Lessons from scaling Ramp | Sri Batchu (Ramp, Instacart, Opendoor)

[00:00] I do think there's actually a general path that most B2B companies take and should take. My view is you start off with founder-lit sales. The early team needs to know how to actually sell. Then you hire your first couple of salespeople. Then you start some very kind of [00:13] low cost targeted marketing efforts. So whether it's like content, community, small scale events, and then PR after all of that is when you start paid and brand effort. And then SEO probably start around the same time that you start paid marketing efforts. The reason for the progression the way I've described it is the channels get more expensive as you go farther along and they get more effective as you understand more about your customers. [00:43] This is Danny's podcast where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. [00:51] Today, my guest is Sri Bachu. [00:53] Shree was VP of Ops at Opendoor, [00:56] then head of growth at Instacart, [00:57] and currently he is the head of growth at RAMP, which, as you'll hear at the top of the episode, is the fastest growing SaaS business and the fastest growing fintech business in history. They hit a $100 million yearly run rate in two years, which is absurd, and in the last year, grew 4x during a period where most companies barely grew at all. I recently did a newsletter post on how RAMP builds product with their VP of product, Jeff Charles, and in this episode,

[01:27] what Ramp did in the early days to kickstart growth, how they mostly grow these days, how their growth team is structured, their prioritization framework, plus their Northstar metrics, also how they operationalize velocity, which is at the core of their team culture. Ramp is a really special company that is clearly on an incredible journey, and I am really excited to share this glimpse into how they operate. Enjoy this episode with Sri Bachu after a short word from our sponsors. [01:53] This episode is brought to you by Atio, a new type of CRM that's powerful, flexible, and built around your data. Traditional CRMs were built for a different era, with totally different speed, scale, and data demands. Atio is different. It allows you to quickly build a CRM that matches your unique workflows and data structures. Within minutes of connecting your email and calendar, you'll have a CRM that's already set up, complete with customer profiles and automatic data enrichment. [02:23] You'll also have real-time dynamic reporting at your fingertips. No more slow deployments, outdated user experiences, or tedious manual data input. With Atio, you can build and adapt your CRM on the fly, no matter your business model or company stage. Atio is the CRM for fast-growing startups. Get started today and get 15% off your first year at atio.com slash Lenny. That's A-T-T-I-O dot com slash Lenny. [02:51] This episode is brought to you by Coda. You've heard me talk about how Coda is the doc that brings it all together, and how it can help your team run smoother and be more efficient. I know this firsthand because Coda does that for me. I use Coda every day to wrangle my newsletter content calendar, my interview notes for podcasts, and to coordinate my sponsors. More recently, I actually wrote a whole post on how Coda's product team operates, and within that post, they shared a dozen templates that they use internally

[03:21] team, including managing the roadmap, their OKR process, getting internal feedback, and essentially their whole product development process is done within Coda. If your team's work is spread out across different documents and spreadsheets and a stack of workflow tools, that's why you need Coda. Coda puts data in one centralized location, regardless of format, eliminating roadblocks that can slow your team down. Coda allows your team to operate on the same information and collaborate in one place. Take advantage of this special [03:51] just for startups. Sign up today at coda.io slash Lenny and get a thousand dollar startup credit on your first statement. That's coda.io slash Lenny to sign up and get a startup credit of $1,000. [04:04] coda.io/lenny [04:07] Shree, welcome to the podcast. Thank you, Lenny. Thanks for having me. I'm a huge fan, and I've been following the podcast and the newsletter. So excited again. [04:18] Really appreciate that. So let's talk about ramp. So ramp where you lead growth. [04:23] is apparently... [04:25] one of the fastest growing products in history. I believe it's the fastest growing SaaS in the world. [04:31] product and business and also the fastest growing fintech business [04:34] So first of all, is that generally true and correct? Yeah, I mean, I'm sure you know of Paki, and he's done a great analysis where he shared this work and compared us to a bunch of other companies when he released this. [04:47] A year ago, we were the fastest growing company, $100 million of annualized revenue at the time. I don't know if there's been others since, but certainly not in the fintech category as far as I know.

