Gina Trapani: It's a pretty good Airbnb commercial. I haven't seen those. Hm. And then I was like, I don't know. I don't know how I feel...

Chris LoSacco: I don't know how I feel about that.

Gina: I'm paying for this, but I'm also seeing ads, right? It's that thing in the middle.

(CATALYST INTRO MUSIC)

Gina: Hello and welcome to Catalyst, The Launch by NTT Data podcast. I'm Gina Trapani and as always, I'm joined by my business partner Chris LoSacco. Hey, Chris.

Chris: Good morning, Gina.

‍Gina: It's so nice to be here.

Chris: It's always great to be in the studio. We've got that On Air sign lit up.

Gina: We do.

Chris: We've got an exciting topic to talk about, it's all good things.

‍Gina: Let's just talk about soft... I want to talk about product. I want to talk about digital products. We've got a software conversation that we've got to have. I've been waiting for this.

Chris: This is a good one.

Gina: This is a good one. So... There is a product called Mint, which is now owned by a big company called Intuit. It's a personal finance product. And for a long time, listeners know that Chris and I are huge personal finance nerds.

Chris: (Laughs) It's true.

Gina: And I've been using Mint since 2009. In, like, 2009, I wrote a post on Lifehacker, the site I used to edit, about, like, you know, why I stopped being paranoid and started using Mint. The premise of the app is, you know, you are a person in the world. Maybe you have a family and you've got, like, a bunch of accounts. Like, bank accounts. Checking account and savings account, you've got a 401K and you've got a credit card, and... I wouldn't say I'm a credit card churner, but I've got a bunch of different cards. I've got, like, the travel card and the cashback card...

Chris: Most people do.

Gina: Most people do. You know, if you're married or you're in a family that you share, there's a ton of accounts. And so, you log in to one of your banks. You know, there's a pie chart. Here's where your money's going. There's some spending, right? But it's not useful. Because when you've got a bunch of different accounts, it's just a tiny slice. 

Chris: Right. You're only seeing part of the full picture. You're only seeing that bank or that financial institution, you know, their particular data set about your spending or your income or whatever.

Gina: That's right. My Amazon card thinks all I do is spend money at Amazon.

Chris: (Laughs)

Gina: Because I don't... That's the only place that I use it.

Chris: Right.

Gina: So Mint is this product that essentially aggregates all your accounts and all your transactions into one place, with the idea that, you know, I like to create an illusion of control in my life.

Chris: (Laughs)

Gina: If I know where my money is going... That might be a therapy session and not a podcast. (Laughs)

Chris: Right.

Gina: But I've been a big fan and a user of Mint since 2009. And what's so interesting about this kind of personal finance app is that the more that you use it, the more history, the more data you have, right? About your spending, about your life, about your net worth, about your debt. You know, hopefully going down and not going up, right? You start to get this, like, very full and, like, long-term picture of your progress in life. Not... I'm not equating money with progress in life, but it is one way that we manage our lives and figure out and, you know...

Chris: Yes.

Gina: ...Have families and buy homes and all that kind of stuff. So, like, the more that you use it, the more that you sort of train it, and say, this is my paycheck and this is how, and this is, this category is, you know, food delivery. Like, it just kind of works in the background, pulls your transactions. 

Chris: So this was the premise of Mint, right? The premise of Mint was kind of like, set it and forget it. You know, you link all your accounts and then you have to do very little manual work on top of it for it to start to derive insights about your income and spending that could then provide you some value about changing your behavior. Right? And a lot of people bought into it.

Gina: Yes.

‍Chris: And they said, let me connect all this up. But what you're driving at is that, this isn't a personal finance review episode of Catalyst.

‍Gina: It is not.

‍Chris: What was interesting about Mint is that it was completely free.

Gina: Yes.

Chris: You could come in and connect all your accounts, upload all your stuff, and then use the product for free, in perpetuity, right? And it was a very interesting model. Because the way that they made money was through offers. They had partners who would offer you, you know, a credit card or an account or a line of credit or a personal loan or whatever, that was, you know, targeted at your particular situation.

Gina: Right. Because it knew a lot about you, right? Like, specific offers. Like, I see that you're paying a high interest rate on this credit card. Here's a lower interest rate credit card, right? And these were partners. These were sponsored... This is ads.

Chris: It's ads.

Gina: This is an ad-supported app. To the point where, you know, you look at your transaction list and there would be, like, a couple of transactions and then there'd be an ad. And you could, you know, to Mint's credit, like...

Chris: Oh, in the transaction list.

Gina: Yes. It wasn't overwhelming. It wasn't, like, takeovers and newsletter pop-ups, and... It was in the experience. But it was definitely there.

