I just saw your post since we were reading up on Voyant - thanks for summarizing some of the companies that are out there. I noticed you covered a number of the newer online finance and retirement sites - in particular BoulevardR. BTW - I’m the founder of NewRetirement.com and we’re trying to build out a useful resource for people focused on retirement. I’m curious how we get on the radar of someone like you better and what you and your readers think of it.

Best,

Steve

>>with regard to Dave’s point about Quicken validating acquisition opportunities in the market, I’m worried…

hmm. well, i don’t believe that acquisition is the only exit opportunity for Mint — and it’s very early to even begin speculating anyway — but i’m pretty sure there are plenty of non-aligned players who would consider either Mint or Wesabe or other smart Financial 2.0 sites a great addition to their platforms.

even with the potential merger/removal of one of those big players (Yahoo, by Microsoft), that still leaves:
* Google
* Microsoft/Yahoo
* IAC
* AOL
* eBay
* Amazon
* Intuit
* NewsCorp/MySpace
* Facebook
… and about 30-40 other large players who aren’t always on everyone’s tongues.

personally i believe people are over-reacting to the [potential] removal of just one acquirer. if anything, the long-term trend over the past 3-4 years has been a growing plurality of profitable internet acquirers, and an acceleration of M&A deals for promising internet startups.

recent recession concerns notwithstanding, the overall market for online ecommerce & advertising continues to expand rapidly, and should provide a relatively long period of opportunity for both startups & large internet players for quite some time to come. if and when online spending levels off & market consolidation down to just 2-3 players occurs, then i’d start worrying. however, my best guess is that day is at least 5-10 years away, if ever.

my .02,

• dave mcclure
  [investor & advisor to Mint, friend of extended family with O'Reilly / Wesabe investor]

However with regard to Dave’s point about Quicken validating acquisition opportunities in the market, I’m worried. While it may be true that Mint or other ad-supported sites would do well with a trusted bank partners, the fact that they advertise for other financial products is going to be a problem, either for the buyer or for the customer who perceives that the advice may now be “fixed.” That leaves them with Intuit or perhaps a portal company as a buyer. If Microsoft does get Yahoo!, there’s one less potential buyer on the market.

I’ll add one more thing: These financial aggregation sites provide users with a very valuable service beyond savings and affiliation deals. It is a nightmare for most people to deal with and reconcile their paper statements, online statements and other financial information. So my take is most people would love a useful, simple, intuitive service rather than the mess that exists today. But, as demonstrated by some of the comments above, some people love spending their evenings with a calculator and all their paper statements on the table figuring things out. Frankly I have better things to do and as per Dave’s comment, so do most people.

One the one hand, these sites offer much lower barriers to trial for the mass part of the market that has security concerns, since they generally don’t ask for any personally identifiable information besides an email address (if you choose to register). They also have the ability to model the impacts of financial decisions, which helps with figuring out how they can get on track for a secure retirement (by far the biggest financial concern for Americans).

On the other hand these “holistic” sites can’t show you exactly where your money is going or point you to specific products that can save you money based on your current cash flow (though I imagine they will ultimately be able to offer product solutions, based on the user’s financial goals).

Another issue for these sites is that they may not have the user transaction data that companies like Mint does. Therefore, they can’t verify user inputs, though for forecasting and what-ifs this isn’t so important as long as the user is relatively close. The transaction data, particularly on investment accounts such as IRAs and 401ks, is also useful for tracking progress over time.

One question on segmentation- I wonder how many people whose finances are in such bad shape that their big financial issue is just making rent for the month would actually use a site to track their finances (or are they attracted by the proposition: if you give us your account information, we’ll save you $X). My guess is that these folks are not particularly savvy when it comes to finances and that using an online tool to evaluate their cash flow isn’t high up on their list.

Sites like Boulevard R seem to be attracting consumers with assets and incomes well above the national averages.

Full disclosure, I’m one of the founders at Boulevard R.

Generally, IMO, savings ( defined as non-utilization of as asset ) is generally bad and non-productive. Savings rate should not be confused with savings account, because more often than not, these have interests and so have utility, and for the gain of interests, the risk of the bank holding the account folding up must be accepted. IMO, with proper calculated risk strategies more asset utilization can be done, which Americans have shown they are adept at. The current financial crises should not distract anyone from the benefits of asset secured loan arrangments. What is happening now is essentially a panic, which is getting to a head when combined with trade deficits, massive media manipulation, an unpopular war and labour arbitrage.

