Transcript 0:00 I believe we're a productivity company. I believe we're a workflow company. And where we compete where others do not compete well is thinking about the cost of people's time. Expense reports were a nightmare. 0:12 People wouldn't do it. Welcome to Fintech Brainfood Interviews with Eric Glyman. 0:29 For the first episode, I wanted to go big or go home. 0:32 I've used this company thousands of times in anecdotes to demonstrate what customer obsession looks like, and I have a whole shtick where I take screenshots of the Ramp product and show it to bankers because they can't be told what the future is. 0:44 They have to see a competitor do it first. Ramp has become known for expenses cards that just work. And while there are a few in this category, none have ever grown quite as quickly as Ramp, it seems. 0:57 And I've always put that down to some of the obsession. Obsessive on details like North Star metrics. How many hours have we saved per user? How many dollars have we saved per customer? 1:08 So I got curious, and I wanted to ask a lot of questions because it takes a lot of effort to make stuff look effortless. There's a lot to learn from how Ramp executes if you're in fintech or in a bank. 1:20 And today, Ramp is obviously much more than an expenses card, and it's got a competitive landscape filled with very, very competitive folks like Brex, to name one, uh, but also Mercury, Arc, and many others snapping at their heels. 1:34 So I wanna start with Eric and Ramp, but I also wanted to get into the industry itself. And if in a post-SVB world, is fintech here to stay or are you just gonna end up getting acquired by JP Morgan? 1:46 So Eric, welcome to the show. Thank you for helping me kick things off here. Simon, thanks for having me, and it's great to be with you today. Thank you so much for being with us. So very quickly, let's cover the lore. 2:00 How did you get to being on this podcast today? What's Eric before Ramp, and how does Ramp come about? So the company that I started just before Ramp, in many ways is, uh, the spiritual influence for what Ramp became. 2:14 It was a company called Paribus. The premise was very simple. 2:17 Let's say you bought something online at Amazon, Macy's, Bloomingdale's, whatever, and the price of what you bought dropped online, all these stores guaranteed that you could get the difference back. 2:27 So we built back in twenty fifteen what was a very simple email app. You would just link your email, your Gmail, Yahoo, whatever. That was all you had to do. 2:36 Paribus would then scan your inbox for receipts, track your prices of what you bought, and if you were eligible for a refund, just email the store for you. 2:44 The next day, you might wake up to an email for fifty, a hundred dollars, whatever back, and we kept a cut. Super simple business, and effortless savings was, was the idea. We launched that in May of twenty fifteen. 2:55 Within a year, we grew to a million customers, uh, and got what was a life-changing offer from Capital One, really the upstart credit card company in the US, to, to buy it. 3:04 After a summer of back and forth, we agreed to do it, and we spent the next two and a half years there, which I think were very critical, uh, to what Ramp became. I wanna dive into that. 3:14 That, that was brand-new information to me, but my experience of Capital One culture is they obsess over details. Is that fair from your experience on the inside? Yes. 3:24 It's, uh, the acronym is a little more unfortunate today, but they, they would use this term, uh, IBS, um, Information-Based Strategies. 3:32 And what they were really trying to do, uh, was could you take pieces of, of information in order to make whether it was better underwriting decisions, better marketing decisions, you name it. 3:42 Um, they, they were originally very famous for, uh, the insight that you could have sloping of risk. 3:50 If a customer was, you know, ten points below the FICO score needed to approve them for a card, you didn't have to hard decline them. You could be running tests. 3:58 You could maybe raise an interest rate, lower a term or duration, and playing with different variables in order to find more. 4:05 And so at their core, I think they really do drive based on heavy operational details, data experiments, and constantly trying to uncover the bounds of what's possible. 4:16 Interesting how that led to a bunch of insights, I'm sure. Do you use some of those principles in day-to-day life like this? 4:24 Where did the, where did the insight for Ramp come from, and, and what did you draw on from that previous experience? Definitely. Um, I think it was two things working in concert. 4:34 First was we were constantly thinking about savings and turning data into savings for customers. Over the two and a half years that we were at Capital One, uh, we scaled Paribus dramatically. 4:45 It turned into what's now Capital One Shopping, which is, uh, one of the fast-growing parts of, of, of that company. And we felt we were scratching the surface of what's possible, and I'll, I'll come back to that. 4:55 They didn't quite know what to do with us given we were an email savings company and they were a credit card company. So they said, "We'll put you in the credit card division and let you operate independently." 5:03 And it was fascinating for me. I was a fintech outsider. 5:07 I didn't really understand how credit cards and ecosystem worked, and I got to see up close what made the model so elegant, what made the company so profitable, uh, but also saw, uh, misalignments. 5:18 There were a lot of really smart folks thinking a lot about how do you get customers to spend more on their cards to grow purchase volume, which grows net income. 5:26 And there was lots of folks as well inside of the, the credit card division who were terrified of the rising costs of points and rewards and what it could do. 5:35 And so we're find-- trying to find ways to get customers to think the points are worth more and devalue it. Coming back to Karim and, and Gene and I, we, uh, were the savings people. 5:44 We'd ask, you know, customers, "Did you want points, cash back, something different?" 5:49 Uh, and if you really listen to them, usually what they would say is, "You know, I'm actually just looking for more in my bank account." And it felt that both sides were trying to outsmart each other. 5:57 Customers were trying to max the value of the points and, and take from the bank, and the credit card company was trying to get people to spend more than maybe they intended to. 6:06 And, and, and we just got stuck on this idea of what if there was a card and software, um, that was- Intending to help you spend less. 6:16 Um, a dollar n-never spent on something you don't need is 100 times better than getting 1% back on it. 6:22 Uh, and you might be able to compete on the basis of value, money and time savings, and break out of competing on price. So that was the original insight that led us to, "There might be something here." And then why B2B? 6:36 Why not consumer? All sorts of, sort of reasons. Uh, eventually, I, I think consumer is fascinating. 6:43 I think it's a couple sets of things, some of which is when you're, you know, really about to take the jump and start a company on your own, there's very few things that you can optimize. 