The Ever-Elusive Personal Finance Manager

I worked as a developer on the Microsoft Money team for a little over two releases (Money 99 - Money 2001).  During my time on Money, it made its transition in the eyes of the press from an inferior Quicken wannabe into what reviewers would agree is a superior product (the dramatic improvement wasn't due to me, of course -- I just happened to have graduated in 1998).  Despite this, I ultimately left the team because I was frustrated by the direction that Money was being led.  Instead of making Money into what we knew users wanted, we were busy trying to match Quicken and meet MSN goals.  This is the back story regarding what eventually led to my departure.

Time to take a break for a shameless disclaimer.  What follows are my own opinions and perceptions of what happened.  The facts I present may be completely wrong.  I may discover years later that I had a grapefruit-sized tumor in my brain during my years on Money.  And regardless of what I say below, the Money team was one of the most enjoyable, cohesive set of folks I've ever worked with.  And I still love the product, warts and all.

The majority of consumers who buy computers claim that personal finance management is one of the top three reasons they are purchasing a PC.  They've been claiming this for more than a decade.  But only somewhere around 2% of consumers end up using a personal finance manager (“PFM”), with Intuit Quicken and Microsoft Money dominating the market.  Both products have been around for -- you guessed it -- more than a decade.  This dramatic disconnect between consumer demand and actual market penetration is mind-boggling.

Take a guess at what percentage of consumers launch Money ever again, after running it only once.  You'll need to remove a digit from whatever percentage you're currently guessing.  It's seriously that low.  Granted, most copies of Money are actually pre-installed by the OEM on consumer machines, so you're not exactly dealing with a captive audience.  But we're still looking at a huge discrepancy between expressed consumer desire and actual consumer behavior.  There's a lot of money to be made if we solve this mystery!

From Money 99 to Money 2001, the product suffered from two major debilitations that ultimately ended up in disappointed customers:

  1. Competition with Quicken.  Don't get me wrong -- I'm all for competition in software.  The dynamics of competition with Quicken, however, created an environment that ultimately did not serve customers.
  2. Money's subjection to MSN success metrics.  Money is part of the MSN organization.  During the heady dot-com days, when all reason was tossed to the wind, Money's success was measured against the same metrics that other MSN properties (read: “websites“) used.

We'll need to take these one at a time.


Competition with Quicken

Before all The HatersTM spam my inbox, let me go on the record saying that competition in software is almost always good for the consumer.  After all, who can forget the BBS days, back when ProCOMM and QModem were suddenly assaulted by Telemate, a multi-tasking DOS-based modem program written by -- brace yourself -- one Japanese guy.  No doubt in my mind that competition breeds innovation.  (Whatever happened to Telemate's author, anyway?  Unbelievable what he achieved. With Telemate, you could download one game, unzip another, and play hangman all at the same time -- I kid you not.)

Brief refresher on how the PFM market works:  consumers don't buy PFMs for themselves.  They don't.  Well, maybe three of them do.  But the bulk of the PFM market resembles two other markets:

  • Deer Hunter.  What?  Not familiar with the multi-platinum PC game title that has sold gazillions of copies after 5+ versions?  It's a game where you shoot deer.  Seriously.  Stay downwind, keep quiet, the whole works.  Anyway, the point is that you don't buy Deer Hunter for ~yourself~.  Heck no.  You buy it for your husband.  For your dad.  For some business client that just signed a billion-dollar deal with your firm.
  • Anti-virus.  Your parents' Pentium 60 still has the same anti-virus program that originally came bundled with their PC.  And it's probably got Money 97 on it.  Enough said.

The reality of the PFM market is that it's completely driven by journalists' reviews of the software.  Don't know which PFM to buy dad?  Check the PC Magazine review.  Want to know which PFM to pre-install with your new line of consumer PCs?  Read the Wall Street Journal review.

