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>> Andre Streetm, Chairman of Stone based in Brazil.
Welcome to Stanford into the industrialist dilemma.
>> Thanks Rob.
Thanks for inviting me.
>> Tell everybody a little bit about Stone, what the company is, how it got
started and why it's had such explosive growth over the last six to seven years.
>> Well, market was close to the financial industry in Brazil.
Just two credit card acquires.
20 years overcharging and underserved merchants.
So basically with the experience of having built other companies in Brazil
in Fintech, we saw in 2012, the opportunity of starting something
with a much better product developed from the scratch.
So we needed to seriously put something together that would be ten times better
than the narrow competitors as we always say.
We have to be much, much better in terms of products and
we created a customer service that would amaze customers within the financial
industry is something that people were not used to think about and we created
a distribution channel that goes directly to these merchants across Brazil.
We know small cities of the country and we talked directly to them, and
we understand their needs.
>> And you look at the explosive growth that Stone has had.
What do you think the business is going to look like in the next five to ten years?
Where might it grow in other areas?
>> Payment is just the beginning.
So we started with payments, because it was the main pain
point of those merchants in the beginning when we started in 2012.
But we started putting a lot of other products and
presenting products to our client base, and
most of them have been successful, and adopted by our client base.
So we try to provide what they want.
So we are building the company from the client's point of view to Stone's point
of view.
So we try to understand what they want and many things that they want
have to do with the financial industry, so they need an account.
They don't need a bank.
They need an account to make wire transfers to pay their bills and
they need a credit to run their businesses to help them grow to the next phase.
So we provide them what they call the ABC.
So the platform that is acquiring banking credit and we also provide them credits.
We provide them a software as we call the act two, which is giving them
software's to help them become more productive and grow their businesses.
>> Why don't you think any of the incumbents did this?
What was the opportunity for Stone to step in and solve that problem?
>> Yes, I think we had to have the entrepreneurial and
technology background to think like that and I think they had a lot to lose.
So we could be cheaper,
much more efficient with technology created from the scratch.
We could provide many other features that for them would be very
difficult to create and we think about software all the time.
So we think about new features and the software needs to be very
adaptable to bring new functionalities to the customers and
we need to have the mindset of putting client first which is something cultural,
difficult for this incumbent banks to think like that.
>> When you and I were together in Brazil in September, the country felt very
positive, very different even then maybe even a year earlier.
What's it like right now to be doing business in Brazil and
more broadly in South America?
>> Brazil is not easy.
Brazil has business environment which is not easy to start a business.
Not easy to be an entrepreneur, but I think it's becoming better.
It's becoming much better, because now single digit interest rates is
something very structural to the economy of the country.
And that by itself already helps a lot, but
I think there's another thing that is going on that
the entrepreneur spirit is coming to Brazil somehow.
So you see when they go to university to talk to students,
I see many other young kids, young people that wish to become an entrepreneur,
wish to start their own business which is great.
So it's a cultural, generational move that might encourage
people to start their own business and win in life and create more,
pay more taxes and employ more people and great progress.
>> Now you're a many time entrepreneur, you started your first company,
I think when you were 15.
And yet, education is always something that's been very important to you.
You're involved in a number of educational activities, as well.
Tell us a little bit about what you do in the education space and why you do it.
>> Well, so first of all is when I see a kid that really wants
to study is impossible not to have.
It's impossible not to help.
When you see that image of someone that is in a public school
in a poor public school in which the school cannot give to this kid,
create interest in the kid to study, but the kid wants to do something.
Usually gifted kids, they are a problem to the school.
And if people cannot find them and
diagnosis that as someone that is a special,
that needs to be treated differently and they don't have meritocracy in schools.
The schools in Brazil are terrible, the public schools.
And the way I try to help is to identify these people,
these young kids that really wants to win in life, wants to create progress.
Don't know exactly how, but they want to study.
They want more knowledge.
So my diagnosis is when I find someone that wants to have more knowledge,
I try to bring them close to me and
try to provide them more resources to study better schools and
to have access to other sources of knowledge and
to go encourage them to study whenever they want in the world.
They can come to Stanford.
So I encourage them to study wherever they want.
So when they have this input at early age, we think that they can
really become someone very transformational to the country.
>> It's great to see the younger generation of business leaders in Brazil
be so involved in trying to get education to be more broadly available to those
people that need it the most.
Last question for you, pretend that it's 2 o'clock in the morning and you're lying
in bed staring at the ceiling and you're thinking about the future of stone.
What's the like the one thing that keeps you up at night that would worry you about
the company that you would want to be spending time on to
make sure that your worries were unfounded?
>> All the team is thinking on the client first and
we'll never allow bureaucracy to get installed in the company, and
disrupt the relationship that the company has established with the trust, and
the relationship that the company has established with the client base.
And hearing the customer and really trying to build things from
what they heard, not inventing things from their minds.
>> André Street, Chairman of Stone, thank you so much for
traveling all the way from Sao Paulo up to Stanford.
It's great to have to back on campus.
>> Whenever you call, I come here.
>> Thanks so much.
>> Thank you so much. >> Have a great day.
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