David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

Fintech transition and global scale

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1:48So the last time we did this, I think you had 35 million customers, and I have 140 million customers, so well done. Busy five years. Yeah, busy five years. One would be tempted to think that with that kind of growth, we've saturated the potential of fintech as a category to create a new platform, digital, mobile first, this sort of thing, and that we're maybe in the later innings of the fintech technology transformation. I know that you think it's the exact opposite, and I'd love you to detail exactly why and what you think we can expect in the next five years,

2:23not just for NewBank, but for digital financial services globally. If you look at global consumer financial services, it's about a $10 trillion industry, and still something like 90% of that industry goes through banking branches, and it's owned by incumbent banks. So while there is a lot of new banks and fintechs across the world in a number of different areas, we are, all of those fintechs and all these new banks together, we're less than 10% of that entire market. Still in financial services, it's still almost as if 90% of the world was going to blockbuster

2:55to get VHS and DVDs, and Netflix-like services still had something like 10% of that industry. So that transformation, that migration that you've seen in other industries, in media, with Netflix, in retail, with Amazon, with the Barnes & Noble, in transportation, with companies like Uber, that migration from incumbents to digitally native companies is still very, very early in financial services. I think Nubank is very unique, specifically in Brazil and Latin America, because we are really the only new bank in the world

3:26where we've fully surpassed the biggest incumbent bank. In terms of scale, we now have, in Brazil, close to 120 million customers, so 65% of the Brazilian adult population is a customer of us. So in terms of sheer scale, it's very large. But even more than that, we become the primary bank account of the entire country. So about 60% of our customer uses us as their primary bank account. We replace the incumbent bank. We're not a secondary wallet. We're not some money that you leave that. We are the primary institution where people are really banking day to day.

3:57And that is very unique to Nubank in Brazil. And increasingly, we're doing that also in Mexico and Colombia. We think that this is a little bit of seeing the future of what will happen around the world over the next 10 to 20 years, where you would expect a lot of shift from market share, from the still incumbent banks to the digitally native companies. And that is just migration of market share. But also, you'll see a significant increase in market size as billions of people across the world entered the banking system. You still have 3 billion people that are completely inside the banking system

4:29and don't have access to credit.

Levers for the netflix transition

4:31I'd love to break this into two components. You could imagine if you froze the product today and just worked on getting it in more people's hands, that could be one dimension of expansion. But then, of course, I'm sure you're thinking carefully about all the wonderful things that AI will allow you to do and technology will allow you to do for customers that you don't yet do today. Can you talk through each of those levers to achieve this blockbuster to Netflix transition? The first phase of transformation that enabled a lot of the migration in our industries was the smartphone. And this is the same thesis you see repeating

5:03through the smartphone is the moment that we get to serve consumers without all that physical infrastructure, we have such a gigantic cost structure advantage that we can pass that efficiency to the end customer via lower fees and better product. Just to give you a data point, we have 140 million customers with 10,000 employees. Our competitors have 100 million customers with 100,000 employees and 6,000 branches. And you start thinking about why the cost of real estate of those branches is gigantic. So our cost to serve a customer

5:34is about 3% of what a traditional incumbent bank is. That means we have so much margin to give back to the customer via no fees, better experience, better interest rates, and overall a better product. That's pre-AI. We're still here in phase one of what a smartphone enabled. AI will be an additional multiplication on that efficiency to that because then you get to choose whether you want to have much more efficiency and you could automatize a lot of areas of the bank. You could imagine banks that have 500, a billion customers

6:05with 5,000 employees. It's just within sight or you can just decide to increase your level of ambition. And for somebody like us, especially when we look at how early it is in the transformation, for us is why don't we go to 100 countries and try to accelerate this transformation by Nubank being one of the leading digital financial services firm in the world. What are the craziest things that you can imagine the product or a bank like yours doing for the customer in three or five years because technology has made things possible that weren't before? Just like mobile made

6:37a lot of new things possible. We've got a much bigger wave now. Like, have you really dreamed about what could be possible? What are some of those ideas?

Access, cost, and intelligence

6:45We like to categorize the problems that we see in financial services in three buckets. One is access. Second is cost. And the third is intelligence. On the access side, again, you still have 3 billion people in the world that don't have access to a credit product. It's crazy. It's almost half of the world does not have access to credit. Even countries like Mexico or Colombia, 13% credit card penetration. Why hasn't that happened yet? Because you needed the creation of a lot of data. You needed sophistication and credit underwriting. You needed the digitalization of these systems to happen.

7:17And this is happening. Cash goes away, disappears, enter a number of real-time payment systems as you've seen in Brazil with PICS or India with UPI. So there is a lot of transformation and catalysts that are accelerating the rails on which you increase access to consumer banking for the world. And this is going to be a massive opportunity. 10, 20 years from now, 100% of the population has access to banking services. 100% of the population has access to credit. 100% of small businesses have access to credit. This is an insane push

7:47to global GDP. I mean, I don't think it's really understood how big of a model this could be for every single economy as you get half of your entire population in some areas access to banking. So that's access side. Cost is the one that it tends to be more hidden, especially in developed economies. U.S. is generally a well-served banking services, especially if you're a high-income consumer. But when you look at the cost of that banking system, it's pretty significant in ways that are not readily apparent. So, for example, there's about $15 trillion

8:17of retail deposits in the U.S. banking system. But banks pay, on average, about 40 basis points on yield a year. In a world where your interest rates are 4.5%, 5%, you look at the calculation of those $15 trillion, that's more or less $600 billion that are going to banks to pay for banking branches that, in a digital banking environment, would actually stay in consumers' pockets. So this is a massive wealth tax, the fact that banks don't pay any yield. If you're high income, you do.

8:48The lower you income, the less you get paid. That's a huge tax and that's a huge cost. And then you look at remittances, for example, in the U.S. $100 billion go out of the U.S., people pay 5% to 10% per transaction. That will go to zero. Remittances, moving money, you're moving bits. That will trend toward zero in a more competitive environment. Monthly account, people are paying $5 to $10, $15 per month in the U.S. banking system for a bank account. And you look at Europe or developed economies, Japan, same thing. You see a huge amount of cost that consumers are paying

9:19that will eventually, with models such as ours that come to compete, will also compete away. And then finally, intelligence. I think this is also the one that is less understood and is beginning to be discussed with the advance of intelligence. If you're in the top 1% of income, you have access to the best financial advice. You probably will have a private banker. That private banker is understanding all the bank accounts that you have, is optimizing your deposits, is thinking about what is the right tax-efficient structure.

