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This space is really difficult to crack for a few non-obvious reasons. The first is that the total TAM is less than you think; for most people, tracking their s

This space is really difficult to crack for a few non-obvious reasons. The first is that the total TAM is less than you think; for most people, tracking their spending to manage budgets just doesn’t appeal to them. For many consumers, just seeing all of their finances is incredibly depressing. I suspect the 13mm Mint users are a large portion of the addressable market for this kind of product. So without a strong monetization engine that will work incredibly well at only ~10mm user range, you’re in trouble. Lead-gen isn’t sufficient here; Credit Karma has 10x the userbase and much stronger signals of intent, which is why they dominate digitize acquisition. When I was there, we put a lot of thought into how to crack personal finance, and ultimately felt that “spending” was too complex and too niche. The fact is you need radically different products for different parts of your consumer audience. That’s why you’ve seen a rise of more focused products like Robinhood, Wealthfront (going after the high end), savings apps like Acorn and digits, banking apps like Chime, etc (being a bank is profitable) that have incredibly strong revenue models attached. I think you could run a reasonable lifestyle business here if you don’t take VC, but I’m skeptical this can ever be truly mass-market.

davidajackson 7y ago
I was told recently by someone who runs one of these types of apps that TAM that has been tapped so far is <1B. And these apps have been around for a while. So for some of these businesses, their consumer app can be a "wedge" to get them going, but they hedge by exploring B2B opportunities.
wpietri 7y ago
That makes a ton of sense to me. In some areas, I think our natural categories obscure human variation that's important from the product perspective. For example, task management software sounds like a coherent thing. But in practice, people think and work so differently that there will never be a solution that everybody loves. At least from personal experience, personal finance is the same way.
- eldavido 7y ago
  Meta: do you view a product through the customer's eyes or through the eyes of the person making it? That's been an important insight for me to understand. Describing something in terms of its features/how it works, you might say "photo sharing app". But this core feature could be wrapped, packaged, marketed, and described so many different ways: flickr, Instagram, Getty Images (!!), a scientific collaboration tool, etc. "Task management" feels similar.
  - wpietri 7y ago
    Definitely! With the caveat that this problem often persists even within the eyes of the customer. A lot of people would agree with the problem statement of, "I need something to help me keep track of what I have to do." But "I", "keep track of" and "what I have to do" varies widely in ways that the customer isn't aware of. It's sort of like picking a place for a group of people to have dinner. A lot of people think they just want dinner until you say, "How about X" and then they realize their desires are much more specific.
ASinclair 7y ago
> I think you could run a reasonable lifestyle business here if you don’t take VC, but I’m skeptical this can ever be truly mass-market. You Need a Budget (YNAB) is proof of this. I don't believe they've taken any VC funding and are a pretty successful lifestyle business in the Budgeting/Finance space.
- dangus 7y ago
  They’re great, but they aren’t super quick with features and I wish the product had more, especially when it comes to the graphical reports. It’s also an expensive product for most people. But we do need more of these sustainable low-growth non-VC style SaaS companies out there.
  - briffle 7y ago
    I just wish their imports were a bit more reliable. Although some of that comes down to the fact they use 3rd parties that scrape the screen of your bank, so any time something changes, it breaks the imports. (it would be great to get an API standard, with proper authentication, etc) Also, there is a plugin that gives you more reports: https://www.toolkitforynab.com/ https://www.toolkitforynab.com/
    - HatchedLake721 7y ago
      https://en.m.wikipedia.org/wiki/Open_banking https://en.m.wikipedia.org/wiki/Open_banking
  - taurath 7y ago
    If a product is good, we shouldn't judge it on its inability to continuously add new features.
    - EpicEng 7y ago
      Not sure I understand that. If I want feature X, and <app> doesn't have feature X, then that's a negative. Doesn't mean <app> is not "good", but it's certainly criteria by which to judge it.
Dig1t 7y ago
I'm sorry, what is TAM?
- arkades 7y ago
  total addressable market
- bearcobra 7y ago
  Total Addressable Market
- jghn 7y ago
  Total addressable market
- peterbell_nyc 7y ago
  Total Addressable Market - how many people might use your thing.
- deleted 7y ago
  [deleted]
- deleted 7y ago
  [deleted]
- deleted 7y ago
  [deleted]
- jngreenlee 7y ago
  Good baiting to gauge how many MBA/VC types are lurking....they can't resist!
jjeaff 7y ago
Luckily for most founders, a business that tops out at $10mm a year in net income is still considered a lifestyle business for most VCs.
- danieltillett 7y ago
  Yep. You can probably go higher than this today - $25 million these days seems to be too small for the VCs.
byproxy 7y ago
> For many consumers, just seeing all of their finances is incredibly depressing. Fuckin' ay. Consider me one of those consumers! ...I should probably stop consuming.
philwelch 7y ago
> The first is that the total TAM is less than you think; for most people, tracking their spending to manage budgets just doesn’t appeal to them. For many consumers, just seeing all of their finances is incredibly depressing. I think that depends on how you address the market, actually. The Mint way, which requires continuous engagement and ad impressions, is something you’d be right about. But there’s a larger addressable market of people who intermittently think about getting their finances squared away, maybe as a New Years resolution or something. If you market to those people the way gyms do, there might be a larger market.
Ozzie_osman 7y ago
I think you hit the nail on the head, which is that this is only a successful business if: * The revenue model is stronger than lead-gen. * The product isn't too complex or depressing. :)

