Did you know Wesabe? It launched late in 2006 as a web app to help people manage their personal finances. It shut down last summer. Co-founder Mark Hedlund did us all a favor recently by posting Why Wesabe Lost to Mint.
It’s a rare treat to get an entrepreneur’s own analysis of his startup’s failure. For obvious reasons, we get a lot more stories of successes.
I didn’t know Wesabe, but I do know and use Mint. It’s an online financial app. You give it your passwords, and it helps you manage online banking with little effort. It reads your transactions and keeps up with your balances.
I looked Marc Hedlund up on O’Reilly Radar. He’s paid his dues:
. . . an entrepreneur-in-residence at O’Reilly Media . . . VP of Engineering at Sana Security . . . CEO of Popular Power . . . founder and general manager of Lucas Online, the internet subsidiary of Lucasfilm, Ltd. . . . Director of Engineering at Organic Online . . . CTO at Webstorm, where he wrote one of the internet’s first shopping cart applications in 1994. He is a graduate of Reed College.
So what does he say happened? Not what you think. I’d fail the true-false quiz myself, if Marc is right. It wasn’t that Wesabe never made money. It wasn’t about better design or who was viral, and not even about who was first. He summarizes in the quote here, but only after he’s explained in more detail earlier:
You’ll hear a lot about why company A won and company B lost in any market, and in my experience, a lot of the theories thrown about — even or especially by the participants — are utter crap. A domain name doesn’t win you a market; launching second or fifth or tenth doesn’t lose you a market. You can’t blame your competitors or your board or the lack of or excess of investment.
And the real lesson?
Focus on what really matters: making users happy with your product as quickly as you can, and helping them as much as you can after that. If you do those better than anyone else out there, you’ll win.
And can you apply this to your business? Does this warning apply to you?
Changing people’s behavior is really hard. No one in this market succeeded at doing so — there is no Google nor Amazon of personal finance. Can you succeed where we failed? Please do — the problems are absolutely huge, and the help consumers have is absolutely abysmal. Learn from the above and go help people (after making them immediately happy, first).