Chris: Yeah.

‍Gina: And it's funny. Like, we talk about free. With ad-supported apps or websites, you know, you're paying with your attention. (Laughs)

Chris: That's right. That's exactly right.

Gina: And you're paying with, like, the microseconds that you take to be like, no, I don't, you know? And look, I've got to tell you, after years of using it and seeing, like... Ads work. Like, there were a couple of things that I did actually sign up for. I'd seen them on Mint and I'd, like, heard of them. So then when it came time I was like, oh, I thought of... You know, not that I was, like, necessarily clicking ads. The model works, but the model didn't work well enough. (Laughs) Mint was not... This is kind of my editorial.

Chris: Yeah. That's right, sure.

Gina: And what I mean, like, I think that it was, you know, not making enough money to sustain itself. Intuit, makers of TurboTax, had purchased Mint. They made the decision to sunset Mint and to roll it into Credit Karma, which is another Intuit product.

Chris: Another one of their products.

Gina: Which is, like, a product really focused on your credit score, and, like, managing your credit score. And so they announced this in the fall, last fall.

Chris: Yeah. It was several months ago. A while ago.

‍Gina: Yeah. They gave folks, like, a big heads up. But it was like, hey, you're going to go to Credit Karma. And to their credit, they're like, there's just not... the same features. (Laughs) There are many features that are not going to be in Credit Karma. And...

‍Chris: Right. But, I mean, it's a different product.

Gina: It's a totally different product. And your transactions, we're only going to have, like, the last few months. Like, they're not going to keep, you know, I had... Whatever. 13 years or something. Now there's, you know, ways to export. And I did that. And so I was in this spot, where I was like, oh, okay. This thing which I've sort of come to rely on and, you know, like I checked in on my spending and made decisions about my life, you know, in this app. I was like, alright, I gotta make a change. And there's a whole world of personal finance apps that do this, right? There's, like, the Quickens and, you know, the Simplifies. There's like, spreadsheets. I love spreadsheets.

Chris: Spreadsheets are great.

Gina: And I had to make a call. What am I, you know, what am I going to do? And I was like, oh, I'm going to have to, you know, train this thing and get it all set up and configured and, you know, into my process. And so, I looked at a bunch of the alternatives, and I tried an app called Monarch. Which was actually founded by one of the original Mint PMs, product managers. And Monarch jumped on the Mint announcement. They jumped on it. They immediately deployed like a 50% off. It's a paid web app. And I was like, alright. And it was, like, a free trial, like it was well done. And so I did the trial and I was like, oh. This is like a modern, front end... Like, this is a nice, like, modern web app. Because Mint had, in my view, the front end, the experience, it hadn't changed a whole lot and it felt old. It kind of atrophied a little bit.

Chris: It was kind of dated.

Gina: It was kind of dated and frozen in time.

Chris: Right.

Gina: It was clear they weren't investing in it. 

Chris: Yes. It's like when you go into a kitchen in a house and the kitchen is like...

Gina: Yeah.

Chris: It's not, like, super old.

Gina: It's not bad. Yeah.

Chris: But it's from, like, the mid-'90s, and you're like, oh, I could see how you could update this. Like, this just feels a little stuck in the past, you know? 

Gina: Yeah. I mean, counters were clean, the appliances were functional, like, it wasn't...

Chris: It's not bad.

Gina: ...A terribly ugly... But it just was like, oh. Yeah. I just feel like I went back in time a little bit. That's kind of what Mint felt like. So my immediate impression of Monarch was like, oh, like, this is, you know, they, there was like, use of emo... Just like, modern touches that are, gosh, I can't even say are really modern even at this point. But just like, using emojis and understanding dark mode...

Chris: Mhm.

Gina: And didn't feel the refreshes, right? Like, we just, we don't expect to feel whole-page refreshes, for example, you know?

‍Chris: Completely. 

‍Gina: Like in web apps, in modern web apps anymore. So I started using Monarch. It was really interesting to me, though, because Monarch was not ready. (Laughs) For the...

Chris: For the influx of users. Yeah.

Gina: Yes. And so I started following the Monarch subreddit, and I started watching, you know, reading their blog to, you know, they were really pretty communicative about the fact that they, you know, they were jumping... This is like an opportunity of an app's lifetime, right? Like..

Chris: Oh my God.

Gina: This mass exodus of people who...

Chris: Need a new thing.

‍Gina: Are potential customers. Yeah, exactly. And we're in this moment in 2024. And I'm curious to know if you agree. I think we're in this moment where people are paying for software. Paying for software is a lot less of a controversial thing. Like, as a user.

