Simple had hoped to invent an entirely different kind of bank.

From its start in 2009, the Southeast Portland company cast itself as an altruistic, tech-savvy business, offering new generations a distinct alternative to the stolid financial institutions withering amid the Great Recession.

As its name suggests, Simple aspired to a straightforward approach to banking. It offered no-fee accounts built on a smartphone app geared at helping its young, mobile clientele accumulate personal savings and improve their financial health.

Simple struggled, though, to resolve a central tension: Was it a bank or a tech company?

The business stumbled repeatedly in the early years at basic banking services, enduring occasional outages that briefly cut off clients' access to their money. Meanwhile, Simple was slow to introduce new technology and watched with dismay as the old-line banks it reviled began co-opting some of the concepts it pioneered, and its growth suffered.

"Honestly, I think one of the things that happened is we became a little bit complacent," said Dickson Chu, an executive with Simple's corporate parent, the Spanish bank BBVA, who stepped in as interim CEO in May.

Simple spent too much time thinking about its own culture, he said, and gave too little thought to the people it initially had hoped to serve.

"We forgot about the customer," said Chu, a former PayPal executive. "We really did."

Simple has replaced nearly its entire executive team in the past year and laid off 10 percent of its staff. It retreated from its showcase headquarters in Southeast Portland into a smaller annex across the street.

Weary from last year's upheaval, Simple is now trying to reboot. Chu wants to instill a new sense of urgency and focus, but some longtime employees are wary of the blunt language from the new guy from corporate.

Still, Chu insists he isn't changing Simple's original mission or what set it apart from established banks that profit from hidden fees, overdraft charges and hard-sell pitches from loan officers and account managers.

"We do not and should not make any money on customer confusion," Chu said.

'We don't suck'

Simple created a local sensation in 2011 when it moved its headquarters from Brooklyn to Portland. Here was a nationally known startup choosing Oregon over New York at a time when the state's tech scene was just awakening after nearly a decade of decline.

Simple said it chose Portland for its friendly, tech-savvy vibe, just the image it hoped to communicate to its customers through a cadre of soon-to-be-hired customer service reps, always at the ready to answer questions and solve clients' problems.

And Simple became the rare Oregon company focused on consumer technology, a service people could actually use instead of computer hardware or arcane back-end business tools.

At a time when Americans reviled the big financial institutions that triggered the Great Recession, co-founder Josh Reich had a single organizing principle for his new business: "We don't suck."

Technologists embraced that tagline and the concept of a no-fee bank with amiable customer service and online tools designed to encourage clients to save.

Simple makes its money on interest from customers' deposits and merchant fees generated when customers use their accounts. Simple doesn't charge monthly account fees, out-of-network ATM fees, overdraft fees and other surcharges common at legacy banks.

The Portland company doesn't have bank branches, offer home or auto loans, or other services like conventional banks. It's just a straightforward place to stash your cash.

It's also not a bank. Not technically, at least. And that turned out to be kind of a problem.

Federal regulators, wary of the abuses that triggered the 2007-2009 global financial crisis, all but stopped issuing new banking charters. So Simple had to find a partner to do the actual banking while it provided the services. The complex arrangement created regulatory, technical and financial obstacles that persisted for years.

"The timing was difficult," said Reich, who ran Simple for its entire history, until last spring. Simple ultimately gave up trying to go it alone, selling to BBVA in 2014 for $117 million.

BBVA opened its wallet, and Simple added hundreds of Portland employees. It outgrew a succession of offices around the city's core before moving across the Willamette to a brand-new development near OMSI.

"Clumsiness"

Outwardly, Simple was thriving. The story inside the company was more complicated.

Periodic outages when Simple first started out cut customers off from their accounts, undermining customer faith in the startup. Reich once accidentally emailed disappointing internal business results to a journalist who had the same name as a new employee.

And just last year, Simple had to close some customer accounts when it ran out of time to move them all to BBVA from its original banking partner. It chalked up the failure to "clumsiness." Current and former employees say management was unprepared for the scale of the task.

All startups struggle to adapt as they grow. Companies like Simple, which place a special emphasis on creating an inclusive, fun-loving workplace, sometimes trigger a backlash if they fail to maintain the tight-knit, unified culture that initially attracted employees.

Simple had the added challenge of learning to exist within BBVA, a multinational banking group with $840 billion in assets, 130,000 employees and 75 million customers worldwide. Even with an unusual degree of autonomy, managers and employees had to learn to accommodate corporate systems and imperatives beyond their control.

While Simple was coping with growing pains, established institutions from Bank of America to Wells Fargo were upgrading their smartphone apps and adding features that mimicked some of the concepts Simple introduced.