9:51If you need a loan, they're going to go and compete a bunch of different banks with each other and get you the base yield. But if you're in the other 99%, especially the more you go in the bottom, you have access to nothing. Historically, there's been a lot of conversation about education is the answer. You just got to educate people. People don't have financial education. That never worked. People don't sit down to do classes. You're not going to solve this problem of intelligence through education. You're going to solve it through AI. And that's where I think AI is really transformational in financial services because it's almost providing every single person around the world

10:22super intelligence to be able to optimize their financial life on their behalf and remove a lot of these profit pools that exist today in banking that in an environment with intelligence will be competed away. Flesh that last piece out a little bit more. Wealthfront used to have this idea of self-driving money which comes to mind like, okay, I've got some money. Either I don't have it in the banking system which is the worst. So I come into the banking system, I'm earning 40 basis points instead of 4%. So I'm in a lousy starting position but I certainly don't have investments or tax loss harvesting

10:52or all this other fancy stuff. What do you think that ends up being for the average person in a couple of years because of this intelligence bucket? The first obvious rearrangement is those $600 billion that banks are keeping in their balance sheets to pay for banking branches get rearranged, get forwarded to all the banking consumers because suddenly they realize what am I doing with my money leaving it at zero? Especially when you think about compounding what that means for savings and compounding interest. This is a lot of money being sent ultimately

11:23to pay banking branches. You look at really any country around the world any structure you look at Mexican banking balance sheets for example or Brazilians where it's exactly the same thing. The big incumbent banks about 70% of their deposits they pay zero and 30% they pay some yield generally to the highest income population or the corporates. One of the things that you see in banking is in a perfectly competitive environment the best product should win. If you're charging no fees you have the best experience. Banking is a commodity product ultimately so you should be able to get 100% of the market share. That doesn't happen

11:54because there is a lot of inertia in the system and with the combination the multiplication of intelligence with open banking for example Plaid can connect 120 million accounts and you put intelligence on top of that you're effectively allowing each customer to know how to optimize their financial life and where are the fees coming. So I'll give you an example we're doing this in Brazil today where about 15 million of our customers every day we're telling them hey your bank account your credit card in that or bank is due tomorrow you don't have any money there and they're going to charge you a 15% interest rate

12:25per day that is give you some money so you can pay that credit card or refinance you have this loan at 10% interest let us refinance that at 5% interest it's ultimately a drive towards optimizing and removing a lot of those profit pools on behalf of the consumer in some products like small businesses do want to sit down with a banker with a human and have that conversation if you have millions of dollars to invest you still probably want to see a human

12:55on the other side of the table and have that conversation for certain consumer segments and for certain products if you want to get a mortgage or certain sophisticated products there is value in having a physical space but that might be 5% of the cases today versus if you have a savings account a credit card or a loan you just don't need that anymore so I think the rationale would be effectively yeah we're trying to serve these customers but it's ignoring that for the majority of people especially in mass market increasingly you just don't need it and you don't go to that physical

Defending against AI startups

13:24infrastructure anymore one of the questions that I think lots of investors and founders are wrestling with is what will be the best competitive advantages or moats in this new AI era when the cost to build new stuff digitally is much much lower if you had to imagine it like you're some new founder I strip everything away from you and your only goal is to kill new bank is to like build a new company to attack new bank let's say in Brazil or in Latin America what do you think you would do like what would be the vector of attack on your own business which in a way was what we did to the incumbent banks 13 years ago right

13:55we were the disruptor going up to incumbent banks so I think the early stage startup today that is AI native their biggest advantage will be the speed the ability to move extremely quickly and launch a number of different products especially if you're born unregulated then you're going to be able to move fast by now we are fully regulated we have banking licenses in a number of different countries and so we have to go at a certain pace we have to be checking with regulators now I think specifically in financial services specifically banking that will only get you up to a certain point

14:26because eventually you're going to need to be regulated as well and so I think in summary there's been a lot of conversation about how AI disrupts software and that you can ask ChatGPT or Codex to rebuild an entire software strategy but you still cannot really get ChatGPT to get you a banking license and you still cannot really get them to have regulators give you a license in six months instead of two three years specifically on credit or in certain products that we operate in the amount of data that we have is pretty significant right so we have about 140 million customers

14:57for each customer we have something like 20 to 30,000 data points across 13 different years so this is a huge massive amount of information that allowed us to build our own foundation model we build our own foundation model for financial services for credit and this gives us a significant advantage in making credit decisions for example or collection decisions the early stage startup entrepreneur world they would have the speed they would have a much harder time getting to that level of data so data becomes a significant moat now for more of the incumbents companies like us

15:27we're sort of in the sweet spot of benefiting the most from AI because in one way we already have the scale and the data and the brand and the trust and the licenses that will be hard for the early native startup to move but also we still have the technology angle and the technology infrastructure to allow us to benefit from AI and what AI is creating and move even faster than we were moving before Vanta automates compliance so your team can spend less time on security reviews and more time getting customers Vanta cuts audit prep

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AI adoption timeline and foundation models

17:17Can you build the pretty detailed timeline of when you first had the thought like wow AI is a thing that we need to take really seriously and then as the leader of the business how you have thought about rolling it out and being more aggressive with it over time and I'm interested in the details like you said you have your own foundation model like how's that built is it open source that you've tuned based on your own data like who do you work with how did you think about it I'm really interested in your personal timeline like how far back it goes and what the major hash marks have been we started using machine learning since we started

17:48the organization since 2013 and we looked at Brazilian interest rates for consumers paying 500 and 600% a year we said there's an opportunity here to use better data and analytics and machine learning to price credit risk and different than a lot of fintechs we decided to take balance sheets to take credit risk and to be capital intensive by default and so we had already an organization that was very optimized for making decisions based on models and data when the chat GPT moment came about three four years ago we started paying

18:18significant attention around how technology was going to facilitate some of the decisions and we acquired a company called Hyperplane in Palo Alto that was already working on doing foundation models for financial services they were having such a hard time selling to the big incumbent banks sales cycles were two years they were not really able to move while the technology itself was fairly forward looking so we bought that company we integrated the team we think we were the first financial services firm in the world to build their own foundation model with its own

18:49proprietary data to do credit decisions specifically we even published all our own research in this area we developed an early advantage we're not using our foundation model for fraud decisions for Mexico for Colombia as we launched the US and our international markets we can day one already come in with our own foundation model and understand how to use that data for making basic decisions this should accelerate our ability to come in the data thing is such a good example of the scale advantage and you're an investor obviously before starting

