3 weeks ago, I woke up to a pissed off customer telling me her payments were broken. My startup uses Stripe Connect to accept payments on behalf of our clients, and when I looked into it, I found that Stripe had decided to deactivate her account. Reason listed: 'Other'.
Great.
I contact Stripe via chat, and I learn nothing. Frontline support says "we'll look into it." Days go by, still nothing. Meanwhile, this customer is losing a massive amount of business and suffering.
After a few days, my team and I go at them from as many angles as possible. We're on the phone, we're on Twitter, we're reaching out to connections who work there / used to work there, and of course, we reach out to patio11. All of these support channels give us nothing except "we've got a team looking into it". But Stripe's frontline seems to be prohibited from offering any other info, I assume for liability reasons. "We wouldn't want to accidentally tell you the reason this happened, and have it be a bad one."
We ask: 1. Why was this account flagged? "I don't have that information" 2. What can we do to get this fixed? "I don't have access to that information. 3. Who does? "I don't have access to that information" 4. What can you do about this? "I've escalated your case. It's being reviewed."
I should mention at this point that I've been running this business since 2016, my customers have been more or less the same since then, and I've had (back when it was apparently possible) several phone conversations with Stripe staff about my business model. They know exactly who our customers are and what services we offer, and have approved it as such.
After a week of templated email responses and endless anxiety, we finally got an email from Stripe letting us know that they had reviewed the account and reactivated it. We never got a reason for why any of this had happened, despite asking for one multiple times. Oh well, still good news right? Except nope, this was only the beginning.
This morning I woke up to an email that about 35% of my client accounts had been deactivated and were "Under review", the kicker here being that one of those accounts is the same one they already reviewed last week! This is either the work of incompetent staff or (more likely) a bad algorithm. No reasonable human could make this mistake after last week's drama.
So currently, my product doesn't work for 35% of my customers. Cue torrent of pissed off customer emails.
And the best part is, this time I have an email from Stripe this time: Apparently these accounts are being flagged, despite the notes on our file, and despite the review completed literally last week, as not in compliance with Stripe's ToS. They suggest that if I believe this was done in error, I should reach out to customer support. Oh, you mean the same customer support that can't give me literally any information at all other than "We have a team looking into it"? The same customer support that won't give me any estimates as to how long it's going to take to put this fire out? The same customer support that literally looked into this a week ago and found no issues!?
I feel like I'm going crazy over here. These accounts have hundreds of thousands of dollars in them being held hostage by an utterly incompetent team / algorithm that seems to lack any and all empathy for the havoc they wreak on businesses when they pull the rug out from under them with no warning, nor for the impact they have on customers when they all of a sudden lose all ability to make money. And all that for an account that has been using Stripe for nearly 7 years without issue!
This goes so far beyond "customer support declining at scale." If lack of customer support means that critical integrations start to fail, that's not a customer support failure, that's a fundamental business failure.
It's an arms race with fraudsters that eventually sucks in legitimate businesses.
But in all seriousness, being a YCombinator startup is now a big red flag outside of the VC-funded bubble. My current employer, and the previous one, have strict no-YC policy for SaaS due to numerous issues with previous YC companies. And these are both tech-friendly/tech-adjacent companies.
It's even worse at stodgier companies; an executive sees "Stripe froze my payments" and that's what they remember when a Stripe salesman tries to pitch them on using stripe for their online store. Stripe is quickly becoming Google, in the bad way: it's a name people are learning to avoid, and if that hits critical mass they're dead.
As executives and purchasing managers get more tech-aware I think we're going to see an increase in due diligence into who is running companies, who their investors are, what other companies they've invested in, etc. Brands like YC will end up getting punished (and all their portfolio companies, by extension) for the bad actors.