Last fall, executives at payments giant Stripe gave employees an unusual warning: Look out for watermelons.

The company had just scuttled a crucial project called Sonic, which was supposed to rewrite significant pieces of Stripe’s code in part to speed up transactions—an important step to reduce cloud computing costs and boost profit margins before a blockbuster public listing.

But the project, an 18-month coding slog that involved hundreds of engineers, got stuck in a company morass. Executives called it a watermelon because on the outside it looked green, or on track. But inside it was red—meaning it had gone off the rails. They said the company needed to do better at spotting problems on big projects before they spiraled out of control, according to a memo sent to employees.

For years, Stripe has been one of the most valuable and admired private tech companies, with a valuation that once stretched as high as $95 billion. But the economic downdraft of the past year has laid bare some festering business challenges for the Silicon Valley darling, according to interviews with 10 current employees, former employees and investors.