Ranjay Gulati: Strong leaders make for strong companies, and one of the critical steps in defining the purpose of a company is creating a corporate culture that makes your goals achievable. Once you’ve defined your purpose, use it as a screen or a filter to make hiring decisions.

David Vélez: The culture of a business is built by the first 10 to 15 employees in the first six months of life.

Ranjay Gulati: That’s David Vélez. He is the founding CEO of Nubank in Brazil. It’s the world’s largest digital bank, and it has some 48 million customers across Latin America.

David Vélez: Those first six months, those first 10 employees are really critical in building the key basis of that culture. It’s a bit like for whoever has kids, the early years of development, right? In those, the first five, 10 years, when you’re dealing with your kids, when you’re teaching those values. Sometimes, I hear from some CEOs that, “I’m very busy about building my culture. When we become a unicorn, then I’ll care about that.” And it’s a little bit like saying, “I’m too busy to educate my kids. By the time they turn 18, I’ll start working educating.” Forget it. It’s too late.

Ranjay Gulati: Hi, everyone. I am Ranjay Gulati, a professor of business administration at the Harvard Business School, and this is Deep Purpose, a podcast about courage and commitment in turbulent times. Like a lot of top CEOs we meet in this series, David Vélez comes from a family of entrepreneurs, people who believe it’s best to be your own boss. David was born in Colombia, but his parents moved to Costa Rica when he was a boy, to get away from rampant drug gang violence at home. As a kid, David worked in his father’s button factory and on the family farm. That’s where he started his first venture at the age of 12, raising the money he would eventually use to go to Stanford University.

David Vélez: I decided that the best investment and the best startup I could do was buying a pair of cows, because the cows multiply themselves. My dad had six cows, and I convinced him to let me buy one. I bought one, and then from 12 to 18, that cow became another six cows, and that was kind of the entryway or understanding of compound interest. Obviously, my dad was nice enough that he didn’t make me pay any expenses, no veterinary, no food, so ultimately, this became actually a really good business, and I sold them when I was 18, when I went to school, when I went to Stanford. I was always very fascinated getting entrepreneurship, with the story of Silicon Valley, and the people that had built great companies, that were building it around the area, so decided to go there.

I was determined to find a business idea in my first couple of years at Stanford. The years passed by, and I had no idea how to even begin. I did not have that great insight. I did not have that great startup idea, so to my own disappointment at the time, I decided to go to Wall Street and take an investment banking job during my junior summer internship.

Ranjay Gulati: Turns out, he liked it, so after graduation, David worked in banking, then private equity. He ended up in Brazil, scouting opportunities for the investment firms Sequoia Capital and General Atlantic. All the while, he wanted to start something of his own, something that would be big. His eye was on financial services.

David Vélez: First, it was a really interesting market, because it is the largest market. There is nothing bigger in the town. When you look at who are the biggest companies in Brazil, they are banks. The biggest company in Mexico, they’re banks. In Colombia, they’re banks. So from a sheer size perspective, with these very, very large organizations, these organizations that through good times and bad times, generated an incredible amount of money, they were some of the most profitable financial institutions in the world, and in 2012, when I went back to Brazil, I had one experience that I always think that it was a bit of the catalyst to help me go and identify the opportunity.

I had to go opportunity a bank account in Faria Lima. Faria Lima is sort of the downtown. It’s almost like the equivalent of the Wall Street of Latin America, in one of the very nice branch of one of the largest banks, and I had to go through that experience that I often tell about, that it looked more like a prison than a nice place where you’re welcome as a customer. I had to go through a bulletproof door, that had two armed guards. I had my cell phone in my pocket. The alarms started sounding, because I had metals. The guards came out of the branch. They grabbed me. They asked me to put all my stuff in a locker outside the branch, to then come back in, then waiting 45 minutes, it took until somebody who had no interest really, in helping me, and he clearly let me know with his attitude. That was the beginning of a four-month process of going back again, and again, and again, and finally getting a simple bank account, that charged me hundreds of dollars a year and charged one of the highest interest rates in the world.

