Wesabe Steps Out

Over a year ago when we first started thinking about personal financial management tools on the web, I had this OMG moment when I realized that a web based personal financial management service was going to be way more disruptive than just putting Quicken on the web. It was immediately obvious that the data buried inside everyone’s personal spending patterns could be an incredibly important asset. It was equally obvious that it was very personal and sensitive data and any company that wanted to aggregate that data would need to have a great deal of respect for their users privacy and for their ownership interest in that data.

Our portfolio company, Wesabe, made two announcements yesterday that demonstrate both how valuable this data can be and how much they respect their user’s rights to the data.

I’ll talk about the second announcement first. The Wesabe Value Engine is a turbocharged Tips tab that incorporates anonymous, aggregate consumer spending data to help you make better decisions. How often have you stood in line waiting to pay the auto dealer before picking up your car and wondered just how much more you are paying than you should be? All you really want to know is how much you are paying relative to everyone else in your neighborhood, but until now, there was no practical way to aggregate that information and make it available to consumers. Wesabe anonymously aggregates spending data from thousands of “neighbors” so you can now know that, on average, a service visit to the Weatherford BMW dealership costs $700 more than a visit to a visit to Bavarian Professionals and yet users rated Weatherford 17 on a scale of 100 compared to the independent shop’s rating of 96. Aggregating data on spending patterns and satisfaction for the hundreds of merchants and service providers we depend on in our everyday lives, and making that data available to consumers will empower consumers to make better choices with their money.

Looked at from a distance, some might say that we already have thousands of review sites on the web that let us rate everything from grocery stores to plumbers, so why is this fundamentally different? The difference between user contributed reviews and actual user spending data is in some ways obvious and in other ways subtle, but profound. On the obvious side, the first thing Joshua Schachter, the founder of del.icio.us said to me, when I mentioned the idea was “how cool – you can’t spam it”. There are lots of reasons why someone might slant a review, but how many folks would buy more shoes just to promote a shoe store. The subtle distinction is more interesting. Someone could give a fancy, expensive restaurant a five star review after visiting only once. That review will be helpful to some, but others might find it a lot more useful to know that the anonymous reviewer of the five star restaurant ate there only once, but visits the unpretentious Italian place down the street five or six times a month. Wesabe freely admits the tips are not perfect, but they are already useful in the many markets where the company has a concentration of users and it will get better and better as more users contribute more data.

I could go on and on about how valuable this data can be. There are a number of other in Wesabe’s post, and there will be more and more as the site grows, but I want to mention the other announcement they made yesterday, the Wesabe Automatic Uploader. This new service makes it possible for a user to input their credentials once and have their accounts automatically uploaded into Wesabe. Now, whenever a user logs into Wesabe, their account data will be there and up to date. Users have been asking for this level of convenience for a while. It has taken a long time because Wesabe’s ment to user privacy and control made it impossible to use a third party aggregator. Only by investing the time and money to build their own aggregation technology could they meet the ment outlined in their Data Bill of Rights and assure their users that no other provider would store a copy of their data and that if they ever chose to leave the Wesabe service, their data would leave with them. Building their own uploader also allows Wesabe to offer an API, so that the consumers who choose to contribute their data won’t be entirely dependent on Wesabe for innovative new services based on that data.

With the announcement of the new Wesabe Tips tab, the company has enabled consumers to anonymously share spending and satisfaction data, shifting forever the balance of power between merchants and consumers in favor of consumers. By waiting until they could offer the convenience of automatic uploading without compromising their users ownership of their data, they have reinforced their reputation as a trusted partner.