In 2008, when Ramp CEO Eric Glyman was an undergraduate student at Harvard, he spent his days during the academic year studying Economics and Mandarin Chinese and his summers interning at financial firms like Houlihan Lokey—fascinated by the rapid growth of economies abroad and the unique opportunities that existed for someone with the right financial experience and language-speaking background.
“I went back to China every summer; I thought the place was fascinating,” Eric tells me. “And there were a lot of years I thought I was going to spend my whole career out there.” But after reflecting on his experiences, working on financial restructurings in East Asia just didn’t feel like a differentiated path for him.
And, at the time, working on a startup wasn’t obvious either. In his early 20s, Eric didn’t know he wanted to be an entrepreneur. The beginnings of his first company, Paribus, came from wanting to save money on flights and seeing how software could automate the process of contacting airlines and invoking their own purchase policies.
After working on Paribus with his cofounder Karim Atiyeh (now also the co-founder and CTO of Ramp) for two years, their company was acquired by Capital One, where they spent another two and a half years post-acquisition continuing to scale Paribus, which was merged into Capital One Rewards, and working in the US Cards division. Having the chance to think more about cost savings and credit cards, Eric and Karim decided to leave Capital One in early 2019 to start what would become Ramp, this time involving their long-time friend Gene Lee as a third cofounder.
In less than four years, Ramp—a company offering corporate cards and an expense management platform with a unique goal of helping businesses save money—has grown to well over nine figures in revenue, over 10,000 customers, and $1.4 billion in venture funding from the likes of Founders Fund, D1 Capital Partners, Stripe, Conversion Capital, and others, valuing it at over $8 billion as of March 2022 (when Ramp was just around its three year mark).
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I recently had a chance to sit down with Eric at TechCrunch Disrupt to learn more about how he leads Ramp’s team of over 400 as CEO and dive deeper into the tactical elements of the company’s rapid growth in a hyper-competitive market amidst a plethora of legacy players.
Steven Li: Ramp and Paribus’s core businesses are pretty different in most ways but what would you say were the most important learnings that carried over?
Eric Glyman: There’s a ton of carry-over. I’ll share a bit of the product narrative and some of the company-building stuff. A shared question that we asked at both companies was how we could use data on people’s behalf to help them spend less and save more money. At Paribus, we built software really rapidly to cluster and organize data, which helped us file refunds to help customers save tens to hundreds of millions per year over time.
That approach we now use to do price benchmarking shows customers that actually they were spending money on several sets of project management software and if they organized the structure then they could get more insights back.
More generally, there were times at Paribus when I’d spend 10% of the week’s bandwidth and only be able to get 20 users, and Karim would just post something on Reddit and get 400 users to sign up. From that, we learned that the inputs and outputs are very nonlinear—that there are some things that are just dramatically more effective in your business.
At Paribus, we learned this lesson in a lot of different ways and it taught us a lot about how to be deliberate around fast operations, what inputs actually lead to outputs, and killing things that don’t. I think a lot of jobs don’t work that way and imply that if you put in the hours it’ll be fine.
One other lesson that carried over was to do right by people: treating them really well and being more generous on equity and ownership. There, what we learned at Paribus that continues to ring true at Ramp is that the best people and some of the most expensive hires in the short term are actually the least expensive long-term because you come together and you create so much value as a team.
A lot of founders just look at benchmarks and they just say “Well, here’s the benchmark and I’m gonna pay exactly that.” It’s good to know the benchmark but it doesn’t get you the outliers most of the time. For us, a lot of the team is pretty young, but we try to find people with super steep slope and spiky personalities and prioritize that over intercept. Often people have real gaps and that’s okay. As a founder, you can construct the right team to work around people’s gaps and make sure that their skills are complemented.
Post-acquisition, you and Karim ended up spending a few years at Capital One. Can you also walk me through how that time might have been meaningful to your later journey at Ramp?
We were bought by the credit card division at Capital One, and so we got to learn how the business works: what makes it great, nice and profitable, but also the thinking around how to get customers to spend more money or more points.
When we started Ramp, that experience made us really think about how we could help people. We would ask our customers about points, cash back, rewards—you name it. But we found that people would normally say that they actually wanted more in their bank account. In that way, it felt that the incentives of credit card companies and people were very misaligned—that each was trying to make the other worse off. We felt like by designing a card to help people spend less, we could help customers get more of what they were looking for.
Being in the authorization layer is a crucial part of what Ramp wanted to build, so having the corporate card component down as quickly as possible is probably the first step. Can you walk me through what goes into getting a corporate card into the hands of a customer and what the timeline looked like?