I was enraged by that experience. I was very frustrated with the probably 30 hours of time that I did not have, that I had to invest in that experience, so when I combined that insight of how bad the user experience was with the original insight that this is the largest bank, these are the most profitable industry in Latin America, that seemed to me like a really interesting opportunity. Because I couldn’t understand, how are people putting up with this? And if their margins are so big, why isn’t anyone competing with those big banks? Why isn’t anybody trying to challenge these very established incumbents?

Ranjay Gulati: But David, first-time entrepreneur, I would imagine would start small, with a small idea, you know? Maybe buy a few more cows, or maybe build a button factory. You know buttons really well in Brazil, but you say, “I want to build a bank.” That sounds really hard. I mean, that’s like taking on the behemoths of banking. These are big companies, with large pockets, and they can snuff you out in a second.

David Vélez: And I think that was one of the main reasons why I wanted to do that, and I’ll tell you why. During the time, there was the early beginnings of tech entrepreneurship in Brazil, and I remember seeing a model of the Groupon of Brazil. It was a very popular model that everybody was starting. At some point, there were 3,000 clones of Groupon in Brazil, and this happened over a six-month period. There were a lot of clones of Amazon in Brazil, a lot of eCommerce clones, a lot of undifferentiated businesses, that in six months, you had a ton of competition.

And as I thought about what I wanted to do, and I thought about it doing it from like an investor perspective, I had never been an operator, but I had worked as an investor, and entrepreneurship is effectively the biggest investment you’re going to do, right? You’re not only investing your money. You’re investing your time, and you’re all in. You’re putting all the eggs in one basket, so to me, that meant that I had to find something that was very hard to do, so that I would have less competition, that had significant impact, because I was ready to dedicate the next decade or plus of my life on something. It might as well be something impactful, that made a difference, versus something easy that everybody could copy.

By this point, I think I had kind of getting towards a bit of an understanding of what really motivated me, and had come to the conclusion that I was very much motivated by the size of the challenge and by the level of impact. And to me, while everybody told me this is impossible, I thought this was the single most impactful thing I could imagine. I would ask me the question, “What is more impactful? What is hardest to do in Latin America than starting a bank from scratch?” And there was nothing. There was no answer to that question. It was the hardest thing that I could possibly imagine, so to me, that was very motivating.

When I started talking to a lot of the local experts in the industry, I heard a lot of conventional wisdom, people saying, “David, you’re not Brazilian. You have no idea what you’re doing. The big banks are going to crush you. It cannot work. One of the big banks, Unibanco, tried a digital bank in 1999, and they failed, and that’s why you’re going to fail.” So there were a lot of these arguments, and there was just a lot of fear. There was a lot of fear in the environment, about competing with these big banks, and that’s why nobody had even tried it to do. And ultimately, that bad experience that I had gone through, that everybody in Brazil could relate to, was real, was there, and people just were ready. Basically, what I had to bet is that we were able to execute, and that people were going to like to be treated better and pay less fees.

Ranjay Gulati: How do you find the confidence? I mean, was there anybody who believed in you? You did have some investors you were able to convince to invest in you. Were there others? What was your support system to kind of convince yourself that you could actually do this?

David Vélez: Yeah, so it was tough, because I heard a lot of nos, especially from the experts. A lot of the local experts, the former COO of a Brazilian bank, the expert in banking, all of them were basically saying, “No, impossible,” and they had their own arguments. But I would really listen carefully to those arguments, and I would just not butt in, because I was very... I was developing a lot of conviction of how digital and technology could fundamentally alter this industry and provide better products at a lower cost.

But then I was very lucky to go back to Sequoia, to my former boss, and present it to him, and his first reaction, he was like, “Well, this seems interesting, but we don’t do seed investments in Brazil. We don’t know anything about banks. Maybe I’ll invest because I like you, but this is not a Sequoia investment.” But then I spent a week talking to a number of different partners at Sequoia, and after that week, I had to present to entire partnership, and they came back and said, “We’re in. We want to invest a million dollars, and we think you should try to find a local investor for another million dollars.”

