18 ms·

Braid is dead, long live Braid

145 points by inmygarage 3y ago

Kattykay 3y ago
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albertajanice17 3y ago
[dead]
dylan604 3y ago
I can some what sympathize with part of what it sounds like here getting crushed by people committing credit card fraud. I had a small little company online in the early day's of the interweb's online payments. We had a very niche retail site, and for a few months we were increasing sales month-to-month. We'd get sales, the merchant company would approve them, and we'd ship out the product. Right up until the point where we got hit with enough fraudulent sales in what had to have been a coordinated effort that it killed us. The card numbers used were stolen, and we got hit with a massive amount of charge backs. Except, now we're out the inventory and no money to restock. It was the end of the retail side of us. To this day, I still have some sort of PTSD from that experience. I have a new site being worked on integrating with a popular modern card processing company. I am terrified to let the site go live and get hit with fraudulent charges again. I am on the fence of not even allowing for sales through the website.
- nrp 3y ago
  We’ve had good experience using Stripe with extremely aggressive Stripe Radar settings, and using a manual review queue to avoid false positives. We also don’t enable payment methods that automatically accept disputes (e.g. SEPA Direct Debit).
  - dylan604 3y ago
    Stripe is who I'm playing with now, but I just do not like having to include their JS library on every page just to use their fraud detection.
    - bpicolo 3y ago
      The signals they get from you including that library are a big part of what makes the fraud detection effective
      - dylan604 3y ago
        It doesn't mean I have to like it. There's a lot of things in the "include our JS file, and get X benefit" in the world that I don't like. I don't have the time nor the desire to attempt to reverse all of the data that is being sent back to the mothership for some "benefit". I take pride in knowing that I'm not collecting data about my users to be stored for later use. I can't say that when I include 3rd party libraries.
- sneak 3y ago
  If only there were some good and fast internet payment mechanism without middlemen or gatekeepers, where the person getting paid could be immediately 100% sure that they were in possession of the money. Maybe someone will invent it one day.
  - CJefferson 3y ago
    The problem is that would have the opposite problem, that purchases made with stolen cards were 100% unrecoverable. While im sure we can improve things, the fact that the current system favors individual people, rather than businesses, is intentional, not an accident.
    - kolinko 3y ago
      Having a 2FA for credit card / wire transfer payments solves this issue and it's a de facto standard now in many European countries.
    - happymellon 3y ago
      How are people using stolen cards? Do your banks not have 2 factor enabled? Using the card not present should require a second factor, Visa Secure type of thing and in person should require your pin for non-frivolous amounts.
      - dylan604 3y ago
        In the late '90s when it happened to me, this wasn't even invented yet. In the US today, 2nd-factor is not widely used at all. Not once I have I been challenged by a 2nd-factor, and if I were to be, I'd have no idea what to do with it.
        happymellon 3y ago
        If you were purchasing online then it will tell you to refer to your banking app. If it's in perso , them asking for a pin is pretty straightforward. So who is pushing back against this? The networks already have it in place everywhere else, and since it's part of the transaction process there isn't a lot for stores or websites to do.
chirsz 3y ago
When I saw the title, I thought it is the video game Braid[1]. I really want the Anniversary Edition. [1]: http://braid-game.com http://braid-game.com
- deleted 3y ago
  [deleted]
- mock-possum 3y ago
  Same! Was just drunkenly ranting about that game to a very patient rando the other night. I’ve really been wanting to take turns running through it with my partner lately, especially given the atom bomb references in light of the recent Barbieheimer phenomenon.
- hannofcart 3y ago
  Imo, it's the best game ever made. It's the Rembrandt of games.
  - zoky 3y ago
    Meh, it was okay. Not nearly as good as the artiste (and COVID denialist and general arsehole) Jonathan Blow made it out to be.
- DonHopkins 3y ago
  It's about time!
- benatkin 3y ago
  I thought it was https://github.com/braid-org/braid-spec https://github.com/braid-org/braid-spec Except I didn't believe it would shut down. It hasn't :)
jrflowers 3y ago
I am hopeful for the future of this findom app
- pyrophane 3y ago
  I don't think findom needs money pools. Its just a bunch of individual account holders receiving payments.
  - jrflowers 3y ago
    Imagine if your dom could call you a piece of shit within minutes of paying your electric bill
astrange 3y ago
It's amazing anyone ever thought there was a fintech sector when it only seems to have about two useful companies (Stripe and Betterment).
- barrkel 3y ago
