Why It Works: Lunch Money Personal Finance App

Why Do People Want This (Biz Side)

What is the problem? Who is the target customer? What is the solution, the promise? Why do people pay?

The Problem: is in the personal finance and budgeting domain. Many apps exist in this space. Some try to do too many things and have a poor user experience. Some are very rigid and don't work for unique use cases. For example no support for multiple currency for digital nomads and frequent travelers.

Target Users: Modern users who find the other apps in this space 'dated' and hard to use. For those who travel frequently and want to track spending in cash based countries.

The Solution: Jen Yip built a delightfully simple personal finance and budgeting app, Lunch Money, designed with modern UX and multi-currency support. People pay because it suits their needs and matches their approach to personal finance.

Why Is It a Good Fit For the Founder (Human Side)

Why do the founders keep working on the business? What makes it a good match for their strengths, goals, and desired lifestyle?

Jen is a software engineer. She worked at Twitter for 3.5 years on three different teams to get a breadth of experience (front-end, growth, back-end).

She was craving autonomy with what she worked on and decided to join her friend's startup (in the pet health space) as a technical co-founder. That startup ultimately didn't succeed, they got rejected from YC and Jen didn't really care about the pet health space.

Jen decided to leave silicon valley, sell everything and travel in a minimalistic way. While traveling in various cash based countries, Jen maintained a spreadsheet to track her spending for 1.5 years.

I was pretty proud of my budgeting spreadsheet to be honest. But it wasn't something that you could just share with the world. It was very very personal.

She shared the spreadsheet with her sister-in-laws, set them up with a template. They were still using the method 3 months later. That was validation enough to pursue turning the spreadsheet into an app.

Jen designed and built the app over two months while living in Japan. Jen is a software engineer who has always been interested in Design (learned how to make websites in 7th or 8th grade). She now gets positive feedback on the user experience of Lunch Money. Marketing (including SEO) is something she learned in real time in order to acquire new users.

Marketing is hard for an engineer's brain...because the feedback loop is so long. You do something and wait 3 months to see the results, to make the needle move. And the needle might move back and you have to figure out why.

Jen never planned to be a solo founder but it worked out that way. She was always interested in design and marketing and wanted to wear all the hats she gets to wear as a solo-founder. She wants to stay a solo-founder as long as possible. Long term, she wants to enjoy her time with her family and potentially be a stay-at-home parent, not because "I married rich or whatever but because I built something that supports me."

I'm not trying to get a million users. I think having a million users would kinda be a headache. I want to make a cool product that a couple thousand people find useful. I wanna make them happy, and that will make me happy.

First 100 Customers

Where did the very first customers come from? What channels did the founders try? What didn't work? What did work? How long did it take?

Action: 1.5 years to perfect the spreadsheet. Two months to build the MVP. Four months of private beta. And 2 months later a public launch. Motivation for getting the MVP done was so she and her husband could use it.

Outcome: She and her husband used the app. Friends and family used the product. Got around 50 beta users, giving feedback while adding features and iterating on the app.

Action: Launched on Hacker News. Made it to the front page of Show Hacker News

Action: Also launched on Product Hunt around the same time as Hacker News Aug 2019.

Outcome: users went from 56 to 594! Users for the free trials, not all converted to paying customers.

Action: Implemented feedback from the initial launch. Added more features.

Action: Launched on Product Hunt again six months later in April 2020

Outcome: 250 paying customers for a annual revenue of $25k by April 2020.

Bonus: more around market size, competition, target audience, and acquisition channels.

Competition - It may seem like personal finance space is saturated but Jen was not deterred by large competitors like Mint and YNAB, because 1.Lunch Money had multi-currency support from the start. 2. personal finance is personal and everyone has their preferred way of doing it. So you just have to find the people who resonate with your way to doing things.

Market size - Mint has 13M customers and they are all frustrated with the product so if you can capture a small percent, you're good.

Target audience - She thought it would be someone who does not use other apps but wants to start budgeting. But she was wrong. Turns out 40% of Lunch Money users are ex-Mint users.

Acquisition Channels - In the beginning, Lunch Money's users came mostly from Hacker News and Twitter. Now, they come from: Google SEO, personal finance blogs that list the app in "Top X budgeting app" listicles, Twitter, a few other sites like Product Hunt, Failory and Netlify.

Lunch Money reached 1000 paying users in March 2021.

You can learn more about Lunch Money's story on IndieHacker's podcast episode 150.