I went and looked for Kaszek Ventures. Kaszek was a former startup founders of Mercado Libre. I knew them very well from [Atlantic], presented to them. They also liked it, and with that, that was enough. So while I got 30 nos, I got two yeses that mattered a lot, that gave a lot of support, and also, I had been able to develop a lot of conviction about this and ultimately felt that I had to give it a shot.

Ranjay Gulati: The plan from the start was to be a totally digital bank, skip the bank branches with their security doors and relentless bureaucracy.

David Vélez: And the basic insight was these branches, and this infrastructure, and this huge hierarchy of the big banks is just too expensive. Just to give you one data point, today we have 54 million customers, that we serve with about 6,000 employees, where competitors in Brazil had also around 50 million customers, and they had over 100,000 employees. So we can serve the same amount of customers today than they do with 20X more efficiency per employee.

Ranjay Gulati: David tells the story of a visit to Faria Lima Avenue in Sao Paulo. It’s a financial hub in the city’s downtown.

David Vélez: I walked from one side of the Faria Lima to the other side. I counted 94 branches of five banks. There were corners that have four branches of the same bank. It was insane. It was like, “How kind of competitive industry? What kind of margins do you have to have to be able to afford that kind of inefficiency, where you have four big branches in the same corner?” So there was clearly very large margins, and there was clearly a lot of inefficiency, so the bet, as I said, was being a full digital bank, fully focused on the consumer, with no branches and much more efficiency. We didn’t have a banking license initially, so we had to figure out a strategy to begin in one product, and then become multi-product, eventually getting a banking license.

So we started with credit card as a first product. That credit card was a great product to build a consumer brand, to start developing a muscle around credit. Credit, as a skillset, is probably the single most important skillset in financial services in Latin America. It represents 70% of all the profits of the system. So since day one, we had a product that had real profitability, that had a real business model, and we used that credit card as an entry path to then offering a number of other financial services products, ultimately getting a banking license, and ultimately offering a bunch of different products.

So how do we make money? We make money basically three ways. We make money through interchange. Every time a customer uses the credit card, we get something around one-and-a-half percent of every transaction from the merchants. Then, when customers finance themselves with a credit card, we charge an interest rate. And then, we have fees, which are fees of the products that we cross-sell, so we cross-sell investment products, insurance products, and a number of other products that we ultimately end up cross-selling to all our users.

Ranjay Gulati: So David, there’s no rocket science here. I mean, anybody could do it. This is not like some sophisticated algorithm that nobody can copy you, right? Interchange fees, cross-selling products, offering digital services. Why did nobody come chasing you?

David Vélez: Well, I would say I think that the basic insight is clear, but frankly, it’s the same basic insight that any technology company or digital company had, right? You would think about Amazon the same way. It’s so easy to launch books online. Why isn’t anybody copying? Or Netflix. It’s easy to have a bunch of content that you deliver online. Similarly here, it’s easy to be a fully digital financial services platform and deliver this product digitally.

What is hard about that? It’s hard, number one, to build a culture that is consumer obsessed, because ultimately, that’s what drives product development, and that’s what drives a user acquisition that is effectively zero. All of our growth has been viral. We’ve spent effectively no money on marketing, and that’s because we started to, instead of investing a ton of money on TV, or Google, or Facebook, we started to invest in customer service, since our consumers have such a great experience, that then they ultimately would grow very, very fast through word of mouth.

The other parts that I think was ultimately hard was, in financial services at least, credit underwriting is fundamentally hard. That’s where a lot of the AI and machine learning comes into play. Credit is a bit like playing with fire. You can do great things with fire, but you can also get burned really badly, and that’s why most fintechs globally, or even most new banks, started with payments first, and then they went to credit. We are very unique, in that we decided to go with credit first, and then we went to payments.

That meant that we had to be very, very good at credit underwriting. That forced us to go get some of the best credit talents in the world, which we brought from Capital One, built very sophisticated data, infrastructure on the cloud, that can process over 9,000 different variables, to be able to give the right limit to the right person at the right time, be able to really underwrite risk at the n=1, and not what the banks do, which is effectively everybody gets the same line, everybody gets the same interest rates. So that, the entire managing credit at a very large space and very high growth through a lot of data, that is probably the most sophisticated, technically complex part of what we do today.

