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00:00:00
00:00:01
Daniel Brachfeld
49 Plays3 months ago
We talk about going from United Airlines to McKinsey to American Express to Capital One. And Daniel has a question about college aged children.
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Transcript
Daniel's Early Career at United Airlines
00:00:01
Joe Waltman
All right, today we've got Daniel Brockfeld. Daniel, thanks for joining.
00:00:04
Daniel Brachfeld
Alright, thanks Joe.
00:00:07
Joe Waltman
All right, first question, same as as as always. Refresh our memories. What were you doing before it's yet? And what have you been up to for the last 21 years?
00:00:16
Daniel Brachfeld
Um, yeah, that's right. 21 now. Um, the, so before NCI, uh, after university, I went, I worked at United Airlines. Right. Um, and that was great. Um, I got the job cause I know how to code in SQL, but I really did a route planning, um, aircraft purchasing decisions. It was pretty awesome as a first job. Uh, I got very lucky. Um, and, uh, first I was in Chicago, then in San Francisco.
00:00:43
Daniel Brachfeld
um And the you know I got to do all sorts of fun things, you know like take delivery flights from Toulouse or from ah from ah Seattle down to San Francisco. um I also played around some aircraft simulators, so I really liked my time there.
00:01:02
Daniel Brachfeld
um And most importantly, right, so I was, you know, young, single, I had my flight benefits.
Post-9/11 Career Shift to INSEAD
00:01:10
Daniel Brachfeld
So I could go anywhere.
00:01:10
Joe Waltman
Yeah.
00:01:11
Daniel Brachfeld
And I did go anywhere, right? So I traveled every weekend. So that was really pretty amazing. So I loved it. ah Until 9-11, when ah myself and 20,000 of my closest friends got laid off ah from United.
00:01:24
Daniel Brachfeld
And after that, I was in San Francisco. So I decided, you know what, I'm going to apply to business school. um I grew up in France, so I always thought I'm going to go back to France at some point in my life. And i've all I still believe that I'm going to go back to France at some point. um So I applied to a few schools in the US, but applied to also NCI, because I thought you know it'd be great to go and find out what ah but it's like to live in France again. I was 12 when I left. right I grew up in Strasbourg and Paris.
00:01:58
Daniel Brachfeld
um And so then when I got to NCIAD, I didn't get into the Fontainebleau promotion. I got into Singapore. So I started there and spent the first two periods there and the next three over in Fontainebleau. So I went to Fontainebleau right when it got freezing. ah But I loved it. Right. And, you know, I've noticed, Joe, on your on your podcast, you have lots of amazing guests, but you don't have that many people who've started in Singapore. You have a few. You had the Joannas, which is great, and a few others. but ah You got to get more representation.
00:02:29
Daniel Brachfeld
That's just two cents.
00:02:29
Joe Waltman
Yeah, maybe you can help me with that. Maybe there might be outside of my social graph.
00:02:31
Daniel Brachfeld
yeah All right.
00:02:33
Joe Waltman
you Please, i I'll lean on you hard for that.
00:02:35
Daniel Brachfeld
All right.
Consulting at McKinsey and Family Considerations
00:02:36
Daniel Brachfeld
Perfect. Love it. ah So after I said, um I actually had two offers, one at American Express in London, the other in San Francisco at McKinsey. And so I went to McKinsey in Silicon Valley, actually. And and that was very interesting.
00:02:54
Daniel Brachfeld
um I loved it, but unlike some of your other guests who you know were McKinsey in Europe and got to no do projects in Munich or Vienna or wherever or other fun places, I was in Appleton, Wisconsin, Detroit, Everett, Washington. right These are not the most stuff amazing places in the world, if you would. So I loved it. It was super interesting.
00:03:18
Daniel Brachfeld
ah After three years, I had my first son and decided I can't do this anymore. I can't be traveling you know four days a week. So um at that point, as I started looking for another job, I got a job but at American Express in London. So my wife said, you know you know what? That's karma. you know That should happen. So we then moved to London. So this is now 2006.
