The Mint.com founder now runs a big part of Intuit and invests in startups on the side. Here, his take on Jack Dorsey's Square and the one investment on which he's glad to take a pass.
If you’re not one of the 5.6 million active users on Mint.com, we suggest you give it a long, hard look, because even the most business savvy can benefit from its services, whether it’s saving up for a summer vacation to Hawaii or receiving email reminders when users pass self-imposed monthly allowances. Mint makes personal finance a bit less painful.
These days, 30-year-old founder Aaron Patzer has more on the brain than just Mint, which was acquired by Intuit in late 2009 for a reported $170 million. As Intuit’s Vice President of Personal Finance, he helms a $130 million-a-year division and a staff of 100 that handles brands like Quicken, Quicken Bill Pay, and PayTrust.
We caught up with Patzer earlier this week at Intuit’s Innovation Gallery Walk event in Manhattan, where he reflected on the last year or so post-Mint.com acquisition and offered up some personal savings tips as tax day fast approaches.
Fortune: It’s been about a year and a half since Mint.com got bought by Intuit. How has the transition been from running a startup to being a part of a larger entity?
Patzer: Well, Mint has done very well. Part of that is because — to Intuit’s credit, they’ve left us largely alone in some sense from a management perspective and what not. Like I said, to their credit they put me — I was 28 at the time — in charge of the entire personal finance division. They gave me the power I needed to make all the changes that I wanted. I would report in every couple of months — here’s how we’re doing, here’s our strateg — but it was never you have to do some product like this. They sort of left us alone to continue what we’re doing.
It was actually only a couple of weeks before the acquisition went through that I knew I was going to take over this whole division. And then you have Quicken with like a 90% awareness over the population that you’re all of a sudden in charge of. And actually, it was a product I hated so much that I started Mint.
That’s kind of ironic.
Yeah, it is. Now you get to fix the things you don’t like. I said, all right, I’m going to take all the things that I learned in Mint and apply them as best I can to the desktop product. The 10-page setup process is now two pages. … We redid the information architecture which sounds like a weird thing. It’s not exactly a feature, but it’s how do you navigate the product. It was so complex — so many buttons, so many reports — it was impossible to find your way around it. Now, it’s much simpler.
How much of a challenge was it coming in? Were people like, who is this guy and why is he changing so much of the product?
Well, we removed about half of the [staff] before I got there my first day, so that helped. We were down to the very best people. I probably had four three-hour sessions where I went through with all the engineers and the product team. Why is this feature exist? Why does this dialogue box exist like this? Why is this stacked on that? Why did you name this like that?
And they actually had decent justifications for that but it was more like, well, some people asked about that 7 years ago. Well, things have changed, here’s how it probably should be done thinking from the customer mindset.
One big trend Intuit’s catching onto is mobile service with products like GoPayment, that turn mobile devices into credit card and now check transaction machines. There’s another company though in mobile that’s been getting a lot of buzz: Square from Jack Dorsey. What do you think of what he’s doing?
I think he’s great at PR — the company’s received a lot of press. They’ve got a great set of investors, and they have good executives. But I think one of the advantages Intuit’s GoPayments has though is not just on mobile payments but becoming point of sales systems, so not just being able to accept a payment, but also tying all of your information back to the services and inventory you have inside say, QuickBooks. So you’ve tied your payments all the way into your system of record you’ve used for taxes, business insights, statements, that your accountants. That integrated system is where Intuit has an advantage in incorporating more into it.
What’s holding mobile payment tech back?
Well certainly NFC is not in mobile phones, so that would be the biggest hurdle for that, and certainly there are lots of companies vying for a very fragmented market. Until you get it down to probably two, it’ll be hard to get the masses for consumer adoption. You’ll need some good consolidation before it really takes off.
You’ve invested in several startups over the last three years. What are you looking for in a potential investment?
Well, I can tell you about the things that don’t attract me. I actually don’t invest in anything that is social, mobile, deals or ad networks simply because those are areas where there are so many players and so many other smart people in the space, I feel like I don’t have a competitive advantage. So I tend to go after things that are e-commerce, like healthcare. Things that are actually more complex to do and solving a real problem in a big market where there’s nobody else doing what HealthTap is doing.
If you think about photo sharing sites, the mobile photo sharing and social, there’s no competitive advantage, there’s no obvious business model, so I never play with anything like that. I avoid it like the plague. Even though those are the most popular things and other people think that’s silly. Forget it. I don’t have any advantage over others in that area.
Are there any startups you wished you had invested in?
Kevin Systrom of Instagram used to work for us as a consultant in the early days of Mint. I knew him a long time ago. Maybe I could have gotten in there. But with photo sharing, I don’t know if there’s an obvious business model. I don’t think there’s a competitive, sustainable advantage.
These days, all the media’s been talking about whether we’re seeing another tech bubble happen. Are we?
The legitimate part of that was in the sort of boom times — not the late 90s, but mid-2000s, 2005, 2006, 2007. It was doing well. There were about 800 to 1,000 venture capitalists to raise tens of billions in funds, and I don’t think they had enough good companies to put them in. So I think that the categories are over invested in. That’s fundamentally why you get higher valuations than people think are justified.
Any companies you think fit that mold?
I’d prefer not to name names.
So, then which companies are you interested in right now?
I invested in a company called NetPayments. … This company has signed up 6,000 different credit unions and they have a modern web services interface where it checks both sides, both banks, at the same time. It checks to see that you’re the owner of the account, that you have the right amount of funds. It’s instant and it costs 7 cents, basically the cost of ACH or close to it. But with the speed of a wire transfer and the cost of a credit card, a revolution of payments. It’s real time, instant, basically no cost payment.
Sometimes if you search for “side pain male” on the Internet, you’ll come across stuff that’ll make you think, “Oh, my god. I’m going to die.” But what HealthTap is doing is revolutionary. The team has pulled together all of this research and these databases that were in different formats. It’ll ask things like, is it acute or not? Does it come or go? Then it’ll say, all right, based on the fact that you’re not pregnant, this weight, or this age, 95% of the time it’s going to be this, it’s got a 3% chance of being this. It’ll also offer up treatments: this drug is 95% effective, doing nothing will be 50% effective. It’s personalized. So if you’re 20 years older, it’ll give you a different set of actions and stats.
I don’t think people understand how hugely powerful that is.