by Rick YangJan 13, 2020
Make money easier. That’s how William Hockey and Zach Perret pitched their fintech developer platform to us in 2013. It was a compelling and ambitious mission that aligned well with our deepening investment thesis around fintech. We had early conviction in Plaid’s potential to be a leader in the space, connecting banks and financial institutions to new technologies and applications. We were lucky enough that the founders allowed us to partner up with them in their seed round and every subsequent financing!
Fast-forward to 2020, and it is with great excitement and overwhelming pride that we congratulate William, Zach, and the entire team of talented #plaidpeople on their recent acquisition news!
The NEA team and I have had the privilege of being a part of the Plaid journey from the initial investment in a team of three people (and a dog!) to a deep partnership with an organization of 400+ that has democratized financial services around the world. As an early board member, I've had the opportunity to learn a tremendous amount from the founders throughout the past seven years—lessons that I will carry with me into future partnerships with founders.Clockwise from top left: William Hockey and Zach Perret; NEA's Aaron Jacobson with Zach Perret at 2017 CEO Retreat; NEA's Albert Lee and Rick Yang with William Hockey
Zach and William would be the last people to be caught up in the hype of such a big milestone for the company (and the industry)—in fact I’m sure they are back to their typical heads-down, relentless execution to further the mission. But as an ode to such a special company, I’ve attempted to capture key learnings along the way, in hopes that other founders may be inspired by the magic of Plaid…
1. Define a clear mission and let it guide everything.
It all started with that simple premise: Make money easier. After attempting to build their own fintech applications, the painful process of allowing a consumer to access their financial data led the founders to become obsessed with the bigger problem—they realized that the best way to affect change was to go deeper…into the infrastructure layer. The shared frustration led to an unwavering belief in the mission, which consistently fueled every action and decision throughout the company’s growth.
2. Create a culture that prioritizes people.
The founders had an unwavering focus on people from day one. The clear, ambitious mission combined with an extreme focus on talent enabled the founders to attract amazing people.
They built the foundation of the company around the highest of bars when it came to talent, even personally recruiting and interviewing the first 100 people. More than 10% of all employees (the highest I’ve seen) are dedicated to the People function, and it’s a focus that has paid off, resulting in the company being a talent magnet.
Glassdoor data for Plaid, January 2020
3. Never compromise on taste and design.
Every company talks about the importance of design and delighting users, and research suggests that this is quickly becoming table stakes. But what set Plaid apart from the beginning was a focus on design that emanated beyond the product and was a core part of the company’s DNA—something that struck me as unique and unexpected for a tiny fintech infrastructure company! From Plaid's website, to their API documentation, their product, their office, and their schwag, an enormous amount of design thinking goes into every little detail. When meeting new companies, I look beyond design and now look for taste. It's hard to articulate exactly what this is, but you know it when you see it. I’ll let you decide which of the founders is the tastemaker 😜.Plaid: Fintech's Happy Plumbers via Forbes
4. Overpromise and overdeliver…and be thoughtful about where to miss.
The company set ambitious goals, but with maniacal focus—they were able to beat them consistently, overachieving on growth and coming in lower on spend. As first-time founders, William and Zach’s ability to execute constantly impressed us. However, when the company did miss, they missed on hiring. When it came to talent, they never settled on quality in favor of hitting a headcount number. Every new team member was driven by the mission and elevated the whole, resulting in a lean, high-functioning team which does more with less.
5. Build a product that growing customers need.
Another key factor for Plaid’s success was that the company was building something that customers not only wanted, but a solution that they needed. Having experienced their customers’ frustrations first-hand as developers, the founders were able to build a platform that they knew would solve the right problems. This led to an efficient go-to-market early on where demand was pulling Plaid in. The company also benefited from an ever-expanding universe of customers thanks to the booming fintech market; the customers have been growing in their own right as well, due to open banking trends and increasing interest by consumers to own and understand their financial data.
(Learn more by watching this recent feature on Plaid and the rise of open banking.)
6. Maintain a foundation of capital efficiency.
The combination of a lean but highly productive team, a large and growing market, and a solution that customers need leads to a beautifully efficient business model. This has allowed the company to do what it does best—execute on their mission while not getting distracted by fundraising and runway concerns.
7. Commit to your values.
At NEA, our values of Trust, Teamwork, and Excellence permeate into everything that we do. Plaid places a similar emphasis on values, something that can be difficult to develop and maintain, but when done right can pay huge dividends for a company. Transparency, Intellectual Honesty, Courage to be Bold, Pragmatism, and Humility guide every interaction and every decision for the company.
To date, Plaid’s API has analyzed more than 10 billion transactions, but perhaps what’s most impressive has been their ability to stay true to their culture, values, and mission. This dedication has allowed them to transform the landscape of financial services, putting the customer first by empowering individuals to understand and interact with their finances. Plaid has truly made money easier. We are deeply grateful to the Plaid team for choosing us to be a small part of their story…we can’t wait for the next chapter!