Wesabe co-founder talks about why — and why not — his company failed.
Via TechCrunch today I came across this postmortem by Wesabe co-founder Marc Hedlund. Wesabe was a personal finance web site that competed with Mint.com. Despite coming to market earlier, Wesabe eventually shut down while Intuit acquired Mint.com for $170 million.
Hedlund makes convincing arguments for why Mint.com won, but also disagrees with other often cited reasons. One reason he disagrees with is that Mint won because its name was better than Wesabe. Hedlund writes:
Mint’s CEO likes to talk about how ridiculous our name was relative to theirs, but I think the examples of Amazon, Yahoo, eBay, Google, and plenty of others make it plain that even ludicrous names (as all of those were thought to be when the companies launched) can go on to be great brands.
I’ll agree that you can create a branded experience from a name. Amazon is a great example. But in this case Wesabe was made up. If someone told you to check out “wesabe dot com”, you’d have no idea how to spell it. You’d probably go to Wasabi.com, like the sushi sidekick. If someone tells you to check out “mint dot com” you would find it. Same with “amazon dot com”. The domain doesn’t necessarily have to do with the product, but you need to be able to spell it.
Later Hedlund writes:
You’ll hear a lot about why company A won and company B lost in any market, and in my experience, a lot of the theories thrown about — even or especially by the participants — are utter crap. A domain name doesn’t win you a market…
Hedlund is right. A domain name doesn’t win you a market. It can help, however. That doesn’t mean you should blow millions on a domain name if it doesn’t leave you enough to develop and market your product. Mint.com could have gone with something else and it still would have won. That said, had Mint been called something like Wesabe, which few people could spell, it certainly would have faced a harder course.
Jeff Edelman says
Of course there are many examples of businesses with horrible domain names. But it takes a lot of money to build a brand. When you have a name like “Wesabe,” you would need to spend a lot of money to get people to be familiar with your name and how to spell it. When you have a name like “Mint,” you have a headstart worth a helluva lot. Wesabe is worthless as a domain name. If you had the same content on both of these sites, I think you’d be hard pressed to say the difference in value in domains isn’t worth at least a few million bucks.
Leonard Britt says
A prime location can give a restaurant or retail outlet a lot of first-time visitors but if the quality of the product, service or prices are not competitive with surrounding establishments,… Domainers perhaps overvalue the contribution of a solid domain to a business’ success but I believe most nondomainers don’t understand why a premium domain should cost so much.
Chris says
We Sabe. Wes Abe. Wesa Be. Wesabe.
A domain name doesn’t win you a market? Ask the guys who own:
cellphones.com, baby.com, money.com, stocks.com, et al.
A great domain name wins you the brand. With that comes traffic. A crappy name wins you heartache and a potential trip to bankruptcy as you spend all of your money on marketing.
IM Links says
Great to see such a clear example of the “radio test”
owen frager says
With just a few million dollars any one of us can build a business with third party fulfillment, direct response TV and celebrity spokesman (or lawyer in this case) who works for a piece of the action. LegalZoom.com or Priceline, for example.
Gazzip says
Wesabe is a pretty lame sounding brand name, not even in the same league as a name like Mint.com
Nic says
The most “ludicrous” name (example) of them all?
GoDaddy
Einstein says
There’s an argument for not spending $1-$5 Million to get a topname.com right away. Sure it may help but that may not leave much money for anything else, like designing the product, but for a few $1000 Wesabe could have found a much, much better name.
Wesabe is what exactly? How do you tell someone what the site name is?
Mint is ideal, it even sparks a conversation:
Mint?
Yeah, Mint as in that mint gum or minting money.
Oooo….h.
Spellman says
You wrote:
>>If someone told you to check out “wesabe dot com”, you’d have know idea how to spell it.<<
Seriously? Maybe YOU would have no idea how to spell it… but then, apparently you can't even spell "no."
Robin Ong says
Who can blame Hedlund. Not many people can understand the science, art and business of domain name, what’s more the significance it had on a business.Asking a once powerful brick-and-mortar CEO to admit defeat to a mere ‘domain name’ is actually asking him to admit to not understanding technology.
Mircea says
Mint acquired the domain name mint.com from a rich new yorker. That new yorker wasn’t interested in money so he got shares in Mint. That was a smart choices because Mint was sold for 170 million…and I bet that guy did make more than if he would have just sold the domain.
Facebook acquired the domain facebook.com for $200,000. Who owned wasn’t interested in shares (which Facebook proposed first)…I bet that guy is scratching his face now…
Steve M says
While he’s correct that a domain by itself doesn’t win you a market, it does put you at the head of the table.
::: Domainers Gate ::: says
not true! a good domain name is VERY important!