[MUSIC] David, Bienvenido
>> Gracias. >> Welcome back to Stanford,
welcome back to the GSB. Ten years ago, you would have been sitting
out in those seats contemplating your graduation just six weeks away. Today, you founded New Bank, the world's
largest digital bank with over 50 million customers and
valued at almost $30 billion. So, on behalf of all my
classmates sitting here today, I really just have two questions for
you, what and how? >> [LAUGH]
>> We do have a lot to cover, so I want to get started. I want to start before the GSB. You grew up in Colombia,
then moved to Costa Rica, you had a family of entrepreneurs,
both your father and your uncles. How did that keep you? >> Well, first of all,
I'm so honored about that. I mean, I don't even know what to say,
I'm really speechless. It's an honor to be back here
at Stanford as a GSB alum and undergrad this place is super special for
me, I made some of the best friends for my entire life, and it's been incredibly
influential so, thank you for having me and excited to be
telling a little bit of our story. As you said,
I come from a family of entrepreneurs. I grew up in Colombia,
my dad has 12 siblings, my mom has five, they were all entrepreneurs,
there were small businesses. And it was all about hustling
all the time, every time. My dad had a small button company for
jeans and I was working the button company doing quality control
of buttons when I was four years old. And I grew up in that environment where
it was always about problem solving, it was always about leading and
about not necessarily following rules, but questioning when the rules
didn't make any sense and trying to open space to
solve those problems. And I remember one day, I don't know,
had a conversation with my dad about, what are you going to be when you grow up? What are you going to study? I told him I'm going to be a manager
thinking that was the best thing, or I'm going to start management and
he said, no, what do you want to manage? You're going to be a founder,
you're going to start a business, you're going to build your own space. And so, I think that was
the DNA that I grew up in. I was very lucky to be here
at Stanford undergrad. And I think kind of that radar that
everybody has about trying to find what to start,
what business to start was always on. To my own disappointment, the first
year half pass and second pass and third year pass and
I had no idea where to start. And to my own disappoint, I ended up
going through more traditional financial services experience but I loved it. I learned a ton and worked with really,
really amazing experienced people. And eventually, through a long story and
I'm sure we're going to talk about it, I finally had the shot at starting
building the company I was. It took me almost 15 years
to figure out what to do. >> Yeah,
I want to get to that in a second, but first, you mentioned after some time
in investing with the Atlantic and some banks, you came back to Stanford,
came to the GSB. What were you looking for from the GSB,
from this place back then. Let me ask it in a different way,
what mattered most to you and why back? >> [LAUGH] Yeah, so that essay, yeah,
that's a tough one to write [LAUGH]. >> [LAUGH]
>> So, I think for me, I wanted to start something to me going
back to business school was, okay, fine, it's done, I really need to
start to get ready to build something. And it was also about Latin America and I
think related to the question was impact. At some point, I realized that two
things were really drivers for me. One was learning, I had to always feel
that I was learning something new, and I felt that my level of motivation quickly
declined when I find myself that I had mastered, or I had learned,
or I wasn't being challenged. So, but
then beyond that it was almost about, what's the meaning of what I'm doing? What's ultimately what I'm doing every
single day, what is it driving towards? What is that creating? And initially when I was
in investment banking, I was learning a ton and
getting out of the comfort zone, but what I'm ultimately driving to
was harder for me to answer, move to GA when I was closer to the
entrepreneurs, that was easier to answer. But ultimately I was not building it, I
was sitting in front of the entrepreneur, and I thought that what the entrepreneur
was doing, I wanted to be that person, I wanted to be the one that
was making the hard decisions, not necessarily telling them what
to do but actually doing it myself. And ultimately, what I wanted to do is,
what I wrote in the essay was just create that impact, build something,
but back in Latin America, where I always felt that there was so much
to do and so much to build that it needed to be able to tie it back what I was doing
to that overall impact in the region. >> Right. And yeah, and so while at the GSB,
you're still investing, working for Sequoia, focused on Latin America. And after graduation, you stayed in
investment, went back to Sao Paulo, but within a year, less than a year,
you had found a new bank, what happened? >> Yeah.
