Wesabe

Personal finance management website

General Information
Category
Finances
Country
United States
Started
In 2005
Business Failure
Business Outcome
Shut Down
Closed
By 2010
Cause of Failure
Bad Management
Founders & Employees
Number of Founders
Two
Name of Founders
Jason Knight, Marc Hedlund
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
2
Total Funding Amount
$4.7M
Number of Investors
2
Description

Wesabe is a former Personal Finance Management system which served its clients by helping them make better financial decisions by analyzing the client’s available financial options based on the data that the clients provided Wesabe with. The actual Wesabe web application also integrated community forums which include a dozen other people who are devoted to making smarter and better financial decisions.

Cause of Failure

The tragic downfall of
Wesabe can be ascribed to two major reasons.

To understand the first one,
we need to talk about Yodlee. Yodlee is a company that offers an automatic data
aggregation system for PFMs. This was usually done by screen-scraping the
client’s bank account website activity on the supported bank corporations by
Wesabe. This information is then transferred to the PFMs own platform for them
to analyze. On a meeting with Wesabe, both parties never agreed to close the
deal since Wesabe referred to Yodlee as a “crumbling corporation” and was
afraid they wouldn’t be able to follow through. Because of these instances,
Wesabe opted for a different solution. Instead of working with Yodlee, Wesabe
chose to make their own data acquisition program with was to supposedly have
better privacy settings for clients. This move, however, later resulted in
Wesabe losing to Mint – their main competitor- since Wesabe’s data acquisition
system was never fully finished. Instead, when Mint launched into the market a
few months after Wesabe, it had its own data aggregation system, all thanks to
their partnership with Yodlee.

Apart
from that, there was also the fact that Mint provided a better and easier user
experience. Mint’s system automatically categorized and edited the client’s
data which resulted in a better consumer experience. While Wesabe’s clients
needed to fill out more fields on sign up forms, etc. which was a little bit of
a hassle for most people which often opted for the easier choice even though
Wesabe’s platform was more precise and would have helped them make better
financial decisions on the long run.

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