Chris: I completely agree.

Gina: How did that happen?

Chris: What's that saying? Change happens slowly and then all at once.

Gina: Yes.

Chris: You know, I think we've been moving in this direction for a while.

Gina: Yeah.

Chris: I think the general population has gotten more comfortable with the idea of subscriptions, period. You know?

Gina: Yes. Yeah.

Chris: Like, it's very interesting if you think about the parallels to like, TV. Where it used to be, you get your cable subscription and somebody comes to your house and they physically run a wire from your street to your house, and they plug it into a box, and they say, good news, you now have access to all of these things, and you have to pay me $149 a month but you get it all.

Gina: Yes.

Chris: And it was like, okay, cool. And we were all kind of on board with that for a while. And then, you know, the great unbundling happened.

Gina: It was like, you want HBO? (Laughs)

Chris: Right. Exactly. Right. And then it was like, well, I don't want to pay for hundreds of channels that I never watch. I want to pay for...

Gina: The good ones.

Chris: The few things, right, that I do watch. And so, it kind of became normal that, like, oh, I want, you know, Netflix and Hulu and those are the things. And I don't need the entire set of things that I never go to. Although, it's interesting, we could maybe do another episode on how, like, bundling is kind of coming back. Because now it's like, Hulu and Disney+.

Both: And ESPN! (Laughing) 

Chris: And... Right, right. But... I think my point was, it was normal that like, oh, I need to subscribe for this now. Or like, I bought my iPhone and I need to make sure that I have enough space to back things up and enough room for my photos. I'm going to sign up for, you know, one of the iCloud tiers. And just have all my stuff there.

Gina: Yes. Mhm. Mhm.

Chris: And it's a monthly fee of $9.99 or $4.99 or whatever it is. And I'm just, like, used to it, you know?

Gina: Yeah.

Chris: Paying for stuff, slowly and then all at once, became more natural and more easy. And people were like, okay, I'm kind of, like, used to this. And so, software products were the same, right? It became, I'm not going and taking a box off the shelf and saying, great, now I have Photoshop that I can use forever. It was like, I get a subscription to Creative Cloud from Adobe, and I can use Photoshop and Illustrator and whatever else that I need to use. It's getting consistently updated and I'm getting the latest features, right? On demand. And I'm paying a subscription for the ability to do it.

Gina: For the updates, for storage, for... Yeah, yeah.

Chris: And then if I end up not using those software, I can cancel the subscription and now I don't have access anymore, but I don't have to bear the cost. It just became more normal. It became a more normal thing for people to sign up and give their credit card, versus just expecting that they could access something for free. Or having to pay, you know, a much bigger one-time payment to get something, in a sense, for like a lifetime license.

Gina: You mean like going to the big box store and, like, buying that, like, copy of, you know, Flight Simulator off the shelf at Best Buy?

Chris: Exactly. Right.

Gina: Yeah, with the CD or whatever? Or is that... (Laughing) Yeah.

Chris: With the CD or, depending on your frame of reference, floppy disks, which I remember. Yeah.

Gina: Floppy disks. Right. Exactly, exactly. In the early 2010s, I was, like, deep in the open source, like, world. And sort of thinking, you know, like, software wants to be free, information wants to be free. Web 2.0 and APIs just became open and it was this idea that, like, you could access data and connect, you know, apps. Like, even, like, Twitter, like the Twitter API and see, you know, mash up, you know, data from this app and then make a kind of a free website. This was, like, a big thing. When I was editor-in-chief of Lifehacker, I had a rule. Like, I was like, we do not cover software that you have to pay for.

Chris: Really?

Gina: We are only doing free software. Yes.

Chris: Wow.

Gina: At that time, you know, it was just this explosion of new free... I'm saying free. Advertising-supported things.

Chris: Right.

Gina: And I... I mean, you know, again, you're paying with your attention versus your money, right? And there's like a different psychology about those two things. We were really into, it was like, oh, look at all these cool possibilities and what can you hack together? I mean, there was also this just like, sort of ethos of like, you know, if I take IFTTT or, you know, Yahoo Pipes or, you know, Zapier would be the modern equivalent...

Chris: Yeah. Fling a bunch of stuff together.

Gina: And I connect these two things, like... Yeah. It was like Lego parts, you know, and you can, oh, you can do this, like, cool thing for free. But, you know, over time I was like, this is a mistake. Because paying for something that's valuable to you, that provides a valuable service... And I think also today, people understand the way that the internet works a little bit more, like the way... Like, this idea that there are servers somewhere, like computers somewhere, that are saving your data, you know?

Chris: Yep.

