Ramp founder Eric Glyman on the many ways AI is changing corporate spending

Eric Glyman is the cofounder and CEO of Ramp, the finance automation platform that now powers over 2% of all corporate spend in the US. He sits down with John and co-host Alex Rampell to discuss how Ramp scaled to over $1 billion in revenue in just seven years, and why the future of fintech is "selling time, not money." They cover the "SaaS apocalypse" (and why lines of code are becoming a liability), how Ramp uses AI agents to review 100,000 expenses a day with 99% accuracy, and why their internal data suggests the US economy is much stronger than the Census Bureau reports. Timestamps (00:00:21) Ramp business today (00:04:27) The *correct* expense policy (00:11:07) Bill Pay (00:16:52) AI and software (00:32:23) Stablecoin-backed cards (00:33:06) Ramp data (00:36:25) How to cut your expenses (00:41:13) Ramp strategy (00:57:08) Capital One (01:06:34) Treasury

• 0:01Speaker 00

  Eric Lyman is the co-founder and CEO of Ramp, the corporate card and finance automation platform. Founded in 2019, Ramp has taken the industry by storm. Oh, sure.

• 0:09Speaker 01

  Oh, sure.

• 0:10Speaker 00

  Hey.

• 0:13Speaker 00

  Can you describe maybe a good framing, just the Ramp business today? What's the biggest part of the business in terms of where you make money? What are the new growth lines? Any metrics you can share on the scale? But I think Alex and I have a million questions, but maybe you can start by just framing it up for us.

• 0:26Speaker 01

  Yeah, of course. So first, just the pace that this has come together has been pretty remarkable.

• 0:34Speaker 00

  Seven years, yeah.

• 0:35Speaker 01

  You know, I think by the time we were, you know, six years and change, the company had passed over a billion a year in revenue. The largest portion of that is card. And so that might be a classic kind of interchange-based model. But behind it...

• 0:51Speaker 00

  This is people in their business. They have spend cards. Everyone walking around the company has a Ramp card. And you earn interchange on those, yeah.

• 0:57Speaker 01

  That's right. That's right. Next, you can think about bill payments and software. Software, it's a, you know, two-something-year-old business line, just about two years and some months. That's over 100 million a year business line in and of itself. And that can be advanced functionality to maybe manage lots of entities, to automate aspects of accounting, maybe aspects of procurement. Bill payments. So this can be sending checks, wires, ACH, and that's predominantly a float as well, in some cases, foreign exchange transaction business. Treasury. You know, that's a product that is about a year old, several billion dollars of deposits. Some of that is checking-like products. Some of that is more of an investment

• 1:41Speaker 01

  and money ladder-type product. And then the last, the other ones are procurement and then travel, which is a bit of an in-kind. And what's been so interesting is that if you break down and look

• 1:54Speaker 01

  towards maybe, let's say, contribution profit, gross profit of the business, a few years ago, it would have been, you know, 90-plus percent card. I think by the end of this year, you know, the second, third, fourth, fifth lines of business will comprise, you know, in aggregate... The majority of Ramp's business and so it's evolved into this platform by which if you're trying to operate your company, it's just a lot more efficient. You know, you spend less. I think people, no Ramp for, you know, we help the average company cut their expenses by about 5% per year. The thing that's been really fascinating is as people are starting to use these products in aggregate, not only they're not paying for five, six sets of point solutions,

• 2:38Speaker 01

  but they're also not wasting time. They're growing faster. I think that the average customer last year on Ramp grew their revenue by, I think it was 16%, which compared to in the United States, the average business. Yeah, I think it's 5% in the US and so it's, I think in some sense what we're trying to do is be not just a better platform, but a better, almost kind of digital brain for organizations to allocate resources and make sure spend is not wasted.

• 3:08Speaker 00

  So you start by selling, say, spend cards into a business. The CFO likes it, the employees like it, and then that gives you permission to go sell some of this other functionality. And so it's kind of a classic multi-product cross-sell. Is it all this starting with spend cards or do you now have kind of multiple front doors into the business?

• 3:29Speaker 01

  It's been the big story of the past year. You know, I think there was, you know, the last quarter, thousands of businesses that came in just for bill payments. There's accounting firms that, you know, are becoming into, they say like, you know, we're a Ramp shop here. If you want to work with us, you know, we'll bring in bill payments, treasury, just, you know, we use Ramp to go power that and they can manage, you know, 10, 100, 200 clients all through one platform. And we're excited. I mean, probably the fastest growing line of business is procurement, where there's single clients that are looking to kind of bring in and do

• 4:07Speaker 01

  full-scale, you know, purchase orders across, you know, whether it's single or, you know, dozen plus entities all the way through. And so that's been, I think, the really fun story of the past year.

• 4:19Speaker 00

  Do you have a view on what the right policy is for employee spend within a business?

• 4:24Speaker 01

  I love the choice.

• 4:25Speaker 00

  You know, 37signals or someone will say, companies are so lame, you just give everyone a credit card and trust people and it's fine. And then meanwhile, large companies are like, well, this hotel is in a tier-two city and therefore there's this dollar limit and it must be booked 14 days in advance. And so you see companies operate as really two ends of the spectrum in terms of how much flexibility they give people. What is correct for a company or does it just vary by size?

• 4:49Speaker 01

  I love this question. And the interesting part, if you really kind of dig into RAMP's businesses, we have ways of backtesting and actually understanding. Based on how strict your policy is, how things are running, does that have an impact on how much time your employees are, let's say, doing expenses? How quickly you're growing? And you can start to actually compare based off of the operating hygiene of the company. What are end margins? What is like a pace of growth that occurs in the company? And I bring this back to-

• 5:27Speaker 00

  Do you do a correlational study between expense policies and company growth?

• 5:31Speaker 01

  Yeah. And, look, it's pretty interesting. I mean, the first, there's an aspect of, in most companies, particularly really high-growth companies, it tends to resemble something closer to the no-rules, rules, Netflix approach of we're going to trust but verify and shine a light on it. Spend tends to be reasonably permissive, but then part of the breakthrough of the past year is you could basically take an expense policy, let's say it's written in plain English, if the flight is more than five hours, you can take business. If it's under things that would have been horrible to go and have your managers go and verify the stuff, now you can run that through an LLM.

• 6:12Speaker 01

  I think that we're processing over 100,000 expenses a day that are being reviewed agentially. This is a very fast-growing subset of the business.

• 6:22Speaker 00

  So, sorry, like you give the RAMP agent this company's expense policy and then it applies its transactions that are coming through?

• 6:29Speaker 01

  Exactly. And so you can start to do things, like I think about the episode you'd had with Susan Lee was incredibly instructive where, you know, she sort of says like, it would feel so silly-

• 6:43Speaker 01

  And it's not a great use of my time in some sense to be a very expensive machine learning algorithm to do to review expenses, but yet somehow a lot of people and companies are reduced to that thanks to Sarbanes-Oxley and the rules around it. Now you can have an agent functionally that does that, that takes that aspect of the job. And so it has access to the full set of data that you that you would, all the transaction related metadata, the receipt data, the timing data, the policy data. It then can go in real time review. You know, was this in or out, can have the full audit trail explaining its reasoning. And today it's over 99% accurate, which turns out it's much more accurate than people are. Yes. People don't know the expense policy and expenses are pretty automated. And I find this thing super interesting in part because I don't think it really is,

• 7:28Speaker 01

  should be anyone's job to go and review people's expenses, but somehow, well, it's a no one's JD. The law kind of requires everyone to waste an hour of their time every month if you're a manager. And does the law allow for it to be reviewed agentically and then just signed off on by a human? It does. Yeah. It's like, the goal of this is separation of duties. That you yourself are not reviewing your own expenses. There is a mix of procedures that govern and actually are effective through the action of, okay, the rule says this, did you take some steps to do this? It can be a system that does it. Yeah, you can self-certify.

• 8:04Speaker 02

  The funny thing is that, I mean, one way of doing this, actually, we used to do this, is why not just post your expense reports in the public eye?

• 8:11Speaker 01

  Mm-hmm.

• 8:11Speaker 02

  Right? So, and the reason to do this is actually it could go wrong. You could say, I'm gonna spend, you stay at the Four Seasons, I'm gonna stay at the Five Seasons. You could go that direction. But what you want is you actually want a moral code.

• 8:22Speaker 01

  Yep.

• 8:22Speaker 02

  Right? It's like, if you were the owner of the business, it is your own money.

• 8:25Speaker 01

  Yes.

• 8:26Speaker 02

  So if you were staying at the Five Seasons, I've just made that hotel chain up, it's like, you're stealing from yourself, why would you do that? So it's like, the problem is that once you get to tens of thousands of people, how do you impose that moral code? And actually, like, the two, like, tent poles that you just mentioned, they're both bad.

