The Exchanges

Q So I have this weird thesis where I literally don't back founders who haven't made money early. I find the greatest entrepreneurs always make money early, whether it's Daniel Ek making websites or Toby with Shopify, the best start early. Do you agree with me?

A I think so. I think there's something about, um, and it's funny because I think there's been two experiences for me that were similar to what you're describing. First one is I build this thing online. Um, and the first thing I actually made, like, Real money, I guess, was there was this, I was selling this app on the Cydia store. Cydia store was the, the, the, the, the jailbreak, the unofficial app store for, for the iOS back in the day. And, uh, and I made, like, I don't know, like, 200 K in, like, when I was 14. And my mom was looking at that and she was like, oh, what is this money? Like, what are you doing online? And then I explained to her, I think she got it, but it wasn't her tax return because I couldn't, like, file tax returns on my own. When you're 14, you can only file them, I think, when you're 16 and above in Brazil. Uh, so that was a fun one. I guess the other one that was interesting for us is we built our first company in Brazil, um, to probably, probably the first, you know, four or five years of the company. We went from zero to, you know, processing, you know, a few billion dollars a year in GMV, and all the money we raised was 300 K. So we had to make the company work with 300 K. And the interesting thing is you just build this wiring in your brain around how do I create value on everything you do, right? Because you, you can't afford to ship a feature if i…

AI assessment note: “I think so. I think there's been two experiences for me that were similar”

Q What do you think needs to change within the brightest business for you to be a public company? People always say, bullshit, there's no such thing as an IPO window. Great companies can go out at any time.

A Like, being a public company is very easy. Like, it's remarkably easy. You, you, like, you hire a banker, You fundraise and you're done. The question is how to be a low volatility public company. That's the hard part. And, and I think You know, the only way that you can do that is having a very high degree of predictability in the business model. And I think for us, um, that has been the hardest part. So like last year we were behind plan, uh, in two quarters, this year we're way ahead of the plan. And, and the point is like, you know, we did our best to forecast it. And there's a lot of levers in what happened in terms of customer spending, in terms of where, um, Where a lot of these things come to mind, but I think we're not yet at a level that we can say, oh, we know for sure where revenue, where, you know, where income is going to be in two or three quarters. And I think it's really hard to go public unless you have that. Um, and, and that's probably the biggest bottleneck for us into, into doing is just level of predictability that we want to have.

AI assessment note: “that's probably the biggest bottleneck for us into, into doing is just level of predictability”

Q Traditionally, your business is viewed as a beautiful business for many reasons, but one reason is LTVs are long. People don't churn or change much when they're in, you know, with such a, a vendor. Um, is that changing in the face of increasing competition, more options, better products?

A When you look at the card at face value, like just the actual card, I think cards are like not that sticky, right? Because the reality is that you can just start swiping another card. You can say, Hey, I got more cashback. Uh, you know, we talked about some of our competitors that offer the same product for cheaper, right? Essentially higher cashback. And you see that dynamic playing out a lot in the market of like someone comes in and I, we always, we have a channel that we talk about like, uh, new competitors, right? And a new competitor comes in and they say, Hey, I'm launching a car to hire cashback. And if you think about it, like conceptually, right. As like, uh, the sort of like, uh, uh, economic book, economy book view of the world. Like the, the rational thing is, Oh, customers are all switching away because they're getting more dollars back. But, but I think something different plays out in practice, which is a lot of the value they get from the platform and the software and the automation starts to play a bigger role where, you know, customers like, well, I actually run my whole closing process on top of this. So the cost is higher than what I gain as cashback.

AI assessment note: “something different plays out in practice, which is a lot of the value they get”

Q Pedro, I want to ask one final question, then I want to move into a quick fire. Over a company life, culture gets hit. When was the culture the worst?

A I would probably say, um, in 2021, when we pivoted very aggressively towards the enterprise, because we were serving small businesses, and it was like a full, almost a one 80. Um, that was pretty hard. And, and I think the learning was, as you prioritize, um, Focus on serving your own customer really well before like trying to like, you know, Serve the whole planet. And we had our own customers that were startups that were growing, that were becoming bigger, and they had these needs, um, of larger companies because they became larger companies themselves. We didn't have something that could serve them as well as we wanted. And then we just had to make this really aggressive pivot to, to solve for that. And, and in some ways, the most customer focused thing we could do was to serve enterprise customers well, because our own customers were becoming that and startups that are successful become that, um, Um, so, so in some ways it was like this very, um, sobering and, and, and in hindsight, special moment of like learning how to really focus on your customer. And, uh, it was really painful, but totally worth it.

