Stripe responds to the Financial Connections/Plaid kerfuffle

A lot of comments here saying that this is the death knell for Plaid, but I wouldn&#x27;t be so sure. Stripe has launched competitors to existing fintech products and failed to gain traction plenty of times before.<p>Example: Remember the Stripe Corporate Card? It was &quot;launched&quot; as invite-only 3 years ago and is still invite only today, with little signs of traction. Meanwhile both Brex and Ramp have become decacorns through crazy revenue growth.<p>It&#x27;s not really just a Stripe thing either. I think people are way under-estimating how hard it is for a large company to launch and succeed with a product outside of their core offering, especially when the competition is a small nimble startup with a singlular focus on that one product.<p>Startups die all the time, for all sorts of reasons, but &quot;large company started competing with it&quot; is a rather rare one.

I don’t know all the specifics of the interaction that happened here, but the hard truth is that if you aren’t eventually expecting this to happen to your business - regardless of the space you are in - you aren’t being realistic about the nature of competition in SaaS.<p>Plaid has enjoyed years of life without much direct competition. My hunch is that few other businesses were interested in the space because it feels inherently fragile, and Plaid has had the benefit from having spent years doing a lot of sausage making.<p>The inevitable dynamics of competition are finally catching up to them. In established corners of SaaS a vendor with a unique idea barely gets 6 months before their competitors have replicated anything that shows signs of product market fit. Not saying it doesn’t sting, but that’s reality.

I have dealt with Stripe as a partner for my last three companies, and I do not trust them.<p>The core team was A+ and very reasonable, but the non-core folks would regularly lie and misrepresent themselves. I have to be careful about examples because I don&#x27;t want blowback to my colleagues, but here&#x27;s one: telling a third party that they should not do a hybrid Stripe + my_old_company solution because our product couldn&#x27;t support the use case. But, of course, we had the exact product requested in market then, and the team in question knew that. It&#x27;s fine to want to close a deal, and I guess some people lie to close a deal. But saying one thing to me and another thing to the world has happened many times with Stripe.<p>I don&#x27;t know anything about this particular case, but it does match a pattern that I have seen firsthand.

I&#x27;m surprised that all the comments here are not about how Plaid CEO maliciously misled people.<p>&quot;Interview&quot; turns out to be a job interview before Jay even joined Stripe back in 2014. Jay started working on this product in 2019.<p>&quot;RFP&quot; turns out to be a regular RFP where Stripe wants to integrate with multiple partners like MX and finicity.<p>In the past few years, Plaid CEO and Plaid requested meetings with Jay. Jay never initiated those meetings.<p>Now Plaid CEO has deleted the tweet and acted like Stripe Mafia has got to him. LOL<p>Plaid CEO has very low ethics, it seems.

&gt; Maybe we should have explicitly reached out to them to discuss this upcoming launch so that they could privately express any concerns they had.<p>A thousand times no. Companies privately discussing launches with each other to avoid stepping on each other&#x27;s toes is bad for the consumer. In addition, it may actually cross the line into illegal market allocation.<p>I am glad that Stripe developed and released a product that they thought would benefit their consumers.<p>I do not want companies feeling they have to consult another company before entering a market. (which once again may actually be illegal).<p>EDIT:<p>Maybe I am being paranoid, but the tone of the Plaid founder and the apologetic nature of this post, kind of brought back memories of Steve Job&#x27;s indignant emails about other companies hiring, and their apologetic response which ended up leading to an illegal agreement not to hire each other&#x27;s workers. I don&#x27;t want any &quot;gentlemen&#x27;s agreement&quot; about market allocation and collusion about what products&#x2F;services will be released.

This is a good, helpful response!<p>As an aside, I’m excited to switch to Stripe’s transactions API from Plaid for MoneyHabitsHQ.com.<p>Plaid’s security review process is “submit questionnaire and wait an unspecified amount of time.”<p>I’m at five weeks of waiting and three help tickets and it’s been absolute silence.