6:52 You have to constrain a lot of variables, and I think one of the most challenging parts about starting a consumer fintech is the immense regulatory oversight, as well as the long and high risk, um, involved with doing it. 7:05 The way to drive it home is, you know, if you were to look at the annual report of American Express and their corporate card division, they had loss rates, uh, of about 0.1% per year. So $1,000 goes out, 999 come back. 7:20 You would look at, uh, in comparison, Capital One, maybe in the Main Street or consumer card division, all, all public, you might have $1,000 go out and maybe 950 come back. They would have about 5% loss rates. 7:34 And when you sort of think about both, it, it combined with the, the need to monitor, which we're doing internally from the get-go, it means that not only are you trying to find product market fit and make something that's useful, you have to deal with lots of unpredicted, you know, averages. 7:51 You know, the lie what actually happens, you might have 20% loss months and 0% loss months, a lot of unpredictability versus in the corporate landscape, simple, very clear, you're dealing with sophisticated entities on the other end, and it constrains the variables, uh, down to what we hope to compete on, which we can dive much deeper into, which is building a world-class product, just having great UX, fantastic workflows, uh, and competing where I think most banks are not excellent, which is making world-class products. 8:22 Yeah, and I think that world-class product thing, it's probably worth contrasting what expenses card always looked like. 8:29 I mean, if you're listening to this and you've never used Concur or SAP Expense Management, uh, you know, a few people were using Expensify. Talk me through that landscape and what it looked like pre-Ramp. Definitely. 8:41 So a lot of this is, is steeped in the history, which if you were a bank, uh, in the US, you were allowed to move money. 8:49 Uh, and if you were not, functionally, you couldn't issue a credit card, you couldn't open a bank account. 8:55 And so, you know, as the world went from no phones to flip phones to iPhones, your credit card, your bank never really changed. 9:01 And so when, when companies were running us this question of, you know, the IRS is requiring us to collect receipts for transactions in order to be comply with Sarbanes-Oxley, in order to keep good books and records, all, all that kind of stuff. 9:15 Amex didn't build it, Chase didn't build it, Capital One didn't build it, and so you'd have these aftermarket sets of expense management software providers sprouted up. 9:23 These are SAP Concur, Expensify, others that you cited. And when you follow that through to the user experience, what it functionally meant was you'd have companies issuing cards in one platform. 9:35 They would send it to their employees. The employees would get a login or a card or something in the mail. Then to go buy something, they would swipe that card, maybe look up a card number, whatever it was. 9:45 There's a 24-hour f- data feed delay, uh, between [chuckles] you know, when the bank ultimately sends it to Concur. So maybe you get your receipt. 9:53 You log in a day or two later, 'cause if you log in too soon, there's no expense there. You need to enter a bunch of in-information. There's a lot of loss of data. 10:01 You go enter, you snap a photo of your receipts, enter some details, all that, and then ping some manager to review it. 10:07 And so for one purchase, you have delays, and you have multiple sets of software, uh, involved just to buy one thing. Then, of course, you link it to accounting. We'll, we'll go into all that in a little bit. 10:17 We know this was crazy. You know, to buy one thing, it should be one place or ideally, you know, we like zero-touch experiences. Back to Paribus, it was an effortless experience to save. 10:27 Uh, we thought if you were, you know, on a first principles basis, if you were issuing the card, you could either, A, you could text the cardholder when the receipt is still in their hand. 10:37 You'd have the information from the network. There's no loss in data. It's a much easier job rather than taking an image and trying to associate what could it possibly connect to. You just verified it. 10:46 You have lots of details that can give you much higher accuracy. Text it back, and you're done. Or even better, what we're doing today, um, you can pull receipts directly from merchants. 10:55 You can pull receipts from Gmail, from Outlook, so it's zero touch. We can get into it, but you could, you could eliminate lots of steps out of this painful or previously painful process. 11:04 Well, nobody was doing product in that process. It was kind of the customer was the product manager trying to optimize it, and you'd use a third-party tool and trying to aggregate it yourself. 11:14 And often that customer was not the budget holder inside of the corporation, and often the person that worked in accounting was not the budget holder inside of a corporation. So how do you invert that? 11:26 I guess growing with growth companies helps, but what did your wedge look like when you were getting started in your early days of growing? I mean, this really was the wedge. 11:35 The context and the history is, is, is fairly important for Ramp's story because we incorporated in March, uh, of 2019, and at the time, the industry was already taking off. 11:48 There were competitors, you know, on the West Coast, middle of the country, who had raised hundreds of millions to billions of dollars of capital, and we were this tiny company out o- operating, uh, really for that first year out of an apartment in, in, in New York City. 12:01 Uh, and so if our strategy was we were gonna outspend, we were gonna acquire, we're gonna give points and, and all these things away, uh, we would lose. 12:11 And so we thought the only thing that possibly could work, it's, it's two things. 12:14 One, if we could align incentives, um, if we could truly design our business such that when we help the customer spend less money and time, we would do better. 12:22 But then the other part I actually think was more critical, beyond just being aligned and being able to be on the same side of the table It was to build an extraordinary product. 12:32 If we could acquire and, and work with some companies and have them experience that wasn't just good, but was, you know, to borrow the, the Apple Steve Jobs-ism, insanely great, [chuckles] um, that actually worked better, we might be able to have some word of mouth, some virality, all of that. 12:48 And so when you kinda come back to it, by the middle of twenty twenty is when we had finally cracked this. It was a card that could help you save. 12:56 We helped the average business cut their expenses by two percent per year, uh, at that time. 13:01 But the most interesting part was you could go to controllers and you could say, "You could replace this, you know, Expensify or Concur, the software you're spending five thousand dollars, ten thousand dollars a year on and you hate, uh, [chuckles] and that employees don't use, um, with Ramp. 13:16 It works. It meets all of the IRS requirements. We'll pull in receipts, um, more quickly and more dependably, um, at a higher throughput than what you can possibly do, uh, on your existing app. Try it and love it." 13:27 And very quickly, we started seeing in our, in our dashboards, when you looked at the places that new companies were coming from, it was heavily word of mouth. 