Idea #2: Budget Buddy
Have you ever used any of those accounting software packages?
QuickBooks? Microsoft Money? Peach Tree?
Nope. Neither have I.
And I think there’s a reason for that. I’m not an accountant, so I don’t need accounting software. And I don’t want to learn how to use accounting software.
Moreover, I don’t need to keep a balance sheet (my bank’s website shows me my balance) or track my 401k (the investment company sends me a statement).
All I really want to do is keep track of how much money I’m spending on food, gas, movies, music, etc. I just want a really basic application that can keep track of where I’m spending my money. It should be able to show me a pie chart each month, dividing my expenses into different categories, either as an actual dollar figure, or as a percentage of my monthly income (which sometimes fluctuates when I work on freelance projects). It should also be able to display a line chart, showing how my expense distribution changes from month-to-month.
And that’s it.
Anything more complex than that, and I’m not likely to use it.
Of course, an Excel spreadsheet would be able to accomplish everything I’ve described here. And, in the past, I’ve often used a spreadsheet to track my expenses.
But most people don’t know how to use a spreadsheet, especially if it involves using formulas and creating charts.
The Market
To be honest with you, I have no idea what the market landscape is like for a product like this.
I can imagine many people like myself, looking for a dirt-simple piece of personal finance software, without any of the confusing bells and whistles of the more sophisticated packages. What I don’t know is whether another product like this already exists.
However, even if there are competitors (and there are likely to be at least a few), they’re not household names. There’s no product from Microsoft or Adobe or Google that clearly fits into this tiny slice of the market, so the competition (even if it’s likely to exist) isn’t likely to be fierce. I think I could definitely hack it.
Pros:
- A product like this would be extremely simple to develop. I could probably have the first version up and running within less than two weeks. Compared to a multi-tiered, complex product like WebDelve, I could have a BudgetBuddy type of product in the marketplace in a fraction of the time.
Cons:
- As a consumer product (and a ridiculously simple consumer product at that), I would be hard-pressed to sell this software for more than $20 or $30 per license. As such, I’d have to sell considerably more licenses to earn a reasonable amount of money. With a $20 price-point, I’d have to average 240 licenses per week to generate $250,000 in annual revenue. It would probably take a long time to ramp up to those kinds of numbers. A really long time.
- Since the target demographic would be non-technical users, I’d probably struggle to figure out the best way to market the product. I think I’d be more comfortable marketing a product toward technical users or business users..
- With absolute simplicity as one of the primary goals of the product, it would be difficult to continue developing upgrades and adding features without making the software overly complex. What would the 2.0 or 3.0 or XP versions include? And if I can’t count on revenue from upgraded licenses in the future, is it really worth it to develop this software?
…
This is the second of 30 business ideas that I’ll be writing about over the next 30 days. Some of the ideas are good. Some of them suck. One of them will become a product over the next six months, and the foundation of my new software business.
June 12th, 2006 at 1:08 am
You should connect it to online banking.
You see, here in the Netherlands many people do their banking through internet. Most of the expenses can be traced by account numbers and thus automatically classified:
Mortgage, supermarket, gas, savings, etc.
It would be a nice feature for this banking software to produce the kind of charts you mention.
Also, if you would be able to sell your software to a bank, it would provide you the sales volume you mention.
Good luck!
David.
June 12th, 2006 at 2:38 am
What about deployment model of application? It would be web-based or a desktop one? I think this is important because as a prospect user, I would like it to be acessible via web. Accessible on cell phone / PDAs is another good feature to look for.
June 12th, 2006 at 4:37 am
Lots of potential. I’ve thought about this type of thing myself a lot.
Although prototyping this would be quick, making it simple could take a lot longer than one might think. On the other hand, you mention that adding features could make it too complicated, but I don’t think so. Integrating with accounting packages and online banking could be hidden away in menus so they don’t clutter the experience until the user goes looking for them, giving depth without taking away anything from the simplicity.