AI assessment note: “I would probably say, um, in 2021, when we pivoted very aggressively”

Q How would you advise other founders when it comes to this statement?

A Yeah. So, so I think it's like very simple. Um, I think it all starts by asking, Hey, what's limiting your rate of growth by now? And people say, Oh, there's many things. There's not like there, by definition, there's only, there's one thing like in any system, like throw, you know, limits the rate of progress for the whole system. It's called the bottleneck. Uh, and, and by the way, like, Um, people should read Toyota production systems. It's like the best book on all of this, like lean manufacturing. I love these, these things. Um, and, and once you find that bottleneck, the highest leverage thing you can do is increase the throughput of the bottleneck. More than anything else in the system you could change. If you could change only one thing, it's changing the rate of progress in the bottleneck.

AI assessment note: “once you find that bottleneck, the highest leverage thing you can do is increase the throughput”

Q What do you think needs to change within the brightest business for you to be a public company? People always say, bullshit, there's no such thing as an IPO window. Great companies can go out at any time.

A Like, being a public company is very easy. Like, it's remarkably easy. You, you, like, you hire a banker, You fundraise and you're done. The question is how to be a low volatility public company. That's the hard part. And, and I think You know, the only way that you can do that is having a very high degree of predictability in the business model. And I think for us, um, that has been the hardest part. So like last year we were behind plan, uh, in two quarters, this year we're way ahead of the plan. And, and the point is like, you know, we did our best to forecast it. And there's a lot of levers in what happened in terms of customer spending, in terms of where, um, Where a lot of these things come to mind, but I think we're not yet at a level that we can say, oh, we know for sure where revenue, where, you know, where income is going to be in two or three quarters. And I think it's really hard to go public unless you have that. Um, and, and that's probably the biggest bottleneck for us into, into doing is just level of predictability that we want to have.

AI assessment note: “biggest bottleneck for us into, into doing is just level of predictability”

Q In terms of that going long, you know, you and Enrique, I think, quite reportedly took out a decent chunk of secondary. I'm always in favor of it. For the long-term mindset. How do you think and advise others when you get asked about SAC?

A Yeah. I, I, I think we're very pro, uh, doing it. We do it for our team whenever we have an opportunity. Um, and the reason is because I think if, if money is going to take someone out of the game, it just better do it early. Like, because the reality is, um, I think I have, there's a saying in Portuguese, which is you only learn who people truly are when they make money. Right? Because before then, it's all shits and giggles, right? It's like, oh yeah, like, everyone can say what they're excited about, what they're interested in, um, And, and, and they can, they can very well be, but the moment they make money, and the moment you see how their life changes after they made money, then you know who they really are. Uh, and I think there's some, something to that, which is, um, I, you know, we made, we made, I call you three tender offers since we started a company, and like, nothing changed. Like, the people are the same. They're working as hard as they did before. Um, and, and I think you have to treat liquidity as, you A part of life and not as this like point in time in an IPO where, you know, there's this one day where everything changes and people get rich. And then before that day, people were born after they, they're rich and they're going to change how they see the role and change the company because we don't see an IPO as like, as like the goal. We see it as a milestone…

AI assessment note: “I think we're very pro, uh, doing it. We do it for our team”

Q What does that, what does that mean, the rate of progress in the bottleneck?

A So like, so, so for example, like, you can ask yourself, well, like, hey, what is, what is my bottleneck right now? My bottleneck could be, well, I don't have, for example, Braxton, our bottleneck was, we didn't have an enterprise product, right? So, so we were limited in the kinds of customers we could serve. Because the reality is, as customers matured and got to a certain scale, Brex, the product that we had back then, didn't scale for them anymore. So, so when you look into the numbers, and you look into where the growth of the business comes from, and you look at, like, how we retain customers throughout their whole lifetime, um, that was like a really big pain point. As time passed, um, you're like, what is that one thing that can change the trajectory of the business? And the one thing is building Uh, an enterprise product. Because if you don't have an enterprise product, there's nothing you can do. You can have the best sales team. You can have the best, uh, marketing. You can have the best everything. But if the product is not truly great, you can't, uh, unlock the next growth phases of the company. So what I did back then is I just said, hey, I'm going to spend 70% of my time building that product. And I just, like, delegated everything else of, like, day-to-day management of the company to my team. And I just spend, like, you know, 60, 70% of my time writing APIs of …

AI assessment note: “our bottleneck was, we didn't have an enterprise product”

Q It's free. Um, sorry, that was totally random and unfair of me to embark on you. You said there about the best quality product winning. So many of your investors told me what a brilliant product mind you are. As bluntly as possible, and as granular as possible, how do you do roadmaps, and what have been the biggest lessons here on what works and what doesn't?