19:20new bank and so I'm sure you've thought about this endlessly it sounds like scale is maybe the most important thing that will make new banks so competitively advantaged for the next 10 years or something is that right like does that feel like the right one to pick I think scale is important but you need it also with the right culture and the right systems so one of the things we heard a lot in the early days was well how are you going to compete with the banks the banks have scale they have a hundred year history with a hundred million customers how can you replicate that data and going back to the analogy of blockbuster my answer was always well blockbuster had a huge amount of data right imagine

19:51the amount of people coming in into the blockbuster and seeing if they were looking at that VHS or the DVD or not or renting did the data help them build a better search algorithm no because they were not capturing the data they did not have the right systems to capture data they didn't have the right culture data culture to be making decisions based on data or based on models and something like Netflix was able to come in with no data and build a better algorithm and ultimately use that scale and data is important but equally important is your systems and your culture you ultimately

20:22being a culture that is using a lot of this data to make the right decisions and this I think what differentiates neobanks or more digitally native organizations like us versus the more traditional incumbent banks that are still operating with 15 different systems as a result of a huge amount of acquisitions that they did over the years and they're still if you look at a lot of the AI applications I will use AI to transform COBOL how do we get away from the main frame you're talking about 10 15 year histories of going to the cloud they're still in that process of going and putting systems on the cloud

20:53how do you run that tactically in the culture to make sure you don't fall in the same trap that like all the big players before you have fallen into which is that you're suboptimally using your advantages and you don't have a good algorithm like what is the tactics of you making sure the team doesn't mess that up and actually does the opposite I think the biggest difference is that historically traditional banks saw their basis of competition as a lot of banking branches that literally how consumers used to pick a bank is I'm going to pick a bank that

21:24has a banking branch very close and so that's why there was a huge amount of effort and energy into real estate and physical infrastructure and obviously a lot of focus on building brands and building trust with consumers in financial service especially you need to protect that trust with consumers that's very critical so when we began the company we did not have to spend energy or focus on an offline world it's more of an online world and we saw technology and data as a way to build comparative advantage and so since the beginning we saw ourselves as a technology company not a

21:54bank technology company that happens to be in financial services and therefore the culture itself has a culture that uses data and analytics consistently for every single decision and what our own foundation model has enabled us is the cost of putting a feature into a model has gone down significantly pre-ai you had to spend six months adding a new feature if you wanted to test a new feature in a model you had to be spending you know several weeks work testing this feature putting in the model testing it around with our own foundation model you can test a number of different approaches much

22:25faster and then the cost of creating a model you have an email that has purple letters or yellow letters the cost of doing a specific experiment has gone down significantly and so every decision in the organization can now be automatized and be done by model versus a human that's what AI is also enabling so it kind of let us do what we were already doing at a much more significant scale but the culture itself already existed since we saw this as a way to differentiate ourselves since the very

Exogenous changes in global finance

22:55beginning how do you think the global financial system will change the most or needs to change the most in the next five years totally away from your business like what are the exogenous changes that you're most carefully watching that you think matter one of the most transformational technologies in the world in French is going to be the first one is the end of cash and this is happening really everywhere there is a lot of big cash-heavy economies like Mexico for example or Indonesia or a lot of African countries Brazil used to be like that where that cash will go away and will digitalize

23:25mostly through real time payment systems I think the implications of this some of them are obvious you don't need banking branches or you need less some of them are less obvious which is what happens to the economy for example the efficiency of banks when they don't need banking branches the speed at which money moves in the economy the amount of data that gets created in an economy that then can be used for example to provide access to credit so that's a big catalyst the second one is open finance and open

23:55banking across the world this is basically the concept that you as a consumer own all the data that you have across all institutions and you're able to grab that data and share it with anybody else so one of the biggest sources of inertia in financial services but also let's call it telecom for example or utilities is that you have a history with a specific company and you cannot transfer that history with somebody else that comes new and incumbents have benefited a lot from that inertia of data the moment

24:26that you can connect all your history from all your services and pass it to somebody else you're reducing that inertia and you're enabling more competition for your data and you can monetize that data as a consumer you can grab your historical information with a bank and offer it to somebody else that is willing to pay for that if you decide to do so right now social media does that without you deciding to do that increasing you're going to be able to do that as a decision and the reason open banking is important is because then it will decrease that inertia globally and will increase significant competition in banking

24:56banking today globally really is still very much an oligopoly structure you have five six banks in the us that own 60 70 percent of all the assets same in europe same in asia same in latin america so that will mean a less concentrated banking industry much more fragmented much more competition obviously that translates into less fees and less cost big trend that has a couple decades is the role of crypto and stable coins around the world what will eventually happen with increasingly people that are much more mobile in nature is that you operate in a combination of

25:28the fiat system in your country with a global offshore system your lives go in between without you even realizing this for a lot of countries around the world is really important you've seen with the usage of access to bitcoin for example stable coins increasingly they want to bank in the offshore system they don't trust their banking system they don't trust their fiat currency today there's about 190 currencies around the world my view is that 10 20 years from now those 190 will be maybe 10 because the

25:58fiscal situation in so many countries around the world is so dire that a lot of that fiat money is not real money this is basically crypto tokens so increasingly billions of people are going to be banking on the offshore world u.s stable coin but also bitcoin and other type of assets you see these two parallel systems interrelating with each other across the world if you had to think about the u.s dollar and its importance if it goes from 190 to 10 or something do you think the u.s dollar is the reserve currency 10 years from now is it one of a few what do

26:30you think its role will be in the world there are two sides of that argument you can make the case u.s stable coins ultimately will be the big savior or one of the biggest saviors of the u.s dollar because it democratizes access to the u.s dollar in a while the fiscal situation in the u.s is not great and it's deteriorating fast it's still better than the fiscal situation for the other hundred and plus countries around the world you look at the balance sheets of all of the central banks or countries in emerging markets in Latin America it's way scarier and you don't have

27:02the sovereign capabilities at least there is a lot of demand for the u.s stable coin there is very little for the brazilian stable coin unfortunately so the fact that stable coin exists for u.s dollar will ultimately mean that the u.s dollar maintains its power as a reserve currency for a very long time but it won't be unique i think you'll have other five six fiat currencies that people will be saving in and a few crypto tokens where you also be diversifying and i've always been a bitcoin fan and it plays a role in a diversified investment portfolio what's the most

