I built a billion dollar company in 18 months

Transcript from https://podmenti.com/t/4843c54ffe096f32

Can you build a billion dollar company in only eighteen months?
Today's guest, his name is Eric Lyman. He's a buddy of mine who started a company called Ramp. And him and his co founder, they asked themselves this question before they started the company. They wanted to get to a billion dollar valuation in only eighteen months, and they reverse engineered it.
And I'd heard him tell this story before, but he didn't really like give a lot of details on it. And I thought it was amazing, uh, the fact that they were this bold and then they actually pulled it off. So the company is worth something like twenty billion dollars now, and they're only, I think, six years old. And so
Give this episode a listen. Let me know what you think. Again, Eric Lyman of Ramp is on today's episode of My First Million. I feel like I could rule the world. I know I could be what I want to.
I put my all in it like my day song. On the road less travel, never looked at the case.
That was like pretty crazy. It was I wanna get I wanna build a billion dollar company in eighteen months. In eighteen months, yeah.
And that was
Kind of shocking because that's like cra I mean, that's crazy fast.
Is that really what happened?
You guys had that conversation? Yeah, that's a real conversation. That you guys didn't have you and Kareem were you on the same page? We we want to go fast for sure.
You know, I think like the world is moving faster than ever. We had already sold our first company.
And we were definitely like neither of us came for a whole lot. We were comfortable and
you know, I think even at the time had already proven a a couple of things out and
you know, in some sense had left. Like I was I was a twenty six year old
you know, senior director of Capital One. I think it's like the youngest person at that that age. Like we left very good setups. Um
And so we knew that if we wanted to leave, we wanted to go and make this company big and either
make it huge quickly or fail really quickly. And so yeah, Kareem really did have that conversation. I think he had it with Calvin who
You know later it he cracked me up. I I think when we finally did become
uh a billion dollar company. Um and it did occur
Uh in uh
in twenty twenty one.
Um and so it was less than two years from uh
Incorporation of the of the company. No shit. Wait, two years after incorporation. Yeah.
That's insane. Yeah.
It was crazy. You know, a lot a lot of magical things happened in twenty twenty-one, but it it really did happen. And Calvin said, you know, look, sometimes it's uh best not to know the odds.
You know, if I had looked it up and known, I would have seen that there was no company in New York's history ever
Uh that was worth it.
billion dollars within eighteen months or two years or three.
Uh but was your revenue when you r when you did that? I mean in twenty twenty one, uh
Jesus that was uh you gotta remember this was like

uh excitement in the market.
I think we started that year
Maybe around ten million in in revenue, probably less. Um six months into the company, you're at ten million run rate.
So
Let me let me back it up. Yeah. We incorporated the company in March of twenty nineteen.
We launched it publicly.
In February.
Uh
of twenty twenty.
The pandemic hit.
things slow down, then ramp just started real accelerating. I think that year revenue grew something like 70 times year over year.
Uh to the point where a small denominator.
Um but we had hit it was it was approaching ten million uh a year.
before the company was out for
Even a year.
And by the end of twenty twenty one, um again, I think the multiples really hadn't changed too much.
But the company ended with an eight point one billion dollar valuation and uh we were coming up to but hadn't yet crossed the hundred million a year in revenue.
Um it was a crazy year. So how many years until
How many months until a hundred million run rate?
We were one of the fastest ever. Um, I mean, so if you go back to it, we uh
Uh I think announced it.
I wanna say in March of
twenty
twenty two, I think is when uh Packie McCormick um
Uh, it's covered the company deeply, become a very good friend. I think w wrote the article talking about it, as well as the eight point one billion dollar valuation.
I believe that was in March of of twenty two. Um we launched in
Feb of twenty twenty, I think we hit our first
you know, million run rate sometime in the spring, maybe by early summer. And so if you look at the traditional charts.
There's it's now become a bit of a meme of like time from a million to
uh a hundred million in revenue. Our chart's actually wrong and that's from like time from incorporation.
I wanna say like fifteen to seventeen months from a million to
It was
Explosive.
That's insane. And like I don't even know I don't know anything about
Uh the finance industry or or I don't even know anything about your biggest business model other than I use it.
Like I know everything about personal finance apps. I'm a huge nerd in that.
I don't even know how
I you you take a
Percentage of
of spin, I imagine, but I don't even understand. Explain to me how that works.
You know, I didn't know anything about it either until I sold my last compina Capital One and and learned the business model. And so
In in inferential services, there's is particularly in the the card space, there's two basic business models. Credit cards. The credit cards.
There's two basic ways that they that they tend to make money.
Uh number one is a transaction based model where there's this thing called interchange. Every time a card is swiped, there's a series of payments. The merchant
Um rightfully so gets the the lion's share.
And then folks involved in moving the money take a little bit.
A little bit goes to let's say the merchant processor, the people who accept the cards, route it.
That would be like a Stripe or Square, maybe a Shopify. And they take a huge percentage. Right. So they collect it, but they don't keep a huge percentage. So um you might see headline on some of these sites, you know, two point nine percent plus forty cents or something like that.
At the very end of the day they might keep
You know, it varies anywhere from like point one to point five percent.
is ultimately their net take, but the gross is much higher'cause they're collecting.
They've also paid the networks. Well so they have a few folks involved. They have the the merchant bank. Um so you as a customer have banks that's the you know, uh it's deposited to some bank, which maybe you keep it there or you move it to your
your business's bank account, they'll keep a little bit, maybe ten cents visa or a MasterCard.
They'll keep a little bit too, call it like point one to point four percent.
