How a Web Startup Went from Zero to 170 Million in Two Years

In many ways, the story of Mint.com is almost unbelievable. A twenty-something kid starts a personal finance website in his basement that is bought by Intuit after 2 years for 170 million. Even more amazing is the number of new users who willingly enter their bank, mortgage and credit card account information into Mint’s website on a daily basis.

How was this possible?

I’ve been a longtime fan of mint, and I think there are real lessons to be learned from its success:

Solve a Real Problem

Personal Finance is a notoriously difficult area (How should I categorize this expense? Wait, maybe it should be transfer….). Many people struggled with tracking their finances and the existing software was costly, difficult to use, or took an accounting degree. Mint was free and made tracking your finances as simple as entering back information then setting categories once. From that point on, Mint would regularly connect, retrieve your latest expenses and categorize them for you. What could be easier?

Build Trust

The biggest hurdle mint had to overcome was a social one and not a technical one. How to make users comfortable with entering their financial accounts into mint? First off, they enlisted third parties to daily test the security of their site. Second, Mint did a excellent job of explaining exactly what they do with your financial information:

Mint is a “read-only” service. You can organize and analyze your finances, but you can’t move funds between — or out of — your accounts using Mint. And neither can anyone else.

Mint uses the same levels of physical and encryption security that banks do to protect the data we do store. Our practices are monitored and verified by TRUSTe, VeriSign and Hackersafe, and supported by RSA Security.

Pour Your Heart Into It

It’s also clear that the Mint founder, Aaron Patzer, put everything he had into his product. He self-financed it, paying himself only 30K in the first year and was known to work 100 hour weeks.  He gives his thoughts in an interview about the highs and lows:

I was 25 at the time, and basically oscillated day to day between thinking “This is the greatest idea ever!” and “This will never work. Who am I to take on Intuit and Microsoft? If this was a good idea, someone would have done it before.” It’s very emotional, and I don’t think people ever tell you about that. You see your net worth quickly draining, you have no idea what’s going to happen next, and you’re sitting alone in a room with no help, no resources, just your brain and sheer will-power. Whenever I got down, I would listen to “That’s Life” by Frank Sinatra

Congrats to Aaron for reaching the pinnacle! Now let’s hope that Intuit doesn’t screw it up….