[04:57] Okay, so you said if FAST is going to 100 million, I think it took two years to get to 100 million in run rate, right? Exactly. That's insane because rarely is there [05:06] all of this money sitting around for a company to just come in and, you know, and accumulate and grab from people and provide that amount of value. So, [05:13] That's an insane... [05:14] stats. Maybe another question along these lines, is there any other just stats you could share, but just like the scale of Ramp or just the speed that Ramp has grown? We publicly disclosed that last year we grew Forex on top of that, very sizable based from the year prior. And Okta actually released some recent stats on fastest growing software companies among SMB and mid-market. And Ramp is by far the fastest growing, despite the fact that a bunch of [05:44] still very lean for the amount of growth. We're under 500 people roughly today at that scale. And so definitely have a much higher kind of, you know, revenue for employee than some of the competitors and others in the space. And yeah, I mean, we've got a very thoughtful and smart finance team that I've worked with actually closely, our old head of security finance at Instacart. And they set ambitious goals for us on growth. And I'm happy to say we consistently beat those ambitious goals [06:14] Since I've trained. [06:16] Which is especially challenging in this environment. So it's extra, extra meaningful. [06:20] Okay, so here's the big question I want to start off with. I know you weren't there at the beginning of RAMS, [06:26] journey but [06:27] From what you know,

[06:28] What do you think the team did early on [06:31] to seed this level of growth and success [06:35] other than just building an awesome product that people really love? And if that's the answer, that's fine. But usually that's part of it. [06:41] I'm curious, just like, is there any some... [06:43] any clever, unique [06:45] tactics that they used to help kind of create that incredible growth from the beginning? I think you're certainly right on the product side. Obviously, you've recently written about Ramp's product engine with Jeff. And there's been incredible product market fit because of the product team that deeply understood the customer experience. And I think that's certainly helped initial word of mouth. One thing that I did want to point out that Ramp did that was interesting is, you know, obviously, Eric and Kareem, the co-founders of Ramp were previous [07:15] So they had a strong reputation as founders and came in with the right side of experience to build RAM. And one of the things that they did is what I call kind of cap table as a growth strategy, where they did a great job of getting a large number of early stage founders and other influential operators and advisors onto the cap table at the company. [07:45] that we're on the cap table or the founders were on the cap table for. And Ramp today is actually not majority startups or tech companies anymore. The vast majority of our customers are mid-market enterprises where our revenue comes from. But there's a lot of love among the tech founder community because of the early days, both the product quality as well as all of these investors that Ramp got.

[08:08] Wow, I have not heard of this strategy before, and I didn't know this was actually a big part of the initial... [08:12] story. So, [08:14] Is there examples of folks that they had on their cap table that are examples of folks that helped them grow initially like this? One example that I can think of is Eight Sleep founder has been very close to the Ramp team. Same with the Pop founder and then a bunch of VC firms that are investors in the company are also customers of the company. [08:32] Do you know if the strategy there was [08:35] VCs who connect them to small companies that would use Ramp or is it directly founders of companies that would immediately use Ramp? Yeah, I'll say it was more founders and executives of customers that can use Ramp. Certainly, we have a fantastic group of very sophisticated investors who have made introductions to Ramp as well. And that helped. But I will say that is not as big of a channel as one might expect, because, you know, companies have their own decision making frameworks. [09:05] for selecting a product like RAMP. And the investor opinion and recommendation matters, but it turns out it doesn't matter maybe as much as, as another customer who's actually used the product that they know or are actually experiencing the product. [09:17] Amazing. Awesome tactic. I've not heard that before. [09:20] In terms of growth, [09:21] How much of growth [09:23] early ramp was [09:24] new customers versus expansion within existing customers because what's cool about our [09:29] Credit card is people spend more. You make more money because you're taking a piece of that. [09:33] So roughly how much of the growth in sanity over the first couple of years was from expansion within existing customers? Obviously, many of our early customers have grown quite a bit. And our whole strategy is to be safe companies time and money so they can redeploy that in other ways for their own growth or other objectives. And we obviously are growing our product suite as well, like BillPay, Flex, etc., where our customers can spend more money on Ramp and get more value out of Ramp.

