How PFM Company Mint is Rethinking Math

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Someone once said that there are lies, damn lies, and statistics.

Personally, I think that there’s a hierarchy there. Anybody can lie. If you’re good, you can tell a damn lie. But you have to be really good to use statistics. Alas, I don’t think makes it to the top tier.

At the Finovate conference in NY, presented and shared some numbers that piqued my interest. It claims that it “manages over $12 billion in transactions” and that 50% of its users have changed their spending behavior by using Mint.

Manages transactions? Perhaps “tracks” would be the more accurate word. And how does Mint know that the behavioral changes have come as a result of its tools — and not the general economic conditions?

Then there’s Mint’s boast that it has identified more than $100 million in potential savings for its users. This is ridiculous. Imagine if Capital One claimed that it has provided more that $100 gazillion in consumer financing by adding up the credit lines offered in the marketing offers it has sent to customers and prospects.

And finally, according to its CEO, currently has 500,000 users, enjoying a sign up rate that has “more than doubled” in the past 3 weeks.

Sounds pretty impressive. When Aite Group spoke with Mint in April, it had 220,000 users, and (we were told) was signing up 10,000 people each week. In its August 18th press release, it said it had 400,000 users. So in the eight weeks leading up to the Finovate conference, it added 100,000 users. Which, my calculator tells me, is 12,500 users per week, and just 25% more than the weekly rate from April.

I’m not calling a liar. I believe that it has doubled its sign up rate. After all, with the economy going the way it has, who isn’t more concerned about managing their finances? It doesn’t surprise me at all that the sign up rate is increasing. The enrollment rate might have dipped during the summer for all I know.

But let’s put’s numbers in perspective. It may very well be the largest “online personal finance service.” Online. There are reportedly 9 million Quicken users. If grew by 40,000 users per week from here on out, its user base wouldn’t equal the Quicken population until we’re ready to throw the next president out of the White House at the end of October 2012. At 20,000 users per week, the 9 million figure will be attained while you eat your Thanksgiving turkey — in the year 2016.

But this is a silly discussion. Enrollment isn’t the critical statistic — the percent of enrollees that are active users is the critical factor (any online banking exec will tell you that). Intuit will tell you that, too — it has sold a lot of copies of Quicken to people who don’t use it. At least the firm got paid for each copy it sold.

Here’s my request of If you present at the next Finovate, please don’t share BS statistics (that’s not “Bachelor of Science” by the way). Instead, tell us, of the people who have enrolled, how many are active? How many use the site on a daily or weekly basis? How many site features do they use? How many accounts have they aggregated? How does usage change over time? How many of the saving offers that have been presented to users have been accepted? We’d be a lot more interested in finding out how much Mint users have realized in savings from Mint offers — not just those that the site has identified.

The reality of the PFM space is that while money is really really important to us — and getting even more important with the economic uncertainties of the day — the process of managing our money is something that few people want to do, or enjoy doing.

Quicken has succeeded by finding a segment of the population that likes to track, trend, graph, and forecast their financial lives. has done a great job of replicating a lot of that functionality, and going beyond Quicken by making it easier to get data in (through aggregation), provide offers for savings, and engage users with its blog.

This segment is small. is deluding itself (and trying to delude others) when it says its tools are for the masses, and sites like Wesabe are for the hardcore PFM users.

The key behavioral change that will determine the success of the PFM space is not how many dollars in transactions it “manages.” It’s getting more people to become more disciplined about managing their financial lives. There’s no doubt that tools like those offered by the PFM vendors can help people become more disciplined. But this is not an inconsequential change in behavior. Effecting this behavioral change is as tough as quitting smoking, losing weight, or something like that.

Which PFM site or business model will be the one that is most successful in helping to effect this behavioral change? I have my bet, which I won’t share here. But I will say this — for all of’s chest thumping, the PFM game is far from over.

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