• 8:42Speaker 01

  Yep.

• 8:42Speaker 02

  Right? Because it's like, if you have to stay at a crappy hotel, and you're about to sign a $2 million contract, right? And you didn't get any sleep, it's the Motel 6, and you take a two-hour taxi, it's like, all right, you save the company money.

• 8:54Speaker 01

  That's it.

• 8:55Speaker 02

  Like, that does not make sense. Stay at the Four Seasons.

• 8:57Speaker 01

  Yep.

• 8:58Speaker 02

  But you can't really embody that in like, if this, then that. Because what you want is you want this moral code. Like, that's what you want. And like, how do you actually instill that? And there's almost a behavioral psychology way, which is like, hey, we'll just show what people are spending. If you're at the top of the leaderboard, we might trust but verify and verify a lot more. But that's the hard thing to do and actually preserve as the company goes from like the founder to the founder plus the founder's brother to like, you know, many, many more people. How do you keep that same, you know, esprit de corps or, you know, kind of this informal code?

• 9:31Speaker 01

  I think it comes back to,

• 9:35Speaker 01

  what was the name of the movie? 12 Angry Men?

• 9:37Speaker 02

  Yeah.

• 9:37Speaker 01

  I think it was. Where, you know, you, as you're watching the film, you get some level of detail and someone seems very guilty. You know, it's a dead shut case. And as more evidence emerge, you realize actually this may be different, different. And you need more context in order to arrive at maybe a moral conclusion. Did it relate to closing a project? How does it relate to an outcome that maybe you'll see emerge one month, two month after this? You stayed at the five season, closed the deal that changed the company, whatever the example is. I would argue in favor of tools that have more context, that do more jobs of work. Because it both, not only can you do the narrow job better,

• 10:22Speaker 01

  but you can start to get at the answer of what actually is right for shareholders. Where should we be allocating capital?

• 10:27Speaker 02

  Because it's so interesting to you. Because every company approaches this differently.

• 10:30Speaker 01

  Yeah.

• 10:32Speaker 02

  Like, I'm on the board of Wise. And, you know, Cristo flies coach everywhere. Everybody flies coach. Like, that's just the policy. But, you know, it might be penny wise, pound foolish. Okay, not for me to say. But I also really admire the corporate code. It's just like you actually, that is cultural.

• 10:48Speaker 01

  Yep.

• 10:49Speaker 02

  Like, it's kind of weird to say expenses are cultural, but they are.

• 10:51Speaker 01

  For sure. Yeah, it's shared. Shared belief system. It's a shared belief system. It's like, what is the culture of the company? You talked about your expansion to bill pay. It seems like bill payment.

• 11:05Speaker 00

  Has proven over the past forty years uniquely resistant to automation and modernization. If you look at how a typical business pays their rent, or if you order a keg of Guinness, you'll get a PDF now emailed to you by some person who has a relationship with you, and there'll be bank account details which hopefully are correct, and you kind of send a payment to those. And even like bill payment products, you guys have a bunch of technology here, but it's like we scan the PDF in an automated way, or we ensure that the bank account details weren't mistyped or something, but it's kind of putting a little bit of lipstick on the pig of the whole system being super antiquated.

• 11:50Speaker 00

  Why is the system so antiquated when it comes to bill payment in particular?

• 11:54Speaker 01

  I mean, I think this is some of what Alex was bringing up. It's the constraints of programming things that in an if this, then that kind of world are very heavy. There's a lot of complexity. And when you think about the nuance and algorithms that govern, why do companies spend money under some circumstances? How hard it can be to record? I wouldn't overlook, let's say that you're a manufacturer and you're buying some asset which you're going to use for five years and it's going to depreciate, it's a very different accounting treatment versus I'm buying like a pay-as-you-go SaaS app. All the complexities around that that might govern whether or not you decide to spend. And then finally, once you get all this detail, like how do you review this

• 12:39Speaker 01

  and decide where to allocate your next marginal dollar is very complicated.

• 12:44Speaker 00

  But like, many systems are in-place upgraded despite the fact that's pretty complex. So credit cards started with no real-time authorization system, which is crazy. And you just like hope that they were good for it.

• 12:55Speaker 01

  Exactly.

• 12:56Speaker 00

  Yeah, yeah.

• 12:56Speaker 01

  Carving capital.

• 12:56Speaker 00

  Yeah, exactly. Exactly. The machine with the pleasing sound. They'd do great in the current ASMR environment, I suppose. But then they added, like you could call up and get an authorization. And then they obviously added to kind of the current systems we know.

• 13:09Speaker 01

  The modem.

• 13:11Speaker 00

  Exactly. Yeah, yeah. And then the modem. And so kind of in-place. Credit cards were upgraded with much better capabilities. And similarly, if you look at kind of checks and how they work, even though we kind of think of checks as antiquated, it used to be the case that physical checks had to be flown all around the country to be like physically settled. And then there was the Check 21 Act in, what was it, the year 2000, where they said a scan of a check is good enough. And so they could be, you know, digitized by the banks and then shredded. And then there was the, you can take a photo of a check with your phone. And so we've like managed to take this super old timey check system. And despite the fact it's super old timey in some ways, it has actually been meaningfully upgraded. And with, if you looked at the bill pay system from the outside, you would say, we should have DNS for companies. So rather than a company like sending you their bank account details,

• 13:55Speaker 00

  you should like look them up in some central clearinghouse. And that way you confirm that you're not being phished. And a lot of spear phishing kind of attacks.

• 14:02Speaker 02

  Although you, you referenced this, so like there's actually an indifference point that you can graph. Like if interest rates go up high enough, if I send you a check, right, which is like a paper mail check.

• 14:12Speaker 00

  Yes.

• 14:12Speaker 02

  And that takes five days and hopefully the USPS goes on strike for two more weeks, right? So I've got the postmark. I actually benefit, it's actually cheaper for me to.

• 14:21Speaker 00

  You're legally paid, right?

• 14:22Speaker 02

  It's crazy.

• 14:22Speaker 00

  Yeah.

• 14:22Speaker 02

  No, it's crazy. So like this is the problem, like credit cards, everybody, like I'm in the store, I want the TV. You want to sell me the TV. We both want this done right away. And in the knuckle crunching, you know, ASMR, you know, carbon copy days, they might not have been willing to sell that to me. Because they didn't know if I was good for the money, they'd never seen me before. And the interesting thing is that, you know, AR and AP are almost an adversarial process. You mentioned this, right? It's like, what do you want to do as a controller? Well, you want to pay as late as possible.

• 14:51Speaker 00

  Yep.

• 14:51Speaker 02

  And you want to collect as early as possible. And then you have this weird thing where like checks, like it's not just an accident that they stick around for a long time. It's like there was a financial incentive for one party.

• 15:02Speaker 00

  That's true on pay and timing, I agree with that. But there are some things that are just a dead weight loss, like the ability to fat finger a bank account.

• 15:10Speaker 02

  Yes, yes.

• 15:11Speaker 00

  You know, detail, like no one benefits from that, like everyone has a horrible time.

• 15:14Speaker 02

  Nigerian guy. There's some people.

• 15:16Speaker 00

  Nigerian princes.

• 15:17Speaker 02

  Take of everyone. Take of everyone.

• 15:19Speaker 00

  I will posit that many networks have been upgraded in place, but somehow kind of the. Network of businesses paying each other via PDF invoices has proven very resistant to in-place upgrades.

• 15:32Speaker 02

  Also, if you understand, I love your notion of DNS for payments or for expenses. So I don't know if you saw this, Google wanted to issue a 100-year bond.

• 15:41Speaker 01

  Yes.

• 15:41Speaker 00

  Yeah.

• 15:42Speaker 02

  So why is that interesting? So imagine that I am owed money by Google. I am one of the small businesses that you reference. Their job is to pay me as late as possible.

• 15:50Speaker 01

  Yes.

• 15:51Speaker 02

  Right? They can borrow money for 100 years at like 3% or whatever it is, like cheaper than the US government, probably.

• 15:58Speaker 00

  T plus 100, yeah.

• 15:59Speaker 02

  I mean, it's, it's, it's, yeah, so a little more expensive than the US government. But, but they are borrowing, like, that's crazy.

• 16:03Speaker 01

  Yeah.

• 16:05Speaker 02

  I can borrow money at 20%, but why do I need to borrow money? Because Google's paying me late, those jerks, right? So like, I should be able to borrow money kind of at the rate at which Google is borrowing money. Because my, my AR, my AR is their AP.

• 16:21Speaker 01

  Yes.

• 16:22Speaker 02

  But the problem is unless you put all this together, you would just look at me and you're like, well, you're just a little schmuck. Like, I'm not gonna, I'm gonna charge you 18%. It's like, yeah, but, but it's Google.

