Growth Lessons From Scaling Opendoor, Instacart and Ramp with Sri Batchu, Ramp

I've just released a book from grassroots to greatness 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike Disaster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomenon. Check it out at from grassroots to greatness dot com. The digital copy is on for 99 cents.

You don't go to war with the army you want, you go with the one you got. That gives a lot of opportunities for the existing team at a startup to attack new problem surface areas. Did I have any business running a 40 person sales team at Opendoor my second year in there? Probably not, right? We could have probably hired somebody external that could have done that. But the reason I got that opportunity is because I gotten myself deep into that problem space. I was excited, I was ready and available and then went and learn how to do that. I'd never bought or sold a home, but I was managing a large team of people that were selling homes for Open Door and so I went to Phoenix. I spent lots of time with Realtors and learned how to do the job on the ground like was doing open houses myself. That's the kind of roll up your sleeve nothing is beneath you type of mentality that I think is critical to be able to do so many different things and be able to scale in different way. I need some traction. You need some traction. Let's get some traction.

Hey, what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host, Lloyd Lobo. We're a community of over a hundred thousand people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana and many more. Hey, Traction fam. Super stoked to chat all things growth today with sri, the former growth leader at Ramp, where he joined in late 21 and saw them through 4.4x of ARR, reaching 300 million.

Wow.

From shaping Instacart's ads business to playing a pivotal role in opendoor's journey from 100 million to 5 billion in revenue. SRI's dynamic career spans McKinsey's consulting to key roles in private equity at Bain. Man, what haven't you done at a young age? Welcome to Traction.

Well, thank you. I'm excited to be here, Lloyd So.

Before we dive in, you've had like a different route to startups, right? You started in McKinsey Consulting and then private equity at Bain. And a lot of founders said, don't hire people from consulting, but you have like, literally hit three home runs or four home runs with like, Open Door and Instacart and now ramp. So give us your backstory. How did you, like, get into all of this? I mean, did your education shape you to go into working at startups? I mean, we come from sort of Indian backgrounds, right? And when I graduated engineering, actually, I wanted to be a founder. And I asked people like, what's the best job I could get? And they're like, everything you do as a founder is communication, so go fix your communication. And my first job I took was cold calling for a startup. My parents lost it. Like, your friends are working at Microsoft and Google and you take a job cold calling, but you've had like a work in consulting, which is like the Indian parents dream kind of thing. So walk me through that journey of how you go from that to working at startups.

It's funny you should say, you know, it's an Indian parents dream, but I think my parents were disappointed that I went into, you know, go be a consultant because they wanted me to be a doctor. And, you know, like any good Indian kid, I was a pre med, did everything, took the mcat, AM cat, and at the last minute decided that wasn't the thing for me and obviously joined McKinsey. And my experiences at McKinsey and at Baincap and private equity were amazing learning experiences. Experience. As you were talking about, you know, how you took a sales role to learn communication, I think, you know, McKinsey is just like a boot camp for all business education from communication to strategic thinking to lots of things. And so I'm very grateful that I had that experience early and learned a lot and, and similarly learned a lot as an investor at Bain Capital and a couple of other places. But I had this itch of like, you know, I didn't want to be just somebody that moves numbers on an Excel sheet and then thinks about capital allocation and really helps build things. And I wanted to learn what that experience of building was like. At the time, the founder journey wasn't for me. So I wanted to go find, you know, an exceptional startup that I could go learn from. And historically, with my kind of startup journey, I've really focused on not optimizing for titles or, you know, scope, but really finding a super interesting problem and an extraordinary people that are working on that problem. And so when I joined Opendoor, it was a 40 person company, was trying to, you know, revolutionize real estate, the largest industry out there.

I had Keith on the show not too long ago.

Yeah, and Keith, as you know, is fantastic. You know, he had an opportunity to work closely with him at Opendoor and he's on the board of Ramp as well. And I'm working on something with him right now as well actually. So Keith has been an amazing mentor and somebody that I've learned a tremendous.

Amount up from one question here. When you're working at a large company like a McKinsey Bain. Right. The environment there, although like it preps you for all kinds of business. It's more like, I guess Navy style business operations. Because small startups at the early stages don't operate mostly like that. Right. It's like move fast, break things, pivot on the fly kind of thing. You're just trying to find and validate maybe through product market fit. But as an inspiration for a lot of professionals, we got like founders who listen in. We got people working at large enterprises wanting to do startups. How did you find this opportunity at Opendoor? Like a lot of people just have a hard time breaking out of their corporate roles to find these interesting roles.

Yeah, honestly at the time I was living in New York, wasn't part of the Bay Area ecosystem. And you know, obviously startups are a bigger thing, you know, now 10 years later versus, you know, when I was looking and I remember actually I went to business school as well. And when I was graduating From HBS in 2013, that was the first year that, you know, startups were, I think it was like close to equal number of people moved to New York versus the Bay Area. So historically, you know, from Harvard Business School, most people would go to New York, work in finance and consulting. So you can see kind of the cultural zeitgeist changing. But in terms of how I found my first role, I honestly did it the way anybody else would, which is I boil the ocean. I went and looked at all of the top lists, you know, the breakout list, the CNBC list and what have you, as well as went to each of the, you know, major VCs portfolio pages and looked at companies that I thought might be interesting and just like created a Google sheet for myself of all the companies that I thought would be interesting and then went through LinkedIn at those company pages and tried to find somebody to connect me to somebody at those startups that were on my short list. And Then kind of told them my story. It was like, hey, like, I'm not a startup person. These are my experiences. I think I could be valuable, you know, in some way and eventually actually had offers from three companies. I don't know if I was lucky or good. All three companies actually IPO'd in 2020, so it probably wouldn't have made that much of a difference which of those companies I joined in 2015, which is when I was doing the search. And obviously I chose Opendoor and I learned a tremendous amount from that experience. But just goes to show you, just because you have a bunch of brand names in your resume doesn't mean it's necessarily any easier because it wasn't for me in 2015 when I was looking at it. I think it's just, it's funny, it's almost. I think recruiting is actually very similar to a growth promotion in the sense that, you know, you're selling yourself and so you have to build a funnel of who are all the prospective people that could possibly hire you and then go through that, you know, process of actually finding your product market fit for yourself.