A We got a lot of pages from the from brian's playbook at airbnb so the realization here is so there was this feeling that i had probably in like i had this over the years many times in 2020 10 and 21 even 22 i think we fell this to some degree where you know we're investing almost a hundred million dollars a year in product and then you go use the product every year right and the experience is like not that much better Like, it's like, it's like, it's getting, like, marginally better, but there's nothing, like, tremendously different. And that feeling bothered me because I was like, what are we doing here, right? Like, why, why isn't this yielding to, you know, big things changing that actually, you know, makes the experience dramatically better? And, and one of the things that we did, uh, as part of Bracks three point O is that we said, we have a single roadmap now for the whole company. Uh, there's no more broad teams don't have their own roadmaps. We have a single roadmap. I choose what the roadmap is and there's a single editor. And, and most importantly, um, we do very few things in that roadmap. And, and typically the way it works today is we ship three times a year. Um, and each release has, um, Three to four big themes. Uh, I, I choose what they are. And there's a process in which people inside a company and product teams can pitch what gets added to the roadmap. And, an…

AI assessment note: “we have a single roadmap now for the whole company... we ship three times a year”

Q Traditionally, your business is viewed as a beautiful business for many reasons, but one reason is LTVs are long. People don't churn or change much when they're in, you know, with such a, a vendor. Um, is that changing in the face of increasing competition, more options, better products?

A When you look at the card at face value, like just the actual card, I think cards are like not that sticky, right? Because the reality is that you can just start swiping another card. You can say, Hey, I got more cashback. Uh, you know, we talked about some of our competitors that offer the same product for cheaper, right? Essentially higher cashback. And you see that dynamic playing out a lot in the market of like someone comes in and I, we always, we have a channel that we talk about like, uh, new competitors, right? And a new competitor comes in and they say, Hey, I'm launching a car to hire cashback. And if you think about it, like conceptually, right. As like, uh, the sort of like, uh, uh, economic book, economy book view of the world. Like the, the rational thing is, Oh, customers are all switching away because they're getting more dollars back. But, but I think something different plays out in practice, which is a lot of the value they get from the platform and the software and the automation starts to play a bigger role where, you know, customers like, well, I actually run my whole closing process on top of this. So the cost is higher than what I gain as cashback.

AI assessment note: “a lot of the value they get from the platform and the software”

Q What does that, what does that mean, the rate of progress in the bottleneck?

A So like, so, so for example, like, you can ask yourself, well, like, hey, what is, what is my bottleneck right now? My bottleneck could be, well, I don't have, for example, Braxton, our bottleneck was, we didn't have an enterprise product, right? So, so we were limited in the kinds of customers we could serve. Because the reality is, as customers matured and got to a certain scale, Brex, the product that we had back then, didn't scale for them anymore. So, so when you look into the numbers, and you look into where the growth of the business comes from, and you look at, like, how we retain customers throughout their whole lifetime, um, that was like a really big pain point. As time passed, um, you're like, what is that one thing that can change the trajectory of the business? And the one thing is building Uh, an enterprise product. Because if you don't have an enterprise product, there's nothing you can do. You can have the best sales team. You can have the best, uh, marketing. You can have the best everything. But if the product is not truly great, you can't, uh, unlock the next growth phases of the company. So what I did back then is I just said, hey, I'm going to spend 70% of my time building that product. And I just, like, delegated everything else of, like, day-to-day management of the company to my team. And I just spend, like, you know, 60, 70% of my time writing APIs of …

AI assessment note: “our bottleneck was, we didn't have an enterprise product”

Q The best podcasts, honestly, dude, are when people will talk about mistakes and talk about lessons learned. Fewer things better. What did you not do that with the benefit of hindsight you wish you'd done? And on the flip side, what did you do that with the benefit of hindsight you wish you hadn't done?