27:32surprising thing do you think about the move away from cash what would i not appreciate about the implications of that or how long it would take like what's surprising about going cashless the main one is what this means for credit markets for the majority of the world in the majority of the world economy still economies are very much offline and just think about this situation where you have a taco stand in a corner in mexico city and you're selling through cash that transaction is not being recorded anywhere that's a transaction that you're selling to somebody and it goes away and that

28:03taco stand cannot get credit today now that person has a history where every day they go and sell tacos and they get cash flow that's being recorded but nobody can underwrite on top of that the moment that that transaction goes into a digital ledger that transaction happens digitally then suddenly that taco seller can take that information to a bank and says hey look at my cash flow give me access to credit and if you give me access to credit i can now have two taco stands or i can have five taco stands digitalization of the economy

28:34and what that enables for credit for a significant percentage of the world population is something that is not very well understood today and is a huge accelerant and again you look at economies like brazil for example something like 70% of all the employment in the country is still in small businesses it's not the big corporate small businesses the same thing happens in india for example or southeast asia a lot of these small businesses historically also dealt with cash now they're digitalizing so this is trillions of dollars of credit being enabled for

29:07billions of people around the world this could be a significant economic shift for economic mobility across the world and is a very exciting opportunity do you think that you can create credit worthiness versus just predict or measure it once you have all this data like is that one of the goals to like help people become more credit worthy somehow yes absolutely i mean the first thing you have to do is kind of measure or record a lot of those transactions into a ledger and that's what the utilization of cash enables and then with better algorithms and ai plays a

29:38role here and then also with better products you can enable people to start building that credit history so i'll give you an example we were the first credit card for 30 million people in latin america when we used to ask banks why so many banks didn't give access to credit what we heard is people don't want credit people don't want a credit card they are scared about paying taxes and so they're never going to use the product but what really matter is when what we realized is what they were really lacking was a product that really matched their needs and so we started for a lot of people with a product that the first line

30:08was twenty dollars a twenty dollar credit line when banks saw that product they thought it was absurd but in reality people really appreciated that the twenty dollars were better than zero and those twenty dollars became a hundred and the hundred became a thousand over a period of time and so you enable them to create a credit history through the right product and then you enable an ai copilot for that customer that tells them all the different moves and what they need to do in terms of spending and investing and savings to gain points and

30:38become more credit worth and that's again the concept of you providing a coach to somebody to improve their ability to access credit and improve their financial picture so absolutely I think that there's going to be a big enabler how siloed are the individual countries in terms of how useful what you learn in one is helpful in another like when you went to mexico from brazil how much of the learning from brazil was portable versus something about mexico that's just distinctive about that country and then how do you think about all the countries you've learned in so far and exporting that and those learnings to other

31:09geographies it's more exportable than we would have expected the part that was less exportable the biggest difference between at least a country like brazil brazil was actually much more banked than unbanked and so when we went to mexico a lot of the conversation that we heard is like well but people in mexico like cash they don't believe in digital payments or credit cards or debit cards in the early years of mexico that was the biggest difference when you go from a banked customer or banked country to an unbanked country it's harder to compete i always say that we are a shark in digital waters when

31:42we are forced to compete in the offline world with banking branches we're much less competitive we don't have banking branches we don't have atms and so for a couple of years it was harder for us to compete even though we became the second largest bank in mexico by now in the largest digital bank there but as these countries digitalize also including mexico then the world starts looking closer to each other and that's ultimately what you actually see across any other industry right you look at social media across the world is the same product you look at

32:12netflix the same product you look at spotify the same product you look at uber the same product amazon generally the same product so i would say historically there were a lot of particularities and the cash part was a specific one the future looks much more homogeneous than the past even for

Investing in fintech versus incumbents

32:30financial services if i force you to put your investor hat on thinking about fintech writ large and where there might be other opportunities beyond the ones that you're focused on addressing if i were to adopt the phrase of our great mutual friend mickey malka who said a couple years ago fintech is dead maybe he's the best fintech investor ever and now he's doing less of that and more things in the eye and power and data and things like this how would you frame the global opportunity to invest in fintech businesses of new companies of startups versus companies like yours that had the scale can go take

33:02advantage of a lot of this thing like if i think about that battle between if i want to invest in fintech should i do it in the incumbents you're a new incumbent let's call you and pure startups like what do you think the opportunity set looks like i actually asked this question wiki last week because i saw him spend a lot of time in the eye and investing in the eye companies i was like what are you done with fintech really and i like his answer which is no we're not we are just doubling down on the larger neobanks or neofintechs that are now running the sweet spot between maintaining the ability to transform

33:33themselves through ai but now have access to these modes of scale and data and brand and licenses and so he continues to be an investor of us he continues to be an investor of an umbrella of startups and so for the early entrant i think he's going to be in areas that are potentially less obvious as an entry path it becomes a little bit harder and you probably are applications on top of ai models that you do so there'll be specific applications i think of an entry path but i think building a consumer brand with hundreds of millions of customers at this stage unless you come up with something completely fundamentally

34:04different is going to be it's going to be harder can you talk about this big announcement that you just made and why you're so excited about it kind of what it means for the business i think most people still identify new bank as a brazil neobank or latin america neobank which is what we are but when you go back in time and look at our seed deck in 2013 and the way we thought about the opportunity there's nothing specific about brazil and latin america around the thesis the thesis really is that global retail banking will be transformed by digitally native companies

34:35and this is because digital native companies can solve the problems that financial services have better and these are the problems the cost the access and the intelligence and so we're excited about this announcement as we launch the u.s as a market and we also announced launching to upwards of 35 different countries as stablecoin backed account because this is the beginning of continuing to play in this thesis that is a global thesis in nature we think about our past 13 years as proving this model in latin america in the countries that we operate and i think we did we're now the largest private financial

35:08institution in the entire continent we have the highest net promoter score from a profitability perspective we have the highest return of equity in a country like brazil so we kind of did all the checks and now is a moment to continue executing this multi-decade vision of taking this model global so we're very excited u.s is obviously a very competitive market it is the biggest market in the world there is a lot of very strong neobanks and fintechs in the u.s that will be coming to compete with but in reality it's a market that's still dominated by big incumbent banks so while

35:38there is a lot of fintechs you look at where is the market the market is still dominated by a few incumbent banks and some community banks most of the banking in the u.s is still happening through banking branches as if most of the video and media were happening through blockbusters they're still need to charge a lot and they need to pay zero yield effectively to be able to fund this physical infrastructure and there is a lot of comparative advantages that we bring to bear like our ability to do credit for the mass market or ability to do payments globally and there's something that we also announced with the feature

