YouSaid · the spoken record

Henrique Dubugras

lines on the record: 86
first: 2023-04-04
most recent: 2023-04-04
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I would say, you know, we're now seeing travel today. So I would say keeping building more spending tools. So we want all your spend on brakes. So travel is what we have right now, but we're going more. We're going global. We're going larger. So just think more spend”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Syncus AI thing is big, man. I do think that's real. And I do think the world is going to look very different in five years than it did nowadays does now because of AI. Like I was playing with GPT-4 and I was asking it to code. And dude, it was really good. You know, like I'm an engineer. Was very impressed with what it built, you know, like with a very easy prome I think that the cost of building software at a cost of building products, the cost of serving customers is going to massively reduce over the next five years. And we don't even, I can't even imagine what the world's going to look like. So I think this is going to change a lot.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, exactly. Like, it's not like, definitely, I don't think crypto is ready for this, for the scale that this is. And, you know, the level of trust, right? Like we just had FTX, right? Like we just had, so I don't think we have the, like, I don't think crypto has a lot of trust right now either. And this is a trust issue. So I don't think maybe over the long term, but I don't think it's a solution for right now.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Independent way I like, I'm pragmatic, it's what exists, you know, and banking is a regulated industry, so we're always dependent on the government from doing stuff.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think it depends on the government, man. This is one of the things that government will have a huge amount of influence. I think if they really step in to say, hey, we're going to. Make sure that the regional banks and the small banks of America still have business after this. They can. It's going to be expensive. And there's other fights like inflation and other fights that they're fighting. But I think if they don't do anything, then we're going to get to where you're saying of concentrate on even smaller amounts of banks and getting the bigger, the big getting even bigger. So I think it's a lot on the government and we'll find out over the next few weeks”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Look, we're six years old. I mean, say we're RVCs. They still have most of their fund left. We don't feel any pressure. I would say, I think if we were pushing 10, 11, 12 years, maybe, but at six, we'd have a good amount of time.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“And Brax, it's like kind of like an uphill battle. So then, when we look at, okay, so we take out all the loans, we take out all the management of large pools of money, what are you left with from their P&L? Left with credit cards, FX, accounts and wire fees. Little bit of pains. That's all the stuff we do anyway. Does that make sense?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think there's a couple reasons. The first one is if you look at the Silicon Valley P&L, you'll see that 80 plus percent of it was what we call net interest income. So this is just love. We're not a regulated bank, we are structurally in a worse place to make loans than banks. We will always So if you look at the market cap Silicon Valley, a lot of it came from that and we're just not in a structurally place to win that business. That's one. Second piece of it is if you exclude that, right, I think that after this, it's not going to be like, let me put all my money in the fintech. That's not going to be like the kind of flight to safety that people are going or not like flight to fintech. It's going to be flight to even bigger banks. So it's like a very hard battle to win of like, hey, I actually wanted to keep all of your money.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that's basically it. It's less about the revenue sources because, like, we already have a lot of them. Like, it's not what we're missing, but it's like, we can have end-to-end T&E experience for your employees, right? Like, so we can have everything integrated in one place. So we can literally just have experience request a trip. If it's approved, you just swipe and it's done.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“As you expand, the new product is travel. You've also been working on it for a while. You say, okay, this is going to help us go get more of these customers, right? We're going to show up in more places. We'll increase the amount of business that we're doing, the number of transaction fees. And now I can show up and say, look, we can take even more of concur or a gents here or whatever out of the mix and make this simpler. Is that how you think about investing in a new product area? This is going to solve more problems for our customers.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I know. I know, but you get these companies, and all these finance teams are making the decisions, and they go, oh, too overboard in the controls, and then it just becomes impossible. And they want to make it better. And the other thing is like finance teams, they hate being the prevention of new business, you know. They hate being the person that's like, oh, let me put things so people can focus on my things versus doing their job. That's not what they want. They just want to do their job and have the right controls and make sure money is being spent appropriately. So when there's a tool that can both like help them add more controls and do their job, but still get employee experience, and they're kind of like a hero versus like they're like the villain that's like in the bad cop. They hate that bad cop feeling. So, you know, it works really well in that way.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“They don't think it's like the only thing that's going to retain employees, but it's part of the package. Like, it's less bureaucracy. Like some of these big companies we're talking to, they have a head of debureaucratization. Like it's a product out of the head of debureaucratization.