Nov 17, 2022 · 30m · saastr
SaaStr CRO Confidential: Founders Fund Partner Sam Blond + Divvy CRO Sterling Snow
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of SaaStr's CRO Confidential, host Sam Blond and guest Sterling Snow reflect on the historic Brex-Divvy rivalry to share actionable strategies on market segmentation, competitive sales execution, guerrilla marketing, and GTM operational efficiency.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Jason as informed peer 7.1 Guest teaching 1.6 Guest disagreement 0.9 Jason pushing back 1.1
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 6:20 Sterling on misjudging competitor economics
Sterling highlights his past mistakes in dismissing Brex, admitting he wrongly assumed they were unit-negative and bleeding cash on every swipe.
Hardest push from Jason ▶ 5:17 Sam's billboard counterpointSam gently pushes back on Sterling's narrative of competitor imitation by pointing out Divvy perfected and owned Brex's local billboard concept.
Biggest teaching moment ▶ 3:20 Fintech processor and BIN complexitiesSterling breaks down the hidden technical and unit economic mechanics of fintech that SaaS leaders fail to appreciate until making expensive mistakes.
Jason holds their own ▶ 18:15 Sam on selling simplicity over Divvy's budget toolSam masterfully illustrates how Brex turned Divvy's flagship budgeting feature into a perceived flaw by selling adoption simplicity to high-growth teams.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Competitive Mistakes and FinTech Nuances | 6 | 3 | 1 | 2 | Sterling candidly reflects on early FinTech ignorance and misjudging Brex's unit economics. Sam interjects with a gentle counterpoint, noting that Divvy took Brex's billboard idea and executed it significantly better in Utah. | |
| Segmenting Startups vs. Main Street America | 7 | 1 | 1 | 1 | Sterling explains Divvy's deliberate pivot toward Main Street SMBs like HVAC and plumbing rather than competing head-to-head for VC-backed startups. Sam validates this strategic focus using frameworks from The Innovator's Dilemma. | |
| Avoiding the Pricing and Rebate Race to the Bottom | 7 | 2 | 1 | 1 | Sam introduces the dangers of rebate price wars and advocates positioning as the premium player. Sterling agrees, explaining the underlying margin complexity involving interchange and risk modeling. | |
| Tactical Approaches to Competitors in the Sales Cycle | 8 | 1 | 1 | 1 | Sterling describes finding the middle ground in sales calls between ignoring rivals and bashing them. Sam details a precise discovery question framework that allows reps to co-author the buying criteria and subtly differentiate. | |
| Positioning Product Value: Complexity Versus Simplicity | 8 | 1 | 1 | 2 | Sterling shares Divvy's core value proposition around departmental budget controls. Sam counters with Brex's tactical positioning, which reframed Divvy's complex budgeting features as an unnecessary administrative headache for agile companies. | |
| Adapting GTM Strategy to the Macroeconomic Downturn | 8 | 2 | 1 | 1 | Sterling admits that hypergrowth led to hiring bloat over process automation. Sam emphasizes the power of dedicated GTM strategy and operations headcount, citing an initiative that tripled average deal sizes through lead scoring. | |
| Scrappy, High-Impact Growth Initiatives on Low Budgets | 6 | 1 | 0 | 0 | Sterling recounts scrappy early growth wins like the Cashback Cowboy stunt and a $1,000 Owler newsletter deal generating 900 demos. Sam matches the energy with Brex's $3,000 conference breakfast burrito stunt. |
Statements from this episode (10)
Blond: Bill.com acquired Divvy for $2.5 billion in 2021
“Last year, two and a half billion dollar acquisition by Bill.com.”
Blond: Brex and Divvy were fierce corporate card competitors from 2018–2020
“Brex, where I was most recently CRO, and Divi, where Sterling is currently CRO, were bitter competitors from the time that I joined at least, which was mid 2018, at least through sort of like early 20 20, we were the primary two players in the corporate card, …”
Blond: Targeting startups as an initial niche drove Brex's market share
“Brex launched as the first corporate card for startups. And what that did was it sort of branded us as The right fit. If you're a startup, this is where you come. If folks are familiar with innovators dilemma or innovator solution, we picked like a small segme…”
Snow: Divvy parked branded cars outside Brex's office to troll them
“We paid some cars, wrapped them in like, you know, the Divi branding and said, you know, corporate card for everybody. And we had them sit outside your office.”
Blond: Brex took bad margins to aggressively undercut Divvy on price
“We had a lot of sort of low margin deals where we were hyper competitive because we negotiated on price so deeply something that I'm a bit conflicted about, but those, there were a lot of deals where the margins weren't great.”
Snow: Competing on economic incentives inevitably triggers a race to the bottom
“It's hard not to race to the bottom if your value is built on on either one of those like underlying economic factors.”
Blond: Brex framed Divvy's advanced budgeting features as unnecessary complexity
“Divi had a sophisticated budgeting tool. There was a feature that Rex did not have. And we actually positioned that as a negative. We said, you're a, you know, 50 person company. You don't want to have a lot of sophistication around rules around where cards ca…”
Snow: Divvy reduced CAC by 75% after COVID caused a 30% drop
“And for our business, we immediately, you know, revenue drops 30% overnight, and so we get, we got thrust into that efficiency mindset for just a second during COVID, and then it obviously went crazy again, but during those moments, we had an initiative that r…”
Snow: A single newsletter ad generated 900 Divvy demo requests
“And I remember that day, like it was a very pivotal moment for me. Cause we got like 900 demo requests.”
Snow: Standard SEM spend on Google or LinkedIn won't yield outsized leverage
“You just have to find those opportunities, though, because it doesn't exist in just plugging in money in Google or LinkedIn SEM. Like it doesn't work like that if you're trying to be, if you're trying to find outsized leverage.”