Guest: Jason Knight - Wesabe
Guest: Marc Hedlund - Wesabe
Host: Irina Slutsky - PodTech
Host: Eddie Codel - PodTech

Irina Slutsky - PodTech
Hi! This is Irina Slutsky.

Eddie Codel - PodTech
I'm Eddie Codel.

Irina Slutsky - PodTech
And, we're here with LunchMeet with Wesabe.

Eddie Codel - PodTech
We're at the Berkeley offices of Wesabe, it like that you guys just launched just a few days ago, right?

Jason Knight - Wesabe
It's correct.

Eddie Codel - PodTech
Okay, and please introduce yourselves there.

Jason Knight - Wesabe
So, I'm Jason Knight. I'm the CEO of Wesabe.

Marc Hedlund - Wesabe
And I'm Marc Hedlund, I'm the Chief Product Officer and we're the co-founders of the company.

Eddie Codel - PodTech
And what is Wesabe exactly?

Jason Knight - Wesabe
It's a Personal Financial Management Website. So, you can think of it as a place where people can anonymously add their personal financial data that you might get out of a bank Website or from credit card company and see all of your transactions much like you would from your bank or from your credit card company, but aggregated in a single place. So, you get a comprehensive view of where you're spending your money. And, then what we do is we match where you spend your money to tips from other users so that we can help you find places to save money.

Irina Slutsky - PodTech
So, clearly the first concern that comes up is security and privacy...

Jason Knight - Wesabe
Yes.

Irina Slutsky - PodTech
So, how do you get around that and how do you assure your users?

Marc Hedlund - Wesabe
Yeah, I come back that.

Irina Slutsky - PodTech
Go ahead.

Marc Hedlund - Wesabe
So, there are few things that we've done to try and make sure that it's secure and private. So, one of them is that, obviously the most private thing is your Bank Username and Password. You don't want to go to some Website and put your Bank Username and Password into that site.

Irina Slutsky - PodTech
Right.

Marc Hedlund - Wesabe
So, we have a little downloadable application called the Wesabe Uploader and that's kind of like that Flickr Uploader that you'd use to upload pictures to Flickr, but we use it to upload just to transaction data (ph) to Wesabe.

Eddie Codel - PodTech
Sounds good.

Marc Hedlund - Wesabe
What we do is we keep your passwords their on your machine and we never send them to the Wesabe server and then the Uploader will go to your bank Website and get your data for you automatically, strip out anything that's identifiable and upload just the transaction data to the site. So, rather than having, Eddie, just shopped here or Irina just shopped here it says, "Hey! User X just submitted these transactions, but the account number isn't there, the username isn't there, the password isn't there."

Eddie Codel - PodTech
So, what's the example of how that's valuable?

Marc Hedlund - Wesabe
Sure. So, one of the things that the Internet is really good at is collecting together information about small decisions a lot of people have made and using that to help other people make better decisions in the future. So, this is exactly how Google works with the search engine. If you link to us and you say, "Wesabe," and you link to us and you say, "Wesabe" and when somebody searches for Wesabe, they're going to get us as the first result because a lot of links have pointed to us as that word. So, a lot of those things aggregating together make the search engine really valuable to other people. We think of spending money as being a similar sort of thing where I go out and I say, "Okay, I need to get my car fixed. Where am I going to get my car fixed?" I go and I ask on a mailing list, where should I get my car fixed? I get a recommendation and then I go and I say, "Okay, I'm going to give this shop my money." When I do that I've made a decision to spend my money at this place.

Irina Slutsky - PodTech
To link to that shop.

Marc Hedlund - Wesabe
Exactly, so, if a lot of people are doing that, and they're doing it repeatedly, then that's probably a good indication that they think that's the best option for them. Now, it could be the best option, like maybe you call that plumber all the time because your pipes are really bad, not because that's the greatest plumber in the world but because you have a big problem that you made first.

Eddie Codel - PodTech
All right, or maybe for some reason that's just the person you've been using for years and...

Marc Hedlund - Wesabe
That's right.

Eddie Codel - PodTech
You just don't know anybody else to go to...

Marc Hedlund - Wesabe
That's right.