  Revolut is still going well. Wise.com is still doing consumer forex. But it seems to me that there is only so much space for B2C fintech. There's a bunch of B2B fintech you might be less aware of because it doesn't advertise to the general public. I spent 7 years at one, Duco, that specializes in reconciliation - comparing data flows from different entities in the finance industry, making compliance with regulations easier.
valyagolev 3y ago
"We’ve found our cohort of wildly passionate early adopters... Unfortunately, these people are criminals" reminds me of another exciting and hip big fintech-adjacent industry
tarr11 3y ago
I appreciate stories like this, they are the memento mori of startups.
buffington 3y ago
That was such a well written, introspective, and vulnerable story. I've had several opportunities to experience similar rides with very similar endings, and know how gut wrenching failure feels. And how it's often just a failure, with nothing learned. With writing like this, though, the rest of us get to learn.
pyrophane 3y ago
It's like Venmo meets a corporate card program.
- subpixel 3y ago
  I can’t think of any scenario described in the post that Venmo wouldn’t handle. One person is the admin of the collective or company bank account, and repays people as needed using Venmo. If all of that has to be free - no transaction fees, etc - then there is no business there to build. I wonder if revenue wasn’t also a problem for this startup.
aiunboxed 3y ago
Well written, I guess the key takeaway for me was to be a little wary about being dependent on building businesses on partnerships, there are few .. I have personally seen some business teams in incumbent partners using small startups for their pumping their own metrics and once their motto is over they can pull the plug.
raverbashing 3y ago
> Initially, we thought leveraging third-party software would help us move faster and focus on our core offering. > What we found, instead, was every additional partner had the potential to break big, important parts of our stack. Sounds like a, literally, very expensive lesson to learn And the other side of this is also worrying, I wouldn't put it past Braid being one of the biggest customers of this 3rd party, (unless it's a big one like AWS) and then you shoot yourself in the foot with a non-planned deprecation making your customers migrate.
orthecreedence 3y ago
> Every dollar a startup can raise is a gift. For a time I lost sight of this, and I won’t make that mistake again. This seems like too general of advice. If you are profitable without raising, that in itself is a gift. Why take on debt if you don't need to? This might apply to fast-growth ventures that need to outpace competition to have a chance at existing, but not every company is structured like this or is in a market that requires this. > A regulatory rug pull can and will outstrip any early traction or compliance gold stars that you think might save you. Interestingly, this reminds me of all the apps built off Facebook's APIs in the early days. They would regularly remove one feature that was catastrophic. It's difficult to base your existence on some whale's whims, but in some ways often inevtiable too. > A critical third-party informed us that they’d changed their mind on a key technical decision. I'm so curious who. I got sick of dealing with Plaid's ceaseless API changes and ended up writing my own scraper for Wells Fargo transactions. I doubt they were using Plaid though XD. Overall a really interesting writeup and I'm thankful to the author for sharing.
- sillysaurusx 3y ago
  That strategy works fine till hard times come. Look up Beyond The Summit sometime. Sad story how it ended. Raising money insulates against death by starvation of funds. Of course, the game becomes different; you need to keep growing. But those are the two alternatives, and of the two, sustained growth over 8 years seems like a better general strategy.
  - TeMPOraL 3y ago
    Selling your soul to the Devil is great strategy for the Devil. It may be for you too, at least initially. But it isn't good for the rest of the world.
  - ssivark 3y ago
    Just to balance out your comment — OTOH, a bootstrapped might survive tough times with some tough choices, but a VC-fueled rocket might sometimes have no choice but to liquidate if they can’t carry through with the growth necessary for the next round of fundraising.
KronisLV 3y ago
What an unfortunate story, trying to do most stuff right and caring about what you're doing, yet failing due to a lot of things mostly outside of your control. I'd feel justifiably wronged by the bank and the vendors of the third party tech.
DonHopkins 3y ago
Oh no, I was hoping this was about a Braid remake, like Time Travel Understander! https://www.youtube.com/watch?v=1fABGyVzVwI https://www.youtube.com/watch?v=1fABGyVzVwI https://en.wikipedia.org/wiki/Braid_(video_game) https://en.wikipedia.org/wiki/Braid_(video_game)
- stavros 3y ago
  Oh man, I was really excited to watch that video, since I love Braid, but wtf is that voice? I couldn't bear listening to it.
  - autoexec 3y ago
    Wow, you really weren't wrong... why would someone do that?
  - DonHopkins 3y ago
