Why Market Size is Everything

Harry, I love your podcast, and I’m honored to be here.

I come from a tiny town, population 10,000 in the middle of the Bolivian jungle. And I was born in an oil camp to two doctors’ parents who were communists. So the first lucky break in this journey that got me from there to here is against their best thinking, they decided to send me to the American school and I learned English. And that was amazing. When it came to college, I couldn’t afford universities. So I was limited to only people that offered scholarships and that happened to be the good universities in The United States.

So I got into Harvard and Harvard was life changing. And I was the first Bolivian in three fifty four years to come to Harvard College. Revolutionary life changing. It’s an institution that I’m eternally grateful for. But that was sort of lucky break number two in my life. I did college and business school at Harvard. After business school, decided I to go live in Brazil because I found Brazil fabulous, exotic, it’s tropical, it’s beautiful, the music. And I had fallen in love with my Portuguese instructor. So then twenty years in Brazil and my first tour of duty in Brazil was an entrepreneur.

I was co founder of the number one e commerce company in Brazil in the 90s, company called submarino.com, which became the first tech Brazilian company to go public. And in the context of building Submarino, I met General Atlantic and we had met about 200 investors and General Atlantic was different. And I fell in love. Unfortunately, they didn’t fall in love with me. And they didn’t invest in Submarino. They should have, but they didn’t. And so be it. We built Submarino, we took it public, we sold it.

But after that, I got a callback from General Atlantic. And the second time around, they did love me. And they hired me to run their Brazil office. We expanded that to Latin America. Latin America is now about 15% of what we do. We’ve done very well over the last ten years, thanks to people like Seba and Cesar at Gympass and some of the people that you’ve interviewed. And about five years ago, they invited me to be chair of our global investment committee in New York. For some reason, they thought I was qualified and that’s what I’ve been doing for the last five years.

So the GA is massive, right? We manage $80,000,000,000, 15 offices globally. We’ve been around for forty one years. Fabulous firm. And I’m proud to be a partner in the firm.

Bolivia is a place of limited possibility because of its history, because of its poverty, because of its lack of infrastructure and opportunity. A starry eyed dreaming boy is claustrophobic in a world of limited opportunities and gets a little crack in the door in a world of limitless opportunities in The US at Harvard. And as I’ve seen my life transformed by the opportunities provided by the universe in The US and elsewhere, I want to help other entrepreneurs and other people globally tap into that little door into a world of limitless possibilities.

So that’s my journey.

They don’t know what Harvard is. They had never been to The United States. I didn’t know what Harvard was. I actually wanted to go to Yale. It was ranked number one in some ranking I had seen. I was like, I have I can’t tell apples from oranges. I need to go Harvard was number two, Yale was number one. I got into Yale, I got into Harvard. And then a very famous guy from Bolivia, the governor of La Paz called me and said, you are going to Harvard.

Right? And I said, sir, I’m sorry. It’s number two. I’m going number one. And he convinced me. I I had no idea. I landed there. I was like, okay, fine, whatever. So yes, now they understand and they’re very proud. At the time it was okay, scholarship. Okay, you can go.

So Harvard has 1,600 people as freshmen. And when I arrived and interestingly, in belief that you have to do military. So and it’s very short because most people get disqualified on medical grounds because they can’t afford to have everyone in the military. But I did spend the week in the military, so they shaved my head. So here it was, and I don’t have a small head. It was shaven. And I dressed rather modestly and I was thrown into Harvard College. And I had the feeling I was the dumbest of the 1,600, the absolute dumbest.

And it took me two weeks to find someone that I thought was probably at my level. And I relaxed at that moment. And I said, oh, I’m not at level. It takes a while for you to build self confidence, but it was an overwhelming experience. Harvard tries its best to make you feel less overwhelmed. It is impossible not to be overwhelmed.

Two sets of lessons. One is around what it’s like to operate in a bubble. And then there’s other sets of lessons around what it’s like to be an operator. So let’s do the operator one. I think it’s a fabulous school to spend time as an operator before you become investor. And the two things I learned as an operator, first of all, how hard life at startup is. And you hear people talk about it, you hear Steve Jobs talk about it. When you feel it, you understand.

