Eric Glyman on Ramp’s Rocket Growth, AI-Powered Finance, and Redefining Corporate Finance

0:00You hit on this aspect of speed. We're religious about it. We count the days. We're 2 ,367 days old. Well, you know exactly how many days old ramp is. We do. Why? I think it creates this urgency. Hi, everyone. Welcome to Leadership Next, the podcast about the people and trends that are shaping the future of business. I'm Diane Brady. And I'm Kristen Stoller. Earth observation technology is transforming industries by offering vital data that improves decision making, reduces risks, and boosts efficiency. We are here with Jason Garzadas, the CEO of Deloitte U.S., sponsor of this podcast. Great to see you.

0:40Great to see you, Diane. Earth observation. So what is it and how can it help drive value for business? Earth observation really means the collection of data about the natural events and man-made events captured from all the satellites in orbit. We've seen a real explosion in a number of satellites. Over half of them are commercially owned at this point and that number continues to go up. Jason, I'm curious, what are some promising trends and why is right now a good time to be talking about Earth observation? I think the realization, particularly amongst commercial enterprise, that this data is providing new insights and it's now at a cost-effective point in its development for all sorts of organizations in different sectors.

1:29So I'm curious, are there a couple of examples of ways to use this data that you'd want to share? I think some of the areas that are particularly exciting is in the agricultural space when earth observation data can be used to monitor the stress on crops and different weather cycles. I think also very complex supply chains that may have operations and hard to access or more distant elements of supply chains, whether it's in utilities or in oil and gas, that's opening up a whole new frontier for cost-effective, insightful data that can be used to innovate as well as to achieve cost leadership. Fascinating stuff.

2:11Thanks, Jason. Thank you. Thank you. Hi, everybody. Welcome to Leadership Next. I'm Diane Brady. And I'm Kristen Stoller. And we are here with the woman we call boss, Alison Chantel, editor-in-chief, chief content officer. Thank you for joining us. Thank you for having me. This is such an honor. I love what you all do. Thank you. This is fun. Well, we are teeing up the conversation that you had on stage with Eric Glyman of RAMP at Brainstorm Tech. Tell us a little bit more about what you learned about him as a leader. So Eric joined us at Deer Valley, our tech conference. We've been doing it for almost 25 years.

2:49And we like to have a mix of titans of industry and also disruptors of industry. And Eric is definitely the disruptor. He is one of the hottest startup founders on the market right now. They raised at about a$16 billion valuation over the summer. And then six weeks later, that valuation jumped even higher to$22.5 billion. So it's a hot AI market. They won't say they're a total AI company, and yet they have AI kind of in their bones. It's integrated into all of the products. And basically, Ramp is a company that wants to remake how corporate expenses happen. And they've sort of flipped the model on their head, where formerly a lot of credit card companies would say, like, hey, the more you spend, the more rewards you get.

3:30They sort of incentivize you to have bad financial behavior in some ways. And Ramp is like, well, that doesn't totally make sense. What if we flipped it and we said, let's help you spend less in this environment where there's so much caution about efficiencies, cost savings? that was really attractive, especially during the pandemic when Ramp really took off. So fun to have him on stage. Super unusual for a fintech company, too, to have that crazy of a valuation. There goes your three martini lunch, Kristen. I know, I know. And Ramp is going to be or is on the cover of the next issue, is that correct?

4:03Yes. So Fortune, one of our goals is to highlight the people in power, but also the people who are, we think are going to be in power and the people that you should know who are rising stars. And so Eric falls into that camp. So he is our next cover star. I'm very excited to say. You know what I like was he hung around the event. And I have to say, both Chris and I, of course, that's a lot of our bread and butter is doing these events. I'd be remiss not to talk a little bit about the Fortune Global Forum coming up because that to me is the kind of place where we have these conversations. Ed Bastian, who I know you've spoken to.

4:38I mean, talk a little bit about the importance of just the face-to-face right now. Oh, I think it has been so severely missed from the pandemic. We still all have these lingering feelings of loss of connection with each other. And we're just seeing it over and over in our events and our gatherings. People want to be together. They value and they crave the time learning from each other in person. You know, here at Fortune, we're back to the office five days a week. We're on that train. We've been on that train. But the value in person is real. we're doing this. This is not the same on Zoom. I get to smile with you, enjoy you both, like really feed off your energy.