00:03:43
Daniel Brachfeld
um and And I joined the American Express really in um kind of a deal-making role for airlines,
Transition to American Express: Airline Deals to Risk Management
00:03:51
Daniel Brachfeld
right? So bringing my old airline background. So airlines are huge users of corporate cards, of you know consumer cards. They have Mr. Coburn, membership rewards, the loyalty points, the use of the lounges, um all of that stuff. And so I was working kind of organizing these deals.
00:04:11
Daniel Brachfeld
um until ah March 31st, 2008. That week was kind of an eventful week for me because two airlines in the US went bankrupt, went to chapter seven at the same time. I don't know if you remember them, Aloha Airlines and ATA, American Trans Air out of Indianapolis. And so in a week we lost $12 million. dollars So immediately my job became risk management. and That was not a choice. It was like, okay, what just happened?
00:04:41
Daniel Brachfeld
ah You know, you book your flight on Aloha, suddenly Aloha doesn't exist anymore, so you call your credit card company and say, I want my money back, right? That's how we lost it.
00:04:51
Joe Waltman
Oh, and AMX is the one that gets stuck with the bill on that.
00:04:53
Daniel Brachfeld
Yeah, that's right.
00:04:53
Joe Waltman
it's it's not oh Interesting. Yeah, because the airline is bankrupt.
00:04:55
Daniel Brachfeld
Yeah, that's right.
00:04:56
Joe Waltman
oh
00:04:57
Daniel Brachfeld
So so at that point, I started managing credit risk management for, in essence, all non-U.S. airlines, because it was based in London, as well as all global cruise lines.
00:05:12
Daniel Brachfeld
and so And this was during the recession, right? This was a tough, tough credit environment. And ah the job was really difficult. Every day I'd i'd be on the phone with CEOs, CFOs, telling them, look, I'm going to hold back your money. I'm sorry, I know you get paid from your customers through Amex, but I'm going to hold back your money because I think you're risky.
00:05:31
Daniel Brachfeld
and
00:05:31
Joe Waltman
yeah i mean The wheels are spinning, and and this is probably going to be a very naive question. ah But like was Amex doing nothing before then to to sort of you know mitigate some of these risks? And what do they do, aside from holding back money you know moving forward?
00:05:45
Daniel Brachfeld
Um, MX did very little surprisingly, right? Um, at least not systematically. They were, MX was very reactive to losses. So let's say, you know, so the biggest loss for American express before then was a Renaissance cruise lines back in 2001, which, you know, uh, yeah.
00:06:02
Joe Waltman
Same story where that they would belly up and you had a bunch of refund requests.
00:06:06
Daniel Brachfeld
Yes, that's right.
00:06:06
Joe Waltman
Okay.
00:06:06
Daniel Brachfeld
That one was a big number. That was 35 million. But, you know, in seven years, that kind of um focus kind of disappeared. It was and growth growth times, right, from 2001 to 2006, and seven and eight.
00:06:22
Daniel Brachfeld
And so after that, when that happened, kind of a risk team was created to say, let's not lose any more money. and That was a goal. No more losses. The goal was actually don't lose customers and don't lose any money. which is no goes a little bit counter, right? When you think about very risky companies, but um it was definitely very interesting. I'll look back on it fondly, but at the time I remember it was so intensely hard. I was threatened. I was threatened with lawsuits. I was threatened. I had a guy hang out in my office for weeks.
00:06:55
Daniel Brachfeld
because I was holding back money from his cruise line. I had to leave out the back of the office right to go home. So yeah, those were interesting times. ah But ah things got a little better.
00:07:08
Joe Waltman
And and whos this is actually this must must be like you know a little bit soul crushing at one level, but also very similar.
00:07:08
Daniel Brachfeld
Go ahead.
00:07:13
Joe Waltman
How are you determining which which airlines your crew does get their money and which ones don't? And you're kind of making a judgment call, right? like
00:07:20
Daniel Brachfeld
you're You're doing credit assessments, right? You're you're kind of forecasting their their revenues. You're looking at ah you know ah global flight patterns, traffic, things like that, and saying, OK, here's how much revenue I think every single one of these airlines and cruise lines is going to make. And are they going to not meet covenants? And if they're not going to meet a covenant, then at that point, then you know they're going to go into Chapter 11. And the point is, the moment you that begins to happen, you want to be the first one to have funds.
