+00:00 GMT

Build or Buy: Scaling Through Acquisitions & Ownership

with Marianna Tessel & Aileen Lee

August 24, 2021


Marianna Tessel Chief Technology Officer @ Intuit

Marianna oversees Intuit’s technology strategy and leads all of Intuit’s product engineering, data science, information technology and information security teams worldwide, harnessing advanced technology that helps power prosperity for our customers and partners around the world.

With more than twenty-five years of experience, Marianna joined Intuit in 2017 to lead product development for the Small Business and Self-Employed Group, responsible for Intuit’s QuickBooks product family. Previously, she served as executive vice president of Strategic Development at Docker, developing strategic partnerships and expanding its product portfolio and open source platform. Prior to Docker, she held engineering leadership roles at VMware, Ariba, and General Magic, working at the forefront of significant technology transformations, including virtualization, cloud, and DevOps.

At the beginning of her career, Marianna served as Captain for Computer Center R&D in the Israeli Army. She earned a B.S. in computer science from Technion, Israel Institute of Technology, and has coursework toward an M.S. in computer science and brain research from the Weizmann Institute of Science in Israel.

"There's several things we're looking into (with acquisitions). One of them would be... we call it, 'is it core or is it context?'

Is it something that is core to our business and critical to our business? Or is it more of context... it's not really where are we going to bring the value for our customers?"

- Marianna Tessel

Aileen Lee, Founder and Managing Partner @ Cowboy Ventures

Aileen is founding Partner at Cowboy Ventures, a team that backs seed-stage technology companies re-imagining work and life through technology, what they call “life 2.0”. Cowboy Ventures works with a wide range of startups from modern enterprise oriented companies like Guild Education and Lightstep to new consumer digital native brands like Dollar Shave Club and Tally.

Aileen periodically writes about technology insights and is known for coining the business term “unicorn” for public and private companies valued over $!bn. She has been named to the Forbes Midas List of best investors and Forbes Most Powerful Women, as well as to Time Magazine’s 100 most influential people.

Prior to Cowboy, Aileen was a partner at Kleiner Perkins Caufield & Byers for over a decade, was founding CEO of digital media company RMG Networks and worked at Gap Inc in operating roles. She has degrees from MIT and HBS, is mom of 3 and wife to a startup founder, and is an Aspen Institute Henry Crown Fellow and co-founder of the non-profit All Raise, aiming to accelerate success for women in the technology ecosystem.

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Show Notes

  • About Marianna’s role at Intuit (2:33)
  • How many acquisitions / build vs. buy decisions have you had to make? (4:35)
  • Marianna’s evaluation framework for buying companies (6:26)
  • Assessing engineering talent in acqui-hires (9:37)
  • How do you decide to buy vendor software or build yourself? (15:41)
  • How do you define what’s core to the business vs. context? (19:11)
  • Where are you looking to buy instead of build right now? (21:40)
  • Hard & soft skills that helped Marianna advance her career and run a 5000+ person team (23:48)
  • Were you always good at the "developing talent" and "managing" part of being a CTO? (26:50)


About Marianna’s role at Intuit

Patrick: Welcome Marianna and Aileen. Thank you both so much for joining us today.

Aileen Lee: Hi. Thanks.

Marianna Tessel: Hi Marianna

Hi, Aileen. How are you?

Aileen Lee: Good! I'm super excited to talk with you. So we will just dive in. Is that cool?

Marianna Tessel: Let's do it.

Aileen Lee: Okay, cool. So first I think we got a great intro to you but maybe you can, we can just start out to remind folks on your role at Intuit, your CTO... And so, how long have you been in Intuit and what does your role encompass?

Marianna Tessel: Yeah, so I've been here for three years at Intuit. I actually started from managing engineering for the small business and self-employed group. And I've been a CTO for the last couple of years.