>> Where was that switch? >> So, I started full quarter at Stanford
ready to start taking all the classes about entrepreneur, ready to enjoy my
two years of partying and learning, and thinking. And then one afternoon,
David George was around, tells me you gotta go meet Doug Leone
at Sequoia right here at Vista Doug and he's they're thinking about
investing in Latin America. And I, of course, went and
met Doug at Sequoia. And a lot of things were very
odd about the first encounter, generally because your first interview
in any place generally is with the most junior associate,
with the youngest person, here I was talking directly with the head
of the firm and that was not usual. And then I sit in front of the Doug and
we had just a great conversation for 60 minutes, lot of conversations about
family, a lot of clarity about personal, very uncharacteristics of
venture capital interview. I'd later realized that it was all
a psychological profiling that was happening at that point [LAUGH] and
Doug told me, come back meet our people at Sequoia and
let's see what happens. And between between me leaving Sequoia and
getting into my car, I already had an email from Michael Moritz
saying, come back I want to meet you. It took five minutes for Doug to talk to
Mike and Mike had sent me back, and so in two weeks, I went and met everybody and they proposed me to help Sequoia
look at Latin America and Brazil. And so, at that point I wanted to
I wanted to start a business but this was just too good of an opportunity
to say no to, I was going to be able to be closer to an entrepreneurship and
venture capital investor, I was going to be able to be very close
to some of the best entrepreneurs in the world that operated around this area,
seeing that, being there as they pitched. I saw Sequoia, saw the opportunity
was too good to pass, and decided to put once again,
pause to the startup idea and spend effectively those two
years working at Sequoia. >> How did you balance that? For the current students here,
what was the day like? >> It was incredibly intense. There was an advantage that
Brazil is five hours ahead. So, I had to wake up at
4:00 in the morning, so that Brazil was at 9:00 and 10:00. I was in the Sequoia office at 4:00, 4:30,
calling entrepreneurs and talking and sourcing like crazy. And so, I was working at
Sequoia from 5:00 to 8 AM, would come to GSB,
would have all the classes done, then go back to Sequoia until,
I don't know, 6:00, 7 PM. Then go back home and
try to do some homework. I think the video said that somehow I was
perhaps close to RJ Miller's color, no. >> [LAUGH]. >> Not even close. You had to sacrifice something. And I quickly sacrifice,
this does not make any sense. I cannot do that. I'm not going to do 100% of the readings,
impossible. I'll pick and I'll take the risk of
the professor calling me on a class and not having the answer,
because I didn't read everything. I'll embarrassed myself. But you have to give something up,
you cannot do it all. And that's what I ended up giving up. And there were no Tuesday night party for
me. Wednesdays were the day off. And they were some of the most kind of
really surreal experiences of getting picked up at GSB, going to the airport, get into a plane with Doug,
fly to Sao Paulo. Landing Wednesday 8:00 AM, having ten
meetings, signing four term sheets, get back to Sao Paulo, and
be back on Thursday for GSB. So, I would pinch myself being in a plane
saying, what it's happening here? But anyway, it was super intense, but you had to be able to balance it somehow,
to make everything work. >> Right, you talk about giving something
up, you end up giving up investing, right and making that switch. What was that decision? What was going through your mind? >> So there was a really good advice I
got from Doug at some point that made me thought a lot, and kind of conceptualize something that I had
already been thinking for a long time. And I'll just give
an example talk about that. I remember right before business school
going to a conference in New York, a venture capital conference,
Latin America venture capital conferences. And seeing one day eight
private equity funds in Latin America pitching their fund. At the end of the day, it was like
every single pitch is exactly the same. There was no differentiation,
everybody was pitching the same strategy. And then there was an advice at some
point that I heard from Doug is, and it was very also timely about what's
going on in Silicon Valley in 2012 is. That you want to position yourself in
the side of the scarcity of the market, not in the side of the oversupply. And where was a lot of oversupply? There was a lot of oversupply of
investors at that point in Latin America trying to do. There was a lot of oversupply
of people like me in the US. And so, me staying in the US was
being positioned in the area where I was a commodity,
I was a complete commodity in the US. My background what I knew was too many
competent people in Latin America. That's not true,
there is a scarcity of talent. And then where's even more scarcity,
we went and made a lot of startups. There were few startups and the few
startups that they were trying to do were almost like clones of US companies. They were not really solving
the real Latin American problems. When we went there were 3,000
clones of Groupon in that time. That's not the biggest problem of
Latin American, is figuring that out. That's not what people really care about
when you don't have banking access, when there are no hospitals,
when their education is horrible, when there is bad infrastructure. So there were all these
gigantic problems and there were no intrapreneurs actually
solving them or addressing them. So when you combine all of that it's, this is where their scarcity lies is
these huge challenges in Latin America I can position my service strategically
to be able to address those. And ultimately that meant also stopping
investing and ultimately going as an entrepreneur to build something
that was very different at that stage. >> Yeah, so you mentioned you
wanted to solve difficult problems, you chose banking which
