What Ramp's data tells us about AI, unemployment and more with CEO Eric Glyman | E2192

Today's show: *Eric Glyman of Ramp joins us to share the fintech unicorn's growth secrets AND their Lab full of research data. On TWiST, Jason and Alex chat with Eric about Ramp's counter-intuitive mission — helping startups spend LESS money — PLUS they take a deep dive into the company's treasure trove of startup trend data. Why is there a huge spike in unemployed recent college trends? Is "static team size" as a big a story as Jason and Alex think? What does it actually take to get companies to adopt AI Agents? The answers all might be in these Ramp numbers. PLUS Eric joins us for some hot Founder Q's, and what's going on with all this Y Combinator drama? We're sifting through the angriest tweets for the inside scoop. FINALLY, Jason recommends some of his favorite startup accelerators of the moment (aside from his own) including… PearX Arc from Sequoia Antler Speedrun from a16z Timestamps: (00:02:18) The 72-hour rule strikes again: Trump's China's tariff reversal (00:03:10) Why crypto got hit even HARDER than the stock market post-Trump announcement (00:07:32) Market manipulation "at a scale we've never seen before…"; what does this mean for everyday investors? (10:05) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www. Squarespace.com/TWIST (00:12:55) Ramp CEO Eric Glyman swings by to update us on his fintech unicorn's growth and their "Lab" for research data (20:09) Netsuite - Download the ebook CFO's Guide to AI and Machine Learning for free at https://www.netsuite.com/twist (00:21:40) Is "static team size" a real trend? What the Ramp data shows… (00:26:25) Ramp's "counter-intuitive" mission: to help companies spend LESS money, not more. (30:24) Paper OS offers the largest library of AI-driven Workflows for both founders & fund managers. Claim your $10K credit at paperos.com/twist (00:38:07) WHY the huge spike in unemployed recent college grads? Especially among the guys? (00:49:16) What it actually takes to get companies to adopt AI agents into their processes (00:52:25) Why Jason thinks Eric is a top-tier TWiST guest. We're going through the metrics… (00:54:05) There's YC drama on social media now… we're spilling the tea. Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www. Squarespace.com/TWIST Netsuite - Download the ebook CFO's Guide to AI and Machine Learning for free at https://www.netsuite.com/twist PAPER OS - Building an empire? PaperOS offers the largest library of AI-driven Workflows for both founders & fund managers. Whether you're raising capital, launching a fund, or wading through diligence, PaperOS unlocks simplicity and scale for your ever-growing empire. Claim your $10K credit at paperos.com/twist Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  30 minutes before Trump dropped the news and sent the markets into chaos, someone took a very large short position, about $700 million, Jason, in notional value. And then after the crypto market took an enormous dump, they closed the position and made between 160 and 200 million dollars reports vary a little bit. Now, they have highlighted the person they think this is, a hedge fund manager out of Hong Kong. He has gone on to Twitter and say, hey, guys, I know inside information. I don't know the Trump family, but that's pretty speculative. I don't think we've locked down 100% that it was him. But people are just saying, hey, if you make such a strong trade so quickly before an enormous news event and close it, it seems like you had inside information. This week in startups is brought to you by Paper OS.

• 0:44Speaker 00

  Building an empire? Paper OS offers the largest library of AI-driven workflows for both founders and fund managers. Whether you're raising capital, launching a fund, or waiting through diligence, Paper OS unlocks simplicity and scale for your ever-growing empire. Claim your $10,000 credit at paperos.com/twist. NetSuite. The business landscape is very chaotic right now. That's why you need NetSuite by Oracle. Download the CFO's Guide to AI and Machine Learning for free at netsuite.com/twist. And Squarespace. Turn your idea into a beautiful website. Go to squarespace.com/twist for a free trial.

• 1:30Speaker 00

  When you're ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain.

• 1:41Jason Calacanis?

  All right, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. With me, my co-host, Alex Wilhelm is back.

• 1:48Speaker 00

  I'm back.

• 1:48Jason Calacanis?

  You're back. Friday, you had a little bit of sick nannies, sick kids, the whole thing. Yeah, it happens three times a year when you get kids.

• 1:56Speaker 00

  Yeah, it was brutal. We're like 90% healed. We're over the hump. And I'm stoked because, gosh, Jason, it's a busy news day. We got a great guest. It's gonna be a great show.

• 2:04Jason Calacanis?

  Awesome. Well, let's just kick off with this first show, the first story here, because it's been another 72 hours of chaos. Good time to review our rules of Trump. Number one, Trump says a lot of stuff. And rule number two, wait 72 hours. So here we are. There was a big announcement on Friday that Chinese tariffs were going to be insane. What's happened since?

• 2:28Speaker 00

  Well, after Trump said Chinese tariffs were going to go up 100% in addition to the prior levels, we have seen the stock market come back a little bit. About $2 trillion in market cap was wiped off the US stock market on Friday. That's an enormous amount of money. Jason, people were very worried. The crypto market also took a pretty big hit. Since then, things have come back. Today, taking a look at where things are, the NASDAQ's up 2%, the S and P 500 is up about 1.5%. So a nice recovery bounce, not all the way, but I think it goes to show that the fear that we saw on Friday has come down pretty much materially. I don't think we're out of the woods yet on the Chinese tariffs issue, where earth's issue and everything else, but traders seem to be breathing a bit easier today, and that's good for everyone's portfolio.

• 3:10Jason Calacanis?

  Yeah, the earth's rare earth metals is a key issue here. As we talked about on Friday, you know, like 60, 70% of rare earths come out of China, but they only have a third of the known deposits, and we keep finding more of them. So although they have a lock on it in terms of distributing them right now, the truth is, it's just because most countries don't want to rip up the earth and take out rare earth metals because it would cost more than China can provide them for. So if you can get your wheat from a farm in the middle of America, you probably don't want to stand up a grain field in your yard. Even if you could, you'd

• 3:53Jason Calacanis?

  just buy it from the cheapest person. That's called capitalism, globalism. So it's really not going to be that big of an issue. And I think most countries are going to, because China keeps yanking this chain on rare earth metals, they're going to start becoming more independent, just like China, because we won't sell them certain chipsets, are going to make their own chipset. So this is how the markets work. If you don't sell stuff to the other party, they're going to find ways to route around you. Market, yeah, took a real dive. Crypto got

• 4:27Jason Calacanis?

  Creamed because you can still trade it when the market closes. So it fell from 122 to 103. The interesting part of that was that somebody made $200 million placing a trade 30 minutes before Trump's tariff announcements and prices falling, which is perplexing, but not unexpected. Lots to unpack there. Have we figured anything out or maybe just explain to the audience what technically happened?

• 5:03Speaker 00

  So 30 minutes before Trump dropped the news and sent the markets into chaos, someone took a very large short position, about $700 million, Jason, in notional value. And then after the crypto market took an enormous dump, they closed the position and made between 160 and 200 million dollars. Reports vary a little bit. Now, they have highlighted the person they think this is a hedge fund manager out of Hong Kong. He has gone on to Twitter and say, hey, guys, I know inside information. I don't know the Trump family, but that's pretty speculative. I don't think we've locked down 100% that it was him. But people are just saying, hey, if you make such a strong trade so quickly before an enormous news event and close it, it seems like you had inside information. And I think we have seen in the crypto world over

• 5:46Speaker 00

  time that the traditional financial world's rules don't always apply. And this is one of those times which people are saying, hey, maybe someone here was acting unfairly with information that the market didn't have. And I think it was Joshua DeVos of CoinDesk. He said, "The timing and scale of the positions opened on October 10th, Friday, immediately prior to the market-wide liquidation does raise suspicion of information asymmetry," which is a very understated way of saying that someone might have cheated the market.

• 6:13Jason Calacanis?

  Yeah, and it's important for people to note, although people are now putting crypto regulation in place and we didn't have new regulation for crypto for the past, I don't know, well, for the whole existence of crypto, we really haven't had new regulations. The regulations have been, see the old regulations, which obviously sometimes apply, sometimes don't apply.

• 6:37Jason Calacanis?

  What all this means is if you're playing in a global casino with anonymity and every jurisdiction in the world participating to some extent, that's never existed before in the history of humanity. What that means is groups of people can manipulate markets at a scale we've never seen before. You want to place bets and try to move markets around stocks, you have to have brokers. Some countries allow you to buy shares, some don't. There's so much regulatory framework in the stock market, in bonds, even in gambling. You know, you go to a casino and you count cards, they've got an eye in the sky, they watch you. Well, we created a global casino and the global casino still has no rules.

• 7:21Jason Calacanis?

  And one of the rules that people perceive the market has in many cases, but it doesn't, is trading on insider information, in crypto, on prediction markets. They're kind of predicated on the concept that some people will have information. Information asymmetry is kind of like saying, I have information you don't have. I have an edge on you. I know that, I don't know, the quarterback was out all night in a strip club drinking and I saw him stumble into his hotel at 6:00 a.m. when they've, you know, with a whole gaggle of partiers and the game is, you know, tip offs at 1:00 p.m. You kind of have inside information. You can trade on that.