And then the remainder
tends to go to the issuer and the issuer processor. That's generally the people that you think of as like
people's name is on your card. It could be like a chase or it could be like a ramp or something like that. Or a capital one if you have a capital one card or Wells Fargo if you have that kind of a card.
And so the issuer
in interchange is traditionally keeping most of that interchange. And and the reasons actually make sense when you think about it.
You know, especially in credit.
They're taking on the risk, they're saying that merchant, we will pay you
Іно, імені аркамер дозін пай ус.
When you accept this payment.
you were getting you were getting paid for and if the customer later defaults
That's on us. And so they're generally taking the credit risk.
They have the operational costs of standing up the card programs.
And actually classically, if you if you look historically, these rates used to be very high.
Yeah, a lot of these came from like the old
department stores in the early nineteen hundreds where you'd have like a bank setup shop.
uh actually in the department stores an interchange could be as high as five or six percent.
Eighteen months in at a hundred million in revenue, how many employees did you have?
Somewhere between a hundred and two hundred. Maybe two hundred. Dude, so I don't that just like boggles my mind because
My company is I think two years old and we're small. We're it's a bootstrap company, we own the whole thing and so it I think we have fifteen or eighteen people.
But when you're doing everything yourself as a bootstrap company, just like getting
one or two hires a month is hard. I'm sure at Parabus you were feeling the same thing. Yeah.
Just like
the logistics of getting that many people. Yes. Just the day to day, like
Does everyone have a computer?
That's incredibly challenging. So that's ten people a month.
That you need to do that. Yeah.
It's kind of
Challenging to understand how
How fast that is.
I mean now we're over eleven hundred people, there can be single
you know, two week periods when we have forty to fifty people that start.
You definitely need
Great.
Software and
You know, even to the point of y you'd said earlier of like you use rampant, don't don't totally understand exactly how it wor how all this stuff works.
I think there is in any business so much complexity in going and starting a company and operating and scaling it.
Uh, and I think there's an entire class of tools that tend to be great business models and some of the fastest growing companies in the last few years.
Uh have actually been that. You know, you can look at like a ramp in the card space is what it's doing. It's allowing you to scale up and down
With full control, full visibility, all your expenses managed, your accounting managed.
You don't need to think about it. In HR and payroll, Fripling is a great example where
You know, I think that they're eight years old. I think their last round out rippling.
You know, an age eight should be. I was one of the first customers. I mean, maybe twenty sixteen, maybe nine, but
You know, they're they're they're not that old. And I think their last round I wanna say was at seventeen billion. Yeah. There's a lot of these tools. HubSpot, you know you y you mentioned them, like they're an incredible company that

There's lots of little
Papercuts that generally need to deal with as a business owner and abstract those away. And so
I think kinda these boring business models can actually be uh very good. I think I've been able to grow into some of like
My success a bit because this happens a little bit slower. Yeah.
When you're
thirty two years old or whatever, and you have two hundred people.
Or you have this valuation or whatever like that. It's a little bit
Overnight feeling.
Did you have like weird feelings of like self actualization of like
Oh my God, all I what I wanted is actually here this fast, and I don't know if I'm actually ready to
step into that position of or have this responsibility.
No, there's always like imposter syndrome and you know
You know I a and I would say to so so there are a couple of things. I mean we
From early on designed the company explicitly around velocity. Um
If you kind of step back and and sort of look at the the the particular industry that we're playing in.
Not a joke. Most of the founders of the companies that we compete with
actually wore top hats. You know, they they live in the eight you know eighteen.
You know, like James Pierpont Morgan, uh, Henry Wells, like you know, you you you look at the people who started Amex um City.
Chase, you know, nothing write these these businesses. In fact, there's a lot to love about them. They're enormous businesses, but
You know, a lot of
Their fundamental edges were in
long time enduring brands, unbelievable distribution, risk and underrating, the benefits of scale and of time.
But all of them move very slowly.
I I think an analogy I like to use sometimes is like
You know, imagine that um
Uh, you wake up one day and you have to use like the computer or like the cell phone technology or like the tools that your parents uh used when they were your age.
It'd be very like you couldn't
do this podcast. It'd be very hard to run your business in that way.
But if you woke up and you had to use their bank account or their credit card or or debit card, you probably could.
Um
You know, not too bad. And and I think it's sort of proof of like
not too much innovation has happened and the products haven't fundamentally evolved over the past thirty, forty years is
You know, from you know no phones to flip phones to computers that can think.
Um and so a lot of our view was early on we needed to count the days move at incredible velocity.
And simply be designed to ship things faster. And so today we're two thousand three hundred and ten days old.
Um, we're six years. Yeah, that's insane, by the way, you that you just said that.
Yeah, you know the day.
I mean that's just like a a radical thing.
It's uh you know, I and I remember in the early days w w when you go back to that eight month sat you were we were talking about at the beginning.
You know, um we were like
Hell bent on OK within forty five days.
Uh we wanna be approved by the network within sixty, we wanna be approved by your bank within seventy, we wanna be you know
funding our first transactions. We want to get this product in front of customers as fast as possible.
And so a lot of what we were trying to do is just move
very quickly. We had set goals that we wanted to grow the company ten percent a week.
You know, um once you start the scale, twenty percent a month do it can't be.
Uh it's very intense.
You don't have the typical
Personality type.
succeed as fast as you have are very, very high
On the disagreeable scale.
Yeah.
You seem
Pretty easy to get along and you're very calm.
I don't understand like how that personality type has like a
been able to grow this.
My view is like
I I don't
Uh
I I'm not trying to find folks who are
You know, low cost.
