The Bankwatch

Tracking the consumer evolution of financial services

The real reason for Wesabe failure, part trois

Ron did up a great post here reflecting on the reason for Wesabe’s failure and the arrogance of someone at Mint as to why they ‘won’ (quotes mine).

First off this from Techcrunch in Sept 2009.

Very early in Mint’s life they signed a sweet deal with Yodlee to provide all that back end technology. Mint focused on the front end user experience, and did a great job with marketing. People who have knowledge of the deal say total payments from Mint to Yodlee over the last couple of years are around $2 million/year. So Yodlee made $4ish million off of Mint.

Which is why the Mint post amuses me with “Disclosure: I designed Mint, and I never actually used Wesabe. I have a strong belief in keeping my mind clear to come up with original solutions to problems. I’ll take my best shot based upon what I know about both companies, and some intuition / guessing”

That aside lets stick to the facts.  Wesabe built a platform from the ground up.  I get the whole thing about buy or build but Wesabe had a clear vision.  I do know the folks there and I was thoroughly impressed by their drive and vision in building out the platform.

I get the rationale whereby Ron picked apart Jason’s points, and frankly am not sure why Jason felt he had to make any point unless he is selling himself.  The way I saw the Intuit deal is a relatively cheap way to pick up 3 million customers at a very reasonable $62 per customer.  Presumably those customers are relatively motivated with a propensity towards PFM software and tax software.  That $62 price compares very favourably with targetted adwords and all in customer acquisition costs – and that is the name of the game these days.

In terms of long term strategic value, I agree with the first comment on this post.  The only issue Wesabe had was to be early and ahead of its time.  Aside from simplified tagging and how you get the data, I have written extensively about the value in data centred on the customer, not on the institution.  That is what has been lost with Wesabe.  When you think of that kind of data in the context of the limited and out of date information held by Equifax, Experion and TransUnion, the Wesabe model had the potential to reshape how customers see themselves, benchmark themselves, and how others (institutions) see customers.  In short the Wesabe model had the potential to level the consumer/ institution playing field.  If I am right, the model is right, and it will re-occur.

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Written by Colin Henderson

September 7, 2010 at 20:37

Posted in Uncategorized

2 Responses

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  1. Thanks for the kind words, but I’m wondering if you missed my point. Intuit didn’t pick up 3 million customers at $62/head.

    Intuit didn’t get a single new customer directly from the acquisition. Those 3 million users don’t bring an additional cent of revenue to Intuit (some may have already been TurboTax or Quickbooks customers).

    If Intuit wanted more customers, it could have simply offered people $50 to register for Quicken Online. It didn’t need to acquire Mint. It acquired Mint (in my opinion) in order to avoid rebuilding FinanceWorks from the scratch and to install Mint as its PFM platform for DI clients.

    I’m with you regarding the data, though. Look what I said about Wesabe 3.5 years ago:

    Ron Shevlin

    September 7, 2010 at 21:23

  2. Ron, yes your point is well taken. There are just so many points about this acquisition, not the least of which is build vs buy. For that price you could build a lot of software!

    Colin Henderson

    September 9, 2010 at 12:02

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