• 8:05Jason Calacanis?

  You can bet on the Jets or do something stupid like that. Here, you could bet on crypto. So just know, if you're not running the project, you are the sucker at the table. The people running the projects are the casino, the people running the markets and the marketplaces, the market makers, they're kind of the equivalent of the casino, the bookies, the sportsbook. You really should be thoughtful about what percentage of money you put into crypto and what your expectation is for that return. I would say, I've always said low single digits of Bitcoin or the most known stable projects. If you can afford to lose it, you'll make it up if you do. And if it goes 100x, well, wow, you know, it's 5% of your portfolio. Now your portfolio is 5x, it's great.

• 8:50Jason Calacanis?

  So be thoughtful, folks. And it is what it is.

• 8:53Speaker 00

  I'll just throw in that later on, Donald Trump did post again that, you know, don't worry about China, we'll sort this out. And that led to Coffeezilla, one of our favorite friends of the show, we've had him on the podcast, said, imagine getting liquidated because of tariff fears on Friday, only to have it called off two days later. People took a lot of financial hits, Jason. I saw people posting on social media that they were leveraged and lost all their assets. So if you're going to trade in crypto, maybe don't use leverage as well. That seems like an additional risk that you don't need if you're going to dabble in exotics. I'm just glad that, you know, AMD was off 8% and Tesla fell 5% and Nvidia lost 5%. I'm glad that we're kind of coming back from those concerns. Though I do think that it shows how brittle the market is, Jason, that things fell so

• 9:38Speaker 00

  quickly over a Trump tweet this far into his administration. That was my takeaway.

• 9:42Jason Calacanis?

  Yeah, and producer Claude made us a little table here, we'll pull up on the screen. As you just mentioned, AMD, Tesla, Nvidia, Broadcom, Apple and Oracle were, are these the top declines or amongst the top declines?

• 9:57Speaker 00

  These are amongst the top declines. Some were a little bit sharper, but we looked at market cap and percentage decline to try to find the most interesting declines.

• 10:04Jason Calacanis?

  As my friends at Squarespace like to say, a website makes it real. So like the sort of thing you need to hire a huge team to do, right? Well, it's actually easier than ever before with Squarespace. They have everything you need to get your domain name and establish your online presence right now. Maybe you want to showcase your work. Maybe you want to set up appointments for a service. You're a masseuse, you're a tutor. You can sell products, you can invoice clients, you can collect donations now, you can monetize your content. Any business model is possible with Squarespace and Squarespace. Has the easiest to use, most beautiful templates. Plus, Squarespace has joined the AI revolution with their Blueprint feature. And this like basically works as your creative partner, helping you generate

• 10:48Jason Calacanis?

  original images and designs and customize the perfect website that matches you and your company's aesthetic. So check out Squarespace.com/twist for a free trial. And when you're ready to launch, go to Squarespace.com/twist to get 10% off your first website or domain purchase. That's Squarespace.com/twist.

• 11:13Jason Calacanis?

  Got it. Okay, so we took two variables into account here. And if you look at them, some of them are directly impacted by China. Apple makes iPhones and their laptops and everything mostly in China to this day. And then you got Nvidia and AMD, who are very fully, very large companies now. So one might even say Tesla falls into that as well. Robust valuation club seems to get hit a little bit more because anytime your valuation gets disconnected from fundamentals in some way. Some people might call it a meme stock, momentum stock, or just visionary founders with incredible potential. And people get excited about owning it.

• 11:55Jason Calacanis?

  And/or they have a brand name that makes retail want to own more of it. Yeah, when there's a, when there's a pullback or a down drift, they might lose double what the market does. And thank you to producer Claude from our friends over at Anthropic. Hey, man, if you want to do really great, real time, deep research, research like this, get a producer like Claude, head to claude.ai/twist and you'll get 50% off your first three months of Claude Pro, which is what we use and we pay for here at the show. Claude.ai/twist.

• 12:31Speaker 00

  Yep. All right, Jason, shall we move over and talk to our guest?

• 12:33Jason Calacanis?

  Absolutely.

• 12:34Speaker 00

  All right. So next up on the docket is someone that I've known for a long time, Eric Glyman, the co-founder and CEO of Ramp. If you don't know Ramp, they started off their life in the realm of corporate cards. They've expanded quite a lot since then, bringing AI agents to the fintech use case for all companies out there. Jason, they're a mega unicorn. They're doing incredibly well. Eric, welcome to the show.

• 12:56Speaker 02

  Alex, Jason, it's great to see you both and thanks for having me today.

• 12:59Jason Calacanis?

  Of course, of course. I'm, I have a lot of these heavy, heavy ramp cards in my, in my little man purse, also known as a satchel. Don't judge me. Indiana Jones had a satchel. But you know, it's great for corporate spend and expense management. I don't know if we have a promo code, but I do love the product. It's a great product. And you've been doing a lot of work around taking the aggregate payments that startup spend and you're able to, without invading anybody's privacy, putting that out there very clearly. Tell us what's going on in the space. Who's spending on what products, huh?

• 13:38Speaker 02

  Absolutely. And well, first, just thank you for, for giving us a shot and believing us and, and letting us serve you and your team. It means a lot to me and, and all of us. And you're exactly right. We're now Ramp customers, over 50,000 organizations are spending more than $100 billion per year across the platform. And through that, it turns out it's an incredible index in an aggregated and anonymized way to get a sense of what's actually happening in the economy. You can see this at any point. Just go to ramp.com/data and you can dive into and see,

• 14:19Speaker 02

  you know, spend increasing, decreasing, where people say, you know, growth is happening in the AI market. How is it happening at the model layer and dig in in any way. But that's been a really fun project, open source.

• 14:33Jason Calacanis?

  All right. Let's leave that up for a second here, Alex, because we can review it and explain it to the audience if it was listening primarily. If you're listening and you want to watch the show, we have video up on Spotify and you can go to youtube.com and search for us. So, well, we had that chart of the leaderboard. I think the leaderboard was kind of interesting if we can go back to that one, Alex.

• 14:53Speaker 00

  Absolutely. Here you go.

• 14:55Jason Calacanis?

  Perfect. I'll make it two times bigger if you don't mind. New customer count, OpenAI in the number one spot, Intuit, which makes QuickBooks, I believe, Anthropic, which makes Claude, Canva, which makes, and Adobe, which make creative software. And then by new spend, you got HubSpot, Carda, Vanta, Pipe17, and Avalara. I don't know if I know Avalara, but Carda, obviously for cap tables, Vanta for your SOC 2. And by new spend, that's interesting. So, these are the top SaaS vendors from last month across all of your customer base, which is startups, right? Or mostly startups.

• 15:32Speaker 02

  It's, you know, that's how we started, but actually, it's really not anymore. You know, technology where it's a little over-indexed in, but you know, this is everything, consumer goods, healthcare, manufacturing, you name it. And, and some of these are temporals. So Avalara, for example, is, is sales tax automation software. And there's a big tax deadline, I think actually on Wednesday of this week. And so,

• 15:58Jason Calacanis?

  Yeah.

• 15:58Speaker 02

  folks kind of bolstering all, all that side of it. But it's an interesting look, even at just what AI adoption is, or software adoption, even outside of typical software world.

• 16:11Jason Calacanis?

  Yeah. And this information, people used to trade on information like this at hedge funds where it was available for purchase. So there would be companies that would aggregate credit card data. They would pay the credit card companies for the aggregate data. They would clean it up and they would sell it to hedge funds. You know, just like satellite companies sometimes would look at the number of cars in a Walmart. And then they would, literally back in the day, Alex, count them. And then they would show the trend of how many people are in the Walmart parking lot and for how long or whatever they could. And then you could maybe make some trades on how Walmart versus Target are doing and make a couple of basis points. Again, back to that information asymmetry we talked about earlier.

• 16:52Speaker 02

  I think you raise a really good point, Jason, that a lot of this data was out there, but it was the highest bidder to go and get this. And a big part of why we publish this at the same time every month, we make it available to everyone is it turns out for most people, just small business owners, finance teams, people just trying to make improvements, have very little visibility, both into what are others doing to improve their business. And so we just try to open source this and let people see what are right or wrong, what are people moving their businesses to, so you can have the latest sense of what actually might be creating value, not just who's marketing, but what are people buying. And then more interestingly, you can, this is even broken down in a product I love in

• 17:37Speaker 02

  the in Ramp's product called Price Intelligence, and then Accounting Automation, where you can see, maybe you get a quote from a vendor like Salesforce, they tell you it'll be $300 per seat, you can upload that contract and see here's what the rest of the market is paying. And so just as you can go on Zillow and see what your home might be worth, you can figure out if you're paying market rate or getting charged a little too much and make your business a little bit better. And so we love just making data available to people building businesses.