• 16:30Speaker 01

  Yeah.

• 16:31Speaker 02

  They could borrow money at T plus, you know, whatever, you know, LIBOR plus, SOFR plus 100.

• 16:34Speaker 01

  100%.

• 16:36Speaker 02

  That's not fair. But the only way to really solve that is with more data and actually entangle, not entangling, but just kind of connecting these things together.

• 16:43Speaker 01

  For sure.

• 16:44Speaker 00

  What's your vision for, um, once AI is doing a lot of software engineering? What does that look like in three or four years' time? Like, is the competitive equilibrium similar? But just the expectations for, uh, the amount of software and functionality businesses are shipping is much higher? Are software teams similar looking, different looking? Again, you're doing a lot of AI engineering. What does the future hold?

• 17:11Speaker 01

  It's all blurry. It's totally crazy. Like, um, you know, there's a, you know, designer shipping code, um, marketing at Ramp reports into, um, you know, or CTO Kareem, my co-founder, um, who's doing some of like the best marketing I've ever experienced and seen. We have customer support agents, like shipping code to production too. Like, uh, I, I just think that the Half-life of you see a problem to how long it takes for you to go fix it and do something about it is shrinking immensely. Or if you want to change the color of a button, you can just say, hey, you know, @rampage spec, you know, can you change the color of this button? And it goes and spins it up and it does it. Within minutes, it verifies and validates it.

• 17:56Speaker 01

  And so I actually think in some sense, you know, kind of these classic barriers that software businesses had are clearly going to erode, right?

• 18:05Speaker 00

  Yes, but you know, this old joke of it's much more fun to write code than read code, which explains a lot of software engineers' behavior. And it becomes easier to change the button. Is that like another instance of it being more fun to write code than read code where like lines of code are a liability and not an asset because, you know, they are something you have to reckon with? And so are companies at some level incurring some tech debt now where they are adding a bunch of code, which will maybe be harder to reason with later? Or do you just get bailed out by the models getting better?

• 18:37Speaker 01

  It's really interesting. By the way, one of the other interesting kind of sub-conversations I'm hearing a lot too is, you know, when you think about where tech debt comes from, you know, there's a set of conditions and trade-offs you make. You write things in a kind of a discreet and deterministic way. Under these circumstances, follow this code path. Under these circumstances, follow this other one. In a world where there's LLMs and kind of the models themselves are improving, I think it's entirely possible that the way that code is written is you say, here's what I'm solving for, you know, under these kind of conditions, here's what I want to occur. Go write the code that drives this outcome. And maybe with the models such as they are today, can get it done in sort of a spaghetti

• 19:22Speaker 01

  code-written fashion, but it kind of works, even though it's some kind of Rube Goldberg machine underneath the hood. But if these models get much smarter, you might write your code base in such a way where you say every year, rewrite the underlying code, but here's the outcome I can drive. And today you accomplish my outcome 90% of the time, 95, 98, 99, 100. And do you just have kind of self-healing in writing code all the way through? And this notion of like... Underlying code does goes away because we're writing things in this different manner. Obviously, there's there's real conditions in which like that's not going to never won't occur. Like if you're kind of writing code that needs to have, you know, four nines of accuracy and uptime. Like that's probably not the methods you're using.

• 20:03Speaker 01

  But, you know, if you're like a growth engineering team, that's probably what you're doing today. If you're kind of on the leading edge of this stuff. And so I find this stuff very fascinating, you know. And when I think about like the deeper implications of this stuff, like I think that if you are completing a small amount of cognitive work, right? Let's say you just are a, you know, expense app, you know, the thing, the spend has occurred. You need, you know, to go get the, write it down somewhere and get someone's approval. And that's all the knowledge work that you're doing. That's like very few tokens in order to accomplish that, both to create the infrastructure and order to facilitate it. Like that probably evaporates. You know, I think you should, anyone can probably custom write that kind of app.

• 20:48Speaker 01

  Whereas if you're doing much deeper kind of work, you know, such to underwrite a company, provide financing, automate areas of accounting. Like I think kind of the fitness function for companies becomes, can you actually do things in such a way where even if you could kind of spend tokens on it, it would take more tokens to create the thing or do that work than the system maybe that you've built to kind of drive that out. So it's a, I just think the rules of what it means to be a software company are changing. I think network effects and what you're building is more important than ever. Like if you think about kind of the classic set of modes that are there. I think that this this question of where are there modes in a world where, you know,

• 21:31Speaker 01

  I like Dario's way of putting this, if you have like a, you know, a country of geniuses, you know,

• 21:38Speaker 01

  you know, living somewhere and they're writing code and they're incentivized to compete with you too. You know, if you're not really kind of following what are the classic four modes and building towards that, like I think just life gets a lot harder.

• 21:49Speaker 00

  Yes, yes. I mean, do you have a house view on the new?

• 21:55Speaker 00

  Competitive equilibrium with a lot of AI engineering really working?

• 22:00Speaker 02

  Well, I think there are a couple of things. So like, I think Mark talked about this a little while ago, but what is an EPD team, you know, engineering product design team, product development team? So you'll normally have one product manager, maybe you have five to eight engineers and one designer. And now everybody has cursor or Claude code. So the designer is like, I don't need any of these bozos. Right? The product manager is, I don't need any of those bozos. And each of the engineers is like, I don't need any of these bozos.

• 22:25Speaker 00

  It's like the start of the Dark Knight.

• 22:27Speaker 02

  Yes. And they're all right. It really is the same. Exactly. And they're all right. It's like they're all wearing the Joker mask, or the Joker mask is Claude code or cursor. And but the problem is, is because I was talking to one of my CEOs. This is a pretty scaled company, lots of revenue, and it's like they use all these tools. They're not more efficient. And he's like, why aren't you more efficient? And it's two things. Number one, it's like it's a real company. They have real customers. They can't just like push things and hope for the best. But it's like you actually have a, you have an HR problem. In that if you're building from scratch, granted, you have nothing, you have no tech debt. You don't really have to worry about customers. You don't have any. But you wouldn't have an eight-person EPD team.

• 23:06Speaker 00

  Yeah.

• 23:07Speaker 02

  You would probably just have like each person, you'd have like, all right, we have eight different product managers slash engineers slash whatever. Like each one is a pod unto themselves. So that's one thing.

• 23:19Speaker 02

  I totally agree on the data modes where that has become more important. I mean, I'll tell you a story that you might like. So I met this company, V Lex. It's a 25-year-old company. This guy, Alex, bought up every legal record in Spain. Like probably going back to 1492, like buys the, and here's the Ferdinand and Isabella, like, you know, here's the document. Like, I'm going to take a picture of that. I'll sell it to every law firm. And he built like, it was like a $20 million a year SaaS business, you know, bootstrapped for 25 years. And then it went to like 100 million in one year. Now, why is that? Because he used to sell this document, or like, you know, he used to sell a subscription to Kirkland Ellis and Latham Watkins and all these big law firms. And they would take, a paralegal would take that. They would turn it into like a document. They'd charge the client $10,000.

• 24:04Speaker 02

  And you know, ChatGPT can't do that, like GenAI can't do that.

• 24:10Speaker 02

  But you know who can do that is Vlex. And now, so another, another good example of this of like, who has proprietary data? A lot of times the data is free. This is the really cool thing. Or like it's sitting, like I wouldn't call your data free, but it's, it's not, it's not like for sale data sets. So do you know DomainTools.com is my favorite business? So DomainTools runs a cron job every day on every single internet website. They do a who is lookup. So who is lookup every single day.

• 24:38Speaker 01

  Historical record of that, which no one has.

• 24:40Speaker 02

  So if you want to see who owns Stripe.com in 1999, like, well, it was free in 1999. So if you invent a time machine, go run that who is query in your, your terminal, but you can't do that.

• 24:51Speaker 01

  Yeah.

• 24:51Speaker 02

  So you have to pay them. But all that data is free or FlightAware with ADSB data. Like, so you have a lot of these weird businesses.

• 24:58Speaker 01

  Yeah.

• 24:58Speaker 02

  And of course, this is not a new idea like FactSet, Bloomberg, like you have aggregators of data, but that becomes so much more valuable.

• 25:05Speaker 01

  Totally.

• 25:06Speaker 02

  Because your 10,000 geniuses cannot do that.

• 25:08Speaker 01

  Hundred percent, hundred percent. And like you always experience this of like, you hire like someone extraordinarily talented, like top of the class at MIT. And you say like, all right, join like the, join the engineering team and go ship the code. And they ship something kind of crazy, you know, on the first day and it's sort of slow. And it's like, you know, you can have someone who is like intellectually like an absolute giant, but learning kind of how a company does things, the way it does, um, learning the kind of the procedures and nuances of an organization like takes times. It's part of what makes working with interns or junior engineers like fun. I think their learning curve is obviously immensely steep. And I think that the speed at which, you know, with sufficient access to the data and the procedures of a company, they're going to get there very, very fast.

