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About Last Week’s Announcement

TSUTiger 4y ago
I wasn't even aware of last week's announcement and I don't meet any of the criteria...
hansword 4y ago
They have this great quote on their site: > 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.
- namecheapTA 4y ago
  75% of people assembling a kit car said it was pretty easy! Ignoring that 95% of people looked at the parts requirement list and instructions and ran away.
mchusma 4y ago
I am a Brex user, but not an affected user, but I thought this was an incredibly dumb decision. 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.
- bombcar 4y ago
  AWS doesn't launch money-losing services (and if they do, they either raise the price or eat the cost).
colechristensen 4y ago
The issue is not at all transparency, if your company once creates a business emergency by firing a significant portion of your customers, there’s really no reason for anyone to trust you. 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.
- bound008 4y ago
  This point is very interesting. I was watching a PG interview on YC's resources for startups. 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-paul-graham-sus-2018 https://www.ycombinator.com/library/85-a-conversation-with-p...
  - bombcar 4y ago
    This is so obvious that I’m surprised more companies don’t do it - even Google falls into these blunders.
gjs278 4y ago
sithlord 4y ago
It's always hilarious to see these blogs from companies who are trying to save face. Literally no one would be wise to use Brex at this point. What are you going to do next, change it to 750k in cash - because 500k isn't your definition of a startup or a scaled company anymore? 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.
- KennyBlanken 4y ago
  Don't forget that the CEO came onto HN and posted a comment talking about how difficult a decision it was. Dude's a walking poster-child for why someone who is in their early twenties should not be worth hundreds of millions of dollars.
MikeBVaughn 4y ago
"We set a high bar for ourselves, and we didn't live up to those standards last week. We’re approaching this moment with a Growth Mindset, and squeezing every drop of learning from the unfortunate situation we put our customers in." 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.
- colechristensen 4y ago
  Classic case of the attempted response being strictly worse than saying nothing.
  - deleted 4y ago
    [deleted]
- xvedejas 4y ago
  Isn't this language exactly what you'd expect from a moment of reflection? Pointing the blame back at oneself, and contemplating one's own values? I'm not sure that the over-use of 'we' is much more than some metric you're making up to be a convenient score card for apologies. At least, I'd find a criticism of the actual content more compelling.
  - MikeBVaughn 4y ago
    Tone and semantic content are inseparable, whether we want them to be or not, particularly in damage control situations. I can envision ways of writing this article that I would read with a much less cynical lens. 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.
RyanShook 4y ago
Funny how just a few months ago Brex was handing out signup bonus offers to anyone with an EIN. This move probably makes sense for them but wow did they do a poor job of explaining it.
yodon 4y ago
> Last week we told some of our customers that Brex would no longer serve them. We did a poor job explaining this decision, which eroded some of the valuable trust we built over the years. 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.
- mousetree 4y ago
  Could you provide a bit more information on what information they gather (besides the merchants and amounts etc) and what they do with it? We're a Brex customer so would be great to hear more about this.
  - toomuchtodo 4y ago
    https://www.brex.com/insights/ https://www.brex.com/insights/ > 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.
- iancarroll 4y ago
  Doesn’t make much sense; Brex has a very clear revenue stream of the insane interchange rates on business credit cards. I doubt they (like Moviepass…) will make much off of transaction data; the card networks are already selling it anyway.
r2sk5t 4y ago
We switched to Ramp earlier this year because Brex couldn't get their banking integration to work, which impacted our credit limit. Fortunately, we moved everything to Ramp long before the recent email from Brex firing us as a customer. We like Ramp because the banking and Quickbooks integrations work.
indymike 4y ago
Announcing you are doing something bad to customers, and then having to publicly justify it again might be a signal you need to revisit the decision. 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.
absherwin 4y ago
These criteria are such a low bar that merely stating them upfront would have changed the discussion last week. 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.
- bfgoodrich 4y ago
csmpltn 4y ago
> "Our decision wasn’t driven by financial constraints, but by how many things we can do well at once." In other words - "our decision was driven by financial constraints; we can't do many things at once".
- imbusy111 4y ago
  Long term, financial constraints are the biggest factor. But short and medium term you can be more constrained by the organizational capacity to make decisions, hire fast enough, onboard new people, receive timely feedback, etc. We all have the same amount of time in a day +/- a few nanoseconds. I'm not in any way associated with Brex.
  - smegsicle 4y ago
    one might even say that confusing organizational/engineering constraints with financial constraints is what brooks's law is warning about
- strunz 4y ago
  Gotta love internet snark. You really don't see a difference between multitasking and budget? They are not mutually exclusive or necessarilyeven related.
- dreamcompiler 4y ago
  When somebody says "It's not about the money" it's usually about the money.
Imnimo 4y ago
>Received an equity investment of any amount (accelerator, angel, VC or web3 token); 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.
- deleted 4y ago
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- az226 4y ago
  Please bid on our token https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac8c248420045cb7b5e/56351872183243938646652853695743141774779739573019482867879804729492382941185 https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac...