You know, um
push them to an extreme, burn them out. I would rather find people who like just find extreme joy in their craft.
Uh and just set them up where
They can be doing just that as much as possible all the time.
But I think that you have to
If you want to move quickly.
You can't do everything, there's only one or two things you can pick, and you try to have like extreme focus as a company on that.
Uh and just having an everyday trying to just ask like what are the things we can do to optimize just this one function.
All right, so I've built a few companies that have made a few million dollars a year, and I've built two companies that have made tens of millions of dollars a year.
And so I have a little bit of experiencing, building, creating new things.
And
I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at, what my skill set is
is researching different ideas.
different gaps in the market in reverse engineering companies.
And I didn't invent this, by the way. We had this guy, Brad Jacobs, we talked about him on the podcast. He started like four or five different publicly traded companies with tens of billions of dollars each. He actually is the one who I learned how to do this from. And so with the team at HubSpot, we put together
all of my research tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks. And so
If you wanna see my framework, you can check it out. The link is below in the YouTube description.
So you had just sold.
Is it Parabus? Yeah.
Have you ever said how much money did you make off that?
Uh we even I mean talked about it publicly, but it was mid eight figures. You each walked away with that. No, that was the total deal. The total. But we hadn't raised very much. I mean we had the three of y'all?
Uh
Yeah, it was it was really K cream and I, um, you know, then and
But we had raised something like
Two million dollars at at the time. And so there were some investors, but most of it went to founders and employees. So it was enough that you're like I'm
Good, potentially good for forever, depending on how I live, but I have enough.
So you're sitting around and you're like
Uh capital one.
Doing your thing. What was your list of ideas that you guys were like scheming on where you're like, it could be this, it could be this. What if it was this and this angle? Like what was that list? So um I think everyone has a list. You go through all these different phases. So the first
year we were just dead set on
These people just change our lives.
Um
We want to make sure that they feel incredibly good.
uh actually about this deal. So the first year we actually didn't spend too much time at all. Um
You know, we wanted to go and make sure there wasn't failure to launch, like we didn't get crushed kinda by the weight of joining this fifty thousand person company and that that that's Yeah, so you're just being a good seller. Yeah.
Um which I I think is good, but but sort of like underrated kind of the value of like integrity relationships. You know, you know that was important to me when I saw it too. I was like
I remember thinking
I think they got the better of the deal, this or that, but I was like, you know, I'm happy.
But I'm also
I kind of want to have a reputation as someone who
It was a we all won. We all win.
Exactly. Right. And I I I'm more flaggative like for folks who are like young and you know, the value of like a great reference um of people saying like the world's small, man. It's so small.
And so that was that was the first year.
I I think the second we start saying, Okay, this is interesting, but
You know, I miss the speed.
Yeah.
You know, I feel like I'm at a cruise ship versus a small speedboat of of kind of going and starting a company and so
I I think I did what a lot of entrepreneurs
do which is I started trying to come up with, you know, ideas in the abstract and
You know.
The I I think
We went on a journey of like bad ideas until eventually it was um came back to good ones. So I think at the time
You know, I was looking at um I think similar to our talk before this, we were
you know, looking at places in New York and they're all kinda bad and we're wondering why are they bad and we should
You know, cars are manufactured, planes are manufactured, all these products that are low cost, affordable, but wondrous that anyone can afford are are manufactured. Why aren't homes manufactured? Like like
when I was a kid a bunch of my poor friends like and my grandparents they lived in
Uh we just call the uh like mobile homes. Yeah like just many I guess that's what they're called n I mean the nice way is manufactured houses. They're manufactured houses I mean there is also um
Yeah, i like one of the places that like
is extremely
Populous um
It's the like biggest city in the world and yet ho housing isn't so crazy unaffordable is like Tokyo.
Or you go to Japan and it's because they actually most of the home builders are home manufacturers.
Um and things are very standard. The cost of a new home build is like not that expensive. Um
And uh
You know.
Uh I think there's all sorts of issues in the States related to this. And we thought, wow, we should look into like manufacturing homes.
And I still buy the uh and I think that there is I've invested in a few of them. They're very hard.
It was very popular right around when you were starting a ramp.
Yeah.
Two or three. Yeah. Uh that space interested me.
None of them have like completely taken off.
In uh
Ultimately we decided not to do this for a couple of reasons.
I actually had no business in doing it. You know, I rented an apartment in New York and never owned a home. I manufactured anything. Um
And um, you know, there was no connecting story to it, but then the more you read about it
Um the constraint in the bottleneck was not around manufacturing at all.
Uh it was all the zoning. Um
And was that you could manufacture a house that was zoned to go nowhere. Um
Uh, unless you could go and see it to t there was a lot of complex problems and and by I hope someone solves a lot of this. I I think that there's
Uh You think that's still interesting?
I think it's still interesting.
The the manufacturing is part of it, but the zoning question is very real. It's how do you actually get and it can show up in all these funny ways of like
Which weight is the house space, you know, how far back does it have to be set, what are the proportions. Joe Gebia is doing something in this space.
If people crack this, I think it is an enormous opportunity, but it is like a big slog and like this is one of those businesses where
You're not gonna ten X for
A while you're gonna be ten percent, twenty percent compound, but there's a great business I do think to be built there. Okay, it's just too expensive. So that was on the list of like
Tractor trailer or I don't know what you call it. Uh
Dude, like my friends, like their home.
Or like my grandparents, they lived in a place where like their home was delivered on like a truck. Yeah.
