July 4th, 2004
Philip Su, a Microsoft developer who works in the Tablet PC team and used to be part of the team working on MS Money has posted a story about how Money's developers lost the plot about five years ago: basically, Money came to be regarded more as portal to Microsoft's online finance services than as a tool for the user to manage their finances. The most interesting point he makes is about the tiny percentage of users who actually continue to use their Personal Finance Management software after the first couple of attempts.
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!
I have the impression that the main reason Quicken and MS Money failed to close that gap was that after a certain point both applications started piling on features that would be of use to perhaps 5% of users. As with word processors, which went through the same process about a decade earlier, the result was a bigger, slower, less reliable piece of software which wasn't obviously superior to the earlier version you'd seen five years before.