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“It depends on the size of the company. I would say that for the larger companies, it's two things either saving money. It's like, hey, I have a T&E cost of X. I want to put it to Y. How does Brex help me take from X to Y? And kind of like the budgeting stuff I was telling about, you know, we really help kind of like execute on that, et cetera. Or it's like, hey, I'm a big company. I'm already having trouble retaining employees. And they hate my app. They hate this. I want to like improve the employee experience because I get complaints about this all the time.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Just call my CEO and just tell him to let me start swiping the company car. But you still got to sell it, right? There's a huge transition cost. There's a training cost. You got to send out 50,000 new pieces of plastic or whatever. What's that sale like? What's your pitch? Are you going to save money? Are you going to make your employees happier? What's the ROI on the big investment in switching over?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Talk to me about going and making that sale, right? You're the external CEO, so you're showing up at a Fortune 500 company. They've deployed Concur. It's got 80% market share. There's literally nothing worse for any large company than an enterprise software change. They all hate doing it. Employees hate, I hate. My goal at work is to never use software again. Your product sounds amazing because it sounds like I actually don't have to use very much software. You don't have to do it.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Depends on how the company configures it. Some are more stricter than others. I would say though our recommendation is you actually let people swipe it. A lot of times they have a good reason for it, but that then goes for approval because it's out of policy. So when the manager is looking, instead of looking to 200 transactions that they don't have time to see, they only see, hey, these ones are out of policy. This is why it's out of policy. Do you want to approve it or not? And if they don't want to approve it, we have a very easy way to revert that and actually charge the employee discount from their payroll or bank account if it's supposed to be kind of like personally paid. So we make that flow kind of like much easier. Some companies decide to say, hey, I'm not going to approve it. We don't like that usually. We think employees in general have good intent and they're trying to do the right thing. And, you know, a lot of times they have a good reason for it or they don't know what the right thing is. So we prefer to be a little bit more flexible.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“You can find everything on Brexit. You can find on Google Flights. So I think that also helps the kind of adoption of the product because everyone now can find all the flights. And lastly, I would say it's global. Like as organizations go global, let's say you're flying to India and you need to go to some city that needs a low cost airline that does that route. A lot of these companies don't have these travel agencies. They don't have those like low cost local airlines. And our partner that we partner with integrated all of them. So we actually have all this like global capability. So you can travel globally and serve your global employees much better as well, build them in different currencies, et cetera, et cetera. So those are kind of like some of the key reasons customers choose our travel products.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Are others. And the last thing that I'll say two things. So another way to help prevent that leakage, and I don't know if you ever had the experience of like you go and confer and we actually had a lot of customers from trip action tell us this. They go to these competitors and they try to find a flight and then they go to Google Flights, they find something cheaper. And you're like, oh my God, what's happening? Always find cheaper stuff. And the reality is a lot of these companies, they know that travel like airlines and hotels, they know that travel buyers, they're less price sensitive. So they actually pay these companies to not show the cheapest stuff because they know that they will buy it anyway. That's pretty bad. So what we do is like we just are completely unbiased. Like we don't take any of that money and that's not part of our business model. We have a lot of other ways we make money and we just show a completely unbiased inventory so we don't have the question of like, oh, yeah, like, you know, I can find a cheap wrong Google flight.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Ashby just doing less trifs. And by giving managers that visibility and say, hey, this is your budget, you need to decide how you're going to use this. We actually see that people say no to trips and say, actually, like, we don't have enough budget for you to do this trip. I'd rather spend it on that. And, you know, if you can give visibility and empower people to make decisions, how would they think it's better for the business? It's the best way to actually manage and reduce travel costs. So that's like the number one thing. The second thing is a lot of issues that companies have with travel is the adoption. It's like people go and they just don't use concurrent. They just book it outside and then reimburse it. And then you just don't have visibility. What's happening? You have no control. It's harder to see if it's in policy. And we believe that we see that if we make it so easy for the employees, it's so much easier for them to just do everything in the Brex app. They actually adopt it more. So the adoption of these travel kind of like products is a lot higher across the organization instead of having them leak to Google Flights or Expedia.