Now, 40 person company, meaning you're working very closely with the founders or in some capacity, maybe one degree away. What was that like? And is the advice then if you want to break into startups, find a role where you have close purview with the founders to optimize for learning?

I would say yes and no. I don't think, you know, necessarily reporting to the founder is critical for you to learn a lot, especially at an early stage company. I think optimizing for high quality founders who tend to attract high quality early employees and executives, I think is the most important thing. And I had the good fortune of, you know, reporting to working very closely with the founders of, you know, the three companies that you've mentioned. But having said that, I learned a lot from peers as well as frankly people that I hired into these roles. So I think the key question is like maximizing for talent density at the company. You'll discover that actually pretty quickly as, you know, as somebody trying to go interview at places to where you're like, oh, wow, like everyone I talk to is like a plus, a star versus at other companies where you'll be like, I found one or two folks that during the interview process that were amazing, but there were a lot that I'm not sure if I could learn a ton from. So I would say in those two cases, always optimize for the company where you can maximize the learnings from A much more talent dense team.

You know, Keith Raboy used the same word or phrase, talent density. He used that a lot. He said, optimize for talent. He said, you know, try to find people who are Swiss army knives, like generalists, who can sort of pivot in different directions. And based on your career graph, it seems like you are the quintessential of that role. Kind of start somewhere and can span multiple areas, like a Swiss army knife. Now when I talk to like, I guess Gen Zers, they asked me like, what is a Swiss army knife? I did get asked that once recently. So when you started at opendoor, there were 40 people. What were you doing and how did your role evolve and what were your key learnings from that experience?

Yeah, because of my kind of background, my initial role was to lead a finance team of one at Opendoor. I was reporting to Eric and the initial goal was just like, help set up the basics in terms of the finance team, helping close the series C, doing the 498 process, building the annual plan and all of that. Obviously, the part of the reason I was leaving finance and joining the startup world is to get roll my hands up further than building financial modeling and annual planning for a startup. And I'd made that clear during my interview and hiring process. That's what I wanted. And to Eric's credit, like, you know, we made that transition pretty quickly, actually. We hired some senior finance leaders in my first couple of months at Opendoor and I'd moved into a more operational role. I think for folks that have a little bit more of a financial background. I actually find that starting there is a great starting point because you get to really understand the end to end of the business, understand what the key drivers are and where the leverage is in terms of how value can be driven in the company. And so through my experience in finance at Opendoor, for example, we identified that a clear gap at the time of Opendoor was Opendoor for people that might not know we buy and sell homes. So we make it easier for home sellers to sell their home, we buy it off of them, and then we resell it eventually to other future buyers. So with that kind of a business model, as you can imagine, we're taking capital risk, right? We're putting out money to buy these homes, putting them on our balance sheet. And so how long the home stays on the balance sheet is critical for the business for operational reasons as well as long term strategic reasons. Right. And at the time it was taking us 150 days end to end from acquisition, close to resale, close to dispose of the homes on our balance sheet. And so it was a top problem at the company. And Eric said, you know, go reduce that, figure out how to bring that down in whatever way you can, because it's the most important thing at the company that we can fix. And over the, you know, next year, initially it was just myself and we built a small team and it was obviously a very cross functional problem. Anything anybody was doing at Opendoor could impact how long the home stayed on the balance sheet. Right. Whether it's renovation, whether it's pricing, whether it's, you know, the sales team, what have you. And to work closely with all these teams, learn how to influence without authority and, and drive results. And by the end of it, we had, you know, reduced it to 90 days. And then roughly where it's at today to a bunch of things. We don't need to get into the details of specific projects, but through that process we also learned that our sales team was under optimized and there were some key things that we could do. So that's how I got my next job with an open door, which is like, oh, hey, like, why don't you go redesign and lead our sales team? And so I did that as my next role at Opendoor. And as that, you know, as we kind of stabilized that and hired a sales leader, we got a new coo. You know, was like, hey, actually our analytics infrastructure and team is broken. Can you build that out for me? So that was my next role. And through that process we learned that, you know, the pricing, which is again a key part of the business, was under optimized. And so I was asked to go take on and lead 150% nationwide pricing operations team at Opendoor. That's been generally my journey at Opendoor, or frankly even later at Instacart, is kind of started off with solving an initial problem and through the success of that was able to move to an adjacent problem or expand scope of that service area.

