Shut Down: July 2010
Founders: Marc Hedlund, Jason Knight
Wesabe was a personal finance management web app that allowed users to track their spending and help them manage their finances. There was also an element of data mining and analysis where Wesabe would use the data collected in aggregate and offer suggestions to the users.
By Co-Founder and CEO Marc Hedlund’s own words (from “Why Wesabe lost to Mint“), Mint overshadowed Wesabe almost from its launch in September 2007 (10 months after Wesabe). Wesabe eventually folded after running out of cash and not generating enough revenue to continue.
Why Wesabe Failed
Ultimately, Marc Hedlund puts the failure down to user experience, the key difference between Wesabe and Mint:
- Mint used a third-party financial data scraper and aggregator (Yodlee) while Wesabe tried to make their own, which wasn’t nearly as good.
- Mint focused on making their service as user friendly as possible (e.g. automatic import, categorization, editing, etc), essentially allowing the user to do as little work as possible, while Wesabe focused on tools and other features.
- Mint’s site was better designed
Another takeaway was the difference in the marketing spend of the two companies; Mint embarked on an agressive marketing and user acquisition campaign while Wesabe “spent almost nothing”.
Some other reasons that were floated for Wesabe underperforming vs. Mint:
- Branding – the name Mint was superior and led to better brand recognition. The value of the name is debatable, but may have been factor on top of the usability differences (not least because it was easier to remember and spell).
- The value of blogging – Mint were continuously blogging about topics in personal finance, often with very popular infographics, which no doubt helped to build their brand.
- Targeting the right audience – Mint purposely targeted an audience of middle-aged men and “soccer moms” who were neither financially or technologically proficient. The argument was that Wesabe (and other personal finance apps) were directed at those who were already financially / technically aware and ultimately Mint’s target audience was just bigger.
- iPhone app – Mint had one, Wesabe didn’t (at least not to begin with)
There is more post mortem discussion at Hacker News.
- Focus on user experience, make your product as easy to use as possible.
- Use third-party applications and packages for things outside of your core business (don’t re-invent the wheel)