Mint.com: Bootstrap Your Internet Start Up

The Triumph of Web 2.5

The well-deserved success of Mint.com, and what other Web businesses can learn from it.

How Savings Savvy Are You?

Do you know the tricks that insurance companies, grocery stores and other companies use to separate you from your dollars? Try this quiz and see just how savvy you are about saving money.

By Daniel Gross

Sep 18, 2009 | Updated: 5:20 p.m. ET Sep 18, 2009

Earlier this week, Intuit, the software company that owns the popular personal-finance software programs Quicken and TurboTax, agreed to pay $170 million in cash for Mint.com, a two-year-old startup whose free tools allow chastened customers to manage their personal finances online. Some critics, such as Web entrepreneur Jason Fried, view the deal as a defeat for upstarts: A wounded incumbent that charges hefty fees for its services is taking out a free competitor for a relatively small sum and increasing its market power. (Last year, Slate's "Shopping" column tabbedQuicken.com and Mint.com as the best online tools for keeping track of personal finances.) But the all-cash deal, which will provide a hefty payday for the company's founders and venture capital investors, represents a triumph of a new business model. Indeed, the sale of Mint.com may be the first big payoff for a Web 2.5 company.
Web 2.0 refers to the generation of companies and services built on the wreckage of Web 1.0.

In the 1990s, hundreds of billions of dollars were spent building the physical (fiber-optic cable, server farms, payment systems, software) and mental (marketing, hype, promotion) infrastructure of online business. Many of the companies that created the broadband ecosystem wound up going bankrupt. But they left behind a platform and user base that could be tapped into by new companies, which could gain scale without having to make massive investments. YouTube, MySpace, Facebook, Skype, Twitter, Salesforce.com, blogging software, and, above all, Google.

The first generation of dot-coms burned through cash rapidly because they had to spend a lot of money building and running their businesses—marketing and advertising to get the word out, not to mention software, consultants, and programmers to run online systems and analyze the results. Thanks to Web 2.0, many of these costs have plummeted. Many of the basics are now essentially free, which means a business built on the infrastructure laid down by the first two generations of Web companies can gain scale on a shoestring budget, all while giving away its products and services for free. Call it Web 2.5Yesterday, at a panel I moderated in San Francisco, Donna Wells, Mint.com's chief marketing officer, stunned a room full of digital marketing pros by noting that she really didn't have much of a marketing budget. Mint.com has gone from zero to 1.5 million users in two years with no ad campaign, save a mid-five-figures sum spent on search engine terms. Rather than purchase traffic, it has pursued the same type of strategy that food trucks and online magazines do: Using free social media and piggybacking on popular new communications technology. Mint.com has more than 36,000 Facebook fans and 19,000 Twitter followers, a well-trafficked blog, and a popular iPhone application.

Mint.com, which advises customers on how to pinch pennies, does some penny-pinching of its own. It uses Wordpress (free) to run its Web site and blog. To analyze traffic partners, conversion rates, and other essentials of an online business that generates its revenues through lead generation, it uses Google analytics (free and sufficiently simple that Wells' marketing staff can use it without the help of software experts). Wells referred to a bunch of other services it uses to keep tabs on its site, such as ClickTale and Crazy Egg and Compete, as "virtually free"—costing a few hundred dollars a month. Mint.com's main market research tool is Zoomerang, which helps companies conduct online surveys and collect user feedback. The cost: about $700 per year.

Mint.com has benefitted from a cultural shift as well as a technological one. During the free-spending housing bubble, a Web site that encouraged people to manage spending, comparison-shop, and save was definitely out of step with the prevailing mood. But once the financial and housing markets tanked and the nation went into recession, the zeitgeist shifted. Shrinking top lines have caused people to focus on the bottom line, and the savings rate has spiked. Third homes and luxury goods are out; coupons and growing your own vegetables are in. Saving is the new borrowing. Thus considered, Mint.com, which launched in September 2007, timed the market perfectly. It hit the Web at a time when more Americans suddenly had the time, inclination, and motivation to manage their financial affairs more prudently. And it gave them a way to do it without having to spend a dime.

Misner: Using small actions to get big results

Ivan Misner: Networking

Use Small Actions to Get Big Results

When it comes to creating relationships with other companies, take a long-term approach.

By Ivan Misner | December 03, 2008

Recent Articles
By Ivan Misner

I was recently speaking to a friend of mine who's a partner in an international consulting and training company when we discovered we had a mutual acquaintance--a bestselling author and fairly well-known speaker.

In our discussion, we found out he'd contacted each of us individually to see if there were any possibilities for some type of strategic alliance with his company and each of our own, individually. We were both open to the possibility but couldn't see an immediate and dramatic way our companies could link with his and undertake any specific projects at that time. We were both a bit amused to then discover that we were summarily "dropped" from his radar after that.

We sensed he was looking for that one big alliance that would help his company soar to the next level. Ironically, we'd had the same type of phone call with each other just 18 months earlier. We had come basically to the same conclusion: There was nothing on a grand scale that we could do together at that moment. The difference, however, was the rest of the story.

You see, we agreed to stay in touch, and we did. We connected several times over the year and met in person as well. During that time, we gradually found some simple ways to help each other and slowly enhanced the relationship. This was a sharp contrast from the third party we'd talked to individually. We both felt that when this person didn't see any big payoff, we became persona non grata with him. On the other hand, the two of us found ways to help each other gradually and still continue to build our relationship.