You know, this is one of the best skills to have as a founder, right? I say this, I had recently Jason Freed of Basecamp and we were talking about how the titles of a founder and CEO are like at loggerheads with each other. It's like having the title CTO and Chief Luddite. Because as you scale, the job of a CEO is to stabilize the company and the job of a founder is to inject new risk in the business. You grow by injecting new risk. And so as a founder, you gotta keep Sort of reinventing your job in the job so you can keep doing that, like try new things and stabilize it, which is what I was doing at both new markets, new products, et cetera. And so it seems like you had the opportunity to do it at high scale companies without risking a lot of personal stuff, which is pretty cool that you had the opportunity. But also you had I guess the, what do you call it, the fortitude to take that on. Not a lot of people I know from actually probably you are the only person I've met who comes from like a big core world who has said that they've flexed in so many ways. I've not met anyone. So what are the key things one needs to have from within to flex in so many directions? Because I truly believe whatever you said is like the best experience to go and start a company.

I don't know if I'm going to have like a brilliant, novel insight in terms of like what's required to be able to do that. I think it's fundamentally just comes down to a growth mindset and being able to be humble and learn from people. You know what's great about startups is, you know, I think this is like a patent thing that I often repeat, which is, you know, you don't go to war with the army you want, you go with the one you got. That gives, you know, a lot of opportunities for the existing team at a startup to attack new problem surface areas. Did I have any business running a 40 person sales team at Opendoor my second year in there? Probably not, right? We could have probably hired somebody external that could have done that. But the reason I got that opportunity is because I gotten myself deep into that problem space. I was excited, I was ready and available and then went and learned how to do that. I'd never bought or sold a home, but I was managing a large team of people that were selling homes for Opendoor. And so I went to Phoenix. I spent lots of time with realtors and learned how to do the job on the ground like was doing open houses myself. That's the kind of roll up your sleeves, nothing is beneath you type of mentality that I think is critical to be able to do so many different things and be able to scale in different ways.

That is some great advice. I think the curiosity and I think there's two kinds of people, one kind of person that draws joy from doing the same thing over and over again and optimizing it for the nth degree. And there's another kind of person, just people like you, me like founder mindset, I call it growth mindset, I call it founder mindset, which is like you want to take on new challenges, do it well and then to optimize it for the last, I don't know, 5, 10%, just hand it off and then you move on to the next channel. And that just keeps life very interesting. I don't know if I got that right about you, but.

No, absolutely. That completely resonates. That's kind of how I've been working historically as well, which is, I think, you know, that 8020 mentality of like just really solving the bulk of the problem at the highest leverage point is personally the most fun for me versus like managing an existing system for the last 5, 10% of optimization.

You know, one of the things we say is velocity is the currency of high growth startups. Now you've been at companies like Open Door, 40 people and then when they IPO, I think they were like 1500 people or so Instacart and Ramp, you were there early on and seen through massive growth spurts. How do you keep that high velocity mindset as you scale and add more people? Because sometimes I find like, you know, three people can do more growth than 30 people. Right. But the mindset is, and the org design matters a lot and it seems like you've had very strong involvement or purview into managing that parts of the business.

I'm generally a believer in diseconomies of scale as teams get larger. And you know, there's that cliche and startup world of the two pizza team, you know, as you kind of get beyond that and not only do you produce less per person, sometimes you actually have less output overall. And so as you mentioned, like it is the most important thing that a founder can do as companies are scaling is figuring out how to maintain that velocity and intensity. I think there's kind of two ways to do it. One is honestly just cultural and it comes from the top right on how important this is as a value, both in terms of stated value, but also actually executed value at the company. And the example that I often like to give is Ramp always having, you know, the day of the company at each major presentation, at all hands, at board meetings, et cetera. And you can even go to like days ramp.com and you can see how many days it's been since Ramp's founding. The reason that's important is because the smallest unit of time you plan towards is the fastest you move. So if you go to a large company, they talk in quarterly annual planning cycles, you know, things that happen next year, next, whatever. And you tend to notice that as soon as you have that as the framing companies slow down massively and you get this notion of like, oh, I can do it next week, next month, whatever, versus like, you know, never put off something for tomorrow that you can do for today is really the culture that you want to reinforce from the top down. I tend to find that a lot of high performance intensity people resonate with that, especially if they're surrounded by other folks like that. I think that's piece number one. I think piece number two is a little bit of more of like organizational art than science, which is around breaking down, you know, teams and goals into subsets that feel independent, that the teams can have really high ownership over, that they can drive. And that way you reduce some of this. Like part of the reason why a lot of teams slow down as they get bigger is because there's a lot of cross functional dependencies and there's a lack of single owners for output. So as soon as you have multiple owners of something, you have no owner of something. And so I think you can really design organizations where even if the company is getting bigger, you have smaller teams that can execute independently and where there's a clear owner and they have a metric that is, you know, clearly cascading into the overall company metrics that matter. And I think that's how you can kind of fight the organizational slowdown as companies get bigger and still drive velocity.

Now when it comes to growth, right, I think you hear this all the time, but everyone's looking for growth hack and sort of silver bullet, right? Like, how do I do this? Tell me the one growth hack. Like you see, you go to the gym and they're like, tell me the one thing you do to get like a 6, 5, 8. Everyone's looking for the silver bullet which doesn't exist. And you've seen it now 3x.

Yeah.

Break down the fundamentals of growth for us.

