Building Brex 3.0, March 2024

Last week I sent this note to our team sharing my learnings from the first six weeks of Brex 3.0, our new operating model designed to increase the intensity and quality of our execution.

Team,

This week marks our 7th week into Brex 3.0. I wanted to take some time to share my thoughts on how Brex 3.0 is serving us, and my learnings thus far. While it’s still premature to see the impact in metrics, the early signs are inspiring, both from a cultural and a work quality standpoint. Personally, I’m at my highest level of energy in many years, and enjoying a day-to-day back in the weeds, building and scaling our product closer to customers and teams on the ground.

When we rolled out Brex 3.0, I told LT and our board that my mental model was simple: imagine a new management came into Brex, and all past decisions were questioned, with no regard for previous management. What would they do differently? And then do these things ourselves.

How we build product

As a technology company, the first thing to revisit was how we build software. In Brex 2.0, many teams worked on many products, shipped many things, measured a lot of metrics. But as time passed, I didn’t feel our product experience improving as a customer. A few months ago, I decided to run the financial operations of a small Brex subsidiary through our product, and got to experience the joys and pains of using Brex as an admin. The experience was eye-opening.

Make no mistake: we made tremendous progress serving larger customers over the past 24 months. Every month more large companies (including public ones) adopt Brex, and our investments in global financial infrastructure over the past six years made us the best and only modern solution for global teams across 50+ countries. Our readiness to scale is why customers of all sizes choose Brex. But at the same time, our product became harder to use for smaller companies. Features only relevant to enterprise customers creeped into my small subsidiary, and different parts of the product felt like disconnected experiences. We shipped our org chart more often than not, which was an inevitable outcome of how we used to build products. Each team worked towards so many initiatives that it became borderline impossible to review everything that shipped, let alone make sure it all worked together cohesively as a single product experience.

We changed this model with Brex 3.0. We killed our planning process, and now have One Roadmap for the entire company. I am the ultimate editor of everything that ships. We release 4 times a year, and each release has no more than 3 big themes. This forces me to choose what truly matters, allowing us to make a large, company-affecting investment in the few things that are step-function changes to the customer experience, and drop everything else. Our Winter release was the first example with Bill Pay, and I’m excited about how the Spring and Summer releases currently in the works will simplify the customer experience on Brex.

Because we now build fewer things in any given release, we spend so much more time designing each product surface and sweating the details. I now review on a weekly basis everything that will ship in the next release, and Design is doing an amazing work building and guarding the customer experience on every release. Great work is hard, but also so obvious and simple when you see it done. You’re not done until you look at a solution and say: “This is so simple. How could this be any different?” The hidden benefit of this approach is that it allows us to break the trade-off between designing for small and large customers by building more thoughtful and composable product primitives that are simple to use, and continue to scale as spend on Brex grows.

While increased focus and quality is the most obvious benefit of Brex 3.0, the most rewarding part personally is how we work. We eliminated the role of pure people managers, because it’s impossible to manage people divorced from work. All the leadership energy previously wasted on busywork of planning, resourcing and managing org boundaries now goes towards a single thing: building something excellent. We’re all, across all levels, reconnected to the craft of building great products. For Brex 3.0, I wanted to build a company that I’d be proud and excited to come work at every day – this is it for me.

How we go-to-market

Our releases aren’t just an artifact to manage EPD work, which we then package and ship to customers. In fact, it’s the other way around. Each release starts with a story we’re telling customers, from which we then build the product backward. It all starts with: “Here's a problem you have, and how we’re going to solve it better than any alternative you’ve seen thus far.”

The release is the universal tool everyone at Brex uses to deliver value to customers in a predictable fashion. The word “predictable” is important. Ironically, releasing fewer times a year in a predictable cadence allows GTM teams to get our products in the hands of customers faster. Our pace of innovation and product changes last year was so high that I still meet customers that have no idea we now have AI-powered expense assistants, actuals vs budgets in real-time, and support for 50+ countries with local cards that can be paid in local currency (which requires owning your own financial infrastructure). Enabling our teams to sell, support and set up customers for success is as important as building the product itself.

Equally important is to meet customers where they are. We now serve many customer segments with many products, so we can’t be too dogmatic about where customers start their journey with Brex. Companies come to us with different pain points, from global cards to expense management to banking to bill pay to travel. Our job is to solve that specific pain point as quickly and reliably as possible, and adjust our roadmap accordingly. For instance, our bill pay gaps were the biggest reason we lost deals to SMB players like Ramp and Bill.com, but since our Winter release, win rates skyrocketed to 70%+. Meeting customers where they are is a win-win for everyone: customers get their problem solved faster, sales cycles shorten, and we prioritize work that is more impactful.

As we earn customer trust, we earn the right to solve bigger problems. Continuous Finance is a big, bold vision that not all customers will buy into on day one. It’s not their fault. It’s too hard to believe it, unless you see it with your own eyes in your own data. The fastest way to transform how companies make every financial decision is to start with a small set of financial decisions, doing it exceptionally well, and expanding from there.

. . .

A few weeks ago, an early stage customer asked me why building a company is so hard. In my 12th year as a founder, I thought about that question quite a bit.

On one hand, the outcomes really matter. We started Brex to build a generational company. No one is here to build something small. We’re still less than 1% of the US market, the opportunity ahead of Brex is huge, so it’s obvious we need to obsess about where we’re going, and how to get there as quickly as possible. How could we not care about the outcome?

But on the other hand, the outcomes don’t matter. We don’t control the outcomes. The only thing we control is whether we’re putting out great work every day. Have we shipped products we’re proud to use and recommend to our friends and family? Is our marketing amazing and clear? Have we mastered the craft of sales on every pitch? Are we excellent at setting up customers for success, and truly improving how their companies run? These are the only things in our control. It’s no accident that a company’s culture is defined by whether it tolerates anything but great work.

The central tension of building a company is: obsessing over outcomes, but at the same time, not caring about them at all. Ironically, the more you let go of the outcomes and focus on putting out great work, the more the outcomes come. It’s the old adage: the score takes care of itself.

Since we rolled out Brex 3.0 six weeks ago, my level of conviction in the future of Brex increased by the day. Not because metrics are moving up and to the right yet, but because the quality of the work we’re producing is light-years ahead compared to what we ever did.

All we need to do is to put great work in front of customers, and the score will take care of itself. I’m so proud of every single one of you for the amazing last six weeks. I can’t wait to see where Brex 3.0 will take us. Onwards!

Pedro

PS: Feel free to reply to this email with what’s going well, and what’s not going well on Brex 3.0. I’d love to hear from you!