And the big conclusion of understanding that pain and suffering and toil is you recognize that the heroes of the entrepreneurial journey are the managers are not the investors. We are the supply lines, we provide occasionally a good idea we support, But the people on the front lines are the true heroes of the story. We owe them our success as investor. What they do is hard. And nothing would upset me more that coming to a board meeting as an entrepreneur, bloodied in the hands of the things I have to do, and the 23 year old snotty guy complained about us meeting our working capital targets for the quarter, not understanding the complexity of all the things we were trying to do.

at you because of the age joke. But if that’s a mistake, I counsel all our teams not to make because life on the other side is really hard. The second realization is in the process of human learning, read a theory, you understand it, but when you feel it, you internalize it. So we read that working in a expanding market is better than working in a stagnant market. We read that there are certain business models that have moat and that have competitive differentiation, those are better than commoditized.

When you have lived the difference of what it’s like to swim against the tide and for the tide and what it’s like to run a business that has competitive differential and one that is not. It is a different appreciation of the beauty of market growth and the elegance of business models. I invest in things that have two things going for them, beautiful business models, win in their sale in terms of market growth, Because I felt what it’s like when that’s not the case.

We have forty two years of data at General Atlantic and we’ve done over 400 transactions we know and across the entire world and six sectors. Over the forty years, 10% of the transactions lead to 50% of the gains. And that’s been consistent throughout time. And we lose money on 3% of the cap. And that has stayed also consistent. When we were looking at the common characteristics, and we have all this data. Now there’s seven things that matter in terms of your probability of being in that 10%, that lucky 10%.

The three more statistically significant size of the market, the feasibility of the business model, the quality and the capabilities of the team, the three things equally significant, but the most significant size of the market. Because no matter how good a team and a model is, you will never outgrow your market. We are lucky as investors, we don’t need to choose situations, we only get two of the three. We can be picky enough to only invest in things that have the three things. Don’t compromise on these three.

Anton, my friend Anton Levy, co president of the firm, invited me to look at Uber in the $2,000,000,000 round because of the international opportunity. And we went and we met Travis and the entire black market industry. And at the time, Uber was just Uber, the premium Uber, was less than $2,000,000,000. So we were like, we can’t pay $2,000,000,000 for a business that’s going after a town that’s $2,000,000,000. It just doesn’t work. So we passed. Of course, Uber redefined what it does, launching UberX and Uber Eats and all the extensions that Uber did, and we missed it.

One of the hardest things of an investor is to look at these three variables and their other variables, but to run simulations in your mind of alternative universes, where those things change dynamically. So the team is augmented to fill in a gap, the TAM is expanded to change in a different way. The experience curve is so strong that the moat is built through experience, not through structure. So it’s just, it’s a dynamic puzzle that requires a leap of faith. Certain situations are easier for such expansions to happen, and you lean on those.

Sometimes it’s not as easy. And great managers are very good at redefining their markets. So you’re absolutely right. It’s not as simple as seeing what the current market is today. You have to sort of imagine alternative universes.

Understanding your biases not just based on history but based on psychology is one of the greatest challenges of our profession. And no matter how pure your heart is, you have biases. And if you don’t admit to them, you’re lying to So I admit to my biases. And when we discuss a transaction with the team is like, I know I have this bias, I have this opinion, but I’d like to explain to the team that my opinion would be wrong because I know I have this bias.

Then we challenge the opinion, then we come to the conclusion. Voicing out that you have this bias helps you address and mitigate the bias. But it’s hard. We are all victims of our upbringings and our experiences and our successes and our failures.

One of the problems of the venture capital community and the growth community is we’re extremely pro cyclical. We drink our own Kool Aid, we overinvest in the peak of the bull market, and we lose all this. And it happens time and time again. Why it happens? Because the technology is exciting. Because people begin to make lots of money as more and more people join into a trend. Because some of the best companies only raise money and come up for air when the valuations are very high.

So the incentives and we all suffer from FOMO. The incentives are all wrong. And we’ve seen it enough times at GA that we build guardrails to protect ourselves from the siren songs of this fake bull market and not do silly things like a lot of our competitors did, and we can talk about those guardrails. But it’s beginning to be the end of the bull market when three things happen. First, everyone’s making money, even the least talented people in the market. That’s a clear warning signal when everyone’s making money.