Ranjay Gulati: The partners decided to focus their attack not so much on the competitors, but at the complexity in the banking system.

David Vélez: And if we fought the complexity, we’re going to be able to empower people and create 100 to 100, 500 million Latin American consumers that were more empowered in their daily lives, to be making better decisions, and to ultimately be living a better life. That has been the North Star since those early days, and I think it’s served us very well, because when we interviewed the next candidate, when we go from 15 to 100, or to 1,000, or to 5,000, people come and talk to us like, “Why do I need to go to Nubank?” It’s like, “No, no, no. You’re not coming here to sell credit cards. You are coming here to empower 500 million consumers, to really change society, to bring more competition to these industries.”

Ranjay Gulati: Attracting the right talent is essential to any new business venture, but especially in the kind of fiercely competitive field as banking and financial services. David Vélez says Nubank’s crusade against complexity helped him recruit great people.

David Vélez: Definitely one insight, or one principle that we had at the beginning was that it was going to be really trying to build a team that had a lot of diversity of knowledge and experience. I remember one conversation I had with one of the partners at Sequoia, who told me very candidly, “David, seems like a great opportunity, but you don’t have the background to build this.” And it was a bit of a punch, a low blow, but I really thank him for that kind of feedback, because that forced me to say that he’s totally right. I got to find people to bring on board that had the level of experience and skillset that I don’t have.

My two co-founders, I looked for them specifically to do that. There were two key gaps that I had in that initial team, so it’s been a process for the past eight years, of consistently identifying where the gaps are, and then going around the world trying to identify who are the best people in the world that do something, and bringing them on board?

Ranjay Gulati: David Vélez took on the big banks and financial services companies in Latin America as a relative newcomer. That required courage, his own courage, and courage in the people who joined this literal David versus Goliath quest. As he and his team interviewed their first batch of job applicants, they looked for people hungry to challenge the status quo.

David Vélez: We started the company in a small house, and small house, you would pass by it, you wouldn’t even imagine that somebody was working there. My co-founder lived in the second floor, had a dog. We spent a lot of time there, and we would invite people to interview, and there were two type of people that showed up. The first people, the first group would come in with their very nice suit and tie, ready to interview for a Sequoia backed startup, that wanted to compete with big banks, and then they would go and see this house, and they would think, “What a waste of my time. These kids are crazy. There’s no way these kids in this house can compete with the biggest bank in Latin America.”

And then there was a second group of people that they would go in, ring the bell, come back in, sit with us for 30 minutes. We would tell them, “Yeah, we’re about to go and disrupt the biggest industry in Latin America. Yes, we’re going to go compete with the biggest companies, and you know what? If we fail, again, it’s better to fail doing big things than small things, so what a great adventure, right? We’re ready for the adventure.” And people would say, “I’m in. I’ll be starting on Monday.”

So that house was the perfect filter. It created the perfect self-selection, in that it biased the people that were courageous enough to go after these giants, and go fight this fight. So that DNA, let’s call it the courageous gene, was part of those first 10, 15 employees, part of the culture. We then went and hired 100, 1,000, 5,000, and that has been a consistent value across the entire organization, where we go and challenge the status quo.

Now, people, of course we run into trouble, and we’ve had tough times, and one specifically very hard time a couple years ago, when one day we wake up and regulation had completely changed, and there were real questions about whether we were going to subside. At that moment, one of the things that we do to address courage is first, see every one of these challenges as an opportunity to test ourselves, and really test what we built, so instead of us becoming frozen by the fear, we feel motivated because we want to challenge ourselves. We want to test ourselves.

And the second was an opportunity to really build... reinforce that culture, putting everybody in the boat, and go from this peacetime mentality to wartime mentality, where we need to go together to figure out what we’re going to do with this problem. So it’s also how you behave in the face of adversity, and showing people that there are different ways to behave, not being a hostage, but being empowered, that you start building this... Really, we’re building this value of courage across the organization.

Speaker 3: Nubank’s purpose: to fight complexity, to empower people.

