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

“Yeah. I think it's just like B2B versus B2C, right? Like, yeah, even though we had a lot of accounts to open, it was like 4,000 accounts off, you know, 400,000, right? Like, I think that's like. I think just the scale levels of B2C are just like different. And like money coming in, there's not a lot of servers that process that. It's just like a bigger number coming in. It's not like there's like 5 million people trying to trade.”
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
“Sure. So just one thing that I think about all the time is just scale, right? This is a wild swing in demand that you can't have foreseen even in the space of a day, right? You start the morning. Smart people are saying this isn't going to happen. You end the day and it is extremely happened. How did your site say up? How did the service stay up? Because we see other companies in similar situations. In particular, I'm thinking about Robin Hood. Like when I think about other bank runs and other financial providers in the middle of extremely unpredictable financial events, the first one that comes to mind is Robinhood. And they were not able to stay afloat. The service kept crashing. Why did you stay afloat?”
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 would say, like a normal day would be in the low hundreds of million, like maybe like 100 million, 200 million with inflows and then some outflows. You know, then it got to like 500 million, you know, kind of like in one day, which is high, but not like insanely high. It's like 5x. It's like a lot, but it's not like it was, you know, the next 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
“Then we raised all this money, you know, like over a billion dollars we had raise, and then we were about to pull the trigger, and then the FDIC announced that people were going to have access to their money the next day. A lot of waste at work, but never been happier to waste work in my life”
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
“Would get most of their money back, but they just needed a bridge for a few weeks potentially. But I'm a hedge fund. I can't operationalize lending to a thousand different companies. So we were pretty unique because one, we could operationalize that. And two, even if you could operationalize it, they only had a Silicon Valley bank account. So who could even open an account for them to get it? So we could open an account to actually deposit the money as well.”
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
“Like maybe like low hundreds of millions from other banks. It was because basically they have blocked all the wires in ACHs. This is before the FDIC. I think it was 11 a.m. FDIC announced. And then all these customers started going crazy. Like, what am I going to do? I couldn't get my money out on time. My payroll. And that's when we started working on the emergency payroll line. And I think we were very uniquely positioned to do that because we talked to a lot of hedge funds and they wanted to help, right? Like you understood the situation. These are good companies, right? Like these are like solid 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
“Then it got to the billions in like three hours. We just thought it was like super, we had like so many people pinging me to open accounts because we could open accounts the same day versus like other banks took like a whole week to open accounts. So all like a lot of weird stuff, you know, and so I was like at that point I knew something was going on and it was going to be bad. So we worked a lot to just like mobilize the company to open the accounts. And that was a lot of work. Next day I wake up FDIC receivers. And that was really weird because it was like, oh my God, like I didn't think I was going to get to this point. You know, like I thought they were going to, they had this capital raid. They had this call. I thought they were going to like not be able to raise the capital, you know, but not that they were going to become insolvent and the FDIC is going to take over the next day. Like I didn't think it was going to be that quickly. So that happened and all these customers and we had gotten billions of previous day in the past. The next day we got zero. And not zero.”
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 weird because I understood about banking. So I pushed the arguments for them. And basically the argument is like, look, unless there's a 50 plus percent bank run. They're going to be fine. And what's the probability of a 50 plus percent bankrupt? And then I talked to the young people like, yeah, dude, but like everyone I know is taking their money out. And I was like, okay, like maybe there's like a five percent chance that there's a 50 plus percent bank run. So okay, maybe we won't move our money out because we can always wire back on Monday. So, you know, why take the risk, right? So we took our money out. This is like maybe 10 a.m. So an hour of all this. And then by 1 p.m. I was certain there was going to be a bank rate. Everyone was talking about it. We were seeing insane amount of deposits come in.”
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, like not in my office, but you know, we have a dashboard, I just pull up every morning. And we were like, why is this happening? This is kind of weird. And we started getting some text about SVB from investor. And then I called a couple people that really understood about banking, like really, really solid bank people. And they said, everything's going to be. I'm like, okay, you know, like there's no one that I trust more than these people. They're like literally like, you know, I won't say who it is, but I was like C level of the biggest banks in the world. So then I called a couple people who didn't really understand about banking, but seemed to be in the flow of stuff, and it was sending me these messages. And they all think that the world was going to end and NVP was going to go bankrupt and it was going to be terrible.”
