I built a billion dollar company in 18 months

Can you build a billion-dollar company in only 18 months? Today's guest, his name is Eric Lyman. He's a buddy of mine who started a company called Ramp, and him and his co-founder, they asked themselves this question before they started the company. They wanted to get to a billion-dollar valuation in only 18 months, and they reverse engineered it. And I'd heard him tell this story before, but he didn't really like give a lot of details on it. And I thought it was amazing, the fact that they were this bold and then they actually pulled it off. So the company is worth something like $20 billion now, and they're only, I think, 6 years old. And so give this episode a listen. Let me know what you think. Again, Eric Lyman of Ramp is on today's episode of My First Million. You said something that was like pretty crazy. It was, I want to get— I want to build a billion-dollar company in 18 months.

In 18 months. Yeah.

And that was kind of shocking because that's like, great. I mean, that's crazy fast. Is that really what happened? You guys had that conversation?

Yeah, that's a real conversation that you guys didn't have.

You and Kareem, were you on the same page?

We wanted to go fast for sure. You know, I think like the world is moving faster than ever. We had already sold our first company and we were definitely like neither of us came for a whole lot. We were comfortable. And, you know, I think even at the time had already proven a couple of things out and, you know, in some sense had left. Like I was, I was a 26-year-old, you know, senior director of Capital One. I think it was like the youngest person at that age. Like we left very good setups. And so we knew that if we wanted to leave, we wanted to go and make this company big and either make it huge quickly or fail really quickly. And so, yeah, Kareem really did have that conversation. I think he had it with Calvin, who, you know, later he cracked me up. I think when we finally did become a billion-dollar company and it did occur in, in 2021. And so it was less than 2 years from incorporation of the company. No shit.

Wait, 2 years after incorporation? Yeah. That's insane.

Yeah, it was crazy. You know, a lot of magical things happened in 2021, but it really did happen. And Calvin said, you know, look, sometimes it's best not to know the odds. You know, if I had looked it up and known, I would have seen that there was no company in New York's history ever that was worth $1 billion within 18 months or 2 years or 3.

But what was your revenue when you, when you did that?

I mean, in 2021, geez, that was, you got to remember, this was like peak excitement in the market. I think we started that year maybe around $10 million in revenue, probably less.

Um, which was 6 months into the company. You're at a $10 million run rate.

So let me, let me back it up. Yeah, we incorporated the company in March of 2019. We launched it publicly in February of 2020. The pandemic hit, things slowed down, then ramp just started really accelerating. I think that year revenue grew something like 70 times year over year. To the point where it was small denominator, but we had hit— it was, it was approaching $10 million a year before the company was out for even a year. And by the end of 2021, again, I think the multiples really hadn't changed too much, but the company ended with an $8.1 billion valuation and we were coming up to but hadn't yet crossed $100 million a year in revenue. It was a crazy year.

So how many years until how many months until $100 million run rate?

We were one of the fastest ever. I mean, so if you go back to it, we, I think, announced it, I want to say in March of 2022, I think is when, uh, Packy McCormick, um, uh, has covered the company deeply, become a very good friend, I think wrote the article talking about it as well as the $8.1 billion valuation. I believe that was in March of '22. Um, we launched in Feb of 2020, I think we hit our first, you know, million run rate sometime in the spring, maybe by early summer. And so if you look at the traditional charts, there's— it's now become a bit of a meme of like time from a million to 100 million in revenue. Our chart's actually wrong. That's from like time from incorporation. I want to say like 15 to 17 months from a million to 100 million. It was explosive.

That's insane. And like, I don't even know. I don't know anything about the finance industry, or I don't even know anything about your business model other than I use it. Yeah, like I know everything about personal finance apps. I'm a huge nerd in that, but I don't even know how— like you take a percentage of spend, I imagine, but I don't even understand. Explain to me how that works.

You know, I didn't know anything about it either until I sold my last company to Capital One and learned the business model. And so in financial services, there's— particularly in the card space, there's two basic business models.

Credit cards.

Credit cards. There's two basic ways that they, that they tend to make money. Uh, number one is a transaction-based model where there's this thing called interchange. Every time a card is swiped, there's a series of payments. The merchant, um, rightfully so, gets the, the lion's share, and then folks involved in moving the money take a little bit. A little bit goes to, let's say, the merchant processor, the people who accept the cards, route it, uh, and deal with all the—

And who's an example of that company?

That would be like a Stripe, um, or Square, maybe a Shopify.

And they take a huge percentage. Right.

So they collect it, but they don't keep a huge percentage.

Got it.