corywatilo 4y ago
"which created confusion about which companies Brex would still serve." 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: https://twitter.com/watilo/status/1537513616324415492 https://twitter.com/watilo/status/1537513616324415492
- smegsicle 4y ago
  hahaha that's brutal 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
- pavon 4y ago
  Yeah the fired customers had clarity. The confusion was among all the existing and future customers that Brex wants retain, but who now question whether their business is still supported and for how long.
mellosouls 4y ago
The controversial post discussed here: https://news.ycombinator.com/item?id=31772211 https://news.ycombinator.com/item?id=31772211
mherdeg 4y ago
Hard to avoid the appearance that they: * 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
- bombcar 4y ago
  Wait $1k per? I bet half or more of those "small businesses" are just people getting the bonus.
  - fooobar124 4y ago
    Not only that, but the deal terms and conditions quite explicitly didn't include industry-standard rules limiting bonuses to one per person... many many many people got multiples.
    - bombcar 4y ago
      THAT starts to sound suspiciously like intentionally encouraging multiple signups to juice numbers. Shades of the dollar coin fiasco again.
      - eins1234 4y ago
        I don't know... If I had to guess, this sounds more like incompetence than malice to me.
        PragmaticPulp 4y ago
        Not a chance. Even at scrappy startups, these offers are carefully evaluated by lawyers to comply with necessary laws. There’s no way their lawyers looked at this and just sort of forgot to catch the lack of a “one per customer” clause. It’s not really malice, though. They simply wanted to buy their way to the maximum number of signups they could get, and paying customers to sign up is the easy button to do that. Removing the limit for multiple signups will take it even further.
lemiffe 4y ago
The target market of the business is a strategical internal investment from a marketing and product perspective; this is not something that needs to be communicated externally... 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.
UkrainianJew 4y ago
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; This sounds like a panic mode statement from someone who never even bothered to do product/market/pricing research. If your service generates losses for 1-man freelancing shop customers, price it accordingly. 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.
- jefftk 4y ago
  Their answer to that is: The answer is more complicated than costs – the needs of smaller businesses are fundamentally different. To serve smaller businesses well, we need a fully automated, one-size-fits-all product experience that doesn’t fully exist today. On the other hand, startups and scaled companies need a higher-touch experience with Brex tailored to the individual needs of their organizations. Seems pretty reasonable to me?
  - jhardy54 4y ago
    I don’t think I understand, can you help make it click? 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”?
    - 3np 4y ago
techcollector92 4y ago
this is going to be good for Ramp. better platform anyway (happy I made the switch) https://ramp.com/ https://ramp.com/
- Aeolun 4y ago
  I note that Ramp doesn’t have a cost associated with it either. What is to prevent them from doing the exact same thing…
  - collegeburner 4y ago
    Show $75,000 cash minimum and it looks like they audit cashflow statement. That's a hell of a lot more than the warm body standard Brex applied.
Aeolun 4y ago
I love how this ‘Sorry’ish’ announcement doesn’t really make things better. 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.
whiskeytuesday 4y ago
Brex was pretty rude to me in twitter DMs about two and a half months ago when I had had trouble trying to sign my startup up for their services. They said that my business wasn't appropriate for their service even though they had no information about what my business is or was, and when I asked for details they said that couldn't be shared with me. 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?...
mnd999 4y ago
Do they have an Italian domain? Brex.it? Because it’s sounds like they’re going to be about that successful in the long run.
testesttest 4y ago
My account was effected. I contacted support and they said it would remain open. Today I got an email saying it will be closed. I transferred my 10K cash balance out. I still don't know if my account will remain open. I used to recommend Brex heavily but their communication has been horrible. Also, A one month notice to change all payments is insane. Brex should not be trusted.
- mox1 4y ago
  Yea, if the account requirements are changeable with 60 days notice, they sure as heck can do it again, not sure I’d want my startup banking with them. (Full Disclosure: They are kicking me off and I am very annoyed…)
ThePowerOfFuet 4y ago
Why are functional (but not strictly required)/cookies forced on, and performance cookies on by default? I am in the EU. This is not kosher. Bad first impression last week, bad second impression this week. Put down the shovel, maybe?
- collegeburner 4y ago
  They only provide service to American companies via the American banking system. EU laws do not apply to them.
deleted 4y ago
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ar7hur 4y ago
Can’t wait for the even more bizarre « about the last week second announcement » next week. Seriously who can remain a customer after this?
yawnxyz 4y ago
We've been holding off fundraising, because we were lucky to receive government grants because of our connections with academia, which lets us gather data through clinical trials, funded by millions of dollars in grant money. 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?
ivraatiems 4y ago
If there's one thing customers in Brex's newly preferred demographic like, it's lots of uncertainty about whether they'll still be able to pay people and be paid next month. This will truly help address the concern every mid to large sized business has about their banks, which do tend to be far too reliable and certain. After all, it's only money. What could be more important to a for-profit corporation?