• 18:05Jason Calacanis?

  Well, this is just such a great startup tip. If you can create data that comes out on a regular basis and people cite it on podcasts or journalists do, that's how Zillow with this estimate, and we've had the founder of Zillow on here a couple of times, and I've actually had the CMO who created it on, and it infuriated people. And when they launched it, they did an estimate, which then forced everybody to talk about and how it was wrong. And so then everybody engaged with it, which then created more press, because people were like, my home's worth $2 million, you're saying it's worth $1 million, this is terrible. It's like, okay, well, we can fix it. Just tell us what it's worth and we'll adjust it. And they did that even on a very granular level, Alex. They would do

• 18:48Jason Calacanis?

  it by market. So then they created a marketing strategy in the 2.0 of that. To go after the local newspapers, go after the local news programs, go after the local radio shows. And this is what's called earned media in the space. Paid is you're paid for Google Ads or TikTok Ads. Earned media means you created something of quality content that gets you on a podcast like this and we talk about it. And there's an implied like, oh, well, this person Eric is smart because he has data. And here you are. Now people know ramp to get a couple more customers. So well played. And you know, Carter does this. Everybody does. But you got to actually have a thoughtful, good data set. And I always appreciate Eric, when you tip me off on which trades I should make with this data before in our group chat. So I do appreciate that. Everybody gets access to it after we make our trades and play some.

• 19:33Jason Calacanis?

  Eric shaking his head. We don't do that.

• 19:35Speaker 00

  And we'll cut that out of the show immediately.

• 19:37Jason Calacanis?

  But you know what? I will tell you, it would not, this is not financial advice, but I don't believe, and I'll have a lawyer vet it with us, but it's not actually inside information. Knowing, processing data, whatever, that's not inside information. Inside information's inside the company or with their partners. I don't think this would fall into that. But hey, if you're, if you're a ramp employee or partner, or you build the website, don't, don't do it. Don't do it. Eric's not gonna.

• 20:05Speaker 00

  Don't insider trade. That's a terrible, terrible thing.

• 20:08Jason Calacanis?

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• 20:48Jason Calacanis?

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• 21:30Jason Calacanis?

  But you also know how the economy is going, I think, Eric. So there's been a lot of discussion, and we came up with a term here for it. What's our term for, oh, static team size? So we was talking, Alex and I, about this trend for the past four years. Uber, Airbnb, Google, Meta, Microsoft, all having the same number of employees this year as they likely did four years ago, or modestly up or modestly down. So static team size. The team size does not change. You probably know when team sizes change because they would issue more ramp cards. So what is the data saying there? Are companies hiring or not? And then what does that say about the impact of AI? Because you're seeing a lot more AI spend. So we got really two interesting points here. Let's just go with the first. What are you seeing in terms of the

• 22:15Jason Calacanis?

  size of companies that are already large? Are they staying the same, getting bigger?

• 22:21Speaker 02

  So first of all, you're exactly right. Company, the revenue scale and also the valuation, the market cap scale of companies per employee has gone either just up generally for these mega cap companies to even, you know, you look at companies like, you know, Cursor, which are maybe these extremes, you know, a couple of years ago, were bringing on their first customers to today. And I believe they have something like, you know, 50 employees, you know, ballpark for, you know, a 20 to rumored, you know, 30 billion valuation. I think that the sheer leverage per employee, you know, events in particular, industries or

• 23:05Speaker 02

  not, I think has gone up. And while this is going on, the backdrop of this, I think, unemployment in the US for the labor force was something like 4.1%, which I believe below 5% I think is the target that the Federal Reserve keeps as a target when they kind of make their estimates for, you know, is inflation low or not. And so it's both these Companies are getting smaller while unemployment is actually within target and even below. And so I think to me, this is both interesting. I think sometimes people focus on the fears of like, do you need as many people to build companies? I think the other way to look at this is actually, maybe there's going to be more companies.

• 23:52Speaker 02

  Maybe there's going to be more people who are not stuck in, you know, mid-level hell.

• 23:58Jason Calacanis?

  Absolutely.

• 23:58Speaker 02

  Working at these giant organizations, but instead whether it's at startups or more lean and highly leveraged companies, people can just get more done with every dollar an hour. And so I tend to be fairly hopeful in the near and midterm around this.

• 24:11Speaker 00

  Just for everyone's information, the natural rate of unemployment or the Fed target is between 4% and 5%. And currently we're at 4.2. So Eric, you're dead on.

• 24:19Jason Calacanis?

  Yeah, and this is the 50-year low for our lifetime. And if you look at recent college graduates, however, they're having a heck of a time getting jobs, which I attribute to entry-level jobs are being taken by AI because they're easy to automate. Now, Eric, you make such a great point. Whenever a complex system has some unique variable introduced to it, things can get weird and you have reactions. And then you have second-order effects. So if you look up the broad concept of, you know, cognitive biases and how and systems thinking, you can jump into a rabbit hole where a bunch of, you know, Malcolm Gladwell-type people spend and Bill Gurley spend a lot of time

• 25:02Jason Calacanis?

  thinking about thinking. But the truth is, if there's no jobs for graduates and they're smart, then what three or four of them will do is apply to Y Combinator or launch Accelerator, Found University, try to find something to do with their time because they'll be frustrated, which is what we did. When I was a kid and we graduated school in the early 90s, there were no jobs. This huge recession, I think we were probably at like amongst young people. Mid teens. I think in that time period it was mid teens. So, you know, most of your friends had jobs, but probably one in five didn't, one in six didn't. And what happened then was people started zines, or they started bands, or they became freelance photographers and they joined what was called in Wired magazine Freelance Nation. It was really interesting, this concept

• 25:47Jason Calacanis?

  that you didn't have to have a full-time job and stay somewhere. Let's go to the next piece, which is, "You are a SaaS-based business, and it's got a per-employee component to it, because each employee gets a ramp card. So, some amount of your revenue is based on headcount. So, how does this impact you if you're the land-and-expand concept as a SaaS company doesn't work? Do you have to spend more time trying to find new companies?"

• 26:14Speaker 02

  I love that she asked this. And so even, you know, SaaS apart, we started the company about 2,400 and I guess one day ago with this sort of counterintuitive mission, which is, "We actually want to help our customers spend less money, not more." And we would get all these questions of, "But don't you make money when businesses spend more?" And we'd say, "Yes, that's true, but it turns out if businesses stick around for a while and spend less, maybe they'll spend less this year, but I think there's going to be a lot more. Their health span will increase. Maybe I'll make 5% less on the card spend, but you might expand into more of the business and the business might become larger over

• 26:58Speaker 02

  time." And so, you know, in general, we're actually totally okay if our customers spend less on software in one given year. We think kind of doing right by businesses will earn us more businesses for the long run.

• 27:11Speaker 00

  Eric, just to be clear here, you're talking about interchange revenues that you make when people use their ramp cards, and that drives a large chunk of your revenue. So, you're happy if they spend a little bit less, as long as they stay with you and grow with you?

• 27:22Speaker 02

  That's right. And I think the same is true. We do have a component where you can add on paid seat-based software. It is an extraordinarily fast-growing business line. You know, it's, you know, two years old and, you know, already the second-largest component of what we do. But what I would say is, you know, we're very happy, actually, if people are downgrading the number of seats at any particular point. The goal is, you know, we just want to be a partner that helps businesses be more profitable. I think that approach and aggregate, what we make may make less than any individual customer has worked over the last year. You know, Jason, we passed over a billion a year in revenue. The

• 28:06Speaker 02

  business is just about doubling and, you know, we're doing it while generating cash, which is,

• 28:11Jason Calacanis?

  Amazing. So are you profitable or are you not trying to be profitable now?

• 28:15Speaker 02

  We're generating free cash flow.

• 28:17Jason Calacanis?

  Wow, congrats. What do your investors think about that? Like, I guess, pre-IPO, that's a good thing because it sets you up. But aren't they also some board member saying, hey, listen, I got in the seed round, I got in the Series A. Why don't we acquire more customers here, Eric? Like, what are you doing with this free cash flow? We don't need free cash flow. We're not here for a dividend. How do you balance that?

• 28:36Speaker 02

  It's very funny that you say that. Yeah, when your product is selling money to companies, you sometimes want them to burn money and to go spend more. And so, one, to your point, we definitely have, you know, investors and board members saying, you know, that's great, you're self-sufficient, but maybe this is, you know, a bug, not a feature. Can you go find more ways to spend more money and grow? And I think they have a point where, you know, something like 2% of all corporate and small business card spend in the US is happening on ramp, but 98% is not. And so, I think there is a good point of we want to find ways to efficiently deploy more capital to

• 29:14Jason Calacanis?

  Let me hit you with an idea. Let me hit you with a couple ideas because this is what, you know, seasoned board members like myself do. We send you on side quests, just based on our own personal experience. That has nothing to do with reality. No, in some cases, it's based on some reality. But I assume that, you know,

• 29:32Jason Calacanis?

