Identifying the Right Customers to Serve, with Ramp CEO Eric Glyman
Welcome to Crossing the Enterprise Chasm, a podcast about software startups and their journey moving upmarket to serving enterprise customers. I'm your host, Michael Grinich. I'm the founder of WorkOS, which is a platform that helps developers quickly ship common enterprise features like Single sign-off. On this podcast cast you'll hear directly from founders, product leaders and early stage operators who have navigated building great products for enterprise customers. In every episode, you'll find strategies, tactics, and real world advice for ways to make your app enterprise ready and take your business to the next level.
Today I'm joined by Eric Glyman, the CEO and co-founder of Ramp. For those of you unfamiliar, Ramp is a corporate card and finance automation platform that's designed to help you spend less. In August of this year, Ramp raised $300 million in Series C Financing at a $3.9 billion valuation. They have over 2000 businesses using Ramp as their primary card and Ramp is one of the fastest growing companies today. They've seen their transaction volume increase over 1000% year over year. I'm super excited to chat with Eric about how Ramp is moving up market and crossing the enterprise chasm. Eric, welcome to the podcast.
Thanks for having me.
Let's just jump in. Give us a quick update on Ramp. Where's the business today? Where's the team at? What's your current focus?
For sure. Today Ramp is about two and a half years old. We're serving in the thousands of customers and processing well into the nine figures per month in card transaction volume. And we're working to scale. We started as a pure play corporate card, expanded into expense management, reimbursements, bill payments, accounting automation, and much more. And really where we're trying to get to for customers is to really automate all the tedious work that goes into closing their books at the end of every month and identify waste so we can cut it out.
And so for the average company, we speed up their month and close by about five days per month. We also help the average company spend 3.3% less than they would've otherwise. And our current focus is in many ways similar from the start of the business. Our purpose is to help companies save time and save money so they can better achieve their own purpose. But I think that as we grow and get more and more into the thousands of businesses, we're seeing businesses of all shapes and sizes, sales motions, product motions, and the like, and working to expand and cover more surface area.
Today, you describe Ramp as a finance automation platform with all these different components that tie together. I'm curious if you can break that apart and talk more about it and maybe sort of where you got started. I think the corporate card was kind of the beginnings of a lot of this and how it grew into this wider platform.
Definitely. Yeah. Today we are the fastest growing corporate card in the US. And some of that comes down to that's been our core product. That's where the motion is most developed and we're still growing at rapid rates. And we tend to double in size just about every three to four months to be a sensible volume on that. But as we started serving customers, it was very clear early on the need and challenge wasn't just the card. It was people didn't turn their receipts on time, we needed expense management software. And so we followed that. And so the next product that came along was integrated expense management.
Now over 90% of our customers have fully replaced software like Concur, Expensify and the likes. And then as we got deeper there, customers would say, sometimes you've got employees who don't use the card and need reimbursement. And so we built that. Next people said, could you do bill.com too? We love it. If we had this automated close on ECH wires and the likes, so we went there. I think a lot of the roadmap like many B2B companies has been born out serving customers, seeing the problems and challenges they have and seeing if we can help out.I think that adoption across each product is very deep across cards and expense management. We're much earlier in certain products, even in beta phases that expand out of it.
It sounds like Ramp is just getting pulled into all these different other businesses. It's just kind of like, buy that energy from the customer base.
It's strange. I know we say we're the card that wants people to spend less, but it's so different. Most of our competitors Incumbent Financial Institutions, some of them have been around since the 1800s. Actually, multiple were the largest, literally. They're not focused on helping companies save time, money, and it's strange, but it's such a different focus and we have a different core foundational mission like that. And you say to customers that I'm actually aligned with you, it turns out, they'll tell you their problems. They'll tell you where wastage is happening. And it's been a great opportunity to one, to serve that but we're not trying to come up with ideas in thin air. It's really our prioritization exercise each and every day.
I know you say that you're helping companies spend less, but clearly companies are spending more and more as they're growing using Ramp. And you have a huge customer base of companies that start off small and continue to grow. I think this was the early days of Ramp selling to startups and fast growing tech companies. Talk through how those companies of grown and expanded and how their needs have changed, and how you think about Ramp moving up market into bigger and bigger businesses.
