I've been a long time user at yodlee.com which powers the backend of Mint.com and other account aggregators.
Yodlee gave up on the idea of trying to monetize the customer information they have.
They instead reinvented themselves as the technology provider for all other financial institutions.
I am sure Yodlee.com is a profitable company but I do not think their investors will ever see much return on the 110 million dollars worth of investment since 1999.
If you take away Yodlee powered backend, Mint.com does not have much going on for them other than the subscriber base.
If you have a hard time monetizing from the subscribers you have, It's just going to be a long painful ride for everyone involved.
Yodlee has dozens more features than Mint does, yet Mint has so many more users. Why is this?
Because personal finance is intimidating, and nobody wants to do it. By having virtually nothing to do in Mint, it lowers the intimidation factor that people have when thinking about managing their money. It's a way to get people in the door, and getting that far has always been the struggle behind personal finance sites.
I've made use of Yodlee so much so that over the years, I've told it to anyone within earshot. The most common excuse I get from even the tech savvy programming crowd is "I do not want to have all my account information in one place, it's a single point of failure".
While true, the same holds for all information that we have online that is important to us. But it's a big mental block that both these sites need to overcome. Yodlee kinda shifted that burden by selling software to financial providers whom we already trust by opening accounts.
I think mint is having a hard time monetizing. I love their value proposition (i.e. costs BofA $300 to acquire a new mortgage customer, mint charges $150 referral while saving mint's user x from their previous mortgage) but I have never been interested in any kind of offer from Mint. Maybe it's because I am satisfied with my financial accounts or I just rather hear a referral on a great new card from a friend. Has anyone ever taken up mint on their offer? Or even clicked through?
I'd like to see Mint leverage on it's user data but since it hasn't yet I doubt it is as simple as turn on AdSense and watch the money pile up. Which leads me to wonder when will they start leveraging it and how?
We (RescueTime, YC08) have a lot in common with Mint.
Having experimented with it a fair bit, I can safely say that if it's not a content site with CRAP-TONS of page views, it's really hard to make PPC ads work. Stuff like Gmail is not a big win in terms of CTR because users quickly learn to ignore the ads-- and neither is Mint or RescueTime (our baby). Mint can play the leadgen game (sending people to different banks) but bank changes and new mortgages are rare decisions and I'd imagine that Mint users often ignore the lead gen links and focus on their own content.
I also imagine that they have a similar problem that we do-- giving people data visualization isn't inherently sticky and people drift away from data like this. It gets boring. And because it's self-improvement/awareness focused, it's like a gym that doesn't have a membership fee and has no cancellation cost-- few people are disciplined enough to stick with it.
On the data asset front, we have the same type of asset. But it only really has value (beyond linkbait/PR) if it's a representative population. I'd wager Mint's userbase decidedly doesn't NOT represent a cross-section of America.
I think Mint has a lot of promise, but I think they have some tough problems to solve. And by taking $14m (presumably on a $50m valuation), they've just signed up for a very very long road.
I always thought they should leverage their users against the bank. Rather thank taking in money from a referral fee, why not gather 100 customers @ at least 10k and get them all 1% more on their savings accounts, and gather 50 customers looking for a new mortgage to get them a lower rate. I'm sure that would raise all sorts of complexity problems for them, but it seems like another avenue than simply referrals.
That is nifty but I think Mint's model looks better on paper. They want to operate in the transaction/opportunity cost of switching financial services. Banks have transaction costs (marketing fees, referral fees to other institutions, brick and mortar fees) and consumers have have opportunity costs (analysis paralysis, etc). By lowering these costs, they are creating wealth and taking a piece of it.
I think this sounds better (at least on paper) because you are both the friend of the consumer and the institution. In your model, the institution becomes more or less the enemy. Actually, since you (Mint 2.0) are trying to unite consumers against the bank, the bank will just shut your site down by not blocking access to the consumer's transactional data.
I disagree that the institution becomes the enemy: what is really happening is that a portion of the fee Mint earns from a referral is being given the consumer, in the form of higher interest or some other perk.
By grouping multiple customers together, Mint is further reducing transaction costs for the bank, so that it may become economic for Mint to give some of the rewards to the consumers, in the form of higher interest (Mint earns less because the bank will have to pay Mint less to make up for the better deal to the consumers).
If this allows Mint to generate enough leads, the smaller fee may be made up by an increase in volume.
The way I originally understood it was more from an aggregation of power into the hands of the consumer. By banding together they would be able to leverage a better rate. In that sense I would see the bank as becoming a common enemy (probably a poor choice of wording too).
This is an interesting model in that Mint becomes the preferred provider or discount broker or something along those lines.
I agree with you that the institution does not become the enemy. I had always envisioned in my head as by bringing in customers to a bank that bank gains leverage too. So say you bring an extra 1 mil in savings accounts to a small bank, that bank now has X times as much to lend out as credit/leverage. Same goes for mortgages.
I am sure Yodlee.com is a profitable company but I do not think their investors will ever see much return on the 110 million dollars worth of investment since 1999.
If you take away Yodlee powered backend, Mint.com does not have much going on for them other than the subscriber base. If you have a hard time monetizing from the subscribers you have, It's just going to be a long painful ride for everyone involved.