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Budget a lot of people want to decrease travel costs. And the best way to decrease travel costs is not getting their people to travel shittier, right? Like, I can say now you have to take two stops to go”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“And search for your flights and your hotels. You can just book them. We will show you if they're in policy or out of policy, so it's very easy for you to know what you can or can't book. You would book those flights. And then now you have your Brex card that's now authorized to spin within that budget. Every restaurant that you swipe, you don't need to get a receipt. That ought to be there. You don't need to put a memo. Everything is there. So you can just swipe away and that's it. And then you get to your hotel, you do your trip, you come back. We would automatically, the receipt from that hotel so you don't have to actually like work. You can just walk out and check out. And if all your expenses were in budget and in policy, you didn't spend anything out of policy. It's already like approved and your manager doesn't even need to look at it. Just goes through. Because if it's in budget and policy, why do you have your manager kind of like review everything, right? So that's the kind of like overall experience. And the reason that's important for companies that this experience is really good is for two reasons. The first one is the one I mentioned about.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“They have $100,000 a quarter and T&E budget for the podcast department, very well funded department. And the manager will look in your trip and, you know, oh my God, there's like a $5,000 budget here. I have $100,000. Do I think this is worth my budget? They would say yes.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. So before this launch, you could do corporate cards and expenses on Brex, but you still have to book your travel either on some OTA, Google Flights, Expedia, et cetera, or you would have some other kind of travel management company like Nirvana or Trip Actions, for example, or even Concur. Now we can replace all of it and have like all your trips, your TD in one place. So the experience would be, let's say you want to go from New York to San Francisco, you would do a few things. The first thing is you would go and you would request a trip. So you would go say, hey, can I go to San Francisco? And that would go to your manager that has an overall budget for their department. So let's say, you know, the department, I'm going to call it the podcast department. And the podcast department has a podcast department.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, again, like, I think SUB was very unique and it was built in a generation and with the second trains. And there's a lot that made SUB what it was. And I think hopefully they still can provide. But I think that our opportunity, again, look, in my view, it's much larger than the startup ecosystem. I think like if we look about, you know, around managing spend and fintech globally, credit cards and payments for companies all over the world and companies of all different sectors, I think there's a lot of places to disrupt there. And we started with startups because they're early adopters and they're great. But I would say a lot of the issues that startups have, we have companies that are 500, 1,000 people traditional industries that have the same issues. People hate their expenses. They also want a better UX for their banking. It kind of goes across a lot of different industries.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think a lot of people are thinking that that's your opportunity. Are you feeling that pressure? When I told people that I was going to talk to you today, a lot of what I got was ask him if he can replace SVB, which I think is just like a fascinating people see that as your opportunity, but you're pushing back on that pretty hard.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“No, I see Brexit growing into spend management across every industry. And, you know, if we look at the direction we're going, like does banking stuff happen and a lot of people talk to us about it, but like a lot of our core businesses, corporate cards, been managed, replacing Concur, and we're doing that for companies across every different Segment and providing service. And that's why we compete a little bit of SUB, but we also want them to survive because it's honestly like a small part of our business. A lot of our business is not that.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Are the farthest thing from an older millennial? Is that your opportunity, right? In addition to SVB failing, and you can go capture some share from them, in addition to taking some points of share from the big banks, because people want to diversify, is that your overall opportunity? Do you see Brex growing into just like a dominant provider of banking services for young companies across the board?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“To new markets. You can see that with Gen Z, right? Like all these different brands now cater to Gen Z and the old brands struggle to adapt. And that happens every new generation. So I think that's still going to be true. And we're going to be old someday and there's going to be some next gen, you know, that is going to be understanding the next generation. We're going to be like, oh, this makes no sense. I already feel old. I'm a millennial. I already feel that this Gen Z makes no sense to me.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think I've been working since I'm 14. So even though I'm 27, I've been working for 13 years full time, you know, kind of in tech. So there's some of it that is just the only kind of adult life that I know of, right? So it's not like I have anything else to compare to. So I think that's kind of like a point. But at the same time, the other side is like, look, banking is a really old industry. And I think a lot of what people say about startups is that it takes naivete and it takes ingenuity, right? Because if we knew how hard it was, we wouldn't have started it. I think that's true. And I think, look, a lot of people understand more about banking than we do. Like, I won't say I'm an expert, but I would say probably very few people understood about the customers that we serve in the startup ecosystem. You know, silicon by bank probably the only one that did. So I think that, you know, old industries are really good at what they did, but they're really bad at adapting.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. I think it depends. Depends who the buyer is, right? If they sell the bank to someone who wants to preserve the brand, preserve the franchise, preserve the customers in the ecosystem. I think there's a chance we can get a lot of what we still had. I think still people will want still redundancy. I think no one wants to be stuck in that weekend again. That weekend was pretty terrifying for a lot of people. But I think we can still get a lot of the benefits. But if they get bought by someone who just wants to integrate them in their brand, buy the loan book, you know, kind of just buy the assets and, you know, and kind of like a financial transaction, but that doesn't want the franchise, I think we lose a lot of it. So I think it will depend a little bit on what's going to happen.