In my role, I oversee all of the engineering activities. I am responsible for our technology strategy. As well as our, IT functions our security functions, et cetera. You know, at the end of the day, I'm responsible for strategy and make sure we deliver our product.

Aileen Lee: And how many people are in your org? How many products do you oversee? I assume you oversee both infrastructure and backend stuff plus front end stuff? Talk a little bit about what's in your org.

Marianna Tessel: Yeah, I oversee about 5,000 people. So like there's about 5,000 engineers across many sites. We have you know, sites in the US but also in India, in Israel, in Europe, in Brazil, in Australia. So, quite a diverse team.

Aileen Lee: Awesome. It's very impressive. And we will hopefully get to... I know we're going to talk about build versus buy both in terms of company acquisitions and also just building internal technology versus buying from vendors.

But I think your career has been so outstanding and so impressive and also very inspiring. So hopefully we'll get to talk about that a little bit too.

Marianna Tessel: Thank you so much, Aileen.

Aileen Lee: You're kind of a bad-ass! And Mariana and I have been friends for many years. We actually met... I can't remember how many years ago, maybe 10 years ago?

Marianna Tessel: Yeah, something like that.

Aileen Lee: Yeah, when one of the portfolio companies that I worked with was looking for a VP of Engineering and Mariana was a candidate. Although probably a lot more horsepower, a lot more technical than what we needed at the time. And, but we have been friends ever since. So it's a pleasure to get to hang out a little bit.

Marianna Tessel: I think that's the best thing that came out of it is that I met you, Aileen. It's been amazing to know you

Aileen Lee: So fun.

How many acquisitions / build vs. buy decisions have you had to make?

Aileen Lee: All right. So let's talk a little bit about Build versus Buy. Maybe give us a little background on, you know, you had this amazing career, first of all, you were in the Israeli Special Forces, then you came here and you did kind of like, I guess, like, you know, B2B.

In the first boom of it before SaaS at Ariba and Intacct then you moved to Docker, like had an amazing career.

Talk a little, give us a little context on how many acquisitions of companies like technology-driven acquisitions have you worked on in your career and maybe how many build versus buy decisions have you made on both acquisitions and, or building new products internally instead of buying from a vendor?

Marianna Tessel: You know, it's interesting because in each one of these companies and throughout the years, there's always been this question of build versus buy, like in the M and A type of realm. What I've noticed is actually in the last I would say decade in particular that really intensified.

And, you know, I think it's kind of started if I remember there were companies like Google early on were going on like a big shopping spree of companies. And I think it's kind of like became more and more of a thing. And you know, that's kind of how I experienced that.

So like early on, we would acquire a company, but it was kind of rare, but as the time moved on, it's a really ongoing discussion for companies. And you know, overall throughout my career I participated and integrated and bought probably over 20 companies.

So have quite an experience in that. And, you know, and I evaluated a lot more. And sometimes you decide it's, it's not a good fit, or sometimes you're trying to bid on a company, but somebody else kind of overbids you.

But there's a lot of companies that I've integrated and bought. And like I said, it seems to be intensified in the last decade more than I've seen it before.

Marianna’s evaluation framework for buying companies

Aileen Lee: I mean, especially with public companies like Intuit or any of the public tech companies with such incredible market caps and incredible currency. It's like, you know... you've got a lot of resources to play with, to think about being able to buy something.

So maybe give us an example, let's stay on the acquisitions, like company acquisition for technology purposes. Like, do you have frameworks that you use to like work with your teams on evaluating whether you should buy a company?

Take us through maybe a recent example of how long it took. Who is involved and how you thought about the considerations?

Marianna Tessel: Yeah, Aileen!

You know what, it's like an ongoing discussion that we have. We always look at companies that we should be, or spaces we should be looking at.

And I would divide it into three areas. The first one is I would call it like an, a business more of a business acquisition. And this one we would say, Oh, we're trying to get to this part of the market. We're trying to you know, like go after these types of customers. Or we see a match on the business side. So there's a, there's like business acquisitions.

