It’s 2012 in New York City. It’s the middle of spring, the followers are blooming, bees are everywhere and the Occupy Wall Street protest has just moved to Union Square Park. You see signs everywhere saying “People before profits.” Police are arriving each day to calm the crowds. Insults and tears are flying, both sides are tired.

[Camera cuts to two guys walking north to a small office]  Zach Perret and William Hockey talk to each other 

Zach, “Hey people aren’t happy with the financial system, everyday we walk past these protestors. Let’s build something” 

William looks over and entertains the conversation “What do you have in mind?” 

Zach responds “Let’s build better tools to help people analyze their finances.”

This is the beginning of Plaid’s story, They are now worth $13.4 billion.

This story is unique, these two co-founders were not juggernauts, not Stanford dropouts, and didn’t have millions to spend on building an app. They were regular guys and they made it big. Let’s walk through how you can replicate their success.

They set out with a goal to help people analyze their finances better. So they went out and built product after product. One to save money at restaurants (by not eating out), one that recommended places to go to that were more budget friendly, and some others that analyzed spending in a fun way. 

If you downloaded some of their apps that were supposed to “help” you with your finances and it said to you “Stop spending money” how long would it be before you deleted it? Not long, that’s exactly what happened.

People were not interested in the obvious, they wanted a solution to their problems.

This went on for 6 - 7 app builds before something amazing happened.

Their friends told them that their apps sucked! They didn’t understand psychology and were wasting time. 

One good thing came out of this wasted time. They figured out a really difficult thing. How to get information from financial institutions and make it look nice. 

Remember this was a time before Stripe. If you wanted to send money a bank would test send you a penny first to verify the account and the whole process would take days. There was no simple way to verify accounts or learn about what was happening with your money.

Developers saw that they solved this really difficult problem and wanted to license it.

The tide was finally turning. They had something that people actually wanted. But they needed more than just one person saying it was cool before going all in. 

They needed validation. They pitched 70 investors and said we built this new product and to be successful we would need other people to build new products on top of ours. Of course, 70/70 said no. 

They then went to the 2013 TechCrunch Disrupt Hackathon and built a product called Rambler that became V1 of Plaid and won it. They won $5,000. They got the validation they were looking for. This gave them the conviction to move to San Francisco to find engineers and get to work.

The switch from consumers to businesses started. They reflected on their time and realized that they had been building half baked solutions to big problems that no one wanted. They decided to narrow their scope. They had built out the backend for American Express cards and a lot of the first people using Plaid focused only on expense management. 

So they went from building tools to help analyze finances to building a solution for corporate customers who wanted to analyze their expenses on their American Express cards. 

Oof, that’s what you call niching down.

This solution only worked for this narrow use case but it solved all of their customers’ problems for this use case. This is how they were able to get their first few customers and eventually landed Venmo as a customer. 

But I’m jumping ahead of myself.

They used one tool to get these customers.

They started talking to everyone they could. They were looking for two things. 

If both requirements weren’t fulfilled they wouldn’t pursue the customer. 

With the customers that satisfied the requirements they didn’t make them sign contracts, they gave out 1 year free trials, but when they reached out they expected a conversation.

They were looking to shorten their feedback loops as much as possible to get their product as good as possible.

Customers would say to them “We like working with technical salespeople because they understand what we need” and they gave it to them.

On top of texting everyone almost every week, they also had PlaidOuts, they’d invite everyone who they were texting and said to come in the office for food and drinks. They’d bring friends and it would turn into a little party.

They met future hires, future customers, and future friends at these events. They did all this while not being drinkers and being socially awkward but they kept going because they saw the value in it.

They did this well into having over 200 customers and eventually, it was a friend who ended up introducing them to the Venmo team which led to them getting all of their major accounts.

Relationship building wasn’t just for the small guys and early customers. They did the same with the big customers, they wanted to know everyone on the team that would be working with Plaid. They were hungry for feedback and it turned into a cheat code.

Since they knew everyone on the team when one person left to go to another company they’d keep in touch and ask how they’re doing and if Plaid could be useful at the new company. When it would be useful they essentially had an internal ambassador that would help land new customers

This was Genius.

All of this helped them to have incredible growth. Growing their valuation from $0 to over $2 billion in 5 years.