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What’s Wrong – And What’s Right – With Wesabe 4comments
On Friday, Wesabe was launched to the public. For those unaware, Wesabe is a community-based (meaning similar to flickr or 43things) personal finance site that allows people to track financial information and share money ideas. From their extensive FAQ:
Wesabe is a community of people who share our experiences with our money so we can help each other make better financial decisions. We do this by aggregating and analyzing our community members’ personal financial data, and showing tips — recommendations to get the most from our money. These tips and recommendations come from the collective wisdom of our entire community. When one of us figures out how to make a great decision, we all learn.
I could go on and on about the features of Wesabe, but I’d just be repeating the content of this excellent introductory post on Get Rich Slowly. If you’re more of a visual type, just visit Wesabe or watch this wonderful orientation video.
At first, I thought Wesabe was a brilliant idea: it basically utilizes the community concepts embedded in many of the best websites around (like reddit or 43things, two personal favorites of mine) and applies it to personal finance thinking. That initial rush made me feel much like Matt Haughey does about Wesabe: it really is an amazingly cool tool.
But then I played around with the site for a while and I came away with a bit of a funny taste in my mouth.
First, for a site that requests a lot of personal data from you, their privacy policy leaves a lot to be desired. From their privacy policy:
We may use personal information to provide the services you’ve requested, including services that display customized content.
We use aggregate and non-personally identifiable data to provide the broader Wesabe community with information to make better decisions.
We may share aggregate data with third parties outside of Wesabe.
When we use third parties to assist us in processing your personal information, we require that they strictly comply with our Privacy Policy and any other appropriate confidentiality and security measures.
We may also share information with third parties in limited circumstances, including when complying with legal process, preventing fraud or imminent harm, and ensuring the security of our network and services.
Read those carefully. They are essentially saying that any personal financial data you give them will be (a) used to craft a profile of your personal financial habits which will then be (b) leveraged to create advertising that targets your very specific financial habits (meaning that the ads will be more tempting because they strike directly at your real money uses), (c) sold to third parties as long as they “strictly comply with their privacy policy,” and (d) immediately handed to unspecified third parties for unclearly specified reasons. They also provide no specifications on their methods of data security.
I don’t know about you, but having my financial data bandied about in such a fashion really frightens me. The only electronic personal finance data that I keep is encrypted and behind a firewall. I have little interest in allowing unspecified third parties to have a heyday with my data.
Second, the other sections of the website are essentially reproductions of digg and (especially) 43things. Although the entire site has a personal finance bent, the actual features provided are duplicates of features from other sites with a tweak or two.
The only real novel twist also worries more than it excites me: aggregate spending data. The site is able to give aggregate data on spending over all users so that you can see what you’re spending on certain things compared to a community consensus, but all that tells you is how much more or how much less of a consumer you are than other people using the site. If you’re really interested in improving your personal finance, your time is better spent with a real budgeting tool, determining what specific areas of spending you can cut down on, not comparing your spending to other spenders and simply feeling good because you spent less on beer this month than 27% of other Wesabi users.
Third, even the non-sensitive portions require an account, unlike the other community-based sites. Non-users can’t visit some of the sections that would be interesting to the general public, like the section that lists the most popular personal finance tips. You can’t tour the site in any fashion (outside of the video above) without signing up for an account; it was that reason alone why I signed up for a test account, simply so I could explore the options.
That being said, there are many good features of Wesabe. Of particular use are the tips and goals sections; the former has a digg-like interface that allows people to contribute personal finance tips and vote up the tips of others, while the goals section is very similar to 43things: it allows you to add goals, assign goals others have created to yourself, and discuss the goals in detail, again all with a personal finance bent. These parts of the site are intriguing and don’t require you to reveal specific personal financial data. There are also many aspects to the money management portion of the site that are intriguing, but I am hesitant to explore with real data due to my concerns with privacy; I would love to dig into them with real data, but for now I’m sitting them out.
If the creators of Wesabe read this, I have a couple of suggestions that could turn this from a merely intriguing site into an essential personal finance site. First, make the privacy policy extremely detailed and comprehensive. People who are really interested in personal finance (i.e., potential leaders within the community you are trying to build) are often very concerned with data privacy. Our passion is money management and one of the basic precepts is being careful with that money; we don’t like to hand out our data without some strong assurances about what will happen with our data. This is especially true for you, as a completely new entity without a track record of data security.
Second, make it possible for people to at least browse the tips and goals sections of the site. For outsiders who want to dip their toes in, these are fantastic tools for convincing people of the power of the community, but you keep these tools hidden from non-users. Look at the approach of digg or 43things; they don’t require signup for people to enjoy the non-sensitive content of the site, and this openness has propelled both sites into the general web consciousness. Such secrecy is just preventing people from diving into the site.
Given all this, I still think Wesabe is worth a whirl if you don’t provide any real personal data to the site. It’s useful for looking at tips and goals of others and contributing your own non-specific tips and goals; the only thing hindering this from becoming very useful is a relatively small userbase, which will likely grow in the future, as they’ve got Matt Haughey extolling their virtues and he is often ahead of the curve when it comes to spotting breakout communities.
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It’s nice to see that Marc is keeping in tune with what the user community thinks.