is highly regulated. In particular, Latin America has a lot of entrenched
players in particular in Brazil. Why banking and what were the VCs telling you about
that when you were pitching that idea? >> Yeah, so, couple of reflections
I think I had some time. Going back to what really were driving me. The big question was, what it impact? How can I optimize the amount
of impact per unit of time? I'm going to start a business,
its going to take decades, right. It's going to take as much energy to
do something small than something big. And when I asked the question, what is
the single hardest thing I can possibly imagine, what is the single most
impactful thing I can possibly imagine? Banks was that answer. Because when you look at Latin America
the biggest companies in Brazil are banks, the biggest companies in Mexico are banks, the biggest companies
in Argentina are banks. There's nothing bigger,
it was the hardest thing I could imagine. It was the single most impactful thing I
could imagine because it's an oligopoly structure is, you have five banks that
dominate 80, 90% of all these countries. When you have an oligopoly,
you have no competition. That translates into some of the highest
interest rates and fees in the world, really horrible experience. And significant percent of the population
not having access to anybody, not being able to get into bank account,
not being able to serve them. So if I managed to figure out how to
bring more competition to that industry make it 5, 10% better by
competing with these five giants, then the impact of that was going to
spread around to entire region, right, going to be really, really impactful. So I arrived to that from a very high end
thinking about that impacting question, no idea really how to do it. It seemed impossible. I think I had 30 meetings, coffees in Sao
Paulo with the former CEO of this bank, the former CEO of that bank. The overwhelming consensus is, no,
you cannot compete with these banks, it's impossible. These are the banks that are the most
powerful corporations in Latin America. They are controlled by the wealthiest
families in Latin America. They will never let you compete. They will go after your kids. They will go after your family. Lot of people had done it, but then a lot of arguments that
just didn't make any sense and I would listen very carefully
trying to filter out the noes. Because there was real
reality behind the noes and the noes that were just ultimately
a symptom of consensus and fear. And there were things like, well,
iTau tried to do an online bank in 99 and they failed,
that's where you're going to fail. And I was, we're in 2012,
60 million people have a smartphone, 99, you have 5% Internet penetration,
and that was the argument that the experts were using to dominate
that people were not use. Our internet in Brazil is very slow and
then you had 100 million people already use being Brazil, top five in the world
in Instagram and Facebook and YouTube. So a lot of arguments that the experts
were proposing against that idea. But when you think a little
bit deeply about them, they would be very weak underneath. And ultimately, my conclusion at the end
of maybe two months of talking to people was, wow, there's so much fear. There's, so much fear about competing
with that, that's all what is driving. And obviously technology was
switching the opportunity, if we had been 20 Tend to
compete with those banks. I needed a billion dollars to
put branches in every corner and buy IBM mainframes the right time
called the why now question. Smartphone removed all those barriers and allowed us to use technology
to reach 100% of population. So it was a confluence of technology
at getting to the right time, but then also kind of as an outsider,
and I saw myself as an outsider, I'm not Brazilian, I never worked for
a bank in Brazil, I was not consumed. They did not grew up in that environment
where people were fearful of these big companies, I didn't even know a lot
of these controlling families that my Brazilian friends knew and feared. Having been an outsider looking in ended
up being a huge advantage because allowed me to disentangle a lot
of the arguments and ultimately realized that there
could be an opportunity there. Yeah.
>> But from that idea to traction is a long road,
right? When did you know that you are getting
traction with the consumers? The ones making the decisions every day? >> Yeah, so at every stage. Yeah, we got the first
million from Sequoia. It was a huge bet in the region
on the Reggie bar we dug. That helped with Casa
could put the R million, but there were so many open questions
that I couldn't even answer, and there were so
many points of perhaps complete failures. So for example,
there were two issues of credit cards. One of them, when we went to them, and
said, hey, we're starting this FinTech Neo bank said, you crazy, no way,
we're not going to work with you. One left and
when we went to them they said yes, so if they had said no, we're done. There were changes in regulation that came
in and at every single step there were points of failure but somehow with
a small team we were creative. I remember there was a new law that
appeared in Brazil, a new regulation that effectively forced us to launch
three months before in April 2014. We were going to launch first card in June
and the regulation change that said if you're not operating April 2013 you
will need a banking license which means it will take you three years to
get it, which means you'll be dead. So we grabbed the entire team and
said forget the timeline, survival mode, April we have to be live and
we have a timeline. And it was so crazy that to be able
to match the timeline perfectly, we had to get an approval from
MasterCard the right time, and there was only approving in Holland. FedEx was going to take two more days than
me flying in an airplane to Holland and giving that sheet in the headquarters
of MasterCard there. So we would get in a plane in flight
to Holland to give one pitch to somebody MasterCard, because that
will save us today from FedEx. So that was the level of urgency of