Secondly, traditional forms of valuation are disregarded. We make up new metrics. It’s not EBITDA, it’s not profit, it’s not cash flow. It’s ARR adjusted for growth. And it’s not 10 times, it’s 20 times. And then the third one, in the peak of formal fever, deal velocity spikes to the point that deals are getting done in weeks and months. When those three things happen, last chance. So what did we do? 2021, we were liquidity minded, we had record liquidity. But more importantly, we told all our companies get to fully funded plans.

In 2021, our portfolio raised $20,000,000,000 of primary cap, 19 of which from other parties. Today, we have 200 companies, 97% of them fully funded plans. The world is doing what you just said. The world is nervous. A lot of entrepreneurs are nervous. The vast majority of entrepreneurs have a full tank of gas and are ready to capitalize on the opportunities that happen when everyone else is nervous. It is the most fun time. This is a lot more fun than 2021.

Fun is a strong word. Rationality has been restored. Companies that did their homework are efficient, have cash reserves, will consolidate their industries and reimagine and redefine what it is they came to do in their markets. Reimagining industries and taking advantage of you having done your homework. It’s a lot more fun than competing for deals on two weeks notice and paying 20 times an hour. I find that irresponsible with the capital of our capital partners. Redefining industries or potentially redefining industries is a lot more fun.

Listen, we’re not perfect. But what we did learn, we learned this in 2000 is the two ways you get hurt is you spend too much of LPs money at the peak of the market. And then you have too many unfunded business plans who need to raise money when everyone is frozen. And either that money is very expensive and your shareholding gets diluted or the company’s done. So the two things we said is we’re never going to run our commitments faster than three years. And we want to make sure the vast majority of our companies have fully funded plans.

And we got that done. And it’s really hard because every one of our competitors was running their funds in twelve to eighteen months, deploying capital three times the rate we were. And a lot of the young guys were like, we’re not getting enough reps, we’re missing the boat. This is a new market. The new venture capital market has been transformed by a new way of doing transactions. You guys are not keeping up with the times. And we’re like, calm down. And I think the data is still out, but I think the more measured strategy yields better returns over the decade.

I remember when my wife was pregnant with our first kid. We have two girls. And it’s so nerve wracking. Our doctor said, it’s been done before. When you put it in that context, there’s billions of births been done before in humanity. You’re like, yeah, okay. So living through the cycle you’re living through, Harry, has been done many times. And the most important objective you should have as a company, as an entrepreneur, as a founder, as an investor in this period of adjustment is to not die as a company.

Have a fighting chance at the new day. The wheel of fortune always turns. It’s never sunny always and it’s never rainy always. It always turns. And you just have to be alive for the next sunny time. If you do, you’re gonna do great. So Submarino, which I told you the short story, the long story is we ran out of money. So we had raised $200,000,000, we were three weeks away from IPO in 2000, the market crashed, we had opened Submarino in five countries, I had personally opened four of those countries.

We ran out of money, we had to shut down the four countries, focus just on Brazil, put ourselves for sale, strategic buyer offered $25,000,000 for us, we were about to go public at a billion, three months later, 25,000,000 and after due diligence left us at the altar, because he said we were more valuable dead than alive. We spun off a business unit to raise some cash, We worked really hard in efficiency and we broke even and then the market returns and we went public. And that same buyer that left us at the out there for 25 in a merger transaction end up paying close to 2,000,000,000 two years later.

So the wheel of fortune always turns. You just can’t die. You can’t shut down. So Harry, just stay alive.

In growth and in emerging markets, you often get tourists. Tourist capital shows up when it’s sunny and they’re very excited, they’re very loud. But as soon as it gets a little rainy, they always leave. So we knew this was a temporary phenomenon, but we didn’t know how long it’s going to be and we lost to them. Here’s a sort of wise seasoned manager that adds lots of value, but requires three months of due diligence and pays 40% less than a guy that gives you a check-in three days, hire to compete.

