Invest Like the Best with Patrick O'Shaughnessy
01:06:24 · David Vélez
[01:06:24] S1: 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% of Brazil. Very soon we're going to run out of Brazilians. Ideally, 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 enable us 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 from 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 Nubank 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 think that would be solved. 3,000,000,000 people don't have access to credit. Cash is becoming digital. More people need access to banking. If we have these cost structure advantage versus our competitors, versus the industry players that still own 90% of the $10,000,000,000,000 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.
01:08:14 · Patrick O'Shaughnessy, David Vélez
[01:08:14] S0: When I had you last time five years ago, I already asked you my traditional closing question. So I have a different one for you today. Again, NewBank and the incredible experience that you've had building it so far. What is the most interesting lesson that you've learned about entrepreneurship? [01:08:29] S1: 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. I 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 than 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 it's 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.
01:08:29 · David Vélez, Patrick O'Shaughnessy
[01:08:29] S1: 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. I 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 than 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 it's 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. [01:09:26] S0: It 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?
01:09:26 · Patrick O'Shaughnessy, David Vélez
[01:09:26] S0: It 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? [01:09:46] S1: 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. It will be much more painful than anybody anticipates. And if you don't have the level of conviction for the mission, will be just harder to go. [01:10:05] S0: 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?
01:10:05 · Patrick O'Shaughnessy, David Vélez
[01:10:05] S0: 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? [01:10:16] S1: There is a level of serendipity there and luck. There's 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 to 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. [01:11:05] S0: Incredible place to close. What an awesome closing thought. Interesting lesson. Thank you as always so much for your time. [01:11:10] S1: Thank you so much, Patrick. It was awesome.
01:11:10 · David Vélez, Patrick O'Shaughnessy
[01:11:10] S1: Thank you so much, Patrick. It was awesome. [01:11:12] S0: 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 slash subscribe. [01:11:33] S1: 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 Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PositiveSum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.