20VC: Nubank CEO David Velez on Scaling Nubank to a $25BN Company, Why What Makes a Great Founder Does Not Make a Great CEO & The Responsibility Framework and How Leaders Can Use It To Drive Efficiency

David Velez is the Founder & CEO @ Nubank, one of the fastest growing digital banks in the world with operations in Brazil, Mexico, Argentina and Colombia. To fuel this growth, David has raised over $1.5BN for Nubank from some of the best in the business including Doug Leone @ Sequoia, Micky @ Ribbit, Thrive, Founders Fund, DST, Tiger and more. Before changing the world of LATAM finance, David was a Partner @ Sequoia where he was responsible for all LATAM investments. Prior to Sequoia, David was the co-founder of General Atlantic's South American investment programme. In Today’s Episode You Will Learn: 1.) How David made his way into the world of startups through becoming a Partner @ Sequoia? How that led to his founding of Nubank? How his time at Sequoia impacted how he thought about building Nubank? 2.) How does David think about the relationship between growth and quality in company scaling? When scaling so fast, what are the first things to break? How does one know when is the right time to expand geographically? What is the right thought process to go through when determining how to know when is the right time to expand product lines? 3.) Looking at the market today, how does David for-see the future of digital banks? Will we seen increased consolidation over the coming years? How does David think through the verticalisation of neo-banks? What does the reduction in barriers to creating neo-banks really mean? How did Nubank scale to the scale it is today with $0 CACs? 4.) How has David seen his leadership style change with the growth of the company? Why does David feel it is wrong that the titles of Founder & CEO are so inextricably linked? What element of being a great founder are actually not good for CEOs to have? What elements of great CEOs are bad for founders to have? What has David found the hardest to scale in himself? 5.) How does David use "the responsibility framework" when making decisions today? What are David's thoughts on imposter syndrome within leaders today and how it can be harnessed for good? How does David approach head vs heart when it comes to decision-making today? Does David engage with regret minimisation as part of this? Item’s Mentioned In Today’s Episode David’s Favourite Book: One Hundred Years of Solitude As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is 20 VC with me, Harry Stebbings, and I do have to laugh because it took five years until we had our first guest on the show from Latam. And then we have Simon on the show from Rappi last week. And today, I'm so thrilled to welcome David Velez, founder and CEO at New Bank. For those that do not know, New Bank is one of the fastest growing digital banks in the world, with operations in Brazil, Mexico, Argentina and Colombia. To fuel this incredible growth, David has raised over $1.5 billion for New Bank, from some of the best in the business, including Doug Leoni at Sequoia, Mickey at Ribbit, Thrive, Founders Fund, DST, Tiger and more. Before changing the world of Latam Finance, David was a partner at Sequoia, where he was responsible for all Latam investments. And prior to Sequoia, David was the co-founder of General Atlantic's South American Investment Programme. I do also want to say a huge thank you.

• 0:45Harry Stebbings?

  This schedule was made so much better by Doug Leoni at Sequoia and Jeff Lewis at Bedrock, who provided some amazing question suggestions today, so I really do appreciate that. But before we dive into the show today, did you know that more than 80% of US public stock is owned by just 10% of Americans? This divide is even greater in the private markets. Carter makes it as easy to issue equity to your employees as it is to issue payroll, and for employees as easy to accept it too. More than 16,000 companies issue equity to their employees through Carter. Whether you're just getting started or getting ready to go public, the team at Carter can help. Check them out at Carter.com. And then another incredible product you have to introduce is SecureFrame.

• 1:24Harry Stebbings?

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• 2:08Harry Stebbings?

  So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com and also check out CooleyGo.com. But that's enough from me tonight. I'm so excited to hand over to David Velez, founder and CEO at New Bank.

• 2:28Speaker 01

  You have now arrived at your destination.

• 2:32Harry Stebbings?

  David, it is such a joy to have you on the show today. As I said, I've heard so many great things from Doug Leoni, from Woody at TCB, from Jeff. So, thank you so much for joining me today.

• 2:41Speaker 02

  Now, thank you, Harry, for the invitation. It's a pleasure to be here with you. And also, I'm glad you're looking at Latin America. I invited a couple of guests here as well. So, very excited to be on your podcast.

• 2:50Harry Stebbings?

  Well, listen, the pleasure is all mine. I've been a big follower of New Bank for a while now. So, I want to start with a little bit on the story because New Bank is this kind of behemoth in market today. And I want to ask, how did you make your way from, you know, partner at Sequoia to founding New Bank? And what was that aha moment for you?