[10:03] said all that what's interesting is the vast majority of our growth back then and even to this day is via new customer acquisition it's just we are adding so many more customers that the growth of our customers uh while strong and important part of our growth lever is not nearly as material as you might think [10:21] Okay, awesome. So that's a good segue to the next question I had, which is, [10:24] If you were going to create a pie chart of how RAMP grows, [10:27] And ideally, if you could even share early on and then now, [10:30] Like, how does that pie chart look? What are the slices of that pie? And then what are the rough percentages of where growth comes from? [10:36] Rather than going to the specifics, one thing I'll say about the growth system today is if you were to look at what percentage of our business comes from outbound sales, paid marketing, field, and then a bunch of other channels, and then you compare it against industry benchmarks, I think the secret sauce of Ramp is not that we've found a channel that's unique and that we've over-invested or under-invested. I don't think our distribution would be [11:05] not that far off from looking at other companies at our size and stage. I think what we've done differently is we've really focused on making all of those investments very much driven by technology and data. And so like one example that I'll give you is that our sales teams are actually incredibly efficient by any metric that we look at and we obviously benchmark them.

[11:35] that's dedicated to supporting that efficiency, including adjusting third-party data and using AI to automate much of their workflow, etc. We've been doing this well before AI has become the buzzword du jour for a lot of folks. But this is something, you know, we've had this team for almost two years now that's been working on sales automation and data to just make our sales teams more efficient. [12:05] and thinking about how do we inform this better customer and prospect data, and how do we automate and technologize it so that we can build that competitive mode for each channel. [12:13] I'd love to learn more about this growth. [12:15] eng team that works with sales. [12:17] How is that structured maybe as the first question? And then just like, what are their goals? How do you measure their progress and success? [12:47] and input metrics that are important, but they really do feel accountable for the pipeline-driven and the efficiency-driven by that team. And I think that naturally allows them, bottom-up, to come up with the right projects that they think will have maximal impact on efficiency and top-line. [13:04] So what are the sorts of things they do for a sales team? Is it like they help them prioritize leads?

[13:10] Or is it they help craft their messaging? Like which parts of the maybe most... [13:14] All of the above. Helping find the right prospects, sending them the right messaging, as well as prioritizing responses and drafting potential responses for the team as well. Fascinating. How much impact have you seen that has on sales? It's incredibly helpful to our sales team, and it's one of our most efficient channels, as I've mentioned. So I think that there is something unique about our ability to bring technology to every channel. [13:41] Super interesting. Maybe on that topic, [13:44] Can you just talk about how your growth team is structured at RAM? What are the kind of sub-teams and how do you think about them? [13:50] We've got an organization today that might evolve, and if we get to that topic, we can talk about it. But historically, the way we've been organized is we've got channel-based teams that are deploying spend in a given channel. So we've got a paid marketing team, a light cycle CRM team, we've got a field marketing team, etc. And then we've got a product engineering team that is supporting growth and sales and helping each of these channels be more effective, that's dedicated. [14:20] to growth. And then separate from that, we've got a small kind of what I call an innovation or skunk works type of team that works on cross channel. Just things that don't neatly fit into a box that we think could be cool or fun to try to just do more experimentation. That's that is cross channel and cross team. [14:37] Definitely sounds like the most fun team. [14:39] What are some of the things they've done or worked on?