Definitely. I think the tech press and the like would frame Ramp as a card for startups, but our initial focus was actually on what we would describe as mid-market companies where we felt there was a hole in the market. Suddenly, when you talk to companies and they got past 15, 20 people, the needs shifted. People were no longer looking for, bribe me and not paying enough. I would love points, rewards, lounge, and the like. Things that you might see in a consumer card that actually people would say the business is working. It's just really complex to run it. I would like something that's more stable. I know there's waste.
And that enterprise sales teams are charging me at my willingness to pay, help me identify that, help me spend less, help me spend less time. And so I think even from the early days, a lot of our ethos was more product led in that we viewed Ramp, not just as about offering a card that was really secondary, but about really filling in all the gaps that make running a company very hard. And I think we've benefited from one as it's been very easy and intuitive to use. We're able to expand horizontally in the product set and customers have pulled us when they really know Ramp is a tool that saves them time and money. But two, as they've grown, it's been very helpful for that dollar retention, our ability to expand and grow in a business as well.
I know Ramp's really easy to sign up for. Anyone can just go and go to your website and sign up today and just get started. How important is your sales team? When did you start building sales as a motion and how did you think about the role of the sales team early on with this product led motion as well?
It was super important. My last company was in the consumer space. And so I didn't know anything about sales when I got into it. And I've definitely had to bang my head against the wall at times, but it's been very valuable. Now it's one of the core parts of the team. First just some things that weren't intuitive to me that were helpful. One, as opposed to general SaaS motions, where often it's about getting a customer on the phone, excited, ready to buy, you sell, and then you have seats and maybe there's a bit of a land and expand, but really the revenue recognition comes from the contracting phase.
Ramp is very much usage based where a customer could have a credit card, but if they never use it doesn't matter. Ramp is fully free. And I think that what we underestimated and what was very important was in our business, the importance of not just measurement along some of the self surge portion of it, but really customer success and account management. If a company wasn't set up well and right, if people didn't issue cards out, if it wasn't on a few core places early, if it wasn't linked to accounting software, if people had completed tested in their first expense receipt within a certain period of time, we could to see the signals that this would not be a company that would Ramp.
And above a certain size almost was impossible for us to really grow and scale. And so very early on, we figured out that we would need not just people to kind of go and get people on the phone and to sell, but account managers and customer success from very early. And today that's be born out in the structure where it's not just folks who are maybe traditional sales development, account executive kind of function, but account management and success as well.
I have a really specific tactical question about that. Typically, sales reps are comped based on the quota of deal they close. You close a $20,000 deal or $50,000 deal, and that goes into your quota. With a business like this, with this expansion, and if they don't use it, you don't really make any money. That's a challenge to figure out how to comp those people in sales, and also the folks on customer success are kind of helping with the expansion or doing the account management. How do you navigate that? How did you set that up to pull in sales, but for these kind of seeds you're planting, you need to water them for quite a while before you can actually harvest?
Completely. We didn't know anything about sales at the start. And so when we were calling people up, we'd call SaaS leaders and they'd have these answers. I'm like, that doesn't feel quite relevant. And it turned out there was a small class in a growing class of SaaS, like FinTech, businesses that were struggling with this question. And I think there's a few people who've done great at this. I think Twilio is an example of it where you start using it, but then maybe you become Uber and you're sending out millions of phone notifications daily. And they had started to hone on this model that went something like the following.
The SD function probably similar what you would anticipate of qualified meetings booked, good proxy. Account executives, whereas before it could be what's the value of the contract actually closed actually funded? For us, we wanted to tie it to the core way that the business monetizes, which today has primarily been spent. Every time a card is swiped, a certain amount of revenue comes back us. And very quickly we started to get better and better at estimating the amount of spend that a customer would have. And so what we've moved to is in estimate of spend.
And we want to make sure one, there's some recognition right away. And so let's say a customer is closed. It might take three months for someone let's say to Ramp and to get to that level of spend, no pun intended, a portion of comp can get paid out right away. And the rest we actually measure later out and you make an adjustment later on. And so you get effectively the hit when you bring people in but there's some truth and alignment of if.
And last for account managers and success, we're looking to even break some of this up further. But there's one, the onboarding phase, can you get to an estimated level within a certain period of time? And then later too, as customers have been around for a year plus, can you identify unmet needs grow and all that? And so we're still very candidly figuring all this out, but it's been an interesting one. I think even a lot of the general frameworks in SaaS we found didn't quite good in framework, but didn't quite apply in the reality for us.
