Business Models 2.0

If you use, or have heard of, Mint.com you may have wondered how they make money. The website offers a sterling service, using fast, elegant and patent-pending technology and charges absolutely no money at all to its users. But without user subscriptions or even Google Ads, it would be hard enough to finance their server costs, let alone an entire payroll.

So how do they make money? First of all, Mint differentiates between its users and its customers.

Mint.com users:

• Mint users are people who visit the website, sign up and import their financial data.
• For these people, Mint has created a compelling value story in the form of an online application that radically simplifies the way people manage their money.
• The value story is compelling because for many people, personal financial accounting is often left to chance, with ‘ugly’ surprises arriving with the quarterly bank statements.
• Therefore, the possibility of having a constant, aggregated and accurate bird’s eye view of your spending does add tangible value for many people.

Mint.com customers:

• Mint’s customers on the other hand (customer = he who pays you money) are not its users. They are the companies who want access to the users and are willing to pay something for it.
• In effect Mint works a little bit like a price comparison site, where people go to check out different offers, choose the most advantageous one, and the comparison site gets a % from the referral.
• The difference however is that Mint is not just delivering “eyeballs” to its customers. It is delivering a user who is armed with accurate knowledge of her spending and, by virtue of being logged in to the service, is in the right frame of mind for a relevant offering.

The Business Model

1. Create a niche service that delivers strong value, in this case knowledge. (‘Niche’ here does not refer to a demographic segment but to the ‘role’ a particular user takes, i.e. when they’re managing their money.)
2. Build trust and community. (People have been recommending the service.)
3. Recommend stuff to that community that adds even more value (cheaper insurance for instance) and get paid by the seller for doing so. It’s a little bit like being an affiliate, but unlike most sites that simply ‘pollute‘ the internet, these guys have permission from their users to do so.

Create your own compelling value story using Smarter Start.