Yeah, I love that you use the example of the gym because I think it really is a lot like that both, you know, the outputs of, you know, being a growth team as well as honestly something that's related, which is just your operating skill set as a growth person too. You know, if you don't train for six months, you're not going to be as good at the job. So you got to be doing the job in some ways, you know, constantly. But at its core, right, growth is really just about building a product that people want and Figuring out a distribution strategy that meets your customers where they are. Right. And I don't mean that like, literally, although actually that is important. Where your customers literally are so you can, you know, reach them, but also in terms of, like, what they're looking for, understanding deeply what their problems are, and then delivering a solution that works for them. I think you and I have talked about, you know, the early examples of Airbnb using Craigslist to hack growth, right? That is a quote, unquote, growth hack, but it's also actually very much related to kind of what we just talked about, which is using Airbnb as an inspiration. Obviously. There was clearly a product need and a product that Airbnb, sorry, Craigslist is an example Airbnb built. And then where were the customers that were potentially customers of Airbnb? They were currently using Craigslist. So it was brilliant of them to meet their customers where they are. Right. And so the other thing about a lot of these growth hacks that I think really missed the point is they're focused on, like, initial customer acquisition, which, of course is a challenging problem, but it's actually not the most important problem, in my opinion, in terms of building a business. It's really around how do you get those customers to retain and over time, monetize them? Right? So if you look at the world of consumer social, we've all seen the graveyard of lots of startups that get huge initial traction because they've gone viral or they've used a lot of paid marketing to get there, and then they're not, you know, able to actually retain those customers and really build a business off of that. And typically the reason for that is because they forgot, you know, what is it that they're building for and what their customers want. And so I think growth always comes back to, you know, where are your customers, what do they want? And it just starts from a deep understanding of your customers.

I love this quote from Elon Musk which says, don't reason with analogy. Boil things down to the lowest common denominator, to the first principles, and then reason up from there. You said it so beautifully, right? Like, build a product that people want. Like, do you have a singular customer or an ideal customer profile that has a need for your product, Right. Or a job to be done that your product solves? And then anytime they need that done, they keep coming back. So an ICP that needs your product, that doesn't churn, and if you keep growing that cycle, then you can sort of invest in growth. You put that beautifully. What do you need to have in place? Let's dive into that. Like, what are the key things, ingredients that go to make that work before you start pouring fuel on fire. A couple of years before I did Boast was part of an investor backed or investor incubated company called Speakeasy. And we launched with like 10,000 users and we were spending so much money on growth. And when I looked at the data and the analytics, it was funded by Decimer and Salesforce. Like, dude, I can't draw a singular ICP here. There's butchers, bakers and candlestick makers signing up for this app that's supposed to be a calling app for salespeople. And that's when I knew right away, if we don't fix this, we're going to fail. And eventually it came down to loggerheads like, oh, build it as a horizontal app. I'm like, can't build a horizontal app on day one when it's for salespeople. And by the time we came to the realization to kick everyone off and just keep salespeople, we ran out of money. So you're very painful learning burning through 6 million. So I wanted to put that out there. You've seen it now firsthand, successfully grown these companies. What were the things you had to have in place before investing in growth?

Yeah, I think my advice here, like a lot of other advice, is not that it's novel. I like your Elon quote around building things up from the first principles. So when you hear it you're like, okay, that makes sense, of course. But I think the key thing about a lot of this advice is being able to consistently apply it, especially when it comes to you. When you're too close to the problem, you find it really hard to zoom out and actually, you know, apply the advice that you probably would give to a third party if they were in the same situation. Right. And so in terms of, you know, what do you need before investing in growth? I loved your example because at the end of the day, what you really need is product market fit. It sounds simple, but I like the way you framed it. What typically happens when you solve a very large and deep pain point for a small group? You start off with understanding, who is that tiny? It can be one person or it can be 10 people. Who is that person or company or person where you're solving a huge problem, where The NPS is 100, where they could be natural evangelists for your product. Once you find that, you know, core customer and customer type, I Think you can grow in kind of concentric circles of other folks that have similar problems that you can build for. Right. And I think what a lot of companies might get wrong, like the example that you provided is like grow very quickly without understanding who that core customer is and what that implies for your next wave of growth. And because you need to build differently for different customers and if you try to build for everybody at once, especially in the beginning when you have limited resources, you're not going to be successful. Right. And so I generally tend to think that like, you know, the initial days of a company and until you know, well past product market fit, you don't really need a growth leader or significant team investing in growth. What you need is the founders and the early team finding, you know, those customers with the deep pain points and solving for them in frankly unscalable ways. And then you can figure out how to like, you know, approach those customers in more scalable ways later and how to find, you know, people that look like them via other channels. But I think the first step is finding those customers with a deep pain point and solving to them.

I've just released a book, from grassroots to greatness 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike Disaster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomenon. Check it out at from grassroots to greatness dot com. The digital copy is on for 99 cents. You know, in the early days is the time where you can put a, you have the luxury to put a lot of time and love into understanding your customers and the problem set. And as you scale it becomes it takes you a little farther and farther away. And so it's important to do that. Be an inch wide and a mile deep. Every time I failed was from doing otherwise. Now break down the different growth channels and your favorite ones and walk us how you think about identifying and validating the best ones for your business, particularly for capital efficiency.

Yeah, I mean there's of course like any number of ways that you can acquire customers and ultimately like what's best for your business depends on who your audience is, where do they hang out, how do they like to be reached and what your product is in terms of how deep the pain point is, how easy or hard it is to explain, how many touches it might take to do that. And I know capital efficiency is Top of mind for everyone still. Although the market seems to be coming back just a little bit, but interest rates are still high. So it's always good to be fit because it's easier to grow from there. In terms of one way I think about this question, and I wonder if it'll be more helpful to your audience, is to just go through a handful of, you know, the major channels and maybe provide some insight on how I found them to be more efficient or what might have worked in some of my past experiences.

Let's do it.