So it was humbling and we did lose some opportunities, some great opportunities. But the damage that these tourist capital do is twofold. They encourage a mentality of growth at any cost, which is not healthy for the development of companies. If you grow measured in a measured way, and focus on unit economics and focus on fundamental, the feedback loops come in time so you can fix your strategy and make your company even better. But when you’re doing things so quickly, that feedback loop is noise and you just burn through the $100,000,000 without having the benefit of learning.

And companies lose themselves when they stop listening to the signals and just write the noise and spend money like crazy. And that’s the real damage. We lose market share, that’s fine. Companies losing discipline and losing their soul and ending up in situations where they don’t have business models that can survive is the real danger. And that’s what we’re going to have. The hangover of a period of excessive abundant capital globally, not just in Latin America, is that you have a large percentage of the companies who got lost in this abundance of liquidity and today don’t have viable business models and will unfortunately cease to exist.

There’s only one situation where being outspend by a competitor is dangerous. It’s in a winner take all market. If you are in a winner take all market, you’re trying to be the search engine of Brazil, you’re trying to be the Alibaba marketplace of China. And it’s very clear the network effects are such large that the winner captures everything. Then your logic is absolutely correct, and that you want to suck in all the capital and make sure you are the winner. Even if if you end up being diluted to a 5% stake as a founder, the winner is so valuable, number two is not valuable.

So you go all in for the winner. Only 3% of business models are winner taking all. Most business models are winner taking most, and that’s fine. And in most situations, it is often the follower that does even better because they learn from the mistakes of the leader who spent all that money recklessly without listening to the signals. And you’re listening to the signals and you’re being wise. These guys gets exhausted and you win. Google is not the first search engine, Facebook was not the first social media.

matters, especially in the later stages. Everyone who says price doesn’t matter hasn’t been around long enough to experience that it does matter eventually. In negotiating price with an entrepreneur, it is often that the investor has a lot more information than the entrepreneur. And it is often that the investor has a lot more experience negotiating terms than entrepreneur. One of the things I’ve done since the beginning of time is I believe in paying the fair price. I start with the fair price and I don’t really move very much from the fair price.

And if it works, if it doesn’t work, the fair price is the price that allows me to get at least a 25% return in five years based on a P multiple exit by the time I exit. I backtrack into what I can afford to pay today on a base case. Sometimes we do scenarios because it’s a weighted average base case. And that’s the price I’m willing to pay. And it’s hard sometimes to negotiate and sometimes it’s not hard. But I think that’s the point at which a partnership starts.

And the partnership with the investor and entrepreneur should start at a fair position.

It’s not a win lose game. It’s a dance to get to a fair price and begin to build the partnership. Over the last three years and you’ve talked to people who’ve become partners of GA over the last three or four years, which was crazy la la land. We looked like tough negotiators because we were pricing things 30% below the tourists. And to get there, it’s hard. And you have to convince them and you have to be tough and you have to be resilient. And we were that.

If you do the same interviews three years from now, because all the tourists have left and it’s just us, We’re overpaying for assets all across the world. It’s just it looks a little more rich now than it did before. So I don’t think I’m particularly good negotiator. I am committed to only doing things that are a fair price. And something that really helps is at GA, we meet 10,000 companies a year. We invest in 50. So we say no a lot. At GA, our most valuable resource is our time.

My time is so precious, your time is so precious. We’ve been on earth for so few years, we’re at the peak of our capacity for even a small fraction of those years. If we want to maximize impact, let’s do it with people that really want to do it with us. So I have no patience for people who don’t want to start that kind of partnership. If you don’t want to agree with me that we’re the right partner and this is a fair price, I’m okay. I have many other places to spend my time with people that do agree this is a good match.

And that’s probably a better match for us anyways. So I’m okay. So this willingness to walk away is important and people sense it and they know it’s genuine. It’s not an act. I honestly have a million things I’d rather do than haggle over price with someone who doesn’t believe in the fair price. Oh, okay. That’s okay.

This is a good story. So when Bill, our CEO, invited me to be chairman of the IC, I got the imposter complex. I’m a little guy from Bolivia. I’ve been faking it. I could trick the Brazilians, but I’m not gonna trick the New Yorkers. I I go to New York and I interview the founders of our firm, Steve Vining and Dave Hudson. And Steve is Chairman Emeritus and led the firm for the first twenty five years of its history. Former Navy man, McKinsey guy. And I said, help me think through decision making of such a complex global organization.