• 3:05Speaker 02

  Well, the reality is I always wanted to be an entrepreneur. I'm originally from Colombia. I come from a family of entrepreneurs on both sides, both my mom and my dad and my grandpas on both sides. They're all entrepreneurs, small businesses. But the entrepreneurial Kool-Aid was served daily at home. And so, I grew up always thinking that at some point, I wanted to go on my own, that I wanted to start my own path. It took me almost 13 years of experience to finally get to a point where I was ready to pull the trigger. I had to do, you know, I ended up doing financial services in New York for a number of years. That took me to private equity and growth equity in Brazil. That was how I ended up in Brazil in 2008 for the first time. And then went back to business school. And the

• 3:47Speaker 02

  first week of business school, I was ready to enjoy two years of semi-vacation, spending time, thinking about the idea of the startup I wanted to start. And I got a call from Doug Leoni saying, I heard about you, come meet me at Sequoia. And so, I was like, okay, I'll go meet him at Sequoia. And we had an amazing conversation of 45 minutes. They were starting to think about doing something in Brazil. Two minutes after I left that first meeting, I had an email from Michael Moritz in my inbox saying, please come back, let's talk. And then, very quickly, over a week, I talked to all the GPs at Sequoia and found myself with a job again. And it was right at the beginning of my supposedly business school vacation. So, it was a great experience. I ended up doing that for two years, both

• 4:28Speaker 02

  working at Sequoia, helping them think through opportunities in Latin America and tech investing, which is what I had done. Before for General Atlantic, but always thinking about it on the other side of the brain. What is the company that I want to start, how I'm going to start? It was a great opportunity to see some of the best entrepreneurs in the world pitching Sequoia. And so ultimately, that's how we ended up there and eventually building the business from there.

• 4:51Harry Stebbings?

  In terms of like how you think about your own relationship to risk, was it difficult taking the plunge into New Bank, which at the time was a new startup and full of risk?

• 5:00Speaker 02

  Yeah, it was very easy. I didn't think it twice. I knew very clearly that I wanted to start a business at some point. By then, it got to a point after two years for Sequoia, where we all kind of came to a sad conclusion that we didn't want to really start a business in Brazil, which meant I was, Doug wanted me to go back to California and helping them think, invest globally, look at summation, investments. And I just wasn't passionate about investing anymore. I just wasn't. When I sat with the entrepreneur and I heard entrepreneur talking about his or her business, it was very clear to me that I wanted to be on that side of the table. And that it was just too easy for me to give the entrepreneur advice and tell the entrepreneur, go, you know, go faster or grow better or hire better. And I just didn't feel qualified to be given advice.

• 5:45Speaker 02

  I didn't have the operating experience. I had never built a company before. I hadn't really had an operating role. I was more of an investor. So it was a combination of just feeling disqualified for the job, regardless if I had a Sequoia Capital business card or not. But also, I was very clear that what I really wanted to do was take the risk and go for it and build a business and almost have that adventure and see what happens.

• 6:07Harry Stebbings?

  Can I, as you mentioned Doug, you mentioned Mike, the Sequoia partnership is a very special one. In terms of, and this was actually Doug's question, in terms of your experience at Sequoia, how do you think it impacted your operating mentality founding and operating New Bank?

• 6:20Speaker 02

  It was very influential. Sequoia is a very unique place and it's unique because of its culture. It's rare to see a venture firm that has been successful for so long through different generations. And it really comes down to their culture. And before Sequoia, it came from cultures that were much more traditional financial services culture, investment banking, private equity. And it was a shock. The first weekend I was at Sequoia, everything was different. First, it was a true partnership where there's very little hierarchy. As an intern from business school, I was asked in the first meeting, in the first investment committee, what I thought about an investment. I was completely unprepared for that. I was used to sitting over there on the back of the investment committee,

• 7:03Speaker 02

  keeping my mouth shut, hearing all the bosses make all the decisions. And here I was, sitting next to Doug in the investment committee, looking at deals for Sequoia, asking people for my opinion. And being treated since the first second as a real partner, as we're all in the same boat. There's no bosses and that comes with responsibilities as well as benefits. And so that flatness and lack of hierarchy and partnership was a shock for me, but it was very motivating. I remember a couple of months after being at Sequoia, I had never felt so motivated in my entire life working in a job. Because I felt like a true partner, I felt like I was really impactful. Doug gave me a ton of autonomy since day one. He said, "Here you go, you have Latin America, find investments, let me know where you find." And so it was this huge challenge, this entire geography.