And we recently announced obviously the acquisition of Credit Karma, which we're still in the process of doing so I won't be able to go deep into that one. But that would be an example of something like that.

Aileen Lee: How long were you talking to Credit Karma or looking at Credit Karma before you sealed the deal?

Marianna Tessel: You know, these things are always a process it's always an ongoing discussion. And there are times you think about it. Times you are like off. So with a lot of these, it's a long process.

The other type of acquisition is, would be what we call "tech tuck-in." So we would say we really need this capability, but it's going to take us a long time to build it. So we're just gonna acquire it you know, from the market."

One example that we have done recently would be a company named Origami Logic, which actually was doing very interesting things with data and AI in the space of marketing.

And when you look at it, you would say marketing? You know, Intuit? Like how does it relate to each other? And honestly, it did not relate from a point of view of we're not going at all after the same customer.

But what was true about them is that they developed capabilities in the area of data and AI that we really wanted. So we took their capabilities and we reapplied them to the areas that were relevant, for us.

And the third type of acquisition we're looking at is what we call, "acqui-hires." So aqua- hires... I never know if it's acqui-hires or acquihires...

But anyways, this is more like where you look at bringing in talent... and again, like more recently we announced a small acquisition of a company doing no-code development or mobile, I'll call the experience. And that's like a small team. And we brought them in to be part of our team because we were looking for talent in those particular areas.

So again, just to repeat, there's more of a business acquisition where you are actually looking at the business. You want to maintain the customers, you want to maintain the business. You know, they're related. There are tech tuck-ins where you want to bring in the capabilities.

And then we look at talent augmentation or bringing the right talent. We're missing DNA and we want to bring that DNA.

Assessing engineering talent in acqui-hires

Aileen Lee: So one of the questions in the chat was around assessing talent, right? Because probably underpinning at least the second two... it's primarily what talent are we gonna get?

Like what's the process for assessing whether the engineering talent is good enough and is really going to save you time or money or get bring someone new versus just hiring more engineers internally or building something internally.

Marianna Tessel: Yeah, and you know what, this question of talent is actually important in all these three types of acquisitions, because regardless... as we know, one of the most important thing you'll get is the talent. So it's not just when you just bring the talent alone. And you're saying, "I don't care about the technology or the business."

It's actually in all three, it's important.

And you know what we view them as... obviously, you always look at this, if it's... especially if it's a small team. You always look at the founders and you look at the team that they surround themselves in. We conduct almost interviews and we called them A for A - "assess for awesomeness." This is our regular interview path. And we do them for the companies we bring in.

And we look at resumes for team members within interviews. But one of the most important things that I recommend people doing... and I insist we actually do for any size company we acquire... is we look at the code because the code says a lot about you know, who you're acquiring and their craft. So that's a really great way to assess the craft of a team and their culture because often their culture would be apparent in the code itself.

So we do that, and of course, we'll look for...

Aileen Lee: Like how many people were involved in the code review? And is, is there like a qualitative assessment or is there some kind of scoring mechanism to be able to say, like here's where the bar is and this... the code either is above or below the bar?

Marianna Tessel: Yeah. You know, we have some metrics we're looking for. Like, we also look at what technology choices they made, how they actually use the code clean or not. So there are some very concrete things where we're looking at.

But we also have them walk through the code with us. See how they thought about it. See if there you know, point us to like the choices and they can explain them. So those are really good discussions.

In terms of how many people participate. Usually, it's actually not that many people. So from our side, we will have somewhere between two to five engineers...

And by the way, I want to emphasize engineers because in a lot of these assessments we actually bring our engineers into the assessments. As opposed to, again, people that may be more in leadership positions and slightly more removed from the code itself.

And then on their side, again, we will have between two to five people normally. So it's not a big size team looking at the code.

How do you decide to buy vendor software or build yourself?

Aileen Lee: All right.