David Vélez: First, we are about empowering people. We were very mad, we were upset about these big companies – not only banks, but big companies – that ultimately take their customers as hostage and use a lot of complexity, a lot of fees, to keep even more hostages. And you end up with consumers that don’t have the information to make the right decision for their lives. We discussed a lot, and we decided ultimately, the enemy was going to be complexity in financial services and beyond, and that’s what really brings people passion for what they do. I think that’s a very, very unique opportunity to really work in a business that has passion, and that redefines what we’re doing on a day-to-day basis.

Ranjay Gulati: So David, what do you have to say to the cynics? There’s a lot of people who are cynical about purpose, because they’ve seen enough companies pretend to have a purpose. It’s usually some nice statement about, “I want to make the world a better place. I want to improve the life of my customer. I want to help the planet.” And they kind of cloak themselves in that purpose. What do you say to people like that, saying, “Oh, David, I don’t believe this, you know? I’ve heard that before. Come on, every bank has a purpose, and they always say something about helping customers”?

David Vélez: Yeah, well I would say, it is true that other organizations that claim to have a purpose and they don’t have it. It’s similarly to the conversation around customer obsession. Now everybody has customer obsessions, but there are organizations that do have real purposes, and I think for us at least, I could tell you about us, about Nubank is, is in that deck, since the very early days, and it really drives everything that drives our company, and you can go talk to any of our employees, any of the 6,000 people around the world, and you ask them, “What do you do?” And they will repeat this purpose, and they will go and execute products and consumer conversations, and they will treat customers in ways that are consistent with this purpose and with those values.

Ranjay Gulati: Do you think people come to work for you because of your purpose? Do you think they say, “I want to come work for Nubank, not only because they’re a digital company and doing all these great things, but I really connect personally, it makes my life, I feel more proud of working here, it makes me feel like I’m living my own life purpose, because I get to be in a place which is doing these big things”?

David Vélez: I think so. I really do. I think the time to go for a 9:00 to 6:00 job, especially for the young demographics, is over. People do not want to just go do that and get a paycheck. I think people need to feel that they’re part of something bigger than themselves, and work with great people, smart people, that are all feel part of a mission that goes beyond just getting a paycheck. And that is consistent actually, with building a great business. That’s the thing. I think a lot of people also tend to address or to think about this question as being almost like a zero-sum game, where if I have a purpose, I’m going to make less money, and in fact, it’s actually if you have a purpose, you’re going to make more money in the long run. In the short run, there will be conflicts.

There was definitely conflicts, but at least our insight or beliefs in the long run, those two are perfectly aligned, and that’s why it’s a great opportunity, and a great opportunity for retention, and a great opportunity to create a culture that has a bigger reason to exist than simply go from a billion in net income this year to 1.5 billion of net income next year, to 2 billion of net income the following year, which in a way, is the way a lot of the banks have operated for a very long time.

Ranjay Gulati: So how do you help people think about short term and long term? Because you’re right, there’s this inherent trade-off, and people sometimes presume that a lot of people like Larry Fink and others have promoted that you should have a purpose, but that’s long term, but I’ve got to deliver quarterly short-term results, and now that I’m a public company, the pressures are even greater, because now I have to really deliver numbers. Do you think having a purpose is a way to communicate also clearly, that, “Look, we are making these choices because they are long-term benefit. It’s part of who we are”? How do you connect short and long term in your mind, as a business leader?

David Vélez: Yeah, so I think it begins with that, that insight that I mentioned, which is... Call it a hypothesis, a belief, which is you will win... Whoever wins in an industry is whoever provides the best product and service for consumers, whoever is chosen by consumers. Consumers have the choice. Very simple insight. In reality, that really means that you have to work every single day, to build the absolutely very best product. It’s a bit why Jeff Bezos say, “I don’t know how things, what consumers will look like 10 years from now, but I’ll know they’ll want better products at lower cost.” And ultimately, if a consumer is empowered and has choices, they will pick whoever treats them best, gives them a lower price, and gives them a better product.