• 7:46Speaker 02

  And I was flying to Sao Paulo from San Francisco Tuesday afternoon, having eight meetings with entrepreneur on a Wednesday, and flying back on Thursday in time for my business school class. There was no questions asked. And literally Doug would just sit down in my office and said, "What do you think about this and what do you think about this?" So there was a lot of elements of the Sequoia culture that were very, very motivating, that I could see how they contributed to a culture of performance. Because true performance stayed and then very quickly people that were not performing were out. But it was a fair, it was a transparent culture. And so when I decided to start Nubank, one of the first things to do is obviously I did the pitch deck of Nubank to raise capital. But the second thing I did was the culture deck of Nubank. And it was a deck that in a way personified the values that Nubank was going to have as a company.

• 8:30Speaker 02

  When I go back and I look at the deck, a lot of the values that we had then and we have now as a company, such as flat and meritocracy and motivation and sort of that ownership mentality, very much resembled some of the things that I saw at Sequoia. Obviously now at a very large organization, some of the things that Sequoia had are not scalable. You can do that when you have thirty people, you cannot do it when you have three thousand. But it was Very, very much influential and I was very lucky to have been able to see that.

• 8:58Harry Stebbings?

  I do want to ask you, you mentioned that the scale of the organisation today and you know, one thing that's just very obvious is the incredible growth that you've seen with Nubank. And so, you know, one thing that I I do just want to touch on first and it's kind of high level, but it's like when you see the rapid scaling that you've seen, what's the first elements to break?

• 9:14Speaker 02

  There's the kind of the obvious parts of that answer, which is tech will break, there will be crashes, there will be fires, there'll be firefighting. There'll be mistakes done with customers where for a company and culture is so focused on customer experience. Every mistake done to a customer, it feels like a punch in the stomach. So you feel it very deeply. So all of that stuff will happen inevitably with scale and with fast growth. And it is what it is, but some of the areas that I've come to appreciate more that are tend to be even more complex is is the relationship between growth and quality. You want to grow, there is no sense like grow is growth is life. As a startup, you have to grow. But if you come at the expense of a lot of quality, then you're losing what is giving you that growth.

• 9:59Speaker 02

  Now, the other extreme is you need to maintain perfect quality and there is no tolerance for failure, there is no tolerance for crashes, which is also death. You cannot go into that extreme. So what's really hard is finding that balance where you're growing, maintaining a very large growth rate while maintaining great quality. And beyond that is realising that a lot of the times, quality gives you growth and growth actually gives you quality. They're not necessarily a trade off, it's not necessarily a zero sum game. A lot of the times you face this dilemma and I need to sacrifice one for the sake of the other one. In reality, sometimes you have to do those trades in the short term, but if you architect the company the right way, the technology, the culture, both, you can attain both in the long term.

• 10:42Speaker 02

  By more quality will give you growth in the long term, higher growth will allow you to invest in more quality and better systems and better people. So they actually end up reinforcing with each other.

• 10:53Harry Stebbings?

  I love that in terms of kind of the flywheel between quality and growth there. If you think about kind of growth in one dimension, you can grow product lines and you can grow geographically. You know, when we look at, you know, Nubank, you've obviously decided to grow, I mean, in both, but. That start on geographically. First, just from like a landscape perspective, many have tried to grow across LatAm and haven't worked. Just help me understand, why haven't they worked? And what are you doing differently to make it work for Nubank?

• 11:17Speaker 02

  So I think the reality is that Atin America is a collection of very different countries. Each country with its own specificities of regulation and culture and local. And so you cannot treat it as a big country. You can treat it as a multiple countries. That increases the complexity of internationalization. And my view of why it has failed in certain areas is it's actually that I think companies have tried to do it too early in their lifecycle. And you have to do it once you have a very strong core, when you actually have won the first country. So for us, there was always a debate. I guess first, the decision about internationalization is not an obvious one, especially when you are in a country like Brazil. It's you have to, if you are starting a smaller country, you have to go to internationalize. There is no option.

• 11:59Speaker 02

  But when you start in a big country, internationalization is obvious. You always have the trade offs of building more in a big market versus going to a second market. So the way to think about this for us was if you have a five year horizon, it doesn't make no sense. We shouldn't internationalize. Brazil has a lot. But if you have a 20 year horizon, then yes, it started making more sense. You are expanding your market, you're expanding your addressable market, you have the opportunity to leverage a lot of the technology and culture and people that you've built for one country in our ones. The strategic logic for that start making more sense. And then it's a question about when is the right time? And that is really the hardest question, I think, for us was we had a conversation in our board in 2000, after three years in, where I suggested going to Mexico and the board slapped me in the face and said, no way.

• 12:42Speaker 02

  You're still trying to figure out Brazil, you're still trying to figure out your business, you have clearly have product market fit. Double down on the product market fit, but it's too premature. And they were totally right. But by the time we had that conversation again in 2019, we were profitable in Brazil, we were cash flow positive, we have great product market fit, we have banking licenses, we were fully funded on deposits. So we had the risk to business massively, which meant we will be able to take this next step by risking a small percentage of the core, which continues to be the most important part of our strategy.