    Then you will HATE the other "Game Helpin' Squad" tutorial videos! ;) No seriously, the smarmy voice and vocal fry is meant to be annoying -- it's spot-on parody of geeky video game tutorials. And it's well worth pausing and reading the hilarious dialog in the chat logs! But be careful not to accidentally open up your Space Inventory. I like "World Quester 2" the best, and I recently showed "Pretend Gas Station" to Will Wright: https://www.youtube.com/watch?v=0Gy9hJauXns&list=PLCD3AF7C1BD114FD7 https://www.youtube.com/watch?v=0Gy9hJauXns&list=PLCD3AF7C1B... (Edit: That's a playlist with all of them, from long ago. I really wish they would review some new games now, there are so many ripe for parody!)
    - stavros 3y ago
      Haha, the voice in that is normal, so I enjoyed that a fair bit (especially the part where caps lock opens up your space inventory!).
- demurgos 3y ago
  I also hoped for some news about the game, maybe an update on the Anniversary Edition announced in 2020 [0]. [0] https://www.youtube.com/watch?v=Cf9A1QPG_yc https://www.youtube.com/watch?v=Cf9A1QPG_yc
EdwardDiego 3y ago
I wanna know who the critical third party was, and also why the regulators said "Yeah but nah"
- twic 3y ago
  Did the regulators say no to Braid specifically? Felt more like the regulators were putting pressure on the sponsor bank to get out of risky businesses in general.
  - inmygarage 3y ago
    Author here, yes this is what happened. It wasn't related to our model specifically but rather to the bank's entire portfolio.
edpichler 3y ago
I thought I was going to read about the Braid (masterpiece) video game.
dean2432 3y ago
I was hoping to read about the video game (man, I loved that game)
xmcqdpt2 3y ago
> Our product was not in any sort of legal gray area (e.g. crypto) and fit within the bounds of existing law. From the day we started until the day we shut down, we’d spend millions of dollars to build a best-in-class compliance program to sit alongside our offering. I worked in AML for a short time, and this: > There were myriad buckets of n users who loved having a financial account designed just for them. A few examples from our own data: coparents, houses, art collectives, extended families who get along, teams, people who share livestock, churches, punk bands, weekend hustles, extended families who don’t get along, wiccans, and our team’s personal favorite, firehouses. sounds like a compliance nightmare. Who is the beneficial owner of the wiccans collective bank account? What happens when one of the punk band member turns out to be an Iranian national? If three art collective members all deposit 5000 in one day, is that "smurfing" (splitting transactions so that they are under reportable thresholds)? I think there is a good argument to be made that our current regulatory regime is bad, I'm not defending it. In this current regulatory environment though, "business style accounts but for informal small groups of individuals" cannot possibly make sense as a product. Their sponsor bank obviously didn't care when they were pulling minuscule numbers (10mm in monthly volume on a business account is really not very much to most banks.) Once Compliance finally decides to look at that Braid account, I'm sure it makes perfect business sense to offboard it for risk reasons. I'm shocked they didn't realize this. ETA: If you are going to build a Fintech, please go listen to The Dark Money Files podcast first, https://www.thedarkmoneyfiles.com/ https://www.thedarkmoneyfiles.com/ Maybe hire them to tell you if your product makes sense. You can't "move fast, break things" with FINRA, it's NOT easier to ask for forgiveness from OFAC, etc.
- inmygarage 3y ago
  Hey there - I'm the author of the essay, happy to weigh in. First, your initial reaction makes sense, and we spent many years (and as noted in the piece, millions of dollars) creating a structure that stayed within the bounds of every reg. That's why we didn't have many competitors. To address your points: 1. The ownership of funds is mapped pro-rata to every user's contribution. If three people contribute $10, $10 and $20 dollars, and then the pool gets spent down to $10 total, the technical per-dollar ownership is $2.50, $2.50, $5. It was critical to have a down-to-the-cent mapping of individual ownership of every dollar in our system at all times. While funds availability is dictated by Federal Law (Reg CC), funds ownership was something we were allowed to establish in our own Terms of Service. It's still live and available to read here (Section 4): https://braid.co/legal/tos https://braid.co/legal/tos if you'd like. Funds ownership was not related to spending permissions, which could be decided by the pool admin (for example, maybe you want all users to be able to spend all available funds, that's up to you). 2. Every individual who signed up for Braid went through our KYC/CIP process. We had a very robust (and expensive) waterfall to verify every indiviual, and screened the entire customer base every time the OFAC list was updated. I was never on board with concept of "treat the group as a single entity" for exactly this reason. For consumers, a group is not a business or an entity, it is a group of individuals and should be treated as such. There are always false negatives and these systems aren't perfect, but if you're on the OFAC list you wouldn't be able to simply sign up for Braid and slosh money around. That's illegal. 