As a consumer, I&#x27;d welcome some more competition in this space. All of the personal finance aggregation apps I&#x27;ve tried, e.g. Mint, YNAB, Personal Finance, etc. have used Plaid and almost always, I have issues with connecting one or more banks on any given day. Submitting tickets re: connection issues rarely resolves in a timely manner too.

I think that people underestimate what this feels like for the Plaid founder and potentially for Patrick too.<p>For Plaid you&#x27;ve spent your life building this business. Presumably there are many happy customers and you&#x27;re working really hard to define the space and provide service. One morning you flip on your laptop and see a headline that one of your customers (and competitors) launched a new service that directly competes with yours.<p>As the founder of &quot;attacked&quot; company not only do you see the competition coming from a customer but from another &quot;friendly&quot; company in your space. Yesterday you were friends, today you&#x27;re enemies. Doesn&#x27;t matter who you are, this comes as a shock and it stings.<p>Worse still, when you show up on HN, a space that in the past might have championed your service, you are now met with comments about how your customers are excited to switch.<p>Showing up to HN and seeing your comrades immediately jump ship stings no matter who you are. And if you&#x27;re Stripe leadership and you believe that you&#x27;re playing an infinite game, then pissing off another similarly minded company (and supplier) isn&#x27;t a good feeling either.

Maybe this entire thing will serve as a warning to those who don&#x27;t have an easy pricing calculator on their website.

That’s freaking good leadership in written form if I have seen one…

Correct me if I&#x27;m wrong, but it seems like Stripe just nuked the whole of Plaid&#x27;s platform and value proposition from orbit.<p>Plaid just went from a decacorn to a cheap acquisition target for PayPal, Square, Shopify, etc.<p>I can understand this being absolutely gut wrenching for the founders and early employees that are still on board. It must feel like having tangible dreams crushed. Not as bad as a cancer diagnosis, but certainly worse than a rejection from your dream school.<p>Competition is an evolutionary force of nature. Brutal at times.

Plaid was and is “just a feature” so this day should have come as no surprise… or am I missing something?

Why is so much of Stripe&#x27;s dirty laundry aired out in the open? It never looks good.

&quot;We&#x27;re the exact opposite of Apple in this regard. People will buy fewer iPhones today if they know what the new one will do. But people are probably more likely to buy Stripe today if they know that the future Stripe will be even better&quot;<p>Will you keep your old iPhone if you knew what the new version will do?

What is the front page test he refers to (second image, last bullet point)?

I want an API to my account data but I don&#x27;t want any of these 3rd parties having access. The banking free market has failed, we need regulators to require apis.

The only thing I learned from this is that both companies have ways to connect directly to banks via API…. <i>sometimes</i> for <i>some banks</i>, <i>sometimes</i><p>and the consumer cant tell at any time.

What we really need a thread by Ryan Breslow.

I’ll never get over how regressive it is that we are literally clicking on images filled with text as a way to share… text.<p>I seriously cringe each time, lol.<p>Anyway, on topic, it’s good to see this little debacle behind them. Both stripe and plaid offer good services and competition is good in any case.<p>I do wonder if there’s some room for innovation here from Google and Apple. It would be interesting to see if it’s possible to login to any website using plain text passwords in a way that can be delegated to other sites without them knowing the password too.<p>—-<p>Thinking about this more, if browsers generally allowed this it would allow integrations between sites to be implemented pretty fast by simply scrapping text.

Seems like stripe is constantly getting called out by other fintech companies. Honestly probably points to the key to their success, they play dirty and are in it to win.

I still find this to be rather passive aggressive. Sharing an &#x27;internal&#x27; doc immediately...Why not call a public statement?<p>Mention Zach deleted his tweet, but not mention what he actually said: &quot;Deleted tweet. Misunderstanding or different styles perhaps. Presuming positive intent.&quot;<p>All so underhanded<p>[0]<a href="https:&#x2F;&#x2F;twitter.com&#x2F;zachperret&#x2F;status&#x2F;1522444749877088256" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;zachperret&#x2F;status&#x2F;1522444749877088256</a>