A I think there was this point in 2019, 20 20 where We thought we could do it all. Like we thought we could be, we're going to be great at serving small businesses. We're going to be great at serving enterprise customers, great at serving startups, and all these different customers are going to come to Brex and be like totally happy with, uh, with what we're offering. And I think we, we try to build it all. Like we, we had a small business offering, we had like a startup offering, we had a mid market offering, an enterprise offering. And I think the learning is the, the, the, the, the limiting factor in how many things it can do is not the headcount, not the team is the leadership bandwidth. It's like how much time your best people spend, you know, doing, building things that are really high quality and really high craft. That's just really hard to scale. Like you can't, it's not just a matter of adding more folks. It's like their attention being divided. Um, and you don't trust that many people around, you know, a completely new business or, or, or, or new thing off the ground. And, and I think that just took us, we just completely underestimated how much headcount is not the bottleneck, uh, for, for just doing more things. Um, and, and, and I think, you know, a lot of the themes and mistakes that we've made over the years were Around that, I would say, like, just like believing…

AI assessment note: “we try to build it all. Like we, we had a small business offering”

Q The best podcasts, honestly, dude, are when people will talk about mistakes and talk about lessons learned. Fewer things better. What did you not do that with the benefit of hindsight you wish you'd done? And on the flip side, what did you do that with the benefit of hindsight you wish you hadn't done?

A I think there was this point in 2019, 20 20 where We thought we could do it all. Like we thought we could be, we're going to be great at serving small businesses. We're going to be great at serving enterprise customers, great at serving startups, and all these different customers are going to come to Brex and be like totally happy with, uh, with what we're offering. And I think we, we try to build it all. Like we, we had a small business offering, we had like a startup offering, we had a mid market offering, an enterprise offering. And I think the learning is the, the, the, the, the limiting factor in how many things it can do is not the headcount, not the team is the leadership bandwidth. It's like how much time your best people spend, you know, doing, building things that are really high quality and really high craft. That's just really hard to scale. Like you can't, it's not just a matter of adding more folks. It's like their attention being divided. Um, and you don't trust that many people around, you know, a completely new business or, or, or, or new thing off the ground. And, and I think that just took us, we just completely underestimated how much headcount is not the bottleneck, uh, for, for just doing more things. Um, and, and, and I think, you know, a lot of the themes and mistakes that we've made over the years were Around that, I would say, like, just like believing…

AI assessment note: “we try to build it all... believing that we could do more than we could”

Q So I have this weird thesis where I literally don't back founders who haven't made money early. I find the greatest entrepreneurs always make money early, whether it's Daniel Ek making websites or Toby with Shopify, the best start early. Do you agree with me?

A I think so. I think there's something about, um, and it's funny because I think there's been two experiences for me that were similar to what you're describing. First one is I build this thing online. Um, and the first thing I actually made, like, Real money, I guess, was there was this, I was selling this app on the Cydia store. Cydia store was the, the, the, the, the jailbreak, the unofficial app store for, for the iOS back in the day. And, uh, and I made, like, I don't know, like, 200 K in, like, when I was 14. And my mom was looking at that and she was like, oh, what is this money? Like, what are you doing online? And then I explained to her, I think she got it, but it wasn't her tax return because I couldn't, like, file tax returns on my own. When you're 14, you can only file them, I think, when you're 16 and above in Brazil. Uh, so that was a fun one. I guess the other one that was interesting for us is we built our first company in Brazil, um, to probably, probably the first, you know, four or five years of the company. We went from zero to, you know, processing, you know, a few billion dollars a year in GMV, and all the money we raised was 300 K. So we had to make the company work with 300 K. And the interesting thing is you just build this wiring in your brain around how do I create value on everything you do, right? Because you, you can't afford to ship a feature if i…

AI assessment note: “I think so. I think there's something about”

Q In terms of that going long, you know, you and Enrique, I think, quite reportedly took out a decent chunk of secondary. I'm always in favor of it. For the long-term mindset. How do you think and advise others when you get asked about SAC?

A Yeah. I, I, I think we're very pro, uh, doing it. We do it for our team whenever we have an opportunity. Um, and the reason is because I think if, if money is going to take someone out of the game, it just better do it early. Like, because the reality is, um, I think I have, there's a saying in Portuguese, which is you only learn who people truly are when they make money. Right? Because before then, it's all shits and giggles, right? It's like, oh yeah, like, everyone can say what they're excited about, what they're interested in, um, And, and, and they can, they can very well be, but the moment they make money, and the moment you see how their life changes after they made money, then you know who they really are. Uh, and I think there's some, something to that, which is, um, I, you know, we made, we made, I call you three tender offers since we started a company, and like, nothing changed. Like, the people are the same. They're working as hard as they did before. Um, and, and I think you have to treat liquidity as, you A part of life and not as this like point in time in an IPO where, you know, there's this one day where everything changes and people get rich. And then before that day, people were born after they, they're rich and they're going to change how they see the role and change the company because we don't see an IPO as like, as like the goal. We see it as a milestone…

AI assessment note: “we're very pro, uh, doing it. We do it for our team whenever we have an opportunity.”