So, um, you might see headline on some of these sites, you know, 2.9% plus $0.40 or something like that. At the very end of the day, they might keep, you know, it varies anywhere from like 0.1% to 0.5% is ultimately their net take, but their gross is much higher because they're collecting. They've also paid the networks. Well, so they have a few folks involved. They have the merchant bank. Um, so you as a customer have banks. That's the You know, it's deposited to some bank, which maybe you keep it there or you move it to your, your business's bank account. They'll keep a little bit, maybe $0.10. Visa or a MasterCard, they'll keep a little bit to call it like 0.1 to 0.4%. And then the remainder tends to go to the issuer and the issuer processor. That's generally the people that you think of as like people whose name is on your card. It could be like a Chase or it could be like a Ramp or something like that, or a Capital One if you have a Capital One card or Wells Fargo if you have that kind of a card. And so the issuer in interchange is traditionally keeping most of that interchange. And the reasons actually make sense when you think about it, you know, especially in credit, they're taking on the risk. They're saying that merchant, we will pay you, you know, even if our customer doesn't pay us back. When you accept this payment, you are getting, you are getting paid for it. And if the customer later defaults, that's on us. And so they're generally taking the credit risk. They have the operational costs of standing up the card programs. And actually, classically, if you, if you look historically, these rates used to be very high. A lot of these came from like the old department stores in the early 1900s where you'd have like a bank set up shop actually in the department stores and interchange could be as high as 5 or 6%.

18 months in at $100 million in revenue, how many employees did you have?

Somewhere between 100 and 200, maybe 200.

Dude, so I don't— that's just like boggles my mind because my company is, I think, 2 years old and we're small or it's a bootstrap company. We own the whole thing. And so I think we have 15 or 18 people. But when you're doing everything yourself as a bootstrap company, just like getting 1 or 2 hires a month is hard. I'm sure at Paribus you're feeling the same thing where just like the logistics of getting that many people.

Yes.

Just the day to day. Like, does everyone have a computer? That's incredibly challenging. So that's 10 people a month that you need to do that. Yeah. It's kind of challenging to understand how, how fast that is.

I mean, now we're over 1,100 people. There can be single, you know, 2-week periods when we have 40 to 50 people that start, you know, it's— I totally agree with you. You definitely need great software. And, you know, even to the point that you'd said earlier, like you use Ramp, but don't, don't totally understand exactly how it works, how all this stuff works. I think there is in any business so much complexity in going and starting a company and operating and scaling it. And I think there's an entire class of tools that tend to be great business models. And some of the fastest growing companies of the last few years have actually been that, you know, you can look at like a Ramp in the card space is what it's doing. It's allowing you to scale up and down with full control, full visibility, all your expenses managed, your accounting managed, done. You don't need to think about it. In HR and payroll, Rippling is a great example where, you know, I think that they're 8 years old. I think their last round—

Rippling?

Rippling. You know, they're only 8 years old. They're 8 years old. They started in— that's crazy.

I was one of the first customers.

I mean, maybe 2016, maybe '09, but you know, they're, they're not that old. And I think their last round, I want to say, was at $17 billion.

That's insane, right?

Yeah. There's a lot of these tools. HubSpot, you know, you mentioned them like they're an incredible company that takes what used to be— there's lots of little paper cuts that generally need to deal with as a business owner and abstract those away. And so I think kind of these boring business models can actually be very good.

I think I've been able to grow into some of like my success a bit because it happens a little bit slower. Yeah. When you're 32 years old or whatever and you have 200 people or you have this valuation or whatever like that, it's a little bit overnight feeling. Did you have like weird feelings of like self-actualization of like, oh my God, all I— what I wanted is actually here this fast. And I don't know if I'm actually ready to step into that position of or have this responsibility.

There's always like imposter syndrome and, you know, you know, and I would say so there are a couple of things. I mean, we from early on designed the company explicitly around velocity. If you kind of step back and sort of look at the particular industry that we're playing in, not a joke, most of the founders of the companies that we compete with actually wore top hats. You know, they lived in the, you know, 1800s, you know, like James Pierpont Morgan. Yeah. Henry Wells, like You know, you look at the people who started Amex, Citi, Chase, you know, nothing wrong with these businesses. In fact, there's a lot to love about them. They're enormous businesses. But, you know, a lot of their fundamental edges were in long-time enduring brands, unbelievable distribution, risk and underwriting, the benefits of scale and of time. But all of them move very slowly. I think an analogy I like to use sometimes is like, you know, imagine that you wake up one day and you have to use like the computer or like the cell phone technology or like the tools that your parents used when they were your age, it'd be very like you couldn't do this podcast. It'd be very hard to run your business in that way. But if you woke up and you had to use their bank account or their credit card or debit card, you probably could, you know, not too bad. And I think it's sort of proof of like not too much innovation has happened and the products haven't fundamentally evolved over the past 30, 40 years is you know, from, you know, no phones to flip phones to computers that can think. And so a lot of our view was early on we needed to count the days, move at incredible velocity, and simply be designed to ship things faster. And so today we're 2,310 days old. We're 6 years.

Yeah, that's insane, by the way. You just said that, you know, the day. I mean, that's just like a radical thing.

It's, you know, and I remember in the early days when you go back to that 18-month SAT you were talking about at the beginning, You know, we were like hellbent on, okay, within 45 days we want to be approved by the network. Within 60, we want to be approved by our bank. Within 70, we want to be, you know, funding our first transactions. We want to get this product in front of customers as fast as possible. And so a lot of what we were trying to do is just move very quickly. We had set goals that we wanted to grow the company 10% a week, you know, once you start to scale 20% a month.

Does that burn people out?

It's very intense.

You don't have this typical personality type. Like usually people who succeed as fast as you have are very, very high on the disagreeable scale. Yeah, you seem pretty easy to get along and you're very calm. I don't understand like how that personality type has like been able to grow this.