I've heard this a lot actually, with even other guests in this podcast where how many people build their sales organization, kind of starting in reverse, starting with success and customer support, because that expansion effect ends up becoming dominant factor of the revenue.
I think so. And even too, early on our first head of sales figure had worked ineffectively customer success for years. And if you look at the early growth and the revenue Ramp here, it was strong but it was not truly super head turning for most of the call it first six months out in the world. And part of that, actually it was very good. The instinct there was spend a lot of time with customers, understand the problems that they're having, understand the usage. It almost was an extended arm of product. And so we took extensive call notes. We prioritized based on the issues that customers had and it allowed us to one, really build in this product led motion of the sales early on.
Later we identified something that was a big miss. It wasn't just the card, it was the card and expense management and a few other things that we needed to build. And once that was there, it set off an extremely fast pace of growth. And so I actually think historically folks in customer success and account management have been really underappreciated. It's not about kind of go listen, make people feel important and send them stuff. It's like actually deeply listen to your customers so you can work with product engineering to build stuff out. And so later it's much easier to sell. It's really listening first thing. I think it's going to get more and more common. I do.
I totally agree with that. I think if you look at these usage based platforms, the revenue that you're recognizing you're charging in like year five, sometimes is more revenue in year five than year one through four combined. This Ramp up and who are the people responsible for that? Oftentimes the customer success team and the support team. I want to also ask about product features. As you were moving up market, there's a lot of these different product verticals that you grew into. What came back maybe from the sales team or the product team specifically for those maybe mid-market proto enterprise or enterprise customers that were looking at using Ramp, but maybe it was missing something that they needed to actually deploy it?
Totally. I learned what stakeholders really meant when they said, this looks great, but from an InfoSec and from a compliance perspective, we need to have single sign-on. This looks awesome, but does it link to our accounting system? The whole company runs on Slack. Can I approve cards on Slack? We want to issue stipends out, but we want to have roles that are based on someone in sales. Are they in product? Are they traveling a certain amount of period? Can you integrate with our HRIS systems? And it turned out that actually at least in our product world was something that one, our competitors, that old guard financial institutions, American Express chases the world, never did.
Some of the new players really emphasized around, spend more money, earn more points. Didn't really listen to what were the problems. And so for us, a lot of our success was great. Let's understand really what are the common motions and some of the stakeholders that you'll start to see as companies go from 50 to 100, to 200 to 500. It actually tends to be a lot more similar than different for companies that are in this category. And that actually was a huge unlock itself, because it meant that during the checklist phase and also from a slickness and ease of use of products, we could stand apart.
Do you have a second enterprise roadmap? How do you approach these enterprise features or think about on the team? Is it something you give everyone? Yeah. How have you approached that as a nimble fast moving product organization?
We really prioritize speed of delivery into speed as an organization. And so some of this is very quite selfish from a developer perspective. People don't want to use a soft API or guys that are just like really awful XL things to go back and forth. And so what's great, I think about serving mid-market proto enterprises often they're using more modern tools. And so if there's an API/VPIs work device or others that can effectively go from one to many, I think that that's a huge point of speed and leverage to go into for that.
I think that often for companies that are in cohorts within similar five years, they tend to use similar tools. And so if you're selling and really define, this is my core customer, this is not and you define. You can start to concentrate and build features where you can serve and grow. And then later as now, our largest deployment are multi-thousand card deployments out in organizations. There are some as directly enterprise, like customers that were built in an era where the tools are still modern enough and maybe they're really forward leaning on this S-curve, or actually they're looking not for a vendor, but for a partner, we build a spec, they'll build a spec and you can sort of align in a joint roadmap. We'll work with folks like that.
But today the folks that we've deprioritized are let's say folks who are deep in SAP as for active directory, everything went where it's super hyper custom. A lot of what you're doing is really building the stoke solutions that aren't going to go and scale. And so we really try to trade off and measure, not just what's the product need, what's the revenue opportunity, how extensible is this, and are we becoming a silver shop or is this integrations that will help us grow in motions?
And if we find that really the area under the curve is biggest where it's a lot of tools, it has some marketability, serves some customers, now we can point to a large volume of customers underneath it. And frankly, it's simpler to develop. We look for that. We think that's where leverage is.
