CEO Unplugged

The new Intuit Small Business Web

First of all, let me start with one of those lame apologies about how long it's been since I last posted.  I've been heads down getting used to the Intuit world and my new job within it.  I basically have two full time jobs now (my old one running Homestead and my new one at Intuit--more on that in a minute).

People who work in big companies have always told me how much I'm not a big company person, and for the most part I can now state from experience: they were right.  However, being inside a big company has given me a totally new appreciation for a) how much easier it is to get stuff done in a small company and b) how hard it is to build and keep a massive organization functioning and growing.  It's way easier to grow a few million dollars of revenue by 100% than it is to grow a few billion dollars of revenue by 5%.  It's way easier to keep a few hundred employees fired up (even if they are underpaid and overworked) then it is to keep a few thousand employees from grinding to a halt. 

Having said all of that, Intuit is really an awesome place.  There are tons of passionate, smart, dedicated people who easily pass the old Homestead "no jerks, no idiots" rule.  The customer loyalty and product excellence is even better than it appears from the outside.  Basically, everything I predicted about the people/culture/values in my original post about the acquisition has come to pass.  But it's way bigger than Homestead (which already felt big with a whopping 175 employees!), and with that comes new ways of getting things done.  We are all still learning the best way to work with each other.

But enough about that... what I wanted to post about was a cool thing that has come out of Homestead joining Intuit's Small Business Division.  We have recently created a new "SB Web Group" that includes not just Homestead's various assets, but most of Intuit's other small business web products including JumpUp, QuickBooks Online, StepUp and MyCorporation.  

Intuit actually has a ton of great stuff happening on the web, but it's often overlooked by the press and the public because of the prominence of TurboTax, QuickBooks and Quicken.  But did you know that Intuit is already one of the world's largest pure SaaS ("software as a service") players in the small busines space?  Or that Intuit's online communities are extremely in-depth (check out JumpUp--it rocks) and visited regularly by millions of customers?  Or that Quicken Online rocks compared to the Web 2.0 darlings Mint and Wasabi (okay, that is just my opinion)?  Or that three of the most downloaded iPhone applications are Intuit products?

I can't say too much about our plans in SBWeb yet (stay tuned), but let's just say that we're planning on making a big splash that will continue the mission of leveling the playing field for small businesses.  I can say that the 350+ employees coming to work every day on our team are going to give all of the "big guys" a run for their money... okay, I guess we are one of the big guys now.  Still getting used to that.  :o)

Finally, lest you all believe that I sold my soul when we sold Homestead to Intuit, I thought you would enjoy the following video.  At the "all hands" meeting for the several thousand employees in the Small Business Group, I played one of my infamous songs about being a part of my first "big company" reorg.  As my mom says, you can take the boy out of Kansas, but you can't take the Kansas out of the boy... sorry my singing sounds so bad--I hope it's because I had a cold and not because I always sound like that.

Click here to see/hear the song.

Thanks to all of you for your continued support.  Believe me, we're still rockin' on.

--jsk

Eliot Spitzer, Emperor's Club and Homestead

Last week was unusually exciting around the old Homestead offices, thanks to our brush with one of the more newsworthy events of the decade.  It turns out that the high-end prositution ring Elitot Spitzer has confessed to patronizing--Emperor's Club VIP--built their website using Homestead.

To be clear, we do not monitor the content of the sites built using Homestead... we have way too many sites to monitor, even if we wanted to.  What's more, it turns out that for legal reasons we cannot monitor our customers sites unless they are brought to our attention by a complaint, the legal authorities, or a call from the owner of the site or other "normal course of business."

So, when news broke like a tsunami last Monday about the Spitzer site, and every web browser in the free world starting hitting www.emperorsclubvip.com (and within minutes had taken down the New York Times and www.ny.gov websites) Homestead's servers started receiving almost 150% of their normal traffic.  The good news is that our servers handled the traffic just fine.  The bad news is that our system soon automatically disabled the site because it had exceeded (big time) it's alloted gigabytes of traffic and guess what everybody saw instead?  A friendly Homestead logo and a message stating "Sorry, the site you are looking for is temporarily unavailable because it has exceeded its bandwidth limits."