13:36 Even to this day, in, uh, twenty twenty-four, about thirty-five percent of n- all new customers on Ramp can be traced back to other customers telling them about it at some point in the conversation. 13:48 Word of mouth and building great products is super relevant to how we grow. And so same is true for a lot of great companies, right? I mean, the early days of Monzo, they tell a similar story. 13:58 But it often, I find the old school banker will look at it and go, "But that's a, that's a credit card. We have those. We could, we could build that." They think about the financial product. 14:07 So talk to me about what great looks like, because it's kind of like trying to deconstruct athletic performance. You kind of, you have to make it real for people almost step by step. 14:17 So, like, what were you doing in the early days feature and functionality-wise that was different? Like, it's IRS compliant, it's saving you money. 14:26 Like, d- what were the things that really caught on, do you think, that people loved? 'Cause often they don't know how to tell you that, but what do you think it was? It's a great question. Um, there were a few 14:38 things that I think are relevant, one of which is, is maybe just stepping back. People think a lot in terms of just one point percent this, two X points on that, whatever. You know, how do these compare? 14:50 Now, that's a perfect analysis if people are working for free and they value their time at zero dollars per hour. But that's not the case. You know, people have salaries. 14:59 An hour of people's time could cost fifty dollars per hour. Uh, if you're working forty hours per week, hundred thousand dollars per year could cost well into the hundreds, you know, depending on who you're going for. 15:09 And when you start to remember, I think one of the, it's a core slogan for Ramp, "Time is money. Save both," it starts to become much more interesting. 15:18 And when you go back to this picture of what was people's lived reality, um, expense reports were a nightmare. People wouldn't do it. Everyone kind of resented it. 15:26 And, and controllers who were, you know, highly educated, smart people were reduced to traffic cops trying to get people to get their receipts in. 15:34 Going deeper, assume you finally get all these receipts in, you're not restating your books constantly to have journal entries and, and, and restate old, old transaction periods, 'cause people are turning in reports six months late. 15:45 Uh, you need to tag transactions. And so when you start going into some of the early features that really took off, these quality of life details, um, in the old days they were very simple. 15:54 Um, it would be, you know, people were working on Slack and Teams, and you could one-click a controller, remind everyone who doesn't have receipts, "Please turn them in." 16:02 Um, and instead of f- you know, writing, copying, pasting spreadsheets, one button, forty different, uh, Slack notices would go out to people with exactly the transactions they needed. They could upload it. 16:14 They were done. Two, okay, that comes in, uh, lightning rules. This was back in twenty twenty. Simple things of we saw that you categorize, you know, someone's in marketing and they are in the LA office. 16:27 Uh, you set rules to categorize it once, Ramp will remember it. You don't need to create lots of different rules, and we'll show you that. Uh, and so it's really starting to follow through the workflow. 16:38 I would pause on it because I think people think of Ramp as a fintech company, and we have a lot of expertise in moving money and risk assessment. We can do all that. I believe we're a productivity company. 16:48 I believe we're a workflow company, and where we compete where others do not compete well is thinking about the cost of people's time. 16:57 And we'll go deeper, but we've saved over ten million hours of work, and that matters to people. Well, I, I think it's an interesting North Star metric. 17:04 The only other one that I could, uh, immediately cite was, um, SpaceX uses, uh, dollar per kilogram in space, and it just really concentrates your mind on what feature functionality should I develop when you have this metric that very clearly demonstrates success for your customers that drives then that word of mouth sort of flywheel that kinda comes around it. 17:25 And you've, maybe this is my ignorance, but you're the only other company I can think of where I can go, "That is really, really clear." Um, and the insight, I can see how it, it kinda comes together. 17:35 So that, that's powerful. And those features are the kind of features that sometimes feel like they're almost, uh, to a banker, to the cynic, that they're gimmicks, right? 17:44 It's l- I've heard bankers call that stuff a good look and feel. But actually, that's the difference between hypergrowth and not hypergrowth. That's the difference between good unit economics and, and, and not. 17:55 But is there a fundamental tension between, uh, saving customers money and then you as a business one day being profitable? 18:03 Like, how do you get to a scale and a point where you have different, uh, experience dynamics, but that is a very profitable company? Like, how do you eventually move in that direction? How are these things compatible? 18:17 Very much so. And I, I just wanna pause on the previous line of questioning 'cause it's, it's so important, uh, and I think it's so underestimated by most companies. 18:25 And I think the world would be better if people paid attention to it. So I, I hope [chuckles] other companies do it. 18:29 Like, like I'll, I'll give you a detail from, from last month where, you know, today Ramp is used in addition for cards, bill payments, procurement, all that, well into the thousands of reimbursements daily. 18:41 One of the engineers started monitoring the logs of what happened when people were doing reimbursements. 18:47 Um, there was a slow function where basically we're verifying and validating that the receipt actually matched to the transaction in, in details. 18:56 And to fully automate it, our previous AI script took about thirty seconds to run. You think about that. Let's say it's five thousand reimbursements per day on that ballpark, something like that. 19:07 Let's call it, uh, thirty-five hours every single day being spent by our users across the base. They monitored the logs and started realizing there was a much faster way to do this without losing accuracy. 19:20 They took it down to about five seconds, so a gain of twenty-five seconds from thirty to five. 19:27 Now, for users, it feels much more magical, but when you start adding it up, every single day, that's about thirty hours, uh, of that thirty-five shaved off. 19:36 And you go back to what does that turn into, that's, um, about four hundred and fifty days a year for our users in time. They're not waiting for this to be logged and done. They're going back. 19:45 And these little details, when you're doing lots of reimbursements, really start to add up to a different experience. And, and I would argue people's scarcest resource in twenty-twenty-four is time. 19:54 There's, there's people constantly competing your attention. Uh, I think it's super important. And so, you know, you can feel it. I think it's the same reason when you open an iPhone, the box drops very slowly. 