June 12th, 2006 at 6:26 am
I’ve just started a desktop-based me-ware project to do this. Personally I don’t like web-based apps for this type of information but if you could sell it to my bank so it would be integrated directly into my online account then I’d use it.
June 12th, 2006 at 6:35 am
I think AdWords would work great for this type of product. I can see adwords driving 3,000 clicks a week. Doing some fuzzy math, at $.50 a click, that would cost $750. If 10% buy, that’s $234,000 after google’s paid.
I think it could work.
June 12th, 2006 at 7:24 am
One more con: as an end-user app, it’ll need a decent support. Support will either eat your time or money, so you’ll need more than 240 licenses/week to cover this.
But the potential is huge, I believe. I myself use Excel to do this kind of simple “where did I spent my last paycheck?” thing, and Excel is not a convenient way. The price I’m ready to pay, you’re right, is 20 to 30 dollars.
Regarding distribution channels: you may think of pushing boxes onto retail or partnering with banks which online banking you’ll support initially. Hard to impossible, but — who knows? Quicken was small once too…
P.S. Your “Submit Commont” button doesn’t work in Firefox. :(((
June 12th, 2006 at 8:08 am
Ali Khan Says:
“What about deployment model of application?”
You’d use a web application? For your personal financial data?
I wouldn’t.
I probably wouldn’t be willing to use a web app as an accounting application unless it was hosted by a big company that I trust (either an actual bank, or Intuit, who makes Quicken and QuickBooks). I certainly wouldn’t be willing to host my data online if I knew the company was a tiny one-man-show company.
And besides, this application doesn’t fulfill any of the necessary qualifications to be a webapp that I talked about a few days ago. So, no, it would certainly not be deployed as a web application.
June 12th, 2006 at 11:41 am
I am glad I found your site so early in the idea project- I can’t wait to see the rest! I agree with Ali on the cell/PDA app perspective (although I know it may diverge from what you listed as a target market). If the program is light and straightforward, I would love to have it on my Blackberry – basically as a replacement to the old check register.
June 12th, 2006 at 10:35 pm
I like it.
But, Money 2006 Standard is less than $30. I know you said you didn’t want balance sheet or 401k, but you could just not use those features of it. So how would your product appeal to someone looking for money software? Why would a potential customer choose you instead of the mighty MS?
June 12th, 2006 at 10:44 pm
I think you can combine the desktop application with web application, in version 2 of the desktop application you can add smth. like synchronize with web application..
June 13th, 2006 at 12:53 am
NZ Says:
“Money 2006 Standard is less than $30.”
Yikes. I had no idea it was so inexpensive.
That’s an important factoid for me to keep in mind as I weigh the advantages and disadvantages of all 30 ideas.
Thanks for the tip.
June 13th, 2006 at 1:08 am
benji Says:
“Yikes. I had no idea it was so inexpensive.”
:) Actually, I didn’t know myself until I read your post and went to check it out.
Anyhow, didn’t mean to ridicule your idea. In fact I really like your approach (this whole 30 idea thing). Just trying to help in brainstorming.
June 19th, 2006 at 8:24 am
I’m using a product of one of your potential competitors called AceMoney. It is basically that simple, I’d say too simple for my taste. JFYI.
P.S.: I really like the brainstorming process you’re transcribing online and wish you luck to settle on a worthwhile idea after all.
August 10th, 2006 at 2:37 pm
When you consider all the features people are mentioning for “Budget Buddy”, you’ve got Quicken (not to be confused with “Quickbooks”). I’ve used Quicken for 12+ years, and it does all the things you say. I spend about $60 every other year to upgrade (skipping one upgrade in the process). Not sure what’s new here with Quicken and Money so prevalent, plus all their existing relationships with financial institutions (not to mention Checkfree).
One thing you should know about Quicken is that, despite all its bells-and-whistle, the basics of its checkbook management functionality is ***dirt simple***. And given that I can download all my transactions from my bank and use it to pay ally my bills online (for free), my data entry goes almost to zero (mostly just picking the right category for an entry and occasionally splitting an entry across categories). ***Everything*** else is entered for me via the online access mechanisms.