Old board members called.  My new employer called.  NBC Dateline (and other press) called.  My mom even called (you can imagine what that conversation was like).

But that's not the whole story.  It turns out, unbeknownst to me, that the FBI had contacted us a few months ago and informed us about emperorsclubvip.com and asked us to cooperate with their sting operation.  This is not as unusual (or Hollywood) as it sounds.  We get several inquiries like this from law authorities every month, and we actually have a well-practiced process that dictates how we balance cooperating with criminal inquiries while also protecting the privacy of our customers.  In this case, because of the evidence presented by the FBI--which corroborated with data on the site--we agreed to cooperate with their sting operation.

The FBI failed to mention their prime suspect was the governor of New York.

Thus, because this type of thing is unfortunately rather routine, I was not aware that we were involved with the investigation--or that it was a Homestead site--until everybody else.

Which brings me back to why last week was so eventful.  It brought into public view an aspect of our business that has been central to much of Homestead's ten year history.  Something that Intuit, our new parent company, has never had to deal with--until last week. 

When you introduce a technology or tool to society, you are not in control of how it is used.  Most of the time inventors are not even aware of how their invention is ulimately used, but when the technology is on the internet, you can actually WITNESS it.  This is a beautiful thing--people do amazing things with it that you (the creator) never imagined.  This is also a terrifying thing--people do things that you wish they wouldn't, or which violate your sense of right and wrong.  There are many sites hosted at Homestead which are legal, but make my skin crawl (see www.michaelsavage.com).  Even though I despise what sites like that say, I really would die to defend their right to say it.

Luckily for us, over the years less than 1/100th of one percent of our (millions of) sites have come to our attention as being objectionable or illegal.  But each time we have had to balance the rights of our customers to use this platform that we nurtured and created with the laws of the country and our responsibilities as a business.

When all the dust settled last week, the feeling I was left with was what a great privilege it is to have created (and still run) a business that has such interesting ethical, constitutional, and social implications.

Now if I could only get my new parent company to enjoy it as much as I do. :o)

--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

Homestead named "Best of Web" by Forbes

We were pleased to learn yesterday that Forbes.com named Homestead.com "Best of the Web" in the Entrepreneurs category.  Now, we've been fortunate enough to garner our share of these awards in the past, especially during the Internet bubble when everybody and their brother was giving out awards to websites.  However, a few magazines have Internet awards that still mean something, specifically PC Magazine Editor's Choice, and Forbes Best of the Web.  Their reporters actually research the sites in depth, follow the competitive trends, and use the products like real consumers.  So, we're flattered to have received Forbes' award again, and especially excited that they have created a new category that is a sweet spot our company and our customers: Entrepreneurs. 

Some of Forbes other "best of" sites in the Entrepreneur category: WebEx (online meetings), Staples.com, Simpata (HR), and Business.Gov (run by the SBA).

--jsk 

Thanks

I just wanted to send a hearty thanks to all of our customers who were so understanding and supportive during our outage last Thursday and Friday.  Things are essentially back to normal, but we're still dealing with a few residual effects.  If you are experiencing any issues with your site please call our technical support line at (800) 710-1998--even if you don't have phone support on your service plan we are waiving that restriction while we work through all issues.

Finally, if you sent me personal email, I apologize that I haven't gotten back to everybody yet.  I'll be working through them this week, but make sure to call our support line if your note pertained to a technical problem or question.  I've personally received over 1000 messages since the outage, most of them wonderfully understanding, and for that I and everybody on the Homestead team send out a big THANK YOU!
--jsk

Talent, what talent?

I've written previously about Homestead's wacky culture, and I thought some of our customers might enjoy a peek  behind the curtain.  So, at the risk of totally humiliating myself and my colleagues, we've posted some of the acts from the famous (or infamous) Eighth Annual Homestead Talent Show.

Click here to see/hear a song that I performed with David Wu, our COO, to the tune of Graceland by Paul Simon.  Click here to view other performances from the talent show.  Viewers beware, we interpret the word "talent" quite broadly around here, although many of them are quite impressive. Unfortunately, mine is not among them.