00:07:49
Daniel Brachfeld
because otherwise you go into a court proceedings and you barely get anything. So we were pretty aggressive actually. And Amex had also had a benefit in that ah as a merchant acquirer, we're in the flow of funds, right? So you swipe your card, it goes to the merchant acquirer. The merchant acquirer is then supposed to pay the merchant. But if the merchant's risky, you are in the flow of funds, so you can just cut them off, right? So, ah
00:08:17
Joe Waltman
Would, would, was Amex already doing stuff in other verticals, you know, non travel stuff for, for, you know, risky merchants or, or.
00:08:24
Daniel Brachfeld
So um risk really only happens in the industries where you buy now, but you're not going to get your items later, which really only happens in two categories, ah travel.
00:08:31
Joe Waltman
Okay. Okay. Yeah. Yeah.
00:08:39
Daniel Brachfeld
and furniture. like know right There's actually a third category, which we ended up like closing, which is lifetime golf memberships. During the recession, we had a lot of customers
00:08:48
Joe Waltman
oh
B2B Payments and Financing at Amex
00:08:50
Daniel Brachfeld
call us and say, I paid $100,000 for my lifetime golf membership.
00:08:54
Daniel Brachfeld
My golf club went bust. Give me my money back.
00:08:59
Joe Waltman
that's funny
00:08:59
Daniel Brachfeld
That was well played. So so things got better. you know the credit recession kind of went away after, let's say three, four years, um got better, but I stayed in risk management. And at that point I started focusing very much on B2B payments, B2B financing. I did a few more years in risk management. And then, um ah so all this time I was in London and we loved London. My wife and I, the whole family, we loved it. um And we had always a one year outlook
00:09:35
Daniel Brachfeld
on London, so you know when you only have a one-year outlook, your thought is, oh great, let's go party, let's go travel, right, all the time, because in a year I'm back to wherever I'm from. But we ended up there nine years. So we did nine years of this, which was great, but ah a ton of fun, loved London. um In 2015, my job was re-org to the US and I had a choice and I decided to go back to the US.
00:10:02
Daniel Brachfeld
Um, and, uh, to New York to, uh, I'm outside New York and New Jersey right now.
00:10:04
Joe Waltman
to New York.
00:10:08
Daniel Brachfeld
Um, uh, actually really close. I just learned to James cook. We met, we met randomly at a school event. Our kids go to the same school. So that's great.
00:10:18
Joe Waltman
Oh, wow. a Small world.
00:10:19
Daniel Brachfeld
Yeah.
00:10:19
Joe Waltman
That's great.
00:10:19
Daniel Brachfeld
Yeah. I know. Um, so, uh, and there I switched out a risk into product management, into, in essence, general management, product management, uh, focus heavily on.
00:10:33
Daniel Brachfeld
business payments, business financing for very large corporates. So imagine the Fortune 100, they're paying their vendors $500 billion dollars a year in payments. My job was to, in essence, monetize that entire payment payment file, right? Make the payments, finance it, ah and figure out ways to engage all the suppliers.
00:10:55
Joe Waltman
Would that be like kind of like factoring, or or is is that different from?
00:10:56
Daniel Brachfeld
and so Factoring is, yeah, factoring is one of the many tools, right?
00:10:59
Joe Waltman
Uh-huh. OK.
00:11:01
Daniel Brachfeld
both ah That's right, invoice factoring. I launched a supply chain finance product, which is kind of a buyer-led, yeah, it's a buyer-led financing to suppliers.
00:11:08
Joe Waltman
The other side of it.
00:11:13
Daniel Brachfeld
um and But that's correct, right? It's factoring, it's working capital for small businesses, ah small businesses of large corporates, which is really where my a lot of my focus has been since.
00:11:19
Joe Waltman
Cool. Uh-huh.
00:11:26
Daniel Brachfeld
um And that was great too, right? Started from scratch, right? Amex kind of been an internal entrepreneurial team at Amex. Started with two people, ended up with 30 by the end of my time there.
00:11:39
Daniel Brachfeld
So that was great. Really loved it.
00:11:41
Joe Waltman
Wow.
00:11:41
Daniel Brachfeld
Had tons of fun. um
00:11:43
Joe Waltman
So this was 15 to what year?