Q It's free. Um, sorry, that was totally random and unfair of me to embark on you. You said there about the best quality product winning. So many of your investors told me what a brilliant product mind you are. As bluntly as possible, and as granular as possible, how do you do roadmaps, and what have been the biggest lessons here on what works and what doesn't?

A We got a lot of pages from the from brian's playbook at airbnb so the realization here is so there was this feeling that i had probably in like i had this over the years many times in 2020 10 and 21 even 22 i think we fell this to some degree where you know we're investing almost a hundred million dollars a year in product and then you go use the product every year right and the experience is like not that much better Like, it's like, it's like, it's getting, like, marginally better, but there's nothing, like, tremendously different. And that feeling bothered me because I was like, what are we doing here, right? Like, why, why isn't this yielding to, you know, big things changing that actually, you know, makes the experience dramatically better? And, and one of the things that we did, uh, as part of Bracks three point O is that we said, we have a single roadmap now for the whole company. Uh, there's no more broad teams don't have their own roadmaps. We have a single roadmap. I choose what the roadmap is and there's a single editor. And, and most importantly, um, we do very few things in that roadmap. And, and typically the way it works today is we ship three times a year. Um, and each release has, um, Three to four big themes. Uh, I, I choose what they are. And there's a process in which people inside a company and product teams can pitch what gets added to the roadmap. And, an…

AI assessment note: “we have a single roadmap now for the whole company. Uh, there's no more”

Q And I think people criticize you as saying it's more towards free, uh, things, coupons, vouchers, incentive mechanisms, and not saving. Do you think that's a fat criticism?

A I think it is, and I actually, like, and I actually love the contrast, because I, I just don't think any great company was built on savings. If you go ask, like, a CFO, if you go talk to, like, any great CEOs, and you say, like, hey, what moves the needle in your business? Like, what truly made a difference in the financing? And what they're gonna tell you is that what made the difference was this ability of making sure every dollar counted. Like, how do you make sure the dollars are going to the right place? And then in these places that really make a difference, then you're truly doubling down, right? You're saying, I want to understand what are the levers of growth? What are the levers of cost savings? What are the levers of where to hire? What are the levers of vendors that make a difference in your business? And it's less about cutting. It's more about shifting. That insight for us has been really remarkable because When we go talk to our customers, they, and, and we start to show them the product, how that happens on the ground, especially a complex use cases, right? Um, and, and, you know, we go to like an enterprise company and we just show how they operate with Brex, how they would operate with Brex. And for example, we have this feature called live budgets, right? And, and what it allows you to do is to have a real time view into where your budget will land at the end…

AI assessment note: “I think it is, and I actually, like, and I actually love the contrast”

Q How would you advise other founders when it comes to this statement?

A Yeah. So, so I think it's like very simple. Um, I think it all starts by asking, Hey, what's limiting your rate of growth by now? And people say, Oh, there's many things. There's not like there, by definition, there's only, there's one thing like in any system, like throw, you know, limits the rate of progress for the whole system. It's called the bottleneck. Uh, and, and by the way, like, Um, people should read Toyota production systems. It's like the best book on all of this, like lean manufacturing. I love these, these things. Um, and, and once you find that bottleneck, the highest leverage thing you can do is increase the throughput of the bottleneck. More than anything else in the system you could change. If you could change only one thing, it's changing the rate of progress in the bottleneck.

AI assessment note: “once you find that bottleneck, the highest leverage thing you can do is increase the throughput”

Q And I think people criticize you as saying it's more towards free, uh, things, coupons, vouchers, incentive mechanisms, and not saving. Do you think that's a fat criticism?