Enjoy, and be kind with your comments.  We spend most of our time working for you, not practicing our acts!
--jsk

The Fourth Priority (drum roll please)

Thanks to everybody for all the guesses about what Homestead's fourth priority is in running our business.  Congratulations to the four people who got it right--your free months of service are on their way.  Now on to the answer (drum roll please)...

It's the community.
In my opinion, after employees, products and customers comes the community.  As a business, you have a synergistic relationship with your surrounding community.  By community I don't just mean your local community, but also your community of customers, suppliers, partners, and those people or groups that you touch who contribute to your success but are not directly compensated for it.  This responsibility to your community starts as local as the people you see walking outside your office window every day, and is as global as worrying about the impact your company has on big, critical issues like the environment, world politics, poverty, and the global economy.   The best part is that I'm utterly convinced being a responsible and proactive community member--at the macro and micro levels--is very good for your bottom line.  And it feels great, too.

Start locally
At Homestead, since our customers interact with us virtually (web, phone, email), they are located all over the globe (at last count, in over 150 countries).  But, our offices are located in a sleepy neighborhood in Menlo Park, a suburb of San Francisco.  And our 100+ employees drive through the neighborhood every day, use the neighborhood gym and park, and eat at the local restaurants (we seem to do a lot of that).  So while there are only a few dozen Homestead customers who live within a 1/2 mile radius of our offices, we still have an obligation to be a responsible member of this geographic area where we work.  Over the years we have built the neighborhood kids a park and play structure, agreed to change the color paint on our buildings at the request of some neighbors across the street, befriended the local restaurant providers and tried to send them major meal orders on a regular basis (Henry, the owner of the local Quizno's, makes us 125 sandwiches to order once a month).  We also have offered internships to local high school kids from one of the most economically depressed parts of the Bay Area, which is only five minutes from our offices.  Still, there is much more we could do.  As I'm writing this I find myself wondering why we don't have an "open house" for our neighbors so that they can see Homestead from the inside after spending so much time watching us from the outside.  We'll have to get on that.

The best ways to give back are free
I am involved with an organization called Entrepreneur's Foundation, which now has over 100 companies who have joined by giving small amounts of stock and a commitment to be actively involved with their communities.  In exchange for joining, EF helps them craft custom community involvement (CI) programs that match local volunteer activities with the interests of the company.  From that perspective, and my own experience in building Homestead's Community Involvement program and the Homestead Foundation, I can tell you that nothing has as big of an impact on a company's culture and employee morale as weaving philanthropic passion into the fabric of the business.  Employees come and stay because of it, customers like doing business with you because of it, and partnering companies respect you for it.

Local non-profit organizations are starved for resources in a way that makes even the most basic start up business look flush.  They need help doing their books, making phone calls, setting up an office, administering their computers, building a website (wink), and even delivering their actual services.  If you spend two hours a week working with a non-profit organization, you can make a serious impact.  If you have each of your employees spend two hours a week, you can change their chances of success dramatically. 

From day one, we allowed employees (okay, at first it was just me) to spend two hours a week or one day a month volunteering for any cause they found important.  In theory they got paid to do this, although most people just spent more time working to make up for it.  Fast forward to this year, and now we spend a few thousand hours collectively volunteering, which is like donating a couple full time employees!

Pocket change adds up
Luckily for all of us, many corporations create giving or matching programs that distribute money to their community charities.  This is a great thing, and it serves as an important means of funding local non-profit organizations in many communities.  Homestead has the Homestead Foundation, which is our financial giving arm.  You may be thinking that's "easy for him to say" now that Homestead is financially established and has more resources to give with, but I created our foundation when I was the only employee and I couldn't afford to pay myself much more than minimum wage. 

I thought it was important that, as we pursued the "for profit" world of business, we didn't forget about the other types of organizations who were also trying to change the world but without the pot of gold at the end of the rainbow.  So, I would stick a few dollars in there whenever I could, instead of giving it to Starbucks.  I also encouraged our early employees to give a little here and there.  Finally, I wrote into our corporate charter that we would donate 5% of our pre-tax profits to the Foundation from then on.  Before you knew it we were turning a modest profit, and the Foundation had over $10,000 in it!  It felt great to give away that first $10,000.