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“You talked just now about VCs in particular making new demands of their founders, diversifying where they're doing their banking, the opportunity for you. But now you've mentioned, and I've certainly heard, look, SUV was the center of this ecosystem. Like you didn't have to think about it. You just did your banking here. You're connected into a financial ecosystem that at least understood what a founder needed or would give you a mortgage to buy a house against the sort of weird shaky founder finances that many early stage startups have. What do you think happens to this ecosystem now without this bank? Do you think this bank comes back and survives? Do you think that the VC sort of attitude, the investor attitude of needing to diversify changes it forever? What happens to this community?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“In Brazil is doing so well because the competition is so bad versus, I think in the US, the fact that you have like so many different banks and they're tailored to their different community, their different verticals, I think that's really positive for the customers.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Than the big banks. And I really, you know, not only for real lending, right? Like venture debt, for example, just an example, like SGB did that better than any other bank in the country. And I think it's going to be really hard. I think that's going to be way worse for customers if they're not around, right? And I think there's a lot of stuff like that that these kind of like regional banks that understand specific niches and can be like a lot more tailored than the small banks that can be a lot more tailored. They're an important piece of the American banking system. And I come from Brazil where we only have few big banks and guess what? The service sucks, right? That's why like New Bank.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think you're pretty dependent, especially on payments. The government doesn't let anyone access FedWire or Nacha or any of the kind of payment rails outside of the banks. So I would say that's probably where we're the most dependent. But are the KYC, the amount, all the custody of the money, because we're a regulator, broker, dealer, we don't depend on banks to do that. That's all, you know, our own kind of license to do that. Why do we send the money to SUB? We think it's pretty bad if the world is like, hey, it's the big four banks and that's it, right? Like the reason SUB existed, the same reason city national bank exists is because they really understand the need much better.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“How do you think about you called Brexit a neobank, which is one of my favorite terms? Because you're not a bank, but you're a neobank How dependent is the neo banking infrastructure? Your infrastructure on the traditional banking infrastructure? It does seem like we're going to get to a place where there's the big four banks and they're going to exist and that's what we're going to have and then we'll have a lot of sort of neo-banking services and competition to provide services on top of or near those banks.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Three weeks I was not going to hit, but it's the case right now for sure. especially in this ecosystem. I'm seeing VCs basically, I won't fund you if you don't have an account at like one of the big four banks. So, you know, that's like, one, it's a problem for a lot of people, but it's also an opportunity because now for Brex, for other neobanks, like you don't need to do everything to be able to win that relationship. You can win a piece of the relationship. And that's okay. And you can win more over time. And I think that's like an opportunity because it was really hard for someone to come and say, hey, I'm going to do everything that these banks do. But it's a little bit easier to say, hey, I'm going to get a piece of that, you know, and I'm going to win a piece of it.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“So, a customer that only wants to have one banking relationship, they will go with the bank that can provide all the jobs to be done for that customer. I think that the world the market is going to evolve now for people to want to have multiple banking relationships and they don't actually necessarily need to have all the jobs to be done with like one specific partner. They can actually split it among different partners. And they want to do that because VCs are pushing them to have multiple relationships and diversify their money, right? Like because they're traumatized by it. They want to have operational redundancy.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think that the opportunity for us is a little bit different. I think that the big chain for customers is that I think before people wanted to concentrate all their banking relationship in one bank. So what was the biggest thing about Silicon Valley Bank was that, look, you come with us and we can do your checking account, we can do your credit card, we can do your private banking for you and your executives. We can manage all the money if you want to invest in treasuries. We can give you loans. We can introduce you to VCs.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“When I say this is an opportunity for you, right? There was that moment of panic. You said a lot of wasted work, but you're happy to the wasted work. The opportunity is that SVB exists as a sort of bridge bank, and we'll see if it turns into a real bank. The big banks are out there. They've hoovered up a bunch of customers. There's a lot of uncertainty about the first republics of the world and other mid-sized regionals. And there's certainly no one that understands the startup economy, the venture economy, as well as Brex does. Is that your opportunity now to go fill the hole and say, look, we're not a bank, but we're really close to banking services and we can just do this stuff for you and we'll just take over all of Silicon Valley Bank's market share.