Let's switch quickly to... I know there's our session's so short it's like I have so much to ask you. Build versus buy in terms of like there's a new product you want to build. There's a new service that you don't have where you could basically work with a vendor to buy software, or you could build software internally.

What's the framework that you use for build versus buy on like, where you're not gonna buy the company. You're either buying software from a vendor or you're building it yourself?

Marianna Tessel: Yeah. You know what, that's yet another interesting build versus buy because that's always the question and there's so much off the shelf that is available today. Like, you know, we, we moved to the cloud and we often speak at AWS reinvent so you know, what cloud we're using.

There's so much that you can just kind of pick up off the shelf.

And open source!

Totally. And it's so tempting. And there's open source. I said as we constantly bring this question.

And I'll say, there's like, again... There's no one formula, but there are several things we're looking into. One of them would be we call it, is it core or is it context?

Is it something that is core to our business and critical to our business? Or is it more of context? it's not really where are we going to bring value for our customers?

Yeah, I'll give you an example. One of the products that we have that is really popular is a way to get expert advice. It's available with TurboTax where maybe you're in the middle of your taxes. You want to get an expert. You can get someone. It's called TT live TurboTax live. And then we also have this offering in QuickBooks, QuickBooks live.

So, you can imagine that a lot of these conversations are actually going on through video. Having said that you know, we don't need to be experts in video, right? We can use... and in fact, we use a third party to do the video connection itself. So we don't need to be an expert in that.

But there's a lot of things surrounding that, that we would say "No, no, no, no. That is core of what we are offering."

And we will want to be the experts in that.

So for example, we have a lot of AI that we deploy around it and transcript of the discussions. So, these are more core versus context.

And like you said, "If it's not a core to me and I'd want to build it and I deem it as something I want to get from a third party, then where do you get it from?"

And in there you mentioned open source and... like you said, I actually spent a lot of time at Docker. And I have to say, I completely drank the Kool-Aid of open-source! So I'm so big on open source. I really believe this is the best way to write software.

I often tell the team, if all is equal and you have an open-source component out there... Just use that! It just gives you your team so much empowerment to be able to add to the code, be able to work with the code, and really understand what you're buying. And you don't have this vendor lock-in. You really are a lot more empowered this way.

And then if not, then if there's, you know, if you're like on a particular cloud. So if there's software is available there on the cloud and is natively managed. So I would use that. And if not equal, we will go to maybe the specialized vendor.

So just to wrap, what we look as is, "Is it important technology for us that we want to own and develop? Or is it something we want to use off the shelf?"

And then we look at open source, maybe vendors we already have a relationship with, and that works with other... In the context of other tools we have. And then last, vendors. So that's kind of what we're how we're evaluating these things.

How do you define what's core to the business vs. context?

Aileen Lee: So let me push on that a little bit. Like for example, I can imagine chat, right? Like there's 1,001 chat and AI-driven chat companies where they're going to make their living on whether their AI is like, or their like usability or whatever their ability to partner with and Intuit to partner let's say customer service chat Is world-class right? And that's going to be one of like, a thousand different things that you do.

But I could see how you could be like, "Well, there's a lot of data. We don't want to give our data to other people... or... like when so many people in the chat said something about Uber deciding whether they were going to build their own maps or buy maps. You know, it's like kind of core to the Uber service, but it's not exactly what they do...?

Like, give us some more specifics around how you decide how you define core and how you parse that?

Marianna Tessel: That's a really good question because something might appear not core, but it is really core. like you said, in an example of maybe chats, maybe the actual interaction is a small part, then you don't need to own it. But maybe the big part is the data. And being able to really use the data from the chat for insights to provide, you know, customer benefits, et cetera.

So, that would be something that, on the surface might seem as "Oh, it's context, we don't need to own it."

But actually when you realize, "No, I actually need the data from that. It's actually very... I want to use it in multiple ways."

That actually becomes core.

