First mover advantage? Ask Kublax…

by Saul on 16 February 2010  |  5 comments
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Kublax today announced that it was moving in to administration, and so disappeared the first PFM (personal finance management) site the UK had. So what exactly did go wrong?

Kublax today announced that it was moving in to administration, and so disappeared the first PFM (personal finance management) site the UK had. So what exactly went wrong?

PFM is big business in the US, with sites such as www.mint.com, www.moneystrands.com, www.justthrive.com, all having generated large numbers of customers. The problem is, they are all, how do you put it, "samey".  

www.mint.com was the big success story, having sold to Intuit late last year for a significant sum. However, the feeling persisted that mint.com were simply the best funded & nicest looking site, and so they got the critical mass. All of these sites use yodlee.com as their technology partner. Yodlee themselves started with a B2C offering, and realised just how difficult it was to build a brand around this functionality.

No doubt http://www.kublax.com/ felt that they could do "a mint.com", be the first significant mover and try and drive their customer base to a critical mass, perhaps, no matter what the cost.

The tech press in the US championed mint.com, and the tech press in the US is more influential on consumer press than in the UK. Kublax were never really a tech story here, because the story was only that they had replicated something already done on the other side of the pond.

The other problem with the UK market is that PFM appears to be of less populist interest. We launched our own, Yodlee partnered PFM solution late last year. The feedback and interest has been very interesting. Customers generally fall in to two camps, the ones who can instantly see the benefits (everything in one place, categorise spend, budget better) and the ones who can see the benefits but are concerned with the security. However, it is clear that this is not of interest to everyone, it does not seem to have the same wow factor that it had on launch in the US.

All of the big UK personal finance sites have looked at the Yodlee offering, and for one reason or another discounted the idea of launching at the moment. Why? Well, the model is not instantly appealing to the large comparison sites, because you pay licence and then user payments for providing the service. The comparison industry is based on a funnel of value extraction, and so PFM is an added complication to this model. When you cannot make money from a service, you lose money. When the funding stops, it is very difficult to get a commercial model in place. You can charge, but this is an industry based on being free. Even mint.com doesn't make any meaningful money from their 800K (upwards dependent on where you get your info) customers.

So, it pretty much leaves moneydashboard.com and ourselves in the UK market. Although moneydashboard are still yet to launch. We had a strong business prior to looking at PFM, and we feel that the benefits of PFM are a great value add for our customers. We have launched the service in "perpetual beta". Our goal being to stand up the basic elements of PFM (aggregate, categorise & budget) and then to iterate on that offering based on customer feedback. We felt that if you lock yourselves in a room for 18 months and produce something in a waterfall fashion in a market which already has standard bearers then it's not going to be fruitful.

We have driven very strong numbers in January (our first full month on launch), with over 2,000 customers signed up and using the service. Feedback has been intense, with great commentary from our customers to what they want to see. The next challenge for us is to integrate the offering with the other aspects of our business, i.e. knowledge, product selection & goal setting.

Kublax were the UK pioneers, they probably took too much development pain and were the first UK Yodlee client. The service is not faultless, many UK banks are not listed, and customer service is passionate and powerful when you are dealing with peoples banking transactions. I think these reasons, coupled with the hyper competitive UK distribution battle in personal finance probably undid all the efforts that had come from the Kublax team.

We wish them the best in the future.