A I think it is, and I actually, like, and I actually love the contrast, because I, I just don't think any great company was built on savings. If you go ask, like, a CFO, if you go talk to, like, any great CEOs, and you say, like, hey, what moves the needle in your business? Like, what truly made a difference in the financing? And what they're gonna tell you is that what made the difference was this ability of making sure every dollar counted. Like, how do you make sure the dollars are going to the right place? And then in these places that really make a difference, then you're truly doubling down, right? You're saying, I want to understand what are the levers of growth? What are the levers of cost savings? What are the levers of where to hire? What are the levers of vendors that make a difference in your business? And it's less about cutting. It's more about shifting. That insight for us has been really remarkable because When we go talk to our customers, they, and, and we start to show them the product, how that happens on the ground, especially a complex use cases, right? Um, and, and, you know, we go to like an enterprise company and we just show how they operate with Brex, how they would operate with Brex. And for example, we have this feature called live budgets, right? And, and what it allows you to do is to have a real time view into where your budget will land at the end…

AI assessment note: “I think it is, and I actually, like, and I actually love the contrast”

Q Do you think you have good enough unit econ to go public?

A For sure. I mean, one thing about us that we do very differently than most people in our space is, uh, we, I, I have this belief that That we need to look at metrics the most punitive way possible. So a lot of times, like, for example, CACs, I love this topic because a lot of people come like, well, like, what is in your CAC? And people are like, well, it's like sales and marketing costs. And I'm like, well, is like the office overhead in your CAC? Is the brand span in your CAC? Is the management overhead in your CAC? And, and, and people can like, you know, you can dance around these numbers and say, you know, no, they're not. And, and, you know, Uh, but who cares about that? No one does that. Right. And, and I think one of the things that I learned from, from Neil and Green Oaks and, and, you know, a lot of our investors, but I think Neil was very adamant on that is like, like understanding the economic engine of the business, uh, in a very deliberate way. And, and, and, and, and from the perspective of like, ultimately you want it to be a great business, not like, you know, investors will look at the CAC and the unit economics that way. And I think for us, a lot of what we did over the years is how do we become, Very sort of ruthless in looking at the numbers in a way that's like, where is the cash flow coming from at the end?

AI assessment note: “For sure. I mean, one thing about us that we do very differently”

Q You have a moment with Enrique recently where you decide that you're going to be the CEO. Can you take me to that moment?

A I think for us was, was, was two things. Uh, one is like, I think, you know, we made, we made a pretty big change, uh, early this year called Bryce three point O where we really, we basically changed the operating You know, rhythm of the company, uh, in a pretty material way. Um, and, and I think one of the big principles is that we're just going to simplify how I run the company at every layer. And the first thing was like, we should, we should, if we're clarifying how roles and how people operate at every level, we should do this at our level too. Um, so that, that, that's like the sort of impetus. And the second thing is, you know, as a company matures more, uh, as we start thinking about, you know, an IPO, uh, eventually, um, you know, public markets, it's an easier transition. If you have like a traditional C structure that every company has, which is a chairman and CEO structure. So, you know, we looked at both and we're like, you know, we're not going to go public anytime in the next year. Uh, it's something coming in the future, but getting ready for this, uh, and having the structure in place sooner, um, probably just acclimates everyone to the way we actually run the company day to day. Um, and so it felt like a very natural point to make the transition.

AI assessment note: “I think for us was, was, was two things.”

Q best are always mother's boys, so it makes me very happy to hear. But also what an important role she's played in your, obviously, early life. But also your upbringing and how you think. I'd love to start with that. And what are your biggest lessons from being so close to your mother, seeing her work multiple jobs, and how that instilled a work ethic and a mindset on you?

A So it's funny because, um, I grew up in Brazil and, you know, born and raised there. And, um, I started coding as a kid, uh, when I was eight or nine, originally hacking iPhones, uh, back in the day where they were not sold in Brazil. And, uh, And as you can imagine, um, I spent a lot of time on the computer. I remember there was this article that came out probably in, like, I don't know, 2007, 2008 or something, uh, saying that, like, Bill Gates' daughter could only spend 45 minutes a day on the computer. And then my mom read that, and she was like, well, you're spending, like, 12 hours in front of the computer every day. And, uh, and she, and there was, and there was this point in time where she was like, well, I can either ignore what you're doing and say, you know what, this is not healthy, fuck it, like, you're not gonna spend that much time, or I can understand what's happening. And I think she, she was wise to see that I was actually trying to build something productive and, and build something, right, and learning how to code took a lot of time. Uh, so she let me do that. And, and, you know, I think there's these like decisions that, you know, your parents make early on that, you know, they sound small, but they completely change the course of your life. And, uh, and that was one of them. And then I think over the years, you know, I started working when I was 12 and I t…

AI assessment note: “she was wise to see that I was actually trying to build something productive”

Q You have a moment with Enrique recently where you decide that you're going to be the CEO. Can you take me to that moment?