36:09ability to really make customer levels fanatically bring a consumer obsessed culture in an environment and industry where customers just don't really care about their banking relationships especially for the u.s mass market what do you think is going to be the hardest part about competing in the u.s building a very strong brand will be one of the hardest things u.s consumers mentioned brand as one of the key attributes to choose banks and it's not cheap and we want to do it in a way where we obviously have a lot of financial resources being a very

36:39profitable decision but we want to do it in a way that is smarter and more capital efficient than simply come in and invest a ton of marketing all over the place so building an organic brand in an environment where there's so many strong banking brands might be one of the most difficult challenges that we'll do when that's critical to build trust with consumers because we want to become their primary bank account that's what we aspire to do if I had every buy side

Financial metrics and customer obsession

37:04analyst that covers new bank here and you got to convince them of how they should think about your business through financial metrics you mentioned return on equity earlier is that the metric that you would point them to as the barometer of how well you're doing are there other metrics that you would hope that investors would use to assess how good a job you're doing that are financial how do you think about that growth of number of customers and net promoter score and the cost to acquire that customer so when you look at figuring out have you hit a vein and are you

37:35growing in a way where you found an underserved market and you're able to offer a product that nobody else were able to offer that's one of the key metrics number user count NPS but then are you doing it at a sustainable pace because you can buy your way into growth by spending a lot of money on marketing so what is the equation there what is your LTV to CAC and ultimately what is your return on equity and the return on equity exemplifies the advantages of the business model could have when you compare us with the big incumbent banks in the countries that we operate we don't

38:06charge a lot of fees we literally charge no fee so we have less revenue but then we end up with a return on equity that is 2 to 3x their return on equity that basically means that you found a cost structure advantage you found a way to offer a product at better quality at a much lower cost and if you find that in general it's through technology then you found yourself a moat you found yourself a comparative advantage especially in markets like banking that are in ways commoditized so I think it would be also looking at that combination of return on equity talking about the US one of the

38:38most interesting least appreciated aspect of it is that by now some of the US incumbent banks have higher return on equity are more profitable than emerging banking banks there's some of the emerging market banks that we compete that means your margin is my opportunity right the typical Amazon view or best of view of that incredible ROI that even incumbent banks have even on top of the huge amount of cost that you're using to provide your product that means there is a significant opportunity to undercut who are your biggest influences like I

39:08know you've learned from some of the great entrepreneurs some of the great investors out there like when you think about your whole new bank chapter of your life who are the people that jump out that have most actually influenced how you think about something who are they and why did they influence you the way they did we began the company as a reaction of a consumer pain of me realizing how bad consumer banking in Brazil was and how painful it was and then realizing that this was a proxy for what the majority of the country was actually feeling so we'll always admire companies that are very consumer

39:40obsessed that know that to win they need to be able to offer the best product and best service in a way that creates almost fanaticism and so from that perspective we were very inspired by Amazon since the very beginning Amazon being the more traditional consumer obsessed company and how they build this consumer obsession and how they thought about that we studied Disney very carefully because this is a company that wants to create magic experiences maybe it's not super obvious but even in banking a boring

40:10banking product we want to create a magical experience for customers what did you learn from Disney that's an interesting one I think it's the communication that you create with consumers and just simply the magic aspect of it when you enter a Disney park the setup of that entry path that you have it's almost like you're entering into a kingdom and the service that you get from everybody that works inside Disney and how they treat the young children spectacles that they create and the fireworks that they create they're really thinking about how do you create a product that is magical in nature and that's something

40:41that we push our teams around is for something as boring as sending money how do you create a magic experience out of that the welcome kit that we're sending to our customers here in the U.S. when they receive that welcome kit of the first credit card the first debit card we're trying to create a magical experience in that moment and we're very inspired by that the customer obsession thing is something that sounds obvious now maybe Amazon really pioneered this way of thinking nothing's for free what are the trade-offs associated with being so customer focused it's become a popular

41:11thing to say and the temptation is like everyone's customer focused to varying degrees but what does that actually mean what is the hard part about being so customer focused I

Managing an AI-first organization

41:21think the hard part is as with any cultural value is to do what you say you do like you see it in any company that has very nice sounding values on the wall then the question is are they actually executing that especially when it's inconvenient most companies will be consumer obsessed but then when they are suddenly seeing themselves making more money because they invented a new fee then oh well maybe I'm less consumer obsessed here and I want to make a little bit more money and you're so prioritizing the short term versus the long term and actually in the

41:51entire AI debate you actually don't hear that much conversation about customers because there is so much energy and focus around how do you use AI for efficiency and optimization there is much less conversation about consumer obsession here and this is where humans still are beating the AI so the biggest complexity is actually prioritizing this value even when it's inconvenient to do so especially from a financial perspective but also the AI bro the tech bro is much more enamored today with the

42:23technology versus the consumer experience itself I'm really curious how you think about your own product like literally the thing I see on my phone versus your own agent versus new agents being introduced in the marketplace do you think there's a world where it actually matters that your marketing is to agents more than it is to humans like how do you think about that world or whether to provide your own interactive agents versus a product that you're clicking around in on your phone I think agents become a customer segment as important as consumers as a segment and you have to

42:53provide a product for the agent and you have to market to the agent and you have to do SEO for the agents right it's the same way we have under 18 segment and we have a small business segment this is an entire segment and we're treating it as a segment we have a team dedicated to understanding that segment and understanding the needs of that consumer which is the agent so that will be equally important but I don't think it's going to be necessarily 100% of that decision because I think still specifically in banking and this might be different in other segments for example but in banking you go back to trust and branding and the human will want

43:25to know where your life savings are deposited and there is the human aspect of that and so you're still marketing to the human and you're still building the trust with the humans you got to do both and also for some products there'll be more delegation and for some products there'll be less delegation specifically for areas like in Brazil where we have 65% of the entire country as a customer we have the opportunity to be that agent to the consumer and the customer is coming directly to our app and asking our agent for support specifically with financial products and we can do it in a way where it's actually an open agent even provides

43:57product from third-party banks and third-party financial institutions so there'll be a mix of this happening at the same time if I think back to our original conversation five years ago and you just think about yourself how you've changed the most in five years or what surprised you the most in the past five years what comes to mind one big change has been this view around five years ago everybody was working remotely including us in order to five years we've realized how important it is to at least spend some meaningful time in person in an office and that's I think a bit counterintuitive even from what you were five years ago also in a perhaps