My view is like, I don't— I'm not trying to find folks who are, you know, low-cost, you know, push them to an extreme, burn them out. I would rather find people who like just find extreme joy in their craft and just set them up where they can be doing just that as much as possible all the time. But I think that you have to, if you want to move quickly, you can't do everything. There's only one or two things you can pick and you try to have like extreme focus as a company on that. And just having an everyday trying to just ask like, what are the things we can do to optimize just this one function?

All right. So I've built a few companies that have made a few million dollars a year, and I've built two companies that have made tens of millions of dollars a year. And so I have a little bit of experience launching, building, creating new things, and I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at, what my skill set is, is researching different ideas, different gaps in the market, and reverse engineering companies. And I didn't invent this, by the way. We had this guy, Brad Jacobs. We talked about him on the podcast. He started like 4 or 5 different publicly traded companies worth tens of billions of dollars each. He actually is the one who I learned how to do this from. And so with the team at HubSpot, we put together all of my research tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies, and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks. And so if you want to see my framework, you can check it out. The link is below in the YouTube description. What businesses were you going to start instead of Ramp? So you had just sold Paribus. Is it Paribus? Yeah. Have you ever said how much money did you make off that?

We haven't— I mean, talked about it publicly, but it was mid-eight figures.

You each walked away with that?

No, that was the total deal.

The total.

But we hadn't raised very much. I mean, we had—

there's three of y'all.

It was really Kareem and I. You know, then and but we had raised something like $2 million at the time. And so there were some investors, but most of it went to founders and employees.

So it was enough that you're like, I'm good, potentially good for forever depending on how I live, but I have enough. So you're sitting around and you're like at Capital One doing your thing. What was your list of ideas that you guys were like scheming on where you're like, it could be this, it could be this. What if it was this and this angle? Like, what was that list? So I think everyone has a list. You go—

exactly. You go through all these different phases. So the first year we were just dead set on these people just changed our lives. We want to make sure that they feel incredibly good actually about this deal. So the first year we actually didn't spend too much time at all. You know, we wanted to go and make sure there wasn't failure to launch, like we didn't get crushed kind of by the weight of joining this 50,000-person company and that— that— yeah.

So you're just being a good seller.

Yeah. Which I think is good, but sort of like underrated kind of the value of like integrity relationships or, you know, you know, that was important to me when I sold to 100%.

I was like, I remember thinking, I think they got the better of the deal, this or that. But I was like, you know, I'm happy, but I'm also— I kind of want to have a reputation as someone who— Yeah, it was— we all won. We all win.

Exactly right. And I am more flagrant of like for folks who are like young and, you know, the value of like a great reference of people saying like, the world's small, man. It's so small. And so that was, that was the first year. I think the second we start saying, okay, this is interesting, but you know, I miss the speed.

Yeah.

You know, I feel like I'm on a cruise ship versus a small speedboat of kind of going and starting a company. And so I think I did what a lot of entrepreneurs do, which is I started trying to come up with, you know, ideas in the abstract. And, you know, I think we went on a journey of like bad ideas until eventually it was— came back to good ones. And so I think at the time, you know, I was looking at, I think similar to our talk before this, we were you know, looking at places in New York and they're all kind of bad and we're wondering why are they bad? And we should, you know, cars are manufactured, planes are manufactured, all these products that are low cost, affordable, but wondrous that anyone can afford are manufactured. Why aren't homes manufactured?

So you're going to— you're interested in manufactured— like, like when I was a kid, like a bunch of my poor friends, like, and my grandparents, they lived in— we just call that like mobile homes.

Yeah.

Like it's just— I guess that's what they're called. I mean, the nice way is manufactured houses.

They're manufactured house. I mean, there is also You know, like one of the places that like is extremely populous, it's the biggest city in the world and yet housing isn't so crazy unaffordable is like Tokyo or you go to Japan and it's because they actually, most of the home builders are home manufacturers and things are very standard. The cost of a new home build is like not that expensive. And, you know, I think there's all sorts of issues in the States related to this. And we thought, wow, we should look into like manufacturing homes. And I still buy them and I think that there's—

I've invested in a few of them. Yeah, they're very hard. It was very popular right around when you were starting Ramp. Yeah. And I invested in 2 or 3. Yeah. That space interested me. None of them have like completely taken off.

And ultimately we decided not to do this for a couple of reasons.

So hard.

One, I actually had no business in doing it and I rented an apartment in New York. I never owned a home. I manufactured anything. And, you know, there was no connecting story to it. But then the more you read about it, the constraint and the bottleneck was not around manufacturing at all. It was all the zoning. And it was that you could manufacture a house that was zoned to go nowhere unless you could go and see it. There was a lot of complex problems. And by the way, I hope someone solves a lot of this. I think that there's—

you think that's still interesting?

I think it's still interesting. My view is it's like The manufacturing is part of it, but the zoning question is very real. It's how do you actually get— and it can show up in all these funny ways of like, which way does the house face? You know, how far back does it have to be set? What are the proportions?

Joe Gebbia is doing something in this space.

I think if people crack this, I think it is an enormous opportunity, but it is like a big slog. And like, this is one of those businesses where you're not going to 10x for a while. You're going to be 10%, 20% compound. But there's a great business, I do think, to be built there. Okay, it's just too expensive.