  People like our company, the executives have an American Express Platinum or Centurion, they got a United Business and then they got a Ramp card. So when I am out and about in the world doing stuff, I'm like, my rank and file employees, go ahead and use the Ramp because you're not spending a lot. But when we have big spending, I'm like, get me those United points, get me my Platinum, get me my Centurion Lounge because we'll use those. So I guess first question, where do you stand in terms of like benefits and competing against the American, you know, wonderful Platinum card is absurd. Not that I'm optimizing for these things, but man, the United Flight Points is a really incredible program. So how do you think about Amex Points, this incredible United?

• 30:15Jason Calacanis?

  And then we were doing Bonvoy for a while and getting, I mean, I didn't pay for a hotel for a couple of years there. So tell me how you think about your value prop versus theirs. Obviously, the world's greatest moderator and the world's greatest angel investor needs the world's greatest solution for managing his funds. So I want to tell you about Paper OS and why we use it here at our own companies, Launch and the Syndicate. Paper OS has helped over 10,000 funds, founders and investors, including me, automate their workflows. Their tools will help take you through every stage of the process, from handling the operational details I don't want to worry about because I'm busy meeting founders and looking for great companies.

• 30:55Jason Calacanis?

  For example, Paper OS has made the onboarding process so seamless for limited partners. Their investor intake forms, automated subscriptions, it just takes all the busy work out of managing our syndicate and it automates capital calls, investor accreditation, tax filings. This is tedious and important. These are the chores of running a fund or a syndicate and they have saved me and my team hundreds, actually now it's probably thousands of hours, which means we can focus on founders. Our friends at Paper OS want to give you a complimentary $10,000 credit. To claim it, just go to paperos.com/twist. That's paperos.com/twist. And if you prefer price discrimination, you can go to paperos.com/disgrazia.

• 31:48Speaker 02

  Yep. Great question. So I'll start with like our general philosophy, then I'll hit to the specifics. So first, for most business owners, I think the average American business has a profit margin of 8%, I think roughly last year, which, you know, if you just think about the math of that, and if you're valued, most businesses in America are profitable and valued on a, you know, a multiple of profits. A dollar saved is not equivalent to a dollar earned. You know, a dollar cut of cost is mathematically equivalent to $12 earned if you're trying to get more profit dollars. And so we think that actually reducing costs and helping people spend less, Ramp helps businesses spend more than 5% less every year, is just much more powerful than, you know, the points and rewards. And so

• 32:33Speaker 02

  we focused on how can we take, what at launch, when Alex first covered us, we were, you know, help companies cut their expense by 2% per year. You know, now it's upwards of 5, and I think that's too low. I think it should be closer to 10. And so I think it's more leverage. And second, I actually would argue, I think that the luxury in today's world in 2025, it's not access to a lounge or anything like that. If anything, when I go to JFK, you know, the lines for these lounges are too long.

• 33:04Jason Calacanis?

  They have screwed them up. This has like become a literal thing that they, the velvet ropes, they just, they're not building enough velvet ropes behind the velvet ropes, in my experience. So that makes sense. I always felt, Alex, that like, this was a bit of a grift, because I remember when I had my last job working for somebody, which was Sony in 92, 93, everybody was trying to figure out not how to get the cheapest flight and hotel, but trying to figure out how to get the most points so they could take their summer vacation. The company just kind of turned a blind eye to it, because it's like, yeah, whatever, we're making billions of dollars. So, but I think that's probably correct. And then you have new entrants like Robinhood. I have that, I was an early investor in Robinhood. They sent me one of the first gold cards, and they pay you back money like

• 33:49Jason Calacanis?

  3%. So I do think there's this trend towards that. I was going to tell you, a Ramp Lounge That when you go to the Ramp Lounge, you buzz in with your Ramp card and it's like,

• 34:04Jason Calacanis?

  "Yeah, here's a bottle of water. Get the fuck out." It's like, that's not why we're here. We're not here to

• 34:09Speaker 00

  Two lawn chairs in a large, open room.

• 34:11Jason Calacanis?

  There is something to be done here with the Ramp card setting up.

• 34:15Speaker 00

  Be an anti-Lounge. I mean, if Ramp's all about saving you money, here's where we're cutting. Eric, can we go back to the 2% and 5% thing though? Because I recall when Ramp was young, you were helping people find double spend, things they were paying for twice and sizing that. How have you managed to 2.5x the amount of money you save on average? Where is that coming from?

• 34:34Speaker 02

  Yeah. So a couple of things. So first, we'll kind of build it from the basics to the really advanced stuff.

• 34:41Speaker 02

  You know, on your consumer card today, one of the most frustrating experiences people have is they sign up for a gym or a subscription to a service and they want to cancel it and you can't do it, you know? You call them, they won't pick up the phone. You wish you could go to the card. You can't turn it off. With Ramp, we were the first in the world and still one of the only companies on the planet where you can one-click, whether it's on one merchant or 10,000 merchants, 10,000 cards. You can say, "I don't want to pay for this gym anymore." And every other merchant in the world can charge your card except for that one. That should exist on other cards, but somehow it doesn't. And you know, when you're running a company, things like this happen all the time. You have engineers paying for software, you're trying things out.

• 35:27Speaker 02

  And they just add up and this gives you kind of a kill switch at the central level to kind of turn off spend. That is not... Yeah, so that's been...

• 35:35Jason Calacanis?

  I had my own, I rolled my own Ramp experience in this way when I would have a, I'd have like two cards created under my card, one for like media subscriptions, New York Times, whatever, and then one for SaaS subscriptions. And I would just say, "Cancel them." I would literally cancel them in September because I know all these things are coming and this, it, trust me, if you're lost on an island, like literally, uh, Wilson, what was the Tom Hanks movie? Cast Away.

• 36:02Speaker 00

  Cast Away.

• 36:03Jason Calacanis?

  You're like, Wilson! You're, you're literally with that soccer ball and Salesforce and HubSpot, they'll come rescue you to get your payment for the next year. They will find you. There's no way for them not to find you because they want that renewal so bad. Um, and so I would just turn these cards off and everything would be ding ding ding ding ding. We'd be phone calls. They call everybody. They get on LinkedIn. They would DM everybody, email everybody to find out what's going on. How do we get this thing renewed? Um, and man, that really works well. That's my favorite use case for what you do, Eric, is to just ramp the cards down to $1 a month and just watch people lose their mind because of these dark patterns. I wanted to share two things that I just think

• 36:45Jason Calacanis?

  would be interesting for our discussion while we're here. You know, this crack, uh, team I have here doing live research to just go back to our discussion. Young male college grads are now jobless at the same rate as non grads. So just take a minute, Eric, to think about this. If you look at the college grads on the left, the men there, seasonally adjusted, three-month rolling average, uh, 22 to 27 years old, by education type, non-college, which I'll call Generation Toolbelt, that's what we call it here on the program, versus college grads, uh, in some cases, getting like weird degrees, um, the college grads spike up. Nobody needs them. Now, for women, the gap is, um, not as bad. I think there's more women in college, but I, for men,

• 37:30Jason Calacanis?

  it does seem like maybe men, men are, uh, not as necessary in the business workforce with their college degrees, or maybe they're getting the wrong ones. And here's, uh, from the Bureau of Labor Statistics, 2019.

• 37:44Jason Calacanis?

  Recent college graduates were at 3.25, second sell down in the second column. 2025 average, same time period, January to December. This is January to July versus January to December, but 4.9%. It's up 1.34, but that's, that's not, that's 1.34 is the point change, not the percentage change. That's like a 50% increase in unemployment versus those folks. There's something going on here, huh, Eric?

• 38:12Speaker 02

  Well, I have a lot of thoughts about this one. For me, it's a couple of things. Last week, OpenAI had their dev day and they highlighted it was only 30 companies ever that have consumed more than a trillion tokens on their model and Ramp was one. And so we're a very, very heavy user of these models. And one of the things that's very unusual about these large language models is, you know, I guarantee, you know, all the latest models have read more about these specialized skills that one might learn in college than any person alive. For it to be specific, these models know more about accounting in aggregate than any accountant on the planet.

• 38:53Jason Calacanis?

  Oh, this is such a great insight.

• 38:54Speaker 02

  They know more about law, they know more about health, you know, diagnosis.

• 38:56Jason Calacanis?

  Because that information is on the open web. Because these are careers and people are searching out career information. So content producers, universities, they put all this stuff online. So therefore the LLMs get, what a great insight. Wow.

• 39:11Speaker 02

  The thing that I think is going to be very strange for people to reconcile with is I believe over the last 100 years, the way to wealth in the US was specialization. You would go to university and you would pick up a craft. Yep, yeah, that's, that's.

• 39:29Speaker 00

  This is the, if you're watching the audio version, I just pulled up.

• 39:31Jason Calacanis?

