The Road to Entrepreneurship...

Last week, I logged onto Mint.com (as I do every morning) to get a snapshot of my finances. While reviewing posted transactions, I noticed a new icon on the top right corner of the transaction summary page - “+ Add a Transaction.” Mint - the free online personal finance service - now offers account reconciliation. You can now manually enter transactions as they occur and Mint will automatically reconcile these transactions after they post to your account. The lack of this feature has been a major complaint for some fellow Mint users to the point where it detracted such users from using the service. While I understand the complaints regarding this missing feature, I am well satisfied with Mint. For me, the benefits that Mint provides outweigh the lack of features such as transaction reconciliation.

Mint, the brainchild of Aaron Patzer, solves the long-standing problem of easy and free personal financial and budget management. It provides a simple solution to a seemingly simple question that most of us have - How much did I spend this month, and on what? Launched on September 2007, Mint attracted more users than any other online solution within its first year, boasting over half a million people opened accounts. Recently acquired by Intuit - the makers of Quicken - Mint continues to flourish as the fastest growing service of its kind.

The major benefit that Mint brought to consumers is that it allowed anyone with an Internet connection access to manage and understand their finances. Mint is able to offer the same services offered by the Quicken (Intuit) and Microsoft Money but for free and securely through a web browser. Personal money management has become demystified and such a benefit definitely contributed to Mint’s early success. Important things to note are the multiple features that make up this benefit. Mint implemented features such as transaction categories, email alerts, monthly spending charts, graphs and so on… to deliver such benefits to the consumer.

There is a relationship between features and benefits. That is, benefits are made up of features. The features that go into a product or service should all serve to provide a benefit because when it comes to products and services, it appears that most consumers look for benefits NOT features when making purchase decisions. Patzer and his advisors recognized this and (I think) focused their efforts on implementing features that provided the most benefits to the consumer - which in the end is all that should matter.

Last night, I was part of an interesting discussion. A discussion based on innovation within any industry. Clayton Christensen in his book - The Innovator’s Dilemma - introduces two scenarios that can happen when it comes to innovation - innovation through sustaining technologies and innovation through disruptive technologies.

Sustaining Technologies

Innovations through sustaining technologies are innovations that “foster improved product performance.” Such innovations are generally more common since they easier to get funded. There is generally available data to support ideas and the transition to the consumer is generally easier. Consumers are already familiar with the product or service, so they *will* welcome your innovation right off the start. Look at the Apple iPhone - the smartphone industry had been a mature market before the summer of 2007 (The release date of the iPhone). Nokia and Research In Motion (RIM) were on top of the smartphone market with their N-Series and Blackberry smartphones. These smartphones could do email, mobile browsing, and messaging quite well. However, with the launch of the iPhone this industry was shaken up. The iPhone brought along dramatic improvement to performance, and ease of use of smartphones into the market. Since then, Apple has able to steal a significant market-share from the RIM and Nokia and also revive the smartphone industry.

Disruptive Technologies

Innovation by disruptive technologies on the other hand rarely do emerge, but when they do, “they bring to the market, a very different value proposition than that that had been previously available.” Such technological innovations are termed disruptive because upon maturation, they can change the industry. New customer segments emerge, and the current industry leaders lose their reign. Start-ups or mature companies with the start-up fight usually bring about such innovation. A well-documented example of innovation driven by disruptive technology is that of online music sales and distribution. Apple introduced the iTunes music store in early 2001. This store allowed consumers to purchase single songs digitally and play them on their iPod. This was disruptive because until then, the giant record stores like FYE, and Sam Goody sold CDs and consumers did not have the option to buy single songs off album. The maturation of iTunes and other online music stores such as Rhapsody changed the way the music industry distributed music to consumers. As a result, the record stores saw their profits reduced to the point that it took some of them out of business.

So given these two scenarios - which would you go after when thinking of ways to innovatively solve problems in your industry? Are you going to continue improve existing technology to provide more value to customers or introduce a whole new technology that will change the way your industry operates? Either way, I do not think you can go wrong. The fact of the matter is that you are still innovating!