And he said, you need to create a checklist. Look at our, at the time it was thirty five years of data, look at our best performance deals, come up with the checklist and make sure that everyone uses the positive and the negative checklist. I was like, checklist? Oh, obvious. We should all use the checklist to simplify noise. Okay, good. And then I go to Dave Hudson and I say, Dave, help, same question. And he says, the first thing he says, resist the temptation to use a checklist.

And I’m like, Dave, you guys were partners for thirty years. You made decisions that were brilliant and you can’t agree how to make investment decisions. So I was like, this is paradoxical. And then it turns out when you do the academic research, and I know you read Thinking Fast, Thinking, it talks about different parts of the brain and how one is primitive and one is sophisticated and how we have biases. And actually the insight of the book comes from the author was a psychologist in the Israeli army developing the interview guidelines for the special forces.

And he developed the checklist because the checklist is a way of curing the biases. So he’s a believer of the checklist. But then it’s actually not in the book. I actually read this after finishing the book in another interview that he did. When he looked at the statistic, there were certain people that were better at using the checklist than others. So there were certain interviewers that had scores like 99 and you can tell when you’ve selected the right people into the right unit because they do well in the unit.

He went and interviews this woman who’s the master interviewer. And she says, I look at the checklist, and then I close my eyes, I listen to my intuition. So I’m a believer that educated intuition is the best way to make decisions. And the way you educate the intuition is you ground yourselves in facts. And the checklist is a way of making sure you’ve collected all the right facts. And then once you’ve looked at all,

So we have a four person investment committee. You need three people to vote yes out of the four. And as the co presidents and the CEO. Deal teams are staffed trying to get the best of the local expertise with the global expertise. We’re the most global of all investment organizations out of common because more than half of our people and more than half of our assets are outside The United States. But we partner in every deal. The sector experts typically in The US or Europe partner with the global teams.

So we get the local and the global sector expertise. We all get paid out of the same pot. So no one gets paid of their individual performance. We get paid out of global performance. But more importantly, we have a culture of extreme transparency. We go to the investment committee not to sell the deal, but with the three things that are keeping up at night. You saw the memo and the memos are standardized and the checklists are standardized. But like these are the two, three things I struggle with.

Let’s make this decision together. It’s typically two partners on a deal plus the four of us in the committee and we discuss things three or four times at a committee and it’s hard.

That’s all. And you create the forums where they can speak up. So our investment committee is open to everyone in the firm globally and you can hear everything. And if you’re a partner, you can even go into the executive session and look at the voting and see why people voted against your deal or in favor of your deal. Extreme transparency. And if someone speaks up and you listen, everyone knows it’s acceptable. In my region, for example, when we’re looking at deal at the initial level, we start with the youngest person at the team to give their opinion.

If I start with my opinion, it’s it’s over. Right? The risk is the hierarchy is preserved and everyone wants to please the hierarchy. But if it starts with the youngest person, occasionally you get brilliant insight. And as a young person, I’ll tell you another thing. When I started in the investment profession, one of the mistakes people make is they just crunch the data so that someone else can make the decision. I always tell the young people is, I gave you the homework and the data, but I want you to start with the conclusion.

And then you show me the data. Come to me with the conclusion. As I was growing up as an investor, not only would I get to the conclusion when I was preparing it, I began to try to understand how the people in the investment committee thought. And I would predict not only their vote, but what their question was going to be. And after a couple of years, I was able to predict 90% of their questions because I knew how their brain worked and I knew what their things they’re focused on.

And by doing that, by having your own opinion and understanding the opinion of people you respect, your own judgment gets better and better and this is the judgment.

I agree with the statement you made, but we love thematic investment. But I’ll tell you how the thematic investing works. We look at a trend, and I’ll give you an example of a trend. The banks ought to be disintermediated in this distribution of retail financial products, because they’re doing a horrible job in The United States in the nineties. That was the theme. And then we went to market and said, who’s gonna benefit from this idea? Who’s got the best mousetrap to eat this business away from the banks?

