TechCrunch has a great post describing how financial management website Wesabe lost to Mint and points to a blog post from founder Marc Hedlund who is up front and honest on why he believes his company failed and Mint won.
Whenever you can get the inner-most thoughts from a person who struggled to build a new company and was first but lost, you should listen.
Interestingly one lesson I took away from reading the post is KISS – keep it simple stupid. Apple and Skype have shown over and over that simplicity in interface design is what wins wars.
Here is an excerpt:
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. Instead, I prioritized trying to build tools that would eventually help people change their financial behavior for the better, which I believed required people to more closely work with and understand their data. My goals may have been (okay, were) noble, but in the end we didn’t help the people I wanted to since the product failed. I was focused on trying to make the usability of editing data as easy and functional as it could be; Mint was focused on making it so you never had to do that at all. Their approach completely kicked our approach’s ass. (To be defensive for just a moment, their data accuracy — how well they automatically edited — was really low, and anyone who looked deeply into their data at Mint, especially in the beginning, was shocked at how inaccurate it was. The point, though, is hardly anyone seems to have looked.)
Between the worse data aggregation method and the much higher amount of work Wesabe made you do, it was far easier to have a good experience on Mint, and that good experience came far more quickly. Everything I’ve mentioned — not being dependent on a single source provider, preserving users’ privacy, helping users actually make positive change in their financial lives — all of those things are great, rational reasons to pursue what we pursued. But none of them matter if the product is harder to use, since most people simply won’t care enough or get enough benefit from long-term features if a shorter-term alternative is available.
Here is a lesson which can be applied to any industry – in any country. Keep it as simple as you can or risk losing to others.