The buyout by Intuit, and Patzer's new role

 

Aaron Patzer, founder of the online money management website Mint.com, started his first business-PWeb, a web development company-at age 16 in his hometown of Evansville, Indiana. After graduating from Duke with B.S. degrees in computer science, computer engineering, and electrical engineering, and getting an M.S. degree in electrical engineering from Princeton, he moved to Silicon Valley. There, he worked a short stint at IBM, where he earned three patents working on the Cell microprocessor for Sony's Playstation 3 game console.

After growing increasingly frustrated by his experiences using the personal finance software available at the time, the 25-year-old Patzer left another San Jose start-up, Nascentric, in March 2006, to start his own business, convinced he could build a better product. Eighteen months later, he rolled out his business model for Mint.com at the prestigious Techcrunch40 entrepreneurial conference and, despite facing off against 700 other start-up ideas, was named the top company. By the end of that year, Mint had more than 100,000 online users and, thanks to its phenomenal growth, was on its way to raising $17 million through several venture capital rounds. Mint's success soon caught the eye of its rival, financial software giant Intuit, which subsequently bought Mint for $170 million in cash in November 2009. After the buyout, Intuit kept the Mint.com website intact and made Patzer executive VP of its entire personal finance group. Today, two million consumers continue to use Mint.com to track nearly $200 billion in transactions and $50 billion in assets.

Recently, we spoke to Patzer in a lengthy interview. This is part two of a *two-part *interview. (For *part one *of the interview, which focuses on his early entrepreneurial efforts, his experiences launching Mint, and the lessons he learned, go here: http://smallbusinessonlinecommunity.bankofamerica.com/blogs/startingABusiness/2010/07/01/interview-with-mintcom-founder-aaron-patzer-part-1.) In this part, we discuss the Intuit buyout and his adjustment to his new leadership role within a large corporation.

SBOC: When Intuit approached you, what was your initial reaction to their offer of a buyout?
AP: Every small company has that apprehension about joining a larger entity. One of the conditions of the deal was that I get to be general manager of their personal finance group, which would give both me and my people at Mint a level of autonomy. That way, we could really come in and continue to grow the business as we saw fit. And that's exactly what Intuit wanted, because they're making a rapid transition from being a desktop software company of 10 years ago to now getting over half their revenue from online products. They wanted that transition to happen in their personal finance group, where the biggest part of revenue comes from Quicken. So, they gave me all the resources that I need and much more autonomy than you would imagine. Ed. note: Mint.com still maintains its independent look a full six months after the buyout, with no discernible Intuit branding on the site.

SBOC: For many entrepreneurs, being bought out can be something of a double-edged sword-it provides sufficient capital to unlock a business's potential but you must give up a large degree of control to get it. What about the deal with Intuit attracted you?
AP: Well, they have a balance sheet with billions of dollars on it. That gives you a stability that you never had, instead of every day feeling like you're fighting for your life or having paranoia about what's coming around the corner. Now, that fear is good in some ways. It makes sure that you work every night, every weekend, to drive things forward to make sure that failure never happens. But being at a big company gives you those resources, plus you get the access to a lot more users. Mint is a fantastic brand, but it only has a certain number of users, what Intuit has takes years to build up.

SBOC: Recently, you listed one of the biggest challenges facing you since the buyout as a cultural one and, notably, all of Mint's management has come with you to Intuit. How have you been able to ensure the successful integration of your three-year-old company and its 30 employees into the larger, more mature corporate culture of Intuit's?
AP: I guess it's the same reasons you use to convince yourself: more resources to work with, more people to access, like the 24 million people who use TurboTaxTM, the 10 million people who use QuickenTM, the millions of small business customers that Intuit has through products like QuickBooksTM. It lets you play at a different scale. I mean, all of a sudden, you're with the largest financial software provider in the country, if not the world, so it also lets you think on a different level.

SBOC: But in your new position as Intuit's VP of Personal Finance, do you find it challenging to be working with and managing legacy products, most of which you had no hand in building from scratch?
AP: You mean products that if I had done them, wouldn't look anything like they do today? Yeah, I do think about that. But this next version of Quicken that will come out will be the first one that I really put my fingerprints on and so, it's really going to focus on ease of use and a better information architecture, and a better user-interface design. There's actually a lot of goodness in Quicken that has just been buried among too many other things that aren't as essential as they could be.

SBOC: Do you ever worry about the internal cultural resistance to change that can sometimes be present in large corporations, particularly when someone who was not so long ago a competitor is suddenly put in charge? Do you have concerns that your attempts to "Mint-ify" Intuit's products or merge the two will create problems?
AP: We brought our learning and our product and user interface expertise to the personal finance group, which I think was very appreciated from their perspective. I've found that they like that Intuit has now put more focus on personal finance than they have in the past five years. In some sense, Quicken was forgotten property because it was much smaller from a revenue perspective than TurboTax and QuickBooks, products that are, literally, billion-dollar-a-year or more divisions. So the people in the personal finance group, who had felt maybe neglected, now realize that personal finance is really strategic for Intuit going forward and they're going to be part of that.

SBOC: What challenges do you still want to tackle going forward at Intuit?
AP: One of the things I'm very interested in is the international opportunity. Intuit, which is a huge software company that employs thousands of people, is in a billion-dollar market but approximately 95 percent of its revenue is domestic. So, I think that we have, in some sense, a huge opportunity to expand personal finance globally. When you look at it, it's hard to take the tax business global because taxes are so different in each country. And it's hard to take your core banking software overseas because while there are 16,000 banks and credit unions in the United States, there are only five in Canada and seven in Italy, so that doesn't make much business sense. But small business and personal finance, I think, really have the ability to go international. There are a lot more ways to save people money and help them plan for their future. So, this is something that is by no means done and now I have the resources to not only continue to build it out, but to take it further, to take it to Canada, the U.K., Australia, New Zealand, Asia, in an international expansion. That's something that I'd like to personally do, not only for the travel experience, but just to really understand how other cultures handle money and their personal financial lives.

SBOC: That's interesting that you bring up the ‘lives' of your potential customers, since you've often noted in the past that helping people spend more wisely isn't just about having more money for money's sake, but because ‘money is for living.' Is that what is at the core of your entrepreneurial endeavors?
AP: Absolutely. We have a big new feature coming out called ‘Financial Goals,' which is focused exactly around that principle of ‘money is for living.' You budget for a reason, you budget in order to save for college, take a vacation, buy a car, buy a house, remodel your kitchen, and this new feature will show you how much each of those tasks or the things you want to do would cost. We'll have these built-in calculators that will be pre-populated with all the financial information we know about you-your income, your interest rate, your credit score-so it makes it very, very easy to track how much you can save per month and whether you're on target for each of your goals or not. For example, if you cut back $100 a month on restaurants, this new feature would literally show you that you could, say, take your vacation 43 days sooner. It's features like these that are affecting the ninety percent of users that have changed their spending habits with Mint. We've literally found hundreds of billions of dollars in savings for people. It's pretty phenomenal.

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