As for the technology aspect, as per the article. These finance internet plays should focus on the financial aspects of personal finance instead of the technology aspects. Any of them (none of which I can think of now) that solve financial problems (which paypal does very well : the problem of micropayment systems) would succeed. But if they just think that adding a .com to their names would ensure success they most be dreaming.

As for prosper.com, which people think is a workable financial technology product, what they fail to realize is what financial problem is it solving. From what I know about it, it brings lenders and borrowers together, which isn’t particularly innovative or even smart ( reasons why to long to put here ), but the real function should be risk mediation. from what I hear, it does that very poorly. It can do better, if it wishes to do the financial math but I assume is it more interested in employing more User interface designers than actuaries to determine risks.

Quicken Online is the best commercial ever for Mint & Wesabe.

2 brand-new startups with FREE products are trying to establish market awareness, and then a huge company steps in and starts spending money to educate the market about their NON-FREE products?

that’s a gold-mine. talk about riding on somebody else’s coattails.

(and let’s not even talk about the fact that regardless whether QuickenOnline is successful, its mere existence creates acquisition interest from other platform players.)

well actually, i think the model will evolve to be such that:
1) without logging in, you can see suggestions on generic ways to save money, lower / raise your cc / savings rates, and
2) if you login, you’ll see even more customized & specific deals

you’re correct that it might require a “leap of faith” to get to the better, more specific suggestions… but i think for most folks that’s not so daunting. if you provide info, you get a benefit… simple as that. i do understand it might not work for you & others… and that’s ok, it won’t be perfect for everyone.

@austinandrew:

re: “entering paypal login info being violation of terms of service”… i think you’re confusing my comment. mint doesn’t accept paypal logins (currently anyway). i don’t know the rules on specific bank TOS, however Mint has a partnership with Yodlee to do the back-end account aggregation, and Yodlee has been working for over 5 years with ~10,000 financial institutions across the country to integrate & provide various services. Yodlee’s clients include folks like BofA, Fidelity, Citibank, etc. again, it’s up to the individual what they decide to do with their data.

(fyi, on the other hand, prior to acquisition by eBay, PayPal did let users enter the eBay login info to PayPal, so that PayPal could update user’s auction info with PayPal payment buttons for accepting credit card and other payments. whether or not this was completely legit, users seemed to like it, and it worked. in the end, eBay decided that it was such a useful service that they had to acquire it.)

in summary: you can’t please everyone all the time, but there’s a big audience of people out there whose security requirements are lower on the priority list than saving/making money. for those willing to create services to address that market, opportunity awaits.

• dmc

You most definitely bring up some very valid points. But, I’m just stating my opinion having worked in the internet money space myself. Don’t get me wrong, I love what Mint is looking to achieve. As a matter of fact the back-end passive affiliate model is ingenious. BUT, there is a huge bridge to close here. What you and your team did at PayPal was awesome. Think about that for a moment. Your model at PayPal aligns more with Prosper than Mint today. At PayPal money transfer followed as transaction. At Prosper is slightly different money transfer followed by transaction. Even if you are to look at the existing PayPal model today it is seen as transaction to payment so it really has not evolved that much (except got much friendlier). At Mint the model calls for one to show your entire hand with some possible/potential savings on the back-end; the psychological barrier here is that I must expose my complete finances and hope that I’m happy with the existing affiliate programs you are publishing. This model is very different from PayPal and Prosper. When I show Mint my credit card is 12.99% they come back with some good credit card alternatives, but, I can find those same alternatives (actually more) at CreditCards.com. The hurdle here for your customer is that CreditCards.com doesn’t require one to first disclose ALL their private information.
Again, don’t get me wrong, because I want Mint to succeed. But, I just don’t believe that Mint can hit critical mass as the model stands today. Of course the definition of critical mass can be defined one thousand ways. The Mint model has to be two tiered:
1) Direct revenue share with partner financial institutions. How about PayPal as a Partner?
2) White label/oem offering for larger financial institutions.