Yeah, let's just go through the list. Hopefully I'll remember all of the major ones, but yeah. So if you were to start with, obviously the most obvious one that everybody thinks about, paid marketing, of course it's not ever going to be the most efficient because generally, you know, your targeting can't be as narrow and of course you're paying for your audience. Right. So my kind of advice there would be to try to find channels that are, you know, the path less trodden. So obviously lots of people think about Google, Facebook, et cetera as the initial ways to spend, but they're extremely competitive platforms. So thinking about what are other ways that are more suited to my audience that might be less competitive. Right. So a couple of things that worked well at Opendoor were One is direct mail. You would not think necessarily would work well, but, you know, folks that are target audiences for Opendoor were people that were older, that obviously lived in the home that they owned. And so these folks check their mail pretty frequently. And so our conversion, obviously there's interesting ways that you can think about making the call to action and more engaging on direct mail. But was a channel that worked really well for us. Another channel for Opendoor that worked was radio endorsements. Again, our core buyers were Middle America, mid-50s folks living in cities where they would be driving a lot. So we knew they were listening to the radio often given that kind of audience segment. And a core problem that they had with Opendoor was that it seemed like too funky of a product. Like, do I trust these people? Will they give me a fair offer? It's a big, you know, consideration in terms of their, you know, lifetime net worth to make. So what we found is like having endorsements with their favorite radio personalities actually drove a lot of value for us from a growth perspective. A couple of channels that get spoken a lot these days, especially because of this whole notion of, you know, wanting to find higher roi or of course, pr, SEO and community and others. I think the main thing about Strategies like PR and community that I would say is for them to be really successful. You're a community builder. So I'm curious your thoughts on this. They have to be audience first, as in, what are the problems that the people that I'm trying to build community towards or to reach care about? If you start with what is the thing that I want to communicate as a company, like, oh, here's my software or here's how I solved your problem, I think it almost never resonates. It has to be number company first and more audience first. So with respect to pr, like the way you can get press to talk to you and give you earned media and do that in a repeated way is for you to give them what they want, which is what does the audience want in terms of new insights. That's at the center of the cultural zeitgeist that you can provide because of your unique value as a founder or team at this company. And speaking about that, I think Ramp and Eric Lyman at Ramp do this really well where, you know, he can really speak to whatever that moment is and provide value to the audience without, you know, it being a sales experience for Ramp. Right. And that's how you get more exposure and more value by really being about the audience first. And similarly with community, I very rarely found inorganic communities that are focused on sales work. I found either organic communities or communities that are not commercial oriented work the best. And then over time, of course you can build awareness and monetize those communities. But being focused on, you know, giving value, like one of Ramp's competitors, Airbase, has a Slack community for, for accounting managers. And it's tremendous value. Lots of people, you know, and the accounting world are in that Slack community and they love it. And Airbase is truly neutral. What's very interesting about that is you see a lot of people recommending Wrap in this community when they're looking for accounting products. And to Airbase's credit, they don't get involved or shut down those conversations. They just really make it a truly neutral product that is valuable to their accountants. So even at probably some cost to them, they still manage that community. And I think it's a great way of, you know, continuing to at least build Airbase's brand as well, despite, you know, them not being as hands on.

What I found very interesting as I was writing this book, which is from grassroots to greatness, 13 rules to build Iconic Brands with Community Led Growth. I looked at man, so many iconic brands from like, and I'm not talking about the tech brands since the 2000s. But I'm talking about like the Harley.

Davidsons of the world.

And I found something very interesting. Every small, obscure idea that eventually became a global, enduring phenomena from Christ to CrossFit went through the exact same four stages. People listen to you or buy your product. You have an audience. You bring that audience to congregate on a cadence. It becomes a community. Now when that community comes together to create impact towards a purpose far greater than your profit, it becomes a movement. And when that movement has undying faith in its purpose through sustained rituals over time, it becomes a cult or religion. So this audience, community, movement, religion. And it doesn't have to be one or the other, right? It's like it's something that you have in parallel to your other growth frameworks. Because building a community is the marathon and it is not a ROI generator in year one. It takes a long freaking time. So if you're contrived about it, you're going to kill the community. So our community is called traction. We never monetized it. We donate the profits from it. Nobody even knows it's the community we built. But effectively, it's like adding value. And there's three kinds of communities, right? There's a community of practice. Community of practice is like your ramp's competitor, bringing people together to get better at a specific skill or a craft. And what happens is if you have no customers or you don't have product market fit, you can't build a community of product like Notions community or Salesforce's community. People are going to be like, you're trying to sell to me and they're not going to show up, right? And so there's this community of product which Atlassian's done really well, which has taken a long time. And that's the second one. And the third one is a community of play, which is like Red Bull or your paddle club or your golf club, right? And I think it depends. But you have to play it with the mindset that it's a long slog. HubSpot. Honestly, everything I'm an engineer, everything I learned about marketing was from HubSpot's inbound marketing community in 2004. 5. They didn't have any product. Everything I learned about customer success was some gainsight's pulse community. They didn't have a product. Then they built this raving following around education and adding value and connecting people to get better. And then one day they said they have a product. And initially they were saying, oh, you can jangle Google Analytics with this tool and that tool. And the one day they said, hey, we have an all in one tool. And then guess what? When I had some money, I bought HubSpot. Right. That's how I look at it. But you had it exactly right.

Right.

Like, I think when you're starting out, you need like some instant gratification channels to stay in business, but then you need some long term sustainable channels that'll help you build a moat and like a brand and so on. So I think it's a balance of both. How did you see it being balanced?