• 25:53Speaker 01

  But, um, you know, these moats are real, you know, anyone who's.

• 25:56Speaker 02

  The other mode I would argue is the dark matter mode.

• 25:59Speaker 01

  Yes.

• 26:00Speaker 02

  And what I mean is like, you know, like the Milky Way, nobody could figure out why the mass is the mass. Because it's like all the observed stars and planets and everything else. It's no, actually the vast majority of the matter or energy, because they're the same thing, is dark matter, dark energy. And what does that mean? Nobody the hell knows. But it's just like, we don't know it. And for products, it's like you built like, if I go tell Claude, go clone Ramp, right? Because this is, this is the SaaS apocalypse that's happening right now. It's like, oh, of course. Well, I just went to the website and now I have a website that looks like Ramp. No, no, no. There are like nine million edge cases. Like, the tech debt sounds bad because it's a pejorative debt, bad. But actually, it's good. Because what you've done is you've uncovered every single problem that can go wrong. Like, the fact that, I mean, a great example.

• 26:43Speaker 02

  Remember when the power went out in San Francisco a month and a half ago? So we have this amazing thing called Waymo. Waymo had not figured out this quarter case of what if the power goes out?

• 26:53Speaker 00

  It was a thundering herd problem with the customer server or the human overrides.

• 26:57Speaker 02

  But just they had no idea. And it's like, that's actually great that that happened. You need these problems to happen.

• 27:03Speaker 00

  For sure.

• 27:03Speaker 02

  And just because my background, I used to write shareware. You know, it's try before you buy software. Shareware was a big thing.

• 27:09Speaker 00

  That's a blast from the past.

• 27:10Speaker 02

  It's a blast from the past. So there's a website that's part of CNET.

• 27:13Speaker 00

  It might come back.

• 27:14Speaker 02

  Well, but it's freemium. But this is where I'm going with the story, and you'll like this. So Download.com was the preeminent site for downloading shareware. It was like, you know, CNET was one of the most popular properties in 1999, 2000. So all the top downloadable software products were there.

• 27:30Speaker 00

  Download.com sounds like a company that had a Super Bowl ads back then.

• 27:33Speaker 02

  They would have. I bet they did, actually.

• 27:34Speaker 00

  They probably had two.

• 27:35Speaker 02

  I'd be shocked. They probably had five, right between Pets.com and something else. But so Download.com had all the popular products. And then this site called Elance shows up. And Elance is now called Upwork. This connected you with work that you would want done by very smart people, basically in the developing world. So I want a software product built. Here's everybody in Romania and Russia and India. I want translation. I want graphics. So what ended up happening is people would look at the Download.com top list. Because before, it was a very cottage industry of who wrote shareware. And it was very profitable, like ID Software, shareware company. McAfee, shareware company. Actually, CyberSource started off processing payments for shareware companies.

• 28:16Speaker 00

  Ah, okay.

• 28:17Speaker 02

  That's how they got McAfee. It's very, very interesting history to this. So we'll talk about some other time. But basically, what happened is people found Elance. Like, oh, I could pay anybody $500 to clone anything on this list. Everything on this list makes tens of millions of dollars a year. Let's go. And the cloning never worked, right? It functionally worked. Because if I say, "I'm gonna clone Eric," I might not know that you have a pancreas.

• 28:39Speaker 00

  Yep.

• 28:40Speaker 02

  Right? I'm sure you do. Right? I might not know that you have two kidneys. So the problem is that the cloning, just it goes skin-deep. And like, that's the embedded advantage of these companies.

• 28:51Speaker 00

  So do you then think the SaaS apocalypse is kind of irrational?

• 28:54Speaker 02

  I think it depends. I think some of it is very rational. Because if I want, if I have a feature that became a company, and I know this sounds like a very negative thing to say, but like, I want to get paged if my server goes down. It's a very, very logical reason to build a company called PagerDuty.

• 29:10Speaker 02

  That now has a lot of stuff around it. But I might just say like, "Hey, whenever my server is..." There are corner cases. There is the proverbial, "The power goes out in San Francisco. Do something differently." That's very, very different than NetSuite, which is, I have a saying that I like, which is, "The best companies have hostages, not customers." At least in enterprise software. Not for you. Because you actually have IMPS. But that, they're much, much harder to go rip that out. And a lot of it is kind of like the Goldilocks zone that you operate in. Right? It's like, if you're too expensive, of course, I'm gonna try to rip that thing out. If it's so cheap, then like, I forgot, nobody even used it. So you have to be in this Goldilocks zone. You have to have enough complexity. And ideally, the front end is different than the back end.

• 29:52Speaker 02

  So like, Workday, I think, is like, nobody's gonna get rid of Workday.

• 29:57Speaker 00

  Yeah.

• 29:57Speaker 02

  And I actually credit David Ricardo with this. 1870, comparative advantage. Like, sure, you could grow your own food. Right? You could plum your own plumbing.

• 30:08Speaker 00

  Yeah, yeah.

• 30:09Speaker 02

  But you're not going to do that.

• 30:10Speaker 00

  And somebody who could do your own HR system.

• 30:12Speaker 01

  I think the one, maybe pitch for Stripe and others that I would say here is, I do think that that is right. And there is a lot of complexity in, you know, local tax law for payments and things that make Workday an extraordinary business. There is this overarching macro question of like, how does work get done?

• 30:36Speaker 02

  Yeah, that's a good point.

• 30:37Speaker 01

  If you believe that, you know, work's gonna get done through tokens, you know, and models. Presumably, it probably doesn't go through payroll, probably goes through a credit card or check to these types of companies. And so if kind of the share of, you know, it's almost this sort of simple math. If you could like x-ray the P and L of most companies, the majority of it classically, at least for asset life sperms is payroll. You're paying for people to do things and SaaS is maybe a, you know, small percentage of companies' income or companies' cost base.

• 31:15Speaker 01

  Does that suddenly that share grow to high single digits, low double digits, significant double digits? And does the share actually move where, you know, the payroll economy itself, even though maybe it grows, becomes less relevant? I think this is the really funny part of even as this has been going on. What do I know as a private company, other than, you know, seeing our own payment data, but you start to see these companies, you know, beating their earnings in a way they never have before. Where, you know, the terminal value perhaps is falling out, but, you know, they're saying, you know, shareholders, we're re-accelerating. We haven't seen this since 2021. We're going faster and you're going to have multiple progressive quarters of this actually occurring for certain types of businesses.

• 31:56Speaker 01

  And so it's a really interesting, you know, time to what I very violently agree with. Your view is like, yeah, it depends. There's some businesses that are doing really well. It's my brilliant comment, it depends.

• 32:08Speaker 00

  Yeah, you mentioned, I have very Howard Marks of you.

• 32:15Speaker 00

  As you're hearing from Eric, Ramp has become the default way a lot of American companies manage spend. Stablecoins allowed that functionality to work in many countries all at once. With Ramp's stablecoin-backed corporate cards, businesses can fund a balance with stablecoins, issue cards against those balances instantly, and allow employees to spend anywhere cards are accepted without the business having to think about stablecoins all the time. Same card experience, same controls, just a much more global set of rails underneath. This is one of the many practical ways we're seeing businesses on Stripe use stablecoins by launching card programs in many more countries and doing so in much less time than it would have taken otherwise. If you're thinking about using stablecoins to expand, Stripe can help.

• 32:57Speaker 00

  You mentioned your spend data. What does the spend data that Ramp sees tell us about the economy?

• 33:03Speaker 01

  It is, I think it is stronger than.

• 33:08Speaker 01

  than many people understand in lots of ways. I mean, first, I'll go back to one of the things that perplexed maybe our our team for a long time and, you know, our economists are on the team, you know, saw this data even as recently as last year where the Census Bureau would do these periodic surveys where they go out and ask like, you know, how much is your business using AI to produce goods or services? It's very, you know, refined economic way of wording the questions and, you know, they would come back with these pronouncements saying a single-digit percent of businesses in the US have adopted AI. And we looked at our data and, you know, we support over 55,000 businesses.

• 33:53Speaker 01

  We lean a little bit towards tech, but not heavily. It kind of resembles the distribution of businesses you would see in the States. And, well, the majority of businesses have used AI. You know, you look at businesses, whether they're paying for They subscribe to ChatGPT or Anthropic or something like that. Exactly, or maybe a business that is a true, you know, agentic cognition or a culture, something like that. This is kind of vertically, vertical application. And so, one, there is this disconnect between kind of the use of tools. If you look at of how quickly businesses are adopting and responding to these new tools versus what maybe people report on. Next, growth.

