November 5, 2010
When a start-up is looking for advice or models to follow, the obvious place to look is for successful ventures that have a similar business model or similar markets. Lots can be learned by studying success stories in books like Founders at Work or on the web. However, I think even more can be learned by an honest and thoughtful post-mortem of a failed start-up. I know I learned far more struggling than winning.
Marc Hedlund, co-founder of Wesabe recently wrote a fantastic blog post analyzing why he believes Wesabe lost to Mint.
If you’re not familiar with the story, here’s the Coles Notes version: Wesabe and Mint were both online personal finance sites that sought to displace the industry leader Intuit’s Quicken. Wesabe is now closed. Mint was acquired by Intuit for $170 million.
In the article, he dispels much of the conventional wisdom about why Wesabe lost to Mint and offers his own explanation:
“Between the worse data aggregation method and the much higher amount of work Wesabe made you do, it was far easier to have a good experience on Mint, and that good experience came far more quickly. Everything I’ve mentioned — not being dependent on a single source provider, preserving users’ privacy, helping users actually make positive change in their financial lives — all of those things are great, rational reasons to pursue what we pursued. But none of them matter if the product is harder to use, since most people simply won’t care enough or get enough benefit from long-term features if a shorter-term alternative is available.”
The post has generated lots of discussion in particular this piece from Eric Reis and has prompted other founders including Ben Yoskovitz of Standout Jobs to share. A collection of 32 such postmortems is here. Definitely worthwhile reading for any entrepreneur.