Yeah, the way I kind of think about it is you're all in this horizons framework, but really you kind of have to have like some seeds, plants and trees through the growth cycle and life cycle of your company. And initially, obviously it's going to be a bunch of seeds where you're trying to figure out which channels work for you and which don't. And so at any given time, you're going to have a couple of channels that, you know, especially as you grow, that are your kind of bread and butter that are working, that you're optimizing. Those are the trees and the plant are the ones that, you know, you've done some testing and it feels like it's going to work and you're going to start scaling them. And then seeds are kind of new, riskier bets that you're making and there's only so much you can put together and maintain as a team. So you want to prioritize those, but you always want to be thinking about the next horizon. Just because, you know, a couple things are working now doesn't mean, you know, you, you should be ignoring the rest. And similar to how you said there's some things that take a long time to pay off versus others. So community and SEO is actually another one as well that takes a long time to pay off. So you want to think about those time frames as well as you start, you know, investing in those bets and prioritizing various things. And then some things, you know, just work a little bit easier at different parts of a life cycle, like brand investing, like you probably, you know, don't want to do until you've got like tight density of, you know, clear product market fit and an audience that works, or you've kind of reached the limits of performance marketing, for example. So you would kind of typically kind of do that a little bit later in a company's growth cycle. But that's my kind of general framework is you should actually build this kind of longer term roadmap and refresh it every year. As you think about what are the bets I'm making in terms of test.

Scale and optimize, that makes a lot of sense, right? And I think PLG gets a lot of love and attention and I have seen it all depends on the frequency of use of your product and meeting where your market's at. If you're gonna try to jam PLG for a market that otherwise wants to consume in a different way, you will fail. And I've seen this now very recently with two startups that were successfully doing sales, led with customer success really well when the PLG route and literally tanked everything. Because building a PLG product requires you to have a DNA. If you don't as a founding team makes it very difficult. You need to be maniacal about user experience and maniacal about data and how you programmatically onboard people. I mean even if you look at Superhuman and what Rahul did there, they were manually onboarding their first thousands of customers because they were afraid that people wouldn't self serve onboard.

Right?

What is your take there on making PLG sort of work? I think PLG works really well with community and a bunch of other channels because it's just a thing, this self perpetuating flywheel. Once you have product market fit and it's going. But what's your advice?

Yeah, no, I think you made a great point, which is it doesn't work for everybody. Right. The product and the user experience has to be attuned to that. And it's funny that you should mention Superhuman, obviously. Great product and I was one of the early people that was manually onboarded back when. So by the way, I understand why they did it because I don't know if I would have gotten as much use of the product frankly if it weren't for that. And so I think there's a lot written actually about classic, you know, how do you use technology to grow your product for bottom up SaaS products, right? Typically via a prosumer free trial, freemium experience, whatever you want to call it. I want to talk less about that because there's so much said about it. And also frankly, if you look at the business that I was most recently working with, ramp, it doesn't have that classic bottom up PLG motion to get a ramp account or a card today. Obviously you have to have your company CFO fill out an application. It has to be credit approved. So you can't just have like an instant multiplayer mode that you can build virality off of for a Product starts that way. Are there other financial products that RAMP is building that could work with? Sure, eventually I think we will build that experience with the multi product thing. But I think one thing on PLG that people don't talk about is how can you use technology to drive, you know, customer acquisition and retention even if you're not like a bottom up fast product. Right. And I think, you know, one of the things that we did well at RAMP is using product engineering teams to supercharge sales and SEO as well as kind of creating, you know, a stronger referral loop and experimentation around that and building shareable moments in the product and things like that. So my like one piece of advice on PLG would be to like not assume that there is no way you can juice growth via technology unless you're like a company that has a self serve and freemium experience. Makes sense. Totally.

Now I want to shift the conversation towards B2B versus B2C. There's a lot of this. We're B2B, we're B2C. And I'm starting to think right like and see this. If you notice something on social right now, brand consumption of content is going down, human content consumption is going up. When you're doom scrolling, whether it's TikTok or Insta or LinkedIn, you're consuming more from humans. But we still in this mindset of no, it's B2B and I have to be done this way and this is B2C. So what's your take on that and how do you approach? Because you did two B2C companies, Opendoor and Instacart. But ramp is B2B. But I feel like you have also approached growth there more like H2 edge, human to human. So walk us through that and shed some light.

Yeah, I love your human to human framework because other people name it as like a B2B company with a consumerized growth approach or something like that. Right. And I think what they really mean is what you're saying which is like thinking about it on a human to human level. So you know, there's obviously differences in how B2B and B2C marketing work because of, you know, the transaction sizes and a bunch of other things. But firstly I agree with your framework which is that it's ultimately a spectrum. And I would also say that B2C marketing is in some ways like B2B marketing on very hard mode. And the reason being that you know, in B2C obviously you know, the transaction size is lower, the consumers are more fickle. And the platforms, if you're using paid acquisition, extract a tremendous amount of value. So you're paying a lot for, you know, far lower ltv. So you have to be extremely efficient and intelligent about how you acquire customers and how you diversify your channels. So if you're somebody that is successful in B2C marketing, I think you will actually do well in BV. I was just a bunch of new things to learn about the enterprise customer in terms of who the buyer is and who the users are and how do you reach them in the buying process and all of that, as well as the fact that you work with a lot lower ends in B2B in many cases than in B2C. So it's really fun to do B2C marketing because you can experiment quickly, you can learn quickly, especially if you're at a scaled, you know, B2C business. But the flip side is you don't have a lot of ltv. So it's sometimes a grind to get to your customer. So I think they're honestly really just a spectrum, both of them. And ultimately how you approach one versus the other is really going to be dependent on, you know, what is your LTV and what's your time to learn in terms of, you know, number of customers, prospects, needs, etc.

