Launch HN: Penny (YC W17) – a personal finance coach

We actually got our start on HN over a year ago. Alex and I spent a couple weeks putting together a prototype of the app as a fun side project in between jobs. We launched that on Show HN (https://news.ycombinator.com/item?id=9942202), managed to raise a seed round a few months later, and then re-launched on Show HN (https://news.ycombinator.com/item?id=10858327) several months later. Thanks for the encouragement and feedback along the way!

Some things that we’ve learned and/or would be happy to discuss:

- Having only five categories scaled way further than we thought. It turns out there’s a silent majority that appreciates the simplicity. We just added a premium version that includes subcategories, but we made it over 1.5 years without them.

- We built Penny as a web app (Cordova). It pretty much guarantees that we don’t get featured by Apple or Google, but it allows us to iterate really, really quickly. All users always have the latest version, and we can update the app in two minutes flat. We think the tradeoff is worth it.

- We’re using a chat interface because it allows Penny to explain your finances in simple, relatable English, but we’re not on any chatbot platforms. We also strongly favor predetermined choices over freeform messages.

- Most people don’t realize when they’ve potentially been harmed: over 40% of our Wells Fargo users hadn’t heard about the scandal a month after the news broke. For the Arby’s breach it was over 70%, and for the Navient lawsuits it was 93%.

- We decided to roll our own Ruby DSL for writing conversations, which renders a JSON syntax tree that’s interpreted by the client. Right now, Penny has 34,560 words of copy, 888 emojis, and 93 GIFs.

Our biggest differentiators: more focus on automation and friendliness. The major pain point we discovered is that average people find finances intimidating and difficult to track. We wanted to take as much of it off of people's hands as possible as well as doing everything we can to make the experience as friendly and engaging as possible. That goes a long way to making something that people feel comfortable using. We think Mint is a powerful tool with a much steeper learning curve, and we wanted to build something that anybody can use.

> We will never sell any information that could identify you for marketing purposes, and we only share limited amounts of information with third-party services on a need-to-know basis.

Very nice! It doesn't show up in HN but they've even gone out of their way to bold the relevant bits.

From the FAQ:

> Penny supports over 15,000 banks in the United States, so if your bank is in the U.S., she can probably connect to it. She can even connect to your Venmo or PayPal account!

> Penny never stores your bank login information. After she first establishes the connection to your bank, she gets a separate, secret access code to retrieve your transactions from your bank. That way, she can access your transactions without ever needing your bank account credentials again.

Do 15,000 banks in the USA really have an external API with API keys? That's pretty amazing.

From poking around the site looks like they're using Plaid (https://plaid.com/). Now that's seriously cool stuff to normalize!

>> How do you make money?

> Right now, we make money through donations and by partnering with financial products that we think you might find worthwhile. You can find out more about our partnerships here. Both the donations and partnerships allow us to continue offering Penny’s services for free.

> At some point, we will need to start charging for some aspects of Penny. We will give you plenty of advance warning when we’re nearing that milestone. In the meantime, you can enjoy all of Penny’s features free of charge!

While I like the idea of allowing people to track their finances better, I don't get how a company like this gets funded without a clear monetization strategy. I'm sure they've got some ideas internally and were probably included in their pitches, but I don't immediately see what it would be. Maybe get individuals to pony up $X/mo for the service? I doubt they would. People are cheapskates ... particularly so when the market is people that want to reign in their spending.