3. We built from-scratch internal anti-money-laundering software that was designed to catch exactly the kind of money laundering that could only happen in a pooled account structure, in addition to all the standard money laundering tactics (circular transfers, flow-through, structuring, transaction frequency, and more) 4. From my perspective, a product like this makes sense within the existing regulatory environment IFF the startup (us) was willing to do the hard work to figure it out. We absolutely were and had the time and money to get it right. But yes, it was very complex and at times infuriating. 5. As noted in the piece, the bank off-boarded every fintech they had -- debit cards for college kids, small business banking apps, neobanks for different consumer groups. I know this because we had a phone chain/support group by the end of it. It wasn't about our business model, it was about getting out of fintech sponsorship entirely. 6. We've gone through detailed compliance reviews with multiple banks, and worked with a handful of well-known legal experts (at least that's how they billed). Especially by the end, we had a good sense of the regulatory constraints and what the regulators care about these days. I've met with the OCC personally a couple times and gotten their perspective as well. FINRA regulates investment products, not deposit accounts. In sum, while there is no such thing "move fast, break things" in fintech, the idea that we shouldn't fight for what consumers want and do the hard regulatory work to make it happen is too depressing for me. I have to believe new products are possible, and still do.
Scubabear68 3y ago
One of the critical observations here for me is: whatever your primary product / value proposition is, make sure to build that out internally yourself, and not buy it from a 3rd party. According to the author, Braid repeatedly bought third party fintech products as core pieces of their platform rather than building it. This simply makes you a hostage to those companies. I also echo some other top comments here - payments and banking is very highly regulated, and for good reason. The base concept seems extremely ripe for fraud.
zoogeny 3y ago
> every additional partner had the potential to break big, important parts of our stack ... > our distaste for contractual and technical lock-in grew dramatically I learned this through osmosis at one financial-adjacent company I worked for. Every senior technical manager was extremely hostile to any third-party integration. I personally saw several product driven initiatives completely dropped because it would require even the slightest lock-in. When I see posts on HN or Reddit where the startup mentions a tech-stack built entirely on third-party services, I cringe. That is one of my main frustrations with the current AI wave - where most businesses are only viable with a quality of AI that is available only through third-parties. I believe in 3-5 years we'll be reading a lot of blog posts just like this one telling the same story about how their AI startup was forced to fold due to some locked-in provider changing policies.
Nellyz 3y ago
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shane496 3y ago
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gumby 3y ago
> Myth: Your Early Adopters Are Your Best Customers These folks suffered an extreme case of Early Adopters being unlike the majority, but anyone who gets this advice should read Crossing the Chasm (one of the 2 or 3 non-worthless business books, even if it's really only a single drawing). Basically: consider the bell curve of a product's life span: First early adopters, then the early majority (your volume customers once you really have PMF), then on the other side of the midpoint: late majority and then the laggards). The think is your early traction is on early adopters: people with special needs (not usually fraudsters :-), who find your product so valuable that they can put up with its bugs and lack of features to get value out of it, or just people who like the latest thing. The features the early adoptors want not only are rarely what the majorities want, they could work against what the majorities want. The gap between the early adopters and the majority is a "chasm" -- huge, hard to get across and, as with Braid, often something a company falls into and dies.
alexa101 3y ago
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CatrionaBath14 3y ago
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CHERISH9900 3y ago
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CHERISH9900 3y ago
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Jaden7 3y ago
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wandarussell546 3y ago
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DEREKSUSUAN 3y ago
Have you ever gotten your coins stolen from your wallet or invested in an ICO that turned out to be a scam, you are not alone because this happened to me too. I initially lost $90,000 in just 3 months from Cryptoallday, I contacted the authorities and they refereed me to a bitcoin recovery agent who helped me recover all my funds within less than 2 days… I’m speaking out to improve our awareness of these cryptocurrency thieves and help you if you have been a victim yourself. Simply email: CRYPTORECOVERYHACKER @ GMAIL COM
Catherine121 3y ago
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Catherine121 3y ago
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VioletIrving 3y ago
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145 points by inmygarage 3y ago