[14:41] in the Skunk Works team? They've done, like, you know, testing of new channels that don't necessarily fit into, like, a very... And that includes, like, new online platforms. They've done some interesting stuff on TikTok and Reddit and other places, things like that. They've focused on... [14:59] kind of [15:00] referrals and how to make that a more delightful experience for the customers, first-party events, things like that. Things that are often kind of smaller scale, and if they work, we can invest more and make that larger scale later. I love it. Okay. [15:18] the teams roughly. [15:19] is there's a paid growth team that just works on paid growth optimization. [15:23] Lifecycle CRM kind of team. Basically, it's like emails, I imagine, is a big part of that. Yeah, exactly. Then there's a field sales support team. Yeah. And then there's the sales team, you kind of, Eng sales team that you talked about. And I also imagine there's like a self-serve. [15:37] Yeah, exactly. There's a self-serve activation inch team as well. And then I missed, of course, there's SEO and kind of like website and inbound lead channel management teams. And then there's awesome Skunk Works team. I love it. Yeah. Okay. So shifting a little bit. [15:51] Something that comes across often and consistently with RAMP [15:56] And this came across very clearly in the post that I did on how Ram builds product with Jeff. [16:00] is velocity and how important velocity is. [16:03] at RAMP. [16:05] There's this awesome quote that I'll read here from Keith Raboy, who I think led many of the rounds of RAMP. He started Founders Fund.

[16:11] famous investor, [16:13] He said that Ram's product velocity is absolutely unprecedented in my 21 years working with technology businesses. [16:20] So, [16:21] Here's my question to you. Can you just talk about what that actually looks like and feels like? [16:27] working inside RAMP with this intense velocity? Yeah, it's a great question. And Keith is amazing and probably one of the smartest investors that I've ever had the good fortune of working with, both here as well as at Open Door. And I'll say he's absolutely right about that. And what you kind of see internally is... [16:47] What I'll say is, [16:48] a razor sharp focus on reducing cycle time and bias to action. And, you know, how do we reduce cycle time? I think it's basically the core of it culturally to me is getting people to think about smaller minutes of time for decision making. Seems obvious, but I think you really have to reinforce it culturally. So one thing that Eric, our CEO does, which I don't know if you've heard [17:18] since the founding of Ramp internally. And it's day 1529 at Ramp. He has that number of days at every board meeting, at every all hands. It's just to remind people that we don't work in years, quarters, you know, weeks. We work in days. Each day matters. And so never put out something tomorrow that you can get done today. And that bias to action really permeates, not just in the product teams, but everywhere.

[17:48] just described is extremely cross-functional. A lot of marketing folks and other expertise on the team, but we work a lot like a product team. We work on two-week sprints, we cross-prioritize across these teams, and we work all together, rather than in kind of separate silos within the growth team. [18:08] Okay, so I pulled up the site you just mentioned, days.ramp.com. [18:12] And not only is it days since launch, which is 1,529 when I'm looking at it, there's many decimal points. [18:21] 1,529.4345. [18:24] 3-1, 4-2, oh my god. Okay. Is that a new addition, the decimal point? No, I think that's always been there. It's just amping it up on how much time is passing. It can be stressful at times, but I think that the mitigating factor is that it's been able, as you know, A players want to work with A players, attract A players, and retain A players, and RAMP has done a really great job of hiring people that are fantastic, that can work in this [18:54] us and the winning from this sort of culture. [18:58] Yeah, I was actually talking to Eric for another piece I'm working on, and he was showing me some early board decks in every deck. As you said, it has like days... [19:06] Day 544 of RAMP. [19:09] So it's very real what you're talking about. [19:12] Is there anything else that just like as someone that came into RAMP from other traditional companies that also move really fast, Instacart and Opendoor?

[19:19] that is just like, holy moly, this is velocity. [19:23] You talked about a few things, but is there anything just like, holy shit, [19:26] You can see the cycle time thing in terms of responsiveness from everybody at Ramp. And I think typically what you tend to see is like as companies get bigger, they evolve, you know, off of Slack to email. And like everything just kind of moves a little bit slower and there's process and and and then there's obviously a lot of good parts of that. But at Ramp, what I noticed when I joined and true to this day is like how quickly people will respond on Slack. [19:56] and jump on things. And even if they don't complete it, there's very clear action item on who the owner will be and what the deadline will be, even if it's not. And that to me was always very impressive. And I think it's one of those things, we build it public, so everything is very visible, so you can see how this is working across teams. And I'm glad that we've been able to maintain that culture, even as we've gotten much bigger. [20:21] there's two kind of [20:22] effects of that. I imagine one is how do you stay in the flow and get work done if you're just expected to constantly respond? How does that actually work? I don't think the expectation is necessarily that one constantly responds, but it is something that I have seen people are good at. And so I think one of the things that, again, not like a novel productivity tool, but something that

