Prosper.com wants to change the banking industry. Can Mint do the same to personal finance?
A business is nothing without customers. Understandably, an e-Business wants customers on its website. Then what?
You have to “compel” these visitors to “buy” something from you – only then will they become customers and you will have a business to speak of! So the $64000 question is:
- How do you get people to visit your website?
- How do you compel them to “buy” something from you?
- What is it that is on offer that they can buy?
- How do you “convince” them to fork over their money to you?
Well, this makes me the king of the obvious – I can eloquently make a case for what is readily apparent to even the most untrained eye!
Kidding aside, this is the most important issue for an eBusiness manager to solve. Cracking this puzzle means – cha ching!
Before we move on, I want to reiterate that “buy” means value creation. Value creation does not mean instantaneous dollar denominated cash generation – there are many other ways to create value that can be converted into cash later.
The story that caught my eye this morning is of an eBusiness named Mint. They got into a business that has an 800 pound gorilla as the incumbent – Intuit. Even Microsoft is working up a sweat competing with them in their space – personal finance. So what do they do? Focus on the basics.
- They identified an opening: people under 35 spend 16% more than they make! They have a targeted market.
- Hit the incumbent where it cannot respond easily: Mint has connected account aggregation with personal finance bookkeeping. This patent pending feature gives them at least 15 years to build a beachhead. The magic? Their target market is ideally suited to this feature!
- Get free publicity following a simple principle: do something people want to talk about!
Well, battle lines are drawn and I do not expect Intuit to go down any time soon. As a matter of fact, they will not go down because they
- Can duplicate this functionality
- Have a sizeable share – 70% – of the “juicy” market i.e. people who really have money. They can easily convert these 15 million people into gold in many other ways – they are already selling other banking products for example.
Besides, if history is any indicator, despite Amazon, Barnes and Noble is still around. However, I do expect Mint – or other companies that will invariably follow – to be a success. Mint.com might be to personal finance what Prosper.com is to banking!