I'll just give you an example where we faced recently where, on first blush, we were saying "Experimentation... we can really use a third party tool and just go with third party tool for experimentation."

But when we found out that there wasn't something that was really a full package that we can use for experimentation. That was one.

The second thing is a lot of what was the smart of the experimentation was the analysis of the data and deciding what actually experiments you will push what experiments win or not. And none of it was available off the shelf.

And the third thing we noticed was that companies really tend to own it themselves. So we realized that there's a competitive advantage there that we want to own. So while we will use maybe components of that. We actually ended up saying, "No, we actually need to build our own experimentation framework. And maybe we'll stitch a few things together that we can use off the shelf."

So that will be an example where a first one we looked at that we say, "No, that's not something we need to own. We're not an experimentation company."

But we ended up building a lot more around it.

Where are you looking to buy instead of build right now?

Aileen Lee: Got it. Awesome. Okay.

Before we move off on this, I guess maybe this is a great opportunity for you to share with the viewers or people who are going to watch later...

Any areas where you're looking to add tech tuck-ins, competencies to Intuit? What are you looking to buy instead of build?

Marianna Tessel: Yeah, well, that's a great question! And like I said, we always looking around for great acquisitions. And first of all, if you are a small team of great talent and you found you're working on something that doesn't go the way you wanted it to. And you're looking to be acquired as a group of talent. We love that!

Because we found that bringing in great people is awesome. But bringing them as a group that already works well together and sending them on a project is really amazing.

So I would say if you worked in a project and you're a talented group and that didn't quite pan out the way you wanted it to... come talk to us.

And other areas we're looking at is, we're really investing in Data and AI and we have really done some very great advancements there. And one of the things I love about my work and everything we do is that we're very oriented about our customers' problems. In fact, our mission is to "power prosperity around the world." And we're very, very focused on customer problems.

So what we found is that we can apply AI for really the goodness of the customers and really help them with making sure they have more money. They have less work and a lot more confidence in everything they do. So that's a great way to apply AI! So again, if you're working on AI and you have something interesting come talk to us!

And then the last thing is, new frameworks today like mobile and others another area we're interested in. So, if you have some interesting innovation there, talk to us.

And of course, anything in our products and everything that you do that you think is relevant. That might be more of a business integration or more of a tech tuck, we would love to talk to you as well. If you think you're relevant we would love to have a conversation and maybe join forces to benefit our customers together.

Hard & soft skills that helped Marianna advance her career and run a 5000+ person team

Aileen Lee: All right. I'm going to switch gears a little bit and we are taking questions. Just add them to the chat and I'm taking a look. So we'll do kind of questions in real-time.

But while we're waiting for some more questions, I want to talk a little bit about your career, right? Because you have basically, you know, moved from being a VP of Engineering to being a CTO. And, you know, running teams that were still big, but like now you're running a very large team.

Can you talk a little bit about... there might be people who are watching, who are ICs or managers or directors or VPs, but it's pretty rare to be running a team of 5,000 engineers.

So I think it might be helpful for people to hear... when you think about the past decade of your career, And as you've advanced in managing more people and running bigger teams and bigger products...

What hard and soft skills do you think that you have had to develop over time, or that you've worked on, that have helped you advance in your career? That you would recommend people work on or think about?

Marianna Tessel: Yeah, I would... first of all, thanks Aileen! Always for the good words.

And, you know, you're right. There's been a lot that I've had to develop over the years as I moved from step to step.

But you know, a few things that I can mention that I just find it's almost always been true, but it has to be like on steroids, now with a large team... is this idea of having a system. Having a system in place to manage your time and manage the teams and have some sort of a theory of how you are actually going to operate.

So, internally we will call it operating mechanisms or operating systems. But actually, be a lot more clear about it and actually setting it in place. That's one thing that I would say I really had to put in place.

Because like, even before, week by week, you know, things come in... you kind of make time. But what I find is with a large team and with so many commitments... because we would have, let's say board commitments or investor day or whatever...

