Giving Away iPads Doesn't Solve PFM Challenges

In about 20 words, NetBanker takes a machete to PFM, cutting it down with three swipes:

  1. It’s hard to get started
  2. It’s a pain to keep up
  3. It’s disconcerting to view spending summaries

But, as NetBanker notes — and I agree with both the swipes and the rebuttal — there are “obvious benefits” to PFM use.

NetBanker goes on to say that “one way to tackle the first problem is to offer a sweepstakes or bonus to induce trial,” and highlights Truliant Federal Credit Union’s attempt to do just that by giving away iPads to members who sign up for using PFM.

My take: Truliant is wasting its money.

If you need to lose weight, you can: 1) Read up on which foods to eat; 2) Eat those foods; and 3) Exercise more. Doing only #1 — reading up on which foods to eat — will do little good in actually reducing your weight. Step #1, without #2 and #3, is a failed strategy.

This is analogous to what Truliant is doing: Trying to solve the three-pronged PFM problem by addressing just the first prong. 

PFM is the new New Year’s resolution. It used to be that when the new year came around, we resolved to lose weight and/or stop smoking. Now we resolve to get our financial lives in order. And just as we used to join a gym to realize our weight loss resolution, we sign up for a PFM to to realize our financial resolution. 

When March rolls around, we’re not going to the gym as often, and not long after we start using a PFM tool, our enthusiasm and commitment wanes, and we stop using it. 

Realizing the “obvious benefits” of PFM requires committed use of the tool over some period of time. Simply incenting people to sign up for using the tool does absolutely nothing to encourage or ensure continued use. 

In fact, if you read the fine print of Truliant’s contest, members don’t actually have to enroll in PFM to participate. (I’m tempted to enter the contest to see if they even really limit it to members). 

My prediction: A large percentage of Truliant’s online banking members will enter the contest and sign up for PFM. Truliant will then boast about their high PFM enrollment numbers. And then we’ll never hear again whether or not those members continued to use the tool and reaped the benefits. 

What should Truliant do?

Think Foursquare for PFM. 

Despite what a lot of people think, Foursquare isn’t about location awareness or the mobile channel. It’s about gamification. It’s about earning badges and becoming mayor. And if there are rewards for doing those things, great.

People like to play games. We like friendly competition, and we like to turn routine things into games to spice them up, and make them more interesting.

And that’s what banks and credit unions need to do with PFM — make a game out of it. Points for setting up a budget, points for categorizing your spending, even more points for keeping to your budget. Points for sharing tips and tricks regarding the management of one’s financial life with other PFM users.  And giving away iPads to the people who amass the most points.

In other words, incenting customers and members to deal with the “pain of keeping up” with the use of PFM.

If you can address challenge #2, challenge #1 takes care of itself. 

As for the disconcerting nature of seeing your spending patterns, I can’t help you. I’m a consultant — not a miracle worker.

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How To Differentiate Your Credit Union

On the CU Water Cooler site, William Azaroff wrote:

“When I look at many credit unions, I’m troubled by their blandness, their inoffensiveness. They used to stand for something, but now they’re moving away from differentiation and towards sameness. And many credit unions are doing this at the precise moment when differentiation is a necessity. The question is: do some people hate your brand? If some do, then I would say you’re doing something right. If not, then I’m guessing your organization is trying to be all things to all people, and should take a stand for something and embed that into your brand.”

My take: To quote former President Clinton: “I did not have sex…” No, wait, that’s the wrong quote. I meant this one: “I feel your pain.”

William is spot on that many credit unions aren’t differentiated in the marketplace. What William didn’t get into, however, is why few credit unions are effectively differentiated. There are (at least) three reasons why undifferentiated credit unions are that way:

  1. They don’t know how to differentiate themselves.
  2. They think they’re differentiated, but don’t know better.
  3. They don’t want to be differentiated.