00:11:45
Daniel Brachfeld
To 21.
00:11:46
Joe Waltman
Oh, wow. OK.
00:11:47
Daniel Brachfeld
Yeah,
Exciting Challenges at Bill.com
00:11:48
Daniel Brachfeld
yeah. So over the course of six years.
00:11:49
Joe Waltman
OK. Mm-hmm.
00:11:50
Daniel Brachfeld
um And then after that, American Express kind of retrenched. So I was moving ah into non card products, right? So invoice factoring, as you mentioned, right?
00:11:59
Joe Waltman
Yeah. yeah
00:12:00
Daniel Brachfeld
And Amex decided, you know what, we're just going to really focus on our card products. There was a virtual cards were kind of taking over the world at that point. And so I lost my job, and I was out of jobs.
00:12:11
Daniel Brachfeld
So I decided, you know, what am I going to do? I dabbled in entrepreneurship as everyone does, right? And ah really, again, focus on the same thing, payment terms,
00:12:22
Daniel Brachfeld
cost of merchant acceptance, right? That's where it really might kind of spike in knowledge is. um But then ah decided the following year, I joined bill so dot.com. So a small, not small, it's not, you know, it's 20 years old, but it's based out of San Jose, Silicon Valley, accounts payable automation, accounts payable payments company, um kind of in the same grouping as, let's say, QuickBooks.
00:12:47
Daniel Brachfeld
Right? um So focusing on US small businesses needing to manage their payments and their receivables. And I was there really on the platform side. So building out their payment platform, building out their risk platform. um Definitely a very different experience because American Express is a very organized company that ah kind of assimilates everyone.
00:13:16
Daniel Brachfeld
I don't know if you remember Star Trek, The Borg, right? Just take you in and you are now one of us, right? ah Bill was not like that. Bill was like the Wild West. And so super exciting.
00:13:27
Daniel Brachfeld
I realized in retrospect, because I'm not there anymore, I didn't really take advantage of enough of that, of the kind of the complete freedom that there was. I was trying to, but again, I was building out platforms.
00:13:39
Daniel Brachfeld
So I did need a little bit of, you know, ah organization, but still,
00:13:43
Joe Waltman
No.
Innovations and Data-Driven Culture at Capital One
00:13:44
Daniel Brachfeld
um I did like it, and then I just left and just joined now another company, so staying in the same space, but I'm at Capital One now, big company, um and again on the platform side.
00:13:53
Joe Waltman
o
00:13:57
Daniel Brachfeld
so And now, at this point, I'm more on a general platform rather than just business payments.
00:14:02
Joe Waltman
When you say you're on the platform side, but what does that mean and but in both those companies?
00:14:05
Daniel Brachfeld
Yeah, so that's a product management, right? So I'm a product manager, right?
00:14:08
Joe Waltman
OK.
00:14:09
Daniel Brachfeld
I've got a team um and ah and there's a set of engineers right that support it. So at Bill, for example, all in between the team and the engineers, there were maybe 50, 60 people building out ah how to accept a payment in.
00:14:25
Daniel Brachfeld
or accept a payment instruction in, how to route it, right? So do payment orchestration, how to route it to all the payment providers, how to make real-time decisions on credit risk, fraud risk, compliance risk, so that it passes through, and how to do all that in in real time, right?
00:14:28
Joe Waltman
Mm.
00:14:42
Daniel Brachfeld
um I mean, the U.S. is very, very far behind the rest of the world when it comes to payments, real-time payments, but it's catching up. Right. And now there's an actual, there is a real time payment network.
00:14:53
Daniel Brachfeld
So how to really have, um, all that be kind of, uh, immediate payment management. And so, yeah.
00:15:01
Joe Waltman
Wow. and a company like I can understand a company like Bill, which is effectively a startup, but a company even like Capital One still is is investing a bunch of money into their, their let's call it, you know moving money around platform.
00:15:11
Daniel Brachfeld
Yeah.
00:15:14
Joe Waltman
to
00:15:15
Daniel Brachfeld
Yeah, that's right. It is. um And even Capital One, you know you think of it like a you know very established company, it's only about 30 years old.
00:15:23
Joe Waltman
Yeah, that's true.
