[Posted by Emmett Higdon]
Intuit announced yesterday that it is purchasing online personal finance management (PFM) competitor Mint.com for $170 million. On the surface, the marriage makes perfect sense. Synergy between the two should result in better PFM tools for both Mint.com users and Quicken Online devotees. Mint.com founder and CEO Aaron Patzer gushes in his blog that “by joining Intuit, we can accelerate our ability to add more fantastic new product functionality into both Quicken and Mint.com.”
But, do we really need more new features? When Tivo conquered the personal video recorder space, it succeeded not because users were unhappy with the lack of features on their VCRs. It won the day with a brilliantly simple interface and a deep understanding of how consumers wanted to time-shift their television viewing habits.
Similarly, a million and a half users have been drawn to Mint.com not because it offers more features than Quicken. Mint’s ease of use and attractive interface have shown a new generation of personal finance users that, in fact, less is more. Offline software products like Quicken and Microsoft Money have been viewed by the iPhone generation as overly complicated dinosaurs. Microsoft Money abandoned the offline space earlier this year and encouraged users to instead visit its free MSN Money site. While Intuit has yet to fully leverage the online opportunities for Quicken, it’s purchase of Mint acknowledges that the future of PFM is clearly online.
Patzer goes on to say that he believes Mint’s influence will mean that “more people will find it easy and affordable to stay on top of their money issues.” Affordable? Not free? Intuit obviously has not acquired Mint to continue giving away the store for free. Getting users to pay for personal finance tools is, again, not about offering the most features. It is about making those features relevant and actionable for users.
Lack of relevance contributed to the death of aggregation once before (see The Account Aggregation Fiasco: Lessons Learned). Customers felt that their finances were too basic to go to the trouble of setting up all their accounts in one place. To escape a similar fate, Intuit must convince customers that budgeting and PFM tools should be an integral part of how they manage their money—like online bill payment—rather than merely a tool to solve a temporary financial crisis.
Much like the restaurant business, personal finance sites thrive based on repeat visits. That’s the real challenge for Intuit and Patzer, as its new head of the Personal Finance group. Ease of use will continue to bring online budgeting neophytes in the front door. Whether Intuit’s purchase of Mint.com can help up-sell these users into a paid Quicken product remains to be seen. Stay tuned.