The last reason might surprise you, or strike you as wrong. But after 25 years of being a consultant, I can’t even begin to count the number of times I’ve made a recommendation to a client to do something, only to be met with the following question: “Who else is doing that?” Risk adversity runs deep in the financial service business.

There are also a fair number of CU execs who think that their CU is differentiated. Almost to a man/woman they give the same description of what differentiates their CU: “Our service.” This is often — I’m inclined to say always — wishful thinking. Why? First, service may be what your firm does best, but it doesn’t mean your service is comparatively better. And second, because service means different things to different people.

The most prevalent reason why so many CUs are undifferentiated, however, is probably the first reason: They don’t know how to differentiate themselves. 

I’m not looking to pick a fight with William — I suspect he would agree with me here — but approaching the topic of differentiation from the perspective “what can we do to tick people off and be hated by some of them?” is not the right way to go about it. 

And with all due respect to my friends in the advertising business, the last thing a credit union should do is bring in the advertising people to help them figure out how to differentiate the CU. 

Why? Because there’s a prevalent — but misguided — mindset among advertising people that differentiation comes from “the story you tell.” (If you need proof, go read Seth Godin).

But the story you tell doesn’t differentiate you. What differentiates you is the story that your members tell. That they tell to themselves inside their head, and that they tell verbally to their family and friends. And those stories only come from their experiences with the credit union, not the advertising. 

Which means this: Differentiation comes from something you do

That “something” must be meaningful to members. And that something must be something that: 1) only you do; 2) you do measurably better than anyone else; or 3) you do measurably more often than anyone else.

Differentiation doesn’t come from standing for something, and it doesn’t come from your branding efforts (your differentiation drives your brand, not the other way around).

William’s credit union Vancity “stands” for community development and improvement.  So do plenty of other CUs. What differentiates Vancity is that — time and again — they do something about it. They can count the number of times they’ve done something about it, and they can measure the impact of what they’ve done.

Differentiating on service is tenuous. What does that mean? That you fix your mistakes better than anyone else? That the lines in your branch aren’t as long as they are in the mega-banks down the street? That Sally at one of your branches greets everyone by name and with a smile when they come in?

If you’re going to differentiate your credit union, you have to do something. Different, better, or more. None of those options is particularly easy to do. Technology initiatives intended to gain a competitive advantage — mobile banking, remote deposit capture, etc — are often easily (I didn’t say cheaply) copied. Better is hard to prove. And “more” requires strong commitment from the management team for an extended period of time.

This isn’t to say that aren’t opportunities for differentiation, just that they require commitment — and a lot of it.

So what can you do to differentiate your CU? I think it comes from committing to differentiate in one — and only one — of the following areas:

1. Advice. Managing our financial lives is tough and getting tougher. People need help making smart financial choices. But the advice available in the market tends to be focused on asset allocation and stock picking for the relatively affluent, or focused at the very lowest end of the income spectrum for people who need help with serious debt problems. What about everybody else in the middle? What about providing help with all those everyday/week/year decisions that have to be made? PFM holds the potential to provide and deliver this kind of advice, but the tools aren’t quite there yet. If this is the path you choose, you’re going to have to make some investments to develop them and get them to point where they can deliver on this promise.

2. Convenience. There’s one bank in the Boston marketplace that advertises itself  as the “most convenient” bank. Hooey. Having extended branch hours and free checking isn’t “convenience.” Making people’s financial lives easier — i.e. more convenient — to manage is a complex and difficult proposition. But when you’re really doing it, people know it. And you’ll be differentiated.

3. Performance. You might not be the easiest FI in the market for me to deal with, and you might not provide me with any advice (maybe because I don’t want any), but if the performance of my financial life — that is, the interest I earn, the fees I pay, and the rewards I get and earn, are superior to everyone else out there, than I will consider you to be differentiated in the marketplace.

I didn’t say differentiation is easy.

Are Bankers Clueless Or Realistic?