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
“Honestly, no. I wish I could say I saw a coming, but I didn't. I would say I was even skeptical. And it was interesting. So it was Thursday morning. We realized that on Wednesday we got like a weirdly high number of deposits, probably one of the highest we've ever got.”
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
“But it is also a pretty massive opportunity for you. So I want to just start with your experience of a bank run, which is, I think, very few people have lived through it the way that you might have lived through it. And I want to talk about what that opportunity represents. But walk us through. Silicon Valley Bank. Did you see it coming right? We're hearing reports the regulators actually might have been giving warnings. Did you see it coming?”
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's very hard to say in the abstract, right? Like, it's not like a one size fits all. I think that a lot of times in business, you know, a lot of people want to have a lot of frameworks that fit. And the reality is each situation is a situation, you know, and it's hard to create like a generalizable rule for everything. And those things in theory, they shouldn't compete as much because like, you know, if you do write by your customers or employees over a long period of time, you know, you think it does optimize for the free cash flow per share. But sometimes you can't be that long term, right? You need to be shorter term. And you need to make these optimizations. And I think depends a lot in situation by situation.”
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
“Of hey, it's not all about making money, but you need to really make customers happy, make your employees happy, make you happy. And I think like some balance of these three things is probably how we think about most decisions.”
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 would say we're very big on three things. One is we thoroughly agree with the Jeff Bezos, the metric that matters the most is kind of long-term free cash flow per share, right? So I'd say financially, that's always what we're optimizing for. And we're trying to make decisions to optimize that. I would say number two is we're very selfish in this regard, but we really want to build a company that we want to work for over the next 10 years. That's a thing. And we optimize like, okay, like which company do I think I can keep working for a long period of time because I like the culture. I think it's good and I think it's impactful. And what does that need to be true for me to be happy working on this company for a long period of time? And for both of us, we optimize around that. And then three is, you know, we really believe in that the kind of like capitalism that is not all about shareholders but stakeholders.”
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 brings me to the classic decoder question, which is you're the co-CEO, you've obviously founded a number of companies. You have a partner that you've worked with for a long time. You've made a lot of decisions with SVB. You just had to make a lot of decisions. What is your framework for making decisions? How do you make decisions?”
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, I would say that it's a little bit more, well, the teams are more involved. SVB happened. I know we're going to get into that. We're discussing how is this going to change the world? Like what is going to change in relation to how people think about banking and people think about things? And I go to talk to a lot of customers and, hey, I get some insights and I tell him, hey, I think we should do this differently based on that. We debate, we discuss, we get some sort of agreement. And then, you know, he kind of gets all the teams aligned and on executing on kind of like the changes that we decided. It was a little bit like the features in the past. Right now, the teams talk to customers directly and kind of get the features and scope it out and prioritize. But I'd say like product strategy, for example, is one of the main things that we both discuss and debate and kind of get to conclusions 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
“I like Walk me through just like a typical scenario here. So you go out, you meet with a big customer, they say, look, we need X, Y, and Z feature in the product in order to onboard 10% more of our company. You say, great, done. I'm the external person. You go back, you tell your COSIO, all right? We got to build this feature. Or is that a discussion? How does it? I mean, he obviously has finite resources. How does that work?”
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 Pedro, he runs the company. So every exec reports into him and he manages the company. He does all the internal work, all hands. And Pedro, which is very different. Pedro loves systems. He loves optimizing the incentives and the people and the org charts. And like he loves all that, you know, and I don't like any of that. I like, you know, meeting new people and creativity ideas, et cetera, et cetera. So it works well, kind of like the combination of both of 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
“Yeah, no. Look, we've been working together for 10 years now, and it works really well. So the way we do it is we do internal versus external. So I have zero reports, which is amazing. I'm not a brave manager, the dream. And I do everything external from fundraising to customer meetings, partnerships, press, you know, et cetera. So a lot of times people want to meet the CEO of Rex, right? And that's a lot what I do. And I think especially kind of relevant, especially as we go more into enterprise, there's just a lot of customer.”