So that was on the list. So like tractor trailer or I don't know what you call it, dude. Like my friends, like their home or like my grandparents, they lived in a place where like their home was delivered on like a truck. Yeah, yeah. And so, okay, so that's the interesting space. What else was on the list?

So that was on the list.

We—

there was various like random crypto things. We were, you know, we'd been interested in this stuff probably going back to like 2012 and 2013. So we spent a little bit of time around that space. You know, we spent some time, you know, helping out different friends starting businesses. We were close with Z at Ro, who started the direct-to-consumer kind of healthcare business, folks at Candid. And so we spent some time on that kind of world. And then I think where it got interesting again is we came back to the things that we actually knew and a bit of our roots. And so there was almost two variants of what eventually became Ramp. Variant number one is what turned into Ramp, and we can come back to that at some point. The other was this view of, you know, in the card space, which is it feels almost voodoo from the outside. It's unclear how you start these things, how the business model works. But we knew this because we had spent a bunch of years inside of Capital One, studied the models really deeply, knew the history well and had some credibility in the space. We were also very interested in the partnership business and the co-brand business. So let's say that you were— you go to Best Buy and at the very end someone says, would you like to open a Best Buy credit card? Someone is doing that. There's people powering those businesses.

Who are they? Who's the big one?

You know, Synchrony is a really big name in it. Capital One, you know, had a large co-brand business. Amex. I mean, all the large banks.

And those are huge, tens of billions of dollars companies.

Barclays.

How big is Synchrony? I've never heard of them.

MBNA. Tens of billions of dollars. I haven't looked up their—

In revenue?

You know, that is as well, certainly in market cap.

Sure.

Huge businesses. And the basic premise of that is like, look, is we had a side of our business at Paribus where we worked very closely with retailers. You know, all of these, these stores have strong customer loyalty and credit cards are great products, but they're very hard to sell. And so the basic business model was if you could, as you know, if you're a store, you had customer loyalty, if you could convert even a tiny percentage of these customers to just take on a new credit card. And that was it. You would make a little bit of interchange. You would kind of lower your costs when they were shopping with you, but also you could make a little bit back at all the other places that customers went and shopped. And so the whole question was, could you build a product that was standard enough, simple, modifiable enough that you could convince lots of different stores? And as this was going on, the online boom was happening. Shopify was, you know, opening up new retailers and stores everywhere. Creators were getting big, you know, and we thought there was a chance to have a modern card for businesses and creators. You know, MB&A was a big company. I mean, they figured out when you look at university credit cards, that's like a huge business. Dara Murphy is here in New York. His business is doing really, really well.

Imprint. I've heard of them.

They're doing very well. These take a long time. Even in the cases where like they're the fastest ever, you're going to be building these businesses for many, many years. And you have to ask yourself, It's like, do I want to be working on this for decades? I thought that it was crazy that the largest credit card companies on the planet were working really hard to get customers spend a little bit more than they thought. And then once they do, they would work really hard to convince people that the points they got were worth a lot and then devalue them in the background.

It was pretty funny. You said, I, I read so many books on the banking industry. Yeah. And you're like, I spent weeks doing it. I'm like, oh, I would have thought you would have spent like 5 years. Like, you must have read a shitload of books in a very short amount of time. Did you learn about any of the weird or shady stuff that the banking industry does for consumers or like the history of credit cards and things like that? Like, I remember reading about— I think it was Bank of America. Was that— was that the first credit card?

Yeah.

And how I believe what they did— well, first of all, like, one of them started as like a dining club card. Yeah, but then another one, what they did was I think they just handed out credit cards to farmers in Central California, something crazy like that. Right.

So the history— so it started by a guy named A.P. Giannini. I think it was Banca d'America d'Italia. It was basically Bank of Italy started by a very poor Italian immigrant is functionally how it got started. And his first big opportunity really was in like the, I think it was like the earthquake of 1906 in San Francisco, where effectively, you know, he was working and kind of supporting and lending to like grocers, immigrants, farmers, folks who would come into SF and trade. After the earthquake, there were fires everywhere. A huge portion of San Francisco burned down. And he was one of the only people that supposedly, the story goes, he set up a table out in the middle on Market Street and he started making loans then and there on the spot. And he went from this, like, tiny bank to effectively, like, started going everywhere. And his history is pretty interesting. He— so it was kind of this bank to merchants and then eventually to consumers. I think in the early 1900s, Woodrow Wilson was trying to supposedly encourage lots of different banks to go and lend to small businesses and the emerging middle class.

Right.

This is the things you hear about if, like, the Americans are buying their first car, their first washing machine, all that kind of stuff. And he was very big on it. And so he, he was, he, I think, was famous for setting up franchise banking where there was like little branches and branch bankings in all sorts of little cities. And they sort of took over what used to be like— and this is relevant when you get into the history of credit cards. One of the most common places that people would take loans would be in a department store. So if you wanted to buy, you know, you may know that Sears was the parent company to Discover. Yeah. Or Bank of America would actually go instead of branches in like the top, you know, somewhere in like a Macy's. So instead of Macy's giving you a loan, so if you wanted to buy a washing machine for, you know, a dollar, you know, you would walk out of it after making a $0.10 down payment and you pay them back. They said, we'll take over that Macy's. You don't need to underwrite each customer. We as the bank can do that for you. And that was the start of it.