• 34:34Speaker 01

  I think it's been clear over the last few quarters is the US itself is re-accelerating. GDP growth has gone from, you know, maybe the 1% to 2% you know, area to four to five. And you could argue how much of this is a little artificial with subsidies, but it's been pretty significant. But subsidized by what? Some of the, like the big beautiful bill, as well as some of the tariffs and where that's been reallocated. I think some people, I would argue on the whole, maybe unfairly, said this, I think that there's more durable growth inside the businesses. But I would say overall, business health is much stronger. And I think that the really interesting thing, and again, some of this is specific to the data that we see, but I think that businesses are generally getting more

• 35:19Speaker 01

  and more savvy about finding tools that help them be more efficient. And I think what skews our data is

• 35:27Speaker 01

  Maybe the savings we drive for people, so the way of explaining it is like people know the, Ben Franklin would say this phrase, "If a penny saved is a penny earned," and this awesome aphorism, but average American business has an 8% profit margin, and so mathematically speaking, a penny saved is equivalent to 12 pennies of revenue earned. And so if you save businesses a lot, you end up with these outcomes of the average ramp basis materially outgrowing kind of the regular use average. And what we think, we can clearly see this and demonstrate this for our own set of customers. I suspect these types of things are occurring at businesses adopting these new sets of technologies, I

• 36:08Speaker 01

  would argue, probably faster, very clearly than what the US is, maybe the classic sources are seeing. So I think it's much healthier.

• 36:15Speaker 00

  When a business saves money on ramp, what happens? Like, you know, CFO comes in and says, "Oh, my God, we're, you know, spending way too much money exactly on confetti. We don't need this much confetti."

• 36:28Speaker 01

  Who's buying the confetti?

• 36:29Speaker 00

  Yeah, and we have huge stockpiles that we don't need. Like, what happens when a business saves 5%? Like, what are they actually cutting?

• 36:35Speaker 01

  Yeah, yeah. So there's two pieces of it primarily. One is like these hard-dollar cost savings, and then some of this is time. And I'll start with the time because it's the squishy one, but I think that it's, in some cases, like actually like much more important.

• 36:47Speaker 00

  Oh, sure. They save time on their expense reconciliation. That makes sense.

• 36:51Speaker 01

  Yeah.

• 36:51Speaker 00

  So they're no longer going through line by line, and therefore there's, you know, one person who is freed up to go do something else.

• 36:57Speaker 01

  Yeah, and it's, I think, kind of one of the classic biases that people forget is people chronically undervalue their own time.

• 37:04Speaker 00

  Yep.

• 37:05Speaker 01

  You know, as maybe a principal business, you know, everyone, you know, everyone has an hourly rate.

• 37:11Speaker 00

  Within a business, human time is incredibly expensive. I think the lean companies got this right in eliminating the bottlenecks there. So, okay, that's one form. What else?

• 37:19Speaker 01

  That's one form. Next, all right, when you start to have these fine-tuned kind of controls, this part has been, I think, probably the biggest line share of this. If you, let's go back to me, one of the earlier conversations of why do people use checks, this horrible system and purchase orders. Well, The advantages of checks is unless you mail it to someone and you sign it, no money can leave your company. And whatever maybe person knows who's ever had a credit card and gone to a gym once and had a good New Year's resolution. But as you go a couple of times, you're like, God damn it, this gym is charging me.

• 37:53Speaker 00

  The difficulty of sending a check is feature, not a bug.

• 37:55Speaker 01

  Yeah, exactly. But part of what Ramp was the first to build.

• 37:59Speaker 00

  One-time use cards.

• 38:00Speaker 01

  Single-use cards, but also more than that, merchant blocking. So you can, whether it's on one card or 10,000 cards at once, build in a kill switch to say, okay, we've signed this new deal with this merchant. We're only on Uber. We are no longer taking lifts. And anytime someone goes and tries to go on merchant A or B, you can do this. Or you sign a new contract and you say, I'm going to spend $10,000 only with Salesforce. And on the $10,000 and $1, they try to charge you, it declines. And what gets to happen? You get to have a conversation with their sales team who really wants to make their budget. And if you look at this mathematically, for most companies that come over a low end,

• 38:42Speaker 01

  maybe a very hygienic company that is more giving out few cards in the old world, you know, could durably cut their expenses about 2% a year by doing this. Some of these very laissez-faire businesses are saving just 10% just through these types of things. Next, you start ending up with these more fine-tuned kind of controls where you can say like, under these circumstances, I want to go and have kind of charges occur. Maybe you have an engineer stay till 8:00 PM at night. You can go and, you know, buy a meal. But if you take an Uber on a Saturday, that should turn off. And so you have the cards, if it's like an Uber on a Saturday, auto decline. But you can text and say, actually, it's for work. You send back a yes, it turns on. And so it's all these little tiny paper cuts that actually start to go into run.

• 39:25Speaker 01

  Next, it's vendor data, one of the unique assets of Ramp. Is anytime you spend money, you upload a receipt. Maybe you upload an invoice or an MSA. This kind of takes us back to the Parabas days. We know across hundreds of millions of purchases every year, not just that you spent money at a software vendor, but what did you spend per seat? And so if you're a customer on ramp and you're about to go and pay this large bill on random SaaS vendor, we can show you in real time before you kind of send the funds, you are paying 20% more than the rest of the market. You know, here's kind of the cost curve, what others are paying. And actually, by going in and powering your procurement team.

• 40:07Speaker 00

  Do you have enough data to do that? Because like my AWS bill is not like your AWS bill. And so, but don't you need to know how many instances we're running to know if this is a good deal or not?

• 40:16Speaker 01

  You can, but you can still kind of get down to the level of is there a bulk discount or not? And start to know if is there a negotiated aspect? There's other types of things where I'd argue, maybe a lot of classic software as a service ends up in this way. It's like your pricing is really dependent on, you know, did you sign that deal on January 1st? Or on December 31st, when the sales team really needs to hit the quota? And you can actually see down to the seat level, you know, you're paying $30 per seat.

• 40:46Speaker 00

  It's a great time to be signing a Salesforce contract.

• 40:48Speaker 01

  Exactly. You know, and so you can actually get down to the seat level and say, okay, you're about to auto renew. The market prices actually move for this set of service. And so it can be very, very useful to procurement teams to know where they compare with the market.

• 41:04Speaker 02

  Yeah, that was my question. So if you remember Groupon, much beleaguered Groupon. But Groupon started off as a site called thetippingpoint.com/groupon. Originally it was like, hey, I don't like the fact that Starbucks uses paper cups. If I get 10,000 other people to donate a dollar, we'll fly a plane in front of Howard Schultz's house, which also emits carbon, it's a bad example. But you only want, it's a collective action thing.

• 41:29Speaker 01

  That's right.

• 41:29Speaker 02

  So, and then down, because I met Andrew Mason and Brad Kewell when they were first starting this business. It was like eight people. It was Tipping Point. And downstairs, there was a pizza restaurant or something like, oh, well, if we get like 50 people to agree to buy pizza, maybe they'll give us a lower price.

• 41:45Speaker 00

  The cause became disconsient.

• 41:46Speaker 02

  Yes, but then the thing is, Groupon wasn't known for this like it has to tip because they always had the demand. So they never had to worry about it because before it's like you've got supply, you've got demand, right? So I guess my question for you is, can you be the arbiter of pricing? Can you aggregate the demand? And the same with that like Costco, who shops at Costco? Every small restaurant shops at Costco, right? And Costco uses that collective bargaining power, if you will, to say, hey, Coca-Cola, give us a very, very low price. They take very, very little of that because right now I'm using Ramp to buy stuff.

• 42:18Speaker 01

  Yes.

• 42:19Speaker 02

  But I would imagine that like if you could say, hey, I have $100 billion. I didn't know it was that high. That's amazing. I have $100 billion to spend. I can hopefully direct it this way or that way. Please give me a 20% discount. Can you do that? Or is that kind of like more further in the funnel of like the purchase process?

• 42:36Speaker 01

  There are this large swath of businesses that I've been fascinated by called these group purchasing organizations. A lot of these, you know this well, like came out of that in the healthcare world where it's a very small set.

• 42:49Speaker 02

  PVM.

• 42:50Speaker 01

  Exactly, supplier. But if you can go and aggregate demand, you could say, okay, for these type of purchases, you're going to offer this procedure at this count for this type of equipment, you're going to give this level bulk kind of discount and you've gone and you've done that. And I think these are very popular now in the private equity world. When I look at Ramp data today, there are dozens of, you know, more and more every year of merchants where, you know, there's, we are sending billions of dollars. You know, it is truly, it is the client's money. They are going where they're going, but we have a sense of actually, okay, where is this actually going? And can you go and say, you know, across the Ramp buyer base over the next 12 months, this is how many dollars will go towards you? Can we negotiate a discount?