Yeah, and so okay, so that's the interesting space. What else was on the list? So that was on the list. Um
We uh there was various like random crypto things. We were s you know, we'd Groom and I had been interested in this stuff probably going back to like twenty twelve and
Routine so we spent a little bit of time around that space. Um
Uh
You know, we spent some time um you know helping out different friends starting businesses.
We were close to Z at Rogue, sort of the the direct to consumer kind of.
Um
Healthcare business, folks at Canada, and so we spent some time on on that kind of world.
And then
I I think where it got interesting again is we came back to the things that we actually knew and a bit of our our roots and so
There was almost two variants of what eventually became ramp.
Uh, variant number one is what turn into ramp, and we can come back to that at at some point.
The other was this view of
You know, in the in the card space um which is
It feels almost voodoo from the outside. It's unclear how you start these things, how the business model works, but we we knew this because we had spent a bunch of years inside.
of Capital One study the the models really deeply.
Um knew the history well and and had some credibility in the space.
Um
We're also very interested in the partnership business, um and the co brand business. So let's say that you were
Um you go to Best Buy and at the very end someone says, Would you like to open a a Best Buy credit card?
Um, someone is doing that. Um there's people powering those business models. Who who are they?
Um
You know, uh synchrony. Um
Uh is a is is a really um big name in it. Capital One, you know, had a large co brand business, Amex, I mean all the large banks. And those are huge tens of billions of dollars company. Barclays, uh,

Sure.
Huge businesses.
In the basic premise of that is like look, is is we had had a side of our business at Parabus where we worked very closely with retailers.
Yeah.
You know, all of these these um stores have um
Uh strong customer loyalty.
And the b and and and credit cards are great products, but they're very hard to sell.
And so the basic business model was
If you could as a added
You know, if you're a store, you had customer loyalty, if you could convert even a tiny percentage
uh of these customers to just take on a new credit card.
And um that was it. You would make a little bit of interchange. It would kind of lower your cost when they were shopping with you, but also you could make a little bit back.
And so the whole
question was could you build a product that was standard enough?
simple, modifiable enough that you can convince lots of different stores and
As this was going on, the online boom was happening. Shopify was, you know, opening up new retailers and stores everywhere.
Creators were getting big.
Um
You know, and we thought there was a chance to have a modern um
hard for um businesses and creators.
You know, MBNA was a big company. I mean they they figured out um when you look at university credit cards, that's like a huge business.
Uh, Dara Murphy is here in New York.
Um, his business is doing really, really well. Imprint.
I've heard of the print.
They're doing very well.
These take a long time, even in the cases where like they're the fastest ever, you're gonna be building these businesses for many, many years. And you have to ask yourself, it's like do I wanna be working on this for
Decades.
Crazy.
That the largest credit card companies
on the planet were working really hard to get customers spend a little bit more than they thought.
And then once they do
They would work really hard to convince people that the points they got were worth a lot.
And then devalue them in the background.
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Alright, back to the show.

It was pretty funny. You said I li I read so many books
Yeah.
You're like I spent
Weeks doing it. I'm like, Oh, I would've thought you would have spent like five years like it's you must have read a shitload of books in a very short amount of time.
Did you learn about any of the weird or shady stuff?
that the banking industry does for consumers or like the history of credit cards and things like that. Like I I remember reading about um
I think it was Bank of America. Was that the first credit card? Yeah.
And how I believe what they did. Well, first of all, like one of them started as like a dining club card. But then another one, what they did was I think they just handed out credit cards to farmers in central California. Something crazy like that, right? So the history so it's started by a guy named AP Giannini. Um
I think it was Bank uh Bank de America de Italia. It was basically Bank of Italy, started by a very poor
uh Italian immigrant uh is functionally how it got started.
And
His first big opportunity um
really was in like the I think it was like the earthquake of nineteen oh six in San Francisco.
У ефективні
You know, he was working and kind of supporting and lending to like grocers, immigrants, farmers, folks who would come into SF and and trade.
After the earthquake, there were fires everywhere. A huge portion of San Francisco burned down. And he was one of the only people that supposedly, the the story goes, he set up a table.
um out in the middle on Market Street and he started making loans then and there on the spot.
And he went from this like tiny bank to effectively like started going everywhere. And and his history is pretty interesting. He he
Uh so was it was kind of this um bank to to merchants and then eventually to consumers.
In I think in the early nineteen hundreds
Uh Woodrow Wilson was trying to supposedly encourage lots of different banks to go and lend to small businesses and the emerging middle class, right? This is the things you hear about if like the Americans are buying their first car, their first washing machine, all that kind of stuff.
And um you were very big on it. And so he's he was he I think was famous for setting up franchise banking.
Where there was like little branches and b branch bankings in all sorts of little cities.
And they sort of took over what used to be like
Um
I and this is relevant when you get into the history of of card of cards.
Um, one of the the most common places that people would take loans would be in a department store. So if you wanted to buy, you know, um you may know that Sears was the parent company to discover. Yeah or
um, Bank of America would actually go instead of branches in like the top
you know, somewhere in like a Macy's. So instead of Macy's giving you a loan, so if you wanted to buy a washing machine for, you know, a dollar,
You know, um you would walk out of it.
um after making a ten cent down payment and you pay them back.
They said, We'll take over that. Macy's you don't need to underwrite customer. We as the bank can do that for you.
And that was the start of it.
Um
No, it was alone. Uh and so it was
Whatever banks normally do. Um
Yeah, maybe they could go and take the good, but uh it just was a credit bureaus exist then?
Uh, this is before credit bureaus. So what do you do if someone didn't pay?
