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Software startup takes on personal finance heavyweights

February 5, 2011

Mike Langellier doesn’t have a financial planning background.

So when he set out in December 2009 to create a detailed budget for his family, he scoured Web-based personal finance software for guidance.

What he found on sites such as Mint.com was a way to aggregate all his financial information, from bank account balances to credit-card debt, and budget how much he was going to spend each month. But he saw a key ingredient missing.

“What I really wanted to know was, how much can I spend now without throwing off my savings goals and budget?” said Langellier, 29. “Am I on track for the future?”
 

Langellier Langellier

A little more than a year later, Langellier and his business partner, Brandon Dewitt, 20, have launched a Web-based service called MyJibe that provides just that.

Like competing sites, MyJibe aggregates users’ financial information. But unlike competing sites that track spending habits, MyJibe also forces everyday consumers to set savings goals and plan what they will need to spend before they spend it. That allows users to see how much discretionary money they have at any moment.

For users who want to go a step further, MyJibe connects them with financial advisers who are focused heavily on the overall budgetary picture, rather than just helping invest money.

“It’s kind of a two-direction next step,” Langellier said. “We’re helping people better help themselves.”


Dewitt Dewitt

Langellier and Dewitt met at Experian (formerly Baker Hill, which provides data and analytics to the financial services industry). Langellier was directing account management, and Dewitt Web services. They launched MyJibe with personal funds and staffing support from Bloomington-based venture capital incubator SproutBox.

The startup, which publicly launched Jan. 31, can support itself for now by attracting enough users to pay a $7.99 monthly subscription. But Langellier is working to attract capital investment to hire more staff members and expand the product. He plans to move MyJibe from Bloomington, where it was developed, into an office in Indianapolis, where he lives, in March.

MyJibe will be going up against some established names in the Web-based personal finance software field—the most prominent being Mint, which is owned by Mountain View, Calif.-based small-business software company Intuit.

But Yun Kim, a research analyst for New York-based Gleacher & Co. who focuses on online advertising and software, said there’s still an opening for companies such as MyJibe to gain a foothold.

The key, he said, will be to aggressively market the product to attract a critical mass of users—something other players in the still-emerging field have yet to do.

“It’s really early in the evolution of the marketplace,” Kim said. “The name of the game right now is who is able to spend more money and acquire more customers.”

One challenge for MyJibe will be convincing customers it’s worth paying a subscription for a type of service that some competitors, including Mint, offer free.

“They will have to offer something very, very attractive that makes someone willing to pay for this kind of service,” said Rafael Garcia, an equity analyst at Chicago-based Morningstar who follows enterprise software.

Langellier said he thinks there’s a market. One indication of interest: the millions of followers of personal finance experts such as Suzie Orman and Dave Ramsey.

He also is selling the product directly to banks, credit unions and financial advisers, who would then offer the service to their customers.

Peter Dunn, a local financial planner with 700 clients nationwide who offered advice in developing MyJibe, said he plans to use the site with his clients. But he acknowledges one obstacle in selling to others in his field: many are focused on investing money for clients, not coaching them on healthy spending.

 Nonetheless, he thinks the site will be successful because he sees it appealing to “people that want to take a deeper look at their financial life but have no idea how to do it.”

People, in fact, who are just like Langellier was when he started scouring Web sites, looking for budgeting guidance.

“This was built with a consumer in mind,” Dunn said. “[Langellier] knows how hard it was to teach himself finance.”•

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