Eddie Codel - PodTech
...because you just can't trust that person in a relationship or...

Marc Hedlund - Wesabe
Exactly.

Eddie Codel - PodTech
You've gotten the job done, you might not be happy with it but they do the job.

Marc Hedlund - Wesabe
That's right. So, what we do is we take all of the transaction data that we have which we consider to be an implicit recommendation, and we add a small amount of the explicit recommendation which is a rating. So, we say, "how did you feel about this?" When you left this place, what was your relationship to this merchant? Where you a fan of it? This place was great? A user of it or whatever, or do you feel like a captive like, "Man, I wish I got my money back or there was a better cell phone company that's friend, I use them because I don't know who that is.

Eddie Codel - PodTech
Right.

Marc Hedlund - Wesabe
Then, that's a captive kind of a transaction. So, what we do is we say, "How do you feel about this company after you've spent your money there?" And, if one out of a hundred people who spent their money there will tell us, or one out of a thousand, that becomes really good information to back-up the implicit recommendations of having spent your money there.

Eddie Codel - PodTech
I see. So, it's a company and has a little bit of qualities of Yahoo! which is kind of a recommendation -- rating service for versions of business. So, is that a piece of it you know after...?

Jason Knight - Wesabe
I think the big difference between, say, Yahoo! and what we do is Yahoo! people show up and they give reviews, and that's great information. The challenge there is that it's not necessarily certain that the person shops there, like you really don't know. What's nice about our rating is that it's always backed by a transaction. So, if someone says, "I really like this place." You know that they purchased there. Someone says, "I didn't like this place." You know they purchased there. But it's not a popularity contest, you can't game the system right. So, you know that there are hard dollars backing every review, that's a big difference. The other thing too is we don't have it, sort of editorial reviews, we limit it to a number.

Marc Hedlund - Wesabe
Well, we limit the rating to this Fan-User captive, and then we aggregate that together to what we call a Wesabe's score, which is kind of like a page rank of how does this place looked to us considering all the data we have? and rather than doing -- as Jason's saying rather than doing reviews where we say, one to five star reviews instead we ask people for tips like, "Did you have a good experience here? What did you do to have a good experience here?" "Oh, You've got to go on Monday night because the Lime Chef (ph) on Monday night is great, and like that's the best time to go that restaurant" or "Hey, I had a terrible time here and I found another place it's way better." So, there is tips or sort of saying like, "How can you solve a problem?" not just what's the quality of the place.

Eddie Codel - PodTech
It sounds like other people have been thinking along the same lines as you guys about this problem or how this is going to be improved. What was your inspiration for this project?

Marc Hedlund - Wesabe
Sure. Well, Jason is much better with money than I am, and I'm much better with money than my wife is. But she has allowed me to say on camera, she's totally fine with that.

Eddie Codel - PodTech
With your own money or with -- or her with your money?

Marc Hedlund - Wesabe
We both have had trouble before we met each other and then, now we're older and we're a little bit better but definitely we both felt like we're not the best people in terms of having control over our money, and I started to think myself like, I'd really like to be working on something that really helps people and you talk to people on money always comes out. That is one of the things that is a stress for them and if you go and you look on like, the American Psychological Association does this survey every year of what causes people stress and numbers 2-10 are very all over the place; war, the economy, politics, family, children but number one is always money like, every year that's the thing that causes people the most stress in their life and I thought to myself, well, it certainly caused me a lot of stress. It certainly caused my wife a lot of stress. Like what could I be doing that would be more valuable than working on the number one cause of stress in peoples' life and well, I can't really think of anything.

Eddie Codel - PodTech
Yeah.

Marc Hedlund - Wesabe
I really felt like, a lot of the applications that are described in Web 2.0 applications are more recent Web applications have a lot of great things going on but Quicken and Money and these Apps that train, help you with your finances something you never made it to Web.

