by collectedparts on 6/23/22, 6:26 PM with 62 comments
by UkrainianJew on 6/23/22, 9:14 PM
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.
by mherdeg on 6/23/22, 8:17 PM
* 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
by csmpltn on 6/23/22, 7:46 PM
In other words - "our decision was driven by financial constraints; we can't do many things at once".
by mchusma on 6/23/22, 7:01 PM
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.
by sithlord on 6/23/22, 7:15 PM
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.
by corywatilo on 6/23/22, 8:00 PM
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:
by yodon on 6/23/22, 7:19 PM
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.
by colechristensen on 6/23/22, 7:10 PM
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.
by whiskeytuesday on 6/23/22, 10:30 PM
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?...
by hansword on 6/23/22, 6:58 PM
> 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.
by Imnimo on 6/23/22, 7:51 PM
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.
by r2sk5t on 6/23/22, 7:29 PM
by testesttest on 6/23/22, 11:01 PM
Also, A one month notice to change all payments is insane. Brex should not be trusted.
by indymike on 6/23/22, 7:32 PM
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.
by absherwin on 6/23/22, 7:33 PM
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.
by RyanShook on 6/23/22, 7:18 PM
by MikeBVaughn on 6/23/22, 7:17 PM
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.
by mnd999 on 6/23/22, 11:00 PM
by Aeolun on 6/23/22, 10:16 PM
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.
by mellosouls on 6/23/22, 8:09 PM
by techcollector92 on 6/23/22, 9:24 PM
by lemiffe on 6/23/22, 8:35 PM
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.
by yawnxyz on 6/24/22, 2:59 AM
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?
by ivraatiems on 6/24/22, 5:43 AM
by ar7hur on 6/23/22, 11:54 PM
by TSUTiger on 6/23/22, 7:45 PM
by ThePowerOfFuet on 6/23/22, 11:41 PM
I am in the EU. This is not kosher.
Bad first impression last week, bad second impression this week.
Put down the shovel, maybe?