How YNAB Started: The Origin Story

A moment to look back, before we begin the next chapter ...

Driving home from church last week, I asked my son what he learned about in Sunday school, and he said, “I can’t remember. Oh wait, it was Adam and Eve. You know, the origin story.”

This cracked me up. Thanks to superheroes and Pixar, my kids can spot an origin story a mile away. They love the backstory, and I’m right there with them. There’s just something about seeing how all the pieces add up, you know? It’s so cool to look back and savor all of the serendipity and sacrifice, the strategy and the shifting—all the details that brought you right up to today.

I’m biased, of course, but YNAB’s origin story is one of my favorites …

Part One: The Birth Story

Jesse, and his wife, Julie, have a lot of babies, but YNAB was their first.

After getting married in February 2003, they quickly realized that they were even more broke than expected. We’re talking two full-time students, no TV, no car, kind of broke.

Jesse began tracking their money very carefully, and he developed a system to help them plan ahead. What started as a simple expense recorder, evolved into a very fancy spreadsheet. And it worked. They were able to anticipate needs, adjust as they went, and even save substantially for the future. They didn’t have much, but they weren’t stressed about money.

As they talked to friends and acquaintances about money (as you do when no one has any) it became clear that flying-by-the-seat-of-your-pants and stressing about money were standard protocol.

Fast forward one year. Julie quit working to stay home with their first baby, Porter. They’d saved for it. It was part of the plan, but it was still a hit, financially-speaking.

One night at dinner, worried about how they’d make their $400/month rent (not a typo), Jesse had a thought:

Jesse: “Do you think I could sell our budget?”
Julie: “What? Like the spreadsheet?”
Jesse: “Yeah, the spreadsheet, the system …”
Julie: “No.”

Lucky for us, this was one of the few times Jesse didn’t listen to his wife.

Jesse: “Well, what if I did?”
Julie: “Did what?”
Jesse: “Sold the spreadsheet.”
Julie: “………”
Jesse: “What could we call it?”
Julie: “You Need A Budget.”

And YNAB was born. Per usual, Julie did most of the heavy lifting.

Part Two: Trial And Error

So, Jesse set about researching budgeting programs and how he might sell his You Need A Budget spreadsheet.

His research showed that almost all the existing budgeting options were the same: know your income, project your expenses—done. They were static, whereas You Need A Budget was a living, breathing budget, which made it uniquely different and powerful. With that, Jesse and his technicolor spreadsheet were off to the races.

His first marketing efforts were guerilla in nature, which is code for running up and down the stairs in their apartment complex hanging posters, while Julie rolled her eyes pushed the stroller.

Jesse can still rattle off the email address of his very first paying customer. (Unfortunately, she had a Mac, and he had to give her a refund when he couldn’t get it to work properly.)

Part Three: Real-Live Software

In 2006, Jesse got an email from a boyishly handsome video game developer in Texas, their first conversation went something like this:

Taylor: Hey. I like your spreadsheet.
Jesse: Thanks!
Taylor: I could make it into software for you.
Jesse: Oh wow. That would be cool.
Taylor: So we’re friends then? But you’ll pay me. Cool.
Jesse: Cool.

And just like that, they got to work. Many an email were sent at 4 am when Jesse got up early to work on YNAB before going to his day job. There were many late-night phone calls, hashing out specs and bugs and numbers. Less than a year after their first email exchange—having never met in person and both still working traditional, full-time jobs—Jesse and Taylor released YNAB Pro.

It would be two more years before Taylor became YNAB’s very first full-time employee and another two before he convinced Jesse to do the same.

Little by little, YNAB began to grow.

And in the wee hours of 2010, having not seen the sun in several months, Taylor pushed YNAB 3 and a new company policy was swiftly put in place: In order to protect the health and sanity of Taylor and future developers, we, YNAB, solemnly swear to never tell the public exactly when we will launch anything. Ever.

Part Four: The Little Budgeting Software That Could

Jesse, always a cautious accountant at heart, was nervous to hire and take any significant risks, and he knew it was limiting YNAB’s growth. One day it dawned on him, that a big part of his stress was his lack of confidence around the ups and downs of cash flow, at which point, it dawned on him that he’d actually built this really great software to help you even out your cash flow …

In early 2013, YNAB began using YNAB and only YNAB for the business books. It was a game-changer, and with more control and confidence, began to hire more aggressively.

Growth remained steady. Month-over-month. Year-over-year.

Then, on December 31, 2015, we launched a web app—the company’s biggest undertaking to date. Those first couple months of 2016 remain a bit of a blur, but we learned a lot, and we’re all sleeping again. We push new updates, fixes, and features nearly every week, and we’re still excited and growing …

Part Five: The Next Chapter

We’re oh-so-eager to announce that tomorrow marks a new chapter for YNAB. Stay tuned for the official news of our latest, extra-special, milestone.

We can’t wait to see where this development takes you and your budget!