Kattykay 3y ago

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albertajanice17 3y ago

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dylan604 3y ago

I can some what sympathize with part of what it sounds like here getting crushed by people committing credit card fraud. I had a small little company online in the early day's of the interweb's online payments. We had a very niche retail site, and for a few months we were increasing sales month-to-month. We'd get sales, the merchant company would approve them, and we'd ship out the product. Right up until the point where we got hit with enough fraudulent sales in what had to have been a coordinated effort that it killed us. The card numbers used were stolen, and we got hit with a massive amount of charge backs. Except, now we're out the inventory and no money to restock. It was the end of the retail side of us. To this day, I still have some sort of PTSD from that experience. I have a new site being worked on integrating with a popular modern card processing company. I am terrified to let the site go live and get hit with fraudulent charges again. I am on the fence of not even allowing for sales through the website.

nrp 3y ago
We’ve had good experience using Stripe with extremely aggressive Stripe Radar settings, and using a manual review queue to avoid false positives. We also don’t enable payment methods that automatically accept disputes (e.g. SEPA Direct Debit).
- dylan604 3y ago
  Stripe is who I'm playing with now, but I just do not like having to include their JS library on every page just to use their fraud detection.
  - bpicolo 3y ago
    The signals they get from you including that library are a big part of what makes the fraud detection effective
    - dylan604 3y ago
      It doesn't mean I have to like it. There's a lot of things in the "include our JS file, and get X benefit" in the world that I don't like. I don't have the time nor the desire to attempt to reverse all of the data that is being sent back to the mothership for some "benefit". I take pride in knowing that I'm not collecting data about my users to be stored for later use. I can't say that when I include 3rd party libraries.
sneak 3y ago
If only there were some good and fast internet payment mechanism without middlemen or gatekeepers, where the person getting paid could be immediately 100% sure that they were in possession of the money. Maybe someone will invent it one day.
- CJefferson 3y ago
  The problem is that would have the opposite problem, that purchases made with stolen cards were 100% unrecoverable. While im sure we can improve things, the fact that the current system favors individual people, rather than businesses, is intentional, not an accident.
  - kolinko 3y ago
    Having a 2FA for credit card / wire transfer payments solves this issue and it's a de facto standard now in many European countries.
  - happymellon 3y ago
    How are people using stolen cards? Do your banks not have 2 factor enabled? Using the card not present should require a second factor, Visa Secure type of thing and in person should require your pin for non-frivolous amounts.
    - dylan604 3y ago
      In the late '90s when it happened to me, this wasn't even invented yet. In the US today, 2nd-factor is not widely used at all. Not once I have I been challenged by a 2nd-factor, and if I were to be, I'd have no idea what to do with it.
      - happymellon 3y ago
        If you were purchasing online then it will tell you to refer to your banking app. If it's in perso , them asking for a pin is pretty straightforward. So who is pushing back against this? The networks already have it in place everywhere else, and since it's part of the transaction process there isn't a lot for stores or websites to do.

chirsz 3y ago

When I saw the title, I thought it is the video game Braid[1]. I really want the Anniversary Edition. [1]: http://braid-game.com http://braid-game.com

deleted 3y ago
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mock-possum 3y ago
Same! Was just drunkenly ranting about that game to a very patient rando the other night. I’ve really been wanting to take turns running through it with my partner lately, especially given the atom bomb references in light of the recent Barbieheimer phenomenon.
hannofcart 3y ago
Imo, it's the best game ever made. It's the Rembrandt of games.
- zoky 3y ago
  Meh, it was okay. Not nearly as good as the artiste (and COVID denialist and general arsehole) Jonathan Blow made it out to be.
DonHopkins 3y ago
It's about time!
benatkin 3y ago
I thought it was https://github.com/braid-org/braid-spec https://github.com/braid-org/braid-spec Except I didn't believe it would shut down. It hasn't :)

jrflowers 3y ago

I am hopeful for the future of this findom app

pyrophane 3y ago
I don't think findom needs money pools. Its just a bunch of individual account holders receiving payments.
- jrflowers 3y ago
  Imagine if your dom could call you a piece of shit within minutes of paying your electric bill

astrange 3y ago

It's amazing anyone ever thought there was a fintech sector when it only seems to have about two useful companies (Stripe and Betterment).