[20:52] using calendar blocking to really effectively manage your time that way. And then doing calendar audits of yourself as well as of your team to say, okay, what are your highest priorities for this week, this day, this month? And how does your calendar reflect your priorities? Because in many ways, you ship your calendar. And so thinking about how are you spending your time and blocking your time? [21:15] And is this mostly a cultural kind of just this is how we operate? [21:19] Or is there principles or sorts of processes that are set up to help people do those sorts of things? Yeah, it's cultural in terms of how we operate, but we also have templates. Our people team has a template on how to do a calendar audit properly and things like that. So we've tried to create some learning materials as well for folks that are new to get into the flow of this. [21:43] of way of working. [21:45] Awesome. Okay, so then the other elephant in the room with talking about working really fast and hard and responding really quickly is... [21:52] work-life balance and burnout and things like that. [21:56] One thing I'll say is I believe in working really hard and working long hours as a [22:00] important ingredient to success. I know there's been a bit of a backlash against that, [22:05] and just like, no, you shouldn't work really hard. You can be successful without doing that. I don't think that's true. [22:10] So with that said, I guess... [22:11] What? [22:12] have you learned and what do you think Ramp has learned about how to find that balance and not just... Yeah. I completely agree with you. I do think, especially earlier in your career, hard work is so important, both for learning, but also impact. And it's a tough balance that a lot of successful companies struggle with. I think my biggest learnings is A, some of it is self-selection. You're hiring people that are excited about doing this work and this way of

[22:42] at least I tend to find the people that I've worked with that are highly successful. Ours are not the problem. It's really, you know, autonomy, flexibility, and, you know, mission alignment and, you know, [22:54] the general happiness they get from their work, right? And so that's what I try to focus on, which is like not the hours that someone's put in, but quality of the work and the impact. And I think a big part of the push to [23:13] having great results and working hard is really [23:17] being grateful and appreciating the team when they do push themselves and celebrating wins. And I think we've done, we could always be doing a better job, but I think we've historically done a great job at that, at celebrating wins, you know, big and small. And I think part of that, like the culture of kind of building in public and open internally helps with that. So people are always sharing their wins. [23:47] to see what percentage people participate. And it's usually close to 100%. People are talking. The entire company is talking on the Zoom chat because they're excited about the wins that their friends and colleagues are shipping and the things that we're talking about in the audience. [24:05] How do you actually track engagement? Someone sitting there watching who's in the chat? No, it must be some tool. Our IT team can do it. It can say what percentage of participants chatted or something like that.

[24:14] I see. So it's not like who's looking at the screen, it's like who's talking in the chat. Yeah, exactly. Or reacting in the chat, etc. That's awesome. And it's not like... [24:23] You must engage. It's more just like, are we delivering content? No, no. And by the way, this is probably the first time I'm sharing this. I don't think brand employees necessarily know this. I don't think we've actually shared this. I just heard it from our IT person recently, and I thought that was kind of a fun step. I love that, because it's not like, yeah, it's more just like, are we providing value to people, or are they actually excited and interested in this sort of thing? [24:44] I was going to add on to your point about how [24:46] Working hard and working long hours can be seen as this, like, oh, this sucks. I wish I was [24:51] at home watching Netflix, [24:52] But I find that the most fulfilling parts of my career are where I was just working insanely hard. [24:57] for a long time. [24:59] As long as that work was meaningful, exactly like you said, it was something that mattered and came out and shipped and people were excited about it. And if it wasn't like, oh, that was a waste of my life. [25:07] So that super resonates. Yeah. I want to come back to growth for a moment. I had a couple more questions I wanted to ask here. [25:15] You talked about some of these teams that you have around... [25:18] ways you're driving growth. [25:20] Is there an area you think you're going to be investing more in over time or that you feel is working better? I know there's, you know. [25:25] trade secrets here that you don't want to share. [25:27] necessarily, but just anything that you feel is like, [25:30] people are maybe under-appreciating or under-investing in that you think you might invest in more? What I'll say on that front is, look, we, like everybody else, are always focused on driving more efficiency in our growth engine. There are some channels that, you know, and we have a diversified, you know, portfolio of bets, right? Like one thing that's kind of interesting about the world of growth today is I think historically, people that used to run growth were folks that had a marketing or kind of a product background.