20:04 It seems crazy, but it says something that they care so much, uh, about what it's gonna be like to unbox it, that you know someone at the other end cares about the product. 20:13 And so if there's one thing I hope people take from it, it's that the experience is everything. Um, it really matters, and I think our industry has totally underestimated it. 20:23 The difference between good and great is always in the details. 20:26 And you-- the great athletes are the ones that, you know, you can get, uh, eighty percent, ninety percent of the way there, but to really be top performance, it's all the tiny details and the form fixes and everything that kinda make that big difference. 20:39 I'm actually gonna stay with you on product for a little while, um, and then we'll ramp back to, uh, ramp back. 20:44 We'll round back to the business in, in a little while, because I do think how the sausage gets made is the most interesting part of our business, um, and I, I'm obsessed with it, uh, personally. 20:57 So how do you think about the vendor stack and the process of making the product? Because frankly, you've, uh, outlined something where you're getting closer and closer to the customer. 21:11 That's one route, to my mind, my analysis of the market, is you have two choices in fintech. You either go closer to the metal or closer to the customer. Closer to the metal, you're more of an infrastructure provider. 21:22 You wanna be a specialist. You wanna be great at that. You're dealing in, um, the fine margins. You're dealing in scale. 21:28 The opposite is to get closer to the customer, obsess over every detail, go wide, but then perhaps, you know, can you also get closer to the metal at the same time, or is that a distraction from mission? 21:39 That's kind of my question. So how have you thought about who you partner with, how you partner, and how that enables you to, to scale? It's a really good set of questions. And so I, I think there are varying strategies. 21:52 Ours was certainly, and I think this has been consistent between both Ramp and at Paribus. There are companies that compete on completely new vectors of technology, uh, of making infrastructure that much more efficient. 22:07 And when you look at Ramp, it's actually c- recombinations of platforms that functionally exist everywhere, but put back together in such a way to be vastly more efficient. 22:18 I, I think there's many extraordinary businesses like that. I think you, you talked about SpaceX earlier and Tesla. I, I would say they, they famously work, work this way. Uh, they did not reinvent rockets. 22:29 However, they did make it vastly more cost-efficient and performant. Uh, and I would argue that Ramp was very much that way. At the very get-go, the idea of a credit card was very old. 22:41 Uh, the idea of, of sending a text based on some action was old. The idea of connecting an expense management software to accounting was not new. 22:52 But putting all of these back together, optimized for the experience of, you know, can you underwrite someone quickly, issue them a card, text their employees they need a receipt, connect it to accounting, and be done, had never been done before. 23:06 So it was reforming all of that. 23:08 And so in that context, what we were trying to solve for is what sets of vendors would allow us to be close to the metal such that we could issue this and generate this really well-crafted user experience, was super important. 23:22 And then in critical areas that we needed to compete, and, and, and we can come back to that, do we have a deep enough relationship such that if we need to modify and change things out, we could? 23:33 Something you had asked as we were kind of preparing for, for this was like, how does it look? And, you know, there's this set of vendors that are, you know, pretty important. 23:40 If you want to issue cards, uh, at the time, we started just on Marqeta. Uh, we work with Stripe as well. 23:45 They're both fantastic for card issuance, and what was really unique about their capabilities versus the Tsys, the, you know, the Fiservs, other folks, Galileos that, that were there before, they allowed just-in-time, uh, transaction approval. 23:59 So we could set card rules, and we were able to get to the metal and modify that. We had to underwrite folks. 24:05 Um, we underwrite folks based on cash balance, so you could, you could use a Plaid, a Finicity, a Teller, something like that. You know, we wanted to create, uh, credit tapes. 24:14 Some of it we built internally, later used Finley. We, we can go through all, all the pieces of it. 24:18 But beyond just picking market leaders, part of what we looked for was would people at the other end, if it was critical and we needed to modify it, would they care? 24:26 And in some cases, if you could be their most important customer or their fastest growing, they would actually build things for you. 24:33 Uh, and so we, we actually, it, it's funny, like, we, we don't outsource vendor selection. It's actually something still you'll even find Karim, who's my co-founder, and, and me, uh, in certain areas weighing in on it. 24:44 I think you can really get asymmetric upside by picking the right partners early on to not just help you restitch together the sets of technologies that you need to do. 24:54 But that you can actually even bend, uh, and inflect the roadmaps of these companies to be more useful to you. If you can get both right, you can do more with less. 25:03 Our engineers can be working on the user experience, making things more intuitive, not on both infrastructure and product at the same time. So that's what we're trying to get to. 25:12 Packy McCormick wrote the great piece, uh, APIs All the Way Down, and described Stripe as hiring the collisons to run your finance team. Uh, it's like ha- a department you hire as an API, is the phrase I've used. 25:24 But the department you hire as an API is not something that is just an API. There are humans over there, and you can help drive their roadmap, especially if you're driving them significant volume. 25:33 So that-- it's an interesting way to think about partner with a capital P rather than, uh, the word partnership, which gets thrown around, which actually means we've signed a contract, and there's some sort of sale and PR around it, which is a, a fundamentally different thing. 25:45 All right. So the other side of, um, product, I wanna think about, like, what does your dashboard look like as you're looking today? You've mentioned a number of the metrics. 25:54 What are you looking for at the CEO level, and what are your product managers thinking about day to day? I think something that gets lost a lot, uh, in company building is people look just to outcomes, uh, and outputs. 26:06 And at the end of the day, as founders of a company, that is how anyone you're asking for, for money or, or time may, may evaluate it. So outcomes matter. How quickly are you growing? Which cash balance were you build? 