Irina Slutsky - PodTech
Yeah, not very good

Marc Hedlund - Wesabe
I thought about Why? and I thought well, if all I'm getting out of the Website is the same interface as Quicken but available to my Web Browser, that doesn't feel right to me, it just feels like I'm giving up potential privacy for no benefit. Whereas, if I can say like, hey, there's really a community to form around this, there's really a way to get, what you know about video cameras and what you know about restaurants, and what Jason knows about cars and put that all on one place and be able to say, this is the best advice, these are the best deals, these are the best values then that could really help people and so that was what motivated us. I think when we got started on it, Jason really believed in the idea, I've really believed in the need and have the best advice for me about how to work on it, and so we started working together on it. We've known each other since Junior High School so...

Jason Knight - Wesabe
People want to spend money. Like, it's -- and part of it, it's just huge one value. I mean that's really the search is like, I'm going to give you my money and I hope to get a good service from you or a good product from you and it's not certain. So, you have a lot of marketers who are like, "No, this is really good, this is really good." And it might be, sometimes it is and sometimes it's not, but collectively we know. Collectively we can find value. So, it's not, don't spend your money, don't do this, that's not our message, our message is let's figure out how to spend really smart and get the most for it.

Irina Slutsky - PodTech
So, that's of course the power of the Internet is that, it's not just the marketers that have the power of voice now, we can listen to each other and we can -- We have a place to talk to each other now.

Jason Knight - Wesabe
There was just one banker who's like (Inaudible) -- once all of these people get together, they can share their opinion. What's the impact of that and it was so funny to see people get it like, where they're actually going (Inaudible). If you all get together and come up with a common view, we're going to have to deal with that view.

Marc Hedlund - Wesabe
So, I wrote back to that banker, and I said, "Well, one of the things that we think is, that this is existed for many years for businesses, it's called the Credit Rating." Like, if you go into an auto shop and you say, "I want to buy a car." They can find out your income, how much you owe, your salary history, your roommates, the magazines you subscribe to whatever contributions you've made, your religious affiliate like anything they want to find out about you.

Eddie Codel - PodTech
Which you really don't have any control over, I mean, you've some control, but for the most part it's this kind of a black-box and most people don't know about this is there.

Marc Hedlund - Wesabe
My feeling is what do you know about that, like maybe a five-star review, maybe you get a recommendation from a friend, but other than that it's really hard to make a good assessment of whether you're going to get good value from this business or bad value from this business. So, the way we think about it is, this is like the Reverse Credit Rating for consumers, it's the value rating of these businesses that we're giving our money to. Are we going to get value out of these guys or not? And that's kind of the question that we want to hope people ask, is like, where can you get the best value for your money? So you're not wasting money, you're not paying bank fees and ATM fees, you don't need to pay and you're satisfied with the money that you spent.

Eddie Codel - PodTech
That's amazing. Well, can we take a look? Can you give us some more?

Marc Hedlund - Wesabe
Yeah sure, absolutely. This is a demo of the Wesabe Accounts tab starting out. So, what you see here is a list of all my accounts, which I've uploaded to Wesabe. I have American Express and a few accounts with the bank called USAA, Washington Mutual and then I have these two reports that show me my overall Spending Summary and my overall Earnings Summary, so I can see where I'm spending the money in a nice simple graph. So, what happens when I upload my data is that the bank will give it to us in a format like this, like UNION 76 00246835 OA and I understand what that is, it's UNION 76, it's a gas station, but that's not how I would represent it, if I were writing this myself.

So, what I can do is, I can go here on edit and then start typing 'Union' and it will pull out the match and so I say, oh yeah, 'Union 76' and I do that and it fills in the Tags for me automatically with gas and auto. Now, with Union 76 I would say, I'm a user of that company I could, if I want to also say that I was a Fan or a Captive in order to express my opinion of it. 'Fan' being I love this place and Captive being Sprint the cell phone company, which is my standard example of Captive.

Eddie Codel - PodTech
Many, many of us have a choice because you're in a contract or something?

Marc Hedlund - Wesabe
Well, yeah, I don't really feel like there's a better option, like...

Eddie Codel - PodTech
You're not a fan but you are a user?

