In 2007, Aaron Patzer launched Mint.com as a user-friendly alternative to Quicken. Now, just two short years later, Intuit, which makes Quicken, paid over $170 million for his website. So how’d he do it?
Let’s take a look shall we and see how we can apply this to your business. Inc Magazine offers 5 quotes from Aaron. I’ll dig a little deeper into what he said and give you a few ideas of exactly how these concepts can apply to you and your business.
Create a product that makes the difficult & boring easy & fun
“What set us apart from 95 percent of other start-ups is that we served a real need,” Patzer says. “Personal finance is so complex and too difficult for most people. I was frustrated with the existing tools and found out that others were frustrated as well.”
Volkswagen is using this idea in an ad campaign to help our environment: http://www.thefuntheory.com
How can you attract new customers/clients by making something fun. Adding a coupon to your website or maybe a game or puzzle to solve for a prize discount. Think about this one and get your creative juices flowing!
Choose a market that’s really, really big. What’s the word? (BIG)
“There are 250 million people worldwide who already use online banking,” Patzer says. “With our 1.5 million users, we’ve barely scratched the surface. Intuit made a billion dollars on its tax business alone and that’s a once-a-year thing. People do online banking every day.”
Or target a niche market the is BIG enough. Of course it would be great to score that $170 million home run – that’s why we think big. But if you target your niche thoughtfully – always delivering your value to the marketplace, you can always target a bigger, wider market at any time!
Develop a business model that actually makes you money.
“Our product is free, but we make our money by helping people save money,” Patzer says. “We understand where people spend their money so we can say, ‘You should refinance’ or ‘You should change your auto insurance.’ The only ads people see on Mint.com are ones that will save them at least $50. Financial institutions then pay us for new customers.”
On the surface, this one seems like a no brainer. That is why we are in business – to make money. But if you are spinning your entrepreneurial wheels, not making money, it’s time to get a better model.
How can you improve your model so that it delivers maximum value to your customers and maximum dollars to you?
Don’t pay for new customers/clients. Ever.
“All of our customer acquisition has been free — through social media, blogs, and the press,” Patzer says. “We don’t pay a dime for advertising. We also use business partnerships with Motley Fool and the credit-report companies. And Apple has given us a lot of free advertising as a featured application.”
This is my favorite! I love FREE stuff! That’s why I am active on the social networks and my blogs giving value away. I follow the Universal Law of Reciprocity. In your life how many times has someone given you a gift that you were anxious to repay? My guess – almost every time you receive a gift. We want to give back, return the favor. It is built in us naturally.
“One of the most potent of the weapons of influence around us is the rule for reciprocation. The rule says that we should try to repay, in kind, what another person has provided us.” ~ Robert B. Cialdini, author of The Psychology of Persuasion
Be a extremely careful about who you hire.
“In the last start-up I worked for, hiring was done haphazardly,” Patzer says. “We have a very rigorous hiring process. For tech people, we might screen 50 people and hire one. For all managers, we use a technique called top grading which reveals patterns in behavior. In the history of Mint, I’ve only fired two people and only one has left voluntarily.”
Bringing people onto your team is a big deal and should be treated such. Don’t hire someone just because they are cheap. This is not a good policy. People who believe in your mission will go the extra mile for you – be on the lookout for those people.
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