Monday, January 4, 2010

Funny Competitor Convergence

I've been analyzing competitors in the online personal finance space. After signing up for 10 services and spending time using each, I've been surprised by how similar most are. In fact, five of the services handle the same 9 tasks.

Of those five, one is clearly the most complete and one is clearly the easiest to use. In a world of perfectly informed users, the other three should go out of business quickly.

But they haven't. In fact, some of them are growing their user bases.

Question: Why?

My Answer: Trying all 11 services required about 12 hours of my time. There aren't many people with that much free time to invest in finding the best. And once people choose, switching takes time and energy. Even an adequate service can grow . . . for a while.