What would they do if you didn't pay?

You know, it was a loan. And so it was whatever banks normally do, you know, maybe they could go and take the good, but it just was—

the credit bureaus exist then.

This is before credit bureaus.

So what do you do if someone doesn't pay?

I think that was why they had the local bankers. You know, they would go and work. I think they would try to collect for a lot of years. But that was like— this is like early 1900s banking. The part where you're getting to was by the time I think Bank of America was the biggest certainly the biggest bank in the US. It might have been the biggest bank in the world. It was just enormous, enormous scale. And I think the town— I want to say it was Fremont.

Yeah.

And so this was in the '50s. And I think that it was something like 60% or 70% of everybody who lived in this town were customers of Bank of America. And, you know, if you were going to a department store, they had this, this branch that you could go in GoTo, but, you know, if you were going to like, you know, any random, you know, hard goods store, you couldn't get a loan for it. And so they took this bet and they said, let's just get the rest of the town, let's get everybody, and we're going to send you cards. I think they mailed everybody in the town. It was like a 4 or 5-digit card and you could go use this and you could say, put it on my card and you would go and pay the bank back later. And it just exploded. Suddenly, you know, they almost everyone in the town became customers and people were using it all the time. People, once they got access to credit, started being able to afford more things. And it was good for merchants, too. You know, merchants who couldn't access and couldn't get a branch to come in could start to compete with the, you know, large department stores that could. And it gave rise to, you know, the BankAmericard. And so the initial credit card was BankAmericard. Once they showed it successful, went to their competitor banks or regional banks and saying, I will run this program for you. We can issue Bank of America cards for the Commerce Bank of Seattle. You know, you can issue it to your customers and we will deal with the operations, paying, you know, collecting from the stores, paying, you know, doing the underwriting, all that kind of stuff. So it was a franchise model. It wasn't the model that it was today.

Was that— is credit like a uniquely American thing?

You know, I think there's a good argument to say yes. You know, and some of it comes back to that early 1900s kind of lineage where as this was going on, you saw the birth of the American American consumer where you have department stores, cars, automobiles, and you saw financing for the emerging middle class. I would say in Europe, even to this day, you see this very different behavior where—

Yeah, like for example, they don't— they put way more down when they buy a home.

And this is exactly it. Americans are very accepting of borrowing and debt, you know, and I think that's the that's the perverse way to say it. I think the non-polite way to say it is like, you know, in Europe, if you're rich, you can borrow. And if you're not, pay in cash. That's all you can do. And I think it's actually much harder for people who aren't in the middle class, who are poor, you know, to borrow. In the US, people, you know, it's this view of you can kind of pick, pick yourself up by your own bootstraps. You know, you can go and, you know, borrow for that car or for that farm equipment. Or the laundry machine so you can go and build your business and go into it. And so I think there's a lot of good that comes with it. Obviously, sometimes there's, there's some bad people can get into credit issues. But I think on net, you know, most businesses it takes— it's the startup costs are real. But once you get going, you can build an extraordinary business.

I listen to founders all the time and like I was listening to the Liz Zottica episode and I'm really fascinated with building a company that can last for 50, 100, 200 years, like something where God willing, I hope this is true, but my children want to get involved in some capacity and it could last beyond me. Typically those— I think those businesses that do that are not the fastest growing companies.

So one, I actually agree with like the basic physics of what I think David and The Founders Podcast studies and what you're getting at too, of like I think if you— to get down to the core of what makes great businesses, it's not like who grew 100% or 200% or whatever this year. It's that which businesses can grow 30% for 30 years. And if you do that, you will be a giant business.

That's not what you did.

Our view is that we can. And like, the crazy part is like we have grown extraordinarily quickly. We're still just about doubling each year. At enormous scale. I think we are 1.5% ish of the corporate and small business card market in the US. And so if you just look at the physics of it, even if we were to massively decelerate and start growing 30% for decades, it's physically possible. The market is so big.

You're sort of like hanging out with like the Illuminati a little bit where it's like these old money families because that's what a lot of the banking industry is made up of. Yeah, because they've been around for 200 years. They've been dealing with money forever. Have you noticed or found anything that you are shocked by where you're like, if the consumer knew that this is how this setup is, they would be infuriated?

It's a— there's a lot there in what you're asking. So one, these families, like, I think that they're focused on doing simple things well and doing it for a very, very, very long time and consistently. And a lot of these families just like don't sell, don't fight or interrupt the power of compounding. You want to find a business where you can just compound for a long time. And so I would say when you're just starting out or if you're building, like you're terrified of like losing money or things going sideways, you have real costs, families, friends, things to take care of. And so you don't interrupt the debt. You want to— when things get risky, you sell. But I think a lot of these families just stayed in for a long time when there was huge— I mean, classically, you'd see a significant recession in the US every 7 to 11 years consistently. A lot of people will sell out at the bottom because they can't take any more pain or they can't take the risk of it going even further. And I think the difference, a lot of these families, is they would figure out how could you avoid it? How could you go and stay in? You know, obviously I've never— none of my family had anything like this. And so I also too, I think as a kid, was very skeptical of people who grew up with a lot of money.

