Hacker News Re-Imagined

About Last Week’s Announcement

  • 65 points
  • 12 days ago

  • @collectedparts
  • Created a post

About Last Week’s Announcement


@colechristensen 12 days

Replying to @collectedparts 🎙

The issue is not at all transparency, if your company once creates a business emergency by firing a significant portion of your customers, there’s really no reason for anyone to trust you.

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.

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@ivraatiems 11 days

If there's one thing customers in Brex's newly preferred demographic like, it's lots of uncertainty about whether they'll still be able to pay people and be paid next month. This will truly help address the concern every mid to large sized business has about their banks, which do tend to be far too reliable and certain. After all, it's only money. What could be more important to a for-profit corporation?

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@whiskeytuesday 12 days

Brex was pretty rude to me in twitter DMs about two and a half months ago when I had had trouble trying to sign my startup up for their services. They said that my business wasn't appropriate for their service even though they had no information about what my business is or was, and when I asked for details they said that couldn't be shared with me.

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?...

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@r2sk5t 12 days

We switched to Ramp earlier this year because Brex couldn't get their banking integration to work, which impacted our credit limit. Fortunately, we moved everything to Ramp long before the recent email from Brex firing us as a customer. We like Ramp because the banking and Quickbooks integrations work.

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@mherdeg 12 days

Hard to avoid the appearance that they:

* 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

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@ThePowerOfFuet 12 days

Why are functional (but not strictly required)/cookies forced on, and performance cookies on by default?

I am in the EU. This is not kosher.

Bad first impression last week, bad second impression this week.

Put down the shovel, maybe?

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@mnd999 12 days

Do they have an Italian domain? Brex.it? Because it’s sounds like they’re going to be about that successful in the long run.

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@testesttest 12 days

My account was effected. I contacted support and they said it would remain open. Today I got an email saying it will be closed. I transferred my 10K cash balance out. I still don't know if my account will remain open. I used to recommend Brex heavily but their communication has been horrible.

Also, A one month notice to change all payments is insane. Brex should not be trusted.

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@indymike 12 days

Announcing you are doing something bad to customers, and then having to publicly justify it again might be a signal you need to revisit the decision.

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.

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@absherwin 12 days

These criteria are such a low bar that merely stating them upfront would have changed the discussion last week.

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.

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@sithlord 12 days

It's always hilarious to see these blogs from companies who are trying to save face. Literally no one would be wise to use Brex at this point. What are you going to do next, change it to 750k in cash - because 500k isn't your definition of a startup or a scaled company anymore?

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.

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@corywatilo 12 days

"which created confusion about which companies Brex would still serve."

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:

https://twitter.com/watilo/status/1537513616324415492

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@hansword 12 days

They have this great quote on their site:

> 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.

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@MikeBVaughn 12 days

"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."

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.

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@ar7hur 12 days

Can’t wait for the even more bizarre « about the last week second announcement » next week. Seriously who can remain a customer after this?

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@RyanShook 12 days

Funny how just a few months ago Brex was handing out signup bonus offers to anyone with an EIN. This move probably makes sense for them but wow did they do a poor job of explaining it.

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@yodon 12 days

> 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.

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.

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@UkrainianJew 12 days

  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;
This sounds like a panic mode statement from someone who never even bothered to do product/market/pricing research. If your service generates losses for 1-man freelancing shop customers, price it accordingly.

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.

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@mchusma 12 days

I am a Brex user, but not an affected user, but I thought this was an incredibly dumb decision.

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.

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@Aeolun 12 days

I love how this ‘Sorry’ish’ announcement doesn’t really make things better.

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.

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@TSUTiger 12 days

I wasn't even aware of last week's announcement and I don't meet any of the criteria...

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@yawnxyz 11 days

We've been holding off fundraising, because we were lucky to receive government grants because of our connections with academia, which lets us gather data through clinical trials, funded by millions of dollars in grant money.

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?

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@csmpltn 12 days

> "Our decision wasn’t driven by financial constraints, but by how many things we can do well at once."

In other words - "our decision was driven by financial constraints; we can't do many things at once".

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@mellosouls 12 days

The controversial post discussed here:

https://news.ycombinator.com/item?id=31772211

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@lemiffe 12 days

The target market of the business is a strategical internal investment from a marketing and product perspective; this is not something that needs to be communicated externally...

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.

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this is going to be good for Ramp. better platform anyway (happy I made the switch)

https://ramp.com/

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@Imnimo 12 days

>Received an equity investment of any amount (accelerator, angel, VC or web3 token);

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.

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