Taxes are known as one of life’s permanent fixtures, but that hasn’t stopped Varun Krishna from innovating with next-level FinTech products and services. As the SVP and GM of Mint and former SVP of TurboTax, both housed under the Intuit brand, Varun is the architect behind TurboTax Live, a revolutionary online offering that allows users file their taxes and access help and guidance from a tax expert whenever the need arises mid-process. It also happens to be the fastest growing product in Intuit history.
Tidemark Founder David Yuan sat down with Varun to discuss the process and potential of carving out a new, human-centered, digital experience.
Dave: Let’s start with the big picture. Tell everyone what TurboTax Live is to you.
Varun: I’m so excited and proud of the work that went into this offering. If you look at the total addressable market (TAM) in the tax prep space, there’s a do-it-for-me model of tax filing and a do-it-yourself option, but not much in between. The marketshare is 50/50 in terms of volume of users between those two categories, but the spend is split 90/10. The amount of money people spend on taxes is just massive. We started to realize that even though TurboTax is an amazing DIY offering, we wanted to go beyond thinking of the system as binary and ask instead: is there a new way?
Dave: It seems like that insight—your understanding of the customer segment and TAM—is a strong signal of huge potential. If you thought about applying this work to other verticals, what would you consider the other major indicators that suggested there was a big opportunity here?
Varun: We started by comparing the offering to a brick and mortar experience and looked for where there were massive inefficiencies in cost. You can easily draw analogies to this in other verticals. If you look at an in-person tax filing, you would have to schedule an appointment, collect all your documentation, drive to the location, sit and wait for some period, all just to go through a fixed, standardized workflow. And our job is to look for inefficiencies. We ask, where can we automate, how can we leverage virtual vs. in person, which touchpoints add value? The key realization behind TurboTax Live was that the technology and automation aspect doesn’t need to eliminate the human component. It should enhance it.
Dave: You’re a great product leader. Intuit is a great product company. What got you over the hump on thinking you need people as central to this value chain rather than just more product or better product?
Varun: The reason the human element is so important because, for some people, filing taxes is a really stressful experience. While we’ve designed TurboTax to instill confidence in DIY tax prep with an intuitive experience, a computer can look at tax filing as a series of steps from A to B, as simply completing a task, but it’s so much more than that. It’s about how you make someone feel at the end of the process. No matter what a computer tells you, psychologically, there’s peace of mind for some people when a real human being is there to reassure you. I see a world in which this product shouldn’t eliminate collaboration or touch points—it should just make accountants into super accountants. Rather than making them obsolete, we want to create the next big opportunity.
Dave: My understanding is that this has been a screaming success for Intuit and a really positive journey. What metrics can you share that would indicate to other SaaS entrepreneurs that they should take this seriously?
Varun: Last year we grew customers about 70%. Our customer conversion for TurboTax products grew about 6 points. We have a 67% retention rate for new TurboTax Live customers. That’s the highest in our franchise. The biggest thing I’d say to folks who are considering this and want to understand the value: when you think about services like we are, you’re automatically thinking of your product like a network. When you do that, you create the potential for a network effect. That’s the holy grail for any kind of growth product—it’s non linear and self sustaining. It’s the story of the great companies of our time.
Dave: What are the biggest opportunities that could come from that network effect?
Varun: I envision a marketplace construct where if you have services you want to offer and a price you want to charge, you can have this amazing tool to acquire customers and get paid. You can just run your financial services business using the TurboTax platform. That could create a new kind of profession for people who want to help others with their taxes and new opportunities across the board. As a society we are inherently going to be in a more and more distributed, collaboration-like environment. You’re starting to see, and will continue to see, a new kind of vertical SaaS. It’s service, augmented. It’s like another dimension gets added with each new vertical and micro vertical. It’s very exciting.