5:12And so we're finding that as people are coming to our conferences and the speakers as well, they're craving connection with customers as well. Yeah. And we're excited to spend more time with you and Ed Bastian and Ray Dalio and a lot of other people October 26th and 27th at the Fortune Global Forum in Riyadh. So looking forward to it. It's going to be amazing. Anything else you want to tee up before we get into your interview with Ramp? What did you take away from it? You know, what's struck me about Eric is a few things. One, his quiet ambition. You know, Leo, who wrote, Leo Schwartz wrote our cover story for Fortune, and he talked to a bunch of people who work for or are competitors with Ramp.

5:52And he would ask them, you know, what is this guy Eric really like? And they would all kind of like fumble around for word and then just ultimately say, nice. And he is, he just sort of seems like, and I saw another interview with him where someone was like, you don't seem like the right demeanor to be the founder of a$22.5 billion company. So he seems kind of calm, cool, and collected, but he's very plan-oriented, go, go, go, to the point where they count the number of days the company has been alive. He knew the exact number on stage of something like 2 ,367 or something. And he says that they do that.

6:24They actually have a website for the count of the days so that every employee can look at it. Sounds obsessive compulsive, but hey, it works. Hey, you know what? I bet a lot of startup founders have that gene, just a little bit. It keeps you on track. But he's like, this is only 2 ,367 that we're ever going to have, so let's make the most of it. Rah, rah, team, let's go. And he and his founder set out from the first talk of the company to set up a billion-dollar unicorn company faster than any other New York company had done it within 18 months, and they actually achieved that. So they've been hitting milestone after milestone after milestone of impressive growth, and we'll see if they can keep it up.

6:59I mean, it's not determined that they will, but right now the trajectory and the hype definitely seems good. No, it's exciting. The next generation of leaders. I love that. Yeah. All right. Time to listen. Yeah. Let's get to it. Thank you. Thank you so much for being with us here today. And at a big moment in time for Ramp, you are one of the hottest startups. You raised at a$16 billion valuation over the summer. And then like eight weeks later, raised at a$22.5 billion valuation. You just crossed a billion in annualized revenue, 45 ,000 customers, so a lot going on. But first, I want to just talk about that number.

7:35You look at like a billion in revenue and then a 22.5 billion valuation. Is the math massing? Are we in some something like valuation hype cycle? What is happening? How does that work? You know, I think Ramp is just growing so unbelievably quickly. Over the last year, we've just about doubled revenue. The fastest growing public software companies, for reference, expect and hope to grow something like 20 to 30 percent over the next year. And so the velocity that we are growing at, combined with the scale of the company, is part of what's getting investors so excited. But beyond it, I think the unusual part is Ramp is actually growing even faster this year and doing it while generating cash flow than we did last year.

8:18And so when you combine that last with the sheer scale of the market, there's over$2 trillion spent in the United States on corporate and small business cards, which is just one of our markets. And we're something like 1.5 % of that market. It's hard not to get excited about the potential ahead. So hyperscale has been in your bones since even the company pre-launch phase. You and your co-founder Kareem sat down together and you said, we want to try and create a unicorn company, which is a billion-dollar valuation, within 18 months. No company in New York had ever done that before. Why is such an ambitious goal?

8:57But you manifested a billion-dollar company because you did it. Within 18 months, I think you were there. And with two years, you had like$100 million in revenue run rate about? That's exactly right. But from two years, less than two years from incorporation, Ramp had been valued at not just$1 billion but$1.5 billion. Within two years of the launch of the company, we surpassed over$100 million in revenue. And just a few years later, last month, we just passed over$1 billion in revenue. For us, I think it's two things. First, you hit on this aspect of speed. We're religious about it. We count the days, we're 2 ,367 days old.