• 13:14Harry Stebbings?

  I mean, I love that in terms of the changes that happened. Incredible to hear about how strong the core was. Can I ask, you've been on the other side of the table, obviously, as a VC and giving advice. For you as an entrepreneur, how do you think about, when you kind of think back to that board advice, how do you think about the advice to ingest and take on board and, you know, act on? Versus the advice, quite rightly, which may not be right, that you discard and you go your own way. How do you determine whether to accept or reject advice?

• 13:41Speaker 02

  I think you always have to, especially with your board members, which hopefully are people that you have significant influence in picking. Generally, they end up being your investors, which meant hopefully you had the luxury to pick your investors. And you had the luxury to be strategic about how to build your cap table, which in our way should be as carefully done as building your management team. Each person in that table has to have a role and a different experience so that they can really add value. So if that exists, then you have to have a view of really listening to people's opinion, because that's precisely what you brought them. But then you really have to hear around the why and really the argument that people are using. And sometimes they'll just give you their opinion and their hunch.

• 14:23Speaker 02

  And their opinion is not necessarily going to be worth more than your opinion. If we're talking opinions, then you can very quickly discard it. And some of the best board members will tell you specifically that this is just my uninformed opinion, so take it or leave it. A lot of great board members does a great job doing that when he gives his point of view based on his experience, by no means has the many expertise in certain areas, and he will tell you that. But sometimes they will actually come and talk out of true experience and you really have to listen. And sometimes you realise you're right and you're wrong and alignments and, you know, and everybody's incentives are fully aligned. We want the company to succeed. And so if there is no ego, if there's an attachment to an idea, then you will agree to do their best thing for the company. And you will be very, very open to hear those point of views.

• 15:06Harry Stebbings?

  We mentioned kind of geographic expansion. The other form of expansion is obviously also kind of product and services expansion. You know, all fintechs kind of aspire and start with kind of one point product, which is kind of hopefully, you know, low customer acquisition costs. And then they cross sell other products. We both know it normally fails kind of 99% of the time. How did you make it? Work in terms of that successful insertion and then successful cross sell.

• 15:28Speaker 02

  You know, I tend to think similarly as internationalization that if you don't do it too prematurely, if you don't try to go to product number two too quickly, you will succeed in cross selling. Like it shouldn't be that hard. If you crack the code with your first product, if you build a phenomenal brand that people loved with that first product, if the experience works, if you build trust, if you have high NPS, if it's stable, if you're really solving a problem, people will be very much willing to get your product number two and product number three and product number four. Sometimes the mistake that has happened in some of those of going to from one to two to three is because companies try to do it too early and then they haven't really built that core enough. And I guess for us, we did credit card for four years. That's all we did.

• 16:12Speaker 02

  I remember all the conversation we had inside the company, all the external pressure where we saw competitors launching product two and product three and product four and all this anxiety, are we falling behind? Do we need to launch? And we just stick to doing one thing very well for four years and we're doing what we said. We own our own destiny, getting to the absolutely highest NPS in the world on the first product, growing word of mouth, maintaining the experience, maintaining the quality. By the time year number five, we launched product number two, there was so much excitement from our customer base and they trusted us on match that they were very much willing to accept it. And product number two for us, which is savings, is way bigger than product number one for us. And product number three is going faster than product number two.

• 16:52Speaker 02

  So each iteration, it actually, there is an art flywheel, which is if people like product number one, they should love all the other ones. Hopefully if you did a good job designing and building. So it really is about when you launch product two and not if you launch it, I think.

• 17:06Harry Stebbings?

  Do you see much, much increased velocity in terms of from product two to product three versus product one to two? Because you're obviously leveraging the brand, the NPS, the customer base. Does it become faster and faster whereby four and five is even quicker than two and three? And then five and six is so much more compressed than that? Do you think you see this even more compression in terms of that release cadence?

• 17:27Speaker 02

  Yeah, absolutely. I think once you go from one to two, then two to three, three to four, you end up architecting your systems in a platform way in which the Cost to launch, the following product becomes easier and simpler. Initially, when you architect your products, you're building for us, we were building a critical company. We were not building a multi-product bank. And so we had to really redirect all our infrastructure, organizational structure to go multi-product, multi-geo, which was a lot of significant work. So we absolutely see that.

• 17:53Harry Stebbings?

  Can I ask, on the core first products, you know, I think a lot of neo-banks in London have really struggled in terms of unit econ, especially around customer acquisition costs where they're sky-high and then the LTVs aren't really fully baked out. I've seen before, you know, you speak about, you know, your CACs, same before that in certain cases at zero dollars. Can you walk me through how you think about like customer acquisition costs and your lessons maybe on kind of CAC optimization?