26:18 Like, there's a lot of outco- outputs you can drive to. Day to day, we do not look at output metrics. We look at inputs. 26:26 Uh, one of the critical things we did really early on was trying to really map and understand what is our business equation. How does it really work if you were to distill it down to its most important elements? 26:39 And, you know, we could describe a few different ones for flows i-if that's useful. 26:43 But what we do is once you really well understood your business, all you would be doing is monitoring how are your leading indicators, your inputs tracking each week. Because they're much more tractable. 26:54 It's very hard to say, "You know, I wanna grow revenue by, by ten percent this week." 26:59 Extremely hard because revenue, in our case, might be a product of how much did people spend, which relies on how many people signed up, what percentage of the cards have been deployed. Are people used to it yet? 27:11 What are they buying? Like, there's all these things. Is the marketing effective? There's all these things that happened months ago that's finally leading to the outputs now. 27:18 And so it drives team crazy to focus on outputs. But I can have a really productive conversation of how many people, uh, dropped their email this week. How many sales calls did we have? How many sign-ups? 27:29 What was the conversion? And I can start going down to folks in the business and start to have really useful, uh, sets of conversations of how do we improve that. And, and, and that, that goes all the way through. 27:40 That, that'll go to, you know, how is the customer service experience going? How efficient are we per, per ticket? You name it. 27:46 But I, I actually think to drive incredible outputs, you have to clearly model your business and manage to the inputs. Double-click on how you th- did that initially. 27:57 I love that phrase, um, thinking about your business equation. Do you have an example of your business equation? 28:03 So it sounds to me, if I, if I could just say it back to you, that you think about, like, the number of sales reps calls, the number of whatever, the n- like, there are all of these, these inputs that create the equation. 28:14 But, like, just work one through for me. A hundred percent. So maybe I'll start with like th- a- and this was in our very first board deck when we were four months old. 28:24 Uh, we tried to model actually how does Ramp's business work, because we were new to, to fintech. 28:30 We were trying to onboard people who never knew about how do credit cards work, and we tried to distill the logic and what we were gonna do down really simply. 28:38 So if you wanna grow, let's say, you know, net revenue margin, it, it's really a factor of, of maybe three to four key variables. One is purchase volume. How much are people putting on your cards? 28:49 And you could talk about what leads to purchase volume. Times interchange rate. How much are you collecting per swipe? Um, less what's the cost of, of funding, um, processing. 28:59 For us the, you know, if you wanna make, um, three million dollars, you might have to go through a hundred million dollars, so it gets progressively high. 29:05 And if you kind of go and, and take those, the purchase volume times interchange less funding costs, you get to maybe a, a, a simple net margin. 29:13 You could always add rewards cost if you're doing that too, but you kinda get it. And when you started saying, "Okay, how do all these things work and how do they improve?" Something interesting starts happening. 29:22 If you wanna grow purchase volume, it's straightforward. Bring more customers, larger customers, higher percentage to spend. Great. If you wanna grow revenue, grow volume. Next, interchange rate. 29:32 Um, it weirdly gets higher and higher the more volume that you get. Um, makes sense. You can negotiate for more maybe with partners. And so strangely, if you wanna grow interchange rate, grow volume. 29:43 Funding cost, if you go to a bank and say, "I wanna borrow a hundred million dollars versus ten million dollars," you almost certainly will get a lower rate. 29:49 If you borrow a hundred, um, you'll have lower losses, which, uh, so if you wanna lower your funding costs, grow volume. 29:55 And so if you start actually observing really what are all these things doing, how do they interplay, there was one variable that mattered way more than most, which was growing volume. 30:03 And so all we had to think about is what can we do to make a product that people will want such that we'll have, you know, Ramp as a card of choice for people to use. 30:11 Then you can start going deeper into what are the drivers of volume. Um, that's sorta straightforward. It's, you know, it's how many customers do you have? How large are these customers? 30:21 Uh, what percentage of maybe their, their budget, um, their card budget are they spending with you? And you start going into, like, what drives all this. 30:30 And then eventually you can go down into, okay, um, you know, I have a, a sales development representative. I have an account executive. Uh, I have some onboarding flow, and I can start actually mapping this out. 30:41 I can see a relationship with the number of meetings that someone has, uh, and the number of closes that we have. I can see, you know, how effective are we if we have a hundred deals come through. 30:50 Are we closing five or ten? Why did we win? Why did we lose? [chuckles] Um, so on and so forth. 30:55 And by then you can break it down where suddenly an SDR knows, like What I need to know is this, and if I do this job, um, I can focus on excellence and getting down to getting, going from eighty to ninety percent to a hundred percent excellence, uh, and you're no longer back to your, your football analogy and sports analogy, Simon. 31:13 Like, I'm not h-here telling, uh, my team, "You're gonna train today to go in the Super Bowl." All we're doing is saying, "You know what? 31:21 We're gonna run, uh, a hundred meters, uh, in this time, and we're gonna speed it up. We're gonna lift this much weight, and we're gonna lift five pounds more, then 10 pounds more in doing that." 31:30 And you can get down to a level where you can finally do something about it. So I'll get off my soapbox, but I, I hope that's useful in, in getting down to it. 31:37 I run a weekly rant on purpose because my soapbox is where I live, and I, I'm, I'm there with you on that soapbox. Uh, 100%. 31:45 Uh, the idea that it's, uh, about progressively getting a little bit better out of each of the core metrics. The head of sales at Sardine, Miles, is a sports guy, right? 31:54 And I think sports analogies do work really well because successful people, successful teams have a lot of similarities to them, um, and the ultra-successful, ultra-competitive spaces kinda, kinda do that. 32:06 So, um, to round us out on product, how do you think about who owns feature development? What does A/B testing look like? How do your product managers get something in the hand? 32:16 Uh, what, what does that look and feel like day to day? So it's a combination of things. So one of the most useful things we did early on is trying to back into, okay, what are the outputs that we're trying to solve? 32:27 What's the mission of the company? 