• 43:32Speaker 01

  The other way, which maybe starts to, you know, sometimes these businesses veer closer to advertising, but where it gets really interesting is we see the fastest growing businesses. What are the businesses that people are getting really excited and are adopting really quickly? And we might have a signal of these are actually good businesses and good tools and actually most businesses should move towards that. Could you go and actually start to say, hey, your renewal is coming up in 90 days?

• 44:02Speaker 01

  Have you considered this other business who has provided a 20% complimentary welcome lower price to you? And so there's multiple forms that can take place, but the short version of it is I think, one, it's yes, I think you can offer a bulk discount. But two, you end up almost getting closer to, you know, back to this other theme of like, can you start to go and maybe, you know, show businesses that directing their next marginal dollar will lead to a, you know, this outcome?

• 44:32Speaker 02

  Well, it feels like there's even like a third thing, which is, I would call it merchant-specific balance. So imagine that it's December 31st, I'm buying something at Whole Foods. And then I see an offer, not donate a dollar to the, you know, whatever charity they're pushing, but it's like, why don't you commit $2,000 of spend for 2026 for $1,800?

• 44:55Speaker 01

  Yep.

• 44:56Speaker 02

  And the nice thing there is that they lock in that spend for me. They actually collect it. I mean, I know it's, you know, there's a sheetment law and all this complicated stuff, but the key thing is it's almost a risk management and a loyalty play for them at once. Because the problem is that they don't know how much, you know, celery to buy, they don't know how many. So it kind of goes back to the AARP thing that we were talking about earlier.

• 45:17Speaker 01

  Yeah.

• 45:18Speaker 02

  Because the other thing is not just saying, hey, I'm going to group, I'm going to group bargain on behalf of all the different customers that I work with, but it's an ancillary thing, which is you might want to just pre-commit your spend to a particular vendor, and that vendor would love to have that spend pre-committed, even if they're Amazon and their cost of capital is very low.

• 45:37Speaker 01

  For sure.

• 45:38Speaker 02

  Because they know, they don't have to worry when they're planning their budget for the next year, that you're going to churn in month nine. And that seems like another, like the closest that you can get to that is gift cards.

• 45:47Speaker 01

  Yes.

• 45:48Speaker 02

  Strangely enough, which I'm sure you know well from your

• 45:50Speaker 00

  Gift cards for business.

• 45:51Speaker 02

  Yeah, because it's like you go to Costco, this is actually a big business at Costco. You go to Costco, they sell gift cards. We were just talking about this. So they sell gift cards, you can buy $100 of Starbucks gift cards for 80 bucks. Is Starbucks dumb? Like, why are they, if they're worth $100? No, because they basically have in the ecosystem, money that is going to be spent at Starbucks. And yeah, there's breakage and other stuff, but it's actually a quite, it's quite a valuable value proposition for the receiving merchant, because they know that you're going to spend your money with them.

• 46:19Speaker 00

  But I want to go back to your previous idea where McDonald's every five years or whatever does a big bake-off between Coke and Pepsi and they always renew Coke and they have a long-standing or maybe a movie theater chain is a better example where all the big chains like they don't serve Coke and Pepsi. They only serve one and they do a big bake-off between the brands every five years. And you have lots of small businesses that are buying from Coke or buying from Pepsi. And so it feels like you just do a bake-off between them saying Ramp is going to have a preferred vendor and you can obviously use a Ramp card on either. It'll work, but we have preferred rates with Pepsi. Is that a thing Ramp should do?

• 46:56Speaker 01

  It's a really interesting question. As short as I think over the, you know, long duration of time, like I'm kind of a bit of a crazy person. I'm like, we should try everything is my, is my actual answer. Plot code. Yeah, let's go. Pepsi, make money for Pepsi. Go negotiate. The cost of a phone call or negotiation has never been lower. But there's this almost philosophical question of like, all right, where is the differentiation? What makes Ramp different?

• 47:23Speaker 00

  But isn't that increasing the scale?

• 47:25Speaker 01

  It is, and I think that you're right in that like at the very beginning of the company, the answer was very easy of like, look, our cost of capital is nowhere close to a bank's. The interchange that we could make is nowhere close to it. We have all the disadvantages of scale and kind of the only thing that we could do to compete with these people was we could, you know, everything was slow at, you know, the bank that I worked at before. It was hard to ship things. We need to move fast. We need to kind of have this emphasis around velocity to ship product and just kind of blitzkrieg faster than maybe others could respond. What it's evolved into, and I think is today probably the largest point of differentiation

• 48:10Speaker 01

  at the meta level between Ramp and maybe the financial service providers that we compete with is they sell money and we sell time. They'll sell you a lower, like a loan at a lower cost of capital, you know, rewards at wherever they set it. We will sell your expenses done.

• 48:31Speaker 00

  And so are you naturally skeptical of this idea because it's selling money rather than selling time?

• 48:35Speaker 01

  I wouldn't say I'm naturally skeptical. I would say that.

• 48:38Speaker 00

  It's okay. We're not precious. We have lots more ideas.

• 48:40Speaker 01

  No, no, it's good. There is this question of, you know, I think back to our roots like, I don't know, like. How do you build a product that is 10 times better than other folks? And I think when you get really large, actually just a line drive is good and a 2X or a 3X is better kind of thing is actually good. But you know, how do you find these set of things that other, your product offering is so different than what you can find elsewhere? And I think that we can conceivably, and I know this, like you can negotiate with kind of like these large logistics companies, a deal with like a FedEx that would be better than what most companies are paying. And I think that that's interesting. Then you have all the sub-levels of how to get people to know about the offer, to sign into the offer, to deal with all these sub-things.

• 49:24Speaker 01

  Or you could just go and spend that next marginal hour to go and say like, "Let's just automate all of accounting for these customers. Let's go and start doing financial work for these customers." No financial institution is able to compete on that kind of vector. And so I would say in kind of the fullness of time, we want to do both. Like I think that you want to save people the maximum amount of time, the maximum amount of money that you can. But I think part of what makes us so different in this kind of world that we operate in is we have this obsession of like, you know, sources of drag of the things that slow down purchases that lead you to overspend versus other companies.

• 50:04Speaker 00

  But just to push on that, I feel like the differentiation for companies often has to change as time goes on. Because they start in one competitive equilibrium and then as time goes on, they are in another competitive equilibrium. It's dynamic. And it feels to me that ramp got its start with very fast product velocity and having this great product experience. And as you grow up, you can just build scale into the product and scale. The scale derived product advantages, not just like we're big, but like Costco, you know, the advantage comes from the scale and they really pass it out to the customer. And it feels like there could be a second stage to this rocket where you get going with faster product velocity.

• 50:47Speaker 00

  But then there's actually a pretty different set of product differentiations as you as you scale up.

• 50:54Speaker 01

  I think it's true. I think it's well said. And there's this almost question of like, In every line of business that we're building, where are we in the S-curve? You know, how far are we? Is this a product that is serving, you know, these tinkerers, early adopters, I mean, the early majority? Are we in the late where we need to shift the business to kind of harvesting, contributing, you know, optimize price, not quantity in it? Or, you know, towards the end? And the thing which is so shocking, and I think maybe is part of why I love this business, and I think even too, I think about Stripe and many of the great businesses and payments that have been built. I believe today, Ramp powers more than 2%

• 51:39Speaker 01

  of all corporate and small business card transactions in the United States. Which is amazing for a business that, you know, the product you couldn't even sign up for it six years ago. And yet, that's a really fancy way of saying 98% of spend is not on us. Unramped. It is un-ramped. You know, and let's say we, you know, we do it again, you know, we grew faster last year than we did the year before. You know, I feel very good about the way this year is starting off. And maybe it's closer to four. 96% is still big. 92% is still big. It is so large. And by the way, there's more ways to buy things than just cards. You know, you think about bill payments. And so, and I think that there is an aspect of,

• 52:24Speaker 01

  for most people, there's so much drudgery around. Like, I think people are doing artisanal expense reports. You know, it's fun to be like a hipster and spend an hour making coffee. But like, it's a little crazy that... This is the Blue Bottle of expense resorts. You know, but unfortunately, you're in Concur and you know, like, it's this spinning wheel. It's a pour-over expense report. Yeah, it's a pour... We love it that way. You know, you try it, it's the experience. But no, it's...

• 52:48Speaker 02

  You're the espresso. Much more efficient.

