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"just pressing the cmd and dot keys :)"

27 years old

United States

Last Login:

   Contacting Alex

   Alex's Interests
General Internet, Movies, Reading, Football, Culture, Tesla, Philosophy, Running (kinda), Finding New Food, Weight Lifting, Hiking, Dogs, Travel

Music Bands: Sum 41, Fall Out Boy, GreenDay, Weezer, Blink 182, Linkin Park, Skillet, Daft Punk, Simple Plan, Three Days Grace

Solo Artists: Post Malone, Kanye West, juice WRLD, B.o.B, Logic, blackbear, ScHoolboy Q, Kendrick Lamar

EDM: Daft Punk, ODESZA, Party Favor, deadmau5

Movies Films: Iron Man, The Dark Knight, 300, Anchorman: The Legend of Ron Burgandy, Crazy Rich Asians, Ted, The Social Network, Wolf of Wall Street
Television Mad Men, Silicon Valley, Billions, Breaking Bad, Halt and Catch Fire, Prison Break
Books Non-Fiction, How-To, Startups

   Alex's Details
Status: Married
Here for: Blogging, Friends, Networking
Hometown: West Palm Beach, FL
Body Type: 5' 10"
Sign: Aries
Smoke / Drink: No  /  No
Education: I'm an open book
Occupation: CommandDot

   Alex's Schools
University Of Florida
Gainesville, FLORIDA
Grad Year: 2015
Student Status: Alumni
Degree: Bachelors's Degree
Major: Finance / Information Systems
From 2011 to 2015

   Alex's Companies
San Francisco, California, US

Even Financial
New York City, New York, US

Birch (acquired by Even)
San Francisco, California, US


Some lessons learned from building a personal finance startup:

Monday, Aug 10, 2020 

Current mood:  helpful
Category: Fintech

A few weeks ago, I shared a thread on Twitter that went semi-viral (2.4k likes!) It was called 'some lessons from building a personal finance startup' and it was about my experience spending 5.5 years building a personal finance app – Birch – that was ultimately acqui-hired.

Before this post, I always received lots of requests from consumer fintech founders asking for feedback, but it's gotten even crazier since this tweet made the rounds.

I don't have the time to meet with every single person and give feedback, so I'm sharing my tweetstorm here to use as a resource – most of my answers to common questions are in this thread:

Some lessons from building a personal finance startup:

Building a personal finance app is a lot harder than most people realize. Lots of handwaving on Twitter about building the next Mint, but even with Plaid/Yodlee/etc you have lots of things to "fix" before you can even launch

Things such as normalizing merchants (making sure Uber1237ahd72 returns as Uber and UberEaaaats092220 returns as UberEats) and categorizing (is Uber ridesharing or taxi or travel or ???) are hard and have to be solved before launch

Then you deal with the issue of different FIs returning different lengths of transaction histories. Chase used to return only 3 months, as an example, while Amex would *sometimes* give us 2 years of history, depending on the account

So when you're trying to analyze someone's transaction history to make recommendations, you've got a whole clusterfuck of inconsistent data across providers. So what do you? Take the shortest historical range across all accounts and project out a full year? Or ??

Bank connections also break constantly. Be prepared to deal with endless customer support tickets asking why new transactions aren't showing or why the app has asked them to reconnect Barclays 17 times

It's also really, really hard to make money as a personal finance app.
You have a few options:

  • Charge a monthly fee to your users
  • Push for affiliate revenue
  • Offer your own financial product (like an installment loan or debit card)

The problem with "charging your customers " is that it's awkward to ask users to pay money when your entire value prop is saving them money...
Some are doing this in other ways - $10/mo for coaching or $xx/mo for additional bank connections. I'm not sure what conversion is

Every PFM then has the magic 'aha' moment. If we make the _best_ recommendations people will open up new accounts through us and we will get paid. Win for the customer, win for us, win for the banks, right?
No, wrong

99% of the banks you actually want to partner with - Chase, Amex, Capone - don't care about the extra 25 or 50 accounts you're going to drive to them per month when you're just getting started.
So you have... 2 options

Either 1) partner with shitty banks with bad products because they will work with you or 2) make an amazing recommendation and then send your user to another affiliate site to have to find and click that product _again_ - a bad experience

3) is probably your best bet if you have the capital and partnerships to actually launch a product, like a debit card or savings account. Your PFM becomes user acquisition for your product. But very few startups end up being able to do this and this comes with its own challenges

The other thing about building *anything* in the PFM space is that it becomes really fucking expensive to acquire customers. Everyone is fighting over the same ad real estate.
You'll likely spend upwards of $15-$30 to acquire a customer and get them through your funnel

Speaking of acquisition, enjoy a nice subset of your users dropping off during the signup flow because they can't remember their bank logins and passwords.
No one remembers their logins and passwords

The last thing I'll say is if you are launching a PFM, expect your costs to be much higher than you anticipate. Plaid and Yodlee are fantastic businesses and their APIs are expensive.
I guarantee you'll consider building versus buying at some point early on

Between the cost of building your apps, API access, and the difficulty of making money, you better have some really innovating acquisition model or monetization model or you're going to have a bad time.

Between the cost of building your apps, API access, and the difficulty of making money, you better have some really innovating acquisition model or monetization model or you're going to have a bad time.

Good luck!

©2020 I ripped this from Myspace.
Glazed Donut