How do you start a small online business in a sector with ginormous competitors, one of whom is Microsoft, and then flip it for $170 million dollars just three years later? Just ask Aaron Patzer, founder of financial management service Mint.
Patzer founded Mint when he was 25 in 2006, charging head-first into a field dominated by Microsoft Money and Intuit’s Quicken. He later sold the company to Intuit for a hefty sum. The name of the game for Patzer was simplicity.
“Mint was born of a personal frustration of using personal finance tools which entailed way too much work. Maybe there was a problem when you have to go through 50 screens of setup,” said Patzer in an interview with Pluggd.in, AKA the “TechCrunch of India.”
Patzer’s startup began gathering customers before the service even launched. About 9 months before launching, the Mint team began writing a simple personal finance blog. They used it to collect 20,000 email addresses, which they then used to get people to place Mind badges on their own sites. Essentially free banner ads. The company also got a publicity boost by launching at the TechCrunch40 conference.
The Mint product itself emphasized security and polish. “Trust is an emotional thing – you know if you are walking down a street in the night – the person coming from the opposite direction is a threat or not. Same thing with websites. We have a pixel perfect website that added to the trust,” said Patzer.
When the company started, Patzer had only $50,000 to work with. Not enough to hire many employees. So he turned to people he knew personally. He convinced his first employee, a hiking pal named Matthew Snider, to work for 3,000 a month, and also gave him his old car.
Patzer had his elevator pitch declined by 50 different people before finally landing some proper startup funding from Josh Kopelman of First Round Capital. Most were reluctant to put money into a personal finance startup, but Kopelman was sold after seeing a hacked-together demo product.
Patzer’s advice for other startups: “Solve a real problem and create real value.” In other words, find a need and fil it in such a way that’s valuable to people. Also make sure you have a wide enough audience, and make sure you have advantages over competitors in the field. (Mint filed 5 patents for data categorization systems).