"It sucks when you see Wells Fargo, with all its reputational problems, launching features you came up with," Reich said, referencing the years of scandals that have plagued the San Francisco-based bank.

Stress was piling up among Simple's nearly 300 Portland employees and its customer growth wasn't meeting projections, making plans to lease additional office space and potentially triple the workforce seem completely out of scale.

A federal lawsuit filed last month by a former Simple manager describes rampant infighting ahead of the 2017 layoffs, with executives both undermining and contradicting one another about the company's priorities. The suit alleges Simple violated federal workplace protections by laying off the manager after she took medical leave.

Separately, Simple fired two senior, male managers last year after colleagues raised accusations of harassment and bullying against them.

Simple has long struggled with the central question of whether its priorities lay in banking or technology. A bank must be dependable, steady and unfailingly reliable. It's holding people's money, after all.

A tech company is a different beast, nimble and imaginative, revolutionary and willing to accept failure so long as it innovates.

To Reich, there was no question about Simple's identity: It was, and would always be, a tech company. Last year's overhaul was engineered to make that plain, sacrificing a measure of growth to focus on developing and introducing new banking services.

"That was probably one of the hardest pills we had to swallow, and that was the decision to go back and focus on building great products rather than just focusing on growth," Reich said. "If we didn't invest in building a better product, we would just become a marketing company."

As recently as 2016 Simple envisioned as many as 900 Portland employees at its Southeast Portland campus. Instead, it now has 300 altogether, including 250 in Portland, all of whom will soon consolidate into the smaller office across from the headquarters it moved into just two years ago. It will sublease the original space.

The layoffs and management exodus accomplished their goals, Reich contends, and renewed focus on Simple's services and developing new products. It put the business on a more robust path, he says, albeit with some cultural cost.

"That's the downside of having a highly empathetic company," Reich said, "is when you go through down times you feel it."

And then Reich left, just nine months after the layoffs. He remains on Simple's board but now spends most days tending to a small farm near Silverton. If it's not exactly mission accomplished, Reich says he's confident Simple is in good hands with BBVA, with a cultural and mission that doesn't require his hands-on involvement to stay on track.

"I think we have the least-suckiest bank that's out there right now," Reich said.

"You need to put some points on the board"

Back in Portland, Chu is reckoning with Simple's legacy and its future. Connecting the two is sometimes problematic.

In his first all-hands meeting, Chu set out to dispel employees' concerns about their new boss. No, he wasn't here to lay everyone off. No, he wasn't going to change Simple's values. But he also wasn't going to remedy the hard feelings that accumulated in the preceding years.

If employees can't move past that, they shouldn't let the door hit them on the way out, Chu said, according to accounts from three people who heard the remark.

"Maybe it was unfortunate phrasing on my part," Chu allows. His point, he said this past week, was that employees who aren't able to get over disappointments or lack of trust from past experiences might be better off starting fresh somewhere else.

Neither Reich nor Chu will discuss details of the harassment and bullying allegations that led Simple to part ways with two managers last year, nor will they comment on the separate medical leave lawsuit.

But Chu notes that Oregon's Bureau of Labor and Industries dismissed the medical leave case when the former employee filed a complaint earlier this year. And he said Simple acted immediately when management learned of the unrelated harassment allegations.

"We will never tolerate inappropriate behavior," Chu said. "It's not who we are. It's not the culture we want. It's not the company we're trying to create."

Nearing the end of its first decade, Simple is no longer the bright new face in financial technology. Chase and Goldman Sachs each have online banking services (Finn and Marcus, respectively) that emphasize setting and tracking savings goals. There are several Simple lookalikes offering comparable services.

Simple aspires to be more than just a pretty interface, according to Chu. He said the company has put together a product roadmap for the first time in its history. The first of these new services, something he teases as "a bit provocative," launches Sept. 26.

While the search continues for a new CEO, Chu, 53, is commuting to Portland from his home in San Francisco four days a week. He has a wife and two children there, but said he's open to the possibility of staying at Simple for the long term.

Simple continues to enjoy a distinctly light-hearted Portland culture, accommodating employees' dogs in the office and throwing evening parties for the staff.

BBVA has their backs, Chu said, but needs them "to put some points on the board."

Sometime in the next year, Chu anticipates a big celebration to mark Simple's millionth customer (he won't say how many clients the company has today.) BBVA remains committed to Simple, Chu says, and believes in the broader mission that inspired the business nearly a decade ago.

"Simple has enormous potential as a standalone business. If you're here, you want to build an important business. We're not a charity," Chu says.

"You've got to do well to do good."

-- Mike Rogoway | twitter: @rogoway | 503-294-7699