Why Wesabe is Trouble

Dave Winer has raised a kerfluffle with his post Why Feedburner is Trouble. He never liked “giving so much power to one company,” especially now that they’ve sold to a bigger company. Fred Wilson, whose Union Square Ventures invested in Feedburner, says Mr. Winer shouldn’t be concerned because it’s so easy to leave. Robert Scoble says that the real issue is big companies messing around with standards. Donna Bogatin says that the real issue is Google hoovering up everyone’s proprietary data.

I have some of the same concerns about Wesabe.

I’ve been ogling Wesabe since Fred Wilson’s first post three months ago. I crave its streamlined data entry, tagging, and web access. I buy the extravagant privacy and security measures. I understand the benefits of anonymously aggregated data and the possibilities for social networking around personal finance.

But it’s one thing to open up your credit card, checkbook, taxes, bills, investments, and tags to a small, independent company whose CEO sets aside 2 hours a day to talk with customers, and another to open them to Google, Yahoo, ACNielsen, or Equifax.

Union Square Ventures led the Series A round for Wesabe. When the number is right, Wesabe will sell to a bigger company. No complaints; that’s how VC works. But there’s no way for Wesabe to bind its eventual acquirer not to be evil. Who wants to see this announcement?

If you take no action by June 15, 2010, the rights to your data will transfer from Wesabe to [Google].

Wesabe insists that its users still own their data, but it’s already slicing and dicing for their benefit. It’s a small step from there to mining for salable data. Sending aggregated data outside the community would violate the Wesabe ethos, but maybe not the Google ethos.

If Wesabe were acquired, I could always pull my data. But that kind of disruption built in 3 or 4 years from now is a huge flaw for a financial service (especially a really good one). So, unless I can be convinced that Wesabe will “sit tight,” it has yet to cross the chasm for me.

UPDATE: More thoughts on what Wesabe has done well.

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3 Responses to “Why Wesabe is Trouble”

  1. Marcel de Ruiter Says:

    Hi,

    Thanks for these thoughts, when I am just looking into Wesabe.

    I understand your concern, but still, as a user aren’t you giving up “your data” to the world (Google included) the minute you start participating in a community like Wesabe? And you do get something in return too!

    Nonetheless, I do believe that aggregated “consumer spending data” could be a powerful force, which I hope stays on the side of the consumer.

    Finally, if I read correctly the Wesabe blog, I got a feeling they will open the API also up on the aggregated data and not just on “my data” for my own use. But maybe I read it wrong…

    Best regards,
    Marcel

  2. Timothy Says:

    Hi Marcel,

    I hope we’re not giving up data just by joining. Here’s how I read what I called the “Wesabe ethos,” from the FAQ:

    “Wesabe is a community of people who share our experiences with our money so we can help each other make better financial decisions. We do this by aggregating and analyzing our community members’ personal financial data, and showing tips — recommendations to get the most from our money. These tips and recommendations come from the collective wisdom of our entire community. When one of us figures out how to make a great decision, we all learn.”

    To me, the implicit promise here is that my data is to be aggregated and shared only with other like-minded consumers. This is very important to their “trust proposition.” After all, if everyone could see the aggregate data, there would be no reward for sharing your own data.

    On the API, looks like you’re right – aggregated data is not open but will be.

  3. Trust and Value « Zeal and Activity Says:

    […] Zeal and Activity Religion, politics, business, books, and music. « Why Wesabe is Trouble […]

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