  Before you go into this thing, what about the ramp? What are you using tokens for at Ramp? Are you using it to identify spend and categorize it?

• 39:39Speaker 02

  That is exactly it. You know, I think one of the very tedious areas of work for companies is, let's say you've gone, you've booked that flight or hotel, you've paid for that SaaS subscription. There's a lot of work that goes in to go and get that receipt, go, you know, put it into clean readable form and then put it into your accounting software. You usually have controllers, finance folks, accountants kind of tagging these. So it's very tedious and monotonous. And our, you know, today rampant is not only faster but more accurate, you know, really than almost all accountants, you know, using the platform. And so just as you can kind of autocomplete your sentence for, you know, things you're writing, you can have like a faster form, rough draft essay, you can have your books

• 40:24Speaker 02

  virtually almost done before you even open them to go review them. And so we use a lot on accounting automation, bill payment automation, procurement automation. So we use a lot of this. But I think, and we can go a lot deeper, but to the macro point, you know, I think that in a world where you can, through a query or an API call, call on this knowledge base of, you don't need to be an accountant, but you know how to interface with a digital accountant. You don't need to be a, you know, a lawyer, but can integrate, interface with a model that knows more about law and how it relates. I actually think there might be a good reason why non-college graduates are doing just as well as college graduates,

• 41:07Speaker 02

  which is if you know how to use these tools, you may not need to have the specialized

• 41:11Jason Calacanis?

  Levels the playing field.

• 41:12Speaker 02

  Exactly.

• 41:13Jason Calacanis?

  What you learned in college is so superficial and light compared to the depth of AI. If you just spent one year using AI tools exclusively, you would be so much further ahead than trying to remember that, you know, top 10% of the knowledge. Interestingly.

• 41:30Jason Calacanis?

  To spend a, if you've spent over a trillion, I'm just looking at Claude AI explaining to me what that costs. Looks like you're spending tens of millions of dollars on AI spend to do this. Ballpark correct with OpenAI?

• 41:46Speaker 02

  It is, I think that estimate is a bit high. There's a lot more efficient ways. There's calls and then there's also what's the amount of data you send through for the query, which lowers the cost quite a bit.

• 41:59Jason Calacanis?

  So if not tens of millions, you're certainly spending millions on AI with OpenAI. Just as a founder, you know, OpenAI came out first, but are you looking at the other models and low balancing beside them and actually thinking like people did in year five, six and seven of, you know, their cloud spend. Years one through five, you're like, this is amazing. I don't have to stand up my servers. Then you get to year six or seven, you're like, wait a second. I wonder if, you know, Google Cloud is going to beat Azure or if Azure is going to beat AWS or Oracle's Cloud. I feel like we're now in that moment where people are going to start price comparing. And then there's always DeepSeek, open source, and there's another open source competitor in America now that's doing pretty well. So how much do you spend here? Which one was it?

• 42:42Speaker 02

  Together AI, I believe.

• 42:43Jason Calacanis?

  Together AI, yeah. So take me through how you think about load balancing and/or comparison shopping and negotiating for tokens versus I'm going to just stand up one of these open source models. Have you tried standing up an open source model and just saying, I'll just do it myself?

• 42:59Speaker 02

  Yes. The short, like to be direct and quick, the answer is you have to do this.

• 43:06Jason Calacanis?

  You're a great guest, Eric, because when I ask you a question, you actually listen to it.

• 43:09Speaker 02

  Yes, no, it's a really good question. And I think like one of the lenses to sort of understand this is, you know, whenever.

• 43:19Speaker 02

  So I remember when there was this release where OpenAI went from Chat, like GPT four to GPT four mini or the four O model and people, you know, investors saw, wait a minute, this, this, this task is to call the mini model, it costs only 10% per call of what it would take you to call the main model. And they said it was 90% accurate. And people said, what does this mean? Are you using this? Are your costs going way down? How do you deal with the inaccuracy? And it's like, no, no, no. What you do is you send, you have, you invest a lot in benchmarking and different tools to kind of go and see what's the accuracy of the models for certain tasks. And it turned out that for 90% of tasks, roughly, it is 100% accurate. And for 10% of tasks, it is completely inaccurate.

• 44:03Jason Calacanis?

  Zero percent.

• 44:04Speaker 02

  And so once you learn, what's the models are good at, what you do is you take this 90% of traffic that works really well, and you send it to the low cost model here. And this last 10% of traffic, you send it to the expensive model. And models are kind of like that. What's strange about these new models as they jump out is things that suddenly didn't work, do work. Things that worked before, you might be able to find a much more efficient model architecture is able to take them on.

• 44:29Jason Calacanis?

  So you gotta be on top of this. Your tech team's gotta be on top of this because it's a, it's a major expense and it's

• 44:33Speaker 02

  Yes.

• 44:34Jason Calacanis?

  a major opportunity. After OpenAI, which obviously you had a major partnership with, who's most impressive to your tech team?

• 44:41Speaker 02

  It depends a lot on the function. I mean, I think that, you know,

• 44:45Jason Calacanis?

  Well, who do they keep bringing up? Like, who do they keep saying, this is impressive? Which one?

• 44:49Speaker 02

  Anthropic in particular for, for coding and engineering. There's just something in the model, I think, in the way that's developed, which lends itself to be, I think, extremely compelling consistently for software engineering in particular. I think it's really good. I think that the latest Gemini model has also, because of the, the much longer context window for very complex tasks, heavy research, I think, has been extraordinary. And even Grok as well, I think for physics and math related.

• 45:23Jason Calacanis?

  Yeah, they're doing great on math. I was, I was at the XAI office and I was meeting with the math team specifically. And they had, yeah, you know that Elon invited me there on a Saturday, parking lot full, ordered in steaks, hung out with the top people. It was very impressive to see their commitment. And they were working on that humanities last test. Is that what it's called? Humanities last test?

• 45:45Speaker 02

  Yep.

• 45:45Jason Calacanis?

  And they were like, walking me through the problems that are like the hardest things in the world to Solve and they didn't want it to like have known the answer just from like, you know, I got, I stole the teacher's, you know, quiz book and I got the answers. They wanted to know how to actually do it. So they introduced a demonic AI agent into the group of agents solving the problem. And they said, the goal of this demon is to try to give the wrong answer. And then these five agents have to explain to it why it's wrong. And it was really, really interesting. What are you showing here, Alex?

• 46:22Speaker 00

  This is the humanities last exam, the test we're talking about. And this is the leaderboard of current winners and Grok four, GPT five and Gemini two point five pro, the models that Eric just mentioned are at the top of it. Eric, can we talk about agents though, for a little bit? Because you guys rolled out agents for controllers in Q three and you rolled out agents for accounts payable in Q four. How strong are these tools? And how are they different from, I think you rolled out ramp intelligence back in like 2023. So to me, it feels like a reprise, but I presume they're doing something different this time.

• 46:52Speaker 02

  The, the big, I would say, when you think about 2023 with intelligence, large language models could go. And I think that the dominant design then was this idea of a copilot. You could feed a questions and it would suggest kind of the outcome. What's unique about agents is I just, I think there's a lot of jargon around this, as I think of them as models plus tools. You know, they're not just the model response, but you give them permission to go do something on your behalf. Whereas intelligence might have said, I suggest you categorize it in this way. I think this might be fraud. An agent will go and can automatically approve that report for you, can go actually initiate the buying purchase.

• 47:38Speaker 00

  From an advisor to an assistant, essentially, instead of telling you what you might do, it just does it for you.

• 47:43Speaker 02

  That's right, is I think one of the big things. And some of that has to do with just the sheer level of improvement in accuracy and predictability, coupled with the ability to handle more generalized tasks going on a webpage, completing some outcome. And maybe to explain what's so useful about the policy agent, ever since Enron happened and that failure blew up, there was this app called Serban's Oxley, which says that for any transaction, you can't buy the thing and review the transaction yourself, someone else needs to do it. Makes sense, good idea for people keeping books, but what it's resulted in is for anyone who's worked at a large company, decades of, pardon my language, but

• 48:24Speaker 02

  just like corporate bullshit, where like, if you buy like a $5 coffee, your boss needs to sign off, was it appropriate for you to buy like a coffee or a hotel or something like that? And it's just this cottage industry of an unbelievable amount of work, where today, most people, they get an expense for their report and they don't review it because it's a waste of their time, or they do and it's, you know, do you really want the boss reviewing? It's a deep human intelligence to go and do this. Functionally, what we built in the policy agent was, we built an AI that knows your expense policy in detail, can see all the context around the transaction, and with 99% plus accuracy, is able to approve, flag, or deny transactions on the manager's behalf.

• 49:08Speaker 02

  We've seen leaders like a Notion, or a Quora, or today, thousands and thousands of other companies adopt this, and they're able to automatically approve 90% of transactions that are in policy, can show you all the reasoning for why that is, flag the last 10% and you catch like 15 times more out-of-policy spend and you save a whole lot of time that just would have been people doing low-value tasks. And so, it's a bit of an example of, it's not really in anyone's job description to do this stuff today, but it's a perfect use case for an agent to go and just make work feel a lot less kludgy.