00:15:23
Daniel Brachfeld
right um the They rely on a lot of partners like to do a lot of their ledgering, money movement, things like that. And so um it's even for them, right there's a lot of focus on bringing that in-house.
00:15:39
Daniel Brachfeld
which then allows a lot more innovation, like crazy, crazy products, right? Which is what the goal is, right? To just enable just very, very interesting products out there. And I've been researching a ton of weird combinations of financial products that exist in the marketplace and they get it super strange, right? But the goal is how how do you make sure that your organization can launch things like that?
00:16:06
Joe Waltman
Yeah, yeah. So you spent, what, 15-ish years at Amex, then a couple of years at Bill, and now you've been at at Capital One for
00:16:10
Daniel Brachfeld
I did, I did, you know, six weeks, five weeks, somewhere there.
00:16:16
Joe Waltman
Oh wow. Oh wow.
00:16:17
Daniel Brachfeld
Yeah, yeah, yeah, brand new.
00:16:17
Joe Waltman
It's brand new. It's brand new.
00:16:18
Daniel Brachfeld
Yeah.
00:16:20
Joe Waltman
How you liking it?
00:16:20
Daniel Brachfeld
So it's, it's good. I mean, it's definitely interesting. um I'm, it's, it's, i I don't think I found my steady place yet in terms of um of the organizational culture, right? American Express was definitely kind of a command control environment. Bill was, you know, do whatever the heck you want. And so i'm I'm figuring out my life here at Capital One. Capital One is very data driven, right? ah Which is great. um But I definitely, I'm,
00:16:59
Daniel Brachfeld
I'm very deep in this space. I love the B2B financing payment space, which I know sounds weird, but it's ah it's been um it's been a very it's a very evolving space with so many opportunities. I got into the crypto space, um not not for the investment side, but really for the payment side.
00:17:20
Joe Waltman
Yeah.
00:17:20
Daniel Brachfeld
right and the lending side associated with it. um I was actually in the crypto space back in 2013 for completely different reasons, which was, you know how do you track what ah how many ah what supplier of what supplier of what supplier is getting paid and what goods they're providing, right?
00:17:36
Joe Waltman
Okay.
00:17:37
Daniel Brachfeld
you know In essence, this ah blockchain that would tell you all that stuff so that you could finance it.
00:17:40
Joe Waltman
Yeah.
00:17:43
Daniel Brachfeld
But ah never properly on the investment side, which in retrospect should have done.
00:17:50
Joe Waltman
Yeah. Well, I'm not sure that supply chain stuff ever really materialized either. Right. That was always kind of a promise.
00:17:53
Daniel Brachfeld
It didn't, no. It was a promise and it never quite happened.
00:17:56
Joe Waltman
hu
00:17:57
Daniel Brachfeld
I mean, the reality is it's not... it's It's overkill for what is necessary, which is just you know knowing what's going on.
00:18:02
Joe Waltman
Yeah. Yeah.
00:18:04
Daniel Brachfeld
I mean, there's a lot of talk about it, especially in trade finance, and like um in-border trade finance, when goods are going from one country to another. But even then, even though a lot of processes exist that are somewhat manual, you know imagine someone at a someone at a port writing down, hey, what's on this ship?
00:18:25
Daniel Brachfeld
What's the true benefit of automating that? It's it's only incremental like for the um for the investment. so it so i mean It's a path that no one's going to get off of, as in eventually all that will be automated, but there isn't this ah killer app, if you would.
00:18:42
Joe Waltman
Exactly. exactly yeah What's the impetus to actually do it? yeah yeah well really Really interesting story.
00:18:45
Daniel Brachfeld
That's right.
00:18:47
Joe Waltman
and and it's it's ah It's great to hear these these careers that get you know very niche and very focused which which i and you seem to you know appreciate the elegance of of of your particular particular space.
00:18:55
Daniel Brachfeld
Yeah.
00:19:02
Joe Waltman
know Some of us, myself included, and and never really focus on anything, probably to our own detriment, kind of slapped in the wind for for you know most of our career.
00:19:12
Joe Waltman
um
00:19:12
Daniel Brachfeld
So, I mean, that was actually, you know, for all the knock you may have on McKinsey, anyone may have on McKinsey.
