Intuit has maintained its startup mentality. They continue to launch new products and services, like QuickBooks Online and Mint, that disrupt their own existing offerings.

Don't be dazzled by size alone. Look for companies, big or small, that have a deep understanding of their customers, the ability to innovate quickly, and a track record of adapting to change. These are the companies that are likely to survive and thrive in the long run, regardless of their current market cap.

It's not the size of the dog in the fight, but the size of the fight in the dog that matters. By focusing on solving real problems for customers and maintaining the agility to adapt to changing markets, even small companies can outpace giants and create tremendous value for investors along the way.

Look beyond the market cap and ask yourself: Does this company have what it takes to survive and thrive in a changing world? Because in the long run, that's what really counts.