• 49:43Speaker 00

  Yeah.

• 49:44Speaker 02

  And so, yeah.

• 49:45Speaker 00

  I'm curious about adoption of agents inside of the brand customer base, because you mentioned earlier that your customers are now much more than tech startups. So when you look outside of the realm of tech, do you see a similar adoption curve for agents amongst your more mainstream customers?

• 49:59Speaker 02

  I do. And in some sense, it's actually been almost faster. I think one of the lenses to think about is like, there's this revolution happening in the world of AI. And people know that this technology is out there, but most businesses don't have a single software engineer working at their company, let alone an engineer working just for their finance team. And so for our customers, they're not saying like, hey, I'm coming to you for, you know, go sell me the AI product. They're just saying, I want to close my books faster. I want convenience to get the expenses in quicker. And so if it's easier and it's quicker, intuitive and it's embedded, they'll just turn it on.

• 50:41Speaker 00

  So there's no concern from them about hallucinations or mistakes? Because if you go back a year ago to AI, people were talking about the flaws more than the productivity. It sounds like in this case, because you've packaged it up in a way that's like save time, people are just willing to go with it.

• 50:56Speaker 02

  That's right. And what's so interesting about our model, there are hundreds of millions of transactions that occur every year on RAM. And it goes at the end of the month to a controller who, they are quite literally hired by companies to review and ensure the expenses are accurate. And so rather than before, they're tagging every transaction by hand and then reviewing it and then pushing it over, the transactions are all categorized. They review it and based on what they approve or deny, it's functionally a large scale context engine to learn not just how companies keep their books, but how you specifically do this.

• 51:37Speaker 02

  And so with every progressive run, less and less needs to be reviewed. You gain trust, then you see these companies move from heavy review to, I trust the model to go take this through on this 90%. And so that training step has been helpful.

• 51:52Speaker 00

  How long does that take for them to go from, we'll try this out to, we're confident this is taking care of 90% of the work for us? Because that seems like a pretty important time spend to understand AI agentic adoption.

• 52:03Speaker 02

  Yeah, not that long. I mean, I think even for the first month that people go and take, do transactions, I think we, one shot, see, it's 90% plus accuracy on our recommendations are ultimately accepted. And every progressive month that goes and teeter up to the 95, 99 and goes from there. And so, yeah.

• 52:24Jason Calacanis?

  All right, everybody. Eric, you are an amazing guest. You got to come back soon. I would just like to have you on and talk about like the news with you. Great guest. You know, I have a four quadrant guest, like expertise and candidness. And you're like in my top right quadrant. You got great expertise and you're candid. That's how I cast Friedberg, Sachs, Gersner, Gurley, all these great people I cast into shows previously is, are they candid? And are they really competent? You're in the candid competent quadrant. Great job, Eric. Everybody go try Ram. It's awesome. I use it. Yeah, not an advertisement, just authentically. I use it and love it.

• 53:03Speaker 00

  All right, Eric. We'll see you soon, man. Thanks for your time.

• 53:05Jason Calacanis?

  Thank you, guys. Yeah, thanks, pal. What a great guest, huh, Alex? I just, I love a guest who just was like, yes, I'll answer that question, not the question my PR department asked me to filibuster in and shoehorn into the discussion.

• 53:20Speaker 00

  Eric has been like that since the very earliest days that I knew him because I covered Rand back when it was raising its early rounds. Not, not trying to brag, just I have

• 53:27Jason Calacanis?

  No, no, no. I mean, part of the reason you're here is that you have such great industry knowledge, having been at TechCrunch as a high schooler.

• 53:33Speaker 00

  Yeah, basically. But he was always that candid. I mean, even, even back in the day, he's managed to maintain it too, which is even rarer, I think, amongst founders who get to the deck of corn, you know, stage, they tend to get a little more closed off. Not so.

• 53:44Jason Calacanis?

  All right, here we are. We're in, we're in our docket. If you want to follow the docket, you can watch us build the docket starting the night before this week in startups.com slash docket. And then as we're doing the show, you can see me in real time looking at the docket. And I do strike through when we've covered something. And I really want to cover this story about the broken handshake deal with YC. And God, it seems like every day is another YC drama. Let's go to the drama. Tell me about the drama. This, this week in YC drama.

• 54:10Speaker 00

  Yeah. Well, you know, YC is, is very large. It's very well known. It's well capitalized, has a lot of founders. You put all that together, Jason, you're going to get some drama. Now, here's what's going on this time. There's a founder by the name of Daniel Jung. He is in charge of a company called Omen, which calls itself the first agentic investing platform, tagline, trade, anything. Pretty standard. Why not go through YC?

• 54:34Speaker 00

  This company applied late, got into YC, used that in primature, that that label, that YC credibility to go out and hire people and then backed away, turned down the traditional $500,000 YC safe investment and essentially just left the program after taking their whipped cream off the top. This led to a lot of folks being a little bit concerned because handshake agreements are pretty important in early stage investing and especially in accelerators like YC. And so the founder was heavily criticized. His point is, well, hey, you guys say dropout at college. Why can't I drop out of YC? And folks are pretty mad. So I want to start, Jason, by asking you, explain the importance of handshake agreements in early stage investing.

• 55:18Speaker 00

  And then I want you to give this guy a grade from he's being the good kind of trouble to he just torched his entire reputation in Silicon Valley.

• 55:27Jason Calacanis?

  This kid's a genius, total genius. If you want to do something punk rock, that's what.

• 55:36Speaker 00

  Pause, pause. You stop screen sharing. I'm going to pull this up. I have a better version of it.

• 55:40Jason Calacanis?

  Okay, great. Yeah, I was just showing people the docket, by the way. If you're looking at the YouTube video, you can see our docket here. That's why I encourage everybody to go to the docket. Thisweekinprofits.com/docket. You see the notes that we're actually reading from and our research team did and producer Claude did, but yes, you share and I'll talk. So here's what I want to say.

• 55:59Jason Calacanis?

  Boo hoo Y Combinator complaining about this and using the YC brand to say it's a YC dropout. Harvard doesn't complain when Zuckerberg does it. And in fact, Y Combinator is known for asking that question. Tell us when you broke some rules. I don't have the exact question, but they ask people and they sort for people like Sam Altman, who are rule breakers who do, you know, crazy things like take a nonprofit for open source, you know, LMS and make it a for profit.

• 56:28Speaker 00

  Yeah.

• 56:29Jason Calacanis?

  You know, like that's what they're optimizing for. They're optimizing for punk rock. And then they want Daniel, the Daniel Young on Twitter. They want him to be well behaved and stay in his lane? I mean, F off. This kid's punk rock. He can say, hey, you know, I did the handshake, but I didn't sign the safe. I'm out. In fact, he can sign the safe and say, you know what? I don't like this. I want you to let me out of the safe. Now, they don't have to let him out of the safe, but he can be punk rock. That's like the whole reason, you know, founders win is because they're willing to be a little punk rock. And if I'm YC, the proper response from the YC people, you know,

• 57:14Jason Calacanis?

  with this, I see Pete Cooman, who I guess it looks like from his Y Combinator logo. Actually, this triggered them. Wow.

• 57:21Speaker 00

  Oh, yeah.

• 57:22Jason Calacanis?

  So you have multiple Y Combinator people responding to him?

• 57:26Speaker 00

  Yes. And they were very, very, very unhappy. And Daniel later on said to Mr. Pete Cooman, Pete, respectfully, blah, blah, blah, blah. You led us into YC. We're grateful that you were willing to bet on us. We think you were right to do so. And we want the rest of the world to know why, even if our stint at YC was shorter than initially anticipated. But YC seems really, really mad about this. And that's why I was curious about the handshake element, because I didn't realize that so much-

• 57:50Jason Calacanis?

  Until it's signed, it's a handshake. That's why they call it a handshake. You know, is it rude? Is it unethical, immoral? All right, whatever. Yes. Yes and no. But the deal's not signed. Until the deal's signed, you have the right to back out of it. You know, you can say like, okay, I want to do that. But if like, on the way to your car, somebody's like, I'll just put a million dollars into your company directly at a $10 million valuation. You don't have to give 10% to YC for, you know, 200K. Well, okay. YC should be happy for them. The reason YC is overreacting here is, well, one, they're super dramatic. Everything they do has to have this drama. But this is anti-founder,

• 58:34Jason Calacanis?

  you know, and they're like, really concerned that this is going to become a trend. I think they've been very threatened by some of the new Speedrun from A16Z, ARC by Sequoia, Pair has their summer program. We have Launch Accelerator and Founding University for a long time. We're not a new entrant. Techstars is coming back, Antler. All of these programs are better for founders, in my mind, than going to YC. Not that YC's bad. YC's, you know, as good. But I think these other programs are better because they give better terms. And you're not one of 500 founders or 250 founders. They're more bespoke. So if you go to Speedrun, if you go to Sequoia, ARC, if you go to Pair, if you come to our program,

• 59:16Jason Calacanis?

  and I'm talking my own book here, obviously, it's less of a factory like Y Combinator. And it's, you're not going to get lost and give a one-minute- Presentation on Demo Day, right? Your other programs like ours, two or three minutes. You know, you get a little more time. In ours, you're one of 12 companies, not one of 200. Or in Arc, I think they take a dozen. So they're more bespoke. If you can get into one of the bespoke programs, I think you'll have a better experience. And I think that's what Y Combinator's feeling is like they have competition now. So, and also, there seems to be something with young founders. I don't know why this is, but there seems to be some pent up, and maybe it's just the nature of being number one in the space and having such a great reputation. So it's, you know, it's actually in some ways a compliment.