And we landed in e trade, and e trade multiplies market by the 27 times the banks were 80% share in The United States went to 10% share in a deck. The same theme in Brazil twelve years ago, a company you should meet, XP, market cap went up from 300,000,000 to 20,000,000,000, doing the exact same thing e trade did except in a market where the banks were at 99% and now are at 82 and dropping. So that thematic investing does work. Being more granular, saying the way you’re going to disrupt the cyber industry is by doing this type of technology, and I think we should find a company that does this type technology.

No. Decide that cyber is gonna become more important because systems are more interconnected and bad actors are getting more sophisticated, go out and meet the people who are in the front lines who are really doing that. And then you invest. You need a macro theme, not a micro theme. And you just need to be surprised by the people in the front lines who are writing that macro theme doing and it elegantly and effectively.

I have lost money, not frequently. And people always say my loss ratio should be bigger and I don’t need it to be bigger. As a firm, we lose money 2% of the time. As an individual, I think I’m not far from that.

There was a period of time where I drifted away from technology led disruption, tried my hand at traditional private equity. I discovered it’s not my cup of tea. And we didn’t make a lot of money in those two transactions. And I went back to my roots. I like technology led disruption and I should stick back to that. And that was a period of time in 2013, 2015.

It’s less bad than 2000 and we came out okay in 2000. And the reason it’s less bad because in 2000, the tourist capital provided 98% of all funds that were invested in the region in 1998 to 2000. And it was the same names, different generation, but same people, same story. It just it rhymes. It doesn’t repeat, but it rhymes. This time around, at least 30% of the capital came from people who are permanently committed to the region. And those guys are gonna make the restructuring and consolidation and the path of profitability a lot less painful than it was for us at Submarino.

We had to break even with our NuCAP. That’s hard. Now there’s gonna be someone to step in and make sure that you can break even with some capital.

One of the views of the investment profession, you accumulate experience and pattern recognition. And provided your mind doesn’t get old, We can talk about what it takes for your mind not to get old because it’s really hard. You get better. You can get really better. I’ve become a better partner to entrepreneurs through the accumulated knowledge and experience and I’m fighting age like crazy in my brain so that I don’t fossilize and become old fashioned. What excites me today is a little different than what excite me five years ago.

Five years ago, I was all about finding the big problems of Latin America and finding technologies that can fix those problems because the bigger the problem, the bigger the value of the technological solutions. And if you talk through all my companies, the running theme is they’re solving big problems and they’re making tons of money doing it. And they’re gonna create, I think, lot of value doing that. In this phase, as I’m starry eyed, another door opened and I’m in New York, I wanna find emerging market entrepreneurs that are taking on the work.

Like the founders of Biteons, like Cesar and Gympass, like Seba at dLocal. They want to eat the world and show the world that you can create a world class company and you can be born in Minas Gerais or in Uruguay or in the suburbs of Beijing. That is fun. How I define my purpose has changed a little bit over time and that’s affected the kind of investing I’m.

Young minds are playful. Young minds wonder. Young minds make silly mistakes and laugh at themselves. Old minds are preachers of the truth. Old minds are moralists. You got to remain playful and humble and experiment and it gets harder. It gets harder. But it’s a lot better than aging, I’ll tell you that. Trying is harder than aging and I’m trying because I think if you can combine the wisdom and experience and the pattern recognition with the playfulness and the ability to wonder and avoid the preaching, you stay relevant longer and you can have a better positive impact.

Hopefully we’ll find very quickly that you satisfy your material needs with relatively modest amounts of capital and they are diminishing returns to spending more money in material goods. Because it turns out it’s kind of a pain to maintain infrastructure. You have to think of what your purpose is. If your purpose is impacting thousands of people, finding shining lights in the emerging markets that create world class companies, that drives you. It’s not the extra $100,000. It’s the passion. And then of course, the money comes.

But if you think of yourself not as a vessel that’s accumulating money and there’s money just spewing over, but as a tube where you’re getting money, but you’re allocating to the great causes that are meaningful to you through philanthropy or through investing, there’s never an overflow of money because you’re just a vessel through which money is energy is just passing through you. And it’s just endless and it’s beautiful. And think of yourself as a vessel, not a kettle.