And after three or four years, we started to realize that there were a significant portion of customers that we could not approve, because the interest rate was too low, the risk was too high, and that the best thing that we could do to be able to increase the business was to increase the interest rates. So, you could say, and we had a lot of debate with our employees, like, “Isn’t this inconsistent with that consumer obsession? Why are you increasing interest rates if you’re prioritizing our consumer obsession?” It’s like, “We’re prioritizing consumer obsession in the long run. If we keep interest rates low, we’ll reach perhaps half a million consumers, maybe a million. If we’re able to increase this interest rate by this level, we can go to 50 million consumers.”

So the impacts over the long run is much larger, and that’s why in the short term, we might actually need to sacrifice a bit consumer expression, so that we can, in the long run, have more impact and a better opportunity. So, a lot of these trade-offs are complex, and the way to do it, I think, is just have a constant conversation with the company, with everybody, trying to look at some of these debates of these trade-offs from every different angle, and get comfort that we really are optimizing for the long run.

Ranjay Gulati: Customer obsession is a mantra a lot of highly successful businesses use today. It’s widely seen as a key to Amazon’s remarkable success, and it’s a core principle at Nubank.

David Vélez: Customer obsession is, as we say, a lot of people are talking about it today, but it’s similar to any other cultural value that companies have. The real values are the way you behave, not the way you talk. It’s actions speak louder than words, and for us, this was a value that we, in the early days, when we had about three people, we set up in fact a culture deck. We sat down together one afternoon, put together a culture presentation that had effectively the five values of Nubank, and one was that consumer obsession. We want customers to love us fanatically. And we almost did a pact of blood that was going to be driving every single decision in the company, because we deeply believed that, while in the short term, sometimes there might be conflicts between prioritizing the customer and prioritizing profitability or short-term results, in the long run, those two things are perfectly aligned, because ultimately, in a world of options, consumers can choose, and consumers will ultimately choose whoever’s treating them better and offering better products.

So that was the logic of picking that value as number one, and then it was all about building an organization that went back to those principles every single day, in every single decision. I’ll give you one example, that to me, we have many of these, but I’ll give you one specific example I think talks a lot. About a year ago one day, an analyst comes and says, “We’re making more money per customer. We’re seeing revenue go up on a cohort basis,” and people started asking like, “What happened?” We went and looked, and it turns out that there had been a bug in the system, and somebody had removed an email that reminded the customer to pay on time, and because they removed that, people were paying more late fees. It was really easy for everybody in the organization to know what to do, which was put that email back, and go back to the customers that we overcharged, apologize to them, tell them that they shouldn’t have paid that, that it was our mistake, and give the money back. It was the easiest conversation.

And it was the easiest conversation because there was a cultural value that gave everybody in the organization the permission to act that way. I can bet you whatever you want that a lot of companies, especially banks today, would have the same situation, that would not act in that way. Even the ones that say customer obsession, they would not have acted that way, because it’s easy to say it. It’s hard when you’re faced with those actual dilemmas, of making more money or prioritizing the customer. But if you think about it, those customers received that email and said, “Wow, how different is Nubank? They’re telling me... They didn’t need to tell me this. I wouldn’t even have realized it. It was my fault for being late, but they’re telling me proactively, that I overpaid, and they’re giving me the money back.”

The value of that interaction is worth more than points, than fees, than a lot of TV advertising in the Super Bowl. It’s worth more for any customer than anything else, so that is why, I think beyond the value and having the clarity of the value in the beginning, probably the most important part is scaling the organization, being very vigilant that we are acting the way we are supposed to be acting.

Ranjay Gulati: David, I want to ask you about your purpose now. Tell me about how your... And most of us, I don’t know how you feel, but I feel my purpose has evolved over time. Tell me, what is your purpose in life, and how does that fit into what you’re doing right now?

David Vélez: I would say my purpose has... I’ve been able to crystallize it over the past 10 years, and I’ve come to realize that to me, what matters is first, it’s impact. That, to me, is the keyword. I want to make sure that every minute, every hour, every day counts, right? That there is an impact, that I’ve done something, that I’ve moved something. To me, time is something that is going to go away too fast. We’re minutes. We’re alive for minutes, really, and so impact, being an impactful life means a lot, and then ultimately, kind of the crystallization that I’ve been made over the past few years is, impact ultimately means, for me, building a better society, impacting people’s lives, leaving the world a little bit better than the way we found it.

