I've been using Wesabe for over six months now, and just finally had time to sit down and write about it. Its been picking up some traction on some top blogs like A VC and Gotham Girl, and I wanted to join in on the fun because i don't think the analysis is in depth enough. Part of the reason that it took me so long is because I was really compelled to give it a fair trial. The idea to be able to better manage your expenses, is a very interesting one that has a rather large potential market. Just about everyone I know has a bank account, and most of them are pretty unimpressed by the online services offered as well as by the idea of using Quicken or Excel.
Wesabe a very innovative solution for getting your financial data into a nice clean format that is ripe for analysis. On a higher level, they are using the wisdom of crowds to try teach us personal finance best practices. This isn't a topic that most people are willing to share and talk about openly, so the social benefits of this application down the road are enormous. I absolutely encourage you to take a look at this service, and most of my analysis below is positive. My only criticisms are because they have done is such a great job so far, that it begs to be taken to the next level. Wesabe gets a critical piece of the puzzle dead-on, right from the start. They figured out a way, using their uploader, to make it easy for someone to pull all of their financial information from a variety of different accounts into one useful piece of software. My previous solution for personal finance management was the Microsoft "personal budget" excel template, and it required a rather painful process to get the data from my bank account into the appropriate format for using a spreadsheet. That problem is now solved.
The next thing Wesabe does incredibly well, is that it allows you to tag all of your expenses quickly. Wesabe learns from the process, so as soon as it has a vendor/expense in the system it recognizes it and automatically uses your previous tags. Yet again I was ecstatic, it's not often that I use a web2.0 application that has this much utility. Most fall short at the very first step.
Unfortunately, this is where I felt that Wesabe starts to taper off. Because the tagging was so easy, I had all of my expenses tagged like crazy in no time. I was able to click on each of the tags, and get some decent graphs, and see how often I was incurring expenses under that tag. The problem was, that my tags were all over the place. Despite the fact that tags have been applied to just about everything in the Web 2.0 world, there are some data structures where tags inherently don't apply. Personal budgeting is one of these.
If we go back to my trusty Microsoft "personal budget" template, we see that we have a nice structure organizing all of my different categories of expenses. This guarantees that all my reporting is logical, that i'm placing expenses consistently in the right category, and it results in me seeing which areas I need to work on. The natural activity of tagging itself doesn't result in such a structured group of categories, so i found that I wasn't able to get as useful an analysis from my data in Wesabe.
Now, Wesabe got a lot of things right. The UI is great, auto uploading of data is really practical, and the automatic tagging is extremely time-saving. But too much of Wesabe is up to the end user and how they use tags. It's a shame for Wesabe to have built such a great system (with plenty more to come!) up until this point, only to fall short with this tagging mass at the end user can create.
They have the potential here to do amazing things with the user's data, and if they help the end-user get to a useful analysis of their expenses quicker, Wesabe will have an incredibly sticky application.
I left out any mention of social benefits until the end intentionally. Because I started using the software so early, I'm not sure that I have actually felt these "wisdom of crowds" benefits yet. Additionally, I feel many of the financial tips that the site offers so far are quite rudimentary. I recognize that these benefits will kick in after a certain critical mass has been reached, and I see a really sticky application as the first step to getting there. The application has to be useful to people immediately on its own before it can start relying on the social benefits as a selling point.
More to come on this topic, some competition is on the way and I can't wait to take a good look!