THE BLOG
10/07/2010 07:45 pm ET Updated May 25, 2011

Three Reasons Why I Started Mint.com

Mint.com was born in early 2006 out of my frustration with existing personal finance tools. Since age 15, I had used tools like Microsoft Money and Quicken, diligently entering, categorizing, and analyzing my spending and investments for an hour every week. One day, I realized that the software was not working for me. I was working for the software, and there had to be a better way.

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Mint.com is the solution: online, to provide access from home, work, or on the go through a mobile device; and highly automated, categorizing all your transactions (and I spent four months locked in a room to come up with a system that now categorizes over 90 percent of all credit and debit card transactions). And it's free. If Mint understands each unique financial situation, it can tell people when to refinance a mortgage, or which bank account might give five times the interest over the old one lying around.

Today, just over three years after launch, Mint has more than four million registered users, because we focused on three principles for any entrepreneur. Click through to find out what they are:

1. Solve a real problem
Solve a problem that will still exist in five years, 10 years, maybe even 50 years.

For Mint, that problem is the complexity of personal finance: mortgages, insurance, choice of investments, taxes, budgeting, credit scores, and savings accounts vs. money market vs. CDs to name a few. Pulling all this information together is tough, and understanding it even harder.

Be careful not to start a company that really belongs as a feature of another company, like the 25 Twitter URL shortener companies out there. Pick a real problem that's here to stay.

2. Find a Big Market
Carefully calculate the potential size of your market to make sure you can grow.

Before starting Mint, I knew that there were about 20 million people who had purchased Quicken or Microsoft Money over the years, and 80 million people using online banking in the U.S. alone.

By contrast, I once worked with an entrepreneur developing a marketplace for college students to resell all their dorm furniture each year. If you multiply the number of college students who are in resident in dorms, that you can make $1-2 per transaction, and at best you have 5-6 purchases each year, the entire market was no more than $50m per year, too small to be worth pursuing.

3. Have a Sustainable Advantage
Develop technology, business or supplier relationships, or expertise that are not easily replicated.

At Mint, we developed five pending patents on our technology, ranging from categorization to the Ways to Save system that calculates how much a new financial product would save a user given their present financial situation. We also connect to over 12,000 banks, brokerages, and credit unions; and get data feeds from partners like Kelley Blue Book and Zillow, along with stock market data. In addition to developing a world-class expertise in user experience design, these technological feats are difficult to duplicate.

The net result from each of these principles is a business that continues to grow rapidly, outpacing competitors, and winning literally tens of thousands of new customers each week.