CEO Unplugged

More on Intuit + Homestead (inquiring minds want to know)

Wow.  Thanks to all of the amazing feedback over the past week concerning our announced merger with Intuit.  Between the hundreds (almost 1000!) of congratulatory emails, the lively discussion on the blog, and the massive coverage in the press and blogosphere, it's been quite overwhelming. Throw in a buck-fifty (note use of web lingo proving I'm hipper than I seem) excited Homestead employees, a bunch of Silicon Valley well wishers, and several thousand buzzing Intuit people and you've got yourself a party!

I have not been able to reply personally to many of the emails or inquiries, so I thought I would respond to some of the common themes.  Here we go (by order of popularity):

Theme #1 (roughly 60%):
CONGRATULATIONS/CONGRATS/WOO HOO!/ROCK ON/ETC.

What I would say if I could respond to each of you individually:
Thanks, dudes.  Much appreciated.  You guys rock, and your support means a ton to all of us.  We have not forgotten in all of this that, without you, we would have nothing.

Theme #2 (roughly 20%):
YOU'RE GOING TO RAISE PRICES/PLEASE DON'T RAISE MY PRICE/U IZ A RICH BAZTARD NOW DON'T RAIZ R PRICES!/YOU PROMISED CHARTER MEMBERS YOU WOULD NEVER RAISE OUR  PRICES ARE YOU GOING TO KEEP THAT PROMISE?

What I would say if I could respond to each of you individually:
We have absolutely no intention of raising prices!  We do intend to accelerate our development of new products, and we'll probably charge for some of these additional features and include others for free in your packages.  As for Charter Members, who have been with us since the very beginning, my promise to you of never raising your price again is still in tact--you don't honestly think I could get away with that and look myself in the mirror?

Theme #3 (roughly 10%):
YOU'RE GOING TO OUTSOURCE YOUR SUPPORT TO INDIA/THIS IS THE END OF YOUR EXCELLENT SERVICE/NOW YOU'RE GOING TO GIVE US BIG COMPANY SUPPORT/THEY ARE GOING TO RUIN HOMESTEAD

What I would say if I could respond to each of you individually:
I was really pleased to read all of your notes and comments about how you much you like Homestead's support.  Words like "Homestead is the gold standard of web support" or "Homestead agents always know how to make us dummies feel smart" were music to my ears!  We're still working hard at figuring out how to deliver world class support to all of our customers and, in spite of the many generous comments this week, we still have work to do. 

As for whether we are going to outsource it--no, no no!  In fact, this week was exciting for another reason.  We opened our new customer service center in Denver.  Yes, as in Colorado, as in the good 'ol U.S. of A.  It should have 100+ additional folks by the end of next year, combined with the great team we already have here in California.  One of the major reasons Intuit wanted to join forces with Homestead is because of our unique philosophy of actually wanting to talk to our customers on the phone.  We've figured out ways to do this profitably, and we're not going to be changing this approach.

Theme #4 (roughly 5%):
NOOOOOOO!/YOU IDIOTS, THIS IS GOING TO END JUST LIKE PHOTOSITE/I CRIED WHEN I GOT YOUR NOTE/IT'S DEJA VU ALL OVER AGAIN LIKE PHOTOSITE/IN TWO YEARS THEY ARE GOING TO SHUT DOWN HOMESTEAD!

What I would say if I could respond to each of you individually:
I totally understand how a few paranoid folks might think this story ends like our sale of PhotoSite did.  But trust me, people, this is totally different.  We sold PhotoSite because we couldn't afford to continue running it ourselves at the time.  It was a labor of love, but nowhere near a mature business (i.e. it was losing a lot of money) which was directly related to its ultimate demise.  In contrast, Homestead is a very healthy business, and is growing rapidly.  A company as well run as Intuit isn't going to pay $170M for a company and then shut it down. This is more like Ebay's acquisition of PayPal, Google's acquisition of Keyhole (became Google Earth), or Yahoo's acquisition of RocketMail (became Yahoo Mail)--all previously established businesses that expanded rapidly in their new homes.  Finally, shutting down Homestead is going to happen over my dead body (and the dead bodies of about 150 other people).  And we're not going anywhere.

Theme #5 (roughly 5%):
MAYBE NOW YOU CAN MAKE MY MAIL SYSTEM WORK/DON'T TRIP OVER YOUR PILES OF MONEY ON THE WAY OUT THE DOOR/<INSERT RANDOM BIBLE CITATION HERE>/THIS IS THE LAST NAIL IN THE COFFIN OF HUMANITY/OTHER CYNICAL OR HUMOROUS REMARKS

What I would say if I could respond to each of you individually:
God bless the Web.