Over the years, the Homestead Foundation has given several hundred thousand dollars and has served as a vehicle to support the organizations that are important to our customers and our employees.  Last year the Foundation granted $75,000 to organizations that were serving the small businesses in the Gulf Coast region affected by Hurricanes Katrina and Rita.  Much of that money came from Homestead and its employees, but much also came from Homestead customers who joined in our efforts. 

We have also given sizable donations to organizations such as Habitat for Humanity, Bay Area Action (a local environmental organization), Boys and Girls Club, RAFT (Resource Area for Teachers), and many others--all of whom our employees spent time volunteering with first.  After we build connections with them by giving our time and non-monetary resources, we then feel comfortable that our money will be well utilized and make an impact. 

My point is, start by finding organizations in your area that you think are doing important work, and support them any way you can (time, "pro bono" services, help with fund raising, $50, whatever).  As you become more successful, it will be programmed into your life and the life of your organization, and then you can give more financially.  Ironically, it's easier for us to give money than time these days, but the organizations often value our continued volunteer efforts as much or more than the checks that we can write.  They remember us as the small, committed company with lots of energy and heart, and that's what they want more of!

Think globally
Being a responsible member of the community doesn't just mean giving your company's ancillary time and money.  It runs deeper than that, to the core of your business and the decisions you make as you build it.  For example, you can choose to start a business that is not a drain on the environment.  Given technology today (and the power of services such as Homestead, yea!), you can set up a virtual office or  store that doesn't have a physical presence, which means no building or store to air condition, heat, clean, etc.  You can also choose to sell services or virtual products, which means there is little or no impact on the environment when your customers purchase.  At Homestead we are proud that no boxes, packaging, manuals, CD's, or other materials are consumed each day when the thousands of new customers come on line to try or buy our products/services.  Of course, if a customer requests a CD we'll send it to them, and they can print out the manual if they want, but you can design your business to make those types of activities minimal or on-request only.  I LOVE that certain utilities and credit card companies allow me to only receive my bill via email for this exact reason--I don't open the physical bill anyway and it just fills up our recycling bin at home.  Be like those enlightened companies with every aspect of your business!

Another way to be responsible is in your decisions about "outsourcing" certain aspects of your business.  I've vowed not to get political in this blog, so I won't take a stance on this sensitive political issue, but please realize even the smallest decisions can have global impact.  Outsourcing customer service or manufacturing or computer programming to foreign countries or non-local areas has both positive and negative impacts on your local community and the communities where those outsources are located.  You may not be making these decisions directly yet, but your vendors and partners probably are.  Look into why one vendor's prices is so much lower than the others--are their business practices in line with your own philosophy of building a community-sensitive business?

There are dozens of other ways that your business has global impact: whether you offer benefits to some or all employees, whether you adopt industry standards or practices that are not law, whether you offer a 401K and/or match, whether you reward employees who bicycle or car-pool to work, whether you diligently respect intellectual property rights, whether you promote these efforts to your customers.  If you and the millions of small business owners like us participate in new trends, it will create a new standard, and eventually influence policies and laws and even global relations. 

I won't tell you how I stand on all of these issues, but I do urge you to consider them and evaluate your business from a local, global, holistic, community-responsible perspective.  Even if you're a single entrepreneur with a dream and a prayer, your decisions on these issues will make a difference.  Trust me, I was one, and it has mattered.

Finally, as always, I'm eager to hear your viewpoint--leave a comment if you have a feeling one way or another.  Next week: the fifth and final priority.
--jsk

September 11th--why it matters to Homestead

The morning of September 11th, 2001 in Manhattan was even more beautiful and stunning than everybody says it was.  I know because I was there, along with the millions of others who witnessed the horrific events first hand.  I was there on business, and luckily had meetings uptown in the morning and downtown (planned) in the afternoon.  What I experienced in New York City on that day, and the rest of that week while I was stranded in Manhattan, transformed my life and changed the trajectory of Homestead.  In fact, it's safe to say Homestead wouldn't be here today, at least not in our current state, had September 11th not happened.