9:38But you know exactly how many days old Ramp is. We do. Why? I think it creates this urgency. You know, I was always inspired, I think, about leaders like Frank Slutman, who wrote Amp It Up and just talks about the default state of an organization. If unless someone is driving and leaders are creating tempo, things slow to a halt, the expectation is you decelerate. And it's easy to say, you know what, why not Monday instead of doing it on Friday? We want to instill that urgency to say, you know, today is the only, you know, day 2 ,367 we're going to have. We're going to make it count. And also, too, when every day you're thinking about what do we get done over the last 30 days, over the last 60, you can measure.

10:16And you can start to make tradeoffs and constraints. And you can say, okay, when I look at my last month, these activities really mattered, moved us forward. Let's do more of those. And these other things, even though I liked it, were not as impactful. I have to say no to these things so we can grow faster. And so that's a big part of it. The last and other important reason for us is our whole mission is help our customers spend less. We want the same for our own company. That's kind of a novel idea. I mean, and I want to talk about that, too, just the idea for Ramp and explaining it to make sure everybody understands.

10:50But it's flipping the incentive structure on its head of the way that corporate credit cards have traditionally worked, where it's like the more you spend, the more points you get. You're encouraged to spend more. you actually want people to spend less, which actually seems like, it sounds like a bad business. Is that a business that's viable? Well, it's some of the largest companies in the world are in this line of business. You look at JPMorgan Chase, an over$800 billion company, American Express, $230 billion company, proving that you can do great by getting people to spend. Now, I sold my last company to Capital One and I learned how this industry worked, what made it great, But I found it so deeply strange that at the core, customers were working to make the banks just a little bit worse off by gaming the reward systems.

11:36And the banks were incentivized to go and devalue the reward system to convince people the points were worth a lot and then devalue it in the background. And we just thought this is a massive opportunity. What if actually we wanted the same things for customers? And what if our goal was not to go and give them the minimum points but actually just help them spend less? You can compete on value, how much better than you make your business, not competing on price, who's giving away more. And so, you know, I think that was the other motivation in attacking this industry. We believed, we didn't know if it would be us, but we thought at the end of the day, this is how the industry should settle.

12:12With companies working to make their customers better off and customers genuinely choosing the provider that's helping them grow. And I think that's been the big secret behind Ramp's rapid growth. So you were not the first startup in this space. There was another competitor and still is another competitor, Brex, which has significant revenue, not quite a billion. I think it was like 700 million is the latest count, but a valuation much lower than yours. But it was the first mover, I guess you could say. And at your point of launch, it was already a unicorn. So how have you just plotted along despite having this big competitor in the space taking venture capital away potentially and just surpass them, frankly, in all the measures.

12:55Yeah. We were accused a lot in our early days of being the second mover. We always thought we were the 150th mover in this. When you think about companies, most of the juggernauts in this country, they started 175 years ago. Their founders quite literally wore top hats. And so it didn't bother us so much to come. Where's your top hat? You need a top hat. We'll work on it. We'll talk with the styling team. But look, when we approached this industry, it didn't bother us to come into this a little bit later. Our view was this was a large industry that was not aligned with the end customers. And also, when your founders maybe wore top hats, I think the importance of time isn't something you're thinking about every day.

13:42You've been around for as long as you've been alive, you'll probably be around. And so what's the hurry? we looked at these great companies in the valley whether it was at the last generation and still very present the metas the ubers the move fast create technology quickly and it was so at odds with the financial institutions where if you were transported back in time and you had to use you know the bank accounts or the credit cards of 50 years ago you'd probably be fine but if you had to use the phones from 50 years ago you couldn't do you and I couldn't do our jobs. And it just drove home of there was very little product innovation.

14:17And so one of the things we set out to do in starting Ramp was we have got to be first aligned with our customer, help them spend less, be more successful as a business, had to be priority number one. And then number two, we would try to build this valley type-like company that is iterating very quickly, that is measuring in days, that is shipping products every single day. We ship more products this year than there are business days, more features and announcements. And the goal that when you do that, the experience of how much time the product saved just expands and compounds faster. And so we're trying to catch up what I think the financial services industry should have delivered over the last 50 years.

