Three Key Lessons We Learned from Plaid

https://finovate.com/three-key-lessons-we-learned-from-plaid/
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Unless you’ve been living under a rock, you’ve probably heard that Visa is acquiring Plaid for a deal that’s worth $5.3 billion. Finovate’s own David Penn covered the story for us on Monday, and virtually everyone in the fintech space is talking about it.

What you might not know, though, is that Plaid was on stage at one of our events way back in 2014. At that point they were already well on their way – they were close to signing their 1,000th customer, and they had already signed companies from spaces like lending, payments, expenses and accounting, asset management, and PFM. In the years following their time on stage, we’ve seen countless demoing companies come across our stage who relied on Plaid to underpin their offerings from a wide variety of areas.

The fact that they were so widely used at such an early stage is a testament to the quality of their code, but there are also a few key lessons to take away from their success:

  1. A valuable tool can be worth more than what you build with it. The old saying goes something like “in the gold rush, it’s better to sell pickaxes than mine for gold.” That’s precisely what Plaid did, putting together a product that was attractive to a wide variety of fintech companies to capitalize on the massive wave of fintech startups that came through the last decade. Whether those startups survived or not, Plaid became a part of all of them, guaranteeing their own payday and removing the uncertainty that so many fintech startups faced.
  2. Simplicity is an asset. Plaid’s API is simple to understand,  install, and build on, which has made it attractive to developers from across fintech. This simplicity also means that the tech is highly versatile, floating easily from one field to another.
  3. Connections are vital. At the time that Plaid was gaining momentum, the API world was a very competitive one, with a lot of providers fighting to get adopted. The technology itself was very important, obviously, but so was the work they did in coming to events like FinDEVr to make sure that developers knew what their code could do. The ability to evangelize for your product is crucial to success, and building momentum frequently has to be done through face-to-face connections with influencers in the industry.

There are many more lessons to be drawn from Plaid’s example, but for innovators in the space, those three lessons seem the most important to me. Plaid’s connections, simplicity, and business strategy put them in a position to succeed and become the latest fintech royalty. Congratulations to them on their success, and the challenge is laid out for the rest of the industry to follow in their footsteps.

https://finovate.com/three-key-lessons-we-learned-from-plaid/