It’s really hard. Most driven people have a chip on their shoulder built on deep trauma related to something that happened earlier in their life. And if you’re a successful, well-to-do parent, the last thing you want is a traumatized child. So we do our best to protect our children from trauma. And I’ve seen some people try to create fake trauma, false austerity. So the conclusion I’ve gotten to is the universe will provide the journey for as much as I protected my two daughters. They’re experiencing trauma, not in the way I experienced trauma coming out of Bolivia, they’re experiencing trauma in different ways.

Their journey, they are stumbling blocks that to them feel very traumatic. And it’s shaping their lives and their drives in ways that are different to mine. And that is beautiful and I need to accept and support them. And they will climb the mountain that’s relevant to them and it’s gonna be different from my mountain. And it’s so humbling to understand that I have no idea what that mountain is because they’re very young, but I know it’s coming.

actually have done a few in Portuguese, but not in English. Thank you. I’m so Thank you for providing me the opportunity.

Two books, Man in Search of Meaning, Victor Frankl, I’ve read three times in my life. It’s great. It should be read many times in our life. Good to great Jim Collins book, Paired Company Analysis is the ability that to truly drive an insight about a business, you can’t just look at the success story, you need to look at the alternative story, the alternative reality to know if that’s just lucky or it’s due to something that action. That idea, is alive in genetics, when you study twins that have separated birth had never been done in business.

And he did it so beautifully that I actually copied it. I wrote a book just Good to Great for Brazil was written by Martijn Escobari. It sold 29 copies, mom bought 10 of them. So there’s 19 people that have read my book, but it was exactly the same idea, paired company analysis and I love those.

You’ve cornered the market just in case there’s never a secondary market.

Rule number one, don’t lose money. Rule number two, remember rule number one. I’m sorry, I know it’s not what Silicon Valley thinks. I’m old fashioned in that way.

Hubers after a home run. A lot of people, and it almost happened to me except I had a nightmare about this, think they’re invincible after they make their first billion dollar gain on a company. And their next large transaction, reckless.

Oh, I thought I was invincible. I almost spent $500,000,000 in buying a company in Argentina. And then the day bids were due, I woke up and said, what what the hell am I doing? And I’m glad we didn’t buy it because the country went where it went.

big, you can.

In business, I don’t do that because I police myself. I only give advice that I’m willing to live by. Personally, Sabrina, eat your vegetables.

Small diverse group, a conversation where the CEO opens his hearts about things that matter to her.

listens and when he speaks, it’s inside.

I should have backed David Vlez at NuConta. David had worked at GA. He left for Sequoia. And I tried to bring him back when I got hired into GA. And he called us in our Series A, Series B, Series C that he stopped calling because he kept saying no. And in the emerging markets, there isn’t a single credit institution that has survived the credit crisis, meaning survived more than ten years without deposits. And Nubank in its original inception had no. So I made a dogmatic decision that this has never happened in the emerging markets ever.

And I failed to anticipate that someone as smart as David would figure out a way to build deposits by disrupting the money market, which wasn’t in the original plan, was hard to do, required regulatory changes that were hard to anticipate. He did it. It’s a $20,000,000,000 company. I could have bought a $200,000,000 wish.

I know. I know. This one hurts. It’s the one that got away. The big one that got away. He’s a good guy. He’s

When I moved to America, a good friend, Rick Elias, Red Ventures, he’s a fabulous guy. He told me to forget my instincts. My emerging market instincts are handicapped to understanding how to work in The United States. And I thought he was right. And then we hit a crisis and I just understand my instincts were pretty good. It just needs to be recalibrated, not reinvented.

Make it more global. Just watch us create $510,000,000,000 plus companies, global companies out of the emerging markets, it’s going to happen automatically.

So we recently announced two deals on the same theme. I believe one of the things that are very present today is the authentication of trust. With COVID, full online digital onboarding became a digital online fraud. Identity fraud has exploded. We invested in a company in Brazil and a company in Mexico who are solving that problem in those two countries. And if there’s one thing we’re world class in Latin America, it’s fraud. So if you can solve this issue in Latin America, you probably have a mousetrap that can solve this issue globally.

Thank you so much for the opportunity Harry. I enjoyed it too.