00:19:19
Daniel Brachfeld
McKinsey was great in that respect, right? I got to ah playing different industries, right?
00:19:24
Joe Waltman
yeah
00:19:24
Daniel Brachfeld
I did some charity work, I did some aerospace work, I did some fast moving consumer goods work.
00:19:25
Joe Waltman
yeah
00:19:33
Daniel Brachfeld
and um And then when I got into, you know, I can't name names, but imagine a large network based out of San Francisco, right? A large core network. When I got there and a large bank in San Francisco, um I realized, oh, you know what?
00:19:48
Daniel Brachfeld
This payments is kind of this, you know, it's a network, just like airlines are, a network of places to fly to and how to make money in.
00:19:53
Joe Waltman
Hmm.
00:19:55
Daniel Brachfeld
So I really like it. And in the end, it's not a very it's not overly complex. It can get pretty technical.
00:20:02
Joe Waltman
Yeah.
00:20:02
Daniel Brachfeld
right That's the only real complex part of it. But um at a high level, from a strategic level, money movement, ah lending is not terribly complex. It's just you know it's much more of an acquisition play, marketing play, things like that, which is very difficult.
00:20:20
Joe Waltman
Yeah, for sure. Well, let me ask you the the the same rapid question I asked everybody else, kind of a two parter. Is there anything we as the community can do to help you you know and in your brand new role or maybe other things? or And secondly, what might you be able to do to to help us?
00:20:39
Daniel Brachfeld
um Yeah, no problem. i'm um So um I guess a couple things that the community might do for me. I have a son who just left the house and is going to college at UCLA, right?
00:20:51
Joe Waltman
Oh boy. Mmhmm.
00:20:54
Daniel Brachfeld
And um he's doing really well, but he just won't take my advice. Right. So I'm not asking to get him a job or anything like that. I just, you know, is there a book or something or a blog or something that you found, you know, teenagers who've just left the house have really resonated with that's not, you know, goat or some type of sports betting or something like that, that, you know, could help put him on the right path.
00:21:21
Daniel Brachfeld
Right. not not Not that he's doing badly, but just think about, you know, career and things like that.
00:21:22
Joe Waltman
Uh-huh.
00:21:27
Daniel Brachfeld
So And as far as myself, no, ah you know, the the only thing is this, right?
00:21:28
Joe Waltman
Interesting. I like it. That's that's that's like the probably the most um tactical ah thing i've I've heard yet in that question. I love it.
00:21:43
Daniel Brachfeld
i'm I'm pretty bad about leaving the safety of New Jersey, right? I know a lot of a lot of people come to me.
00:21:50
Joe Waltman
Well, how are you feeling about the drones? well or let's Let's leave that off.
00:21:53
Daniel Brachfeld
ah Yes, yeah, yeah, Yeah, well, I welcome my alien overlords.
00:21:54
Joe Waltman
of the ah ah
00:22:01
Daniel Brachfeld
um But, um you know, I know people come to New York, right? And ah from NCI, which is always awesome to see. ah I, you know, I think the the, I didn't make it to the reunion, which really sucked. I was quite annoyed. I was in Boston on college tours with my son.
00:22:21
Daniel Brachfeld
to make up for it. I did sneak into the Harvard 2003 MBA class promotion and partied with them, which was fun. ah But it wasn't quite the same. So if anyone comes to New York, you know, look me up, right? I'll i'll try to make it out. And now I'm working in New York, right? I can't put one. So I'm no longer in the safety of New Jersey. so That's what I would like to...
00:22:44
Daniel Brachfeld
No, just continue saying that you're coming.
00:22:44
Joe Waltman
Yeah, notice, notice.
00:22:47
Daniel Brachfeld
I know Beth and I have tried to to connect for a few times, and each time I've been traveling, so I'll continue trying.
00:22:47
Joe Waltman
Yeah.
00:22:55
Joe Waltman
Well, ah that's a great it' a great way to to wrap it up. we would definitely I'll definitely let you know what when and if I'm and i'm in New York next.
00:23:02
Daniel Brachfeld
Perfect. I love it.
00:23:03
Joe Waltman
Hey, thanks so much for your time. Really nice to see what you've been up to.
00:23:06
Daniel Brachfeld
Absolutely. Thank you.