• 52:50Speaker 01

  That's right. But like, what I would say is like, this aspect of time is most people have not experienced of like, you know, this thing you know, you know, is just a fact of life for building a business. That's been hard, doesn't need to be hard. Doing your books doesn't need to be hard. And so, I still think in some sense, in where we are on the S-curves of our business, I lean that way. But you're totally right when you're at this level where... In the not-too-distant future, I mean, you're there processing trillions of dollars per year in economic activity, and we aspire to be there in the not-too-distant future.

• 53:29Speaker 00

  Sounds like you'll be there pretty soon.

• 53:31Speaker 01

  Working our hardest, but.

• 53:32Speaker 02

  Exponential growth is a powerful thing.

• 53:35Speaker 01

  It's definitely given me good things to think about and work towards.

• 53:38Speaker 02

  So I was thinking about, you know, when we met, when you were running Parabiz. And it kind of feels like, you know, one of the first or second or third order effects of AI is the marginal cost of arguing has gone down to zero.

• 53:50Speaker 01

  Yes.

• 53:51Speaker 02

  Right? No, I'm serious, right?

• 53:52Speaker 01

  It's true.

• 53:52Speaker 02

  It's just like, I mean, I, my wife got into an argument with some company, and it's like she used ChatGPT to argue with them, they used it to argue back with her. And it's like, I just saw the future. This is incredible. And like, we won.

• 54:03Speaker 00

  Your agent will talk to my agent, yeah.

• 54:05Speaker 02

  But it's like, you think about this, like, from a chargeback, where it's like, you know, "Hey, this price went down." I mean, this is how, I remember you, like, "This is such a good idea." It's like, the price went down, you have these breakage models that the card networks had.

• 54:17Speaker 01

  Yep.

• 54:17Speaker 02

  And Best Buy has to write you a che, or Visa has to write you a check because that TV fell by 20%, but like, nobody does that.

• 54:24Speaker 01

  Yep.

• 54:25Speaker 02

  And now everybody's going to do that.

• 54:26Speaker 01

  100%.

• 54:27Speaker 02

  Or it's like, you do a chargeback for $5. It's just not worth it.

• 54:31Speaker 01

  For sure.

• 54:31Speaker 02

  It's like, I thought it was Pepsi that I was buying at McDonald's, it was Coke, chargeback, right? Nobody's going to dispute that because the cost is too high, but now the cost goes to zero.

• 54:41Speaker 01

  That's right.

• 54:42Speaker 02

  So I'm just kind of, like, what do you think, I mean, it's hard to, you know, picture five years from now what the actual full effects of this are, but if you kind of think about that as the macro abstraction, it's like marginal cost of arguing goes to zero, what changes?

• 54:55Speaker 01

  I think to be really explicit, I think what's happening is the marginal cost of time, of knowledge.

• 55:00Speaker 02

  That is a much better abstraction.

• 55:02Speaker 01

  Is what's going down so rapidly. And I think about our customer base. Most of our customers don't have a single software engineer, let alone a software engineer for their finance team. And if what we are very good at doing is Selling functionally sets of work. Maybe it's embedded in a financial operating platform, but expenses done, accounting done, some type of knowledge work done. And you can deliver that. That is immense, high-leverage value for these customers. You know, if it, let's say it costs $5 before, they didn't do it, now they can get $5 of value. But, you know, maybe the cost of, it's a software-type cost.

• 55:44Speaker 01

  Maybe it's pennies of tokens to actually go and do that. That is a great business to be in because it's very high customer value. We can capture just a small amount of that and build this business. And when you go back to kind of the original insight of Ramp, we entered into this industry where it was very profitable, but it was, not only was it misaligned, but people were fighting over like basis points. You know, every last dollar that went into rewards could have meant like tens or hundreds of millions of dollars in profit for the business, you know, for them. But, you know, if you think about for a customer, let's say that in order to make one extra basis point as a business, you would try to incent them to spend $100 more.

• 56:28Speaker 01

  For that customer, let's say they buy something, that gym membership they didn't need or that subscription keeps going. They have lost $100. It's gone out the door and maybe they go to the gym, maybe they don't. But that is, that is out of their bank account. And if you just try to say, I'm gonna have a better rewards program, sure, maybe you can get that customer, you know, $1 or $1.10 back or some amount. That pales in comparison to just helping them just like not spend that $100, like cancel the subscription. The economic leverage of that activity is much higher.

• 56:59Speaker 00

  You sold your last business, Paribus, to Capital One. Capital One is one of the biggest founder-run financial firms that people in Silicon Valley don't talk about. What should we all be, and have been extraordinarily successful, what should we all be learning from Capital One and their success? And I actually just say, how did they? Like, what product really broke out for them? Just what is Capital One's success?

• 57:25Speaker 01

  I think there's a lot that makes them amazing as a company. Both the founders are excellent. Rich Fairbank, Nigel Morris. I think it's worth people reading up on their stories and...

• 57:36Speaker 00

  Founded in 90s, is that right?

• 57:39Speaker 01

  So... Not quite.

• 57:41Speaker 00

  Okay.

• 57:42Speaker 01

  From a legal standpoint.

• 57:43Speaker 00

  I'm very woolly on my Capital One history.

• 57:45Speaker 01

  I think that legally, the incorporation, in some sense, for Capital One financially, it was, I think it was in 1994, but the actual start traces back to the 80s.

• 57:55Speaker 00

  Okay.

• 57:55Speaker 01

  At the time, Rich and Nigel had met, they were consultants. And they had this insight that the business of credit cards was, well, it was lucrative, was not serving most of the country. The way you could kind of think about credit cards back then, you know, Diners Club, maybe others have heard of it, it was sort of, it was a way for like, rich business people to get together and have lunch. And like, they put the card down and, you know, the restaurant would pick up the tab and they could go and pay the restaurant back later and, and they had kind of navigated that. And, and, and kind of the, the simplification is if you had a very high credit score, you

• 58:38Speaker 01

  could get one of these cards with the benefits that it had. And if you didn't have a credit score that met that, you could have a debit card. And that was basically it. It was like a very kind of linear cutoff. And what Rich and Nigel, the insight that they had had is, there must be some curve. We should be able to test this. Maybe we give people cards that have above an 800 credit score or something like that then, but what about 790? There might be people there that can go and pay for this. If, and the way we could go and take on the cost of this, maybe we charge them a somewhat higher interest rate until they prove kind of their efficacy and if 790 works, go to 780.

• 59:19Speaker 00

  So it's kind of the BNPL of its day. There is a population who are, for whatever reason, just below the threshold where banks are giving them good access to credit, where you can actually very profitably lend to them.

• 59:29Speaker 01

  This is right. Exactly. And so they, in the 80s, were functionally pitching all these different banks to say, we should go on this exploration. We'll even run this for you. Let us go and run this. And they went door to door to door to door to door.

• 59:46Speaker 00

  And the banks didn't buy it.

• 59:47Speaker 01

  They didn't buy it. And then finally, there was a bank in Virginia, Signet Bank, that said, fine, we'll let you run it. You can come join. We'll give you this group. And some resources to go build this. So they built this as this, you know, division inside of it. And it started to work. As this was going on, the computer revolution was was taking off and they it was sort of an unfortunate acronym, but they called it IBS. It's not, you know. Information-based strategy. And they said, we could use different pockets of data and run these, you know, before there was big data. There was this kind of data we could go and test.

• 1:00:29Speaker 01

  You know, maybe this person has a balance of $8,000 at this bank. We could send them an offer at this interest rate or this kind of, you know, you don't need to pay back interest for six months or 12 months and they could start to go and see the mathematical return against this. And this division started really working and it got so profitable. It became a problem for the business and they convinced them to spin it out. And so in 1994, that is the founding, as people know, Capital One today, but it actually was, I think, almost a decade in building to actually go and do this. I think that there was a lot that they got really right. One, I think that they took a much more of a first principles view of the business.

• 1:01:13Speaker 01

  Whereas others said, this is a profitable product. I'm going to do it like the other person and use kind of scale and distribution advantages. They said, well, let's think about the product nature itself. There's different, everyone's making money in interchange. Maybe there's lending could work and you could kind of have different strategies for different types of populations. They did this so large where I think at one point they were the largest customer of the US Postal Service. They would send out so many offers, I think until Amazon took them over. There was a period of time that they did this. So incredibly experimental. They kind of carved the path and showed how do you go from credit facilities to for fintech founders. Eventually, maybe you become a bank or buy a bank and carve that path. So there's some tactical lessons. I also think they've done a great job of building a great and durable brand.

• 1:01:57Speaker 01

  One of the things that Capital One has done very, very well, I think, has focused on like, what is the consistent visual message? What is the aesthetic and how do you stand out in this kind of busy and different world? And so there's a lot of pieces to what's made that company work, but. And they've also remained focused, which a lot of banks haven't, right? I would say so. Well, I think that's. That is a rewrite of history. They were doing like cellphone financing, healthcare financing, they were a part of this thing. They've come back to focus after wandering in the woods. They had some JV, it's like America One, I think it was called with like Computer with Amazon.