I think that was why they had the local bankers, you know, they would go and work. I think they would try to collect for a lot of years, but that was like this is like the early nineteen hundreds banking. Um
The the part where you're getting to was
By the time I think Bank of America was the biggest
certainly the biggest bank in the US, it might have been the biggest bank in the world. Um
It was just enormous, enormous scale.
And I think the town I I wanna say it was Fremont. Um
Um and so this was in the fifties and
I think that
It was something like
Sixty percent or seventy percent of everybody who lived in this town were customers.
of Bank of America.
And
You know, if you were going to a department store, they had this this branch that you could go
In go to, but
You know, if you were going to like um
you know, any random, you know, hard goods store. Uh you couldn't get a loan for it. And so they took this bet and they said, let's just get the rest of the town. Let's get everybody and we're gonna send you cards. And I think they mailed everybody in the town
It was like a four or five digit card.
And uh you could go use this and you could say
Put it on my card.
Um
And you would go and pay the bank back later.
Um
And it just exploded.
Um suddenly, you know, they almost everyone in the town became customers and people were using it all the time.
People once they got access to credit started
being able to afford more things and it was good for merchants too. You know, merchants who couldn't access and couldn't get a branch to come in could start to compete with the the
you know, large department stores that could.
And it it gave rise to, you know, the Bank Americard.
And so the initial credit card was Bank Americard, once they showed it successful, went to their competitor banks or regional banks and saying,
I will run this program for you. We can issue bank of Marit cards.
For the Commerce Bank of Seattle.
You know, you can issue it to your your customers and
Uh, we will deal with the operations, paying, you know, collecting from the stores, paying, you know, doing the underwriting, all that kind of stuff. So it was a franchise model. It wasn't the model that it was today.
Was that is credit like a uniquely American thing?
Yeah, I
I think there's a good argument to say yes. Um
You know, it in in in some of it comes back to that early nineteen hundreds kind of lineage, whereas this was going on, you saw the birth of the American consumer where
You have department stores.
Cars, automobiles.
And um you saw financing for the emerging middle class.
I would say in Europe, um, even to this day.
Um you see this very different behavior where if you Yeah, like for example, they don't they put way more down when they buy a home.
And this is exactly it. Americans are very accepting of borrowing and debt.
You know, a and I think that's the
Uh that's the perverse way to say it. I think the non polite way to say it is like
You know, in Europe if you're rich, you can borrow and if you're not
Paying cash. That's all you can do.
Uh, and I think it's actually much harder.
For people who aren't in the middle class who are poor.
You know, to borrow in the US people
You know, it's this view of you can kind of pick it pick yourself up by your own boost rings.
Um you know, you can go and
You know, borrow for that car or for that farm equipment.
Um or the laundry machine so you can go and build your business and go into it. And so
I think there's a lot of good that comes with it. Obviously sometimes there's there's some bad people can get into credit issues.
Um but I think on net
You know, most businesses it take it's the startup costs are real, but once you get going, you can build
An extraordinary business. I listen to founders all the time. Like I was listening to the Lizotica episode.
And I'm really fascinated with building a company that can last for fifty, a hundred, two hundred years. Like something where
God willing, I hope this is true, but my children want to get involved in some capacity.
Uh, and it could last beyond me.
Typically.
Does
I think those businesses that do that are not the fastest growing companies.
I I I actually agree with like the basic physics of what
I think David and the founders podcast studies and and and what you're getting at too of of like
I think
If you
To get down to the core of what makes great businesses, it's not like who grew a hundred percent or two hundred or whatever this year.
It's that which businesses can grow.
Thirty percent for thirty years.
And if you do that
You will be a giant business. That's not what you did. Our our view is that
We can.
Um, and like the the crazy part is like we have grown extraordinarily quickly. We're still just about doubling e each year.
Um
uh at enormous scale. I think we are one and a half percent.
ish of the corporate and small business card market in the US.
And so if you just look at the physics of it.
Even if we were to massively decelerate and start growing thirty percent or
decades.
It's physicially possible.
The market is so big.
You're sort of like hanging out with like the Illuminati a little bit, where it's like these old money families'cause that's what a lot of the banking industry is made up of. Yeah.
because they've been around for two hundred years, they've been h dealing with money forever.
Have you n noticed or found anything that you are shocked by where you're like if the consumer knew
That this is how
This setup.
is they would be infuriated.
It's a
There's a lot there in in in what you're asking. So so one
These families like
I think that they're focused on doing simple things well and doing it for a very, very, very long time and consistently.
And uh a lot of these families just like don't
Self.
That's the biggest takeaway from the Founders podcast is don't sell.
Don't
Fight.
Or interrupt the power of compounding.
You want to find a business where you can just compound.
For a long time.
Uh
And so I I would say
When when you're just starting out or if you're building like you're terrified of like
losing money or things going sideways, you have real costs, families, friends, things to take care of. And so
You don't interrupt the debt. When things get risky, you sell.
Um, but I think a lot of these families
Just stayed in for a long time.
Uh, when there was huge I mean, classically you'd see a significant recession in the US every seven to eleven years, uh, consistently.
Uh a lot of people will sell out at the bottom.
Um
Uh because they can't take any more pain.
Uh or they can't take the risk of it going even further. And I think the difference to a lot of these families is they would
figure out how could you avoid it, how could you go and stay in.
You know, I obviously have never
Not on my family had
Anything like this until I I
Uh also too, I think as a kid was very skeptical of people who grew up with a lot of money.
Running my company Hampton, it gives me the chance to meet with hundreds of different businesses. And I'm always surprised by how many of them still use spreadsheets.