And one of my favorite biographies is Titan by John Rockefeller, about John Rockefeller. Yeah. And David Chernow is the author. He wrote one on JPMorgan, which I'm going to get to. Yeah. And it's fun. It's fun reading about these old banking families because they're full stories and they're typically nutty. Yeah, you are going to be an old baking family. You know, that's kind of like crazy to think about.

It's, you know, does that mess with you? I think that a lot of the families of the past have done a great job of being like involved civically. I think that a lot of them have been more upstanding. I wouldn't say all of them have been, but I do think that, you know, like I'm in my mid-30s. I don't know that I've thought so far ahead on like a legacy perspective, but Yes, Ramp as a company is getting very valuable, but like all my stock is in Ramp. It's just a certificate.

Yeah.

And it's only become valuable because we've built something that makes a lot of people a lot better off. My whole obsession is like, how do we keep doing that for a very long time? And, you know, maybe the money comes with it, but like, that's not why I do it.

What was the reason why you did it?

So the first company we started was definitely around like And I remember when we were down to like one month of or like a few weeks of savings and like, that's it.

And like, the worst.

It's the worst. Like, a lot of it is usually—

but you probably felt that way the whole time. Yeah. Like that burden. I remember I felt that burden for 4 years.

And you're just working your ass off the worst every weekend. And like, it's hard to relate to regular people. You're terrified.

It's like, I remember in college I had this girlfriend who cheated on me and I remember like, here, like, sorry. Yeah, I remember like, and then she's like, go to that. I can't. It was horrible. And like, she would go out and I'm like, I had this like anxiety all the time. Like, fuck, this like bothers me. And then when I like started a business, I would remember like checking the bank account all the time. Yeah. And I'm like, I had that same anxiety. I'm like, I don't want to look. I don't want to go over that. I just want to bury my head. I don't want to know. I don't want to be part of this. Yeah, I felt that way for 4 years.

I'm curious if it changed for you too, but like after the sale, like suddenly you have security, right? Like your bank account looks a little more, more flush. You move it out of the student checking account to something more secure. You know, you're good. And then at some point, you know, it's, I don't know, hedonic adaptation. You get used to it. It's just like a number in an account. And then you have like your same anxieties, your same—

you have the same shit, the same stuff, all that kind of stuff. It's better, though.

It's better. It's better.

It's better. But you have a similar anxieties, but it's not existential. You are— it is sort of existential, but it's not like the baseline happiness of knowing that you're not going to be on the street is— makes like the baseline goes up.

I agree with all this.

Half the time I listen to Founders and I'm like, well, every time I listen to Founders, I think I'm going to, I'm going to own this for 50 or 100 years.

Yeah.

And then during the day when I'm having a pain in the ass, like issue come up, I'm like, we're going to set this up so we can flip this thing. Like, it always changes, right? Like your mood. Yeah. Your emotions are powerful. And do you think you'll run this or have equity in it 50 years from now, or would you sell in 5 or 10 years if it was like a no-brainer deal?

I hope this is the last company that I ever work on. You know, I want—

Really?

Yeah, really. You know, I—

Your partners feel that way? Yes.

Yeah. You know, and it's one of these things too where like, you know, I remember even in the early days of going through, like there was deep pain, right? If you're growing this quickly, you know what certainly got you here won't get you there. And I think that some of what Kareem is saying is like, look, if I'm going to go through all this pain, like he has—

But it doesn't seem like you went through that much pain if I'm like looking at you guys from the outside. Of course, it's always more challenging, way more harder than it looks. But like when I'm like, I don't know, $100 million in revenue in, in 18 months like that. Like, yeah, like even though it's hard, you're still winning. And that momentum like that, it's really all about dopamine. That makes you feel good.

I agree with you. So some of it was like not planning for downside and not solving problems until they hit us in our first business. So in our first business, we had a day when we lost 75% of our revenue overnight, vaporized. There were risks that we knew about that we didn't properly manage. And one of the things in Ramp that we resolved to do is like Kareem and I and others are just going to beat the shit out of each other all the time, worrying about problems that are 3 to 6 months to a year out in the future. And so it's true, if you look at kind of RAMP's trajectory, it has been kind of nonstop growth, fairly consistently up and to the right in terms of like the revenue, the cash flow, profitability, all those kind of metrics has been consistently good. But it's because inside of it, there is so much like agony that we spend over like this metric that's going to affect how we perform in 3 months from now is not going the wrong way, is not going the right way. What are we doing about it? And so it's a lot of internally beating each other up. Like I often, you know, when you look at like, like a— I think the analogy is like an athlete, you know, you look at like it was just Wimbledon over the weekend and Sinner and Alcaraz, like each of them look like they're playing effortlessly, can pull off these shots you don't imagine. It's because there's been years and years and years of when you're not looking, they're just obsessing, practicing, trying these shots. So when it counts, they're able to do it. And so I think there's a lot of similarities there. And what I would say is like, as is, you know, for Kareem, it was amplified. He had, you know, his 3 kids now. He got started earlier than I did. And he's like, look, these are some of the most valuable, you know, hours I'll ever have. And if we're going to go through this, like, it's going to be because we're going to— the ambition is going to be real. And if we have a problem, we're going to confront it right away.

