i202 Fall 2010 School of Information, UC Berkeley

Marc Hedlund, co-founder of Wesabe, recently wrote a blog post offering insight into why Wesabe failed and its competitor, Mint, succeeded. The two web applications, which launched within a year of each other, both aimed to help users manage their personal finances. While Wesabe enabled users to tag stores and transactions and took a more community-oriented approach, Mint automatically categorizes information as it is imported from various financial institutions. Reviews of the two sites were divided; some people preferred the interactive, advice-rich experience on Wesabe, while others liked the ease-of-use, data analysis tools, and slick design of Mint. Hedlund cites the easy, automatic nature of Mint as one of the reasons that it succeeded where Wesabe failed, saying, "Mint focused on making the user do almost no work at all, by automatically editing and categorizing their data, reducing the number of fields in their signup form, and giving them immediate gratification as soon as they possibly could; we completely sucked at all of that." The other primary cause he gives is his company's choice not to use the services of another company, Yodlee, which scrapes bank websites to provide financial data aggregation. Wesabe built their own aggregation tools, which he claims were much more accurate than Yodlee's (used by Mint).

I've been using Mint for two years now, and I love how easy it is to view graphs of spending trends for various categories and periods of time. I don't really use the site to actively manage or change my financial habits, however, and it sounds like Wesabe offered more robust services along those lines. I thought it was fascinating to get an insider's opinion on why his company failed against its competition. Mint and Wesabe were both organizing the same kind of information, but developed different systems for doing so. In this case, the product which made users happy quickly won out over the potentially higher long-term benefits for dedicated users (as one reviewer put it, "Wesabe requires more participation from its user before it starts to pay off, it does eventually provide the user with MUCH more useful information on how you can get more bang from your buck than Mint offers"). At the end of his post, Hedlund reflects that neither company really solves people's financial problems, in part because of how hard it is to change people's behaviour. If providing data insights and even community-based tips and knowledge isn't enough, I wonder what it would take to create a truly 'beneficial' financial application. What do you think? If you've used Mint or Wesabe, how have you found their services helpful?