Rewind back to 1998.  Quicken led the PFM market, and had pretty much been spanking Money with thousand dollar bills.  Intuit, Quicken's parent company, called the shots.  The only chance Money had to survive was to win reviews.  Reviews were everything.  All hands were on deck to match Quicken feature for feature... there was a veritable cover-of-the-box bullet-point shootout at the PFM Corral.  Direct from the Money 2001 Deluxe box:

  • “Track employee stock options!”
  • “Shop for insurance through MSN MoneyCentral!”
  • “Gain insights into IPOs!”

You'd think Money users were all upper-middle class technocrats.

Fact of the matter is that we knew from years of usability studies that what users most wanted was a simple system that helped them do the most basic of things.  Track a monthly budget.  Get out of debt.  Figure out what's left in the checking account.  Try as we might to improve these things, we couldn't invest seriously in fixing these basic user experiences.  What if Quicken were to come out with support for calls and puts?  Indeed, that too came to pass, and reviewers latched on to the fact that the new Quicken supported call and put options.  What followed was a Reagan-esque Features Arms RaceTM.  It was all you could do to close your eyes, hang on, and add yet another feature.

There was simply neither interest nor leeway to improve the usability of the core features of Money.  For the business to survive, we had to match Quicken move for needless move, feature for futile feature.  It's little surprise that users flocked to online bank websites in preference to using Money or Quicken.  What?  My current bank balance, without entering any transactions manually?  Single-click bill payment?  Simple budget categories?  Sign me up!


Money's Subjection to MSN Success Metrics

Microsoft Money is considered part of the MSN family of products, and has been for many years.  It was thought that the consumer products division, of which Money was a part, should belong in MSN.  As a property of MSN, Money's success or failure was judged by execs using the same metrics as MSN's websites.

You might have missed that.  After all, this article's kind of long.  So let me say that again.  Money's success or failure was judged using the same metrics as MSN's websites.

Metrics like minutes viewed per month.  Like ad revenue.  Like click-through.  Stickiness.  I am not making this up.

I sat through meetings where we were asked to research ways in which to increase the amount of time that users spent in MoneyIncrease the amount of time!  Users always ask for the exact opposite.  Users want a Navy Seal relationship with Money -- get in quietly, do the job quickly, leave no comrade behind, maybe smoke a little afterwards.  We got busy making Money into a needy girlfriend.  “Let's make it so fun and engaging people won't want to leave!”  Users would rather be scheduled for a root canal than to spend another minute trying to balance a checkbook.

A goal was set to increase ad revenue by 600%.  At this point in time, during the heady dot-com days, Money was already filled with banner ads.  It even installed several icons on the desktop hawking E*Trade and other bygones.  How were we supposed to increase the revenue another sixfold?  Someone suggested showing the banner ads even faster -- essentially increasing the “frame rate,” if you will.  Click-through infected the product similarly.  Push MSN websites!  Get 'em to click through!  We get referrals!

It was 1999.  Twenty-year-olds were millionaires.  Anything was possible.  Money was judged as a portal, so a portal it became.  Thing is, no one wanted a sticky, ad-serving, time-consuming personal finance application.


Silver Lining

Fear not!  The story has a happy ending!  After all, Money still holds a special spot in my techie heart.  I wouldn't leave it hanging.

Money is no longer laser-focused on beating Quicken.  We realized that the PFM pie is much bigger than just getting upper middle class folks to read reviews and buy Money for their favorite uncle.  There's now much more focus on getting simple things done.  Integration with MoneyCentral is going well.  The web forces you to simplify.  And in personal finance software, simple = good.

Funny enough, the other reason the arms race with Quicken is no longer as interesting is that both sides have lost some motivation.  Starting with Money 2002, Money has “won“ more reviews than Quicken.  It's often thought to be the superior product by key reviewers.  Turns out Quicken's not that interested in beating Money either.  Intuit's business is founded on taxes and accounting.  Just look at the 10-Ks -- TurboTax and QuickBooks dwarf any revenues that Quicken brings in.  It's not at all a stretch to say that Quicken's raison d'etre is to drive TurboTax sales.

And what of treating Money like a web portal?  Fortunately, the bubble burst and all sins were forgiven.  Money is no longer evaluated on things like minutes of use per month.  Sanity has returned and all is well.