trying to figure it out how we survive so we could launch those products at time. So we launched in time. We had the 12 cards up and running,
we had 12 employees, went to the corner shop paid some coffee obviously as
always didn't work the first product. Everybody's disappointed, everybody
be sad when at home what's happening, eventually we iterated worked out. And then we raised the serious A and then
that was going to be the coming out kind of announcement we're
going to have do a lot of PR. And we're going to open the company for
external consumers. And the day we announced, as we were
saying, and we opened the website, we had an internal bet about how
many customers are going to sign up. And somebody said 1,500, 1,000,
somebody else said 10,000. The average of the employees was 1,000. We announced we worked really
hard to get ourselves or named there in the big magazine. We got 200. Completely surprised
everybody went home sigh, my god what's going to happen, people
don't want that is everything is wrong. And then a couple three months happen
we were getting 100, 50 people there. As the year passed, and
then there was one one day, unexpected one very niche publication. That was not the main newspaper,
one niche publication that went after the design community and
engineer community, talked about the card. And suddenly the following
day we got 3,000 people, and the following day we got 6,000,
and the following day is 10,000. And suddenly growth just started going
out of control to the point where we were completely unprepared and
we created this concept of waiting list, which then created even more scarcity,
which meant more people wanted the car, which created more. So that's when we started to think
that when that publication came in and all these people started I was,
whoa, okay? There's something here. Yeah. >> Well, so it's incredible to hear this
journey and there's a lot of budding entrepreneurs in the audience like let's
check who here is working on a business or thinks they're going to work in
a business after graduation. Forget us even more than I thought. What's one thing you know now that
you wish you knew when you were sitting out there? >> So, a lot of different things. I think we did when we
looked at that industry and when all these experts told us no or
approach was forget experience, we don't
want experienced people. We want complete outsiders. We want to reinvent everything for
first principles. Everything, from the way
the product works, collections, we did not want hire somebody from
the collection agencies of the big banks. We reinvented collection from scratch. We did not want these core banking
systems of the [INAUDIBLE]. We built a core banking
system from scratch. So it was all about reinventing
the entire industry from scratch. And that meant hiring people
that are completely outsiders. That worked well. But that did not scale and that became our significant
bottleneck as we started scaling. And that also ultimately meant
reinventing the wheel in a number of different things that frankly,
we just didn't need to reinvent. There was a lot of good people in
collection that could bring they won and saved us a year of reinventing
collection from scratch. So that complete dismissal of
experience was too extreme. Ultimately, I think what we learned was
you needed to figure out how to find the right balance between
the outsiders and the insiders. How to find the insiders that we're
still able to think as a beginner. We always say that we like to hire people
that have more questions than answers. And we continue to look for
those people that have more questions and answers than the person that comes in and has all answers that has
three years of experience. We don't want that person even know. But even the insiders that
can ask little questions, they're very valuable because
they know the enemy within. They saw all the vulnerabilities, they saw the things that could be better,
but they can still have the kind of the beginner's mind of reinventing
a lot of products from scratch. And so where we've increasingly dawn and
as we scaled organization we've been actively more looking for
those insiders that can help us reinvent. And especially as you start
really tackling scale problems, how do you build engineering
systems at scale, how do you build customer service
at scale the data science, machine learning systems at scale, then
you need to rely much more inexperienced, doesn't make a lot of sense
to be trying to reinvent. So it's all a balance. But I would say having been able to find
the right balance earlier would have saved us a lot of pain, right? So you mentioned people and I want to
talk about something related to that, which I know you talk a lot
about which is culture. You talk about having kind of
the founding team and expanding. How do you maintain the NewBank culture
that the company is so famous for? >> So I mentioned earlier how impressed
at Buzz, I was with Sequoia and how a lot of the things at Sequoia were so
different. And one of the things that I reflected
while I was doing the internship is, I had never felt myself so much weight
in my entire life with any work. And in previous jobs, I felt that I was
always at maybe 80% of my capacity, 90% my capacity at the beginning
of being pushed and learning. At Sequoia in the first few months,
I was 100, it was clear to me there was nothing more, and so
it made me think, what is driving this? What's different about this place that is
driving somebody like me to want to go at this pace and working for Doug,
what's driving me to go at this speed? And [LAUGH] exactly, it was the resolute. >> [LAUGH]
>> And it wasn't that, that's amazing, it's not the whip. >> [LAUGH]
>> First, it was this sense of ownership, I was an
intern from business school, and the head of the firm in investment committee
asking me what I thought about a deal. Nobody in my previous experience
that had asked me what I thought, I was just an analyst. In the first investment committee at
Sequoia as an intern, I sat next to Doug and he asked me what I thought, and