Gina: And like, that costs money. And also just convenience, right? Like, I don't want to manually back up my photos on a hard drive in my apartment.

Chris: Yes.

Gina: I'm just, I'd rather just pay the two bucks a month or whatever it is to Apple to just automatically... And I'm assuming that Apple has my photos, right? And that's valuable to me because photos are really valuable. It's like, my life, you know?

Chris: Yeah. Part of this is the software as a service revolution, right? But what we're describing is something a little bit different. Or, in addition to, right? Which is the idea that I'm kind of outsourcing labor almost.

Gina: Yes.

Chris: Right? By paying a little bit for it. And the equation, for a lot of people, makes complete sense. I also wonder if some of this is the app revolution, right? The idea that so many people are on their phones, and from the introduction of the App Store, the idea was, there are going to be free apps and there are going to be paid apps. And so, it just became normal that my phone already has my credit card. If I want to get access to an app, I gotta buy it.

Gina: Click to pay.

Chris: Right. Double click to pay.

Gina: And right. And the idea of in-app purchases. Like, you can try this for free, and then at some point, if you want these extra things, which is kind of, like, this other class. 

Chris: That's right. Freemium.

Gina: Yeah. You know, I... The reason why I went to money... I used to use Microsoft Money, and I would download, you know, the files and import them, right? And the reason why I went to Mint, originally, was like, I just don't... I want this to just happen. I don't want to spend my time doing data, like, entering my transactions. And so it was interesting when I... Moving over to Monarch, like, I really became more aware of how sort of complex a personal finance app like Mint or Monarch actually is. Like, there's this... There's two parts of it, right? There's the back end part, which is constantly kind of pulling all of my accounts and getting transactions. And there's complexities around transactions that are pending, and when they're finalized, and is the money available? What is the statement balance versus the current balance?

Chris: Yes.

Gina: Like, there's a lot of complexity. And so there's this back end engine that pulls transactions and gets those numbers, right? And I gotta tell you, I didn't appreciate this about Mint until I switched.

Chris: Yeah.

Gina: Mint had this down. And this makes sense, right? Like, you know, especially at Intuit, right? I'm sure Intuit has these... This down. Mint had this down. I hadn't have any trouble grabbing transactions. Monarch uses... Because there aren't standard formats for this kind of data, Monarch uses, like, a variety of middle, you know, like Plaid and Fin City and MX. And it exposes that to you. Like, if it has trouble connecting to your account and they'll be like, well, why don't you try MX instead? And there's a part of me that's like, I don't want to know.

Chris: Abstract that away from me.

Gina: I don't want to know. Abstract away from me. Yeah, exactly. So, you can see that that's kind of immature on the Monarch side. But the front end experience on Monarch is very, very good. The budgeting... The features. You know, the budgeting, the managing your spending, seeing... And it feels really good. And this point that you made about outsourcing labor, like, that's what I'm paying for, right? Because I had a moment where I was like, I'm just going to have an Excel sheet.

Both: (Laughing)

Chris: Yeah.

Gina: Or, like, a Google Sheet. There's even, like, plugins for those things. There's this thing called Tiller where you can connect, like, through Plaid and MX and Fin City...

Chris: Yeah.

Gina: And, like, will bring in your transaction for you, but you still have to configure your spreadsheet, which again, I love, because I'm a nerd, but, like... (Laughs) 

Chris: Right, there's a point...

Gina: I will spend endless amounts of...

‍Chris: ..where that doesn't make sense anymore.

Gina: Right. That's right.

Chris: This is... I love this idea of comparing, like, things you can kind of build yourself or construct yourself. You start with the building blocks and then you make it all, versus, like, something that is really tailored to exactly what you need. And there are good arguments in both cases, you know? And sometimes it is worth it to make your own thing and to say, no, no, no, I want to, like, do this by hand. And I want to understand...

Gina: Right.

‍Chris: Down to the most basic parts of it, how it's working the way that it's working, why it's doing what it's doing. I want to be able to tweak it and adjust it. But there is 100% a maintenance burden, if you want to think of it that way...

Gina: Yes. That's right.

Chris: That you are inheriting when you do something yourself. And this applies to so many things, right? It's not just personal finance, it's anything you want to make on your own. Versus saying, no, no, no, I'm going to use something that is purpose built for what I want to do, and it's going to give me a lot of things out of the box that then I don't have to worry about. I think this is why Squarespace is successful. Or Wix. Or any of these, like out of the box website platforms.

Gina: Yeah. Yes.

Chris: Right? And the purist in me wants to be like, no, I want to write the HTML and the CSS and I want to, you know, get it right.

Chris: Put it into my server space, and yeah. Exactly.

