Eric Dunn | Crain's Orlando

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Eric Dunn

Background:  

Quicken makes personal money management software and is based in the Bay Area. It was sold to H.I.G. Capital this year after being owned by Intuit. 

Before becoming CEO of Quicken in March 2016, Eric Dunn spent 20 years at Intuit. In 1986, he joined Intuit as its fourth employee and worked as a programmer, CFO, general manager of Quicken and Intuit's first CTO. He retired from Intuit in 2000 to pursue a second career in technology investing, as a venture capitalist at Cardinal Venture Capital from 2003 to 2010. He returned to Quicken in 2015.

The Mistake:

I spent a decade as a tech investor. I was at a venture firm for seven years. The companies that I loved were payment-related companies; I loved the idea of using tech to move funds reliably, quickly, securely, and felt there was a lot of friction in the existing payment mechanism. I was forever looking for the next PayPal.

The harshest lesson that I learned in investing was one of those payment investments.

I invested in micro-payments. It was in vogue in the '90s, then not in vogue and it’s off the radar screen now. The investment was in a web-based solution that would allow people to buy digital content for a few cents, a dime or nickel. What we imagined was that our solution would be a way for content publishers, writers, musicians, artists, poets, to get people to pay in a low-friction way for content on the web.

The company built an elegant solution. ... It was relatively simple, but you had to pay. I thought it was the sweetest concept ever. I invested with enthusiasm in 2003.

What we learned pretty quickly, although it was elegant, reliable, secure—no one wanted it. The primary customers for the service, the publishers … nobody wanted it

It was a harsh reality check.

As investors, we were so in love with the concept, we hired three CEOs in three years thinking that if we got the right talent, it would take off. We were stubborn and shortsighted as a board not to accept that reality more quickly.

The company closed its doors after three years.

We hired three CEOs in three years thinking that if we got the right talent, it would take off. 

The Lesson:

That was a clear lesson in building a company, investing in a company, that it’s pretty important to have a product consumers want. If you look at the value of Quicken, we put customers first. You have to start with the customers or else you’re in a heap of trouble.

On the rebound from that unfortunate experience with micro-payments, I made an investment in (what was formerly known as) Adaptive Planning. This was a company building on the web, a financial planning tool. It was a tight logical case, there was customer demand for this offering, so it was a cautious investment decision.

One of the things I became more disciplined about before an investment decision, is to make sure I talk to live customers of the product. I was pretty thorough in customer reviews before making an investment in Adaptive Insights (a cloud corporate performance management and business intelligence platform).

Follow Quicken on Twitter at @Quicken

Photo courtesy of Quicken.

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