I didn't have an opinion ready. And that meant that for
the next one, I better be prepared, I better knew how to give a good answer. And so that level of autonomy with
ownership was a really strong commendation that how flat
the organization was. It was not all these layers
where the CEO was over there, it was like everybody had the same room. Remember Mike Moritz,
he didn't even have an office, he got us a chair in the hall and
you're talking with him. So that to me, that was culture and
culture was driving that motivation. And the other thing I heard a lot
about Sequoia that I was able to learn when I was sitting in front of this
entrepreneur was hearing a lot of saying that the culture of a company was built in the first six months
by the first 10 to 15 people. So when I started NewBank, the first
thing I did was the pitch deck for the sale but the second thing
I did was the culture deck. And this culture deck was
like the constitution, what are the values of this company
we're about to begin to do? And had a lot of elements that
I had learned at Sequoia, the level of ownership, this autonomy,
this flat organization, the view that I personally thought
drove a lot of motivation. And since the first 10, 15 employees were
so important, as we hired them with my co-founder, we were very actively looking
for people that had brought that DNA, and we co-designed this culture
deck with everybody of them. From the designer to the first engineer, they all participated in
the construction of the deck. And this was very powerful
because in a way, sometimes I think about it as
the Constitution of the United States. The Constitution of the United States
is over 200 years, it's very short, it represents what the US as a country
stands for, and here we are, and people still go drawn to that. And for us that deck was
the constitution of NewBank. And today those values are as
latent as important for us as they were when
we were ten employees. So that has scaled a lot, that gave us a
lot of clarity around the people we wanted to hire, about the way we did performance
management, the way we let go people. That drove all decisions,
that drove product decisions, that drove the type of language we should
use in an email with the consumer. Our focus number one is this obsession
about consumers that meant hours of debate about the words that we could not use with
a consumer, because they were too complex. About the level of simplicity, this
ownership of everybody flagged that meant customers' calls would go initially to
my co-founder Christina's phone and my phone, I would get customers. The first caller was not
a customer service person, I was getting them in my phone. So I think ultimately that
kind of became a bit of the realization where
culture is the driving force. There's nothing more important because
culture allows you to hire people, people build products,
products bring you customers. And so ultimately, consumers don't
come to you because of your products, consumers come to you
because of the culture. They are consumers of culture,
they're not consumers of products. And really authentic companies
are companies that are able to really ultimately represent and
show what they stand for. And obviously, more importantly,
they have integrity, they do what they say they do,
there's perfect alignment. And this is perhaps as you scale the
product would be much more mindful about, the expanding culture has meant
we have a number of the routine. For example,
this culture deck that I mentioned, I still present the culture every month
to everybody that starts at NewBank. Since the beginning till now, it's me,
I don't delegate that to anybody. Every month I present this culture deck
with the values to every single person, from the customer service,
the receptionist, to the engineer. They all go through this
onboarding session with me, where I present them the deck. And I think that shows the level set,
the lack of hierarchy, the transparency. That shows how important culture is,
the values. But then every single time thinking
about the decisions you make, you have to bring back those values in. So I'll give one last example
just to exemplify this. About a year ago,
one team came back and said, wow, something is happening,
we're making more money per customer. Suddenly the cohorts,
the economics start increasing, you see a bleep of revenue per customer. We went and looked and
tried to figure out what had happened. And it turns out that
through a bug in a system, an engineer had removed an email that
reminded the customer to pay on time. And obviously customers were being late
more and we were charging more late fees. It was very simple for
everybody to know what to do, because we had a framework of values that
provided context around that decision. The right thing to do was,
not only go back and put that email, but also go back to customers that have
overpaid and tell them, sorry, we made a mistake, we removed this
email that you should have received. We're not going to charge you this fee,
and here's your money back. And that to me was a really
powerful example because first, 99% of companies would have
done the exact opposite. They actually would have said, let's
see what our email we'll remove, right? >> [LAUGH]
>> This is great, let's take this email out, let's take
this email out to make more money. Even companies that say they're consumer
obsessed would probably have had a lot of really tough conversation
of somebody saying [SOUND], the customer should have known,
it was his responsibility. For us it was both clarity,
we want customer obsession, put that money back, put that email back. And then the answer, ultimately is
a teaching moment for everybody, is like, why does it make sense and
why is it consistent with the business? Because when you're a consumer and
your bank is telling you this, you say, I will never go anywhere else for
the next decade, you got me forever, nobody else will do that for me. And that exemplifies very well I think,
what we think, which is ultimately this culture is
aligned with business objectives. We get to retain that customer for