barrkel 3y ago
Revolut is still going well. Wise.com is still doing consumer forex. But it seems to me that there is only so much space for B2C fintech. There's a bunch of B2B fintech you might be less aware of because it doesn't advertise to the general public. I spent 7 years at one, Duco, that specializes in reconciliation - comparing data flows from different entities in the finance industry, making compliance with regulations easier.

valyagolev 3y ago

"We’ve found our cohort of wildly passionate early adopters... Unfortunately, these people are criminals" reminds me of another exciting and hip big fintech-adjacent industry

tarr11 3y ago

I appreciate stories like this, they are the memento mori of startups.

buffington 3y ago

That was such a well written, introspective, and vulnerable story. I've had several opportunities to experience similar rides with very similar endings, and know how gut wrenching failure feels. And how it's often just a failure, with nothing learned. With writing like this, though, the rest of us get to learn.

pyrophane 3y ago

It's like Venmo meets a corporate card program.

subpixel 3y ago
I can’t think of any scenario described in the post that Venmo wouldn’t handle. One person is the admin of the collective or company bank account, and repays people as needed using Venmo. If all of that has to be free - no transaction fees, etc - then there is no business there to build. I wonder if revenue wasn’t also a problem for this startup.

aiunboxed 3y ago

Well written, I guess the key takeaway for me was to be a little wary about being dependent on building businesses on partnerships, there are few .. I have personally seen some business teams in incumbent partners using small startups for their pumping their own metrics and once their motto is over they can pull the plug.

raverbashing 3y ago

> Initially, we thought leveraging third-party software would help us move faster and focus on our core offering. > What we found, instead, was every additional partner had the potential to break big, important parts of our stack. Sounds like a, literally, very expensive lesson to learn And the other side of this is also worrying, I wouldn't put it past Braid being one of the biggest customers of this 3rd party, (unless it's a big one like AWS) and then you shoot yourself in the foot with a non-planned deprecation making your customers migrate.

orthecreedence 3y ago

> Every dollar a startup can raise is a gift. For a time I lost sight of this, and I won’t make that mistake again. This seems like too general of advice. If you are profitable without raising, that in itself is a gift. Why take on debt if you don't need to? This might apply to fast-growth ventures that need to outpace competition to have a chance at existing, but not every company is structured like this or is in a market that requires this. > A regulatory rug pull can and will outstrip any early traction or compliance gold stars that you think might save you. Interestingly, this reminds me of all the apps built off Facebook's APIs in the early days. They would regularly remove one feature that was catastrophic. It's difficult to base your existence on some whale's whims, but in some ways often inevtiable too. > A critical third-party informed us that they’d changed their mind on a key technical decision. I'm so curious who. I got sick of dealing with Plaid's ceaseless API changes and ended up writing my own scraper for Wells Fargo transactions. I doubt they were using Plaid though XD. Overall a really interesting writeup and I'm thankful to the author for sharing.

sillysaurusx 3y ago
That strategy works fine till hard times come. Look up Beyond The Summit sometime. Sad story how it ended. Raising money insulates against death by starvation of funds. Of course, the game becomes different; you need to keep growing. But those are the two alternatives, and of the two, sustained growth over 8 years seems like a better general strategy.
- TeMPOraL 3y ago
  Selling your soul to the Devil is great strategy for the Devil. It may be for you too, at least initially. But it isn't good for the rest of the world.
- ssivark 3y ago
  Just to balance out your comment — OTOH, a bootstrapped might survive tough times with some tough choices, but a VC-fueled rocket might sometimes have no choice but to liquidate if they can’t carry through with the growth necessary for the next round of fundraising.

KronisLV 3y ago

What an unfortunate story, trying to do most stuff right and caring about what you're doing, yet failing due to a lot of things mostly outside of your control. I'd feel justifiably wronged by the bank and the vendors of the third party tech.