• 18:17Speaker 02

  Yeah, I mean, I think that CAC will be a function of the product that you build and the market you're serving. The example that you're giving in other neo-banks in our economies, I think partly it's a harder market to crack because frankly, the customer pain is not that acute. Banking works fairly well in the US and Europe. Margins are tight. Incumbents have done a decent job digitalizing, which means there's definitely opportunity and some people have been very successful. But the customer pain is not that large. When you go to Brazil and you see customers paying 450% APRs and paying ton of different fees and waiting four months to open a bank account. Or you go to Mexico and you see five banks owning 90% of all the assets of the system. The pain is 10x what you might see in the US.

• 19:00Speaker 02

  And so if you approach that pain with a product that is 100x better, that ultimately translates into very, very, very low, close to zero customer acquisition cost. And I think for us, also philosophically, we always since the beginning said, we'll focus on building the absolutely best product that we can have, the best experience. And trying to, instead of investing money in marketing and giving that money to Google or Facebook, we'll leave those money in the pockets of our customers in a way in which we don't charge any fees. And we pay great salaries in customer service to make sure that we're giving great customer service. And we're investing the experience versus investing in the market. And ultimately, that creates this word-of-mouth viral effect that has what's driven.

• 19:44Speaker 02

  Our growth since we effectively launched.

• 19:46Harry Stebbings?

  Can I ask, when you're a hundred days better, as you said, the word of mouth and the flywheel just starts. And when you see the users pour in, it's amazing and it's fantastic. But also the capital intensity to serve them, I imagine is just pretty high. How have you thought about kind of capital intensity in terms of serving user bases? And what are your thoughts or lessons around kind of capital intensity and kind of funding requirements?

• 20:07Speaker 02

  Yeah, no, sure. I mean, I think when we started launching, I remember seeing the avalanche of customers. And we didn't have the capital to serve all the customers that actually wanted our product. Which is always interesting to see how some of these constraints really create creativity. And so what we had to do at that point, since we didn't have the capital, to your point, we had to create a waiting list. And but we created that waiting list and it became almost an exclusive and desirable asset to have our card. And the fact that it was exclusive, plus a lot of smart social media marketing and influencers, created even more demand for the product, which created more scarcity in the product. And so that constrained demand, allowed us to go and raise capital to investors, obviously to solve the capital need,

• 20:49Speaker 02

  which then allowed us to go and release more customers and continue growing that way. So now in financial services, especially in lending, capital, but more especially liquidity, is one of the biggest bottlenecks that you have. So one of the things we did very early on is, yeah, we are a technology company. We have technology company DNA, but we need a lot of expertise in more of the traditional banking areas, like liquidity management and capital management. We have several banking licenses now and regulated entities. You need really, really strong controls, what we call here defence, around do we have the capital, the liquidity to withstand very, very significant shocks and very significant adverse circumstances. But anyway, you can manage that with the right team and the right skills in the company,

• 21:32Speaker 02

  but you can also use it in your favour by building certain virality hooks in the product.

• 21:37Harry Stebbings?

  You mentioned there in terms of capital inflows into the market itself. You know, it seems everyone is starting a neo bank today. How do you feel about that? And how do you foresee kind of the neo? I know it's a horribly kind of generic question, so forgive me for it. But like the neo banking landscape evolve, will we see the verticalisation of it? Will we? The complete horizontal neo-banks, how do you think about the evolution of the neo-banking space with the proliferation of capital and companies?

• 22:02Speaker 02

  Yeah, so it's incredible for me to see this environment today because I remember running around in 2013, talking to people in Brazil, even in the US about building a new bank, and there was so much skepticism, and especially in Brazil where you have five banks that own eighty-six percent of the entire system, and they are seen as the most invulnerable, most powerful corporations in Latin America. These brands are seen as, as you cannot really challenge them. There was a lot of fear in the market about going in, attempt to challenging of these brands. The overwhelming consensus was the barriers of entry are so high, it's impossible for an entrepreneur to build a bank from scratch. And eighty years after, it's a commodity. It's crazy. It's everybody's building their bank. Their ride-sharing apps

• 22:47Speaker 02

  are building their banks, the retailers are building their banks, the offline retailers are building, everybody's building banks. So it actually reminded me a lot of one of the trends that we were seeing in Brazil in 2011 with Groupon. At some point, when some of the first business model we saw in Brazil, where there were three thousand Groupon clones in Brazil. People were starting a Groupon clone in different neighborhoods in Sao Paulo. And obviously, none of that is sustainable. The fact that barriers of entry are low means they're low for everybody. And ultimately, if you're not charging any fees, you really need significant scale and operational efficiency to be able to have a very profitable business in the long term. So my view is that we're in the era of exuberance, a lot of capital are flowing in, but customers will have less apps in their phone, nor more, and they will