I hear this a lot from folks that are going up market is that you need that kind of equation to balance out. Whether the energy you're going to put into it. The time you're going to spend developing it. If it's some super esoteric old SAP protocol, you have to have a bunch of customers that need that, or a bunch of pipeline blocked, but otherwise it's a one-off and it's not really going to make sense. I think even SSO was like that years ago. Now it's more common all over the place.
Definitely. And we're a little bit quirky too, and that Ramp is free. And if someone is going and ask you to do what might be hundreds of thousands of dollars in customs integrations work, it's like, all right. We don't really have the right mechanism to accommodate that. And so some of this too is function design decisions from years ago playing out. And of course you can revisit, but for a lot of it too, it's a function of what is the team set up to deliver? Where does it make sense from a monetization perspective? You don't have the right model for it. Be careful.
You mentioned speed being really important to Ramp. And I know you guys count it day by day. You really think about what are you shipping today? I've seen some of your posts. Talk about why speed is important. Why it's important and how you've institutionalized that into the culture of the company.
Yeah, it is day 935 today. I love that you asked that and originally some of this was a quirk and we did this in part, we were getting ready for this board meeting and we were about to ship our first cards out. And so some of this was self consciousness of like, okay, we'll just stay on this. And then we really liked it. And it stacked. And part of what we found is one, when you counted the days you had this equivalent period that you could go and measure between every 60 days, every 90 days, what was shipped then, what was shipped now is our velocity increasing? And I think whether it's from an overall company delivery perspective, or even I'll look at like an operating leverage and management leverage with more resources, did people achieve more? Did efficiency go down?
Was it linear? Was it extra linear? What was it? It gives you an ability to really evaluate your company soberly, which has been extremely helpful for us. If you measure speed, it turns out speed tends to increase if you really care about growing that. Next, I think that when you look at things in this way, often from the outside and people look at companies as what's their product, what's the market, what's the strategy to go do this? But when you remember you're two and a half years old, it's really stark to see all this is a collection of people who decided to come together. And one of the core questions any companies ask is, are we recruiting an environment where people can work very effectively and deliver faster and more as a team or less?
And I think that when you count in the days, people have kind of the history and DNA of the company, if we look at this, you tend to think to, okay, am I working well with others? Can I ship at a faster rate and deliver? And that really compounds and we hope will help us go a different path where I don't know that we'll always be as fast in delivery, but probably anyone listening to this has worked at the big enterprise company that's not what it once was. They used to shift fast, but now it's the cruise ship. You can't change the chorus, can't shift like we once would. And we're certainly kicking and screaming internally to try to avoid that state and keep that emphasis on speed and delivery for customers always, and as long as we can.
You're coming up on day 1000 in a few weeks, if you had to go back 1000 days to those early days of even before starting Ramp, what advice would you give your past self? What have you learned? What would you tell yourself?
One, I do think learning about sales earlier probably would've helped us. I think every X consumer or founder comes into it is like, we're going to do this product engineering and marketing and growth loops. And those help and matter, but great sales really actually is talking to your customers, understand what they need and asking like, if we built this, what is this worth to you in closing that loop? I think doing that very early on would've helped accelerate a bit.
Next, I think I probably would've reassured and affirmed some of what we did, I think really worked, which is like, your mission is going to become the foundation of the company. I know some people say that a mission important and people write a mission statement and they sort of forget it. But I think it's really served us well. Our existence is not about driving revenue, driving profit, whatever or anything like that, it's service. It's the help companies spend less money and time. And that for us has been a huge accelerant. It was so different and it was so shockingly contrary to others in the market that I think really honing in and getting that right early on was important. I would reemphasize that I was talking to my 1000-day ago self, but anyone who's even in the early days of really thinking about what you stand for and is that true and consistent and spending extra time on that so those would be the two.
Eric, I think this is a great place to wrap up. Thanks so much for joining. I'm really looking forward to seeing Ramp continue to scale and grow to 1000 and far beyond.
Thanks so much for having me on. This is fun.
You just listened to Crossing the Enterprise Chasm, a podcast about software startups and their journey moving upmarket to serving enterprise customers. Want to learn more about becoming enterprise ready, the WorkOS blog is full of tons of articles and guides outlining best practices for adding features like single sign-on, skim provisioning and more to your app. Also, make sure to subscribe to this podcast so you're first to hear about new episodes with more founders and product leads of fast growing startups. I'm Michael Grinich, founder of WorkOS. Thanks so much for listening and see you next time.