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>Simple opened to customers in 2012 and was supposed to offer a digital-first approach to banking. In fewer words, it was supposed to be “a bank that doesn’t su

>Simple opened to customers in 2012 and was supposed to offer a digital-first approach to banking. In fewer words, it was supposed to be “a bank that doesn’t suck,” to quote one of its co-founders. The service had a website and app that broke down your spending and made it easy to categorize payments, send money, and set savings goals. It was purchased by BBVA in 2014. >BBVA said in January that it would be shutting down Simple later in 2021. The decision came from the company “reassessing its goals” as part of a planned sale to PNC Bank, which reached an agreement to acquire BBVA’s US operations in November 2020. The acquisition has not yet closed. Why is it even possible for a bank - or any company really - to buy up its competition? Let alone buy it up, and then just shut it down. It's like "we didn't like having to compete so we just used our orders of magnitude more wealth than the average person and just deleted them from existence".

duxup 5y ago
Well that's relative to competition right? In the US there are A LOT of banks / competition.
jasonwatkinspdx 5y ago
It gets worse. There are plenty of examples of where a company in a dominant market position with ample cash to work with used bully lawsuits to bankrupt an emerging competitor, then bought them in receivership only to kill the company in total the next instant. For me personally the salient example is what Creative did to Aureal, because what happened is particularly clear cut. I'm not joking when I say the Aureal drivers and support website went offline the very day the bankruptcy acquisition committed. Likewise, there are some pretty infamous examples of the giants doing this crap to each other, like this one: https://www.forbes.com/asap/2002/0624/044.html https://www.forbes.com/asap/2002/0624/044.html
- thedevelopnik 5y ago
  I used to work for Fanatics.com. Together with UnderArmor, they outbid Majestic for the MLB jersey contract. Majestic had had the contract since the 70s. Majestic immediately filed for bankruptcy. Which was good news for UnderArmor and Fanatics, because they didn’t have any ability to make baseball jerseys. So they bought Majestic for a dime on the dollar since it was bankrupt.
  - jasonwatkinspdx 5y ago
    Thanks for sharing such a great example. I don't know quite how to estimate the scale of how much of this is going on, but I think it's pretty clear society in bulk is relatively blind to this family of tactics, or to use PR terms, inoculated against reacting to it.
  - mrweasel 5y ago
    In this case tou could argue that Majestic was poorly managed, given that it apparently survived on a single contract.
    - jasonwatkinspdx 5y ago
      There are plenty of mid sized business that depend on an anchor client. Obviously that's not a great long term situation. But it doesn't really distract from the particular dynamic we've been talking about in this subthread, which is a more aggressive and predatory version of competition that captures the deal then uses the courts to capture the already invested capital infrastructure from the side that lost the deal. This sort of tactic is enabled more by people who can market to investors via manufactured signals vs the idealized lassie faire market reality of the transaction. I'm not pretending this is a trivial problem to solve, but I think it is very much a real problem, and the "they were fools and the market simply beat them" narratives fail to capture what's really going on here imo.

duxup 5y ago

Well that's relative to competition right? In the US there are A LOT of banks / competition.

jasonwatkinspdx 5y ago

It gets worse. There are plenty of examples of where a company in a dominant market position with ample cash to work with used bully lawsuits to bankrupt an emerging competitor, then bought them in receivership only to kill the company in total the next instant. For me personally the salient example is what Creative did to Aureal, because what happened is particularly clear cut. I'm not joking when I say the Aureal drivers and support website went offline the very day the bankruptcy acquisition committed. Likewise, there are some pretty infamous examples of the giants doing this crap to each other, like this one: https://www.forbes.com/asap/2002/0624/044.html https://www.forbes.com/asap/2002/0624/044.html

thedevelopnik 5y ago
I used to work for Fanatics.com. Together with UnderArmor, they outbid Majestic for the MLB jersey contract. Majestic had had the contract since the 70s. Majestic immediately filed for bankruptcy. Which was good news for UnderArmor and Fanatics, because they didn’t have any ability to make baseball jerseys. So they bought Majestic for a dime on the dollar since it was bankrupt.
- jasonwatkinspdx 5y ago
  Thanks for sharing such a great example. I don't know quite how to estimate the scale of how much of this is going on, but I think it's pretty clear society in bulk is relatively blind to this family of tactics, or to use PR terms, inoculated against reacting to it.
- mrweasel 5y ago
  In this case tou could argue that Majestic was poorly managed, given that it apparently survived on a single contract.
  - jasonwatkinspdx 5y ago
    There are plenty of mid sized business that depend on an anchor client. Obviously that's not a great long term situation. But it doesn't really distract from the particular dynamic we've been talking about in this subthread, which is a more aggressive and predatory version of competition that captures the deal then uses the courts to capture the already invested capital infrastructure from the side that lost the deal. This sort of tactic is enabled more by people who can market to investors via manufactured signals vs the idealized lassie faire market reality of the transaction. I'm not pretending this is a trivial problem to solve, but I think it is very much a real problem, and the "they were fools and the market simply beat them" narratives fail to capture what's really going on here imo.