Unless you’ve been living under a rock — which I’m not knocking — you’ve probably heard that consumer sentiment regarding banks isn’t particularly favorable these days. Pick your study, it doesn’t matter, the message is the same: People hate banks.

The credit union people jump all over these findings, and consider them self-validation of their customer service superiority. Industry pundits eat up these findings as evidence for why the industry must immediately undergo some transformational change fueled by _______ [fill in the blank with the technology, consulting approach, or book they’re selling].

But what do the bankers think of these findings?

American Banker asked its readers, in an online poll: “What is the long-term effect of big banks’ poor reputation among consumers?”

The problem in evaluating the answers, however, is that American Banker doesn’t show the number of respondents to the question, nor do we have any information about who responded. So, yes, I’m very aware that we might not be talking about a representative or meaningful sample here. But if it is a good sample, then the answers are very interesting:

6%     The banks will have a harder time attracting customers and building revenue

9%     They’ll lose market share to small banks

1%     They must spend more on advertising to rehabilitate their brands

39%  All of the above

44%  None of the above. Consumers always complain about big companies but keep using them

In effect, almost half of the respondents don’t think that poor reputation hurts big banks. The numbers are on their side. In a number of markets, the large banks’ share of deposits has increased from a few years ago. And the Q1 profitability numbers show a return to pre-crisis profitability levels.

But these are just short-term gains, no? In the long-run, a poor reputation can’t possibly be sustainable, right?

It is and isn’t.

The first thing to understand when looking at the poor reputation stats (often reported as low trust) is that people have little trust in “banks, in general” but report much higher levels of trust in their bank.

While there are a number of people who get really poor service from their bank, or feel that they’ve been cheated or shafted, that number is a minority. A much larger percentage of people are forming their opinion of poor reputation or low trust based on what they see in the news: Media reports on how large banks caused the crisis, or the example of how some large bank mistakenly foreclosed on someone’s house.

The second factor to consider is that as long as core banking products are seen as commodities, a poor reputation won’t be harmful to large banks. I don’t know about you, but when I go into a restaurant and pick up the salt shaker, I don’t ask the waiter if it’s Morton’s salt before shaking it on my fries. As a result, people just don’t care enough about their checking account to make a more considered decision. An apathetic customer couldn’t care less about a firm’s reputation.

A third factor at play here is control. When people perceive that they have little control over a situation, they will not think favorably of the party or person who does have control and wields that control. To a certain extent, people feel powerless in dealing with the “big evil” banks, and therefore say they have little trust in them when the researchers ask.

So, let’s ask again: Is having a poor reputation sustainable?

As long as consumers are apathetic about their financial lives and providers, then the answer is YES. This is why credit unions have been — for the most part — unable to move the needle on deposit share. They’re barketing up the wrong tree (I just made that up). Claims and demonstrations of superior customer service and advocacy don’t mean anything to someone who just doesn’t care.

But the numbers in the market mask changes that make a poor reputation unsustainable. More and more people care. The problem for the challengers (credit unions, community banks, upstarts) is that the people who care are predominantly Gen Yers who don’t have a lot of money (at the moment) for deposits and investments, and Gen Xers who aren’t a particularly large segment of the overall consumer base.

Bottom line: The sustainability of poor reputation is declining. Maybe the 44% of respondents who said “none of the above” in the American Banker survey don’t see this.

The important questions to ask about the future is: What can big banks do to improve their reputations? and What can the challengers do to get people to care?

Technology holds the key to the answer to those questions. Technology (I’m thinking of PFM-type tools here) can be at the center of the bank/customer relationship.

I saw a demo yesterday of what I would consider to be one of the best PFM tools I’ve seen. It doesn’t just give the customer a view into accounts and ability to budget. It integrates financial education, it provides peer comparison and analysis, it aggregates rewards program activity, and it enables customer/advisor collaboration.

What does this do for customers? It engages them in their financial lives, and — this is important — it makes them feel like they have more control over their financial lives. To a large extent, I think this is what underlies the hype — oops, I mean interest — in BankSimple.  It’s about giving control — oops, I mean the illusion of control — back to the customer. 