a decade now. Because we reimbursed
a dollar in a late fee. So ultimately, that is a very
powerful example internally, and shows the integrity of the culture,
which is actions speak louder than words. And this example ultimately
exemplify that very well. >> Yeah, want to switch gears a second and talk about Latin America, a region
that's close to both of our hearts. As you mentioned, Sequoia pulled the plug
in Latin America in 2012 because of the lack of tech and
entrepreneurial talent. And last year,
they came back into Latin America. 2017, Nubank opened an office in
Berlin to attract tech talent, right? And now we have a classmate of mine out in
this audience somewhere, who's gringo as gringo gets, and he's moving to
Sao Paulo next year to join your team. There's a transformation happening,
but how far do we still have to go? >> So it's early days,
there is a lot of work ahead. I think, the future of every industry in
every country is technology companies. There is no way back, and I think it was
obvious in retail, initially with Amazon, and then companies like Netflix in media,
and companies like Uber in transportation. Every single vertical of
the economy will be owned 10, 20, 30 years from now by new
digitally native companies. That means that every single industry you
see today in any country in Latin America is going to be reinvented. And sometimes it'll be the incumbent
that will be able to reinvent. That will probably be
the exception on the rules, but there is a huge opportunity to
reinvent all economies in all industries. Now, who does that reinvention? Entrepreneurs, and
very much engineers at the end. We're starting to finally get
entrepreneurs in Latin America. Hopefully, all of you, even the gringos,
go Latin America and start businesses. Because 12 years ago
that wasn't happening, people were going to the consulting firms,
people were going to the big companies. And the few entrepreneurs were just,
again, looking at the clones, looking at this stuff. But there was a lot of opportunity,
reinvent banking, reinvent healthcare, reinvent telecom, reinvent transportation. Now engineers, that's a big, big,
big problem, very unresolved, it's one of the reasons. If all the industries are going to
be reinvented in Latin America, there are two options by tech companies,
there are two options. Or they get reinvented by
Latin American technology companies, or will be American and Chinese companies
that will be global and will be in LatAm. If it's Latin American companies,
you need engineers, and there are not engineers in Latin America,
there are not. I remember with Doug in
University of Sao Paulo, 42 computer science engineers
graduating in 2013. Brazil graduates,
I think something like 30,000. I was looking at the numbers in
Colombia a couple of weeks ago. There are 10x more graduates today, there are 10x more people studying law
in Colombia than computer science. Doesn't make any sense. And what's strange is you would think,
initially you would say the lack of this bottleneck, you would
think it's a supply issue. Nobody's teaching these
people computer engineering. It's actually a demand issue. These students are graduating
from high school today, and they're still choosing to do
business administration or law, when there is about half a million
gap of computer scientists in LatAm, which is more or less the bottleneck. So, unclear how to solve that, there is a
big opportunity, there's a big challenge. If we don't solve it,
there'll be Chinese and US companies owning all industries in
LatAm, because somebody's going to do it. If we solve it,
somehow we grab all these people. There's a huge opportunity to not only
reinvent all the economies in all of these countries, but also to
contribute to solve one of the biggest problems that we have, which is
opportunity and income inequality. Because if it's just a few
companies from abroad, then you have this extreme concentration
of market cap in some of these companies, and you don't have the Latin Americans
contributing to that. So you will end up with much,
much higher income inequality. If you solve it, then you have all Latin
Americans building their own programming and design and product, creating the next company that are going
to be reinventing all these regions. So it's almost like an existential threat,
for all countries right now, globally, same thing happens in Africa,
same thing happens in Asia. The problem is that, I would say LatAm and
perhaps Africa, we're just farther away. And even though I think
here at Stanford for us, it's almost like it's clear now what's
happening the next 10, 20 years. You talk to the students that are
graduating in high school in Guadalajara or in Salvador Bahia or
in Cali, they don't see it, they don't know what's coming,
they haven't seen it yet. >> Speaking of inequality,
your wife Maria is here today as well and together last year, as mentioned, you were only the second Latin American
family to sign the giving pledge. Take us into the conversation
you were having together. What motivated that decision? >> So, [COUGH] I think, we did Nubank
as I said, because we wanted to build, we wanted to problem solve,
we wanted to create impact. And it was the sheer kind of joy
of creation and creating impact. And so money was never a motivation, it was never really something that we
thought about, it was not an issue. Both Maria and I come from middle
class families that gave us a lot of opportunity, and we feel very blessed
about the opportunities that we had. But money per se was never
really a driving factor. And then suddenly these companies
is being worth $1 billion, and 5, and 10, and 30 billion. And the speed is huge, and
then about 12 months ago we raised money at 25 billion valuation. And you start making the numbers,
like wow, this is a lot of money
>> [LAUGH] >> And we don't need it, we don't need this money. We don't need it,
we don't live a luxury life. We don't need it, and it just feels
like a big responsibility suddenly, because going back to impact,
that's what drives us. And then it becomes a big responsibility. How do you use these money to provide