Now let's shift to metrics, example of good growth metrics and what to stay on top of. Like maybe sort of like from pre product market fit to scale.

I think pre product market fit to early product market fit. The only thing that matters is engagement. Whether you're a B2B or a B2C company, are people opening up your app regularly, are they taking a lot of actions? Like any proxy that you can have that people are getting a lot of value and frequently from your product is critical. This is why I'm social. You know, the Dao Mao ratio or the wow Dao ratio is super important because not only is it that like, you know, people often think about, oh like, you know, the monthly active user, especially, you know, pre product market fit is a silly and useless metric. What you want to know is like how often are people coming back every day, every week, is there really deep pain point that you're solving? And I think you'll see that by engagement and go deeper and instrument to see what are they doing in the product. And I think that's what's critical there. And for some products, shareability might be an important thing, which is like how often are they bringing in others to collaborate, et cetera. So depending on what your product is and if that's an important part of your value proposal. I would track things like that. After a certain point then you start thinking about it in terms of leads and cost per lead and metrics like that in terms of how you're driving volume. And over time, I think businesses mature into revenue. And my personal favorite is payback period rather than CAC ltv. I talked about this before. I think focusing on CAC LTV gets businesses in trouble in a lot of different ways because LTV is hard to project and it also limits you in terms of different customers have different values. So you want to be able to pay more for customers that are more valuable. And like a rigid CAC LTV ratio often gets you to make the wrong decisions versus, you know, just being really grounded in how long it's taking for your customers to pay you for. You get back on the acquisition cost. It is for me a more disciplined way of approaching it.

Hundred percent. Now the thing is, I was Wolf was a bootstrap company. And so, you know, as we looked at it early stages, validation was get people to pay us to try it out. Nothing else matters. Can we get like 10 people to pay us to try it out? We didn't have a website. Honestly, the first product we built was like using Zoho creator with Zapier. We were like wizard of ozzing this thing. Low code, no code, but post product market fit for us. Product market fit was are they using the product, are they completing the core action which was give us data and review stuff so we can give them the money. I mean like in many ways ancillary ramp, right? Getting the money from the government. And for us, honestly, like, you know, a lot has been said about product market fit, NPS score, but as a capital efficient or bootstrap company, it's retention. Like if they leave, I can't eat, I can't pay the bills. And the same thing like product channel fit like the metric for investing in growth was CAC payback period. I never understood CAC ltv. It was like, dude, if I invest in a customer that's going to pay back two years, I can't eat, I.

Can'T pay the bills.

So it has to return less than six months. And I guess that is a little aggressive. But what is a good CAC payback period for you?

Yeah, I think it really depends on the predictability of the revenue as well as frankly your cash flow situation. Right. As a bootstrap company, you can't just the cash flow map doesn't work for having a long payback period. And in general it doesn't work well if you don't have high retention. Right. So for consumer businesses, I would try to go on the shorter side of CAC payback period versus for B2B, especially for larger companies where you have higher retention and higher renewal rates. And growing LTVs would be comfortable with a longer CAC payback period. Right. So like if you were going, if you were only selling to large enterprises, I might even say more than a year to, you know, up to two years might be reasonable versus most B2B companies, I would say like a year is like, you know, a great benchmark versus most consumer companies, I would say six to eight months. You better be getting your money back in consumer. Right.

So definitely now we're at the top of the hour. I got like two or three questions. One of the other things I want to take was as we're looking at metrics and growth metrics, there's this thing that's not talked about a lot which drives me crazy is multi touch attribution. And there are not all things that you can attribute for, especially in companies that maybe leverage offline channels or events or community, which I think RAMP has done a lot of. How do you factor this in? Say someone's building this massive community and then you get, you know, usually the flow in B2B is something like somebody comes to an event or a webinar, it gets forwarded and then somebody else sees it, they download a white paper, send it to somebody else, they request a demo and then it goes to inbound STR website. Like how do you think about attribution and are we like overthinking it or it doesn't matter. Like how have you solved this problem?

I think attribution is really important. I think you need some framework of understanding how much value you're driving from your efforts. Having said that, I think it's never going to be a. There's never going to be a perfect solution. There are going to be always trade offs in terms of some touches that you won't be able to capture. Some touches where it's a judgment based thing. You know, does an open, even email matter? How long since the open of the email should matter? How much credit should each event get? Are all events made equal or not? And so there's a lot of like thoughtful strategic things that you can think about. Because ultimately whatever you'll set the attribution logic for your company directly or indirectly maximizes for the reward of that attribution framework. And so that's an important thing to remember. And that's when you're making trade offs, that's how you want to make those trade offs, which is like, if I give this thing extra credit, imagine the worst case scenario, which is your entire sales and marketing team is driving that one thing. Does that seem like the right outcome? Do I want that to happen Sometimes? Maybe you do and that's exactly what you want to do. And so that's how you think about, you know, that's the art part of attribution is that because it's never going to be perfect, you have to be really thoughtful about what decisions and trade offs you make. And I think you also have to deal with, you know, sometimes cross functional stakeholders are like, well, no, the thing that I'm doing is a lot more valuable than what the attribution logic is saying or what have you. And I think there's a little bit of like company management that says, hey, we're going to keep getting better at this. What matters is that we're improving off the baseline. Let's stop arguing about what the baseline should be and let's like have a third party trusted team, whether it's the analytics team, finance team, kind of a pine on that and arrive at what we think is the best thing for a given period. I think there's lots of creative things that you can do with attribution, which is around, you know, just doing pulse testing, incrementality testing, as well as obviously asking customers, you know, how did you hear about size in the flow or getting it via a structured form with the SDR on the phone. I also think, you know, the problem that you mentioned can be solved by thinking about attribution at the entity level versus the lead level. And there's differences there and there's trade offs there. There's a lot of ways that you can be creative and solve attribution and make it better over time, but know that it's never going to be perfect and know that whatever you decide, the system will overemphasize anything where you set the reward to.