• 23:29Speaker 02

  not have five banking relationships, or ten banking relationships, or five different wallets. So I would expect a significant consolidation of that over the next few years, and I would expect a lot of mix between banks living in e-commerce ecosystems, e-commerce living in the banks' ecosystems, where you're calling it better finance. So a lot of mix around ecosystems of consumers, you being able to use your financial services products in a number of different areas, but not being constrained necessarily by the one relationship that you might have in e-commerce, or in financial services, or let's say, ride-hailing, for example.

• 24:02Harry Stebbings?

  You mentioned operational efficiency. Scale there. I do want to slightly apply that to you if it's okay and not too self reflective. But it's like, you know, with the scale of the organisation, you also have to scale as a leader. And, you know, it's probably one of the hardest things. How have you seen your leadership style change with the growth of New Bank?

• 24:18Speaker 02

  It's frankly, it's been the hardest thing, I think, for me. Scaling myself is evolving myself. The analogy sometimes I use is I found odd that the founder and CEO titles are generally so linked to each other. Because if the founder is a horse and the CEO is a rhino, I think the good founder and CEO is the unicorn. Is this horse that has been able to grow a horn and is this mythical creature? And I find it hard and mythical because they're very different roles. They're almost completely opposite. And sometimes what makes you great at one doesn't necessarily make you good at the other one. In fact, some of the things that a great founder does, sometimes some of the attributes of a great founder, you have to tone them down a little bit as a great CEO.

• 25:03Speaker 02

  And so finding that balance and being able to go from founder to CEO, it's been quite a journey. By no means, I'm even close, I think, to having cracked the code. But it's a challenge, it's a significant challenge.

• 25:14Harry Stebbings?

  You left me a cliffhanger there. What do you think you have to tone down that great founders have, but maybe isn't inherent within great CEOs?

• 25:22Speaker 02

  So when you are a founder, I think you you have to have very strong convictions. You're you're taking a bet, right? As a founder, you are going all in. You are completely concentrated, risking everything you got on one bet for a number of different years. That takes a significant amount of conviction. And you have to be willing to ignore a lot of voices and go against a lot of people. CEOs, I don't think can do that. They cannot afford to do that. They need to evolve in a way in which they are able to listen to a number of different voices. They have to be really, really great listeners. They have to be great managers, which founders rarely are. Founders like to get their hands dirty and build a product with their own hands.

• 26:06Speaker 02

  You cannot scale that. As a CEO of a large company, you need to have people that are building a lot of the products. You can get involved in different areas. You can pick your spot. You can. Your opinion, but you're not building the product yourself. You're not building with your own hands. You have large teams of people that are building the product, large teams of people are talking to customers. Christina and me, my co-founder, we used to get customers calls in my phone. I love that. I still reply every single customer email that gets into my inbox. But it gets to a point where I cannot do that anymore. And sometimes I actually need to be checking with legal and with PR about the type of responses I don't get in in harm. So unfortunately, as a great CEO, I think the company can't afford for you to bet everything you got on one, put all your chips on one table. You have to manage more manage, although you have to also lead.

• 26:48Speaker 02

  And you just have to be spending a lot of your time doing things that might not necessarily be talk to your strengths, but the CEO role requires you to do it.

• 26:57Harry Stebbings?

  Can I ask, you know, you mentioned that a lot of that was kind of around the theme of delegation. You know, I think a lot of founders really struggle to delegate, especially it's your baby. It's the thing that is, you know, the most dear to you. What advice would you give? And I really struggle with this on media companies. So you're advising me and you can invoice me later for the advice. But like, what advice would you give to founders, which is like, you know, how do I delegate effectively and efficiently? And how do I let go of the reins?

• 27:21Speaker 02

  Well, you know, it begins with great people. So it's a given. You have to have phenomenal talent that you can delegate for. You have to trust the person. If you partly of the hesitancy to delegate comes from hesitance around, do I have the right person in the role? So if you haven't figured it out yet, then you have to really think about the question, is this person the right person for the role? Now, if you have confidence that this is the person for the right role, then you have to trust. Then that's precisely why you went to very great lengths to hire the various people. You cannot just go to all those legs and then bring them in and then micromanage that person. Then once that happens, you have to just give a lot of autonomy, let the person fail, be there, close to that person and coach them and allow for some mistakes.