• 1:00:00Jason Calacanis?

  That dropping out of YC is the equivalent of dropping out of Harvard. If I was Tyler, who says, imagine breaking a handshake agreement and bragging about on social media for likes. That's a terrible tweet. What they should have said was, we appreciate the founder. We think they're amazing. We wish them great luck. We wish they would have come to Y Combinator. We hope that when they raise their next round, maybe we could participate. We wish them all the best. If the program's not for them, we want them to do what's best for them.

• 1:00:27Speaker 00

  Yeah.

• 1:00:28Jason Calacanis?

  That's the right response. Tyler's response, not correct. Peters was, for everyone wondering, dropped out of YC is just an edgy way of saying broke a commitment and contract. They're attacking a new founder. You should have some grace for the new founders. They're gonna do things that are spicy on the margins, Alex. They're gonna do things that could annoy you as a more senior executive or somebody who's been in business for 30 years. Sometimes founders do things, I've had founders do, like, multiple times. This has happened with like 10 founders. I've had 10 founders do a round of funding and not tell me when we have rights in that round.

• 1:01:02Speaker 00

  Oh, so you didn't get your pro rata? Oh, my.

• 1:01:05Jason Calacanis?

  Well, no, you could then have to go back and reverse it, or they sign a deal without telling us, or, you know, and then we're like, well, no, but did you talk to your lawyer first? Or like, no, no, I got this great deal, I signed it. And you're like, oh, okay, just, you're supposed to do that. So I always tell founders now, like, before you do any deal, or you give somebody three board seats, like a founder did recently, give them two or three board seats, I'm like, please call me first. Please call me first, because I've already made my money. I'm already micro famous, as everybody knows, and I'm slim now. Like, everything I want in life, I got a great family, I'm schwelt again, I made my money, and I'm micro celebrity. And a micro celebrity, let me tell you, is a pretty fantastic place to be. I get a lot of great invites, I can go to F1, I can go to all this stuff and hang out in the pits, and I don't have to buy a ticket. It's fantastic.

• 1:01:50Jason Calacanis?

  If I tell you anything, it's in your best interest. I'm only doing it to help you and be a good participant in the ecosystem. Like literally, that's 100% of my motivation. So please don't give two seats to somebody. Please don't give two different investors or three different investors, three different terms and side deals and you know, like just keep it standard. And if you're going to sell the company, let's have a process. Don't just sell it to your friend and then, you know, not do the process. Don't give yourself shares without telling the board members. You want to give yourself a new equity grant. Like there's a process here and let's not get you in trouble or you know, cause reputation damage. But here, I think Daniel Young is punk rock and I'd like to have him on the show on Wednesday.

• 1:02:31Speaker 00

  Okay. Well, we'll reach out to him and see. And I believe the YC question you mentioned is what social hack did you do? Something along those lines? Asking founders how they managed to circumvent and kind of short circuit the attention economy. I think the founder of Cloley, who we had on the show back in the day is a good example of the current young founder archetype, Jason, willing to kick sand in people's faces to make a lot of noise. And here we are, one more time.

• 1:02:55Jason Calacanis?

  So there also was another comment. There's this account called Speck, S P E C, that is obsessed with Gary Tan. I love Gary Tan. I've known Gary Tan. I think he's a great human being and I think he's a great founder and great investor. I know he had a bad breakup with Alexis Ohanian, who I also have a lot of respect for. So I don't know, sometimes founders can break up. But I think Gary's great. But this account Speck, which is Open CV with underscores on either side on Twitter, keeps CCing me in this because I guess they want me in on the drama. Or they CC a lot of people.

• 1:03:29Speaker 00

  Yes.

• 1:03:29Jason Calacanis?

  But they had an interesting tweet.

• 1:03:33Speaker 00

  Yeah. So the tweet reads, so you can't neg YC, but YC can neg you. If you're not familiar with the word phrase neg, it means to just diss somebody essentially, Jason. And so in this case, there was a girl who, quote, "lost her full rights scholarship because she dropped out to do YC." And then it shows an email and the email reads, I'll just read it out for folks.

• 1:03:52Jason Calacanis?

  And by the way, neg means negative in this sort of space. So if you neg a girl in these like, you know, those crazy.

• 1:04:00Speaker 00

  Pickup artist.

• 1:04:01Jason Calacanis?

  Pickup artist.

• 1:04:02Speaker 00

  Yeah, that's what I couldn't find.

• 1:04:03Jason Calacanis?

  The neg is like, oh, wow. You know, one of your earlobes, Alex, is longer than the other. That's kind of weird. And Alex was like, will you date me? I'm already dating. You're the co-host. Okay, let's read this.

• 1:04:13Speaker 00

  I'm so conscious about my ears. All right. The email reads, and this is to a founder who is in

• 1:04:18Jason Calacanis?

  You have perfect earlobes.

• 1:04:20Speaker 00

  Thank you, Jason. Also, I, there's one person in the world who's allowed to break my phone silence. It's my wife. Sorry about that. All right. The email reads, I wish I was emailing under better circumstances. It's become clear that you three cannot operate as a functional team. We funded your company under the assumption that you could, and as a result, company name can no longer participate in Y C. You have three options. Shut down, give us the money back, keep the company alive, and give us the money back, or keep the company alive and keep the money, at which case we'll give you back your shares and cancel our safe and no longer be an investor. I strongly recommend you pick option one or two. So this is them essentially saying to a company, you-

• 1:04:55Jason Calacanis?

  That's from Gary? Is that confirmed?

• 1:04:57Speaker 00

  No, this is from someone with the initials M S. I know-

• 1:05:02Jason Calacanis?

  Oh, Michael Sebo, maybe.

• 1:05:03Speaker 00

  I wasn't gonna say it out loud. I also know-

• 1:05:05Jason Calacanis?

  That could be Michael Sebo, but-

• 1:05:06Speaker 00

  Michael's fantastic. Gary's fantastic. But the point here is that Y C will often, well, not often, but sometimes play a bit rough. And so if they're allowed to play a bit rough, then why can't founders do the same, Jason?

• 1:05:17Jason Calacanis?

  Okay. Um, all right, listen, it's business. Things can get a little chippy sometimes. It can be very annoying if a founding group like this, you fund them, and then they start creating chaos. Because what you don't want to do is have a distraction in the incubator for the other companies. That's not fair to the other companies. So, just like if you got accepted to Columbia or NYU, and you know, you start causing drama everywhere, and we've got you on a scholarship, and you're gonna be on the basketball team, or the hockey team, and you're just running amok. And it's like, well, maybe this isn't the right opportunity for you. We take our scholarship back. In this case, it's 125 bucks, 125 K. In this

• 1:05:55Jason Calacanis?

  case, if I was Y C with billions of dollars under management, and, you know, dozens of unicorns, including their most successful ever, I think it's Airbnb, which is worth, I don't know, close to $100 billion. My two unicorns are worth more than that, but I know it's not-

• 1:06:15Speaker 00

  74, 74 billion dollars.

• 1:06:17Jason Calacanis?

  Airbnb is an incredible company. I think it's the largest one to ever go through there.

• 1:06:20Speaker 00

  Robin Hood's worth 125 billion, and Uber is worth 197 billion. There you go, Jason.

• 1:06:27Jason Calacanis?

  So my two are bigger than their biggest, but it's not a competition.

• 1:06:30Speaker 00

  Oh, it's not. I see.

• 1:06:32Jason Calacanis?

  It's not. There's not a scoreboard here.

• 1:06:34Speaker 00

  Oh, okay.

• 1:06:35Jason Calacanis?

  Everybody just tries to help the ecosystem. I'm kind of making a joke here because people do get competitive. And I can understand if it's Michael Sebold or if it's Mary, Susan, whoever. You want to have a clean separation if there's going to be drama. I don't think that email's too aggressive, except for maybe the last line, like pick one or two. But sometimes you've got to be firm with a group of people who are causing chaos and be like, listen, one, two, three. And I have had similar situations happen where something comes out during due diligence. We haven't signed the deal yet, but maybe we're between handshake and due diligence. And we, you can say a thousand times to a founder, pending due diligence, and they will not hear that.