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
“our travel team that it's its own team that builds like a lot of the travel because it's like different enough from everything else we do. Then we have what we call customer journey team, which is this is like onboarding KYC AML, all the kind of like experiences the customer have that go besides the core products and the journey from you getting into the website, they own like our homepage all the way to like the notification systems that they get, you know, the messages And then we have foundation, just kind of like core infrastructure engineering team that works on infrastructure developer productivity, security, compliance, et cetera. Those are probably like our core product teams.”
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 the way Brexit is structured is, you know, traditionally we're functional. We still haven't moved, I would say, to business units or anything like that. So we have product engineering, sales, comms, HR, like kind of like some of the functions directly reporting to my co-CODRO. And within the product engineering orgs, we have what we call the global financial services. So this is kind of what we say. Like this is like the fintech back end, all the payments. So across all these products, they have kind of like a similar way to move money around the world, right? So that's kind of like one big team that we have, another big team that we have is called Empower, which is basically like all these approval flows or budgeting functionality integrations, all the software layer that kind of like creates like the platform for all these financial services and ways to purchase. Then we have 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
“That was the first value proposition, and it only worked for Venture Back companies because the only thing that was different from the other things was the fact that we were underwriting that way. And then what happened was a lot of these companies grew, right? Like we start, we acquired a lot of companies in 2017, 2018 that, you know, five years later, they're like bigger companies. And as they become scale AI comes as a good example, you know, they're like, you know, hundreds, if not, you know, over a thousand employees now, they were our first customer. They had two people when they joined. And now they're big. So as they grew, they needed kind of like new functionality. The first thing we started about getting asked was these kind of like business accounts, right? Then they're like, okay, like I can't give corporate cards like this for everyone. We need controls. We need policies. We need all that. So that's kind of how we got into spend management. So a lot of it was kind of like growing and developing of 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
“Yeah, so when we started out, the focus was startups. So it was like technology companies. And people who are like venture-backed and raised from the VC money. So the whole like innovation economy. We started there because we had this novel underwriting model. We could underwrite companies based on their cash balances instead of their FICOs. And that was very innovative in the market because Amex and others, they were always looking either your FICO financial history. You didn't have financial history and your FICO only get you a $10,000 limit. So if you needed to pay for more stuff, even if you had raised $5 million, you couldn't get a corporate card. So that's kind of what we came in to solve and say, okay, we'll underwrite you based on your cash balances instead of FICO and financial history.”
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
“Like, okay So you start with credit cards. There was a bit of a consumer focus to start with and then this pivot to enterprise, why the focus on enterprise and now what you're calling a spend platform?”
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, I would say, like, fintech was our first kind of company that did fairly well. So we sold that company. And then we got to the US, we were like, you know what? We're tired of FinTech, all these banks and regulations. And, you know, we don't want to do that anymore. We want to do something, the bleeding edge is acknowledged, like Bill Gates and Steve Jobs and all the visionaries that were in Silicon Valley and VR kind of came to mind. I was like, you know, the next kind of computing platform. But a couple weeks into YC, we got into YC this year. We decided to give up. We had no idea what we were doing. We're like, okay, fintech, we actually know what we're doing. You know, we kind of built this company before. We know a lot about credit cards. So that seemed like a lot better kind of like space for us to execute on.”
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, so the story I can start a little bit before. So, my co-founder and I were originally from Brazil. And last year of high school, we were teenagers that coded and we started a payments business in Brazil. That was like the stripe of Brazil.”
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
“Okay, so hold on to that. I want to come back to it. I just want to get a sense of Brex, the company, before we go into the news and why you're building up into travel. So you talk about building up the financial system from scratch, writing all your own code. I'm looking at the history of the company. You and your co-founder started this at YC as a VR startup. How did you pivot into banking and fintech services?”
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 would agree to that a little bit more for travel for financial service is really like a lot of it we rebuild from scratch we don't interact like Mastercard you know is the acceptance network so I wouldn't say that yes but like other than that we don't interact with any other back end thing that's outdated”
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
“That's what I'm kind of drilling down into here. There's a set of back end financial services or travel services. And then it seems like Brex is just a much better, more streamlined, more controllable interface to a lot of things are kind of antiquated in the back end.”
