In this segment, Aaron Patzer, CEO of Mint.com, shares the inside story of his company's acquisition and his plans for the next three years at the helm of Intuit's personal finance division. Mint.com is a personal finance tool with a beautiful user interface that saw astronomical growth from the time it launched at TC 50 in 2007.
In two years, it has gained over 1 million users. On September 13, 2009, Mint announced its acquisition by Intuit for $170 million. VatorNews caught up with Patzer at the Vator.tv and The Funded's Juice Pitcher event last night, where Patzer gave a presentation on the cost side of building a business.
Matt Bowman: Why did you agree to sell to Intuit at this point in time?
AP: Brad Smith, the CEO of Intuit approached me back in late April or early May and I honestly hadn’t thought about acquisition at that point. I was just building a AO.Inside.NetworkHomepage04 product that I wanted to use. That what was the idea from the beginning: I just wanted something that was simple and easy, where you didn’t have to have an accountant to manage your finances. So he put an offer on the table and I said, “You know I really haven’t thought about this, so let me give it some thought.” And I thought about what I really love to do, which is to build things. And I also thought that the offer from Intuit was not just an acquisition, but it was to actually lead the personal finance division. My team and I will own Mint.com, Quicken Online, Quicken PC, Quicken Mac--all the desktop products as well. So you’ve got 10 or 11 million people using a desktop tool who want an online alternative. That’s a huge way to accelerate your growth. You’ve got 25 million people who do their taxes with TurboTax. You’ve got 8 million individuals who use personal finance tools or Internet banking through Intuit, and you’ve got four or five million people who use Quickbooks. All of a sudden, you’ve got access to 40 million people and it launches you like four years into the future in terms of the customers you can access and the impact you can have on the world.
And then, with a bigger company—you know, we’re 35 people; they’re 8200--you can go global. That’s really tough for a 35-person company to do, especially in the personal finance space, because each country is different in terms of the investments that they have, the stock market data you need to have, the business agreements you need to have, any regulatory or security privacy that you need to put in place. So they offer that capacity.
MB: You’re plan then is global business expansion and not so much technology development at this point… or is it both?
AP: It’s both. I’m an engineer by training. Algorithms are my specialty and I have 11 patents in the area.
MB: Will Mint always remain free?
AP: What you see on Mint right now is something that we always intend to remain free. We’re thinking about doing something with credit scores and credit monitoring that costs something for us to provide, so there might be a charge for that. Things like bills-pay or funds-transfer are expensive for us to provide, and they may be paid services, but what you see on Mint right now—the intent is for that to always remain free.
You kind of have to because you can get personal finance tools through online banks. We don’t think they’re as good, but they’re always going to be free because banks subsidize them through fees and through not paying you good interest.
MB: So your plans are to stick with Intuit, and not go off and start another company anytime soon.
AP: I am well incented to stay at Inuit for three years and don’t have any definitive plans for after that.
MB: You took in a lot of venture funding--$31 million. How much of that did you need?
AP: Well, I can’t say exactly how much was used, but we raised a C-Round about 30 days before the acquisition was announced, so we didn’t touch any of that.
MB: Was that negotiating with Intuit?
AP: The biggest competitive threat is to remain independent and beat them at Quicken, which is one of their core brands. In some sense they’re a competitor, but Quicken is a different demographic; it’s an older demographic. I actually think the real battle is with online banking because there are still a lot of people who won’t trust a third party with their financial information.
MB: You’ve helped identify over $300 million in savings, and helped manage over $50 billion for people. Areyou proud?
AP: I’m really proud. It’s the fastest growing personal finance tool ever in existence from the data that we have. 1.6-1.7 million users at this point, growing by—I don’t know—120,000 to 140,000 a month, so growing very, very rapidly, and it’s a very consumer-friendly sort of thing because we’ll show you all the interest rates across all the banks. We’ll tell you when you should refinance your mortgage, when you should consolidate your student loans, when you’re paying too much for phone, TV, Internet—well, we haven’t done that one yet, but we will.