Marc Hedlund - Wesabe
I'm a user of it, it's true, but if I felt like there was (Inaudible) of cell phone company, so I'll be all over it and there isn't. So, well, why is it happening when you look at the cell phone ratings and what's obvious is that I must have gone and test they are Captive of themselves. So, it's interesting to say. So, because these tags are there - that's where I noticed that this one is in Oakland so, I must say, Oakland as well. And when I do that, it does autocomplete on the tag too. And if this were a workexpense, this were something that I wanted to tag as a workexpense, this time but not every time that I could use one time tags to say, "Only makes this workexpense this time, but later on if I go back to Union 76, don't treat it that way."

Eddie Codel - PodTech
I must say, you must say that again.

Marc Hedlund - Wesabe
So, then I save it and that's going to go back to our server and record that and what you'll see that these are all the things that people have recorded already, so this is a Cafe in San Francisco, this is my Insurance Company.

Eddie Codel - PodTech
Now, are we looking at stuff that other people have recorded, but that you somehow are connected with because you spent money at these locations or is it just kind of a wider view of everything?

Marc Hedlund - Wesabe
This right now is my personal information. But, when I see something like Amazon.com, I can click on Amazon.com and get a list of my transactions there and a summary of what everybody spends there. And I can also get -- you'll see right there, it says, '4 tips available, including Use Virtual credit card numbers for Temporary subscriptions and that's the tip that I can use to try and get better value out of Amazon. So I'll bring up one of those pages right now so, we can talk about it. This is Andronico's, which is a grocery store in Berkeley and what I see when I look at this is Wesabeans spend on average is $67.13 per visit and $197.48 per month. So, that tells me pretty much and okay, I can expect that if I'm going to spend this or if I'm going to go out here then II might spend this amount of money each week or each month.

But then I can look over here and say, oh yeah, there're 2 tips available, including Stop shopping at Andronico's, shop at Berkeley Bowl, instead. So, I go over there and I say, "Okay, well what are these tips for Andronico's?" So, there is this one from this guy, who actually works for Wesabe. And I go and I look at it and he says, "The food is better and the prices are lower at Berkeley Bowl than they are at Andronico's." So, I say, "Yeah, I have to agree -- I agree." We go through that and if I go and I look at the Wesabe report for Berkeley Bowl, I'll see that in fact, the prices are lower and a lot more people say they're fans about them, say that they're fans of Andronico's.- So, that's a good piece of information. If I'm shopping at Andronico's right now, I'll get this tip promoted to me and it will help me find a way to get more value from a grocery store that I was getting it for.

Eddie Codel - PodTech
Right.

Marc Hedlund - Wesabe
So, that's it, yeah.

Eddie Codel - PodTech
Interesting.

Marc Hedlund - Wesabe
So, I can mark this one and say, 'Favorite' which I've already done and when I mark it as a favorite it gets saved into my Favorite Tips and then you can see we can go and look at the Most Popular Tips and those are the ones that most people have said, they are their favorites, that's very similar to the way a Flickr does with photos. People say that someone is a faith and then it gets promoted. So, the idea of this is just to say, "If your tips are really great and it's really working for people, then we are going to promote it to more people and make sure that the people are shopping and trying to constantly pay attention to it." Slowly, kind of slowly, so I can go to the next half. The other thing we do is we have what we call 'Goals,' and Goals, it's related to what 43 things does which we think is really cool, we really like to look the way that they've done it.

Well, we try to add some financial specific tools, so that we're not talking about all of your goals like cleaning out your garage necessarily, but just the things that you're worried about for finances. So, I have a bunch of goals over here and with each of the goals, I can upload a picture and we make a little button out of it. That button hangs out on the side when I'm coming through the site and reminds me, 'oh yeah, the reason I'm trying to save money on groceries, so the reason that I'm trying not to go out to eat tonight, that's because I'm trying to save up an emergency fund and pay off my credit cards those goals kind of say (Inaudible) for me.

Jason Knight - Wesabe
But the thing, I think we noticed along the way was the tips were very cool, but the tip is almost like an abstract good, it's like, oh yeah, I could save some money, but, as soon as, you try saving money to what you want to achieve in your life, it becomes very concrete and so there's many ways in which goals make tips real. So, that you can actually see the result that you're going to accomplish from using them.