I wasn't even aware of last week's announcement and I don't meet any of the criteria...

They have this great quote on their site: > 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.

namecheapTA 4y ago
75% of people assembling a kit car said it was pretty easy! Ignoring that 95% of people looked at the parts requirement list and instructions and ran away.

mchusma 4y ago

I am a Brex user, but not an affected user, but I thought this was an incredibly dumb decision. 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.

bombcar 4y ago
AWS doesn't launch money-losing services (and if they do, they either raise the price or eat the cost).

colechristensen 4y ago

The issue is not at all transparency, if your company once creates a business emergency by firing a significant portion of your customers, there’s really no reason for anyone to trust you. 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.

bound008 4y ago
This point is very interesting. I was watching a PG interview on YC's resources for startups. 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-paul-graham-sus-2018 https://www.ycombinator.com/library/85-a-conversation-with-p...
- bombcar 4y ago
  This is so obvious that I’m surprised more companies don’t do it - even Google falls into these blunders.

gjs278 4y ago

sithlord 4y ago

It's always hilarious to see these blogs from companies who are trying to save face. Literally no one would be wise to use Brex at this point. What are you going to do next, change it to 750k in cash - because 500k isn't your definition of a startup or a scaled company anymore? 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.

KennyBlanken 4y ago
Don't forget that the CEO came onto HN and posted a comment talking about how difficult a decision it was. Dude's a walking poster-child for why someone who is in their early twenties should not be worth hundreds of millions of dollars.