Emails and clunky tools that do not talk to each other.
It's like watching someone build a house with duct tape.
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One of my favorite.
Biographies is uh Titan by John Rockf or uh about John Rockefeller. Yeah. And David Chernow, who's the author, he wrote one on JP Morgan, which I'm gonna get to. Yeah.
And it's fun it's fun reading about these old banking families.
'Cause they're full stories and they're typically nutty.
Yeah.
Um
You are gonna be an old baking family.
That's kinda like crazy to think about.
It's um
You know. Does that mess with you?
I think that a lot of the
Families of the past have done a great job of being like involved.
Civically, I I think that a lot of them have been
uh more upstanding. I wouldn't say all of them ha have been, but
I I do think that
Yeah, I look I'm
My mid thirties, I I I don't know that I've thought so far ahead in on like a legacy perspective, but
Yes, Ramp as a company is getting very valuable, but like
All my stock is in Marimph.
It's just a certificate. Um and it's only become valuable because
We've built something that makes a lot of people a lot better off.
My whole obsession is like how do we keep doing that for a very long time?
And you know, uh maybe the money comes with it, but like that's not why I do it. What what was the reason why you did it? So the the first
company we started was definitely around like
You know, I I remember when our we we're down to like one month of or like a few weeks of savings and like that's it. And the worst it's the worst. Like a lot of it is Well, usually f you probably felt that way the whole time. Yeah. Like that burden. I remember I felt that burden for four years. The worst every weekend and like it's hard to relate to regular people'cause you're terrified.
I remember in college I had this uh
Girlfriend who cheated on me?
And I remember like here, like Sorry. Yeah, I remember like and then she's like go to the like it was horrible.
And like she would go out and I'm like I had this like
Anxiety all the time.
Like bothers me. And then when I like started a business I I would remember like checking the bank account all the time.
And I'm like, I had that same anxiety. I'm like, I don't wanna look. I don't wanna go. I just wanna bury my head. I don't wanna know. I don't wanna be part of this.
I felt that way for four years.
Uh, I'm curious if it changed for you too, but like after the sale
Like suddenly you have security, right? Like
Your bank account looks a little more more flush. You move it out of the student checking account to something more secure.
You know, you're good. And then at some point
You know, it's uh
I don't know, hedonic ad adaptation, you get used to it. Um
It's just like a number and account and then you have like your same
Anxieties, you're saying the same stuff, all that kinda stuff.
It's better, though. It's better.
It's better. It's better, but you have s a similar
Anxieties, but it's not existential. You are it is s sort of existential, but it's not like
The baseline happiness.
of knowing that you're not gonna be on the street.
is makes like you create the baseline goes up. I agree with all this. Half the time I listen to founders and I'm like, Well every time I listen to founders, I think I'm gonna I'm gonna own this for fifty or a hundred years. Yeah.
And then during the day when I'm having a pain in the ass
Like
Issue come up. I'm like
We're gonna set this up so we can flip this thing and it's like it always changes, right? Like your mood.
Yeah.
Your emo emotions are powerful. And do you think you'll
Run this or have equity in it.
Fifty years from now.
Or
Would you sell in five or ten years if it
Um
It's like a no brainer deal.
I hope this is the last company I'd ever work on.
Yeah, I really yeah, really.
You know, I uh partners feel that way?
Yes.
Yeah.
Yeah, and it's
It's one of these things too where like
You know, I I remember even in the early days of of going through like there was deep pain, right? If you're if you're growing this quickly.
You know what certainly got you here, won't get you there. And I I think that's some of what Karim is saying is like look, if I'm gonna go through all this pain, like
But it doesn't seem like he went through that much pain if I'm like.
looking at you guys from the outside. Of course it's always more challeng way harder than it looks. But like when I'm like
I don't know, a hundred million in revenue in in eighteen months like that like
Yeah. Like even though it's hard.
you're still winning. And that momentum like that d it's really all about dopamine. That makes you feel good.
I I agree with you. So some of it was like not planning for downside and not solving problems until they hit us in our first business. So in our first business, we had a a day when uh we lost seventy five percent of our revenue overnight.
Vaporized.
There were risks that we knew about that we didn't properly manage. Um, and one of the things in a ramp that we resolved to do is like
Cream and I and and others are gonna just gonna beat the shit out of each other.
All the time.
Uh worry about problems um that are three to six months to a year out in the future.
And so
It's true, if you look at kind of Ramp's trajectory, it has been kind of nonstop.
Growth.
Yeah, fairly consistently up and to the right in terms of like the the revenue, the cash flow, profitability, all those kind of metrics has been consistently good.
But it's because inside of it um
There is so much like agony that we spend over like
This metric that's gonna affect how we perform uh in three months from now is not going the wrong way. Is not going the right way.
What are we doing about it? And so it's a lot of internally
um beating each other up. Like I often you know, when when you look at like
Like a I I think the analogy is like an athlete
Um
You know, y you look at like uh it was just Wimbledon over the weekend. Um
And Sinner and Alcaraz, like each of them look like they're playing effortlessly, can pull off these shots you don't imagine because there's been years and years and years of when you're not looking.
Um, they're just obsessing, practicing, trying these shots. So when it counts, they're able to do it. And so I think there's a lot of similarities there.
Um and and what I would say is like is is is
You know, for Kareem it was amplified. He he had um you know, he's three kids now. He he got started or earlier than than I did, and he's like, look, th these are some of the most valuable.
you know, hours all ever have. And if we're gonna go through this, like
It's gonna be because we're gonna the the ambition is gonna be real and if we have a problem we're gonna confront it right away.