32:29 Maybe in the early days we were trying to back into maybe this upward goal of purchase volume, but what was over all of it was, you know, if we built something that's useful, uh, people will spend more with us. 32:39 What's useful, we believe, and we, we still very much believe, uh, a product that makes it easier for people to not just spend, but to spend less money and less time, um, was very important. 32:50 And so, uh, if we got that right, we believed it would drive purchase volume, which would drive our revenue, which we could optimize a lot of it. 32:56 So everything was, was sort of anchored to this upper level goal of how do we increasingly save people money? How do we increasingly save people time? 33:04 Now let's go into features, um, and like who, [chuckles] who owns it, which is ex-exactly, you know, what, what you'd ask. 33:10 So if you're starting to study this question of like, where are our buyers, finance teams, uh, maybe business owners, um, spending too much money and time, you can start really studying this question of on a card today, where is waste coming from? 33:23 And you may be able to go and turn this into sets of features. People can post stuff and see, right? And, and we can go into a framework to, to kinda test this. 33:30 Mechanically, what we're trying to do is first have a product that works, get it into people's hands, then we're getting lots of areas of feedback along the way. Product is the one often driving, uh, the roadmap. 33:41 We're saying, "Here's the goals. Here's what we're trying to go and amplify up to." Uh, engineering is, is working to figure out to do that mechanically. We're translating it in, in, into, into tickets. 33:51 Um, but what we're trying to, to, to really measure against, and every week we have sprints, and when we're running them, they're in, they're in two-week increments. I would say what's we try to do is do a couple things. 34:02 First, drive outcomes. Uh, how much time and money did we save? How much did we ultimately release? Um, but what we're measuring is, and really tracking internally is, is two things, you know, beyond the outputs. 34:14 First, inputs. Um, are we good at understanding what we said we were gonna do is what we actually did? It's important, I would say, in driving a sense of, of just, you know, consistency and clarity. 34:27 So a product manager can own the roadmap, um, but they can work directly with engineering to ship it. 34:32 They have this North Star set of metrics that they know they're looking for, uh, and you're kinda trying to be data-driven about how they push that out to production. 34:41 And I guess then feedback is, is everything, whether it's coming in the data, whether it's coming directly from customers, whether it's coming that way. And are the product managers hands-on with that? 34:51 Are they working with customer success? Like what, what does that look and feel like? Yes. 34:55 So for example, if you get an, an NPS survey from, from time to time, Simon, and if you put like a, you know, a bad rating on one of the products and ask, you know, "Zero to ten, how useful did you find it?" 35:06 A product manager will reach out to you and ask you for a few [chuckles]... And so if it's an area of ownership for a, a product manager, uh, and you were having a ne-negative experience, you will get a reach out. 35:17 Customer experience and tickets, all that is not owned under operations. It reports into product. 35:24 Uh, we believe that every time that someone writes in with an issue or some paper cut or speed bump, we think there's ten to a hundred times as many customers who had that i-issue and never told you. 35:34 When you go back to we're trying to save people time and money, you have people who are organized and oriented against this. 35:39 They're trying to, you know, every ticket is, is, is a sign your product is not as intuitive as you think it is. 35:44 We're trying, you know, if, if you put, you know, customer experience under operations, an SLA might be, how quickly did you solve tickets? 35:51 If you put customer experience under product, the question is, how can you make these problems go away? Which is fundamentally different to how it was organized historically. And I think the... 36:00 I, I love that idea of, um, being obsessed over paper cuts and, as, as speed bumps. Like, those are the things that are the clues to where your, where your churn risk is gonna come from, right? 36:11 And, and that's, those are the things that you can do to get better on product. 36:14 Listen, we could probably spend another two hours going on this, so I'm gonna have to pull us away from product 'cause I'm curious about some, some other things. 36:21 Just to, just to kind of round us out a little bit, I wanna get into, like, your observations of the broader industry, starting with your, your competitive landscape. Like, B2B Fintech, kinda crowded. 36:32 Don't know if you've noticed. People seem to be attacking it from everywhere and everything. Um, what gives you the right to win, and where are you trying to get to with that? 36:41 I mean, I, I think it should keep getting busier. 36:43 I, I think despite Fintech being arguably first or second largest part of the US e-economy, uh, financial services, you know, healthcare and, and financial services being so large, it's, it's been concentrated in a set of, of players who, uh, are not innovative. 36:59 I, I think it, it actually has a lot of room to go and a lot more room for addition, so I'm excited about it. When I go back to Right to Win, we tried early days to think about what made our competitors great. 37:11 And, and I actually think it's having the humility to, to think about, you know, assuming our competitors are very smart and are very extremely well run, what do they do well? 37:21 'Cause I think at the-- uh, underneath it all, it's, it's often true. And we'll start with the card in industry. I think American Express is one of the great brands, top ten brands of all time. I, I really think so. 37:32 I, I think if our business plan was we were gonna do marketing and branding and points better than them, we would get schooled. I think Chase, amazing at distribution. 37:41 Somehow, some way you might find yourself as a Chase customer or walking into one of their branches. Capital One, amazing at risk and underwriting. 37:48 Um, it's not to say we didn't think about these things, but the idea that that was gonna be our edge and we were gonna do that better was gonna be tough. 37:55 What they all have challenges around, uh, there's both good reasons and perceived reasons internally why they're slow, but this was one of the things I most viscerally felt at Capital One, was it is extremely hard to iterate on technology and on products. 38:11 There's a lot of reasons for it. People may be worried about data architecture. Often things aren't really built internally at these companies. 38:18 There's a lot of consultants and clients outside of it, and so mechanically, even if you wanted to, you couldn't. 38:23 But we said, you know, what frustrates people is, is not that they can't make a purchase, that they can't close their books on time, uh, is that they're not, that they can't spend, it's that they're spending too much, uh, on sets of software. 