[26:00] And what you're seeing these days, I think, are more folks like me who actually come from an investor analytics background to lead growth teams because growth has become, you know, [26:10] more and more about a diversified portfolio of bets at a reasonable ROI and building a system that's designed around experimentation and data oriented, right? So the reason I say all of that is our goal is to over time, of course, make all of our channels more efficient, but also allocate more to channels that are more efficient as long as they're scalable, right? And so the more that [26:40] Thank you. [26:40] owned and earned media, the better for us. And so we've got a few different strategies on that front, but we're also working on making our other channels more efficient by the day. [26:53] So mysterious, but I appreciate you sharing what you can. [26:57] The point about the portfolio bets is interesting because if you think about it, [27:01] Most companies, [27:02] initially grow from one you talked about growth engines that's like the same [27:06] term I use. Usually there's like one thing that helps you grow initially like [27:10] SEO or word of mouth or maybe paid. [27:13] And then eventually every single company basically ends up doing all the growth. [27:17] channels and then has a team dedicated to just keep optimizing SEO, keep optimizing referrals. [27:22] So I think that's a very typical path. And then it's exactly like that, how do we make each of these as efficient as possible? [27:29] Maybe as another last question around ramps growth,

[27:32] Is there any other just really surprising, interesting, really effective things? [27:37] tactics that helped Ramp grow over time? I think one thing that's been interesting is Ramp's ability to leverage PR as a growth machine. And as you've seen, we've got a fantastic PR and comms team, and we get a lot of deserving good press through that. And one thing that's been interesting is our fundraising also as a growth strategy, kind of like not obviously explicitly, we've got very [28:07] for our fundraising, but what we have seen is anytime that we've been fundraising and we've been using that as an effective way of creating a market moment, it's driven actually a non-trivial amount of top of funnel for us. [28:21] People always talk about PR being like, people over invest in PR, they think PR is going to be this magical growth lever. [28:28] But it actually works sometimes. [28:30] And in my opinion, you have to have something really interesting for it to work. [28:34] Obviously, you guys do. The company's growing like crazy. [28:39] which is innately an interesting story. The founders are really important. [28:42] and [28:43] Rarely is funding, like, [28:45] an event anymore for most companies. So I think it's, I mean, it says a lot that people [28:49] care about your funding. What you said is exactly right is you have to be thoughtful about your PR moments. Like everybody wants to announce things about themselves. That's not necessarily interesting for the press or for an audience. And so thinking about how do you compile enough value to the general audience with. So our fundraising announcements usually also have some additional, you know, color on something unique about the business that we share to.

[29:18] provide more value to readers. [29:20] And then there's also newsletter people like me and Paki you mentioned who wrote about Ramp because it's also just so interesting. [29:26] What's your sense of that versus traditional PR? There's this like, I don't know, big debate of just like, [29:31] Traditional media is no longer relevant. [29:34] all these other people will go through newsletters and podcasts and things like that. What's your sense there? It's, you know, what are the audiences that you get with each of these tactics, right? And so we do, you know, both obviously get some earned coverage in these new newsletters and other tactics. And we pay for some and we advertise in other cases. And what we tend to find is like, [29:58] These are great reach, but they tend to work very well for actually hiring. It improves Ramp's reputation as a company for recruiting and hiring, which helps. And they help with a certain audience of customers, which is typically tech founders and folks close to the tech ecosystem. But as I mentioned, the vast majority of the world is not startups, and the majority of Ramp's customers are no longer tech and startups. [30:28] And channels like these are one piece of the equation, but I think traditional PR will remain another really important piece because they just target a different audience. [30:37] As you're talking, I'm watching the days count up on this days that rampage still, and it's stressing me out. I feel like I'm keeping you from doing work to keep growing ramp, but let's keep going. I'm going to close this tab. You talked about growth engines.