Marc Hedlund - Wesabe
That's right, so if you're covered here, you'll see an aggregation of tips for your goal. So, those are of all the goals that you've said, here are the tips that we think you should be working on. And then what we do is we have a really light-weight, simple form of budgeting that we call 'Targets' and basically that is, okay, I know that I spent some $204.18 at restaurants on average every month. I'm going to set a target for that and allowing to do is, I must say, I want to make sure that I spend no more than, let's say $150, I'll try to cut $50 out of my budget, more than $150 a month on restaurants. So, then the next time, when I look at that, it will say, "Okay, you're doing this well, compared to the different target that you set." When I go back to my account list, let me see if I have one, it's here. Yeah, here's one from workexpense. I spent some money at this restaurant and so workexpense and Jason doesn't want me to spend too much all the time.

Eddie Codel - PodTech
For anything.

Marc Hedlund - Wesabe
For anything. So, it takes a $180.78 out of my target for workexpense and it tells me how much I have left this month to spend on that.

Eddie Codel - PodTech
Okay.

Marc Hedlund - Wesabe
So, as I go back here and check it on my account, I get these little reminders of like, okay, I used to have $484 left but now I have $303 left and that just keeps (Inaudible).

Eddie Codel - PodTech
And this is relatively real time right, because this is pulling your credit card information, which presumably gets updated pulling (18:28) or something.

Marc Hedlund - Wesabe
That's right. Yeah, so what we try and be as upto date, which your bank is, different banks will update the information on different schedules, but on the tools we use to try and keep it, as updated as your bank Website is.

Eddie Codel - PodTech
Very, cool.

Irina Slutsky - PodTech
I'm still worried about safety.

Marc Hedlund - Wesabe
Sure.

Irina Slutsky - PodTech
How far is...?

Marc Hedlund - Wesabe
No, no. You should be.

Irina Slutsky - PodTech
I can just see like people are -- I mean don't you get a lot of questions like that?

Marc Hedlund - Wesabe
We do, so I brought up something that we put up on our side in order to talk about this, which is what we call the Data Bill of Rights. And the idea of the Data Bill of Rights is to say, we want to set a different kind of standard for your financial data than any other Website we've seen. So, we say that you can export or delete your data from Wesabe anytime you want, and what that means, is if you say, "You know what I used to look this site, but I don't like this site anymore, get rid of my data." We'll go through and we'll review to every copy that we've ever had of your data. We say that you own...

Irina Slutsky - PodTech
But, in law and order there we say, that it never really gets deleted from anywhere. So, once it's there, it's there forever, right.

Marc Hedlund - Wesabe
Well, I believe that we can provide people with solution where it actually gets rid of it and as a secure way of the hard drive when that happens. So, I definitely agree that this is a concern, I'm not saying that you're making it up. I'm just saying that what we're trying to do is say, we want to do the right thing with this because we believe that if you do get this value out of your data if you do participate in the community, you'll be able to save money and get more for your dollar and we think that, that's great and we know that we can't just ignore which is that you're talking about.

So, we said, "Okay, well, what we want?" I'm a big privacy freak and what we're doing in the data developer, I've just to say, you owning your data we'll delete it if you want us to, we're not going to charge you archive access fees in order to get older data. It's your data and it's online whenever you want it, and if you don't want us to share something with people, we won't share it with them.

Eddie Codel - PodTech
Which gives a lot farther than banks do, and banks don't give any sort of entry really.

Irina Slutsky - PodTech
No. What is your business model?

Marc Hedlund - Wesabe
So, we don't sell ads, we don't believe that ads are the right business model for this site because if you are coming to this site in order to take control of your money and then there is this ad trying to get you to spend money, we think that makes message, we think that that's fine. So, what we do instead is we say, "Anybody can have the Free Account and upload up to three banker credit card accounts to the site and that's free to everybody." Above free accounts we have a Pro Account, which is again just like the Flickr Pro Accounts and...

Irina Slutsky - PodTech
Which I bought.

Eddie Codel - PodTech
Which I bought too.

Marc Hedlund - Wesabe
And with that you can upload upto 12 accounts. Now, we have one thing going on right now, which is that because we know the database is more valuable or...

