Jason, time to get out of the tub!
September 18, 2009
(Jason, far left, photo credit Maggie Mason)
I am not exactly sure where to begin so I will just start. Jason Fried from 37Signals has a post titled, “The next generation bends over” where he argues:
- Intuit is “the poster-child for the last generation”
- VCs are a cancer “killing off the next generation”
- Startups shouldn’t be sold, they should be allowed flourish on their own
Let me start off with some background. Mint is a personal finance site that launched a couple of years ago at the TechCrunch40 conference. Intuit, a ten billion dollar company who makes Quicken and TurboTax, bought the two year old business for $170 million earlier this week.
Mint’s technology was based completely on open source (MySQL, Hibernate, Tomcat, Apache and Yahoo’s UI). The site grew to 1.5 million users who pay nothing to use the site. The company has raised $32 million in three rounds of venture capital from:
- Seed: First Round Capital - $325K
- Angel: Felicis Ventures - $750K
- Series A: Shasta Ventures - $4.7MM
- Series B: Benchmark Capital - $12MM
- Series C: The Founders Fund and DAG - $14MM (last month)
First, Jason suggests that the founders of Mint were forced to sell due to a “VC-induced cancer that’s infecting our industry and killing off the next generation.” He immediately admits, “I don’t know the full backstory, but I’d bet this sale was encouraged by a Mint investor.” Really? How much do you want to bet Jason? I will take your action right now. The latest investors, The Founders Fund and DAG Capital just pumped $14MM into Mint last month. I wonder what their IRR was for this investment - I’d be willing to bet HUGE money they didn’t met their objectives. How much time and energy did they invest on this deal only to exit a month later? I actually did a little homework and talked to a friend at one of these firms and they confirmed it wasn’t the ideal exit.
Second, Jason suggests Mint was “everything their main competitor, Intuit, was not.” Really? Intuit sells more than $3 billion in software and services to consumers. Jason argues that people only use Quickbooks/Quicken “out of habit and legacy”. $3 billion dollars of habit? I happen to know LOTS of folks who work at Intuit and I can tell you that they take offense at this sort of comment. We use Intuit products for our businesses and I take offense at the assertion that somehow we are using Quickbooks out of habit. Mint NEVER solved small business accounting for our businesses - NEVER. Mint didn’t try. I am willing to bet that 37Signals uses Quickbooks (come on Jason, admit it). Has anyone ever mentioned Mint’s revenues? Are they generating ANY revenue?
Its almost like Jason is taking the sale personally. Jason, the founders at Mint are likely making the right decision. These are the worst of times for the economy and consumers are get squeezed left and right - from tariffs on tires, to taxes on health benefits to lower wages and unemployment - maybe combining forces with Intuit was the BEST decision. Maybe Mint can help make Intuit better. Maybe this acquisition will equate to a ‘periodic revolution, a necessary medicine for the sound health of an ‘old world’ company like Intuit’.