38:35 We have to be able to build a better product that saves people time and money better than they can. And so when you go back to even what we're organized around is how quickly can we ship product? 38:44 How much time and money do we save people? 38:47 And my view is be g- be fine at the rest, uh, learn and understand what others are doing very, very well, but have a zone of excellence that is both important but very structurally hard for your competitors to deal with. 38:59 Uh, you might be able to build something that is new and, and, and different and, you know, I, I think it's a big part of the story. Make that real for me. 39:07 What does, what does shipping velocity look like for you day to day? Like, what's that experience? What's a good week and a bad week look like in terms of, I don't know, features, commits? 39:16 What, what, what's, what's the ballpark look like for you? I mean, in terms of major releases in twenty twenty-three, I, I-- we had a hundred and fifty, uh, and we can go to, to what those, those look like. 39:25 In terms of minor, it's, I mean, shipping a production is during a week, dozens of times per, per day. And so it, it depends, right? Like I was at an event, um, a couple weeks ago. 39:36 Someone said, "I, I love the app, but you know, when I go to hit a memo, it's right below the screen. I'm on an, I'm on an old iPhone." And we said, "Yeah, geez, you're right." And I, I sent it to, to the iOS team. 39:46 Uh, that night, you know, we pushed a fix to the App Store, you know, and it was done. 39:49 And, and I think if it's simple things that are fast, um, high degree of impact, short time, I think you should completely minimize, um, you know, time. 39:59 I think that for longer releases that deep maybe will affect, you know, hundreds of thousands of, of people, it, it should be very well tested. And so I, I would apply a different standard to each. 40:09 There's, there's a difference between how quickly you can get to production and how quickly you should get to production. 40:14 Uh, if I were to speak to the folks at New Bank, um, you know, they, they often say the same thing, which is, you know, that you could be shipping multiple, hundreds of times per day if you need to, like if the shit really hits the fan. 40:24 Um, but also you, you shouldn't ship everything that quickly. 40:28 But what's-- the reason I highlight that is because, um, you know, I speak to banks who are trying to get to out of a quarterly release cycle into a monthly, from a monthly into every two weeks and, you know, this is, this is just kind of a different world that you live in from the incumbent financial institutions, and you're not necessarily-- uh, what I heard in you sort of opening about the competitors is you're not necessarily worried about, uh, the B2B Fintech companies because they're sort of competing to do similar things. 40:55 You're worried about the incumbents and, and how do you, how do you have a competitive strength there? Which, which kinda makes sense. 41:01 Um, and you also sounds like less worried about what's going on outside the window and more worried about customers, which is probably a good idea. But what are the material risks to Ramp? 41:10 Like, as you look out now over the next one, three and five years, like, what are you, what do you worry about? What's keeping you up at night? 41:17 I think when you're a founder, it's, you have a visceral reminder of, of this every day, but all a company is, at the end of the day, is the collection of people. That's it, right? 41:27 You can add capital, you can decide how you spend your time, but it's, it's just like, are you attracting some of the world's most talented people? 41:34 Is there a clear North Star, and do they feel like they're actually doing the best work of, of their lives, full, full stop? 41:41 And so what I fear is the day that we lose that, uh, that suddenly extremely talented engineers say, "You know what? I, I, I don't think this is a company worth my time. 41:50 I don't think these problems are important enough, and I'm gonna go somewhere else." 41:53 And, uh, sure, you can, you can grow, you can make p-profit, you can optimize costs, but to build something great, um, I think being a tes- a destination for, you know, extraordinary builders and, um, engineers, designers is, is super important, I would say is, is the biggest thing. 42:09 That's a powerful statement as a person who's worked in multiple big companies and smaller companies and seen that transition, um, across, across various ages of company. 42:20 And, and I think that's something, uh, I mean, again, not to hat tip them too much, but at Sardine, one of the things, the reason I joined was primarily the people. Like great everything, but have you met Supes? 42:31 He's lovely. 42:32 And have you met the people around-- And that's such like a big thing when you're a founder and there's, there's hard things, there's double hard things, and there's responsibility of CEO and founder, where you feel like e-everyone's your family and you've hired these people, and when they start leaving you it's hard not to take that, that kind of personally, I guess. 42:47 But I, I'm curious what motivates you and the team? Like is this North Star really compelling to somebody who's new, or does it feel a little bit like you've made a really great story out of bookkeeping? 42:58 You know, like is this, this should be dull. This should be not saving lives here. Like, how do, how do you get people motivated about this? How do you stay motivated by it? 43:07 Well, I mean, I, I think back to the why is SpaceX a, a great company. We, we, we talked on it a couple times. They certainly have made advances in their field. 43:16 The biggest is they've made the c- you know, the cost per kilogram [chuckles] you know, to get something into space drop dramatically. 43:23 It's putting things back together in, in orders, and it's the small details, it's the boring stuff, I would argue, that suddenly means we have multiple launches every week [chuckles] from, you know, people are talking about going to, to the Moon and Mars again. 43:38 And I think that it, it actually is the mundane. Uh, when you think about what creates wealth, it is productivity gains. [chuckles] Um, it's allowing people to do much more with less. 43:47 And when you think about, um, creation of, of, of wealth and, and improving lives, I think there's an enormous benefit. And I, I go even deeper. 43:55 Like, I grew up in Las Vegas, um, and I was thrilled to learn a couple of months ago there was a charity organization out, out there, uh, not a partnership for, for homeless youth, and they're one of 20,000 plus customers that, that, that use Ramp. 44:09 Um, and they use it very deeply. It's, it's a small team dealing with extremely hard, uh, and, and, and personal problems. 44:14 And the team, you know, the account manager was spending time with, with them, and I'd be happy to, to, to send you what, what they shared. 44:21 Um, they made the rounds kind of internally, but what she said is it, it made the difference. You know, it took what used to take in terms-- There, there's a lot of governance that, that goes into running a nonprofit. 