• 28:02Speaker 02

  But just step back and let this person that you hired do the role. And then consistently provide support, but also be thinking, is this the right person for the role? Which in a five grand organization, the answer might be yes today, six months from now, it might be no. The organization changes so much, the complexity grows so quickly that this is a question that you have to consistently be asking yourself.

• 28:24Harry Stebbings?

  The main man, W. Oney, asked a tough question and he said with regards to leadership, you know, and with the growth of yourself as a leader, you know, everyone always has self doubt. He asked, did you ever have imposter syndrome and how did you deal with that?

• 28:36Speaker 02

  Definitely. I think I have more imposter syndrome about CEO than about founder. Precisely. Sometimes I think because there is an expectation that the CEO has all the answers. And for somebody that didn't do a lot of financial services before, that didn't start a lot of companies before, there is no way I have all the answers. So that ultimately means that if you have that expectation, the CEO has all the answers, then you're being an imposter by playing the role. That was hard, but ultimately the CEO has other functions and a lot of the other functions CEO has is leading an organization, is recruiting great talent, is building a great team. And so if you change your expectation and realize you don't need to have all the answers, but you have to be willing to bring great talent that has all those answers, then that's okay.

• 29:18Speaker 02

  Then it's fine. And then your role is more less than answering all the question is finding the great people and putting the mission that will attract the people that will answer all those questions.

• 29:27Harry Stebbings?

  Can I ask, when I have a problem that I'm just like, I don't know what to do and it's horizontal. It could be across anything from legal to financing to you name your problem. There's like, you know, one person who I go to, no matter what the problem is for the advice, for the reassurance. Do you have like a go to person who's the sounding board, who is your safe space?

• 29:46Speaker 02

  Not fully, not like that, not one single. I try to have a large network of people that are experts in different things that I can either internally or externally that I can go to for advice on a number of different topics. But I wouldn't say I have one single person that can serve us that.

• 30:00Harry Stebbings?

  But I am now always here for you, David. So we.

• 30:03Speaker 02

  Thank you.

• 30:03Harry Stebbings?

  There we go. It's been a productive conversation. I do want to move into my favorite day, David, which is a quick fire round. So I say a short statement and then you give me your immediate thoughts. How does that sound?

• 30:12Speaker 02

  Okay, great. Let's do it.

• 30:13Harry Stebbings?

  Okay. So what's the favorite book and why?

• 30:16Speaker 02

  Hundred Years of Solitude by Gabriel Garcia Marquez. I don't love business books. I love fiction. And it's a great story and it's very representative of Colombia where I'm from. So I love it.

• 30:26Harry Stebbings?

  Okay. Secret to convincing the best talent to move to Latam.

• 30:29Speaker 02

  It's hard and there are big challenges and US and Europe is too easy. You're gonna work. Very, very, very hard to make the life of the one percent, five percent better. If you move to Latin America, you're gonna work very, very hard to make the life of ninety-nine percent of the people seventy percent better. So ultimately, it's just way much more impact.

• 30:46Harry Stebbings?

  How did you respond to your greatest failure?

• 30:49Speaker 02

  There is a framework that we talked here a lot about, it's called the responsibility process, where the first instinct is always denial or blame, but very quickly you go move the faces and you end up in responsibility. When I failed, I feel those faces and my instinct naturally is denial or blame. I try to get myself very quickly to responsibility, to how did I fail? Taking responsibility for what happened and making sure that I'm learning from that failure.

• 31:13Harry Stebbings?

  Help me out here, that's too good. So you have denial and you have blame. What's in between denial and blame and responsibility? Are there steps in between those two?

• 31:20Speaker 02

  Yeah, I don't think I'm gonna be able to say all of that, but it's denial, then blame, then I think there's a point where you also wanna quit, then obligation. You feel that you're, you're gonna do it, but you feel obliged, and then finally responsibility. I think I'm keeping one or two, but look it up, it's called the responsibility process.

• 31:37Harry Stebbings?

  I'm gonna look it up, that's gonna be a lot of future questions answered with that one, and this is really tough. What three traits would you most want your children to adopt?

• 31:44Speaker 02

  I don't know what the best way to say it, but I'll go back to Doug Leone' wise words, which is a bit of a sense of desperation, like a hunger. I want them, it's the opposite of entitlement. I want them to want something really badly, whatever it might be, and feel that they gotta work hard to get that. So that desperation, I think is a, is a very valuable thing, is a very great motivator. That's number one. Number two, curiosity. I want my kids to be exposed to everything so that they ask a lot of questions. I think a worthwhile life is a life that it's filled with knowledge and, and lessons and curiosity and creativity. And so I want them to show that curiosity all around. And third, I think it's, it's being good people, is being, having a good heart and having empathy.