• 1:07:19Jason Calacanis?

  That is like a frequency that like they're not capable of hearing. But if you do due diligence and it turns out like your customers don't match or whatever, or you know, it doesn't feel like particularly defensible technology, you have the right to back out. Here, I think, I don't know, I might be on Michael's side here that he gave them some great options.

• 1:07:40Speaker 00

  He said they could keep the money and they would, they would get off the cap table. I mean, that's, that's the opposite of a lawsuit, Jason.

• 1:07:47Jason Calacanis?

  I think, I'm going to give Michael the win here that I think actually he gave them a firm, crisp set of decisions. You might say like, pick one or two is my best suggestion. Might be a little aggro, but I don't think it's overly aggro at all. I think he's giving them good founder advice, which is, hey, listen, if you guys want to have chaos, that's fine. That's not what YC is about. We need harmony because we've got two, like I mentioned earlier, like there's 200 other, there's 199 or 299 other people in your cohort. Like, please, but stay in your lane and just be productive for 12 weeks. The end. So, anyway, long story short, YC is amazing. Gary's great. Michael's great.

• 1:08:32Jason Calacanis?

  And this kid's great, who's being a little punk rock. You can't optimize for punk rock and then be upset if somebody's punk rock with you. The end, full stop, everybody. And for the YC people, did they delete their tweets when they were dunking on the kid? I saw there's a bunch of deleted tweets in that thread. I don't know whose tweets got deleted, or if we know.

• 1:08:52Speaker 00

  I took those screenshots of the Pete and Tyler tweets myself, and then I grabbed that thread, Jason, just to highlight how many things have been taken down, because Daniel had removed some of his initial tweets that kicked off the controversy. So we had to find them via...

• 1:09:05Jason Calacanis?

  So Daniel deleted his tweets. Anyway, I'd like to have Daniel on. Maybe that's a good investment for me. And if you get rejected from Y Combinator, don't wait six months. Email your boy, jcal. Okay? It's very simple. [email protected] for life, or you can email me if you love the All In program, [email protected]. Or if you want to get a meeting with the 11 people on our investment team, forward your YC application that got rejected to [email protected], [email protected], and you will get a meeting with my team within 24 or 48 hours, including a little bit of weekend time, because my team works a couple hours on the weekend to meet with founders. We will meet with you quickly. We'll

• 1:09:48Jason Calacanis?

  do a 20-minute first call with you. You pitch us your product or service 10, 15 minutes. We ask you one or two questions. You ask us one or two questions. Then at the end of 20 minutes, you know, we end the call, and then we will talk to you and have a follow-up and see if it makes sense for us to go to a second call. We do this because it's founder-friendly. Like, it's good to, you know, save you time. And if you don't get into YC, I don't think you should just apply to YC. I think you should apply to our program, Founder University, if you're pre-revenue, you know, like year zero, or apply to the Launch Accelerator. We have a common app, launch.co/apply. I also think you should apply to Andreessen Horowitz's Speedrun, Antler.

• 1:10:30Jason Calacanis?

  Per does a Per VC, Mar does a great program over there with Pejman. These are great investors, great founder friendly folks. Ruloff and the team, Stephanie and everybody, they do the ARC program. And we'll put those links in the show notes today. I am not a zero sum person. You should, I think the Y Combinator folks have a little bit of like circle the wagons. They're not, I think they're just a little too cutthroat. I'll be honest, it's a bad look because they don't need to be. When you're winning, you should be magnanimous. I've had to learn this in my life. All of us have to learn this. Chamath's talked about learning this.

• 1:11:10Jason Calacanis?

  When you win, especially in, you know, when you get to the top of the, you know, the top rungs of the ladder, where I've been lucky enough after a 30 year brutally hard career, fought my way in here. I get it. I had to go punk rock. I launched a zine. It's as punk rock as it fucking gets. Like I couldn't get published, so I started my own magazine and photocopied it. You know, people didn't respect me. I started my own tech conference because I couldn't get into other ones. Period, full stop, right? I started my own podcast. So I had to be punk rock, but then when you do win, you got to flip, Alex. And this takes personal development work. And it starts from the top and the leadership. The leadership has to say, hey, we've won.

• 1:11:54Jason Calacanis?

  We're going to be relentlessly magnanimous. If I could put a post-it, you know, here on my teleprompter would be, be a mensch. Like my guy, Dave Goldberg, rest in peace. He was the menschiest guy ever. I modeled my career after Dave Goldberg, Goldie, rest in peace. He ran Survey Monkey, he ran Launch.com in a way. I did Launch.co as a tribute to him because I always loved the brand Launch.com, which was his music startup. He gave me time when I was coming up in my career that he didn't need to give me. And if you ask anybody who met Goldie, he gave everybody an hour or two. He didn't need to. He was rich already. He was living the life. He could get any meeting, he could hang out with any powerful person he wanted.

• 1:12:37Jason Calacanis?

  Died too young, but when he was alive, what did he do? He was, he was, if you met 10 menshes and there was a mensch lunch, they'd say, where's Goldie? Because we want to have a mensch at this lunch. Literally, he's a mensch's mensch. That's what I aspire to be in my life. I aspire to be Goldie and be a mensch. Another amazing episode of This Week in Startups. I'm going to get emotional, so I'm going to leave it there.

• 1:13:00Speaker 00

  All right.

• 1:13:01Jason Calacanis?

  Unless you have anything else we need to add or any housekeeping we need to do here.

• 1:13:05Speaker 00

  No, other than saying that we're going to have a really fun AI TAM sheet all ready for you on Wednesday. It's going to be great.

• 1:13:11Jason Calacanis?

  I noticed you taking those notes in the docket. Well done. If you want to tune in live, go to thisweekinstartups.com/youtube and it will automatically send you to YouTube and subscribe you to the show. All you have to do after you subscribe is it gives you a little pop up on YouTube. Hey, would you confirm you like to subscribe? You confirm you want to subscribe, but you hit the alert and the bell there. And then if you could, do J. Cow and Alex a favor. Write us a review on iTunes. I hate to beg for reviews on Apple Podcasts, but it is a big part of the show getting surfaced to new people. If you write a great review, we're going to shout you out at the end of the show, which we're about to do at the end of the show here. We'll read one of the great reviews. And if you email me your review at [email protected] or [email protected], all goes to the same

• 1:13:55Jason Calacanis?

  place. I'll write you back and say thank you. And you get to say hi to me because I'm a real person.

• 1:14:01Speaker 00

  It's true.

• 1:14:01Jason Calacanis?

  Trying to be a mensch every day of my life. I am a real human on planet Earth. And if you get to a position of power, which Y Combinator is the height of power, and you have this impact on people, best advice, do what I did. Do a little personal self-discovery, you know, whatever it takes, just reflect. You can never go wrong by being helpful in being a mensch. And you can go wrong by being critical of people, especially publicly like this, especially for a nascent founder, because some people will frame it as bullying.

• 1:14:31Jason Calacanis?

  I'm not framing as bullying, but obviously that that's the reaction online here. So this is the thing about the power imbalance that YC maybe needs to, and this is something Gary has inherently in his DNA, I believe. He's a very competitive person. He's a full contact person, as you can see with his, you know, opinions on JP Math.

• 1:14:51Speaker 00

  And San Francisco.

• 1:14:52Jason Calacanis?

  And San Francisco, all good character creates. But he should probably build into the YC culture being magnanimous.

• 1:15:03Jason Calacanis?

  Be a little magnanimous when you're at the top, right? Because you you sometimes forget how much power you have. I don't anymore. I you know, I know that if I mention somebody on the podcast, it's going to carry a little bit of weight. I'm not over indexing on it, but it could negatively impact them. So I've been more thoughtful in how I'll say things. I used to be a little more Howard Stern, a little more shoot from the hip.

• 1:15:24Speaker 00

  It's true, but we all learn as we age and we all become a little bit more patient, a little bit kinder, and that's when you can give back. But more on Wednesday, we'll talk AI TAM, we'll have more guests. Actually, we have a very fun guest on Wednesday, Jason. So everyone stay tuned.

• 1:15:37Jason Calacanis?

  Oh, tease it, tease it, even if they're not confirmed.

• 1:15:39Speaker 00

  It might be the first initial S, second initial J, perhaps?

• 1:15:45Jason Calacanis?

  Oh, Stevie's coming?

• 1:15:47Speaker 00

  He might be.

• 1:15:48Jason Calacanis?

  My Stevie?

• 1:15:49Speaker 00

  So Wednesday.

• 1:15:50Jason Calacanis?

  I love Steve Jervis, and that's my guy. What an investor, board member, a Tesla, SpaceX investor. I mean, you want to talk about a mensch and a visionary investor? Steve Jervis, the J in DFJ. And now he's got his own venture firm. We'll see you on Wednesday, everybody. Bye bye.