MikeBVaughn 4y ago

"We set a high bar for ourselves, and we didn't live up to those standards last week. We’re approaching this moment with a Growth Mindset, and squeezing every drop of learning from the unfortunate situation we put our customers in." 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.

colechristensen 4y ago
Classic case of the attempted response being strictly worse than saying nothing.
- deleted 4y ago
  [deleted]
xvedejas 4y ago
Isn't this language exactly what you'd expect from a moment of reflection? Pointing the blame back at oneself, and contemplating one's own values? I'm not sure that the over-use of 'we' is much more than some metric you're making up to be a convenient score card for apologies. At least, I'd find a criticism of the actual content more compelling.
- MikeBVaughn 4y ago
  Tone and semantic content are inseparable, whether we want them to be or not, particularly in damage control situations. I can envision ways of writing this article that I would read with a much less cynical lens. 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.

RyanShook 4y ago

Funny how just a few months ago Brex was handing out signup bonus offers to anyone with an EIN. This move probably makes sense for them but wow did they do a poor job of explaining it.

yodon 4y ago

> Last week we told some of our customers that Brex would no longer serve them. We did a poor job explaining this decision, which eroded some of the valuable trust we built over the years. 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.

mousetree 4y ago
Could you provide a bit more information on what information they gather (besides the merchants and amounts etc) and what they do with it? We're a Brex customer so would be great to hear more about this.
- toomuchtodo 4y ago
  https://www.brex.com/insights/ https://www.brex.com/insights/ > 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.
iancarroll 4y ago
Doesn’t make much sense; Brex has a very clear revenue stream of the insane interchange rates on business credit cards. I doubt they (like Moviepass…) will make much off of transaction data; the card networks are already selling it anyway.

r2sk5t 4y ago

We switched to Ramp earlier this year because Brex couldn't get their banking integration to work, which impacted our credit limit. Fortunately, we moved everything to Ramp long before the recent email from Brex firing us as a customer. We like Ramp because the banking and Quickbooks integrations work.

indymike 4y ago

Announcing you are doing something bad to customers, and then having to publicly justify it again might be a signal you need to revisit the decision. 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.

absherwin 4y ago

These criteria are such a low bar that merely stating them upfront would have changed the discussion last week. 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.

bfgoodrich 4y ago

csmpltn 4y ago

> "Our decision wasn’t driven by financial constraints, but by how many things we can do well at once." In other words - "our decision was driven by financial constraints; we can't do many things at once".

imbusy111 4y ago
Long term, financial constraints are the biggest factor. But short and medium term you can be more constrained by the organizational capacity to make decisions, hire fast enough, onboard new people, receive timely feedback, etc. We all have the same amount of time in a day +/- a few nanoseconds. I'm not in any way associated with Brex.
- smegsicle 4y ago
  one might even say that confusing organizational/engineering constraints with financial constraints is what brooks's law is warning about
strunz 4y ago
Gotta love internet snark. You really don't see a difference between multitasking and budget? They are not mutually exclusive or necessarilyeven related.
dreamcompiler 4y ago
When somebody says "It's not about the money" it's usually about the money.

Imnimo 4y ago

>Received an equity investment of any amount (accelerator, angel, VC or web3 token); 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.

deleted 4y ago
[deleted]
az226 4y ago
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corywatilo 4y ago

"which created confusion about which companies Brex would still serve." 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: https://twitter.com/watilo/status/1537513616324415492 https://twitter.com/watilo/status/1537513616324415492

smegsicle 4y ago
hahaha that's brutal 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
pavon 4y ago
Yeah the fired customers had clarity. The confusion was among all the existing and future customers that Brex wants retain, but who now question whether their business is still supported and for how long.