I think a lot of it's also having alignment around the fact that it's neither all data nor all emotion or art as you call it. I think it's part of day, it's like part science and part art or emotion. And I think until the day humans are doing business with humans, it's always going to be that way. There's an emotional side of things because I always got flack for I can't figure out the value of this community. And then I have to like back channel the logic saying some of our biggest customers to biggest brands, like, you know, like, you have to like orchestrate this thing. And you know, when I asked like folks like Nick Mehta or Kip Bodner at HubSpot and like, you just have to believe in the company's DNA, that's the right thing to do and flow with that gut and not mess with it kind of thing. So I like your take on it. As we close out, I want to ask two questions. One, in all your time, what was the biggest growth f up you've seen happen and how did you fix it?

I would say I'll pick an example from my Open Door days early on, which is, you know, Opendoor is obviously buying homes. And what we would try to do for the vast majority of our customers is we're trying to work with them before they've hired a listing agent. Right. But obviously there's a world of listings out there that are listed. And so if you wanted to, you know, acquire a bunch of homes, we could just go put offers on homes that are on the MLS on the market. Right. And increase our inventory and resell. So a very obvious quote, unquote growth hack is to use that channel of bidding on MLS homes for Opendoor. Seems reasonable. What could possibly be the problem? Right. And what we saw is this tremendous adverse selection. So if a house was listed on the market, typically it's listed for some time and we were to put an offer on it, and the seller, of course, has to still pay their listing agents fee. Right. So their net on this sale was going to be a lot lower than potentially if they could have sold it on the market. And so what we found very quickly is that the customers that took up those offers were ones that do something about their house that we didn't. So we got a tremendous amount of adverse selection where we these houses were particularly unprofitable for us. And if you tried to fix this problem by lowering the offer value to like give us more cushion, it didn't necessarily improve the problem because then we got even more adverse selection from the people that were willing to accept the lower offers. Right. And so it was really a particularly challenging situation for the company where it was a somewhat significant channel in the early days. Not that significant, but one that was, you know, tremendously unprofitable because of the dynamics that I mentioned. And so the short answer is we just stopped buying those homes. So that's not an interesting solution, right? Just shut down a channel. But we obviously still wanted access to this tremendous amount of volume that was happening via agents that were listing these homes. And so what we decided to do in that case is basically move upstream of where the decision was being made. And so what we did is we built out an agent partnership program where we said, hey, if you're going to go talk to a prospective customer, what we will do is, you know, we will give you an offer from Opendoor that you can present at that meeting. And if the customer is happy with that, we will give you the standard, you know, 1% commission, referral fees, what it's called known in the real estate industry on that transaction. And that was a big win because we got to see a more broader range of customers and audience through that. And the adverse selection problem was lower because the cost of the end customer was lower and the agent was getting a win because they don't have to do the full work of actually listing the property. They would just make, you know, that 1% by just exposing this to the customer. So what I would say is like when a channel is not working, the answer might not be just to abandon it, but to work through what the core problem might be and to approach it in a different way.

As we close out, my final question here is around building a growth team, right? Without the team, you have nothing. So post product market fit in these companies that you join, who are the people you brought on to lead you through scale, right? Like what are the key things you need? Because then you just build up on that over time, right?

Yeah, I think it's really spoken about it before as well, like three kind of archetypes of people that you really want as you're scaling your growth team. I think that's one type of person that is a deep domain expert of certain channels and is able to just consistently project, manage and execute and drive results and get into the details at a channel level. I think you need a few of those people. I think you need a set of people that are kind of data oriented, first principles oriented, understand experimentation, can push for velocity at the company, that are more cross channel trained, that work well with product and engineering, whether you want to call them biz ops, PMs, what have you. I think there's like a small subset of those folks that are important for a growth team and then the third group that I would say is really the folks that you wouldn't normally hire at, you know, McKinsey or wherever. These are people that are truly kind of out of the box thinkers that understand the cultural zeitgeist and are able to think extremely creatively and approach problems in ways that, you know, the other two sets probably wouldn't think of. I mean, I think people have names like Growth Hackers or whatever for folks like this, but I think I just fundamentally think of these as people that are like extremely creative, that understand the cultural zeitgeist and can really build experiments and initiatives that others will never man.

This has been a great conversation. Where can we follow your knowledge?

Thank you. Yeah, I mean I'm on Twitter. I'm, you know, like a lot of tech people, so you can certainly follow me and our LinkedIn. I'm easy to find. It's just my name, Srivantu on Twitter. Or Sri Bachu. I need some traction. You need some traction. Let's get some traction.

I've just released a book, from grassroots to greatness 13 rules to help you build iconic brands with community led growth. Recover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike to Saster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomena. Check it out at from grassroots to greatness.com the digital copy is on for 99 cents. Thank you for listening and we hope you enjoyed this week's episode of the Traction podcast. If you enjoyed the show, please leave us a five star review and you can find more information and all the resources mentioned in today's episode at. Boast AI that's b o a s t AI blog.

You're going to need to market.