Last week's anno...
About last week’s announcement
Jun 23, 2022, 3 min read
Jun 23, 2022
3 min read
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. I want to clarify why we made these changes, who’s affected by it, and what we’ve learned over the past week.
We made the difficult decision to focus on our core: serving startups and scaled companies. We learned we couldn’t serve smaller businesses well at the same time, and focus was the only way to deliver a level of service we’re proud of.
Who will Brex continue to serve?
We didn’t clearly communicate who qualifies as a Brex customer moving forward, which created confusion about which companies Brex would still serve.
Our products are designed for companies that have or will soon reach some level of scale, and inevitably face challenges such as fast-growing headcount, global workforces or significant cash to manage. 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;
- Tech startups who are on a path to meeting the criteria above, and are referred by an existing customer or partner.
Why did we change who Brex can serve?
We designed Brex for companies that reach some level of scale, with a white-glove onboarding, implementation, and support experience. Our goal is to give all customers the same service that a large company receives from day one, with things such as a dedicated point of contact, 24x7 global support, and implementation help.
It’s hard to make the economics of this business model work for companies that don't hit a scale threshold, and many customers asked us why we couldn’t keep smaller businesses and charge for a premium service. 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.
Our decision wasn’t driven by financial constraints, but by how many things we can do well at once.
Last week’s announcement was an incredibly disappointing moment for Brex. I signed off on the email that went out, which lacked the transparency our customers deserved. As someone whose dad was a small business owner, the way we communicated this decision weighed heavily on me.
Here are some of the lessons I learned, and some of the things we’re changing:
- Err on the side of transparency, especially when things are hard. We should have explained why we’re making these changes, and shared clear criteria of who we will serve moving forward.
- We should have provided a better migration experience for affected customers. We’re now working with partners and customers to make this process easier.
- Strategy is hard. Focus is harder. We overestimated our ability to serve multiple customers. This made it harder to serve anyone well.
- Focus allows for a better customer experience. For example, all Brex customers will now receive a dedicated point of contact over the next few months. This wasn’t possible before.
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.
This change had one goal in mind: serving customers better. We hope this becomes evident by our renewed focus, and the meaningful changes we have coming in our product soon.
Thanks so much,