

What's the Secret Success of Mint.com? The Real Numbers... - kakooljay
http://www.christine.net/2009/10/whats-the-secret-success-of-mintcom-the-real-numbers-behind-aaron-patzers-growth-strategy.html

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webwright
I'm pretty blown away at the $30-50k for the first engineering hires. I assume
they are either:

A) getting LOTS of equity B) really naive about equity

Are any of the startups here paying their first hires in this range? If so,
what kind of equity package are they getting?

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pxlpshr
We're starting a new company, hiring 2 developers and paying ~$50k, ~2-4%
equity (4yr vesting), and providing health/dental via AdminiStaff. However,
we're based in Austin so that's closer to ~$70-80k along west coast. As
founder, I'll be taking a salary around ~$30k unless we receive our full ask.

I suppose it's also worth clarifying that this is an angel round to build the
prototype, 9-12 month runway. Salaries will go up if all goes well of course.

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sutro
AminiStaff -- thumbs up or thumbs down? Can you share what you're paying on
health/dental per employee? Thanks for the info.

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pxlpshr
I can not share because I don't exactly know, at least not yet because we're
still finalizing the last details. I want to say it's about $12k +/- 2k per
year per employee. We're getting grandfathered in because our investor
currently has a startup using their services. It's my understanding
AdminiStaff doesn't support companies under 10 employees.

At the previous startup I was involved with as a normal employee, we used
AdminiStaff and I thought it was pretty nice. It saves a ton of headache/time,
and they keep you in check with all the employment laws, etc. I thought the
health/dental coverage was really good too; I picked United but you get a few
options to select from. I've been told AdminiStaff can get great coverage for
a lot cheaper because of their size, but I'm sure you'll pay a premium overall
vs. doing all the HR work yourself.

One thing I did like is after the startup failed, I was able to access all of
my employment records for the IRS without having to jump through the invisible
hoop of locating our former office manager (who we fired many months before
the company closed).

So thumbs up from my experience thus far, I'm sure you can google around and
find complaints though. Hope that helps.

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sutro
Thanks!

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diN0bot
> "$100K from friends and family"

shoot and dang.

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coglethorpe
He went to Princeton, so I'm thinking he had some cash among his friends and
family.

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rodyancy
Would anyone have a problem raising 100k from friends and family, knowing that
in 12 months if you were unable to raise a series A, you would be forced to
tell them that they had little chance of seeing their money again?

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coglethorpe
If I get 10k from one friend who has a million, 50k from another who has 5
million and maybe several 1k investments from others, it would be less painful
if things fell through. One would have to be rather up-front about the
incredible risk involved and have a huge amount of trust with many parties
beforehand.

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poppysan
Can I meet your friends? My friends and family couldn't loan me $1000.

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coglethorpe
All friends listed were hypothetical. I _might_ be able to get 10k from my
closest friends and family. :-)

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startingup
This is a great article, but keep in mind that the numbers are illustrative of
one type of company. Mint was dealing with financial information, so they had
to get "serious" fast and that means spending on things that, say, a Facebook
or Twitter would not have had to spend. They project $30/per user for user
acquisition (if I read that right), which again is very different for
different kinds of companies, and different business models. Extremely high
value niche companies would pay hundreds of dollars per user. On the other
side Twitter being a mass player, would spend far, far less. Financial sites
are valuable, so $30 seems like a good deal.

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teej
Typically you don't refer to acquisition cost in terms of $/user/year. The $30
was referring to revenue/user/year. That doesn't preclude your point that they
had to approach user acquisition much differently than Twitter or Facebook.

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ctb9
I believe Aaron is on the record saying that Mint never purchased traditional
advertising, instead they relied on pr/word of mouth.

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spencerfry
The legal fees are kind of astounding. $10-50K/month in legal fees for a 30
person company? We spend _maybe_ $2.5-5k/year on legal fees for our three
person company after the initial $20k operating agreement/TOS/PP/copyright.
The $10-50k/m figure seems a bit outrageous to me. Can someone with more
experience than me explain that in more detail?

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ph0rque
I suspect it has to do with the financial nature of the startup.

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spencerfry
Yeah, you're probably right. I'm guessing the legal nature of having access to
everyone's bank account is a tricky situation. But usually once you've
outlined (legally) how you're going to approach something there isn't a
monthly cost associated to that legal work.

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Shooter
"But usually once you've outlined (legally) how you're going to approach
something there isn't a monthly cost associated to that legal work."

Oh how I wish that were true for everything :(

Ph0rque is right, though. Unfortunately, if you're dealing with money (payment
processing, financial services/PFMs, large-scale real estate, investment
management, etc.) then you basically must have a law firm on retainer to deal
with all of the changing legislation, certification guidelines, compliance
programs, patents, general disputes, etc. etc. Stuff is constantly in flux and
the lawyer work is almost never-ending. Especially right now while the US
market is in the economic scramble, blame-game mode. This stuff isn't like
writing a basic TOS and being done. I'd actually be very surprised that Mint's
legal fees were that _low_ , except for the fact that Yodlee handled all the
backend work for them. I would absolutely _love_ to get off that cheap...we
pay a _multiple_ of what is quoted here. For each of several financial service
companies.

I've heard several entrepreneurs say they intend to fill the vacuum created by
Mint (by building another anti-Quicken PFM.) My firm has gotten pitches from
half a dozen teams already, and we're not even actively seeking investments
right now. The relatively small Mint exit seems to have chummed the waters and
everyone is probably going to blow out a bunch of money and drown each other
like usually happens in these little entrepreneurial frenzy pockets. I'm
normally all for the little guy, but if people think this is an easy market to
enter _now_ without buckets of cash and industry experience, then they're
idiots. For some (most?) industries, being an outsider gives you a new
perspective because you don't know what can't be done. Financial industries,
however, you need both the cash and the experience or else you may end up in
jail.

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arithmetic
I wonder if they use mint.com to track their startup expenses :o

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Shamiq
Eating what you cook -- a great way to know what's wrong with the food.

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auston
That woman is so freaking beautiful I can't concentrate on the article. I had
to firebug/edit html her picture out so I could get it done.

After reading it: It was a nice look into the strategy/numbers but I am not
sure I can take anything away from it. Like (pretty much) everyone else here
being a programmer/developer - I do not see raising $100k for my prototype as
feasible for me.

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spacejockeys
um, wow and thanks?! yer makin me blush. :)

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auston
You're welcome!