What does this do for banks? A million things. Not the least of which is improving their poor reputation or low trust levels.

If the big banks’ — or any bank’s or credit union’s — response to the Poor Reputation situation is increasing their advertising, or G*d forbid, investing to revamp branches, then they’ll fail to either improve trust or increase share. 

Can PFM Help Align Cost With Value?

I’ve argued many times that banks’ biggest retail-related problem is the disconnect between cost and value. That is, what customers pay for versus the value they receive from the relationship (if you want to call it that).

Until recently, a growing percentage of banks’ retail revenue came from penalties and fees. Overdraft fees, out-of-network ATM fees, etc. These fees have not only been out of line with the actual cost the bank incurred to provide the “service”, but customers, by and large, didn’t understand or perceive the value they were getting for these “services.”

And you wonder why trust in banks has been (is?) so low.

Over the past year, I’ve given a presentation on PFM probably 15 times to various audiences at various conferences, clients, and webinars. In each of them, without fail, someone has asked me “do you think banks can charge for PFM?” My answer, without fail, has been “you’re asking the wrong question.”

Determining whether or not to charge for PFM is a question that reflects the historical banking mindset: What fees can we get away with charging the customer without causing mass attrition?

The right question banks should be asking is: How do we align the costs (fees, rates) we charge customers with the value they — and we — get from the product/service?

Now along comes Unitus Community Credit Union out of Portland, OR who will charge its members $2 per month to use its newly-implemented Geezeo-powered PFM solution. On the NetBanker blog, Jim Bruene noted:

“While online/mobile access will remain relatively fee-free, we’ll begin to see more fees for optional value-add services such as advanced financial management. Congratulations to Unitus for taking the lead on this one.”

Taking the lead? By adding yet another fee on top of the relationship for a “service” that many of the members have no idea whether or not they want and whether or not they’ll get value from?

I’ve done the research, and I know that PFM users get a lot of value from the PFM platforms they use. But PFM users only represent about 20% of the population. And if you’re a credit union with an average member age that’s higher than the average age of the overall population, then the percentage of your member base that is already using PFM — or inclined to — is probably even lower than that 20%.

Any bank or credit union that implements PFM is going to see an initial rush of enrollees. Of consumers interested in, or already using, PFM, there’s a good percentage that want it from their bank or credit union.

But what are you going to do to convince the rest of the population? PFM — in its offline form (Quicken, Money) — has been around for a long time. There are reasons why 80% of the population isn’t using it for budgeting or other types of financial management: Too much work, too little value, just not interested, etc.

Slapping a $24/year fee on PFM will be accepted by the minority of the population who get what PFM is and can do for them. But it’s going to be a major deterrent for getting the rest of the customer base to adopt it.

And that’s a really, really bad thing.

Because PFM promises to deliver — and does according to current users — more value to the customer than they’re getting today from the relationship. In the past, the value was somewhat intangible — security (I know my money will still be there when I wake up in the morning) and money movement (when I write a check, I know the money will be sent to the person/entity I’m paying).

Today’s consumers want — and need — more value from the banking relationship. They need help managing their financial lives. That’s where the tangible value lies, and what PFM promises to provide.

What banks (and credit unions) are in danger of doing is perpetuating the model/mindset of: 1) charging for the intangible value and giving away the tangible value because they’re afraid of losing customers, or 2) charging for the intangible AND the tangible, and risk losing customers.

This isn’t a sustainable model/mindset. We need a pricing model that aligns cost (price) with value.

I think Unitus should charge for PFM. But it needs to do it in a way that demonstrates that the value being derived from the account relationship is coming from the use of the PFM tool. Not that the PFM tool is some “add-on” service. Unitus — and other credit unions and banks — should actually limit the ability of customers to enroll in PFM use.