What do you like to read?
I I like to read, um it's part of why maybe why I like the founders podcast so much, like biographies of other founders. I I like um
Reading about like um
You know, design. Are you a designer?
Uh I really like it. So the the first company
uh Parabase I had design and product reported to me. And so I I had to spend a lot of years kind of like thinking about like
you know, um the principles of it, what makes products great. And and so I I uh I love it. I would probably get booted off of our design team. Uh I don't think I have quite the level of uh
of of talent and crafting, but I I definitely spent a lot of time thinking about it.
Up our feast.
In terms of favorites, or what am I reading now? Um I mean my uh you know, it's uh I think I've probably read, you know, fifteen biographies of of Steve Jobs.
You know, it's uh uh I I think as as great as people think he is, I think he's still underrated, um, for what he was able to do and how consistently he was able to to do it. And
Um I also think that he
changed a lot over the years. I think he gets tight kind of typecast to this like brilliant asshole, which like
I I think he was at the start of his career, but I think he got
Much more interesting. Um
uh cared about people um in uh a much deeper way than I think comes across.
Uh, and some of that is like I think people like conflict and people like controversy, but kind of forget
Um, to look at his career as he softened over the years and I think ultimately
I think that's when he built Apple into the the powerhouse that it is today. I've been struggling to find biographies where I admire their whole life.
Yeah, d if you read um
I mean
Uh, just on Steve Jobs. Have you heard Becoming Steve Jobs?
I don't remember. I've read about two or three of them. I I forget the titles.
I I did the Walter Isaacson one.
That one is good, but I think that one is more kind of like pop culture Steve Jobs. It was not
But I remember reading that and I'm like
I don't want to be this person. I don't like him. Yeah. He was very unlikable.
Yeah. And that book.
But what what was becoming Steve Jobs? It so the central question of it was exam examining
Like
who he was over the course of his life. And so it effectively these were journalists, people who covered him for like forty years.
And knew from when he was like the twenty year old kind of wonderkin to
Yeah, kind of like
And of his life, it came out around the time, I think a few months after the Isaacson, and I think that they felt similarly that so much of he was portrayed out was was like
This brilliant trick and instead we're trying to focus of like how did he change over the course of his life.
Um, and I think it's an amazing, amazing read'cause I think it focuses much more on like him, what were the lessons, what were the things that shaped and changed his style. And I I would say like
I super I really highly recommend that book. There's other great
Um
Great ones too on other aspects. Like I love Insanely Simple.
Um, I love uh um insanely great.
Steve Levy. That's like a a lesser read but wonderful book just about just like fifteen of them.
Yeah. Yeah. So
Chat GPT has become my life coach. Yeah.
And there's like a prompt where it's like I forget exactly what it was, but it was like everything you know about me
Boil it down to one word.
Uh
And
I think I phrased it where I'm like
Tell me like my issue or my flaw. So it's like it's gonna be negative.
And
It I think I said two words, and the first one was jealousy and the second one was fear. Yeah.
Which are very similar um emotions actually, I think.
But it was like rooted in like comparing yourself to other people. Yeah.
In New York City it's like so easy to do that. And it's like dialed up to a ten. You're strange to me because you seem like such a
You're so
successful at a such young age and also you seem emotionally stable.
Those things typically are the same. You know what I mean? A little a little out there. Yeah. You know what I mean? Yeah. And I find that unique and interesting about you.
Look, I I I'll like
compete very aggressively in in things that I believe in believe in, don't be wrong, but like
You look back and you're having like a shit day and you're like
All right, I had a bad morning.
What does this affect my afternoon at all?
Um you know, I've got half a day left.
Do I want to make a count or not?
And I just think the ability just like stop, catch yourself and reset.
Um
Is really important and is
increasingly hard as you kind of get older, but it's super important. And I think some of it was like early experiences like
You know my
older brother grown up would have like these really strong mood swings and all kinds of
And I think that's a good thing.
Yeah, he had different kind of like
You know, learning difficulties and stuff and
And he would take medicine and it would like radically change
His mood.
And I was like,
I I remember as a kid
Like that was so jarring and and weird, someone could be like
you know, feel a certain way and then suddenly, you know, feel differently was strange to see and then
You know I
I think as a kid
I I don't think I'd fully process the thought, but
I remember
You know, I I'd get really mad too.
Um or be going to sleep and I was angry about something. I was like, Oh my
Why am I mad?
Maybe I could not be mad.
Um
Uh does being mad help me uh or not? That's a that's an interesting, very, very introspective philosophical question to ask. Like
Well why do I feel this way and do I have to? Yeah.
Yeah.
You know, and I you know, I I think um
You know, my brother and I would get in all sorts of fights. He'd you know, I remember one of you like
There's like a fork and it went into my leg and stuff like that. And
You know, when you have three boys in in a house, like they're
They're probably not as fun as as as little girls they they do.
uh more interesting things and I think my our parents would
Uh my mom was really good. It's like all right, like
Uh
I'm gonna sit both of you down, you're gonna have to go and explain like
Um
You're gonna listen to your brother as he says why he was mad and
Yeah, you get like
pissed and and you'd want to go whatever and you'd be like, you know, you have to go say and you say it back to him and then you're gonna say your side and then he's gonna say it back to you. It's a super intentional thing to do. I it was really intentional. My parents never would have they would have been like
You guys just shut up. Yeah.
It drove me.
Off the goddamn wall.
But after long enough.