the biggest impact possible individually? You go back to the same driving factor,
the impact question. And I had read a book that I
recommend everybody to reading, it's one of my impactful books called
A Billionaire Who Wasn't, Chuck Feeney, the founder of Atlantic Philanthropies. It's a fascinating book where he goes for
20 years doing philanthropy in the world. He decides that he wants to spend it
all while he lives, all the money. And he says that he wants
his last check to bounce. And I just thought that was
the most powerful analogy, and when we started thinking about it,
we said, we want to be that person. Because if you start thinking about it,
first, what a great opportunity, all society is going to change. And we're been benefiting significantly
from the change of technology. But second is it's just going to
drive significant income inequality. And so, philanthropy and
social impact, giving back, plays a role, but why delay it? Why delay this to the end when you're
80 years old, when you're tired, when you don't have the energy, when you don't necessarily bring
the clarity of mind to solve problems. Even worse, why dying and leaving all the money to a foundation
of people that will do it? Or to your kids where a lot of
the times that is just going to make more damage to them than good. So we decided we do not want to leave
it to the kids, they will be loved. They will get a lot of opportunity but-
>> [LAUGH] >> Leaving a lot of the stuff, we don't want to do that. So number one, not to the kids. They're young and they're not looking
at this but maybe one day they'll be- >> [LAUGH] >> They'll be very resentful, I hope not. I hope they'll get to understand
why we're doing this. So number one, number two,
we're all dying at some point. There will be one day where
we won't exist anymore. And I think it was Andrew Carnegie who
said it who dies rich dies disgraced, because there is so much pain and so much
problems to be solved in the world today. Why would you delay it? Why would you not use all that
money now to solve those issues? Why would wait decades you if you can do
a make a difference using your energy, your mind, and your money to do that? Why die and risk not you participating
of the solving of those problems? So all of that,
there was a big kind of brainstorming that led us to this decision that
we want to give it all away. We want our last check to bounce, and
we're going to be thoughtful about it. We're going to set it the right way. We're going to build a family foundation. We're going to go back and use a lot of
the tools that Stanford and business gives us of think back on first principles,
think about all these problems. What is driving this inequality? Where is the highest impacts
per dollar spent in the region? And can we over the next four or
five maybe six decades, use this money and this energy to
create as much impact as possible? And so that's when in the very,
very, very early days of journey, it's a very interesting question. I think philanthropy
needs to be disrupted. There is a lot of lessons on, we see ourselves with Danielle here who is
also largely as big is helping us, that we find ourselves in meetings using concepts
of computer science in philanthropy. Talking about platformization, talking
about open source, talking about crypto. And there is a lot that can be used
to start addressing some of these big problems and ultimately, not let this technology become
one more driver of inequality. But actually have it be an enabler of more
equality of opportunity for everybody. >> Great,
let's actually end on that note for now. >> [APPLAUSE] >> Incredibly inspiring and
a motive for action. I want to go to some audience Q&A. I know we have a lot of questions. So first questions right
over here from Ben. >> Thank you very much for being here. I'm Ben Goldwater, MBA class of 22. One of the reason I'm very excited is that
I'm coaching someone who tells me he wants to be the next you in ten years. So financial products, there's kind of two
sides to each coin, you can help people, but those products can be damaging. I'm thinking about consumer debt,
you can give someone access to resources, but interest can be crippling. I'm curious how you think about,
what products to launch and what guardrails you
should put around them? >> Yeah, now, it's a really good question. I think going back to culture, knowing
that we are consumer obsessed first and we're doing the right thing for
the consumer allows us to move back and then define the product,
versus what happen in a lot of the banks. Which is, how do I make more
money by this product and just launch an hour fee or
increase the interest rate or you end up, what you see in most banks where
you have 110 different fees. If you look at one of
the big banks in Brazil, their fee table is 110 different things,
$0.02 here, $0.01 here, $0.10 here, just send me a text message,
they'll charge you. We went and said zeros,
our fee table is just a bunch of zeros. So we start with the simplicity and
transparency of the business model and figure out how we can to create
a sustainable business model that provides a lot of simplicity and transparency. And then specifically with credit,
there is a lot about aligning incentives. We've been fully aligned incentives. We only win if we provide a line
of credit that's going to work for a customer because we get to maintain
that customer for a very long time. If we provide the wrong product at
the wrong price for that customer, that customer will be in massive debt. But we also lose a very great customer
that we could have in our base. So that just means that
it's credit underwriting, it's fraud underwriting, it's using
other sophistication around modeling. It's a lot of simplicity in the language
about transparency in the communication with the customer, and always trying
to be fully aligned with him or her. >> Great, next question, over there. >> With class 2002. I'm a founder of venture capital
firm otter tech ventures. And so question to your cultural
behavioral managerial style. So a lot of companies
are struggling to transition from, let's call it flat organization