44:29counterintuitive way increases the argument to spend time in person more because increasingly the work that AI can do is more or less the work that people at home individually could do and so the individual at home will be competing with AIs and we'll lose that battle but the work around collaboration and coordination in presence physically which is what humans needs to do is what needs to be happening inside the office we went from remote to hybrid and we're spending significant much more time in the office that has been one change I think

45:01the second part is how the organization changes through AI specifically we start paying attention to the technology but when we tested it it just didn't really work just to give an example we use a lot of closure as a programming language and through 2025 we kept using a lot of the models for closure for programming specifically and it wouldn't work it was really awful as our most experienced engineer said this is not gonna work so we were testing and opus 4.6 came in in december of 25 and that was sort of the moment that a lot of people suddenly realized no this actually works we didn't catch that moment that switch

45:34moment in december we only catched it 60 days after as a couple of my partners and i were in california and we started meeting with a bunch of early stage entrepreneurs and we said well something fundamentally happened and we went starting to test a lot of the new models the new gpt models from closure and said holy shit this is actually working out it can do closure very very well and we're 60 days where it made a huge amount of difference between us and best-in-class companies that were using ai and so we went back to brazil and we went kind of a cold red around the entire organization and we took a step back

46:08and we're almost in the process of reinventing the entire organization we mapped out 120 different workflows across the entire organization coding is one of them but everything from how do you do product design know your customer flows internal audit compliance regulatory capital management every part of the organization 120 workflows were reinvented natively using ai tools we had to create a lot of eval infrastructure to be able to measure at every single step how these

46:39workflows get reinvented and i would say we are more advanced in some we're less advanced in other ones but the entire organization is being reinvented that's what's so exciting about this moment is we get to reinvent the way we do things with ai technology and frankly a lot of the times is that you see huge amount of productivity gains it's not even because of ai it's simply there is always opportunity to be reinventing the way you do things actively and if we were to do it now without ai we would find a productivity gains but ai just augments the possibility to do that and that creates the

47:11opportunity for example for larger span of control less manager much more visibility i personally went from having one direct report to 20 direct reports over that period because it just increases your ability to operate horizontally is less layers on the organization we went from 10 layers to five so the organization went very horizontal this is a bolt of adrenaline to the organization as well in terms of our ability to execute can you say more about what made that possible so what was happening at one direct report in 10 layers and then now what's happening at 20

47:44and five i'm interested in literally like the day-to-day tactical thing i'm sure most ceos would rather have a flatter higher bandwidth of information organization so how does it work like what changed in that i think this is partly ai related partly is the way we manage our organization i think for a period of time as we start scaling significantly and we went from a million customers to 140 the organization just takes a little bit of inertia of itself and that starts adding layers i think every fast scaling organization goes through the same process because

48:15you see things breaking all over the place right you have all these growth pains and the easy answer when things are on fire is to just add managers to solve the fire immediately by sort of a natural organic process we ended up very verticalized and we ended up with a structure that didn't give a lot of visibility partly what ai creates is it allows you to take a step back and reinvent everything about your business this was a catalyst i think for us to think about the way we were structured toby lukey has talked about this how he can now ask the

48:46company stuff because of ai can tell him stuff so the separation between him and ground truth based on data is gone and that used to be this i like this idea of the dictator's dilemma that as someone gets more powerful at the top of an organization it's harder for them to know what is real and what is true how do you stay up to date on what ground truth is or what is happening inside the business when it's gotten so big every part of that chain there is a possibility for a message to get distorted and you get up the distorted vision by the time it navigates 10 different layers so

49:17simply by removing a lot of those layers you are much closer to the ground truth and you reduce a lot of those layers by having information systems that have access to everything that's happening across the organization a company brain that is proactive and reactive it's actually sending me information about what we're doing from changing our ai transformation to how we're doing around launching certain products or metrics or features you get directly to the ground truth there is more about that mentality of how do you actually also actively go

49:48directly to the people doing the work it's very comfortable as the organization takes its own shape to respect the channels you'll see this in bigger organizations you cannot jump a manager and ask the question to somebody that is actually doing the work there is a specific chain of command that needs to be respected this is more related i think of traditional organizations and here is more your approach of being a ceo is like no i want to go talk to anybody that i have a question with and there is no respecting of a chain of command

50:18literally i'll go to whoever has access to the best information if i have a question or we're going to problem solve together if i see something that is not moving so i think it's partly technology partly's culture and attitude of you're willing to be deep down integrated into the organization how do you think all of this will affect your company or any company's ability to raise the overall average talent bar in the business how can you use this to see how good each person is and help them get better or move people on that aren't as good like have you thought about the performance culture management part of the

50:53data and the technology yet i think it's gonna be transformational and i think this is an area that i'm surprised so few people have discussed about how ai is going to reinvent hr in the organizations because if you look at it the way it is today or for most organization is your manager gives you feedback every six months tells you what you're doing well what you're not doing well generally there's a lot of recency bias so it's not really six months it's like the last 30 days what you did in the last 30 days that's good or not generally it's not very actionable it's like you're doing this well you're doing not maybe maybe you should do better

51:27imagine that's the type of feedback you would be giving an olympic athlete that would be crazy you would never be able to succeed olympic athletes that somebody that literally every day is coaching them and providing potential feedback that is the opportunity that ultimately ai is going to create for every single person in organization is you have olympic athlete type of coaching and so what we're building a new bank in our hr operations system is literally every day depending on where you are if you're an engineer or a designer or product manager daily you should be able to get feedback from the ai if your ai copilot if you're coding is reviewing your

52:01pull requests and it's telling you not only how you're using these tools but how could you use them better and it's very actionable and it's very specific to what you're doing if you're a designer is giving you feedback around how you're doing your job and how better you could do in your job if you're a manager managers right now have very little information especially if you're managing a lot of people that's the other thing about this large span of controls there is this sense that you have to be having one-on-ones with every single person in your week like those one-on-ones tends to be very low information

52:32density type of interchange a manager that has access to all this information this instrumentation is now seeing real time how every person in the team is actually doing and it's allowing them to improve what they're doing how do you stay up to speed on ai capabilities like who are the people you rely on what are the things you like to read i feel like you need to time box it every day i get one hour to read the updates or something it's like sports center for business how do you do it i'll spend a lot of time on x i think that's where you're saying a lot of the development also i have an agent that collates and summarizes a lot of the developments