What do you like to read?

I like to read. It's part of why I like the Founders Podcast so much, like biographies of other founders. I like reading about like, you know, design.

Are you a designer?

I really like it. So the first company, Paribus, I had design and product reported to me. And so I had to spend a lot of years kind of like thinking about like, you know, the principles of it, what makes products great. And so I love it. I would probably get booted off of our design team. I don't think I have quite the level of of talent and crafting, but I definitely spend a lot of time thinking about it.

What biographies?

In terms of favorites or what am I reading now?

Favorites.

I mean, you know, it's, I think I probably read, you know, 15 biographies of Steve Jobs. You know, it's, I think as great as people think he is, I think he's still underrated for what he was able to do and how consistently he was able to do it. And I also think that he changed a lot over the years. I think he gets kind of typecast as this like brilliant asshole, which like, I think he was at the start of his career, but I think he got much more interesting, cared about people in a much deeper way than I think comes across. And some of that is like, I think people like conflict and people like controversy, but kind of forget to look at his career as he softened over the years. And I think ultimately, I think that's when he built Apple into the powerhouse that it is today.

I've been struggling to find biographies where I admired their whole life.

Yeah. Have you read, I mean, just on Steve Jobs, have you read Becoming Steve Jobs?

I don't remember. I've read about 2 or 3 of them. I forget the titles. I did the Walter Isaacson one.

That one is good, but I think that one is more kind of like pop culture Steve Jobs.

It was not when I remember reading that and I'm like, I don't want to be this person. I don't like him. Yeah, he was very unlikable. Yeah. And that book. But what was Becoming Steve Jobs?

It So the central question of it was exam— examining, like, who he was over the course of his life. And so effectively, these were journalists, people who covered him for like 40 years and knew him from when he was like the 20-year-old kind of wunderkind to, you know, kind of like end of his life. It came out around the time, I think a few months after the Isaacson, and I think that they felt similarly that so much of who he was portrayed as was like this brilliant jerk, and instead we're trying to focus on like, how did he change over the course of his life? And I think it's an amazing, amazing read because I think it focuses much more on like him. What were the lessons? What were the things that shaped and changed his style? And I would say like, I super— I really highly recommend that book. There's other great, great ones too on other aspects. Like, I love Insanely Simple. I love Insanely Great. Steve Levy. That's like a lesser read but wonderful book just about just like—

There's 15 of them.

Yeah.

Wow.

Yeah.

So ChatGPT has become my life coach.

Yeah.

And there's like a prompt where it's like, I forget exactly what it was, but it's like, everything you know about me, boil it down to one word.

Okay.

And I think I phrased it where I'm like, tell me like my issue or my flaw. So it was like, it's going to be negative. And I think I said two words and the first one was jealousy and the second one was fear. Yeah. Which are very similar emotions, actually, I think. But it was like rooted in like comparing yourself to other people. Yeah. In New York City, it's like so easy to do that. Yeah. And it's like dialed up to a 10. You're strange to me because you seem like such a— you are so successful at such a young age and also you seem emotionally stable. Those things typically aren't the same. Yeah. You know what I mean?

A little out there. Yeah.

You know what I mean? Yeah. And I find that unique and interesting about you.

Look, I'll like compete very aggressively in things that I believe in. Believe in. Don't be wrong. But like, you look back and you're having like a shit day and you're like, all right, I had a bad morning. What does this affect my afternoon at all? You know, I've got half a day left. Do I want to make it count or not? And I just think the ability to just like stop, catch yourself and reset is really important and is increasingly hard. As you kind of get older, but it's super important. And I think some of it was like early experiences. Like, you know, my older brother growing up would have like these really strong mood swings and all kinds of things would go on. And he had different kind of like, you know, learning difficulties and stuff. And, you know, he would take medicine and it would like radically change his mood. And I was like, I remember as a kid, like, that was so jarring and weird. Someone could be like, you know, feel a certain way and then suddenly, you know, feel differently. It was strange to see. And then You know, I think as a kid, I don't think I'd fully processed the thought, but I remember, you know, I'd get really mad too, or I'd be going to sleep and I was angry about something. I was like, oh, am I— why am I mad? Maybe I could not be mad. Does being mad help me or not?

That's an interesting, very, very introspective philosophical question to ask. Like, well, why do I feel this way and do I have to? Yeah. Yeah.

You know, and I, you know, I think you know, my brother and I would get in all sorts of fights. He'd, you know, I remember when he like threw like a fork and it went into my leg and stuff like that. And, you know, we have 3 boys in a house, like they're, they're probably not as fun as little girls. They do more interesting things. And I think our parents would, my mom was really good. It's like, all right, like, I'm going to sit both of you down. You're going to have to go and explain, like, you're going to listen to your brother as he says why he was mad and you get like pissed and you'd want to go whatever and you'd be like, you know, you have to go say and you say it back to him and then you're going to say your side and then he's going to say it back to you.

It's a super intentional thing to do.

It was really—

my parents never would— they would have been like, you guys just shut up.

