In other words - "our decision was driven by financial constraints; we can't do many things at once".
I'm not in any way associated with Brex.
Therefore, we feel confident in delivering a best-in-class service to customers who meet any of the following criteria:
* Received an equity investment of any amount (accelerator, angel, VC or web3 token);
* More than $1 million a year in revenue;
* More than 50 employees;
* More than $500k in cash;
Make tiers: unsupported fully automated service => service with human support per email => service with phone support and customizations.
Price it so that the the first tier is somewhere near the breakeven point, and the next ones give you increased margins, since bigger customers tend to have larger budgets. Offer discounts based on the number of users/transaction volume.
This way you won't need to be unprofessional and pick which customers deserve the honor of using your services, as your pricing figures it out for you with no drama!
The only reason for this kind of announcement I see is that the company acquired lots of low-revenue customers at a loss hoping to fudge the growth numbers. Well, shame on them and shame on the investors that didn't see through the BS.
Seems pretty reasonable to me?
My thinking: They don’t need to build a fully automated one-size-fits-all product experience, they just need to charge for the cost of their existing “higher-touch experience”. Isn’t that exactly as complicated as “costs”?
Please help!
https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac...
* paid $1000+ per "small business" acquired in early 2021 (those were some sweet signup bonuses over on the travel blogs!)
* raised $700M+ cash in Apr + Oct 2021, and negotiated a higher price per share by adding a slide showing exponentially more "small businesses" on board
* got them all offboard once the accounts no longer had value
This feels a little conspiracy-theory'y. I guess you would want to validate this view by
* waiting until the recession has started and finished
* watching for them to pivot and re-onboard this customer base again with more sweet offers
* expecting them to be in the middle of another funding round when the deals come back
In cases like this, though, it seems clear that Brex was abusing the abusers: They knew the signup bonuses would create a signup frenzy and likely viewed it as buying their way to the numbers they needed for the next funding round.
Brex is an intelligence-gathering machine that exists to gather data on the finances and operations of your business, masquerading as a credit card. I understand why Brex would want to build that machine. I don't understand why businesses would want to divulge their data to it.
> Brex processes a lot of transactions for a wide variety of businesses including small businesses, venture-backed, ecommerce and larger mid-market clients. Here you can find a selection of insights from data we collect that offer a snapshot of where startups are spending their money. Check back often as we will continue to develop our insights with rich data-storytelling and interactive charts to let you dig into our data.
We, us, our. What can WE learn from this? How do WE grow as a company? We, us, our.
This is a case study in poor messaging. Look how much of the writing is about Brex, and how many sentences use one of 'we,' 'us,' or 'our,' and how little is about the actual customers.
In particular, I find the emphasis on growth particularly galling for the following reason: If I'm a fired customer, and you're the company that fired me, what do I care about your growth? That's worth nothing to the fired customer, any argument to the contrary is thoroughly illogical. Thus, I'm forced to conclude that it's only about assuaging the concerns of the customers they're currently willing to retain. The customers Brex left in the ditch still matter just as little as they did last time around. I have no stake in any of this, but reading their communications over the matter leaves a sour note in my mouth, and it seems like a completely unforced error. YMMV, naturally, but I don't respect their approach at all.
Created confusion?? Brex literally sent out an email telling me my account was being closed. But yeah okay, let's call it "confusion". This is a non-admission of guilt.
Don't put it on your customers failure to understand what you mean when this is literally what you sent:
last week: "we've decided to close your account, you have one month to f off"
this week: "We didn’t clearly communicate who qualifies as a Brex customer moving forward, the truth is you're dead weight so f off (you have three weeks)"
edit: lol whoops deadline was aug 16, but i read it as july 16, which made the numbers sound a lot punchier.. still brutal tho
If you’re doing it for money, you’re either financially weak or just cheap and looking to save cash by making your fired customers reengineer to accommodate a new provider.
The only way you can fire a huge swath of customers like this is to provide them with an essentially unbounded offboarding runway and being willing to grandfather many in, perhaps raising rates after a generous grace period to encourage departure.