Chris: I want to control it in the end, right? Because this is what we do. We make custom software. So we think about rolling websites as building custom software. But for 99% of the population, something like Squarespace is great, where it's like, oh. You want to make a website and you don't want to have to think about responsive design and good navigation patterns and making sure images look really good and all the, like, basic stuff? It's purpose built for that. Like, we'll handle it all out of the box and, you know, you're going to get all the value. You can jump right to the make your business part of it, as opposed to figure out the website part of it.

Gina: Absolutely. And so... So it's been fascinating watching these... There's this expectation, especially when you pay for something, you're going to do that. You're not going to have to think, right? That it's just going to work. Because you're paying money, right? (Laughing) So I've been following these forums of Mint users who are just, like, come and just say, like, Monarch doesn't work, I have this Canadian bank and, you know, I think transactions are going, like... And this just, like, really angry sense of entitlement. Because it's a paid product. And you paid, you paid half because they had this promotion for Mint people. But it was... There's just a psychology to that. Like I think with Mint, if, you know, and I talked to lots of people whose accounts didn't work with Mint. They were just like, yeah, I can't use this.

Chris: Right.

Gina: And they would just leave, right? They just stop using it, right? Because they're not, you know... But there's something about giving your money and being like, this is supposed to work. And as product leaders too, like, this is a... So... (Laughs) The Monarch folks jumped in and said, look, we had two customer service representatives.

Chris: Wow.

Gina: When they made their announcement. And now we have 24. The expectation is, when something isn't working that you paid for, you're going to get support or you're going to get your money back.

Chris: Right.

‍Gina: Someone's going to help you fix it one way or another, or you're going to lose me as a customer. And folks are like, you know... And so, it was so fascinating to me. I was thinking about how, like, the shape of a team is different when you've got a paid product. Versus an ad-supported product, right? Because you're selling to individual consumers and their $50 or whatever it is a year, versus advertisers, which are much larger payments but less frequent, right? And it just... All the incentives are different.

Chris: They're totally different.

Gina: Completely different. Even though user acquisition in both cases is paramount, right? Like this thing, you know, you don't survive unless you have the right amount of users.

Chris: Right.

‍Gina: With ad supported, you need lots of eyeballs. And with subscription supported, if your pricing's right, you know, there's some sweet spot of number of users you need to sustain your business and the cost of your business.

Chris: This is what I was going to say is, yes, user acquisition is paramount, but it's different.

Gina: Yes. Mhm.

Chris: In both models, right? And you are optimizing for different kinds of growth. And it is... If you think about it from the product leader perspective, you have to approach those two things very differently. You have to... Growth at all costs, because you're trying to get more eyeballs, and you're trying to be able to charge more from your sponsors. Right?

Chris: Sell more to your audience. Right? Because you have a duty to your sponsors, yeah.

‍Chris: Yeah. That's going to lead you to make some different decisions, right? And it takes a very critical eye to say, we need to maintain the integrity of the product that we're building while trying to go after that huge growth. And on the subscriber side, you have to think about, how do I make sure that my growth is measured and appropriate so that I can have the supporting structures in place as people are giving us their money? So that it feels correct and sustainable as we go forward. It's a very different product challenge, and I think people who are very good at one of those things have to have a healthy appreciation for the other as they think about trying something different.

Gina: And for paid services, there's this whole aspect of paid subscriber, you know, services that is just billing management, right? (Laughs) 

Chris: Completely!

Gina: Like, there's the user-facing part of, like, where I submit payments. Then there's just, like, the support part. Like, credit cards expire. And, you know, how do you refund folks who cancel? Like, can you cancel? You know, this is a dark pattern too, right? Like, oh, you need to call us in order to cancel. That, I don't believe that that's true for Monarch, but I've been in this situation where, you know, I think with The New York Times. I'll call that out.

Chris: Yeah, the New York Times, I was going to say that, too! 

‍Gina: Yeah! I was like, alright, I'm ready to, and it's like, please call us. And then you have to go through the whole deal with a human being.

Chris: You have to chat with somebody.

Gina: Chat with somebody, right. Exactly. And I actually think the Times changed this. I think you can do this via the chatbot now. And, in this sort of moment in AI and automation, you often, you know, are going to pull up a chatbot who is not a human being. You know, who's going to offer you... I mean, how many times have you been in the chatbot situation where they're like, it looks like you're looking for information about how to manage your billing.

Chris: Oh my God.

Gina: Like, how does this article in our knowledge base, like, work for you? And it's like, yes or no? And you're just like, I just need someone to help me. Like, you've got... You're charging my credit card, and like, I deserve, you know? (Laughs)

Chris: Right. This is not okay.