mellosouls 4y ago

The controversial post discussed here: https://news.ycombinator.com/item?id=31772211 https://news.ycombinator.com/item?id=31772211

mherdeg 4y ago

Hard to avoid the appearance that they: * 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

bombcar 4y ago
Wait $1k per? I bet half or more of those "small businesses" are just people getting the bonus.
- fooobar124 4y ago
  Not only that, but the deal terms and conditions quite explicitly didn't include industry-standard rules limiting bonuses to one per person... many many many people got multiples.
  - bombcar 4y ago
    THAT starts to sound suspiciously like intentionally encouraging multiple signups to juice numbers. Shades of the dollar coin fiasco again.
    - eins1234 4y ago
      I don't know... If I had to guess, this sounds more like incompetence than malice to me.
      - PragmaticPulp 4y ago
        Not a chance. Even at scrappy startups, these offers are carefully evaluated by lawyers to comply with necessary laws. There’s no way their lawyers looked at this and just sort of forgot to catch the lack of a “one per customer” clause. It’s not really malice, though. They simply wanted to buy their way to the maximum number of signups they could get, and paying customers to sign up is the easy button to do that. Removing the limit for multiple signups will take it even further.

lemiffe 4y ago

The target market of the business is a strategical internal investment from a marketing and product perspective; this is not something that needs to be communicated externally... 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.

UkrainianJew 4y ago

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; This sounds like a panic mode statement from someone who never even bothered to do product/market/pricing research. If your service generates losses for 1-man freelancing shop customers, price it accordingly. 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.

jefftk 4y ago
Their answer to that is: The answer is more complicated than costs – the needs of smaller businesses are fundamentally different. To serve smaller businesses well, we need a fully automated, one-size-fits-all product experience that doesn’t fully exist today. On the other hand, startups and scaled companies need a higher-touch experience with Brex tailored to the individual needs of their organizations. Seems pretty reasonable to me?
- jhardy54 4y ago
  I don’t think I understand, can you help make it click? 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”?
  - 3np 4y ago

techcollector92 4y ago

this is going to be good for Ramp. better platform anyway (happy I made the switch) https://ramp.com/ https://ramp.com/

Aeolun 4y ago
I note that Ramp doesn’t have a cost associated with it either. What is to prevent them from doing the exact same thing…
- collegeburner 4y ago
  Show $75,000 cash minimum and it looks like they audit cashflow statement. That's a hell of a lot more than the warm body standard Brex applied.

Aeolun 4y ago

I love how this ‘Sorry’ish’ announcement doesn’t really make things better. 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.

whiskeytuesday 4y ago

Brex was pretty rude to me in twitter DMs about two and a half months ago when I had had trouble trying to sign my startup up for their services. They said that my business wasn't appropriate for their service even though they had no information about what my business is or was, and when I asked for details they said that couldn't be shared with me. 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?...

mnd999 4y ago

Do they have an Italian domain? Brex.it? Because it’s sounds like they’re going to be about that successful in the long run.

testesttest 4y ago

My account was effected. I contacted support and they said it would remain open. Today I got an email saying it will be closed. I transferred my 10K cash balance out. I still don't know if my account will remain open. I used to recommend Brex heavily but their communication has been horrible. Also, A one month notice to change all payments is insane. Brex should not be trusted.

mox1 4y ago
Yea, if the account requirements are changeable with 60 days notice, they sure as heck can do it again, not sure I’d want my startup banking with them. (Full Disclosure: They are kicking me off and I am very annoyed…)

ThePowerOfFuet 4y ago

Why are functional (but not strictly required)/cookies forced on, and performance cookies on by default? I am in the EU. This is not kosher. Bad first impression last week, bad second impression this week. Put down the shovel, maybe?

collegeburner 4y ago
They only provide service to American companies via the American banking system. EU laws do not apply to them.

deleted 4y ago

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ar7hur 4y ago

Can’t wait for the even more bizarre « about the last week second announcement » next week. Seriously who can remain a customer after this?

yawnxyz 4y ago

We've been holding off fundraising, because we were lucky to receive government grants because of our connections with academia, which lets us gather data through clinical trials, funded by millions of dollars in grant money. 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?

ivraatiems 4y ago

If there's one thing customers in Brex's newly preferred demographic like, it's lots of uncertainty about whether they'll still be able to pay people and be paid next month. This will truly help address the concern every mid to large sized business has about their banks, which do tend to be far too reliable and certain. After all, it's only money. What could be more important to a for-profit corporation?