A I think for us was, was, was two things. Uh, one is like, I think, you know, we made, we made a pretty big change, uh, early this year called Bryce three point O where we really, we basically changed the operating You know, rhythm of the company, uh, in a pretty material way. Um, and, and I think one of the big principles is that we're just going to simplify how I run the company at every layer. And the first thing was like, we should, we should, if we're clarifying how roles and how people operate at every level, we should do this at our level too. Um, so that, that, that's like the sort of impetus. And the second thing is, you know, as a company matures more, uh, as we start thinking about, you know, an IPO, uh, eventually, um, you know, public markets, it's an easier transition. If you have like a traditional C structure that every company has, which is a chairman and CEO structure. So, you know, we looked at both and we're like, you know, we're not going to go public anytime in the next year. Uh, it's something coming in the future, but getting ready for this, uh, and having the structure in place sooner, um, probably just acclimates everyone to the way we actually run the company day to day. Um, and so it felt like a very natural point to make the transition.

AI assessment note: “it felt like a very natural point to make the transition.”

Q Do you think you have good enough unit econ to go public?

A For sure. I mean, one thing about us that we do very differently than most people in our space is, uh, we, I, I have this belief that That we need to look at metrics the most punitive way possible. So a lot of times, like, for example, CACs, I love this topic because a lot of people come like, well, like, what is in your CAC? And people are like, well, it's like sales and marketing costs. And I'm like, well, is like the office overhead in your CAC? Is the brand span in your CAC? Is the management overhead in your CAC? And, and, and people can like, you know, you can dance around these numbers and say, you know, no, they're not. And, and, you know, Uh, but who cares about that? No one does that. Right. And, and I think one of the things that I learned from, from Neil and Green Oaks and, and, you know, a lot of our investors, but I think Neil was very adamant on that is like, like understanding the economic engine of the business, uh, in a very deliberate way. And, and, and, and, and from the perspective of like, ultimately you want it to be a great business, not like, you know, investors will look at the CAC and the unit economics that way. And I think for us, a lot of what we did over the years is how do we become, Very sort of ruthless in looking at the numbers in a way that's like, where is the cash flow coming from at the end?

AI assessment note: “For sure. I mean, one thing about us that we do very differently”

Q What do you think are the most BS elements of traditional thinking around great CEO-ship?

A I, I think like, I think there's this belief which like, oh, the job of the CEO is like, You know, you, you hire a team, and then you manage that team, and the team does everything. And I think that's true to some degree, but, but I think the job of the CEO is to make the company successful. And I think there's very few things that matter. And I think there's this, but I've seen the best CEOs that I was fortunate to spend a lot of time with is they just have this like unbelievably high degree of understanding of what matters. Like there's very few things that make a business work. And there's a lot of things that you can be average, there's a lot of things that you can suck at, but if you're really good at these very few things, Like, amazing things happen, and, and they take care of everything else, and, and I think there's just this degree of, like, how do you understand, like, what are the bottlenecks in the business, right, and, and, and, and what are these, like, structural points of leverage that if you make those very few things better, the whole outcome becomes just bigger, larger, with less friction, faster.

AI assessment note: “I think there's this belief which like... you hire a team, and then you manage that team”

Q And how do you, how do you tell a story?

A And I think the story is like, obviously we're appealing ultimately to the finance team and, you know, with this campaign, which is like finance got the day off. Right. Which is like exactly what I just said. It's like, you know, you got a day off and because Brex automated a lot of the work that you were doing manually before. And, and, you know, another one that we, we were, we were learning about during this, during this work is, you know, it took seven million hours to go to the Empire State Building. Uh, Brex saved the eleven million hours. Like, what are we going to do with that time? Uh, and, and what our customers go do is they're going to build something great. They're going to use that time to put back into their missions and to serving their customers better. And I think there's something profound about you telling the story You know, it is relatable and people are like, wow, like, and you know, it's not just about the story, right? You have to also deliver it. And I think a lot of what we've done wrong in the past is, you know, we did a very, very inspirational campaign two or three years ago. The problem was when you use the product, it was very hard to connect that to that broader story. And I think the power comes when the whole thing is one, right? When you have, when you're using the product, you're seeing, The way the product gets designed, the way you use the…

AI assessment note: “when you use the product, it was very hard to connect that to that broader story”

Q Do you feel you can show that level of vulnerability when you have a thousand people?