53:05of what's going on on details i block specific time in my agenda to use these tools and to build products this is something that i hadn't done for a very long time i coded a non-custodial crypto app for example and that's something that we've discussed at nubank for a very long time to do and i just went in and did a project we asked all of our senior managers to build products every quarter our actual software and products so that we are integrated and very aware of what's going on i don't think necessarily the answer is that i should be spending 70 coding there are better people that

53:39will be much more productive coding than i am but i think it's important for everybody in the organization to be actually not only reading but actually using the tools actively to understand how fast the technology is going your finance team isn't losing money on big mistakes it's leaking through a thousand tiny decisions nobody's watching ramp puts guardrails on spending before it happens real-time limits automatic rules zero firefighting try it at ramp.com slash invest as your business grows vanta scales with you automating compliance and giving you a single

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54:41at rogo.com slash invest the best ai and software companies from open ai to cursor to perplexity use work os to become enterprise ready overnight not in months visit work os.com to skip the unglamorous infrastructure work and focus on your product if you think really carefully about it how has what motivates

Evolving motivations and wartime leadership

55:02you to keep doing this and keep fighting and keep building changed over the course of the new bank journey like if you think back to the start you and actually last time talked about this like what the original motivations were and i mean not just the business opportunity but the personal sources of drive how has that evolved and what's it like today i'm motivated by impact by making it count by doing something we're investing time and energy in something that has a meaning and that has some kind of impact i went through a phase even with new bank where i started thinking is there more stuff that i

55:35should be doing beyond new bank i think all founders get starting on the company the company then has a significant growth and then you start asking your questions what else could i be doing ultimately went through the other side of that analysis for about a year or two years realizing that there's nothing else that i can imagine myself doing that could have more impact than taking new bank from where it is today to making it the next larger and going from three countries to a hundred countries or from a hundred million customers to a billion customers what this means in terms of impacting financial services

56:08impact for people around the world for billions of people access to financial services and with that impact out there is impact internally too it's like how i can also understand myself through bigger and newer challenges and how i can develop better as a leader to motivate an organization that has big ambitions and with big technology shifts like ai can either decide to stay behind or stay in front i think this technology shift forces every organization to think in which side of this disruption do i want to be

56:40i find that i'm more of a wartime general than a peacetime general and so when a disruption a change in the world happens it suddenly is a source of motivation i get more energized to actually continue to execute that mission what's an example of understanding yourself better because of growth like in what ways has that happened one of the questions that i personally had as i scaled the business is will we need to bring much more professional managers at some point because i i didn't manage anybody before starting new bank and then suddenly found myself being the ceo of one of the largest banks in latin america

57:14and asking myself well what does the organization need right now do we need to go and hire much more experienced manager and we did we went and hired a lot of external talent because i concluded or thought that i was going to need that but also then quickly realized that actually that's not what the organization needed what the organization needed was more of what i had already brought into the organization which was this clear leadership the motivation the willingness to think really big and to dream very big and get people excited about doing something that feels impossible at the beginning once something clicks

57:46and says no this is the right answer for me and for the organization then i can continue to do what i'm doing with much more confidence especially when there are changes and shifts there was always a little bit of a latin questioner am i pushing too hard am i asking too much from the team is this the right pace and the answer after 13 years of doing this and being a little bit more confident is yes i'm pushing enough it's my job to push very hard and to dream very big and to shoot very high and then the organization

58:16will react and will push back if needed but it's helpful to have somebody that is actively pushing the boundaries of what perhaps the company is ready to do what is the hardest part of doing that for a long period of time the imposter syndrome it's fine to be a founder at the beginning but then suddenly when you see yourself running a very large organization it's like am i the right person leading this organization you have to through some thinking and through some experiences and through some feedback conclude answer that question for you at some point and answer it definitively on

58:50maybe for some reason you're not but probably you are that doesn't mean that necessarily the founder will have all the answers and will have all the skills you will need to continue bringing people that add a lot of complementary skills to you but i think at least for me was surpassing that phase of having a voice in the head thinking are you the right ceo for the business and in making the shape between founder and ceo because generally you will see founders having both titles but they're very different functions the founder and the ceo are very different functions they don't necessarily fit

59:23with each other what's the key energy of each the founder is impatient huge amount of sense of urgency the founder will want to go run very very fast will move fast extremely fast the ceo will need to be more patient the ceo will need to be more systematic in how it makes decisions i will have to bring generally much more systems thinking into scaling the organization and sometimes those things collude if you have to be impatient on one end you have to be patient on the other end there might be

59:54conflicts in that nature generally you would think that ceos are better managers founders don't tend to be good managers founders don't have a lot of patience or willingness to do one-on-ones and sit down and provide coaching to a team they just want to run a lot of time they tend to be much more ic's individual contributors and managers ceos tend to be better managers because you have to build systems you have to be thinking more from a system perspective i think the key though for me has been to realize that the ceo title itself and the founder title you can redesign in different ways too and it's being able to

1:00:28do both it's being able to have a little bit more patient when you need a little bit more patient but generally you want to maintain more the founder than the ceo and i think that's why founder led companies continue to outperform for decades because if you have to choose to choose more the founder than the ceo mode especially in environments where there are big technology shifts where a lot of the advantages the assets of the founder come to bear and are more obvious than necessarily the advantages of the ceo what was your lowest confidence moment personally in the entire history of the

1:01:04business how'd you get through it i think you go through a lot of different phases and i think scaling a business is hard especially because you're consistently making decisions about situations that you don't really know like for example i wanted to build a technology company but i was not an engineer myself so i needed to go and hire great ctos and build a great technology organization how did i know how to pick a great cto at that point if i didn't have the experience or credit whether it's a lot of specific to financial services and credit expertise so there was a lot of questioning inside internally a lot of the decisions that i made about building the team

1:01:38that made me ask myself the question do we need to bring somebody with more experience from a big bank or from a big organization to run the organization for a period of time is this imposter syndrome that is asking you make question is like are you the right driver of the car as the car becomes more complex and goes faster and faster and faster and faster what was the most emotional moment in the history of the business for you passing a number of different incumbent banks in brazil was very emotional because for 10 years all we heard again and again and again especially

1:02:11from the local experts was that it was impossible to compete with any bank that we were going to get crushed that we were going to die that these were the most trusted brands in the ecosystem and that we had no shot at being successful becoming the largest private bank in the entire country was something incredible that was emotional in terms of what we were able to achieve from a point of scale personally i was born in colombia and i had to leave colombia when i was eight because of all the security situation in colombia as we grew up and i had to move to costa rica and colombia was then our