DonHopkins 3y ago

Oh no, I was hoping this was about a Braid remake, like Time Travel Understander! https://www.youtube.com/watch?v=1fABGyVzVwI https://www.youtube.com/watch?v=1fABGyVzVwI https://en.wikipedia.org/wiki/Braid_(video_game) https://en.wikipedia.org/wiki/Braid_(video_game)

stavros 3y ago
Oh man, I was really excited to watch that video, since I love Braid, but wtf is that voice? I couldn't bear listening to it.
- autoexec 3y ago
  Wow, you really weren't wrong... why would someone do that?
- DonHopkins 3y ago
  Then you will HATE the other "Game Helpin' Squad" tutorial videos! ;) No seriously, the smarmy voice and vocal fry is meant to be annoying -- it's spot-on parody of geeky video game tutorials. And it's well worth pausing and reading the hilarious dialog in the chat logs! But be careful not to accidentally open up your Space Inventory. I like "World Quester 2" the best, and I recently showed "Pretend Gas Station" to Will Wright: https://www.youtube.com/watch?v=0Gy9hJauXns&list=PLCD3AF7C1BD114FD7 https://www.youtube.com/watch?v=0Gy9hJauXns&list=PLCD3AF7C1B... (Edit: That's a playlist with all of them, from long ago. I really wish they would review some new games now, there are so many ripe for parody!)
  - stavros 3y ago
    Haha, the voice in that is normal, so I enjoyed that a fair bit (especially the part where caps lock opens up your space inventory!).
demurgos 3y ago
I also hoped for some news about the game, maybe an update on the Anniversary Edition announced in 2020 [0]. [0] https://www.youtube.com/watch?v=Cf9A1QPG_yc https://www.youtube.com/watch?v=Cf9A1QPG_yc

EdwardDiego 3y ago

I wanna know who the critical third party was, and also why the regulators said "Yeah but nah"

twic 3y ago
Did the regulators say no to Braid specifically? Felt more like the regulators were putting pressure on the sponsor bank to get out of risky businesses in general.
- inmygarage 3y ago
  Author here, yes this is what happened. It wasn't related to our model specifically but rather to the bank's entire portfolio.

edpichler 3y ago

I thought I was going to read about the Braid (masterpiece) video game.

dean2432 3y ago

I was hoping to read about the video game (man, I loved that game)

xmcqdpt2 3y ago

> Our product was not in any sort of legal gray area (e.g. crypto) and fit within the bounds of existing law. From the day we started until the day we shut down, we’d spend millions of dollars to build a best-in-class compliance program to sit alongside our offering. I worked in AML for a short time, and this: > There were myriad buckets of n users who loved having a financial account designed just for them. A few examples from our own data: coparents, houses, art collectives, extended families who get along, teams, people who share livestock, churches, punk bands, weekend hustles, extended families who don’t get along, wiccans, and our team’s personal favorite, firehouses. sounds like a compliance nightmare. Who is the beneficial owner of the wiccans collective bank account? What happens when one of the punk band member turns out to be an Iranian national? If three art collective members all deposit 5000 in one day, is that "smurfing" (splitting transactions so that they are under reportable thresholds)? I think there is a good argument to be made that our current regulatory regime is bad, I'm not defending it. In this current regulatory environment though, "business style accounts but for informal small groups of individuals" cannot possibly make sense as a product. Their sponsor bank obviously didn't care when they were pulling minuscule numbers (10mm in monthly volume on a business account is really not very much to most banks.) Once Compliance finally decides to look at that Braid account, I'm sure it makes perfect business sense to offboard it for risk reasons. I'm shocked they didn't realize this. ETA: If you are going to build a Fintech, please go listen to The Dark Money Files podcast first, https://www.thedarkmoneyfiles.com/ https://www.thedarkmoneyfiles.com/ Maybe hire them to tell you if your product makes sense. You can't "move fast, break things" with FINRA, it's NOT easier to ask for forgiveness from OFAC, etc.