A I do. I mean, I, I talk about this shit a lot with my team. Um, and, and I wrote about it. I mean, we did this mental health series called catharsis where we have like founders talking about their own mental health journeys, which is really hard to convince people to do, by the way. Most people don't like talking about it openly, but I just, I just talk to founders, you know, day in and day out, uh, and customers day in and day out. And that's the same thing everyone's going through. You need to find ways, um, of, uh, How do you frame your mind and how do you frame the work you're doing around something that gives you purpose and gives you joy? Because if you are focused on the outcome, if you're just focused on and you don't enjoy the process, the math doesn't add up. Like it just does not make any sense. And I think a lot of the point about like not being apologetic and how you run the company, honestly, 50% of the value is just doing it in a way that you get energy from the process. Because if you don't get energy from the process, Uh, and the process is not rewarding on its own, and you're just focused on the outcome. It's gonna, it's gonna suck. Uh, it's gonna take a lot of time, and a lot of energy, and more energy than you think, because you need the energy that comes from the actual process being enjoyable.

AI assessment note: “I do. I mean, I, I talk about this shit a lot with my team.”

Q And how do you, how do you tell a story?

A And I think the story is like, obviously we're appealing ultimately to the finance team and, you know, with this campaign, which is like finance got the day off. Right. Which is like exactly what I just said. It's like, you know, you got a day off and because Brex automated a lot of the work that you were doing manually before. And, and, you know, another one that we, we were, we were learning about during this, during this work is, you know, it took seven million hours to go to the Empire State Building. Uh, Brex saved the eleven million hours. Like, what are we going to do with that time? Uh, and, and what our customers go do is they're going to build something great. They're going to use that time to put back into their missions and to serving their customers better. And I think there's something profound about you telling the story You know, it is relatable and people are like, wow, like, and you know, it's not just about the story, right? You have to also deliver it. And I think a lot of what we've done wrong in the past is, you know, we did a very, very inspirational campaign two or three years ago. The problem was when you use the product, it was very hard to connect that to that broader story. And I think the power comes when the whole thing is one, right? When you have, when you're using the product, you're seeing, The way the product gets designed, the way you use the…

AI assessment note: “the power comes when the whole thing is one”

Q Do you think founders can be this open with investors?

A With the right ones, yes, I think so, because I think, I think there's something about, like, it's not about hiding these things, because these things are true, and most founders go through them. I think it's about enduring them, and I think that's the point, which is, you know, Brett's been through a lot the past three years, and the reality is it takes a level of fortitude and, and sort of a, uh, you know, like you have to design your life in many ways, especially outside of work, to endure the things that you go through at work. And I think, you know, you just hear the stories of how the great companies are built. There are moments that are hard and, and they're not ideal. And, you know, the thing that matters is like people are not quitting. And, and I think You know, I, I look at a lot of founders that are really successful, and, and probably the second or third largest reason why startups don't work after product market fit, of course, is, um, founders just burning out. Uh, so, so I think the question is, like, how do you design your life in a way where you can compound the thing we're doing for 1020 years? Because it's not gonna be all up into the right, and, and I think if you believe that, Then you will burn out, because the moment that shit hits the fan, and you are in a tough situation with no support systems around you, and, uh, and you feel alone, and you're anxiou…

AI assessment note: “With the right ones, yes, I think so”

Q Do you regret raising as much as you did? I chatted to Mood before the show, and he mentioned this wonderful hustle and scrappiness in the company, and then mentioned, I can't remember, I think end of 21, 22, he was like, it got really corporate. Do you regret that, and was money the reason behind that?

A In hindsight, as we look back, I think as time passed, like, we, you know, in some ways, I think, um, Brex had this, like, interesting journey of, like, we, we thought we were a big company, and then you start behaving like a big company, and you do, like, a lot of things that big companies do, um, and I think, like, probably the biggest learning over the past six or seven years is the sort of way of scaling a company is, You have to become a larger business, but keep the mentality of a small company, right? So how do you keep a lot of the leaders closer to the ground? How do you keep a lot of the ears close to the customer and understand exactly what's happening? How do you understand how they make decisions and, and why they choose to go with products over, over, over others? There's something about like scale that like scale naturally pulls you away from thinking like a small company, right? Because you have all these layers, these people, these management systems and all that in place. And, and I think, you know, a lot of the, the work, especially over the past, like, 18 months was like, how do we just unlearn a lot of that and go back to the basics? And, and I think like fundraising was, was like, you know, one of the, one of the offenders, but there's definitely, you know, hiring a lot of people is also not a one. And perhaps some of those are enabled by the fundraising, …

AI assessment note: “fundraising was, was like, you know, one of the, one of the offenders”