44:30 What used to take twenty to, to sixty days to clear a purchase to get the requisite approvals to deal with a youth in crisis who it's the center of their life to now it's, it's days. 44:41 And they're spending time not dealing with the internal crap and cruft. Um, they're instead actually pursuing their mission gets us really excited. And I, I, I think about at the end of the day, what are we? 44:54 You know, if our mission is to save companies time and money, and we're successful in doing that, and we're al- giving our, our customers more time back in their weeks to deploy it towards their mission, more money they can use not on wasted SaaS subscriptions or, uh, buying things they don't need, but towards their mission. 45:12 I think in some sense, we're an amplifier. We're part of these companies' missions too, and, uh, I think making the world more productive. So we, we get real excited about that. 45:21 The ability to ground it in real life and real customer stories is, is kind of powerful. All right. Let's, let's look out over the next, uh, time horizons. W- pick your favorite. 45:30 Like, uh, what are your priorities over the coming days, weeks, and years? Like, what, what's next for Ramp? 45:36 'Cause you guys do a lot more than expense management today, but, um, might be worth just sort of talking through some of those other products and then, you know, what does expansion look like for you? Sure. 45:45 We're known for, of course, cards, expense management, accounts payable, uh, extremely quickly growing, which we'll go, go deep into. Uh, procurement, um, is something we spend a lot of time. 45:55 When you're dealing with a, a ten thousand plus, one thousand plus employee person organizations, how purchasing decisions get made. Um, and so of course, we have lots of direct products like that. 46:05 We do a lot, um, on accounting automation. Price intelligence is one of the most important areas of investment. 46:11 It's not just, "Hey, you're buying a Salesforce license," but how does that compare, uh, to the rest of the economy? Think of it almost as a true car or a Waze for, for buying things. 46:22 What I would say over the coming years becomes really important, just as we went from expense management and accounts payables, it started with controllers saying, "This is making my life so much better for card and reimbursement purchases, but I spend a lot on bill payments and checks and all that too. 46:39 Uh, your accounting rules help me save time on this. I wish it helped me save time, uh, on these other area of purchases." And we just follow the customer home. 46:46 We saw what they were doing in their workflows, and we started adding. 46:49 And so you get a compounding effect, not just within a product, but as we're launching new products, we don't just wanna add new SKUs and lines of business. 46:57 We wanna reduce the number of things, uh, and tools that people need to use on the other end. It's what's underlying. 47:03 And so there's lots of areas we, we wanna unders-- you know, help people get more out of their procurement spend, their travel spend, the yield of, of what they're, they're making on the accounts to, uh, so much more. 47:15 Uh, when you think about all the paper cuts that steal, um, money from companies' bottom lines, um, we wanna help plug it and, and increase efficiency of their systems. 47:26 Maybe speaking selfishly as somebody in the United Kingdom, don't know if you noticed the accent. Um, is the job to go global, or is there still so much room to run? I guess the answer is following your customers. 47:35 If there's enough demand, you'll follow them there. But, like, how do you, how do you think about that kind of expansion? Is that even on your radar, or is that something way beyond? So today, I looked this up before. 47:45 Over the past thirty days, Ramp customers spent in, in over, I think it was a hundred thirty countries. We move money, reimbursements, payments abroad. 47:53 So in some sense, like, we can support global, uh, great companies like Shopify, who, you know, headquartered in Canada, operations, uh, all around the world, functionally support, uh, these organizations. 48:06 There's this interesting other test of, okay, what about Ramp UK for UK-based companies with a UK-based Salesforce? When are we gonna get into to that? 48:15 And so there's, there's, there's two sets of things that we're trying to, to trade off, um, and, and think about. One, can you just be good, but not just good, but truly excellent is, is a very hard test. 48:25 I think in the US, if-- it's public, we generate hundreds of millions of dollars of revenue. 48:31 Our market share, it's debatable if it rounds closer to zero percent than one at this point, but no matter how you cut it, we have ninety-nine percent plus of the market to go. 48:40 I think there's a lot of strong draw to stay focused on true excellence and, and becoming the, you know, the namesake. I do think that international is extremely interesting, um, because a lot of... 48:51 A- at some parts of the market, a lot of the pain point for global companies, and, and again, I, I'm in New York, um, you're in the UK today. 48:59 Business is much more done like this with, with people collaborating from around the world. And as you get to larger companies, it's inevitable. So a lot of the pull from the business is supporting multinationals. 49:10 And at some point, I would say, look, I- I think we can't have the impact, um, that we want to do without going abroad. It's just really a question of order of operations. Makes complete sense. 49:21 So my question was partially selfish as somebody who, uh, operates sort of multiple accounts from, uh, multiple parts of the world. 49:28 But, you know, Sardine is a Ramp customer, so, uh, I do get to experience the product day to day, so there's that. Um, is there anything I didn't ask that you wish I had, uh, just to kind of round us out? 49:40 I think today was just, just fast. Like, I really enjoy-- I hope it's useful for people. 49:44 Were there aspects of the conversation, Simon, that, that you wish we had time to get into that maybe we glided over or we want to double down? But I, I thought this was actually pretty expansive. 49:54 Yeah, no, I, I wanted to spend more time on the product, um, and we did, which is awesome. Um, and I nearly skipped past it, so I'm glad we did that. 50:02 And the other thing is, uh, you know, we could talk forever about what life was like after SVB, but I'm sure they're gonna make a movie about that or a documentary at some point. 50:10 So we'll, we'll, we'll just save that for the documentary version. Um, so no, uh, if that's the case, then I'll round it out. Uh, Eric, thank you for joining me. Thanks, Simon. It was awesome. This was huge for me. 50:22 Like, I'm a product-obsessed guy at heart. I get excited by what's possible. Uh, I love conversations where I get to learn, so this, uh, really meant a lot, Eric. Thank you for joining me. 50:33 And thank you for listening if you are listening to this. Remember to tell your friends to leave a review. It helps others find the show. And remember to tell everybody that, like, Fintech Brainfood has a podcast now. 50:43 You can find me @sytaylor on Twitter or the blog at fintechbrainfood.com. And if people wanna learn more about Ramp, where do they go, Eric? Just visit ramp.com. We'd be thrilled to help you out today. 50:55 Thank you ever so much. 50:55 [outro music]