Gina: Customer service. Yeah, exactly.

Chris: There's a growing revolt, I think... (Laughs) 

Gina: Yes.

Chris: That is happening, where people don't... And I'm not talking about generative AI, like ChatGPT-like experiences. I'm talking about, like, the decision tree chatbot where you just click buttons and it's routing you to a particular area. They're awful. And...

Gina: Yeah.

Chris: And I think people's tolerance for them has gone way, way down. It's how phone trees are.

Gina: Yes.

Chris: Like, people reacted very, have a negative association with phone trees, because it just takes 12 times as long to navigate to where I need to go. Versus saying to a human being, here's what I need to do. So that's a tangent, but I think it'll be very interesting to see what our industry does, you know, to use these newer approaches to, like, regular human language to change those experiences.

Gina: Yeah.

Chris: I totally agree with you that the minutia of handling payments and service and all, like, it's critically important. And as you think about expanding to offer that kind of, you know, customer-focused thing, you have to change. You have to change how you, how your team operates, to do it effectively. And it might have impact on your platform, too. Your software stack.

Gina: Right. And there's a whole aspect of the product that you have to build out. Like, just subscription management alone. Unless you're doing it through, like... Through, like, the App Store.

Chris: And there are some good third-party services, right? I mean, Stripe is always referenced.

Gina: Yeah.

Chris: There's a great one called RevenueCat that allows you to offer subscription-based services, like, in apps. So there's a whole secondary world here.

Gina: Recurly, and Amazon. Yeah. Mhm.

Chris: Recurly. Exactly. Yeah. That will allow you to offload some of this to, I mean, they're purpose-built for this exact thing, right? Handling payments and subscriptions and having good management structures around it. 

Gina: The one thing I do want to see, say, as a user who tracks my spending, as we've established... (Laughs) It is, there is a level of, like, subscription fatigue also.

Chris: I agree with you. 

Gina: Like, and we should bring this up. Like, there was something that happened recently that my brother was like, I can't believe I'm signing up for another streaming service. Like, there's definitely, like, this feeling of like, oh. Like, I'm... Like, I just, how many things am I gonna pay for?

Chris: Another thing I gotta download. 

Gina: Right? And all... A friend of mine was like, yeah, you know, I work with a financial advisor. And, you know, she had me go through all my transactions and I realized that I had, like... I had like three Kindle subscriptions. I'm not really sure how that happened. (Laughs) But now I got them down to one.

Chris: Okay. That's good.

Gina: I mean, you know, because you tap the button, you know, you're like, I have this already. I want to just give voice to the fact that, I mean, there is some subscription fatigue right now, I think. And the pendulum swings. Like, I think we started in, like, free. We moved toward more subscriptions and pay for. Then, you know, there's like in-app purchases. Now we're moving again. It was the great unbundling, and now we're bundling a little bit again. I'm definitely on the train right now of like, I just pay for, like, the super fancy, you know, mobile phone plan, which also bundles in, like, Apple TV and Hulu and Netflix, you know? Like, I... Just okay, fine. And like, you know, airplane Wi-Fi. Like, because it bothers me to see the, like, $3 charge on my credit card once a month.

Chris: Right.

Gina: Which is probably a... Which is another, you know, psychology thing, I guess? (Laughs)

Chris: Well, what's interesting is, like, the mobile carriers, that's kind of like the new version of the, what the cable companies used to do. Right?

Gina: Yes, it is. Yes.

Chris: So rather than paying optimum for this giant cable bundle, instead you're paying T-Mobile or Verizon or AT&T.

Gina: That's right.

Chris: But you're getting wireless service plus Disney Plus.

Gina: Some streaming services... Yeah. Yeah.

Chris: Yeah, that's right. Exactly. Plus iCloud, whatever. It's interesting.

Gina: It is interesting. And they, like, work this. There's this, like, T-Mobile Tuesdays. They, like, make it like, oh, these big giveaways! You're getting all this stuff! Even though, like, I'm paying a l... I mean, our phone plan is not... Like, I'm paying for it.

Chris: Right. You're paying a lot of money. Right.

Gina: Right. But it's a psychological thing of like, I'm getting all this stuff.

Chris: That's why it works so well.

Gina: (Laughing) That's why it works. 

Chris: Because you feel like you're getting a bunch of perks.

Gina: T-mobile actually just, like, I still get Netflix, but they downgraded it to the ad supported plan. So... And this happened recently. You know, my wife and I were watching Netflix and, like, an ad started and we were like, whoa.

Chris: There's a lot of things in the middle now. Where it's free and ad supported...

Gina: Yes.

