Brex entered YC as a VR startup. Three weeks in they realized they knew nothing about VR. Here is what they did next.

Henrique Dubugras and Pedro Franceschi were 22 years old when they entered YC Winter 2017.

They had already built and sold Pagar, one of the largest payment processors in Brazil. They were not rookies. They had processed $1.5 billion in transactions.

But they entered YC with a VR company idea.

Three weeks into the batch, Henrique went to the Consumer Electronics Show. He walked around for a day and came back to Pedro with one conclusion, they knew absolutely nothing about the VR market.

They were surrounded by people who had spent careers in hardware and optics and manufacturing. They had none of that knowledge.

They could have pushed through. They had $125,000 in YC funding. They could have shipped something.

Instead, they sat down and asked one question, what problem do we actually understand better than anyone in this batch?

The answer was sitting right in front of them. They tried to get a corporate credit card during the batch and were denied because they were international founders with no US credit history. They looked around. Every founder in the batch had the same problem.

They pivoted to Brex in week three. A corporate credit card built specifically for startups.

Three weeks to recognize a dead end & One conversation to find the pivot and The rest is a $12 billion company.

YC was not betting on the VR idea. They were betting on two founders who had already built a payment company from scratch as teenagers.

I have gone deep down and wrote up case studies on Pivoted founders, which has the early stories of founders who got rejected are underrepresented in the startup conversation, happy to share, if someone wants it...