14:54We're going to try to do in just a handful and actually make our customers' businesses better because it matters. And as you're looking at the product integration, you didn't start out as an AI company, but would you say you're an AI company now? How are you using it to make Ramp more efficient and your customers more efficient? Is it actually working in a measurable way? For sure. So first, when you think about our customers base, we support over 45 ,000 companies of all shapes and sizes, from family farms to the Fortune 500. But for the majority, especially the small and mid-sized businesses, they don't have a single engineer at the company, let alone an engineer working to make their finance department modern, adopt AI, all of that.

15:35Here at RAMP, we spend over 50 % of our R &D budget, of our payroll on R &D, on engineering, on data science, on design, all focused with integrating the latest and greatest technology so that even if you're a small business, you are benefiting from what's happening in these research labs. And so one of the ways that it shows up for a customer is if you go and you tap a card at the store, you will get a text from Ramp saying, okay, you're on this business trip. Hit one if this was a meeting with a business that you're meeting. Two, it's part of your travel budget or three. And we're basing these off of the memos that are written and just being written by an LLM.

16:19You snap a photo of the receipt and we automatically match it to the right transactions. We auto-complete the accounting category. And what today most people are used to expenses being the worst hour of their month, very painful, takes a lot of work on ramp. You snap a photo and you're done. The entire expense experience takes like 10 seconds. And for most of our customers, they're not necessarily thinking, I'm buying an AI expense report. It's just an easier way to do business. And it happens to be that AI is how every single step is being sped up along the process. Does that make sense? Yeah, it does.

16:54And do you feel like the companies are benefiting on the other end from the AI efficiencies you're able to provide. There's all these studies out, or there's one in particular that people keep talking about in MIT where all these corporate pilots are failing, and actually the people are failing to be able to generate more revenue thanks to AI, more efficiencies from a monetary perspective. And so I'm curious, just like has RAMP increased its revenue because of AI, and can you prove that you're increasing companies' revenue because of AI? I love that you asked this question. I think so one of the things that's very unique in our industry, I think we're the first and I still believe we're the only industry to actually measure how much money and how much time have we actually saved our customers.

17:38Since inception, we've helped our customers spend$10 billion less than they would have otherwise spent and automated 27.5 million hours of work. When you look at the average company, though, we actually are able to help companies reduce their expenses by over 5 % per year. Compare that to a rewards program. There's not enough interchange to fund more than, you know, on the order of two-ish percent of a rebate. We are saving customers dramatically more than what's possible. And when you look at kind of the history of the company, when you first covered a ramp when we launched in 2020, we thought we could help the average company cut their expense by 2%.

18:15That's well over five today in large part because AI is starting to go and complete the expense to do the books and accounting, to go and move money to higher yield, it's able to actually not just suggest, but to go and take action as a part of the process. And so, you know, I think there's a lot of companies out there selling AI services, but aren't measuring the results. There's a lot of companies selling you rewards, aren't thinking about the impact on the bottom line. Ramp from the jump has been focused on what is the ROI? What is the impact that we're driving religious on measuring and reporting that out.

18:48And I think that's part of why our net promoter score is in the 60s. It's comparable to an Apple. And I think that a lot of companies that are struggling now with all the AI they've sold that people aren't feeling so great about having the buyer's remorse didn't start with that simple insight as they should be thinking about what is the outcome they're driving and how do you measure it from the start. And are you using AI to also kind of fight AI? Because I saw a story the other about how there's now these AI receipts that look very much like real receipts. And all of our employees are very trustworthy, but there might be a bad egg throwing in some AI receipts in there.

19:26Can you catch that? How are you thinking about blocking AI initiatives that went harder and harder to prove if something's real, like an expense? There's a variety of ways. So first, when it was earlier this year, it was one of the newer GPT-4 models came out and suddenly it was clear it was very easy for people to go and generate AI receipts. We partnered with the leading labs, OpenAI, Anthropic, and others first to create detection systems. But we have a repository of over 100 million receipts that we can look at of valid receipts. And so we actually have systems that, we're using AI to fight AI to go and block these transactions.