The mindset should be: Active users of this tool get a lot of value from it, and if you’re not going to be an active user, diligent about managing your financial life, then we’re not even going to let you use it. And oh, by the way, to you active PFM users: We’re going to charge you for using PFM, but give you other services for free.

I Hope I Don't Get DeGonzoed

I’ve said this before, will say it again: My two most-prized possessions are the collection of Grateful Dead concerts on my iPod and the two Gonzo Banker coffee mugs I own. The rest of the shit I own is replaceable.

And so you can imagine that it’s not very often that I find something to disagree with Steve Williams from Cornerstone Advisors (the alter egos of Gonzo Banker) about. But Steve recently wrote in BAI Strategies, in an article titled Making Financial Responsibility Fashionable:

“The financial services industry should take a tip from the diet-and-fitness industry by promoting the idea of financial responsibility. It is amazing that, after a horrible financial crisis revealed a reckless era of personal finance, banks are doing very little to ‘stand’ for the idea that personal financial responsibility is a virtue. We seem to take an ‘agnostic’ approach so that we avoid making customers feel bad or discourage behavior that might drive revenue.”

Gotta disagree with Steve on this one.

First, the level of interest that banks and credit unions — of all sizes — have in providing PFM is a clear sign to me that they “get it” and are looking for ways to help their customers and members better manage their financial lives. Having surveyed users of PFM tools, I can tell you — and the smart banks and CUs know this — that one of the most-oft cited benefits of PFM is the feeling of control it gives users over their financial lives (2nd most frequently cited benefit after “seeing accounts in one place”).

While banks might have seen PFM as simply the equivalent to account aggregation in the past, that’s no longer their view. They see PFM as a way to better engage customers, and identify opportunities for advice-related discussions. Identifying the pain points — those that Steve would say “make customers feel bad” — is core to the successful PFM implementation.

Second, I wouldn’t be so quick to recommend that banks and credit unions “take a tip from the diet-and-fitness industry.” That industry — which I would argue are really at least two separate industries — is characterized by some arguable shady marketing practices. The diet industry is always making claims regarding the potential impact of diet regimens and drugs. And the fitness industry has historically preyed on well-meaning New Year’s resolution makers to lock them into the gym subscriptions that ultimately don’t get used.

I can’t imagine that’s what Steve is really looking for banks to replicate.

Steve does correctly identify, however, that banks can find themselves in a position of conflict between what’s right for the customer and what’s best for the bank’s bottom line.  Unfortunately, by not addressing this conflict effectively in the past, regulatory agencies have done it for them (e.g., limiting overdraft fees).

But what banks (and credit unions) have not had in the past is a broader picture of a customer’s financial life in which to make smarter decisions about recommending behavioral changes.  That’s what PFM promises, and one way in which banks will be able to help “make financial responsibility fashionable.”

Sorry to disagree with you, Steve — I hope I don’t get DeGonzoed for this. I’m not giving you the mugs back.

Loving That Minty Smell Of Fresh Data

In December 2000, I wrote a report called Personalizing Financial Services, in which I said:

“[Financial] firms will create a virtuous cycle of trust with customers through: 1) Preemptive customer service: Fulfilling service needs before customers ask for them; 2) Peer comparisons: Showing how customers how they compare with their peers; and 3) Contextualized advice: Explaining the differences between consumers, and offering advice that leads to a decision.”


In the intervening ten years, the number of banks that have followed this prescription has been overwhelming. Overwhelmingly underwhelming, that is. There are — or have been, at least — three barriers:

1. Lack of causal effect. I simply had no proof (and continue to have no proof) that there’s any causal link between providing peer comparison data and strengthening customer relationships.

2. Technology. Pulling the data together is not a simple task, and, in the absence of an economic model for why a bank would do it, no one has.

