An adapted version of this newsletter first appeared on Inc.com
When David Vélez wanted to start a digital bank in Brazil, a lot of people told him it would be impossible. And that made him all the more determined to do it. As the Colombian-born entrepreneur recalled, people said, “David, you’re not Brazilian. You have no idea what you’re doing. The big banks are going to crush you. It cannot work.”
There was a lot of fear around the prospect of challenging the big Brazilian banks, Vélez told me on my podcast. But instead of surrendering to that fear, he overcame it. It was a David vs. Goliath battle. Now his company, NuBank, is the largest digital bank in the world, with more than 50 million customers.
How did he do it? By following a path of entrepreneurship, courage, and deep purpose. Here are some highlights of his journey.
He started early.
After his family left Colombia because of its drug violence, he worked on the family’s farm and at his father’s button factory. When he was 12, he bought a cow from his father; over the next six years, one cow multiplied to become six. By the time he was 18, he had enough money to pay for his tuition at Stanford University.
An early experience as a teenager served as a moral imperative for him.
When Vélez tried to open his first account at a Brazilian bank, the building had armed guards and looked more like a prison than a bank, he said. He was treated with suspicion and condescension, and it took him about 30 hours to set up a simple bank account. He knew other people were going through the same thing, and he became enraged: “I couldn’t understand, how are people putting up with this?”
That experience stayed with him after he graduated from Stanford and worked at the investment firm Sequoia Capital, which later became an early investor in NuBank. The plan was to develop a bank with no physical presence (and therefore no intimidating security guards) and to eliminate all the bureaucracy and inefficiency that went along with traditional banking. From the start, Vélez has wanted to ensure that Latin American consumers are more empowered, make better decisions, and lead better lives.
Hiring the right team has been key to his company’s success.
As Vélez put it, “The culture of a business is built by the first 10 to 15 employees in the first six months of life.” He hired people who were fully aware of the risks, but believed in his purpose and said: “We’re ready for the adventure.”
Hiring people with the “courageous gene,” as he calls it, has helped the company power through tough times, such as when banking regulations suddenly changed, threatening the company’s business model.
He took a page from Amazon.
Like Amazon, Vélez strives to be “consumer-obsessed” and to eliminate complexity and create a positive consumer experience wherever he can. Word-of-mouth more than marketing helped his company grow quickly, he said. The company makes money by charging small interchange fees, cross-selling products, and providing digital services.
He believes in sharing his wealth — now.
For Vélez, imbuing NuBank with a strong purpose helps him achieve his personal goal of living an impactful life that improves society. As part of that goal, he and his wife, Mariel Reyes, have begun to give away some of their fortune, estimated at $4.3 billion, to charitable causes.