• 32:25Speaker 02

  Seeing that they have a role to play in society and that is important, especially when you are in a region of the world like ours, where there is so much poverty and so many social problems, that they feel that they have almost an obligation or responsibility to contribute to a bigger purpose in society, to leave the place where, where they grew up a little bit better.

• 32:42Harry Stebbings?

  Which leader do you most look up to and what?

• 32:44Speaker 02

  I've been rereading this biography, which is great. I don't know if you're familiar with Chuck Finney. Chuck Finney was the, there's a great book about him called The Billionaire Who Wasn't. He was the founder of Duty Free Shoppers, the duty free shop that you see all around the world in airports. He sold the company to LVMH for, I think, four billion dollars. And he committed to spend all that money before he died, spending it while living it. And it's an unbelievable read. It's one of the most inspiring stories I've ever read about how much he has done and how much he did it anonymously. People just don't know. He's been partly responsible for the peace process in Ireland. He's partly responsible for changing the entire location system in Vietnam. He's incredibly responsible for changing the location system in the US.

• 33:26Speaker 02

  So it's amazing what one person can do and have done it so on the low end. So it's a great read. I recommend it.

• 33:33Harry Stebbings?

  And listen, I love that. And I'm actually gonna add it to my list. I'm in need of a new book. So that's an awesome one. Tell me, and this is always a tough one, but it's just me and you, David. No one's listening, so it's totally fine. Who's the most memorable board member and why?

• 33:46Speaker 02

  Probably all my board members are listening to this.

• 33:48Harry Stebbings?

  No, no, no one listens to this, David. It's fine.

• 33:52Speaker 02

  No, listen, I really can't tell. Doug has been phenomenal. Nigel has been a mentor since the very beginning, and I looked up to him a lot, learning the Capital One story. Nicolas from Cassick Ventures, Back to the Sea, has been with us since the very beginning, has been a great mentor. Miki Malka, they've all had been great in different ways. I cannot pick favorites. Sorry.

• 34:11Harry Stebbings?

  David, do not worry. I think you also have a career as a politician post New Bank, so there we go. I do wanna finish though on probably the most exciting of all, which is like, I was gonna say next five years, but I don't wanna constrain it to five years, actually. Like, when you look forward 10, 15, 20 years, whatever that timeframe is, how big can New Bank be? And paint that picture for me of just what it can be.

• 34:32Speaker 02

  I honestly think there is no limit. It can be one of the largest companies in the world. I'm very confident with that. It really is up to, we talk about it as a team. It really is up to us to decide how big we want it to grow. Because financial services is one of the largest segments in the world, and emerging markets is one of the most interesting places to be doing financial services in the world. And once you have one of the largest financial Services companies in the world and there's really no limit inside in terms of what other products or services you can go. And I think ultimately we see ourselves as a consumer focused company, as a company that wants to solve problems for consumers. And we happened to begin in financial services, but consumers have problems in n different sectors. So really the question for us is why do we prioritize?

• 35:14Speaker 02

  What is more important next? Where can we win? Where do we put our chips? But we are a company that has a very long term orientation. We really are building this company for several decades. We have phenomenal, phenomenal people, some of the best talent in the world. And so I cannot really imagine what the end it is. It's never ending.

• 35:30Harry Stebbings?

  Well, I mean, I'm only sad that I'm not an investor. It's like tantalizing, but I do want to say.

• 35:36Speaker 02

  It's still early. It's early days.

• 35:37Harry Stebbings?

  There we go. I mean, next round is upon us. So please, listen, I so enjoyed this. I had so many great things. So thank you so much for joining me and this was so much fun.

• 35:45Speaker 02

  Thank you, Harry. It was a pleasure to be with you. Appreciate the questions.

• 35:50Harry Stebbings?

  Absolutely fantastic to have David on the show there and such exciting times ahead for him and for New Bank. If you'd like to see more from us behind the scenes, you can, of course, on Instagram at H Stebbings nineteen ninety six with two Bs. I always love to see you there. But before we leave you today, did you know that more than eighty percent of US public stock is owned by just ten percent of Americans? This divide is even greater in the private markets. Carter makes it as easy to issue equity to your employees as it is to issue payroll and for employees as easy to accept it too. More than sixteen thousand companies issue equity to their employees through Carter. Whether you're just getting started or getting ready to go public, the team at Carter can help. Check them out at Carter dot com. And then another incredible product you have to introduce is Secure Frame.

• 36:31Harry Stebbings?

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• 37:16Harry Stebbings?

  So to learn more about the number one most active law firm representing VC-backed companies going public, head over to coolie.com and also check out cooliego.com. As always, I so appreciate all your support and I can't wait to bring you an incredible episode this coming Monday with Peter Fanton at Benchmark.