Buxfer is a startup with the stated mission of helping you “track your money, effortlessly.” It started innocently enough as a simple script developed by Co-Founder Ashwin Bharambe to track expenses among his college friends at Carnegie Mellon. But after some prodding from friends and inspiration from their soon-to-be angel investor Paul Graham at Y Combinator, they started Buxfer (a merging of the words “bucks” and “transfer”).
I recently talked with Shashank Pandit, one of the two Co-Founders of Buxfer, who explained that the real motivation behind starting the company was Paul Graham himself, who instilled a “nothing to lose” attitude. Ever since the Buxfer Website has morphed with new Web 2.0 features targeted at the twenty-something crowd. Shashank explained that new features are the result of staying in touch with customers and that they “personally answer all emails,” spending about 1-2 hours a day on simply responding to requests and questions. They have also gone out of their way to make it easy for their users to make a suggestion with a prominent “Make a suggestion” link on their global header. Their focus near-term is to “solve the problem of young people to manage their money” and that “shared expense is the hook” for the larger goal “to create the best personal finance application on the web.” They are employing Paul’s start-up approach of releasing “a minimal version one quickly, then let the needs of the users determine what to do next.”
As a result, their general strategy seems to be to constantly add customer-focused features to build an application that people want to use. Along the way, they were one of the first to add Amazon Payments to settle expenses between friends, and are moving towards managing transactions by bank account. Shashank pointed out that they don’t plan on engaging in social networking for generating financial advice (similar to Wesabe), but they see value in social tagging for categorizing transactions and “training” their tagging engine. This is in direct competition to Mint.com, who takes a different approach by auto-categorizing transactions based on 90 different categories.
I asked Shashank about bank aggregation and account synchronization, and he said that for young people, bank aggregation is not important, but at the same time, they definitely have it in their sights and that it’s something they’re working on. Another enhancement that I asked about is security. Shashank confirmed that they use industry standard security procedures, but are looking to add advanced features down the road.
What Buxfer is doing has gotten the attention of banks for the idea that users not only want to track expenses online but most other things related to their money. More importantly, it’s an experiment with how people track their money with other people, not just businesses. It has broad applications beyond overseeing the money you owe or that others owe you. It goes to the very heart of cash flow management, budgeting, and financial planning. Given that their target audience, the twentysomethings, are notoriously bad at this, they have already succeeded in my book.