You have to really think about the time and how you're allocating. And how you make sure you have time to make decisions, sit with the teams, go deep & go broad.

So I actually ended up developing a technology operating system for our teams. And, in our case, there's a bunch of things around it... Think about it as a life cycle throughout the year. But we actually have a day of the week as a company that we dedicate to technology. We call it "Tech Tuesdays."

And in that day we will have anywhere from operational review of metrics to really diving deep into particular areas of projects we were working on: looking at demos, looking at the code.

So that's one thing, is making sure you have a system of how you manage your time and how you actually allocate time to review code. But also make sure you're spending enough time on cultivating talent and, it's just all of it you have to spell out.

Were you always good at the "developing talent" and "managing" part of being a CTO?

Aileen Lee: And were you always good at the developing talent and managing part? Like, you've grown up with pretty technical. Like when you were at Docker, I remember us talking about how you love working on meaty technical challenges and building hard technology and that's one of the things you love.

But, as you become a VP and a CTO, you're spending a lot of time managing people. Right? Has that always been easy for you? or something that you've had to work on?

Marianna Tessel: You know, I... That's something I worked on and I also found that every company has a slightly different culture.

So you almost have to adjust... you have to be the chameleon in that company. You have to adjust your leadership style quite a bit.

One of the things that I've learned, for example, that early on, I didn't do is... To be a lot more declarative and to be able to say, "No, we're going to go into this. Period."

As opposed to like, decisions be made organically. But that's something that I found is actually consistent from company to company, to company. This ability to decide sometimes teams really need...

It doesn't mean that I decide everything. Not at all! But I also notice that I know how to arrive to a decision, be decisive and move on.

And then there are other points that other things that maybe serve me well in one company, but they're not quite appropriate in another.

For example, when I was in infrastructure at VMware and Docker, there was a lot more of this idea... the discussions often are super technical. But when you were more in a consumer company, which I am now. There's a lot more focus on the customer and the customer's problem.

So just being able to toggle your conversation and what is important to focus on when you let's say on the exec table, is something that I had to learn and adjust.

And I remember, this is what you mentioned Aileen, being technical is really important to me because one of my first lessons in leadership is that when I moved from being an engineer, to being a manager... actually I didn't know what to really do.

So I remember there was this time where somebody brought a presentation to me about a topic and they were looking for advice... and I looked at the presentation. And surely, I had a lot of advice. But it went like this... "You know, the font size needs to be bigger and you can use color here. And there are too many words on the page..."

And I was like, "What am I doing?!"

So I've learned, I really need to find ways so I can really be creative to the team. to really understand what we're working on. So I'm not just at the periphery and just give advice that is just really not very useful.

So that was one thing, which I was like, oh, as somebody that's part of the team, of course I knew the code and it was easy. But as somebody that's removed from maybe the coding like, how do I maintain that?

And that's part of, when I talked about this Tech Tuesday. That's part of my way of really making sure I'm involved in the code and I'm listening and paying attention. And I often look at the code and I will ask questions. It's super important to me that I don't stay removed from the team. That is something that I've learned. And every time I have a bigger team, I have to relearn how to do that.

Aileen Lee: That is so awesome. Unfortunately, I think we are out of time, but that was so much fun.

Mariana, hopefully we'll get to do it again. Cause I think there were a bunch of questions. Thank you so much for submitting the questions and we're sorry, we didn't get to all of them. But thanks so much for watching and listening.

Patrick Gallagher: Thank you both so much for joining us. I think this is such a hard topic to get insight on as you become more elevated in your career as an engineering leader.

Just being able to talk through your decision-making process and frameworks for navigating these is so valuable! Aileen, Marianna, thank you both so much.

Aileen Lee: Thank you!

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Build or Buy: Scaling Through Acquisitions and Ownership by Marianna Tessel, Aileen Lee
Oct 27th, 2020 Views 1.5K