Was she like a hippie? Like that's strange. Like that no that stuff wasn't like that stuff's popular now with the with the that's probably how that's how I'm gonna parent my kid. Yeah.
But that's like some
Gentle parenting like hippy dippy shit, which I buy into. I mean it was she a what was her job? Teacher, therapist or something? No, I she sold
Tel like telecommunication. That's interesting. Telecom stuff.
Way to parent.
Good parenting, I guess, but it teaches you to consider the other side a little bit. Um and to to calm down. You see the complexity of things and then
You know, later on when you see s something chemically change other people, it's hard to do it, but
You know, it it forced you to start wondering, like, is it me or is it the
you know, something going on in my head that's making me feel this way. And and look, like I I think sometimes
Stress is good, other times it's not. And
I I think
You know
Ramp is a big company. There's a lot of pressures and and stuff that are
Natural and
You know, like if you step back and you're like, All right
Um
How I act.
Uh and how I
Yeah, how you feel can really impact how you think about things.
Um
You know, I I think I uh now it's it's much more trained, but you spend a lot of time just being meditate. What is the headspace.
I I don't regularly. Um how are you?
It's well balanced.
You read different books too. I mean it it's now a little more more trite, but like
It's funny. I like Ryan Holiday's stuff when he wrote kind of trust me, I'm lying, but then he got very into sto stoic kind of philosophy to read like meditations and stuff like that. And so
I think you pick some of that up. Um, I try to have a day where I just like hang out, just
I don't know, go on a run, two different things or try to clear my head. Yeah, yeah.
Uh, usually Saturday.
Yeah.
U usually then and then Sunday I'll pick stuff back up. But
I also think too during your week, like I think
Especially with other founders is
Life goes on.
You were probably really good at something, um, and you did it a lot, and that's what allowed you to build this company. Then suddenly you're running the company and you don't have time to do the thing that you really liked anymore. Yeah.
Uh and I think that a lot of people lose control over their own week and they don't actually audit like
Am I spending the time on things that I'm good at?
Um or not.
Or or wanna be spending the time on and so
And I pre pretty regularly try to go and like blow up my calendar and be like all right, I actually love doing this thing. Am I spending any time on it?
No, and I promise if you
Spend your too many weeks in a row doing something you hate.
Um, you're gonna be miserable, you're gonna be stressed out.
Uh and so I just
Redesign may
Weeks or months pretty regularly.
I am that helps. The question I've been asking myself a lot is like, Where's my weakness now? Yeah.
And like what do I need to like really work on?
Yeah. It's actually uh whenever I do reference checks when people
One of my little tricks is I'll be like, What's this person one out of ten? And they're always gonna say like eight or nine.
Yeah.
Everyone says that.
And I'm like, cool, what makes them nine or whatever. Okay. Now to get that extra point.
What do they need to work on? I like this question. That's where you hear like weaknesses. That's the only polite way I've been able to get someone
To like.
Talk shit on someone, which is important. And you're like
And then like a lot of those weaknesses that they have, I'm like, I could put up with that. Yeah. Whatever.
Um like if someone's like, Well, they're really not patient. Like, oops, okay, that sounds good to me. Whatever. Uh
Wait.
flaws or weaknesses do you have now that you think you have to overcome to get to where you want to be?
In a decade or two.
So all
Slightly cr critique the the question. Um
Which is like
If you're like a one person company, this is exactly the right question of like
How can I change?
Uh in order to get better.
But if you're like a ten person or a thousand person uh company
Um or whatever uh you are in it. You're on a team.
You can change or you can change how the team is constructed.
Um
is I think
the more interesting way to think about it.
And w what I'll tell you, like one of my big flaws, which is probably very surprising for
Um, you know, ramp scale is like
I don't know if there's like a hundred things to do.
uh that are very important to get done.
Um
The way my mind works is like I'll start with a blank sheet of paper and I'll be like, What are the top five or ten things? And I'll like write'em down and then
probably forget about the rest and don't do them.
And like that's fine early on when things there's like one or two things that matter, but like we'll blow up the company. Um
If you're just consistently not dealing with ninety percent of issues.
And one of the things that I do in order to cope with that and compensate for that is
I surround myself with people who are operationally unbelievable.
Who are incredibly good.
uh triaging, cascading, getting things done and making things move.
Um
And um what I would say is like it's actually totally fine to have huge flaws.
And you could
decide to fix them, or you can say I'm actually gonna design
You know.
my life or the company or whatever to be performant.
in that context. Um and so I think that's okay. Um and and and I I I guess what I what I would say is like a lot of the way that we've built
Um
Ramp and
you know, I think about building companies is a lot of folks kind of look for
you know, what are things they're good at, what are the things they're bad at and how do I, you know, identify all the problems.
Um and it's good to know about them. I I agree with you. Well what I'm referring to is like um
Like for example, um.
I'm a very emotional person. Yeah. And like I like a trick that I've been learning is like
It don't make a it's like don't go to the grocery store when you're hungry. Don't make a big decision when I'm feeling
Pissed off about something or
you know, or really happy about something. Like don't make decisions there. So I gotta I have to wait.
Or when someone tells me something I don't like.
Don't react. Yeah. Just say okay.
Let me think about it.
And so my big thing is it's like um it's it's all about emotional regulation and impulse control. That's like
That's what I have to do.
My big flaw. And I think I ha you
I have to improve that to be a better person.
Yeah.
Um
Business.
Yeah. But that will impact it positively as well.
Yeah.
I totally agree with you.
Thanks, Steve.
That's the part.
Thanks a lot.
I feel like I can root
Well
It be what I want to
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