Chris: And then you've gotta go up a tier or two, right? Netflix was a big one, but there are a lot. I mean, it happens in software platforms too. And some people are like, absolutely, this is totally worth it, I'm going to pay. And then other people are like, no.

Gina: No.

Chris: Like, I'm not paying for this free thing. Like...

Gina: Right.

Chris: Which is very... It's very interesting psychologically.

Gina: Right. You're just like, wait, I'm entitled to this. This... Of course this should be free. This just isn't valuable. Like, enough. Enough to me. 

Chris: Yes. I think it's interesting, too, what media companies are doing, what publishers are doing, where some will do just paywall. You gotta sign up and subscribe and give us money to get in, period. Some will do a certain level of free, right?

Gina: Yes.

Chris: You get ten free articles, and then we're going to put a nag screen in front of you to say you've gotta pay. Some will have a free offering that's free totally, and then, like, a pro offering.

Gina: Yes.

‍Chris: To say, like, okay, you want a little more? That's going to be behind a subscription. And that is interesting, because then you're really catering to the users who do want...

Gina: Power users who care a lot, sees a lot of value.

Chris: Yeah, right. Exactly. They're going to pay for value. That's the thing. They do want to go above and beyond. So it's kind of like this hybrid where you get, in the best case, the best of both worlds.

Gina: The other interesting thing that's been happening around free and paid recently is this, like, crackdown, particularly among streaming services, of sharing passwords.

Chris: Password sharing. Mhm.

Gina: Yeah. I was at a family member's home a couple of weeks ago, and we fired up Netflix and I got this, like, screen that I'd never seen before that was like, is this your household? Because we'd like to, like, just to like, you know, confirm, we're going to send you a confirmation email that this is your household. And I noticed that there were like, several cousins, like in the, like, Netflix user list.

Chris: (Laughs) In the profile list?

Gina: And I was like, hey, are you sharing your Netflix login? And it's like, yeah, yes, of course. Like, literally the whole family who do not live together in the same household are sharing this login. And so the screen came up and I said to my, you know, my family member, like, hey, are you... Like, this is your Netflix account, right? Like we should set this Wi-Fi net.

Chris: Right.

Gina: So I guess, I didn't realize this, but they're doing, like, IP... Like, on this IP address, like, I will...

Chris: Right.

‍Gina: And she was really stressed out. She's like, I don't know! Ugh! (Laughs) She, like, didn't want to cut off her other family members. And so, like, that's been really interesting too, right? Because you have people who are like, oh, like, I was using, you know, so and so's account, I guess I should get my own. Or, you know, I don't care. Folks are getting cut off.

Chris: Netflix have seen an uptick in legitimate subscribers because of the crackdown.

Gina: I mean, this is what happened for me with, like, Gmail. Like, I mean, I'm really dating myself. 2005, Gmail was like a gigabyte of storage. It was like, what?

Chris: It seemed, like, limitless.

Gina: Limitless. Exactly. And then I just got so used to having it. You know, the point at which, you know, I had like a Workspace, I guess what they call now a Workspace account like early on, like my own custom domain kind of thing.

Chris: Yep.

Gina: And at some point they just introduced pricing, and it was low. It was like a couple of bucks a month. It's not that much. It was a no-brainer. I was like, oh, definitely. I'm not... I don't want to mess... Like I can't, like I can't mess with this, it's my email. Especially in photos. Photos is another big one.

Chris: It's like a non-decision. You're like, okay, sure.

Gina: Yeah. Yes.

Chris: You know, unless it was crazy expensive, you're going to be like, yeah, I'm not... I don't want to deal with this.

Gina: Yeah. I mean, I even remember at Postlight, I don't know if you remember this conversation, there was a point where, like, Google Workspace increased its prices, like, per seat. And we were always pretty watchful of our, like, SaaS costs.

Chris: Yep.

Gina: And we got together and I was like, oh, like, are we gonna change to Zoom? Because we, you know, we were like a meat shop. And it was like, no. (Laughs) Like, the cost of switching...

Chris: It was too ingrained in our business.

Gina: Exactly. It was like, no, this is... We're, yes, we're going to pay. Our business has to keep running.

This is what you have to do in 2024 as you think about, you know, expanding a software platform, is you have to think about your core value and where your users are deriving value. And figure out, do we want to orient around attention and figure out how to optimize around that? Or do we want to orient around dollars and align it to value, and then optimize around that?

Gina: Right.

Chris: You know, or both? And some companies are really effectively doing both, but it's just, it's... You have to think about them as two distinct approaches. Certainly from a, you know, just the logistics and the interfaces that people are using.