I watched the first tower collapse in front of me while we were driving back to our hotel in a taxi, about a mile away from the scene.  It was a horrible, but surreal experience: watching all of the strangers mingling and crying together on the street afterward; being a block away from the center where the loved ones were supposed to report to look for missing persons, and seeing their despair and panic first hand; and then being stuck in the hotel for the next four days with nowhere to go, few services available, and a lot of time to watch the national coverage of the scene unfolding not far from where I was. 

The fall of 2001 was the depth of the dot com crash, and at Homestead we had just told our 12 million free members that we were going to start charging them for their sites (the whopping price of $29 a year!).  What happened to me during those three days changed my decisions about how to steer our struggling company.  As I walked the streets of Manhattan, or went on several long runs through the deserted city streets, I noticed that the soul of this most-capitalist-of-towns was the small businesses and little organizations.  The hot dog vendors, the newstands, the neighborhood restaurants, the proud florists, the neighborhood homeless centers, the small museums, the bakery on the corner, the guy in the suit in Bryant Park (free wi-fi access) with a laptop on his knee and a cell phone to his ear trying to serve his customers without an office on the day after 9/11.  How could they bounce back so quickly--and with such a resilliant spirit--so soon after this monumentous tragedy in their city?  If they could do it, I knew that Homestead could do it (far away in sunny California), and I decided we should find a way to tailor our business to help businesses like theirs.  With so few resources they managing to compete with global corporations 1000 times their size.  If we could put the power of technology and the internet into their businesses, maybe it would level the playing field?

That week I realized that the fabric of our economy--and our society--is not a finely woven cloth of mega corporations like the ones whose neon signs are everywhere in New York (like Starbucks, Gap, Duane Reede, Morgan Stanley, McDonalds).  Instead it is a patchwork quilt, where every square is a different size and color and nationality and education level, stitched together by a common belief in free enterprise, hard work, and an intense passion for what they are doing.  And most of those patches are small businesses,  individual entrepreneurs, or small organizations. 

On the plane home I wrote down my thoughts, which I read to the company when I returned, and explained how I felt we could do our small part to respond to these tragic events on the other side of the country.  Rebuilding our company, and deciding that we weren't going to be a casualty of the dot com crash and mini-recession that followed 9/11, became an easy decision after that.  Of course, we weren't dealing with matters of life and death, unlike so many who were in Manhattan (or Pennsylvania, or Washington D.C.) on that day, five years ago.  But somehow it felt good that we could connect the dots, and it gave our company's work a little more meaning.

So as you're hearing all of the tributes and memorial speeches today on the news, and listening to the commentators who say things are worse than they were five years ago, or we haven't learned anything since that terrible day, here's at least one counter argument.  It did change us, and we haven't forgotten, and I believe it has and will make us a greater place to work and live.
--jsk

The Homestead Creed (c. 1998)

THE HOMESTEAD CREED

Homestead was founded on the philosophy of investing first and foremost in an exceptional family of employees and then striving to achieve long term success as measured by our customers, products, community and shareholders. This creed shall serve as the guide which preserves that founding business philosophy, starting with our most valuable resource: our employees.

1. OUR EMPLOYEES

• Every employee of Homestead has both the right and the responsibility to the following:
• to receive honest communication from management concerning decisions and problems.
• to be proactive and voice his/her concerns whenever he/she disagrees with a decision, policy or action.
• to self impose—and then live up to—exceptional expectations. "Good enough" work is not acceptable.
• to share in the success of the company through equity holdings and annual profit sharing.
• to have fun and be passionate. We believe it is the only way to build truly exceptional products.
• to learn on the job. We believe in building a learning company—that means employees will never be penalized for not knowing something, but will be for not striving to learn it. Homestead will always actively encourage and invest in the continued education of our employees.
• to be evaluated based on productivity and his/her contribution to Homestead’s future success.

In this spirit, all Homestead employees and directors, empowered and challenged by the above rights and responsibilities, will work and make daily decisions according to the priorities of this creed.

2. OUR PRODUCTS AND SERVICES

Our second responsibility is to the quality of Our Products and Services, for they will be the vehicles for our lasting impact on the world as a whole.