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“This was at the time where I would say our strategy was a little bit less clear. We were thinking that we might want to get heavier into the process of issing loans ourselves. And the biggest advantage of being a bank is that you can get deposits in conditional loans. I would say as our strategy evolved and we realized we didn't need tuition loans to be successful. And that was not as part of the strategy. Overhead of being a bank wasn't working for us.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Most of our revenue come from credit markets. I would say if there's a run on Brax, we lose some revenue, but it's probably less than 20% of it. And you get all your money out day one. And opposite sucks, like 20% of your revenue is a lot. You know, we'll screw up our growth numbers, but that's it. That's what happens. Everyone can get their money out same day, no issue.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“The reality, right? But there's no what's the backstop for you, right? I mean, these are not necessarily FDIC in short accounts. There's some amount of that happening. But if there's a run on Brex, What keeps the company together if all of your revenue comes from these transaction fees?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Buy Bitcoin if they're cash and have an issue with it. So I think that this is something that you give the customer your own. And the thing is, like, if you look at SGB or JP Morgan, most big companies, they don't keep their money in checking accounts. They all keep it in money market funds because they trust U.S. treasuries. That's mostly what's in money market funds way more than they trust the banks that they're holding in. So that's already the reality for the majority of like large companies.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but at least you get to pick your own risk, right? And think that as a business, actually, there's a lot of like, so when I have a company, usually there's an investment policy that you can only invest in certain categories of things. And our investment policy, for example, is pretty strict. We can only invest in like, you know, I think at least like double A securities with like, you know, up to like.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“There's a big debate about allowing people to bank with their brokerage agencies, right? Like I would say this is like a 50 year debate about financial policy, about whether to expose people to this kind of risk where you should regulate the banks more tightly. You're obviously on the farther end of it, right? You're saying, actually, you don't need a bank, put it in a Brex, trade your money in the back end. Money market funds are very safe, so it'll probably be fine. But we can expose you to a lot of risk. And that'll keep you away from bank runs in case the bank is poorly managed. But aren't you just moving the risk to the customer pretty directly in that case?”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“No, because we're not a bang. It's different. So, this is the difference between a cash management account and a bang. So if you think about how a bank works, it's like this you deposit your money there in a checking account and you're giving them the right to do whatever their regulators allow them to do with your money. So in the SEB's case, besides doing a bunch of loans, which was not the issue, by the way, their own loans were fine, they bought these 10-year securities that they had to hold to maturity. So therefore, when people try to take the money out, they couldn't sell these securities. you know, then they went insolvent because they don't have enough cash to, you know, to give to support all the withdrawals. At Brex, I'm not a bank, so I'm not allowed to do whatever I want the money. The only thing I'm allowed to do is allow you to do what you want with your money. And you own the underlying securities. So if you, for example, we offer money market funds, you can buy money market funds and Brexit and you own the shares of those money market funds. If you want to sell that immediately or if you want to buy longer-term stuff, that's on you and you're taking that risk, not Brex. We're not deciding.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“They weren't taking their money out. The thing with SCB is like everyone just talked to each other in one day and everyone. Got all their money out in one day”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“I think it would even cause more chaos if it was actually harder. People feel that their money is trapped, you know, they create even more panic. I don't think that would have prevented people, there was just to be more friction in the process. Because if you feel your money is stuck, you know, like that's the worst thing that can happen. I think that what it would have prevented is that if it was like a more diversified deposit base, right? Think First Republic is probably a good example where they have a way more diversified deposit base. So they had a lot of people in tech getting out of First Republic. But at the same time, you know, all the regular, you know, I don't know, high net worth dentists were not in the flow.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“The other question I have just as relates to SVB, there's this line out there this is the first bank run caused by Twitter, right? And maybe it's Twitter and maybe it's a bunch of signal chats or group chats or iMessage DMs, but the speed of information coupled with the ease of use of their app, of their service. Basically, created the opportunity for a bank run. If they had made people wait an hour or a day or a week instead of just clicking a button and moving the money, maybe this gets averted. You obviously run a financial product. You take deposits. Have you had the moment, like the stare into the ocean moment of like maybe my shit's too easy to use? And like I need to make sure it puts some friction in there to prevent this from happening”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT
“It was larger than average, but it wasn't like hundreds of thousands, right? Like where we would have any scale issues. It was fine. That piece was fine.”
2023-04-04 · Decoder with Nilay Patel · Watching Silicon Valley Bank melt down from the front row with Brex CEO Henrique Dubugras · IDENTIFIED FROM THE TRANSCRIPT