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
“Integrations of the airlines and like integration of the hotel networks and does all that kind of like back end of the travel side while we do a lot of the front end of the approvals and the payments and all 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
“And then when we built the kind of like spending software, right? Like our thesis was look, the reason this is different. Concur and others is because we have the integration between the financial services and the software, we can make it a lot better. So we can make sure that like your card only works, for example, for the expected policy for it to work. So in a lot of our customers, instead of only the top VPs getting corporate cards, you know, there's a customer that has 10,000 corporate cards around the company and everyone gets a corporate card because there's enough kind of like security features and controls and policies built into it that is safe for everyone to kind of like use it. And I think travel, you know, it's, again, it's more on the software side, but there's a lot of the kind of like leverage infrastructure from the expense side, right? Like all the approvals are pretty similar. The integration of your accounting software is pretty similar. All of that we kind of reuse on the travel side, but then we have a partner actually called Spot Nana that has a lot of the kind of”
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, not exactly how we think about it. So when we started Brax, one of the things we realized is that a lot of the reasons why payments and spending was broken was because you always ended up at the bank, right? So in the end, you're always trying to like work with the banks and use their technology and their software. And you're always limited by that. So what we did starting in 2017 is we decided to rebuild all the core banking software from scratch. So we don't use any of the software from the bank. We rebuild all of it, the kind of like core financial infrastructure. So that was, I would say, a big piece of why we built. It wasn't like connecting to it. We used MasterCard for acceptance, right? So our card is accepted everywhere. Mastercard is accepted. But all the technology around the issuing, the approvals, the credit lines, everything is kind of like built within Brett's.”
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
“That set of competitors is really interesting, right? Replace your corporate Amex, you're still issuing credit cards, you have a credit card partner. And so you're kind of replacing some platform in the middle that still will issue an Amex from MasterCard. Replace your travel and expense software. You're still connected to a bank and you've set policies. Replace concur is actually just replacing concur. Like concur is the travel agent there. It seems like a much bigger kind of project is that how you're thinking about your stack that you've got the interface to things like Amex and your bank and then you've got to just replace travel software entirely.”
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 we do basically spend. You think about it as like all in one spend platform. So we started back in 2017 with corporate cards. That was like the first way of spending that we had after that. We launched kind of like our business accounts, which is kind of like a bank account for businesses. So they can send all other kinds of spending like ACH, wires, checks, you know, international, also receive payments up to red so you can actually store money in it. Then after that, we launch spin management software. So this is like expense reimbursements, for example, and all kind of like the software around spending. Now, not only actually spending, but like can you spend, what are the policies, what are the approvals, all of that, right? So the first one, replace your corporate Amex. Let's put it like that. The second one replaced, you know, kind of like a bank account. The third one, which is in power, think about it, replacing concur. You know, we also do like bill pay.”
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'm excited to talk to you. You've got some news to announce, which is very exciting. I want to talk about Silicon Valley Bank with you that represents both a challenge and a pretty huge opportunity for a company like Brex. And you've just been in the mix of it. So I think you've got some insight there. But let's start at the start. Brex is an enterprise company. Probably a lot of people who don't work in the valley have not used a Brex card yet. What is Brex?”
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
“Welcome to Decoder. I'm Neil I Patel, editor in chief of the Verge, and Decoder is my show about big ideas and other problems. Today I'm talking to Brex, CEO Henrique Dubigras, who found himself playing an important role during the Silicon Valley Bank collapse. Now, Brex is what you might call a neo-bank. You'll hear Henrique use that word. It's not a traditional bank, but rather a financial services provider that helps companies manage how they spend money. Corporate cards, travel, expenses, and the rest. In the middle of the SUV collapse, Brex was more than just a spending management company. He was also a safe place to park money. Brex saw billions of deposits in a very short period of time, giving Henrique a bird's eye view of what was happening and what was happening was not great for the banking system, especially in Silicon Valley. The collapse of Silicon Valley Bank sent a shockwave through the tech ecosystem. Lots of companies, including our parent company,”
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