davidajackson 7y ago

I was told recently by someone who runs one of these types of apps that TAM that has been tapped so far is <1B. And these apps have been around for a while. So for some of these businesses, their consumer app can be a "wedge" to get them going, but they hedge by exploring B2B opportunities.

wpietri 7y ago

That makes a ton of sense to me. In some areas, I think our natural categories obscure human variation that's important from the product perspective. For example, task management software sounds like a coherent thing. But in practice, people think and work so differently that there will never be a solution that everybody loves. At least from personal experience, personal finance is the same way.

eldavido 7y ago
Meta: do you view a product through the customer's eyes or through the eyes of the person making it? That's been an important insight for me to understand. Describing something in terms of its features/how it works, you might say "photo sharing app". But this core feature could be wrapped, packaged, marketed, and described so many different ways: flickr, Instagram, Getty Images (!!), a scientific collaboration tool, etc. "Task management" feels similar.
- wpietri 7y ago
  Definitely! With the caveat that this problem often persists even within the eyes of the customer. A lot of people would agree with the problem statement of, "I need something to help me keep track of what I have to do." But "I", "keep track of" and "what I have to do" varies widely in ways that the customer isn't aware of. It's sort of like picking a place for a group of people to have dinner. A lot of people think they just want dinner until you say, "How about X" and then they realize their desires are much more specific.

ASinclair 7y ago

> I think you could run a reasonable lifestyle business here if you don’t take VC, but I’m skeptical this can ever be truly mass-market. You Need a Budget (YNAB) is proof of this. I don't believe they've taken any VC funding and are a pretty successful lifestyle business in the Budgeting/Finance space.

dangus 7y ago
They’re great, but they aren’t super quick with features and I wish the product had more, especially when it comes to the graphical reports. It’s also an expensive product for most people. But we do need more of these sustainable low-growth non-VC style SaaS companies out there.
- briffle 7y ago
  I just wish their imports were a bit more reliable. Although some of that comes down to the fact they use 3rd parties that scrape the screen of your bank, so any time something changes, it breaks the imports. (it would be great to get an API standard, with proper authentication, etc) Also, there is a plugin that gives you more reports: https://www.toolkitforynab.com/ https://www.toolkitforynab.com/
  - HatchedLake721 7y ago
    https://en.m.wikipedia.org/wiki/Open_banking https://en.m.wikipedia.org/wiki/Open_banking
- taurath 7y ago
  If a product is good, we shouldn't judge it on its inability to continuously add new features.
  - EpicEng 7y ago
    Not sure I understand that. If I want feature X, and <app> doesn't have feature X, then that's a negative. Doesn't mean <app> is not "good", but it's certainly criteria by which to judge it.

Dig1t 7y ago

I'm sorry, what is TAM?

arkades 7y ago
total addressable market
bearcobra 7y ago
Total Addressable Market
jghn 7y ago
Total addressable market
peterbell_nyc 7y ago
Total Addressable Market - how many people might use your thing.
deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
jngreenlee 7y ago
Good baiting to gauge how many MBA/VC types are lurking....they can't resist!

jjeaff 7y ago

Luckily for most founders, a business that tops out at $10mm a year in net income is still considered a lifestyle business for most VCs.

danieltillett 7y ago
Yep. You can probably go higher than this today - $25 million these days seems to be too small for the VCs.

byproxy 7y ago

> For many consumers, just seeing all of their finances is incredibly depressing. Fuckin' ay. Consider me one of those consumers! ...I should probably stop consuming.

philwelch 7y ago

> The first is that the total TAM is less than you think; for most people, tracking their spending to manage budgets just doesn’t appeal to them. For many consumers, just seeing all of their finances is incredibly depressing. I think that depends on how you address the market, actually. The Mint way, which requires continuous engagement and ad impressions, is something you’d be right about. But there’s a larger addressable market of people who intermittently think about getting their finances squared away, maybe as a New Years resolution or something. If you market to those people the way gyms do, there might be a larger market.

Ozzie_osman 7y ago

I think you hit the nail on the head, which is that this is only a successful business if: * The revenue model is stronger than lead-gen. * The product isn't too complex or depressing. :)