Comment by 21echoes | Hacker News Reader

Comment by 21echoes | Hacker News Reader

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As someone who was there for a very long time -- "without a product" is not at all an accurate reflection of the state of things (as the TechCrunch article and plenty of other sources can corroborate).

There was a functional product in beta (as in: being used by non-employees) in early 2012. The issue was that Lucas was unable to secure appropriate relationships with banking partners such that the product could actually launch to the mass public until the end of 2014. Both attempted banking partners had extreme restrictions on the number of users allowed on the system until their legal teams signed off on it (due to the timely influx of new regulations from the CFPB), and both times this took more than 9 months to go through their bureaucracy.

Even while these public-launch-restrictions were in place, obviously it was possible to demo investors on the real product that moved real money between real bank accounts using real ultrasound technology to buy from real merchants, etc. These features were all also in beta tester hands.

As far as why investors were willing to invest in the product.. that's its own discussion that I don't feel like typing up at 6:30 on a Friday. Short answer: mobile payments were hot, the product really was pretty and functional, the go-to-market strategy (assuming a banking license deal went through) was rather pragmatic (debit cards to be backwards compatible & get data from day one), the team (other than the CEO) top-tier, no investor invested particularly much, etc.

It sounds like the deal didn't work out, which the company was unofficially banking on, so the rest of the time has been the leadership frantically trying to figure out what to do with all of the resources so as to not turn tens of millions into complete worthlessness.

I wouldn't wish that position on my worst enemy. I know nothing about what the CEO is like, and he apparently has plenty of flaws, but I think I would be an awful CEO in that situation, too.

Sounds like they had an app, but not a product.

That is a distinction that seemed to have eluded investors and employees alike.

Here is a sentence from TFA:

"Still, there was no app, and Shontell reported that contributed to internal turmoil."

So the main obstacles were cleared by the end of 2014. What went wrong then?

Well in that time, I'd guess

1.) Venmo launched, grew, and was acquired by Braintree (August 2012, then by Paypal, September 2013).

2.) Apple Pay launched to over 10M devices within the first 3 days - which also breathed a new life into NFC payments (October 2014)

3.) I'm guessing ultrasound became a lot less sexy technology in the face NFC and iBeacon/BTLE

Seems like it would have been great in 2012, but is "just another option" in 2014.

the CFPB is really stifling innovation... creating barriers and generalizing everyone as bad actors

The CFPB is doing its job. Things like these are very complicated and I'd much rather the CFPB take as much time as it needs with financial matters than let any little startup through or let banks and other institutions do whatever they want.

The money system, especially for all us little folk, is far too important to be messed about with. More barriers is good. This is one place where a conservative approach is the right one.

"Move fast, break things" is great when you want to create a social networking app and the worst thing that can happen is that somebody isn't reminded to congratulate your friends on their birthdays. With payments systems people can lose lots of real money and there are literally millions of people always looking for ways to game the system - that's why regulation and moving slowly enough is a painful necessity.

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