--jsk

 

Intuit and Homestead join forces

Big news in the Homestead universe today!  We announced this afternoon that Homestead has entered into a definitive agreement to be acquired by Intuit for a generous amount of cash.  You can read the standard-issue press release here.  It's expected to close early next year.

The backstory is a bit more interesting.

Ever since I started Homestead in 1997, I have kept two lists.  The first list is all the acquisition offers we have received over the years (it's nineteen long, not counting this one).  The second list is a "wish list" that contains companies I would actually consider selling our "baby" to; companies that have resonated with me and the Homestead philosophy of doing business over the span of my career (this list has four members).  Intuit is on the first list twice and, as you might guess, a member of the illustrious second list.

You have to understand that when you start a company in your bedroom because you don't want to work for "the man," it is quite exhilarating (and a bit amusing) the first time another company comes along and offers to pay you a lot of money for what you've created.  I've never intended to sell Homestead, but then again I've never intended not to sell it either.  It just hasn't been a primary focus.  It's much more fun to hire amazing employees, build great products, and delight the pants off of your customers.  In fact, you can ask my wife: getting an acquisition offer is a major distraction and usually knocks my world off of its axis for a few weeks until we eventually say no.

Saying no, even though we've done it a lot of times, is not a simple matter.  We have investors who have put millions into our company, and they deserve a rewarding and timely return.  We have employees who have spent many years laboring away, and they deserve to sock away some money in their kids' college funds, maybe upgrade from their 1200 square foot million-dollar Silicon Valley house (or buy one at all).  We have white boards full of product plans that don't see the light of day because of scarce resources.  We have 100's of thousands of business websites that are counting on us being around--and staying the best in the industry--for many years to come.

I have to weigh all of those factors (and consult with many folks) every time this happens, before I can give a response that I feel is fiducially and ethically responsible.  Nineteen times that calculus has resulted in a "no."  Last week it came out with a resounding "yes."

Here's why.  We don't get our kicks out of delivering financial returns for our shareholders (although it feels good, we think of it more as a responsibility than a thrill).  As I said above, our thrills come from employees, products and customers.  So if we can deliver a great return to our shareholders--while accelerating our dreams for employees, products and customers--an acquisition makes a ton of sense. 

Which brings us back to the second list.  A suitable acquiring company for Homestead has to be a place that we all can feel as strongly about as we do about Homestead.  It has to have a set of core values that matches the Homestead Creed.  It has to have a hiring policy similar to our "no jerks, no idiots" rule.  It has to believe in giving back to the community.  It really helps if we can keep our brand, our offices, our wacky traditions, our identity.  And we absolutely have to keep all of our people, and be able to maintain the sense of ownership and pride that we all feel today.

I'm happy to report that Intuit passed all of these tests with flying colors.  I'm 100% confident the merger between Intuit and Homestead is in the best interest of all 5 Priorities that Homestead's Creed spells out.  To our Shareholders (#5), we'll feel proud that we delivered for them as we bid them a fond farewell and begin serving different financial stakeholders.  To our Community (#4), we'll be announcing several fantastic initiatives in the coming months (stay tuned).  To our Customers (#3), you'll notice no changes (except a new privacy policy and a little "an Intuit company" logo under our name); however, we'll be rolling out more great Products (#2) even faster.  And finally, to our Employees (#1), you'll have to buckle your seat belts once again--this wild ride is only going to get more exciting in the years to come!

Oh, and the blog stays, too.

--jsk

PhotoSite Update

I wrote a few months ago about the unfortunate news that United Online, the company that bought PhotoSite from us, was shutting down PhotoSite.  While that has happened, it is still the case that you can move your photos for the next few months by using a migrator that the folks at SmugMug built.  I thought I'd post the instructions if you want to try the migrator:

You can download and install the tool at http://www.smugglr.net/. You’ll need Firefox to run this since it’s a Firefox extension. After you install the tool go into the Firefox Tools menu and click on Smugglr. This will launch the migration wizard which is pretty self explanatory. You’ll need to enter your PhotoSite login / password and your Smugmug login / password into the tool for it to migrate the data over. So make sure to create a Smugmug account before running the tool. You can use the coupon code “photosite” to get 50% off the first year of your Smugmug membership.

Enjoy!

--jsk