3. Privacy. This has been the immediate and knee jerk reaction I’ve heard from countless number of bankers: That providing peer comparison data would somehow be a violation of the bank’s customers’ privacy. Looks like American Banker is jumping on the privacy violation bandwagon, as well. In a recent article, it wrote:

“Mint.com is testing a counterintuitive theory: that consumers will ignore privacy concerns for a feature they find compelling.  Mint announced that anyone can view the transaction data that its roughly 4 million users originally provided for their personal use.”

The rest of the article does quote a number of industry analysts who don’t buy into the “privacy violation” theory (although one prominent analyst who follows the PFM world was inexplicably not contacted for the article — wuzzup with that?).

I’ve got to agree with the other analysts — this is nowhere near a violation of privacy. This is no more a violation of privacy than the US government releasing GNP statistics. After all, those stats are nothing more than an aggregation of spending data across millions of consumers. Did you give the US government permission to include your spending data in those statistics? Of course not. Do you see it as a violation of privacy? Of course not.

All told, Mint.com isn’t buying any of these barriers.

The PFM site recently announced its Mint Data product which “will show spending data both by average purchase price and by popularity, which is defined by number of transactions per month. The rankings can be viewed by category, such as food and dining, by specific business, and broken down to the city level. Visitors to Mint Data can choose among more than 300 cities in the U.S. to compare spending.”

I had a chance to talk with someone from Mint about this, and there were a few things that caught my attention. Mint:

  • Sees this as consistent with their brand positioning of being an advocate for the consumer.
  • Plans on brining an economist on board to develop economic indices based on the data.
  • Is evaluating ways to make the data “social,” possibly by linking the spending data to Google local data, or perhaps to customer review sites.

There’s something that the Mint rep didn’t mention, that seems like a possible angle for Mint to take, however. The tool provides data about spending at various merchants, retailers, and businesses. With Intuit’s focus on small businesses, there might be a play here for Intuit to develop marketing or data tools for its small business customer base by linking in to the Mint data.

It might be hard for some to see how providing peer data is in keeping with being a consumer “advocate”, but, in the context of the “virtuous cycle of trust,” I’m buying it. This is an important announcement from Mint, that points to why PFM tools will evolve into decision support tools for customers, and not be limited to just a budgeting/expense categorization tool.

Why Wesabe Failed

Jason Putorti, Mint.com’s lead designer and an early employee of Mint.com, recently expounded on the reasons he believes caused Wesabe’s demise (and Mint’s “victory”). Below are some of his points with my rebuttal.

According to Mr. Putorti (JP), Wesabe failed because of:

Revenue. JP: “Wesabe never made any. You can’t overlook this in a startup. They literally ran out of money.”

My take: Partially correct. Yes, Wesabe ran out of money. But “running out of money” is very different from “never making any.” Plenty of startups stay alive for long periods of time without generating revenue. Tweet tweet.

Product/Market Fit. JP: ” If they set a price up front, and people didn’t pay, they would have worked on customer development until people started to pay.”

My take: Huh? Geezeo never set a price, and its users didn’t pay, and yet Geezeo is not only far from dead, it’s thriving. Customer development has nothing to do with Wesabe’s demise — if we’re talking about consumers as customers that is.

Wesabe changed its business model from consumer-direct to white label — which Mint, as part of Intuit, is now doing as well. So why didn’t Mint “work on customer development until people started to pay”? Better question: What does “work on customer development until start to pay” even mean?

Savings. JP: “Mint saved people money right out of the box without changing their behaviors. These were in the form of offers, which we then monetized.”

My take: An overstated claim. Mint never made public how many people actually accepted the offers to switch that were made. I’m just guessing of course, but if it was that many, every other FI (besides E*Trade) would have jumped in. And the claim just doesn’t hold water since for someone to have saved money s/he would have had to switch providers, which — by definition — is a change in behavior. It’s also an unsubstantiated implication that Wesabe never saved its users money. The forums that Wesabe managed contained lots of advice on how to manage one’s finances. I’m just guessing again, but I bet plenty of Wesabe users saved money as a result of the tool. And, “changing behavior” is a good thing — not a bad thing.