20:05It's something regular systems can do. And next, because we have multiple sources of truth, we have the card and merchant data, We have the image data. We have the receipt data with the accounting data. We are much better than single systems like maybe Expensify or Concur, where you just get an image, and that's the only thing you have to go on. Because we have multiple sources of identifying did this transaction occur? It's much easier for us to detect what this receipt says the amount was or the way the LLM generated that receipt looks different than these 1 million other receipts we have for this merchant.

20:38That's one large way. The second large way, and I think a lot of waste happens and fraud happens because managers are too busy. When you take a 100 ,000 person organization, a lot of people are spending time as probably in this audience going and checking for your employee, should I approve or deny this expense? But the reality is you're busy, you have another job, you probably just hit approve. We've trained large language models to actually read your policy in depth. It probably has read it better than anyone in this room. It's audited and seen every expense. And we are able, our policy agents are able to actually go and automatically approve 90 % of transactions from the jump.

21:185 % to 10 % that need attention. We can show you why it was in or out of policy. It's 99 % accurate, which is about 10 times more accurate than the average employee. And what it means is it's a massive time saver. It's saving managers from this time in reviews, but it's also catching a lot of things that people would not catch. people spending companies' money that in the old world would have just gone through because no one had the time to look at it. And as you're building all these tools that are AI capable, and efficiency and time and money saving can also equate in a worker's mind to my job.

21:56Is that my job you're coming for, Eric? So I'm curious how you're thinking about, in the most honest way, the bigger vision for if Ramp is really successful in saving companies time and money, what will that do to traditional business functions? Do CEOs need a whole finance department if all goes to plan? Do they need a human resources department even eventually? A lot of the core business functions, operations, is that the grand vision? Yeah. Well, I have two thoughts about this. I mean, one, I don't believe that AI is smart enough to do the job of a CFO or a complete finance function, but it is definitely capable of doing your expense reports.

22:40It is definitely capable of categorizing transactions. And I think for most people, I don't think you're adding deep human intelligence when you're going and snapping a photo and you're describing what you bought and you're going and tagging transactions. It's very low-level work. And for most people, it is just the worst hour of your month. Why not automate these terrible parts of your job away? And it allows your best salespeople to go and spend that last hour selling on actually doing the work they were meant to do. And so we're very much in that phase of actually it's creating a lot of delight and joy for people in their roles.

23:16I think when you kind of abstract it and you look more long term, you think about what is the finance function? Where are people spending time? And at least on the spend side, a lot of it's really just algorithms. It's going and determining who should spend what under what circumstances. Once the spend has occurred, how do I categorize it correctly? That takes a lot of work. And then based on what happens, how do I goal seek to a better outcome the next time? So much of the finance function today, I would argue on the order of 80 % of it, is actually looking backwards. It's trying to figure out what did we do, what did we spend on, what's happening in the business.

23:49It's not asking the interesting questions that most people in finance got in to do, which is, you know, how do I make this business better? How do we spend on the things that matter? Where is value? How do I allocate capital better? And I really am a firm believer of, like, I think that the, you know, the low level and work that people don't want to do, I think will go away. But I believe, and I'm fairly optimistic, that actually when you can go and your books are keeping themselves, money is finest way to higher yield. One, for businesses, you're going to have a lot more at the end of the day.

24:21For the average American business, they have an 8 % profit margin. If you can go and grow it even by 1%, it's equivalent mathematically to a 12 % increase in revenue. And so I just think that bottom line impact to create more margin, to invest more, is going to be profound. And second, I think for people, the work is going to be more interesting. And so at least as far ahead as I can see and imagine, that's what I see. But we're just excited to be working on it. So I want to leave a little bit of time for audience questions as well, but I'll ask a couple more leading up to it. I want to go back to your experience in the current fundraising environment.

24:58What's it like to be the hot girl on campus? How frothy is it out there? And were you surprised by some of the investor behavior you've seen given your last company only raised$2 million, and now you've raised over a billion? Slightly different. So what's it like out there to be a fundraising startup that every investor seems to want to have a piece of? Yeah, it is. I think for investors, I empathize certainly on the venture industry. There's more investors than ever. And I think that there's - There are. Everyone's a VC. It seems like it. Get the part-time fund for you to invest to. There is a lot of capital and I think people are looking to find yield.