Gina: I would have loved to have been a fly on the wall in the meetings at Intuit, where they discussed what to do with Mint.

Chris: (Laughs) It would have been fascinating.

Gina: Because I think there would have been an opportunity... With the user base that they had, which I am sure was in the millions, if not tens of millions. There was an opportunity for them to say, this now costs three bucks a month or something. 

Chris: Yep.

Gina: Or whatever it is. And a lot of people, myself included...

Chris: Would have fallen off.

Gina: Would have just paid.

Chris: Oh! Would have paid!

Gina: I would have just paid. Because I... Because the cost of switching would have been annoying, and it would have been like a  Google Workspace type of situation. Where I'd be like, I'm just, this is so ingrained. Three bucks a month, no problem. Like, I would do this. I'm sure that they did the math. Like, I'm sure that they did the analysis and they made the call that it wasn't worth it. I'm sure that it took a lot of effort to keep that back end engine of pulling that data, you know, right. And so they made a call to say, I'm not going to do this. And it's interesting to see a startup like Monarch say, like, we are going to take a run at that.

Chris: Yep.

Gina: We are going to see if this business is sustainable through paying users, because we think that this is valuable enough and we think that enough people will pay, more than it costs us to run this business. Like, this is the bet.

Gina: That any product leader or company's, you know, founder makes, right? Like...

Chris: And it's a hard bet.

Gina: And you don't know. It's a hard bet. You just don't know. But Intuit had a lot of data.

Chris: Even though we're talking about how it's so much more accepted that people pay for subscriptions and software and apps, and it's just not as big of a deal as it once was to say, okay, yeah, I gotta pay for something...

Gina: Yeah.

Chris: It is still a high bar. And most people are going to default to free, right? In so many areas.

Gina: Right.

Chris: So to get someone to pay even a small amount, you know, every month or every year... You know, not everything is Gmail or iCloud where it's like, okay, this is, you know, part of, like, my everyday digital life.

Gina: Yeah.

‍Chris: So I do... I completely understand why companies can make a decision that's like, it's not feasible for us.

Gina: I think that it depends on the user, right? Like for me, it was so ingrained it would have been worth it, right? For someone else, the switch from free to paid... There's this culling. I think there are a lot of people that would have been like, no. I think that there are probably millions of zombie users at Mint that connected their account at some point...

Chris: Oh, completely. And then never signed in.

Gina: And the servers were grinding and pulling and they never signed in, and it was taking up resources that, and they weren't getting the, you know, the attention in return, right? And I think part of what making it a paid service does is, it makes you an app for power users who care enough and engage enough to pay.

Chris: Well. In conclusion...

Gina: In conclusion.

Chris: I don't know what our conclusion is. (Laughs)

Gina: I mean, I think I... (Laughs) I think it's just this model as a product leader, right? Thinking about this model, like, what are you going for? Who is your real customer? You know, these questions of pricing and the economics of this thing, and the kind of user that you're going to retain and keep and attract, like, and the growth trajectory. It's completely... It's just a completely different thing.

Chris: It is. And it requires real thought and energy and strategy to figure out how, what you're going to go after, and then how you orient your product and your decisions and the roadmap around where you're going.

Gina: And I think 2024, that's a different landscape. I think folks are willing to pay for things that they see that are really, really valuable, right.

Chris: Totally agree.

Gina: So I think the playbook still kind of stands. Where it's like... Launching, you know, an MVP and, you know, find your product market fit and make it really, really, really, really good during that time that it's free. And then at some point you say, okay. Are there enough people in, willing to hand over their credit card details to stay? Right? And that's kind of a moment of reckoning, I think.

Chris: Yep.

Gina: For new products and startups. And if anybody who works at Monarch is listening to this, we'd love to have you on the show.

Chris: (Laughing)

Gina: (Laughs) And I salute you for making a really good product. THank you.

Chris: Or if anybody at Intuit wants to give us a little, uh, insider scoop about the Mint shutdown...

Gina: A little insight!

Chris: We'd love to hear from you.

Gina: We'd love to talk to you. We would love to hear from you in your thoughts and experiences, your subscription fatigue, your feeling that you enjoy paying for things that bring you value. Send us an email. Chris, where can people send us a note?

Chris: The email address is catalyst@NTTData.com C-A-T-A-L-Y-S-T. I don't know why I always spell it, but I do. It's catalyst@NTT Data.com.

Gina: It's good sound going in earholes. Yes. Please send us a note. We love to hear from you. This was a lot of fun. Thank you for listening to my journey, my journey from free to paid. And, yeah, we'll talk to you soon.

Chris: Alright.

Gina: Thanks all.

Chris: Bye.

Gina: Bye.

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