I think we were one of the fastest ever to do it. If you look at the amount of time it took my former employer, Capital One, to do it, it was literally years needed. Whereas with all the innovations in fintech, I think we were approved by Visa on day 50 of Ramp’s existence.
And I think that our first transaction on the Visa network was on day 60 or 65. It’s an intensive process and part of what helped us go really quickly was the experience we had had in the credit card world before at Capital One.
We built fairly robust API interactions and went live with Marqeta. We brought over the thoughtfulness around different levels of insurance for us, our customers, and the bank. We needed to set up a funding structure as well. Every time a card is swiped, it needs to get funded, and so we needed capital upfront.
The form factor of corporate cards hasn’t really changed and so, early on, we felt that differentiating by providing a card that would actually save customers money was incredibly important. So we focused almost all of our energy on that.
Why did Ramp decide to go live with Marqeta instead of working directly with the card networks? And is there a plan to be closer to the metal and eventually own that part of the stack too?
The interactions with Visa and with the merchant are important but when we considered what was most interesting to our customers, the unique value we added was the part of automating their expenses.
There’s a magic moment of turning on an email integration, going to a Square merchant, swiping your card, receiving an e-receipt that Ramp picks up within minutes, and then filing a hands-free expense report. That’s where we have a big edge.
Marqeta’s costs are pretty reasonable for what they do and that gives us the space to focus very deeply on building the right features for our customers. We’re able to be in the authorization layer and Ramp, today, is the only corporate card in the world that we know of where you can one-click lock a merchant, for example. These edges come from picking wisely between where to build and where you don’t.
Now, Ramp has a wide variety of products, but back in March 2020 when Ramp first launched publicly, what would you say were the must-have features? And what was the process for determining what those features were? Some context that I want to add to kind of guide the question a bit is that when Ramp entered the market, there were already lots of players in the market and the differentiation for Ramp was to help customers spend less (i.e. it’s insufficient to just launch another corporate card). How did you think about this challenge?
Yeah, we thought about it pretty intentionally. We actually onboarded our first customer in August 2019. And so we had customers and were working through to understand the experience, even prior to launching publicly.
Our bar for launching publicly was to have a card designed to help companies spend less. It felt a little bit like opposite-day in some ways, given that most credit cards are fundamentally designed with the idea to get customers to spend more money and earn more points. “We’ll give you 7x on this, 4x on that, 2x here.”
Our belief from talking with customers was that points are marginal. They don’t change the long-term outcomes of companies. But helping companies be financially more efficient was much more important.
We wanted to launch this premise and built everything from the ground up to save companies money. We did this by issuing as many cards as a business wants, being simple and unambiguous, and offering 1.5 percent cashback on anything—no games that we’re trying to play or strange incentives that we’re trying to introduce to our customers.
We built scripts to detect duplicate spending and cluster merchants and got some initial social proof from onboarding some of New York’s fastest-growing companies, like Ro, Eight Sleep, and Candid. And it paid off. In many ways we were able to punch far above our weight class, being a 14 or 15-person startup at the time. And we were able to launch with a lot of interest.
In terms of the initial feature set, we had launched with several accounting integrations (e.g. Quickbooks) and we had a kind of light expense management, but that became actually most of the focus for a lot of the rest of the year post-launch.
One thing I also wanted to double-click on is how Ramp is able to save companies up to 3.5% of their spend, which sounds like a pretty significant amount at scale. Would you be able to share an example use case, preferably one that would be pretty unexpected?
There’s the cost savings part of it but what has been growing the fastest now is really around time savings, which I’ll go into in a little bit. On the cost savings side, an example would be if we look at a company using Asana, Trello, and Basecamp; these are all productivity softwares are we can show a customer that there’s duplicate spending for or maybe if they’re on a monthly plan that they could switch to annual.
On the time savings side, I think people sort of take it for granted that the expense management process is painful. Historically, a controller has to have the comfort to say, “I’m going to trust and empower tens to hundreds to thousands of people with the ability to spend.” But at the same time, there would be inadequate controls.
Today, Ramp is the only card that allows you to lock a merchant on a particular card or across tens or hundreds of cards. For instance, I want to be able to spend $200,000 a month on Facebook but I want only Facebook to be able to charge this one card. So, early on, we built software to allow customers to issue different virtual cards, block merchants, and build complex controls such that cards belonging to different departments and locations can behave differently. And getting that level of control gave people this peace of mind where finance could centrally control the exact behavior it wanted from lots of different pieces.