with free flow of information and very egalitarian decision making,
Into more structured businesses. Once you scale, you need to create
business units, you need to create responsibility, and accountability,
and the reporting verticals. What would be your advice? At what point you say, okay, I cannot
be flat anymore, I have to verticalize? And do you have any recipes
how to protect the culture and still maintain the culture of this open
exchange as your organization scale? >> Yeah, it's a great question,
I said about the culture deck and how little has changed through the years,
a few things have changed. >> [LAUGH]
>> And one of them was, again, going back to this mindset of
trying to reinvent everything and think everything from
a point of principle. We came in and said, we're a flat
organization, Deck said flat organization. And that was a really bad idea. >> [LAUGH]
>> It turns out that if you're completely flat and everybody has an idea,
it's complete chaos. And you become really slow, and you end up with these systems of consensus
where everybody needs to be agree. Turns out consensus is actually a driver
towards lower risk type of decisions, which means you'd end up with
a lower risk type of organization. And you slowed down your product. So, after seeing all of this happening and
you always go back and kind of question yourself about,
does this make any sense? And kind of the realization was
a bit is hierarchy is a good thing. There's fundamentally
nothing wrong with hierarchy. Hierarchy has existed in human
organizations for over 5,000 years. Almost every organization has a hierarchy, because hierarchy is very useful way
to organize a larger group of people. What's not good is hierarchies
that are created sometimes for other purposes,
rather than doing the right thing for the organization or
doing the right thing for the product. And what are some of those things? We remember going in Sao Paulo in our
building when we were renting a new building, and I had gotten a question
from the architect of our new building saying if we needed
a special elevator for the directors. And if we needed to reserve the last floor
of the building for the directors, and I had no idea what that meant, until I
was invited for lunch at a big bank. And I saw myself going through a special
elevator to the top floor that was for directors, and I had waiters with white gloves
serving me lunch in a silver platter. Where everybody in the organization
else where it's not eating food, and so that is the wrong reason to build
hierarchies symbols of power and ego. And a lot of hierarchies end up being
co-opted by the ego of the founder, by the ego of the directors, of symbolling
powers, the big corner office of the CEO. When you have a little cubicle, or
having a special parking lot for the CEO, I would love to go, and
I've never done it, I will someday, go to a CEO,
one of these big organizations. Explain to me why having that restaurant
only for you and that officer, how can you tie that directly
to better business performance? There isn't, there is no way to
justify those divisions through better business performance, is ego, so think that's when your organization
hierarchy ends up being a bit corrupted. Because it's just more ego and power, and titles that are driving a lot of layers
rather than doing the right thing for the organization, so, we have a hierarchy,
it's as flat as it becomes. We try to organize ourselves
in autonomous units, but with a clear leader that has real
accountability, we don't believe anymore on group decision-making,
we want everybody's input. We want to hear everybody, but ultimately,
we've got to make a decision and there's got to be an accountable person
to make that decision, so we can move. We don't believe in consensus necessarily,
if consensus arrives, excellent, it doesn't, we have to make a decision. And then you have a hurricane with as many
layers with clear lines of accountability in the organization. And that allows you to drive fast,
but ultimately it's all about business performance and
driving to results, and it's as egoless, entitleless as possible, so
you can remove that from the day to day. >> Great, we're almost out of time,
I know there are more questions, but unfortunately we're almost out of time,
but before we close, we want to do a traditional view from
the top lightning round, are you ready? >> Ready. >> Colombia did not qualify for the FIFA
World Cup, [LAUGH] who are you supporting? >> Brazil. >> [APPLAUSE]
>> That's the wrong answer, let me try again. >> I got four Brazilian kids now, so
>> All Brazil? >> Messi or Ronaldo? >> Ronaldo.
>> [APPLAUSE] >> Okay, we should move on, favorite cast at the GSB? >> Touchy Feely. >> [APPLAUSE]
>> Touchy Feely. >> Biggest learning from that class? >> It's a simple insight but really,
really, really powerful which is, success is driven by people, if you
are better at relating with our people, that's a huge advantage,
because everything you do is with people. Your family is made of people,
you relate personal relations is people, your companies are people,
your teams are people. And ultimately, that and be able to create strong bonds with
people through vulnerability and through knowing yourself well, it's
a very, very, very powerful superpower. >> Yeah, worst piece of
advice you've ever received? Bonus points if it's from Doug. >> [LAUGH] Yeah, exactly, don't launch a data
bank in Brazil because, Unibanco failed in 1999. >> [LAUGH]
>> Better parties, Stanford undergrad or Stanford GSB? >> I think, GSB. >> We can all relate to that, last one, favorite memory with the GSB? >> The GSB, there're just so
many I think it was just been in our house,
president house, appropriately named animal kingdom with [LAUGH] self sorting all of
these animals right here. Animal kingdom, with the illusion of
animal house and just spending time with friends, having a beer in
the afternoon grilling a burger and having just a great
blast with great people. >> Ladies and gentlemen,
please help me thank Devie Venice. [APPLAUSE]
>> Thank you, thank you. [MUSIC]