An audience member asked about how to get pricing right early. Part of PG's answer (from autogenerated CC):
you can always change your prices later though if you want to lower your prices no one's gonna complain and if you want to raise your prices you just grandfather your existing users which if you have exponential growth will always be a tiny subset of your total users and then no one will complain about that either
https://www.ycombinator.com/library/85-a-conversation-with-p...
Cut off future people that don't meet your criteria? Fine. If you need to cut people off, commit to servicing existing people for a really long time (like 3 years).
My trust in Brex is very low, and I already started looking at alternatives. They have proven that if their whims change they will cut you off and fast.
Contrast this with (for example) AWS. I at least believe that if they launch something they will support it for a long time.
What happens if my annual revenue drops from 1 million to 990k, is there some leeway there? where does the leeway stop?
The more concerning one is this:
>Tech startups who are on a path to meeting the criteria above, and are referred by an existing customer or partner.
So - is this your way of saying, if we have a well established company and they recommend there company they invested in, you are going to hold onto them even if they are no where close to the "criteria" because you are scared you'll scare off your whale of a customer? .....i mean at least you very willingly admit to nepotism.
Dude's a walking poster-child for why someone who is in their early twenties should not be worth hundreds of millions of dollars.
> 95% of customers say switching to Brex is easy.
(1) apparently getting kicked out is easy too. a bit tonedeaf it is.
(2) those who thought it wasn't easy likely aren't your customers.
I don't know anything beyond what is written on their website, but everything I see sounds far too buzzwordy for my taste to really take seriously.
Ignoring that 95% of people looked at the parts requirement list and instructions and ran away.
What I'm reading is that if you (inexplicably) wanted to keep your account from being closed, all you have to do is issue a single crypto token, and arrange for your friend to buy it for a dollar.
Also, A one month notice to change all payments is insane. Brex should not be trusted.
(Full Disclosure: They are kicking me off and I am very annoyed…)
I am in the EU. This is not kosher.
Bad first impression last week, bad second impression this week.
Put down the shovel, maybe?
Parts of my messages to them are pasted below, the responses were to say the least unhelpful.
> ...We tried to apply for a Brex account last night but our application was automatically declined with no explanation as to why. I have read your FAQ closely and believe this must be a mistake as your company claims to be essentially designed for scalable software start-up companies, even prior to incorporation and without so much as a website. We are incorporated, have a website, and have a significant codebase already. Please let me know if you can figure out whether this was a mistake or not, and if not by what criteria we were disqualified.
> Your team's response does not answer any of my questions. It's just a longer version of the automated response given by the website in the first place. Your marketing disagrees entirely with your company's actual behavior.
> I don't think you are [sorry]. You have no idea what my business is or how it operates. You have no way of knowing that information and therefore no way of making that determination now or at any time in the future. Your website is completely contradictory to your behavior. If I ever do manage to get ahold of anyone accountable in your organisation I will be sure to share screenshots of this completely user hostile customer service. If not, I'll be sure to publicize these interactions when my company has found someone more reasonable with whom to do business. I'm literally trying to give you money and being refused for reasons which cannot be shared with myself. This is absurd and exactly why people hate bankers. Isn't this exactly what you people set out to change?...
Firing customers is a great thing to talk about at seminars, but in reality, every relationship you end unilaterally has ripple that can turn into choppy seas in the future.
I wonder if these were the original criteria or if this is a partial walk back. The SBA usually defines a small business as having less than 500 employees even if it has significant revenue.
If I had been asked to guess the criteria based on the initial announcement, I would have guessed 500 employees, $100MM in revenue, or $5MM in money raised with some exceptions for top-tier investors or other judgmental criteria.
He could have said something like “sorry, but we’re still kicking you off if you don’t meet any of these arbitrary conditions” and it would mean the same thing.
Simply direct internal AEs/CS/PS + branding/messaging/content to target & serve specific segments whilst offering a very basic level of support towards SMBs, and remove free tiers (opting for "contact us for pricing" action buttons for example).
Afterwards the organisation will organically shift towards that direction; but by making this a public thing it hinders opportunity and affects public perception.
This change puts pressure on us — should we raise a seed round so can stay with our bank? Or should we do the science and product discovery right, and then raise?
The answer is obvious, but we can't pursue the "obvious" answer because we haven't received equity investment. University accelerators, and even NIH SBIRs apparently don't count?