Yeah, it drove me off the goddamn wall. But after long enough—

is your mom like a— was she like a hippie? Like, that's strange. Like, that stuff was like— that stuff's popular now with us. That's probably how I'm going to parent my kid.

Yeah.

But that's like some gentle parenting, like hippie dippy shit, which I buy into.

I mean, it was—

what was her job? Teacher, therapist or something?

No, she sold like telecommunicate, like telecoms.

That's a very forward way to parent.

Good parenting, I guess. But it teaches you to consider the other side a little bit and to calm down. You see the complexity of things. And then, you know, later on when you see something chemically change other people, it's hard to do it. But you know, it forces you to sort of wonder, like, is it me or is it the, you know, something going on in my head that's making me feel this way? And look, like, I think sometimes stress is good, other times it's not. And I think, you know, Ramp is a big company. There's a lot of pressures and stuff that are natural. And, you know, I think if you step back and you're like, all right, how I act and how I how you feel can really impact how you think about things. You know, I think now it's much more trained, but you spend a lot of time to meditate. What is the headspace? I don't regularly.

How are you this well-balanced?

You read different books too. I mean, it's now a little more trite, but like, it's funny, I like Ryan Holiday stuff when he wrote Trust Me, I'm Lying. But then you got very into stoic kind of philosophy to read like meditations and stuff like that. And so I think you pick some of that up. I try to have a day where I just like hang out, just, I don't know, go on a run, do different things. You do clear my head.

Yeah. What day?

Usually Saturday. Yeah, usually then. And then Sunday I'll pick stuff back up. But I also think too, during your week, like I think especially with other founders, as life goes on, you were probably really good at something and you did it a lot and that's what allowed you to build this company. Then suddenly you're running the company and you don't have time to do the thing that you really liked anymore.

Yeah.

And I think that a lot of people lose control over their own week and they don't actually audit like, am I spending the time on things that I'm good at or not to be or want to be spending the time on? And so, and I pretty regularly try to go and like blow up my calendar and be like, all right, I actually love doing this thing. Am I spending any time on it?

No.

And I promise if you spend too many weeks in a row doing something you hate, you're going to be miserable. You're going to be stressed out. Inside, just redesign my weeks or months pretty regularly.

I am.

It helps.

A question I've been asking myself a lot is like, where's my weakness now? Yeah. And like, what do I need to like really work on? Yeah, it's actually whenever I do reference checks when people— one of my little tricks is I'll be like, what's this person 1 out of 10? And they're always going to say like 8 or 9. Yeah, everyone says that. And I'm like, cool, what makes them 9 or whatever? Okay, now to get that extra point, What do they need to work on?

I like this question.

That's where you hear like weaknesses. That's the only polite way I've been able to get someone to like talk shit on someone. Yeah, it's important. I mean, like, yeah. And then like a lot of those weaknesses that they have, I'm like, I could put up with that. Yeah, whatever. Like if someone's like, well, they're really not patient, like, okay, that sounds good to me. Whatever. What flaws or weaknesses do you have now that you think you have to overcome to get to where you want to be? In a decade or two?

So I'll slightly critique the question, which is like, if you're like a one-person company, this is exactly the right question of like, how can I change in order to get better? But if you're like a 10-person or a 1,000-person company or whatever you are in it, you're on a team, you can change or you can change how the team is constructed. Is, I think, the more interesting way to think about it. And what I'll tell you, like one of my big flaws, which is probably very surprising for, you know, ramp scale, is like, I don't know if there's like 100 things to do that are very important to get done. The way my mind works is like I'll start with a blank sheet of paper and I'll be like, what are the top 5 or 10 things? And I'll like write them down and then I'll forget about the rest and don't do them. And like, that's fine early on when things— there's like 1 or 2 things that matter, but like will blow up the company if you're just consistently not dealing with 90% of issues. And one of the things that I do in order to cope with that and compensate for that is I surround myself with people who are operationally unbelievable, who are incredibly good at triaging, cascading, getting things done and making things move. And what I would say is like, it's actually totally fine to have huge flaws. And you could decide to fix them, or you can say, I'm actually going to design, you know, my life or the company or whatever to be performant in that context. And so I think that's okay. And I guess what I would say is like a lot of the way that we've built Ramp and, you know, I think about building companies is a lot of folks kind of look for, you know, what are the things they're good at, what are the things they're bad at, and how do I, you know, identify all the problems And it's good to know about them. I agree.

Well, what I'm referring to is like, like, for example, yeah, I'm a very emotional person.

Yeah.

And like, I like a trick that I've been learning is like, don't make it. It's like, don't go to the grocery store when you're hungry.

Yeah.

Don't make a big decision when I'm feeling pissed off about something or, you know, or really happy about something. Like, don't make decisions there. So I got— I have to wait. Or when someone tells me something I don't like, don't react. Yeah. Just say, okay, let me think about it. And so my big thing is just like it's all about emotional regulation and impulse control. That's like, that's what I have to— that's my big flaw. And I think I, you, I have to improve that to be a better person. Yeah. And I'm not even referring to just business. Yeah. But that will impact it positively as well.

Yeah, I totally agree with you.

Thanks, dude. That's the pod.

Thanks a lot.