Irina Slutsky - PodTech
And how much is the Pro Account?

Marc Hedlund - Wesabe
$4.99 a month.

Irina Slutsky - PodTech
Okay.

Marc Hedlund - Wesabe
So, what we're saying is, if you upload data within 2006 then we'll give you a free Pro account for all of 2007 because we know that the database is more valuable if we can get it exceeded and get some early data into it. So, what we are trying to do is make it so that people who come early and are trying at this site first, don't have to pay and can get hold on effect.

Eddie Codel - PodTech
How many users you have right now, roughly?

Marc Hedlund - Wesabe
I have thousands of users, it's astonishing how quickly it happened.

Irina Slutsky - PodTech
Thousands like tens of thousands.

Marc Hedlund - Wesabe
Not tens of thousands...

Irina Slutsky - PodTech
5,000.

Jason Knight - Wesabe
5,000 registered users.

Irina Slutsky - PodTech
5,000 registered users.

Eddie Codel - PodTech
But it hasn't been a week, you've only been...

Marc Hedlund - Wesabe
It's been four days.

Jason Knight - Wesabe
Four days.

Eddie Codel - PodTech
Four days, right.

Marc Hedlund - Wesabe
I've heard a weekend.

Irina Slutsky - PodTech
And you launched at exactly 01:23 AM.

Marc Hedlund - Wesabe
On Friday, that's right, yeah that's right.

Irina Slutsky - PodTech
On Friday morning. Congratulations!

Marc Hedlund - Wesabe
Thank you very much, we were very tired that night but it was great to be altogether and we think like with people playing for the holidays and going out to see all their holiday shopping that, there's no better time for us to be out in the market than now.

Irina Slutsky - PodTech
And again for some people like myself who -- be a little bit scared to do this. Something like credit card maybe a good way to try it out because I'm thinking with credit cards you have like guarantee, if somebody steals your credit card and tries to use it, it's insured.

Marc Hedlund - Wesabe
That's true. Although, we don't have your credit card number, we just split it out.

Irina Slutsky - PodTech
Right... it's so hard to read out... to understand that.

Marc Hedlund - Wesabe
No, that's totally fine. So, well I would say about this too is, that if you want to join and participate with Tips and Goals and not upload your data though, you can do that and it's free and there is no reason that you should not do that. The only reason to upload your data in 2006 is we'll give you in 2007 (Inaudible).

Irina Slutsky - PodTech
Right.

Jason Knight - Wesabe
The other thing we have is a Web Upload. So, you can actually download a data file to your hard drive, so, you know exactly what you are uploading, and then use our Web Upload Tool to pull it up and so you don't -- you never take our software on your hard drive. You know the file that you've given us, you can delete that file and you can sort of try it out and see if it works for you, it's not the sort of thing where there's one way to work with us, we built this tools around privacy because we want people to use them and we want them to feel safe.

Marc Hedlund - Wesabe
So, what I pulled up on the screen is the Web Upload. So, I don't mean to keep comparing it to Flickr but we love their Website.

Irina Slutsky - PodTech
Yeah, it's actually really good.

Eddie Codel - PodTech
I think it's the finest form of flattering.

Irina Slutsky - PodTech
Yeah, exactly.

Marc Hedlund - Wesabe
So, what we do is we say, if you want to upload through the Web Browser, you just choose your bank and then you go to your bank's Website and download it to your hard drive and then you upload it, just like you would upload the picture to Flickr.

Irina Slutsky - PodTech
Wow!

Marc Hedlund - Wesabe
If you'd rather, we have this thing called the Wesabe Uploader which automates the process. We have it out for Windows and Mac right now and we're going to release it for Linux pretty surely.

Irina Slutsky - PodTech
Oh, very nice.

Jason Knight - Wesabe
So, what that will do is, it will automate the process for most banks, not every bank, but for most banks and just make it so that you don't have to think about it anymore.

Irina Slutsky - PodTech
(Inaudible) we should think about anything. Thank you so much.

Marc Hedlund - Wesabe
Thank you, it was great. Yeah, I appreciate.

Irina Slutsky - PodTech
It's been really interesting.