inmygarage 3y ago
Hey there - I'm the author of the essay, happy to weigh in. First, your initial reaction makes sense, and we spent many years (and as noted in the piece, millions of dollars) creating a structure that stayed within the bounds of every reg. That's why we didn't have many competitors. To address your points: 1. The ownership of funds is mapped pro-rata to every user's contribution. If three people contribute $10, $10 and $20 dollars, and then the pool gets spent down to $10 total, the technical per-dollar ownership is $2.50, $2.50, $5. It was critical to have a down-to-the-cent mapping of individual ownership of every dollar in our system at all times. While funds availability is dictated by Federal Law (Reg CC), funds ownership was something we were allowed to establish in our own Terms of Service. It's still live and available to read here (Section 4): https://braid.co/legal/tos https://braid.co/legal/tos if you'd like. Funds ownership was not related to spending permissions, which could be decided by the pool admin (for example, maybe you want all users to be able to spend all available funds, that's up to you). 2. Every individual who signed up for Braid went through our KYC/CIP process. We had a very robust (and expensive) waterfall to verify every indiviual, and screened the entire customer base every time the OFAC list was updated. I was never on board with concept of "treat the group as a single entity" for exactly this reason. For consumers, a group is not a business or an entity, it is a group of individuals and should be treated as such. There are always false negatives and these systems aren't perfect, but if you're on the OFAC list you wouldn't be able to simply sign up for Braid and slosh money around. That's illegal. 3. We built from-scratch internal anti-money-laundering software that was designed to catch exactly the kind of money laundering that could only happen in a pooled account structure, in addition to all the standard money laundering tactics (circular transfers, flow-through, structuring, transaction frequency, and more) 4. From my perspective, a product like this makes sense within the existing regulatory environment IFF the startup (us) was willing to do the hard work to figure it out. We absolutely were and had the time and money to get it right. But yes, it was very complex and at times infuriating. 5. As noted in the piece, the bank off-boarded every fintech they had -- debit cards for college kids, small business banking apps, neobanks for different consumer groups. I know this because we had a phone chain/support group by the end of it. It wasn't about our business model, it was about getting out of fintech sponsorship entirely. 6. We've gone through detailed compliance reviews with multiple banks, and worked with a handful of well-known legal experts (at least that's how they billed). Especially by the end, we had a good sense of the regulatory constraints and what the regulators care about these days. I've met with the OCC personally a couple times and gotten their perspective as well. FINRA regulates investment products, not deposit accounts. In sum, while there is no such thing "move fast, break things" in fintech, the idea that we shouldn't fight for what consumers want and do the hard regulatory work to make it happen is too depressing for me. I have to believe new products are possible, and still do.

Scubabear68 3y ago

One of the critical observations here for me is: whatever your primary product / value proposition is, make sure to build that out internally yourself, and not buy it from a 3rd party. According to the author, Braid repeatedly bought third party fintech products as core pieces of their platform rather than building it. This simply makes you a hostage to those companies. I also echo some other top comments here - payments and banking is very highly regulated, and for good reason. The base concept seems extremely ripe for fraud.

zoogeny 3y ago

> every additional partner had the potential to break big, important parts of our stack ... > our distaste for contractual and technical lock-in grew dramatically I learned this through osmosis at one financial-adjacent company I worked for. Every senior technical manager was extremely hostile to any third-party integration. I personally saw several product driven initiatives completely dropped because it would require even the slightest lock-in. When I see posts on HN or Reddit where the startup mentions a tech-stack built entirely on third-party services, I cringe. That is one of my main frustrations with the current AI wave - where most businesses are only viable with a quality of AI that is available only through third-parties. I believe in 3-5 years we'll be reading a lot of blog posts just like this one telling the same story about how their AI startup was forced to fold due to some locked-in provider changing policies.

Nellyz 3y ago

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gumby 3y ago

> Myth: Your Early Adopters Are Your Best Customers These folks suffered an extreme case of Early Adopters being unlike the majority, but anyone who gets this advice should read Crossing the Chasm (one of the 2 or 3 non-worthless business books, even if it's really only a single drawing). Basically: consider the bell curve of a product's life span: First early adopters, then the early majority (your volume customers once you really have PMF), then on the other side of the midpoint: late majority and then the laggards). The think is your early traction is on early adopters: people with special needs (not usually fraudsters :-), who find your product so valuable that they can put up with its bugs and lack of features to get value out of it, or just people who like the latest thing. The features the early adoptors want not only are rarely what the majorities want, they could work against what the majorities want. The gap between the early adopters and the majority is a "chasm" -- huge, hard to get across and, as with Braid, often something a company falls into and dies.

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Catherine121 3y ago

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