Team/Founder. JP: “I don’t know the Wesabe folks, but the Mint executive staff and team were world class. I think we just had more firepower. Our board members and investors similarly were world class.”

My take: No argument about the opinions regarding the Mint folks, but to infer that the Wesabe management team, board members, and investors were any less “world class” is uncalled-for arrogance.

Audience. JP: “Mint always focused from day one on people who didn’t want to ‘manage’ their money or do a lot of work. It’s a fire and forget product. We auto-categorized transactions, (Wesabe required tagging which takes time), we synced to bank accounts (Wesabe required uploading data), we emailed you every week, there really wasn’t a lot of work to do.”

My take: Partially correct. Mint did (and does) auto-categorization and syncing, and Wesabe didn’t. But the consumers that Wesabe tried to appeal to were those it believed didn’t place a high value on those capabilities.

The perspective that Mint was (is) focused on people who didn’t want to “manage their money or do a lot of work” is misguided. The percentage of people in this country who want to “do a lot of work” to manage their money is minuscule. Trust me on this one.

The whole reason that online PFM has begun to gain traction is that it makes money management easier to do. I have argued in the past, and will continue to argue, that “auto-categorization” and “syncing” capabilities appeal most to people who have an already established inclination to use PFM tools. Which is only about 25% of the population. Reaching the rest requires something else. To its credit, I think it’s things like peer comparisons and user forums, which Mint is now pursuing. But Wesabe kind of led the pack here.

The ultimate downside to Wesabe of not providing auto-categorization and syncing has nothing to do with the consumer audience. What Wesabe found was that when it went white label, the paying audience — banks and credit unions — wanted these capabilities.

Name. JP: “It’s a cheap shot, but Wesabe fails a lot of tests for what makes a good brand name.”

My take: Agreed (that it was a cheap shot, that is). The name was not a factor in Wesabe’s demise. Once it went white label, it didn’t matter what its name is or was.

——————————————————

So why did Wesabe fail? Three reasons. It didn’t sufficiently execute on:

1. Marketing. By not adequately positioning itself as an “alternative” to the traditional approach to PFM (i.e, aggregation, categorization, budgeting, forecasting), it missed an opportunity to attract millions of users. Had it done that, success would have been far from guaranteed, but with a larger base of users, it might have been seen by investors as worth putting more money into.

2. Sales. From a sales perspective, Geezeo was (and continues to be) far more aggressive about making inroads into the credit union community and with vendor partnerships. Yodlee had a base of large FI relationships to leverage. Wesabe simply didn’t have the sales presence of its competitors (including Jwalla and SimpliFi).

3. Technology. I’m speculating here, but my hunch is that Wesabe didn’t integrate very easily with FI’s online banking platforms.

As a result, Wesabe ran out of time and money.

But there’s something else about Mr. Putorti’s assertions that I don’t agree with: The inference that not only did Wesabe fail, but that Mint succeeded.

With all due respect to the folks at Intuit, let me be clear in my opinion: Mint did not succeed. I have believed all along that the reason Mint sold out to Intuit was that it recognized its business model was untenable. It could not survive for  long on an ad-supported business model.

Yes, Mint “succeeded” at attracting 3 million users. And to Mr. Purtorti’s credit, Mint’s design played a huge role in that. The design is definitely better than any other PFM platform (sorry fellas), and it leveraged that superior design to become the cool PFM tool.

But those are 3 million  “users” — not “customers.” You might not agree, but I’d rather have 100 paying customers than 1 million users I can’t monetize any day. Despite Mr. Putorti’s claims, Mint did not successfully monetize its user base.

If it had been successful, I doubt Mint would have sold out at $185 million, and instead waited a few years to become a half billion dollar firm. Tweet tweet.

Last point: Not only did Mint not win (past tense), it’s too soon in the development of the PFM market to say that anybody has won.  We haven’t seen the last of new entrants into the PFM market.

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