Eric Glyman on lessons learned from founding and scaling Ramp
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Ramp co-founder and CEO Eric Glyman recently joined Erik Torenberg (Co-founder of Village Global, On Deck, and Turpentine) and Jack Altman (CEO of Lattice) on the inaugural episode of their new podcast all about scaling companies, “1 to 1000”.
Catch some of Eric's top advice for founding and scaling hypergrowth startups in the episode highlights below:
Ramp is your second company. What are you doing differently as a second-time founder, and the biggest lessons you’ve learned?
A couple of things. First, I think the first-time founder mindset is very scarcity-focused.
Because you've never done it. I was just always terrified and thinking, “we're months away from, from running out of cash. We need to do everything by hand.” So I would say one of the biggest differences as a second-time founder is getting over that mindset.
Once you've really found product-market fit, it’s being able to lean into that growth and planning out phases ahead. Another big shift that happened as a second-time founder was doing a lot of work up front to validate the business model of Ramp, how it might work, figuring out the unique differentiation.
I think also today, I spend about 35 to 40 percent of my time on hiring and thinking about performance management. Through the first experience of being a founder, banging your head against the wall and struggling to do it all yourself, you start to learn about all these different company functions you didn’t have insight in before. And the second time around, you are super capable in these functions and able to recognize expertise, and appreciate it sooner, by having done it yourself (and done it badly).
You mentioned hiring is one of the things that you spend a lot more time on now as a second-time founder. Can you go deeper into your learnings there?
I think one of the biggest areas that we spend a lot more time on and that we still have strides to make for sure at Ramp, is understanding not just what does the company need, but also who are these people and what are their motivations for the team members that you're trying to hire.
In a way, everyone is the hero of their own story. They're trying to grow, whether you're a founder or a member of a team. And even in performance management, thinking about not just the 1-1s, what do we need to do this week, but once a month having development conversations and thinking about not just what makes people great, but what is the company needing? How do you help shape people over time?
Usually in most people's first company, this is a luxury to think about. And that's fine from employee number 1 to 10, maybe even 1 to 40—there's nothing else to do but survive and get it off the ground. But later on, I think a lot of people get caught flat footed in not realizing that the longevity that people see in your company is the excitement and the ability to grow with it— that actually becomes one of the most important attributes.
I think a really dichotomous set of advice from the startup ecosystem to founders is 1) be lean, scrappy, and test and iterate to find your way to product market fit, or 2) design it all from day one and have this fat startup where you nail the story from the beginning and you're just laying it all out.
So on one end of the extreme, you've got Tesla who from the beginning is like, these are the three stages versus you've a YC company that is like, we're going to just find 10 customers and make them happy, and then 30, and we'll see what happens.
I'm curious, for you as a second time founder, did you come into the product and the strategy differently?
For sure. We were much more intentional about really trying to understand the market, what made the business work, and how it connects to strategy.
We've still been very firm on what is the long-term mission of the company and, that's been consistent and intentional. Our mission at Ramp is to help all tens of thousands of customers now get more of every dollar and every hour. They didn't start their companies to manage expenses or do accounting. They're trying to achieve their missions. And our goal is to be a multiplier on their most finite resources, how we get there.
It's important for a company to say, this is north. This is what we're about and I think too much iteration without a direction of where you're headed is a problem. For us, on the fat startup versus lean compounding problem, I think that we are in an era where there is an incredible correlation of APIs and microservices. AI that can literally write different software and you can connect through workflows. And I think of Ramp much more as a workflow and productivity company that happens to move money. So even as we build new products, it's often around getting our customers more efficiency out of every dollar an hour. And it's less about the product specifically themselves.
In the early days of Ramp, it was less about a heavy amount of technical innovation, it was much more business model innovation. There's a business out there. It's been very profitable for a long period of time called the credit card industry.
The pro was that there wasn't a debate of ‘could credit card businesses make money?’ They're very profitable. They're multi billion dollar businesses. The problem was they were taking all the profits and designing increasingly more elaborate advertising campaigns and rewards programs and were investing very little actually in improving the core customer experience.
And so we just said, this is a great business. You can study it. Let's use the proceeds differently. Let's use it to create world class expense management. Let's use it to create great accounting automation. Let's help your business spend less, not more.
Talk about the different phases of growth. How do you contextualize different phases that you went through? And I'm curious, upon reflection, are there areas which you thought you went too quickly or areas in which you maybe went too slowly or what might have you have done differently?
So our mission was to save you money and time. Something that was differentiated, unique, a real value that might be different in the credit card market. We wanted to achieve a message-market fit. If you could build the thing, and it actually worked, would people care about it? Is there some unique message that if you launched, people would actually say, ‘I want to try this, this elevator pitch works on me.’
And for us, the first phase was really about getting to that. We incorporated in March of 2019 and brought on our first customer in August. And we launched in Feb 2020 with this moniker of ‘the credit card that wants to help you spend less.’ And that was helpful for us to start getting real data that's not just friends. or different people that you could talk to in New York, but random companies signing up so we could really start to test, could we underwrite credit properly?
Could we scalably, grow consistently with businesses that we didn't know was the next phase. I'd argue we didn't really hit true product market fit until later that year. A lot of that phase came from the fact that we realized actually our customers had much deeper pain.
They really disliked Expensify and existing products like that. And once we really had a real possibility to fuse those products, it wasn't just a different message, but it was fundamentally more efficient. You didn't need to teach employees to use two sets of software to make one transaction and close your books, just one.
And I think once we hit that, then it became clear that we've got a product that really is uniquely and truly better than what was there and we could start to repeat it. The next phase was all about that, going from mid seven figures in revenue to the eight and beyond.
How can you scale it? This is really about the repeatable machinery. And so of course we were testing things along each of those vectors. Is there good architecture? Is this a clear message? Is there product-market fit? Can you repeatedly scale to go to market motions? When you get to that late stage, you have all these things interplaying and stacking on each other. And of course, can you hire great people to keep that engine going?
I love the mission orientation of, ‘this is the fundamental problem we're solving for customers and we solve it in various ways.’ I still wonder if tactically, you could zoom back to the early days of those products, and what made them successful, and how to build new products in a crowded category with a lot of point solutions. Does that change the thinking on how you're going to go to market, how mature the product has to be?
It's a good push. The first thing I would say is I actually think that there's very few products that exist in a vacuum. So first I would try to identify what's around you and how is your product interacting where either, you actually can do that next job better, or if you're solving this workflow, going wider actually helps in that workflow. So what's the job to be done?
Can you go wider, or is there part of your value chain where you can extend deeper into that? That is my mental model for it. You can think about the product use cases or you can think about the monetization.
When you think about Ramp structurally, we're a free product that pays customers to use it and monetizes in a different way. Rather than using that for more elaborate ads, we can say, let's use it for great software development and we might compete differently with other companies/ And say, let's use the product more deeply, we can give you more insight to save you money and time that can give us a structural advantage.
So I think it's worth thinking about: what's the end user use case? What products are adjacent and do you also have a business model or talent advantage? A structural advantage that lends yourself well to the question of if you're going to compete, why should someone pick your product versus a different one?
I think often finding the cross section of that is where there's a deep user pain, a deep structural advantage. If you have that interaction, those are great products to be pursuing next.