One of the things I see as a valuable feature for Wesabe is the contextual financial tips, read more at http://www.moneysmartlife.com/2006/11/19/what-wesabe-learned-from-google-adsense
Wesabe…
What are the best sites for learning about Wesabe? We’ve started with these. What else should be here?
1. Wesabe – Web-based community provides users with personal financial tracking tools and encourages the sharing of tips and experiences. (www.we…
You hit it right on the money – compared with Mint, Wesabi has a better community, but Mint takes the cake with features.
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Hi, Trent,
I’m one of the co-founders of Wesabe. Thanks much for the long and thoughtful write-up. Maybe this will surprise you, but I agree with much of what you say above.
Let me deal with the easy parts first:
1. You’re right that our privacy policy needs to be better. We put a lot of thought and time into our “Data Bill of Rights” (you can find it on the “security” page off our our home page, and I wrote about it recently on blog.wesabe.com), but I’d have to admit that the privacy policy isn’t where I want it to be today. There’s nothing nefarious in the current policy — it just isn’t as cleanly and strongly stated as I’d like. I wrote one of my friends about this on the day of launch asking for help on improving the policy, and have gotten what seems like excellent advice for people who can help us improve the policy.
That said, I think your suppositions about the current policy are overstated. We say very clearly in the FAQ that we do not intend to run ads on our site. If you look through my posts on radar.oreilly.com/marc, you’ll see that I spend a lot of time ranting about how much I hate ads. “Trust me” isn’t a good response to this concern — a strong privacy policy to back up our already strong data rights policy is — but I think I’ve said a lot in public for a long time now that at least points to my intentions.
2. You’re absolutely right that registration shouldn’t be required for viewing anything on the site. The reason we didn’t do this for launch was….privacy! We wanted to make sure that the aggregate data we display was correctly protected before opening it up to the public. We haven’t gotten a single complaint on this front, and we have every intention of making tips, goals, and a new feature that isn’t launched yet publicly viewable without registration in the near future. Launching a product is often best done by choosing the essential core to launch first, and while we believe public browsing is important for a lot of reasons, including letting people get their feet wet, we thought the essential core was helping people who want to use the service for managing their money.
That’s the easy stuff, since I think we agree. There are two areas in your post where I disagree, one where I think I can convince you and one where I may not.
I think aggregate financial data on our site today is more interesting than truly useful — as you say, comparing yourself to others is not immediately the best way to make financial decisions. Over time, though, I think you’ll find this to be incredibly helpful. Some examples: it turns out that auto shop in Berkeley (where I live) with the highest average price is also the lowest rated, and that the highest rated is *less than half* the cost. Auto shop prices are not transparent in the consumer market — there’s no place you can go to find out how much you should expect to spend at an auto shop. Of course an auto shop for Mercedes and an auto shop for Kias are going to have different price points because of their respective markets, but if you can compare the price and satisfaction for the Kia shops in your area, you have a *lot* more data to go on than you do now.
There are numerous other examples of this, which we’ll make more prominent on our site as we have more data to use. Do people go to this restaurant once and never come back? Probably a bad bet. Do they go every week? Probably a neighborhood favorite. How does time of year affect the price for new cars? What are the tips that work best for people with my spending patterns? How much of my income should I expect to spend on housing if I live in this area versus this other area?
I think over time, as we have more data to show and better tools with which to show it, you’ll come around on this. Maybe I’m wrong, but I think that aggregating data to help consumers get better values is enormously powerful, both in making the market more transparent, and in giving people real data on which to build their budgets and goals.
The area where we probably won’t agree is on whether what we’re doing is innovative. We definitely love what 43things.com has done, and definitely developed our Goals section with their work in mind (as we say in our FAQ), but we do not intend to replace their site or get people to use us instead of them. I felt that their site, because it is oriented on general goals, did not have the feature I needed to reach my financial goals, since I think financial goals require specific tools, which we’ve tried to add. Take a look at the Targets feature in Goals, and I think what you’ll see is not present on 43things nor any other site; likewise, the way we match Tips to goals is something we developed. If you mean to say that we did something similar to 43things, I completely agree; if you mean we just knocked off their site, I don’t agree. There are some features that start on one web site and spread to others, which is exactly what happened with tags after they were introduced on del.icio.us — now they’re everywhere, including our site. I think having tools specific to financial goals is both necessary and different.
On the Digg comparison, I’m a little more surprised — yes, we have a way to say “I like this tip” (save to favorites) but it seems pretty different than Digg to me. Of course we look at other sites and see how they do things, but that feature is more directly similar to Flickr’s “Save to Favorites” than to anything on Digg. I like the way Flickr allows you to keep track of photos you like and then displays information about that; I think Digg’s and Reddit’s “voting” systems are great for their sites but not right for ours. Of course we look at other sites for ideas about what works and what doesn’t work for people, but to say that we knocked off Digg because we let people say they like a tip seems wrong to me. I don’t know of anywhere else where you can get financial tips matched to your personal spending, and I think that’s truly innovative and useful.
Sorry for the long response, but I thought your post was very thoughtful and reasonable, and I wanted to give it the same kind of response. If there’s anything more you want me to address, just let me know.
Thanks,
Marc