We came to the conclusion that most people who are successful at networking and creating strong strategic alliances view the process as a series of small actions taken with many people to create a long-term positive growth for their companies. The process is more of a marathon than a sprint. Throughout the race, you form alliances and help each other in what may seem like little ways over the long haul, but small actions over time can create big results.

Here's another real-life example of a scenario in which two companies reached out to me and my company to try to achieve a strategic alliance:

The first company, which shall remain nameless on the grounds that it likes to slam folks it doesn't approve of in the media, contacted me. Its introduction was akin to "Glad to meet you--let's get married!" I really got the sense from this company that it wanted to give me the privilege of sharing my entire database of contacts with it based on who it was and how amazing it would be for me to even say I had stood in its shadow. Get the picture?

When I explained our corporate philosophy and my own personal belief system that deepening a business alliance and building a relationship with a business partner took time and effort before getting to the "let's get married" stage, this company abruptly ended the call and--I imagine--moved on down its computer-generated list of businesses to call.

By contrast, here's how a second organization in the same business approached the same issue: The owner himself contacted me and started the conversation by asking what our corporate plans were. I shared with him what our overall goal for growth was over the next five years. The next statement from him was, "We want to help you achieve that!"

From there it went from "Glad to meet you" to "Let's get to know each other better." He then shared with me that he had ideas that could help us achieve our corporate goal and help our members perform better in business at the same time.

When I explained, as I had with Company X, that our philosophy as a networking organization was one of mutual cooperation and that our belief was that anything really of value to either of us would take time, he completely got it.

Our relationship has developed organically, and we now have a strong strategic alliance with the organization based on getting to know each other and working with each other gradually.

I'm not sure how Company X is faring; I don't hear so much about their program anymore. I wonder why.

Looking back over two decades of building an international company, I can clearly see that no one person or company brought something to the table that launched my company to the next level. Instead, it was the cumulative effect of many people, many strategic alliances and many well-nurtured relationships that over time catapulted my business higher than ever imagined in the early days. Each contact, each opportunity to reach out to each other and each mutually-beneficial activity served as just one more spoke in the wheel as we rolled up the hill toward success.

Called the father of modern networking by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the world's largest business networking organization. His latest #1 bestseller, The 29% Solution can be viewed atwww.29PercentSolution.com. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training compan. He can be reached atmisner@bni.com.

The Key to Networking Building long-term relationships based on trust will help open the door to others' prime networks. By Ivan Misner | February 26, 2007 Recent Articles By Ivan Misner When you tell entrepreneurs that relationships are the key to developing a personal and professional network, they often smile and acknowledge the concept without fully appreciating it. Let me put this notion into perspective. Imagine you're standing in a large room full of people, and I ask everyone to pull out their key rings. Visualize everyone holding up the keys to their house, their office and their car as I ask everyone to show them to the room. Now here’s my question: Would you hand over your car keys to a perfect stranger? What about those to your office or home? Of course not! Now instead of a key to a car or a home, imagine you have a key that opens the door to an important relationship with a colleague that another person would like to connect with. Let’s say you hold the key to this relationship, but you don’t know the person who's asking for it. Would you give it to them? Of course not! Why? Because when you give a referral, you give away a piece of your reputation. If it's a good referral, it helps your reputation; if it's a bad referral, it hurts. Intuitively, you'll only hand over the keys to someone you know and trust. What I love about this metaphor is how it works on two levels. First, you’re not going to hand over the keys to a relationship until you know a person well. But more important, others don’t even know what keys you actually have until you trust them enough to tell them. It's not just you; nobody is willing to hand over the keys to important relationships until they know and trust the person asking. Unfortunately, when networking, some people expect perfect strangers to hand over the keys right away. Take a look at your referral partners. Would it surprise you if they had keys to referrals they're keeping in their pockets until they trust you with them? It shouldn’t. So how do we begin this process of exchanging keys? It all comes down to establishing credibility with your referral partners. I've seen many people who think networking is about meeting people and asking for business right then and there. That’s it. They meet someone and focus on telling them what they need or what kind of business they want. It’s like saying, “Hello, my name is Ivan. Let’s do business.” Effective networking is about building relationships with others who can refer you once they've come to trust you, have confidence in you and feel loyal to you. This truly is the key to networking success. And this process takes time. This isn’t a get-rich-quick scheme. If there were a single networking concept I had to identify that most entrepreneurs just don’t get, it would be building relationships over time. They listen, acknowledge its importance, then ask about the best way to close a deal when meeting someone for the first time. The short answer is, you don’t. OK, everyone has that one fluke story about meeting someone for the first time and ending up doing business, but that’s not the norm. The norm in successful networking is building a relationship to generate long-term referrals. I think you'll be astonished at how powerful this concept is when put into action. Think of it this way: When you get to the place where you can, without hesitation, hand over your physical set of keys to someone, you'll be in the best place possible to begin asking for keys to their relationships. Called the father of modern networking, Dr. Ivan Misner is the Founder of BNI and the senior partner for the Referral Institute. He has written nine books, including his recently released New York Times best seller Truth or Delusion? Busting Networking’s Biggest Myths.