In 2016, a friend and I discussed how difficult it is to save money. Our culture pushes us to spend daily but save only monthly. The internet has countless buttons to help you spend money, but very few to help you save. We wanted to change that with Piggy.
We started with customer discovery, interviewing 5 people about their saving habits. Key findings: most people want to save more money, spend daily, have income, but half have poor saving habits. This validated our problem: people have extra money but bad saving habits.
Looking at competition was eye-opening. Existing tools focused on monitoring spending, not building saving habits. We refined our approach: people's saving habits will improve if we engage them in saving daily.
We built a prototype and tested it with 7 users who made $80K+ and wanted to save. The results were great - users found the daily prompts empowering and different from other tools. Half asked to be notified when we launched.
However, we hit technical hurdles. Transferring funds between accounts would cost $10 per user per month. This made our solution unviable, so we explored alternatives including bank partnerships.
The breakthrough came when we discovered the buyer. Through connections, we met with American Express and Citi Bank. We learned that banks pay heavily to acquire new accounts. If our app could guide people to open accounts, it became an acquisition play for banks.
Key learnings: daily engagement builds saving habits better than monitoring, and banks will pay for customer acquisition in the savings space.
Ultimately, Piggy offers a win-win solution: better saving habits for users and customer acquisition for banks.
Thanks for listening!
Saving Money
We Ate The Web, 2016
How two friends quickly tested the idea of a button to save money and
learned of a monetization path.
The internet is filled with convenient interactions that encourage you to spend money: one-click purchasing, recommendation engines, wish-lists, registries, SMS purchasing, and more. There are loads of buttons that help you spend money, but very few buttons to help you save. Piggy brings the save button to the forefront and helps people develop better money-saving habits one day at a time.
A friend and I got into a discussion about how difficult it is to save money. Our conversation shifted to how our culture is a spending culture - we are pushed to spend but not to save. In our personal lives, spending occurs daily while saving occurs bi-weekly or monthly. We are very good at spending because we practice it daily, but the opposite is true of saving. As a result, spending feels easy and seamless, while saving money feels like a chore and takes effort.
Moreover, we both lacked confidence in our ability to save. We felt that our spending habits were bad. We recalled that when we did have extra cash, we usually ended up spending it on socializing or unnecessary things.
The Problem
I want to save money, but my current saving habits and lack of extra cash make it very difficult to save money.
Planning
Our next step was to do customer discovery and see if others shared this pain. Before diving into solutions, we wanted to see if other people had a similar relationship with money. We created a short list of questions and started with 5 in-person interviews.
Key Findings
Most people desired to save more money
Most people spend money every day
Most people had spendable income
Half of the people said they did not have good saving habits
Some people said they didn't budget
Few people said they spend "too much"
Few people said they are often encouraged by others to save money
Few people saved directly out of their paycheck
These responses validated that people wanted to save money, but their saving habits were poor. However, our assumption that lack of extra cash led to difficulty saving was invalidated. We observed that extra cash wasn't viewed as money they should save, rather there was a perception that extra cash could be spent. After the interviews, we modified our problem statement:
Modified Problem Statement
I have extra money that I want to save, but I have bad saving habits.
At this point we felt confident that people resonated with our problem statement and decided it was time for an abbreviated design sprint.
Designing
Almost right away we had an interesting finding. While looking at our competition, we noticed that most existing tools were directed at helping people get context around their money. They "helped" people save by offering budgets or attempting to automate the saving process.
Looking at our competition was eye-opening. It didn't seem that anyone had actively focused on developing a person's saving habit. Rather, existing tools aimed to help people save money by monitoring spending habits. We kept this top of mind as we went through the sprint.
As we diverged, we continually found ourselves digging into the belief that: People's saving habits will be improved if we engage them in saving daily.
As we continued to sketch out solutions, we refined that statement further: Providing a person with daily encouragement and reminders to save their leftover spending cash will help develop better saving habits.
From here we developed a user journey to help guide us through building our prototype. As we refined a potential solution, we surfaced many assumptions about our users that we needed to test.
Key Assumptions
People will use one account for all daily spending
People want to be reminded to save money daily
People want the option to save
People will save out of spending cash, separate from bills
Next we set out to build a prototype to test with users. Based on the outcome from the sprint, we started to build a prototype to test that our solution was viable and addressed our riskiest assumptions.
Impact
We ran 7 user tests with our target market: people who made $80K+, currently wanted to save money, and felt that they had bad saving habits. We weren't entirely confident that this was our target market, but that was the group we had gotten the most positive feedback from.
The user tests were a great success. Not only did we uncover some interface and experience problems, but we got a lot of positive feedback and validation that being prompted to save money felt empowering and different from other tools. About half of the users asked to be notified when the application was to be released without being prompted.
Challenges
Before we started to develop the MVP Piggy application, we spiked on the engineering side. We quickly ran into difficult technical hurdles. The immediate problem we faced was facilitating the transfer of funds from a checking account to a savings account. We were able to find a means to do so, but at a high cost. The best solution we found would cost each user $10 per month.
With a cost that high, we didn't believe that our complete solution would be viable. Five options we were considering:
Don't have a save button, rather remind and suggest an amount to save
Partner with a bank to get free access to the API to facilitate money transfers
Find a better/free solution to facilitate money transferring
Create a better/free solution to facilitate money transferring
Get users to pay
We wanted to pursue the third option, while considering the first option to be our MVP. We felt that although you couldn't save money using the application, the daily reminders and encouragement would still be useful. Our end goal is to provide the means to directly save money without any charge to the customer, so option 5 is out of the picture for now. But before we could take this path we went in search of a buyer.
Learnings
The most interesting learning was finding the buyer. Free products are never free. If a product is free, then the user is the product. With that in mind we started to look into how helping a person save money was monetizable. Through some of my partner's connections, we were able to sit down with people from American Express and Citi Bank.
What we learned was obvious in hindsight. Banks pay a great deal of money to get an individual to open a checking or savings account. If we could use this app to guide people to opening an account, it was an acquisition play for the banks. Moreover, the more money a person has in their account, the more the bank can leverage that money. It's a win-win for the user and the bank.
Closing
The development of the Piggy application has addressed the challenge of saving money in a spending-centric culture. By actively engaging users in daily saving habits through reminders and encouragement, Piggy sets itself apart from existing tools focused on monitoring spending. User testing validated its effectiveness, receiving positive feedback. Challenges related to technical hurdles and high costs for fund transfers prompted exploration of alternative options, including partnerships with banks. The journey also revealed the potential for Piggy to serve as an acquisition tool for financial institutions. Overall, Piggy offers a practical solution to improve saving habits and benefits both users and banks.