I don’t know necessarily why I came to that conclusion. I think perhaps it’s a lot of what I heard from my family, with my parents, the necessity or the importance of giving back, of building, of being a positive force in society, but to me, that impact today is very much correlated with seeing that I’m working. My day-to-day work ultimately translates in making more people better, live a better life.

Ranjay Gulati: David and his wife, Mariel Reyes, have committed to building a better society by giving away their fortune, estimated by Forbes to be $4.3 billion. Mariel is a Peruvian economist who launched a startup that teaches computer programming to vulnerable women in Brazil, especially black and transgender women. I asked David what led Mariel and him to take the so-called giving pledge.

David Vélez: So listen, I’ll be super frank about it. The success of Nubank is something that I never imagined could happen. My wife neither. We don’t come from wealthy families. We had everything we always needed, but we never lived in an environment of luxury, and frankly, the huge success of Nubank, that happened so quickly, caught us completely by surprise. And one day, about a year ago, we started realizing that that stock is worth a lot of money, and that created a big conversation, in what do we want to do with this? What’s the right way to take advantage of this opportunity? Because ultimately, feels like an opportunity.

And we went through a bit of a logic, a lot of thinking process, and we concluded that the right thing for us to do was give it all while we’re still alive. And I’ll give you, very briefly, a bit of the logic. Number one, it is literally impossible for somebody to spend this kind of money. I think capitalism is the best system that has ever been invented, and is responsible for an incredible amount of poverty reduction around the world, but the reality is that the system creates extreme outcomes, and these are extreme outcomes that are a bit inefficient to society, because it’s actually impossible, even if you tried, it’s actually impossible to spend the amount of money that some of these companies create. So number one, you can’t spend all of this money, even if you tried.

Number two, we will die, who knows, any minute now. We don’t know, and we cannot take it with us. There is an end. No matter how much money you have, you will die as everybody else, and you cannot take it with you. Number three, we do not want to leave it to our kids. We just don’t like the thought process of creating an entire legion of generations that will benefit from this. We will give to our kids everything that they need to live a great life, but we don’t think that leaving a bunch of money to them is the right thing for their character, because ultimately, when we look back, we think that adversity made us stronger. Adversity built character, and we don’t want to take that away from our kids. So we want them to struggle a bit, and we don’t want to spoil them with a bunch of money. So number three, we don’t want to give it to our kids.

And number four, there is a lot of pain in the world. There is a lot of people that don’t have to eat, that have been waiting for six months to get a surgery in a hospital, that don’t know how to put their kids through school. There’s just a lot of pain, the Latin pain, today. Today, not 10 years from now, not 40 years from now, today. So you follow that logic, those four points, you cannot spend it all, you cannot take it with you, you don’t want to give it to the kids, and there is a lot of pain, to me, that equation equals, well, then let’s give it all to the people that actually can use it. Let’s allocate this capital that society owns, on society’s behalf on a better way than simply leaving it somewhere yielding some interest rates for the next 40 years. And since the pain happens today, we should start today. What’s the point in waiting four decades if we can start doing today?

Ranjay Gulati: My guest has been David Vélez, Founder of the largest digital bank in Latin America, Nubank. He spoke with me from Rio de Janeiro. David has three points of advice for aspiring entrepreneurs, do your homework, be excited about the journey, not just the destination, and be willing to work really hard. To that, I would add, have a deep sense of purpose and a real sense of courage.

This is Deep Purpose, a podcast about courage and commitment in turbulent times. My website has all of my conversations with leaders in business who are navigating the 21st century environment. You can also find out about my book, titled Deep Purpose. Companies that are serious about establishing and working towards a deep purpose find that it delivers game-changing results, for the workers, the shareholders, and the larger society. So visit with me at deeppurpose.net. This podcast is produced by Steven Smith, with help from Lauren Modelski, Melissa Duncan, Craig McDonald, and John Barth. The theme music is by Gary Meister. I am Ranjay Gulati. Thank you for listening.