Steven Smith - Finicity
This week our spotlight falls on one of Utah's fastest growing companies, Draper-based Finicity. CEO Steven Smith co-founded the company in 1999 to develop a program to help consumers more effectively manage their cash flow and make real-time spending decisions. Finicity has since become one of the leading Web-based money management applications, garnering several prestigious awards, and has grown to over 130 employees. We caught up with Steve to talk about the story behind his company, some keys to success and what we can expect in the future.
Silicon Slopes: Can you tell our readers a little more about Finicity and your award-winning flagship product, Mvelopes?
Steven Smith: Finicity specializes in online money management tools and resources to help people manage, save and enjoy their money. Mvelopes is an online tool based on the envelope method of money management, where income is spread across envelopes designated for specific spending categories (groceries, mortgage, etc.). When a purchase is made, money is deducted from the corresponding envelope and replaced with a receipt to track spending. When the money in an envelope is gone, the consumer must either wait to spend in that category, or transfer money from another envelope knowing that spending in that category will have to be cut back as a result. Mvelopes is the modern version of this method, with virtual envelopes, bill pay, automation and the ability to link to the user’s financial institutions (checking, credit cards, etc.). This provides Mvelopes users with a unified, real-time view of their financial standing, leading to more informed spending decisions.
Silicon Slopes: Where did the idea/inspiration for your company come from?
Steven Smith: My grandparents used a form of envelope budgeting during the Great Depression, which helped them have the discipline to weather that difficult time. And over the years, I’ve recognized that one of the main reasons most people fail in their personal finances is a lack of fundamental tools for effective money management. The three of us (co-founders Nick Thomas, Warren Rosner and I) saw that none of the existing money management solutions addressed that need, which led to the development of a program based on those key principles.
Silicon Slopes: How did you come up with the name Finicity, and what does it mean
Steven Smith: The name Finicity was the result of a collaborative effort of existing employees. Finicity comes from “financial” and “city,” implying a community where anyone can go to find answers and tools to money-related issues, which is in line with where we are headed as a company.
Silicon Slopes: In 2004, Mvelopes transitioned into a Web-based application, making it the first online personal budgeting solution of its kind. Now there are numerous competitors in the space such as Mint.com, Geezeo.com and now Quicken has its own Web-based application. What advantages does Mvelopes maintain that would persuade a user to choose your product over a competitor’s?
Steven Smith: What other applications do well is their ability to categorize expenses and report back each month, after you’re already spent the money. How Mvelopes differs is in our focus on managing your money before it’s even spent, providing the tools to do so. This means proactive thinking on the part of the user to plan ahead for all types of purchases, and allocating funds to each envelope to ensure money is there when it’s needed (e.g. saving for a vacation or for automotive maintenance).
Silicon Slopes: Do you have any other new products in the works
Steven Smith: Currently we’re working on a new personal finance portal and community, which will combine the benefits of Mvelopes with a host of other money management resources.
Silicon Slopes: In 2007 you were named the 9th fastest growing company in Utah on the Mountain West Capital Networks annual Utah 100 list. What’s driving this huge growth?
Steven Smith: A large part of that growth comes from referrals—those people who have had success with Mvelopes and then turn around and recommend it to friends and family. We’ve also seen success from partnering with personal finance experts like David Bach, Laura Rowley and Mary Hunt and from increased visibility via our public relations efforts (recent appearances in PC World, Wall Street Journal and Yahoo! Finance).
Silicon Slopes: What has been your most successful marketing effort?
Steven Smith: Among others, one of our most successful marketing efforts has been our paid search campaign. We’ve seen double-digit growth in that channel year-over-year and expect that trend to continue.