[30:52] I'm curious what you've learned about building a growth engine in a company. Another way to put it is just a repeatable, scalable growth process, whether it's at Ramp or Opendoor or Instacart. People talk a lot about what should the right design of the team be or profiles of people on the team, etc. [31:13] I'm happy to talk about what are the right profiles of people. I think that's an important conversation, but I think like design of the team, people often, I think it's a red herring about team structure and team design and what's the right one, et cetera. I think most of that is irrelevant. What actually matters is, [31:30] culture and rituals and cadences rather than the team itself and so what [31:38] A great growth engine and a great growth team is one where you set the culture, like set very simple North Star metrics, usually one, at most two. And you've created a culture of defining hypotheses that are data driven and a culture where that can be executed quickly and have like an MVP kind of mentality for product and non-product projects, right? Where people can fail and learn quickly and iterate quickly. [32:08] that part of it is more important than the specific people or their functions in many ways to me, especially when you're starting to build a growth engine. [32:17] It's like, can you build a set of people that can generate new ideas and evaluate them effectively and move quickly?

[32:26] is really what you're trying to design for. Let's unpack some of this because this is great. So in terms of Northstar metrics, [32:33] What are some examples in your experience of good Nordstrom metrics? Like revenue is obviously a very common one. [32:38] but often it kind of is too high level? Do you have a sense of what a good North Star metric is? I like having kind of two, right? One is something around volume and growth, and you want that to be, A, very motivating and intuitive for people to understand, and also, B, something that the growth teams can directly impact. [32:58] Revenue is... [33:00] for better or worse, more important for the company, but also much farther down the line, whether or not the growth team can impact that. And so at Instacart, for example, our North Star metric, [33:12] for growth was monthly active orders. And that's what we all rallied around and looked at every day, you know, how are our amount doing? And then obviously we had a large growth in consumer engineering team at Instacart, 300 plus people. And so there are people working on every single corner of the app and outside of the app on acquisition to drive growth. And it's like some of the stuff is like minutiae, right? It's like making the checkout flow slightly better or faster [33:42] So that's a good example, right? It's like, okay, well, so we're gonna go that team on Mal. Like how are they gonna move monthly active orders by making the checkout flow slightly better? Maybe they can have an impact or maybe not. And so one of the things that we did is

[33:57] the actual local team [33:59] has their own metric that they can directly influence. Like you want to actually, you know, hold people accountable for things that they can influence. And then we created via, you know, the finance and data team, a translation layer for every team's metric into Mal. It would be like, if you got one extra weekly order because of your checkout flow from the same customer, it would have like point X impact on, you know, the company's Mal. And then we would just roll up all project plans [34:29] and the other benefit of doing something like that is that it also helps you cross-prioritex much easier. Should we add more engineering to this team? Should we add more budget to that team? It's like, okay, well, [34:42] "What's the mile map? "Like where is there more mile per dollar "or per engineer being built?" And it just really helped us unify and move together. [34:52] I have questions about this. This is great. [34:53] By the way, what... [34:54] Why is it monthly active orders versus just monthly orders? How can it be an inactive order? Sorry, orderer. Monthly active users basically is what it is, but we call them orderers because users can just log in and not order, right? Got it. You're actually ordering on the platform. Yeah, I think there was this backlash against users at Facebook. I think it's monthly active people. And so I get it. Okay, understood. Interesting. So you find that instead of sub-teams having [35:22] a different metric that [35:24] We just know is good. [35:26] That's like one of the... [35:27] variables in the formula of monthly active orders.