• 1:02:37Speaker 01

  They were actually like the most experimental business ever in a lot of ways. And I think it was Hibernia Bank in Louisiana. And this was after Hurricane Katrina, I think it was maybe during it or just after they were able to buy it. It was like, it was an existential question for them and I think that many people worried about, you knew this, like well too from the BNPL businesses where if you're kind of a lending based business and it's fine when interest rates are low, but if there's a crisis and people don't want to lend to you, it can just break your business. And so they had had these kind of like scares and they said, we need a stable kind of cost base. Eventually they bought a bank, which was in a lot of ways very good.

• 1:03:20Speaker 01

  They had kind of the deposits as this durable, stable, low cost of, or consistent capital base. But the flip side of buying it was they had to reconcile their culture of like crazy experimentation, of trying everything to, we're a regulated bank now. We gotta be bank people and it's more than just an attitude thing. Like if you are, you know, a nationally chartered bank. Yeah, it's real strictures, yeah. You know, like, look, it's to the level of, let's say the bank fails on, you know, Monday night. There is personnel. There's guys in windbreakers in your office, actually. Yeah, and they've probably been working there for some time before.

• 1:04:04Speaker 01

  You know, and so it's, I think there was a change. In some sense, there is experimentation, I think, within certain constraints. Would be how I would describe the Capital One post buying a bank versus before would be my read of it. But when you look at them in the 90s and 2000s, it was like them and in some ways like named a high-flying tech company. They were right up there in terms of share price growth. And they started reachieving it, I think, in the late 2010s, but it's a fascinating company.

• 1:04:39Speaker 02

  I mean, I think the talent pool, so at Affirm, our first really good risk person, but this is true for every fintech company. It's just like, actually, this is kind of cool.

• 1:04:48Speaker 00

  Billy Alvarado, our first CEO, grew up in Capital One.

• 1:04:50Speaker 02

  I played the piano. And my teacher was taught by somebody who was taught by somebody. There's actually a chart, you can look this up. Churney and Beethoven taught everybody who ever taught anybody. So like Lang Lang, or Yujo Wang, like pick any famous pianists today.

• 1:05:05Speaker 01

  Yes.

• 1:05:06Speaker 02

  They can always trace their lineage 100% of the time to Churney, Carl Churney, or Beethoven.

• 1:05:11Speaker 01

  Yes.

• 1:05:12Speaker 00

  And Capital One is that.

• 1:05:13Speaker 02

  Capital One is like the Churney.

• 1:05:14Speaker 01

  Our head of risk, Sri Srinivasan, he's amazing, came from Capital, we're the same boss 10 years apart, actually, in some sense. And all the heads of risk for all modern fintechs that are, came from Capital One.

• 1:05:30Speaker 02

  Well, because it's one of these things where like, you know that you don't want to just hire for Intercept, you want to hire for Slope.

• 1:05:35Speaker 01

  Yes.

• 1:05:35Speaker 02

  And this is the problem. It's like you find, oh, here, not to pick on Bank of America or Chase or somebody, but it's like, all right, this person clearly knows how to do their job. The bank that they work in is worth a lot of money, but like, they don't necessarily have, how do I put this delicately, the slope.

• 1:05:50Speaker 01

  Yes.

• 1:05:50Speaker 02

  They won't know what that means, because they don't know what slope means. But seriously, like, the guy that we hired, just so, he was very, very smart. And that was the key thing about Capital One, is that like, they didn't hire banking people, they just hired smart people. And it became known as the place where smart people went. And actually, the fact that companies would poach people from Capital One actually added to the alert. It's like, I want to work at McKinsey, because at the end of McKinsey, I'm going to get a better job somewhere else.

• 1:06:16Speaker 00

  Capital One job more tragic.

• 1:06:17Speaker 02

  Capital One actually had, it did have that imprimatur. And I think part of it is, it's the only founder-led institution.

• 1:06:23Speaker 00

  Last question, Eric. We're talking about banking here. You have a treasury product.

• 1:06:26Speaker 01

  Yes.

• 1:06:27Speaker 00

  In five years, where do businesses keep their money? Is that with, I mean, statistically, mostly, you know, you mentioned 2% on Ramp, it's even higher today in traditional banks, like a Chase or a Bank of America. There's also neo-banks, you know, the, I mean, kind of bank-like entities like Mercury, or Revolut, or Monzo, or things like that. There are companies like Ramp, where you started in spend cards, but maybe moving more into treasury? How do you think that shakes out as a? This is market.

• 1:06:59Speaker 01

  So as a macro point, I think there is an incredible amount of money made by institutions who are enjoying the profit pool and sharing very little with their end customers. You know, if you think about the implications of like the federal overnight funds rate.

• 1:07:17Speaker 00

  Yes.

• 1:07:18Speaker 01

  This is basically saying, hey, if you want to go and.

• 1:07:21Speaker 00

  Just insane that there's so little yield sharing in the current market.

• 1:07:23Speaker 01

  It's crazy. I think that the national average for businesses, right, these are sophisticated entities with personnel that are supposed to be able to manage and put their funds in some place that's more high yield. I think the national average, you know, on checking accounts is 0.07% in the US.

• 1:07:40Speaker 00

  And so I'm guessing you don't believe that Bank of America and JP Morgan and all these folks will wake up more altruistic one day. And so what is the competitive process by which you think we'll get there?

• 1:07:51Speaker 01

  I think that new businesses, whether as they have their own charter or they work with banks too, that, you know, they're, you know, this is not a monopoly. Like they have, everyone has competitors and it is a market that evolves. Like I think that that rate will go up, that the easier it is for people to, whether it's to, you know, create depository institutions, create accounts at these institutions, or create stores of value, maybe even outside of these systems, maybe in a stable currency. And so I think that rate goes up. I think part of what's driven the extremely rapid growth of ramp treasury is it's just at a vastly better deal for customers.

• 1:08:31Speaker 01

  Like why are, you know, maybe you keep three months of just walking around money in your checking account, but you know, if you know the funds you're going to receive and what you're paying out, well, we can move funds on the day payroll is coming due into that account. And then every other day, make sure the funds are earning the highest rate possible. And so I think from a macro perspective, these things tend to go up in terms of the relative yield. I think there's another question of. Slack in the system. If you have more and more, money can think, right? If the dollars in your company have some level of intelligence, right?

• 1:09:12Speaker 01

  Like there's, it's able to kind of, you know, determine when can it be spent, under what circumstances? It's increasingly recorded in real time. And there's some reasoning around this, some ability to kind of opine of where should the next marginal dollar go? And you have systems that are able to think infinitely about these things, even at 3:00 in the morning when most of your team is asleep. Well, once you determine, like, maybe you'll determine, I should keep the funds in some level in like a 2% or 4% yielding account. But I think more of those dollars will go in flight, actually, to go spend to, if you have a business that makes an 8% profit margin a year, that's a lot higher than what you can earn in the overnight rate.

• 1:09:57Speaker 01

  And so in some sense, I think you have the dual effect.

• 1:09:59Speaker 00

  Smarter capital allocation.

• 1:10:00Speaker 01

  I think more dollars will be put to work. I think, I agree with Alex's macro point of if you kind of understand counterparties, you understand more information. I think that, one, the cost of financing should go down, and I think more dollars should be in the system. In some sense, it's actually a waste for everyone to have your dollars just sitting in a bank account. Who does that benefit?

• 1:10:20Speaker 02

  But it goes back to your time point. And it's like the reason why I got mad at Chase a while ago, and I still have a Chase account. And like, why is that? It's like, I have a life insurance policy. I don't remember the login for it. It's just too much work. This is a true story.

• 1:10:34Speaker 00

  Isn't this an issue if you die?

• 1:10:35Speaker 02

  Yeah, I mean, well, but they'll pay my wife. I just don't know how to log in and change the bank account, right? So they'll send her a nice letter, I'm sure, and some flowers. But, but, you know, why, oh, actually, this is a true story. I wrote a check for somebody's bar mitzvah.

• 1:10:49Speaker 01

  Mazel tov.

• 1:10:50Speaker 02

  Has not been deposited. Do I want to be the schmuck who has the bounced check? Right? No, I don't. So it's like, I have to be...

• 1:10:58Speaker 00

  This kid is keeping you at Chase.

• 1:10:59Speaker 02

  Yes.

• 1:11:00Speaker 00

  Well, great to see you.

• 1:11:01Speaker 01

  You too, thanks.

• 1:11:02Speaker 02

  Eric, thank you.

• 1:11:03Speaker 00

  Yeah.

• 1:11:03Speaker 01

  Thanks for the Guinness, it was a great time.