• The first meaning of quality is the quality of the content of our products—their soul. Every Homestead product must have the potential to "revolutionize the way people learn, work and live with technology" as our mission statement requires.
• The second meaning of quality is the quality of production. No product will be released until it has been exhaustively tested and prodded, is of the highest professional standard, and every employee working on it is proud to put his/her name on the product. Finally, when problems are found with a released product, they will be relentlessly pursued until repaired.

3. OUR CUSTOMERS

Our third responsibility is to our Customers, for without customers we have no company. Everything that we do must be done with the customer in mind. We will do this by:

• Never conceiving a product without taking into account how it meets the needs of a customer.
• Always learning first hand from the customer during the design process.
• Providing exceptional and personal attention to the needs, complaints, or comments of our customers.
• Making customer satisfaction the ultimate measure of success—more than money, more than our own satisfaction, and more than publicity or hype. In the long term, we will only succeed if we meet our customers’ needs with a better product and with better service.

4. OUR COMMUNITY

Our fourth responsibility is to Our Community. As we are among its most fortunate and endowed members, we have a duty to participate in and better the communities in which we work and live. Employees are encouraged to give an average of two working hours per week to the community service project of his/her choice. Furthermore, Homestead pledges to contribute a minimum of 5% pre-tax earnings to the Homestead Foundation, whose sole purpose is to support financially community organizations or causes in which Homestead employees are active participants.

5. OUR SHAREHOLDERS

Our fifth and final responsibility is to Our shareholders. Our ultimate goal is to build a financially profitable and successful entity so that it may sustain itself and its business practices for decades to come. Without profit, all of the above responsibilities are impossible to realize. In the short term, we must justify a return on all investments, make only reasonable and necessary expenses, and strive for profitability every year. Meanwhile, we will invest in the long term. We will make decisions that will achieve maximum return in ten years, not two, and never pursue short term gain at the expense of long term sustainability.

The success of Homestead—day to day, month to month, and year to year—shall be measured against our ability to live up to these four responsibilities; and its employees, founders, and directors shall now and for always work and act in accordance to this creed.

Menlo Park, California  (January 1998)

Why the blog, why the name?

So, what's with this blog?  Actually, I've been meaning to start a blog for some time now, as I really enjoy communicating with Homestead's awesome customers.  I'm always looking for ways to generate more conversations with them, and a blog seemed like a perfect way to conduct an informal conversation among many of us at the same time.  I also have lots of observations about the world of entrepreneurship and technology that I would like to bat back and forth with other like-minded (or unlike-minded) entrepreneurs, business owners and thoughtful people.  What better group for that than Homestead's extended family of customers, employees, investors and the millions of people who visit our site each month? 

So, here it is, my official blog.  I can't say that I'm a fanatic about blogs in general, but I think they do a great job of bringing people together to discuss specific ideas.  However, without the feedback loop, you might as well send out one of those cheesy newsletters, so I'm counting on all of you to help me out by joining in.  This is a place for your voice to be heard, so please post a comment if what you read here makes you want to say something!  I welcome any and all comments, as long as they are respectful and sincere.

As for the name of this blog, I'm an amateur (and fairly poor) singer/guitar-player and have been known to write parodies about the Internet, or Homestead products or employees, and perform them at various venues (including the amazing Homestead Talent show we put on every year).  For the launch of our QuickSite product line in 2005, David Wu (Homestead COO) and I performed one such song instead of giving the more traditional demo, at the DEMO Conference in Phoenix where 60 companies get six minutes each to show their stuff.  It went over quite well (we won the DEMOGod award) and created a temporary buzz in the blogosphere.  You can see the slightly embarrassing video here.  A more savvy entrepreneur would have capitalized on the buzz but I didn't, and over a year later the only benefit is that I occassionally am recognized at a conference or industry event as "that crazy dude who sang his demo at DEMO."

Anyway, I like unplugged music, and I like unplugged conversations, so there you are.  I'll try to always give you the truth, unfiltered and without amplification or distortion.  If you think I'm spinning, call me on it.  As for the guitar playing, I'll keep practicing.