1:02:44country number three the moment that i was able to launch new bank in colombia which we did in a big event with the president of the country at the same time was very emotional as well because it was a bit of coming back home and delivering a product and a service that i thought was going to be very great for the country in an environment where i was being recepted by my people and it was videocasted and there were hundred thousand people connected to the launch of new back in colombia it was very emotional too it was

Defining great leadership

1:03:11very exciting with all this experience now running the business how would you define great leadership and i'm especially interested in the subtle points of what defines in your opinion a great leader i think first is vision you have to be able to see something that few people see a world that is not as obvious right now and i think with the massive information overload that we all live in it's increasingly harder to have a differentiated point of view about something about your industry

1:03:42about your company about how things are going to move so you have to have some kind of vision about the future that is differentiated but then you have to be able to sell that vision and selling is about inspiring people and a lot of the time that vision will be very hard or almost feel impossible and the natural reaction of most people when they are presented with an impossible vision is to push back and to declare it non-realistic right this phrase it's not realistic that this is going to happen what is not

1:04:14realistic right i mean look at every single meaningful development in the history of the world at some point it was defined by somebody to be non-realistic the amount of confidence that a lot of the experts or people use when they say it's not realistic you have to be able to sell that vision in a way that a lot of people get motivated by that that drives following and motivation but then you have to be able to be a good listener and understand that sometimes you're actually going to be wrong that vision that you have might not be fully complete there is a mode in which you go

1:04:48against the consensus and you completely declare consensus as wrong and you are the complete revolutionary nothing about the consensus makes any sense and you will reinvent absolutely everything that is one mode the other mode is you're consumed by consensus you think about progress as being non-realistic and things will be the way they are today what's hard i think about a great leader is you navigate in the middle the consensus exists or status quo exists because you think about it from an evolutionary perspective the vision of the world competed with other visions of the world and

1:05:24it won and so the world we see today was superior to our possible wars that happened and so there are elements of that status quo that exists because of a reason and so you have to be able to understand what are those elements and they will continue to be here but also you have to be able to fight that confidential wisdom to see what are the elements will need to be changed and i think leadership is about knowing what doesn't have to change and pushing to change the things that have to change that's a combination of conviction but also active listening and humility to know that you might not

1:05:57have all the answers and that you're going to need to change your mind actively when you do that so combining all those different factors i think is pretty critical for good leadership if we think

Bull and bear cases for nubank

1:06:05over the next five years for new bank specifically i'd love you to paint what you think is like the bear case for the business and the case you worry about and are actively making sure it doesn't happen and then if i think about my rose-colored glasses on like the best possible story for new bank over the next five years i'd love to hear the two ends of the spectrum from your perspective the bear case is we are in these three countries in latin america we've saturated them completely growth declines we haven't really been able to find any other growth alternatives from a customer perspective we've i mean we have 65 percent of brazil very soon we're going to run out of brazilians

1:06:39ideally we would see the natality rate in brazil and current people having more children but that's not happening so we're going to run out of brazilians we did not succeed internationalizing we ended up being restricted to these three countries and growth saturated that's the bear case partly of that would also mean that we could not take advantage of a lot of the ai opportunities that enables also and so that's one reason why we're not able to internationalize the bull case is the opposite of that is we truly took advantage of this thesis that we have around how much market share is going to be transferred

1:07:13from incumbent banks to digital native companies over the next two to three decades and how that is going to be accelerated by technology shifts like real time payment systems open finance and ai we're able to ride those tailwinds from technology shifts and we were able to execute through a multi-country platform a global vision of new bank taking us to 100 plus countries over the next few decades and we were able to solve a lot of these big problems that we still think that will be solved three billion people don't have access to credit cash is becoming digital more people need access to banking if we have these

1:07:47cost structure advantage versus our competitors versus the industry players that still own 90 percent of the 10 trillion dollar profit pool if we have a cost structure that is 50x theirs and this is pre-ai then that meant we were able to pass a lot of the efficiency back to the customer via higher yields lower fees better experience fully digitalized integrating advice in our products and truly taking advantage of these internationalization opportunities so that is the bull case when i had you last time five years ago i already asked you my traditional closing question so i have

1:08:18a different one for you today again across new bank and the incredible experience that you've had building it so far what is the most interesting lesson that you've learned about entrepreneurship how to quickly ignore the imposter syndrome and how the fact that you are the person that had the vision and the energy to build something out of nothing to give birth that already is giving you a level of care for that company so high that it will make you become the right leader for a very long time

1:08:53i don't think anybody in the world cares as much for this company as i do right to a level that is almost miserable you're a father right you have children nobody will ever care so much about this company about this company being successful then i will and that will make you put so much energy and focus to make it successful to the point that that ultimately is what is going to make you be the right leader for the organization for a very long time independently of your expertise or your knowledge or whether you have the right experience just that insight just that energy will make you the right person

1:09:26it seems like you could decompose that into have more faith in yourself and be really persnickety about the vision that you want to go work on because if it's not something that's like coming deep from your heart from your gut you won't get the benefit of this thing you just laid out do you think those are the right two parts of that really interesting insight yeah especially the second part you mentioned around the mission it's a luxury and a blessing to find a mission that you truly are excited about because then that will really make you go the long way scaling a company won't be easy will be

1:09:59much more painful than anybody anticipates and if you don't have the level of conviction for the mission will be just harder to go how would you encourage other people to do a good job on that search like if someone's searching for a mission that's perfect for them any advice that you would give them or any sign that they've got the right one there is a level of serendipity there and luck there is a level of search of listening carefully of feeling that this is a project this is a problem that you truly care about this is something that if you really care about you are not sleeping because you're thinking about it you cannot imagine your life continuing if you do not decide

1:10:35to tackle it i think ai makes it harder not easier just because the bar to start a company is now so much easier you were probably just going to go and pursue problems that are easier to solve ultimately i think that's why some of the best founders that we're seeing right now are going for the impossible truly right there is this shift now into hardware and space and things that seem completely impossible because you're looking actively for those opportunities that will be harder and unique to you that you're going to get to believe that only you can really solve incredible place to close what an awesome closing thought interesting lesson thank you as always so

1:11:09much for your time thank you so much patrick it was awesome if you enjoyed this episode visit colossus.com you'll find every episode of this podcast complete with hand edited transcripts you can also subscribe to colossus our quarterly print digital and private audio publication featuring in-depth profiles of the founders investors and companies that we admire most learn more at colossus.com subscribe patrick o'shaughnessy is the ceo of positive sum all opinions expressed by patrick and podcast guests are solely their own opinions and do not reflect the opinion of

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