Let’s say I walk to a Blue Bottle Coffee, I get a new receipt and they send it to my email. Minutes later, it’s automatically matched. I don’t need to go and actually do anything. The coffee example is fun but we also handled cases where there are different SaaS products charging the company across tons of people in the organization.
We were also the first in the industry to propose a manager role. Sounds simple and a lot of people years later are adopting it, but it meant you could actually have this notion. It wasn’t just an admin and a cardholder and a bookkeeper. But you can have people reporting to other people. You can actually as a finance team hold people accountable. You can say “Looks like you’re the manager and you’re overseeing this budget. I want you to go and help us do the right thing.”
Post-launch, Ramp grew headcount and its fundraising efforts rapidly. What were the cultural considerations during these periods of rapid growth? Specifically, what was your vision for the culture you wanted to build at Ramp and, as the company kept growing and you weren’t able to stay involved in the hiring loop of every new team member, what steps did you take to make sure that your envisioned culture was being lived up to?
I think often people think that Ramp is a lot bigger than it actually is, given we are one of the leaders in the space by revenue and transaction volume scale. But we are actually still only a bit more than 400 people—in comparison to Brex, which is around 1200, or TripActions, which is two or three thousand.
We’ve generally tried to be a lot leaner and are big believers that small teams that are well-organized and have clearly-defined goals can outperform large teams. We are strong believers that the more people that you add the more inner-group communications and the harder it is to say who owns what, and have that powerful dynamic of people who really deeply care and are given immense ownership.
In that way, we tried early on to articulate those values and emphasize—first and foremost—the feeling of putting customers first and measuring how much money and time we are saving them. We look for people who care deeply about that mission and believe that those who take ownership don’t want to let other folks down. You see other folks working hard and you want to be there for customers and for others. Even though Ramp is a bigger team today, Karim or I will either meet or review the interview packets of every offer before it’s approved.
Ramp experienced 15x cardholder growth YoY in 2021, which seems to suggest a lot of self-service instead of maybe going customer-by-customer and having those personal conversations like in the early days. What would you say were the most effective and surprising growth levers that fueled this rapid growth?
Totally, not everybody wants to talk to somebody actually, so we want to provide a way for them to get set up so that they can focus on building their company. I think people want to know that if there’s an issue or if they need help or want good advice that someone is always there for them. But I think in a lot of products—ours included—self-service is wonderful. And so we built that as a part of the experience.
As for growth levers, I honestly think—and this might sound funny—that the best growth hack is actually just having an amazing product that people want to talk about. I think even today, we have 10,000+ companies using Ramp and still, over 30% of customers came on at the recommendation or prompting of another.
Most products, I think, are very “blah,” especially in finance—and they’re not really that helpful. So actually having a product that really demonstrably surprises and delights people—one that actually saves them money and time—is the greatest growth lever for us.
How about outside of that 30%? Is the process that an SDR will chat with a prospect’s VP of Finance? And what do those conversations look like if the prospect is already working with another provider for their corporate card or expense management?
In the majority of cases, it’s usually people who are replacing and upgrading to Ramp, which may end up replacing multiple systems. The process varies by size. For instance, there are companies that are 75+ people that almost certainly will reach out and we’ll put folks from sales in touch. In those conversations, our team will chat through features and automations that we want to be enabling for our customers and show them the value. We can even come back with some of their expenses and show them all the areas of savings. It’s really about being consultative.
At an earlier stage, the point of contact can be a founder. At later-stage companies it can be a controller, Director, VP of Finance, or CFO—often someone who has the ability to send money on behalf of the company and authorize the transaction.
What would you consider to be your top priority at Ramp today and what is the most important role you will play in executing against it?
Every company has a purpose and for us it’s really about saving our customers time and money. Being able to deliver on that and measure that impact is our top priority. In doing this, I believe in giving our teams the freedom and flexibility to say, “This is what I believe we can do this month in this area of our products to maximize time and money savings for our customers.” And that actually creates the freedom for people to be quite entrepreneurial to go out and execute.
The size of our mission in some ways helps us maintain our velocity. We are seeing a surge of customers, especially with the strengthening of the US dollar and we want to make the experience great—no matter what currency or company size.
Making that experience of expense management within an organization so much smoother, has been where we’ve sort of made our mark and shine and expanding that out is a big priority to you know for me personally. I really do love the money and time saving stuff. It’s been a passion of mine for a decade. And I think there’s a few products around that that I’m really excited to come out with over the next year.