I studied how Brex (YC W17) went from zero to $12.3 billion company in just 6 years

[hal16]

@alfie13 A lot of VCs seem to expect Brex to fail in comparison to Ramp.

 

[jolene576]

@alfie13 Great write-up. I find it interesting that in their YC application video they call themselves Brex, which means that their brand name (Brex) and their product name (Veyond) wasn’t the same. Just not something you see very often; I went through a YC interview and some of the feedback was that the two should match until you reach any sort of scale.

Love seeing edge cases like this where they’re the exception to the rule.

 

[alfie13]

@jolene576 Haha yes I found it interesting as well. And talk about a 360 pivot lol - from VR to building a finitech

 

[davidcochrane]

@alfie13 Lots of interesting things here, especially after working at a failed fintech startup!

Regular folks tend to underestimate how hard it is to build a tech product for the first time, and they underestimate how complex and busy finance is as well. It takes real work to make a new financial product.

I also like the idea of putting emphasis on your customers: they are really what matters. If you are launching into a small pool of customers: make sure you can support them. Build the product with "supportability" in mind, and compensate your support folks well.

Personally, I'm launching a first product into a market like that: our segment is small, and each end user having a great experience will pay dividends later. Taking the time to integrate a Customer Support platform, and doing that support myself is probably in the cards.

 

[alfie13]

@davidcochrane Finance and tech is hard af. Extremely complex. And you're on the right track - do the first steps right and do things that don't scale which involve talking to customers

 

[jesus4ever]

@davidcochrane Similar feelings as we are also building a fin tech product

 

[delistuff]

@alfie13 Brex' 8th employee here, not currently working there anymoer. Actually pretty accurate picture with a few tiny mistakes:

• Tannebaum was the CFO.
• "Customers were approved for a corporate credit card in just 24 hours with no manual paperwork or in-person visits needed." While this is not untrue, it was our worst case scenario. We were often able to turn around in 5 mins or less, if not instantly.
• "They also sent champagnes to founders offices & cold emailed them a few days after." I still remember thinking "that's never going to work", and being (pleasantly) surprised about this one. It. Was. A. Killer. Not correcting, just reminiscing.
• "Brex focused heavily on NPS (Net promoter score)" Again, not untrue, but also not true. We just talked to customers. No amount of automation will replace just talking to customers. At some point, we did roll out an NPS measurement framework, but it was later than most people imagine.
• "Brex made the product more sticky optimizing for user engagement" This one is just untrue. Or, I suppose I should say, we knew that people should be engaged with the credit card. We couldn't care less that people came to the dashboard frequently and checked their numbers. Almost no one did that apart from founders and accountants. But everyone felt safe to use their cards frequently, and that was by design. I left at the end of 2019, so I don't have any feedback on the existential crisis other than what I perceived from talking to my former colleagues, so I'll refrain from commenting about that time period. Otherwise, great write up. You got a ton correct.

 

[alfie13]

@delistuff woah thank you for sharing! Glad i got a few things right haha - Mind if I dm you for some additional comments?

 

[delistuff]

@alfie13 Not at all

 

[tomorrow]

@alfie13 Great breakdown.

 

[alfie13]

@tomorrow Thanks

 

[bee300]

@alfie13 What's the difference between upsell and cross-sell?

 

[alfie13]

@bee300 Upsell = you move a tier up like from free to paid. It drives expansion revenue. Eg - move from free to Brex empower

Cross selling = you offer additional products that complement the main product. Eg. Hey you have a Brex credit card, you have x dollars in the bank, you should try for Brex debt funding.

 

[bee300]

@alfie13

Via Brex, users could also earn bonus rewards for spending money with their card. Brex partnered with Uber, Lyft, American Airlines, Starbucks and many others. The points earned can then be redeemed in exchange for goods and services, such as AWS or Slack discounts.

So the startups/customer of brex spending on these services like American airlines, they get rewards which could be used to get AWS or slack discounts?

 

[alfie13]

@bee300 Yes they earned rewards for spending via their credit card and then redeemed those rewards on slack etc

 

[bee300]

@alfie13 Interesting

 

[irishkid777]

@alfie13 Great stuff as always. I keep wishing for these to be even longer, there are so many juicy bits.

 

[alfie13]

@irishkid777 Haha thanks my man! Check out the full post in the link - there are a little extra tidbits in there

 

[shatteredparadigm]

@alfie13 It made sense for Brex but I don't think co-build your mvp is the same with Gen-AI startups. Before Gen-AI, you iterate on features that only takes time and a predictable number of engineers to implement so it's key to find out early and fast what features user want. Nowadays, it's still easy to build a prototype based on what the customers want but going from prototype to a reliable product is immensely harder.

 

[alfie13]

@shatteredparadigm Why do you say it's harder to go from prototypes to reliable product? With ai isn't it easier?