[35:30] you actually have a translation. [35:32] that converts that specific metric moving to the NorthStorm metric. Yeah. The team on their day-to-day for their sprints, whatever, are looking at their own metric. But for the purpose of planning and resource allocation and reporting, we would use the translation layers to actually just look at everything on a mild basis. [35:49] knowing those sorts of [35:50] formulas are often not [35:52] Perfect. Yeah. How much weight do you put into that? [35:55] that formula specifically. Yeah. And, and I think like in general, like the planning process is not perfect, right? Like you can have a financial plan in Excel and the reality can diverge quite a bit. The only thing you can be certain of is that you're not going to accomplish exactly the plan. So we did a couple of things to that. It's one is like, you know, [36:14] setting a culture of like, we know this isn't perfect. This is like 70, 30, 80, 20. It's to guide. So like we wouldn't use the translation factor to make like [36:24] a marginal decision, right? Like should we, like, you know, if something's 5% or 10% off, those are done based on judgment. Because at the end of the day, regardless of what metric framework you use, marginal decisions are marginal for a reason. They're really hard things to decide. And so the framework helped with, like, [36:42] just [36:42] reducing the cognitive overload of decision making to only those that are marginal. So the ones that are obvious, that are gonna have a big impact, [36:51] becomes clear, even if the measurement framework isn't perfect. And so that's kind of what we use. And the other thing that we just had as a cadence is we would actually update all of the translations every six months for the new planning cycle based on new information that we knew on how, you know, moving X impacts now.

[37:09] Just to make it even more real, what are some examples of those? [37:12] lower level metrics? Like, is it like increased conversion of sign up by X percent? Any number of things. Like it would be actually like load time of the app on open. There's a team that's like trying to make that faster and more efficient because we know that that impacts whether or not the person actually ends up ordering. If it takes five seconds to load versus, you know, two seconds to load. And so the full customer experience, like we're all segregated into [37:42] to open, okay, number of searches that a user does on the app, we know the people, you know, and number of items that are put into cart, like amount of time from cart to checkout, things like that would be just like, we literally just map out any user's journey throughout the app and have separate engineering teams that are focused on that. [38:04] And there's essentially some kind of regression analysis that tells you here's load times impact on [38:09] Mouse. [38:10] Exactly. And the other thing that we did is just so we would have these translation factors. We could also just see what the cumulative impact of all of the work is that Facebook did this to, which is just long term holdouts. Right. For each surface area. So the checkout experience team that I've been talking about a lot would have their own holdout. And so we can see what the cumulative impact of, you know, monthly active orders on the people that got last half's experience versus this half's experience on the holdout.

[38:40] So regression is one way to do it, you know, and then basically affect the A/B test with a small holdout. Is there a holdout for the performance team where someone just has a really slow version of Instacart? I wonder, actually. But there's a holdout for almost everything. There's a holdout for ads, for example. So there are some lucky Instacart users out there that are not getting ads. And they've never gotten ads because they've always been part of Instacart's advertising holdout. [39:10] That executive agent was a conversation internally on, like, should there be a permanent holdout? Should it be, like, last year's experience? Like, how should we think about, especially because it's such an important driver of modernization. This episode is brought to you by Eppo. Eppo is a next-generation A-B testing platform built by Airbnb alums from modern growth teams. Companies like DraftKings, Zapier, ClickUp, Twitch, and Cameo rely on Eppo to power their experiments. [39:40] increasingly essential, but there are no commercial tools that integrate with a modern grow team stack. This leads to waste of time building internal tools or trying to run your own experiments through a clunky marketing tool. When I was at Airbnb, one of the things that I loved most about working there was our experimentation platform, where I was able to slice and dice data by device types, country, user stage. Epo does all that and more, delivering results quickly, avoiding annoying prolonged analytic cycles, and helping you easily get to the root cause of any issue you discover.

[40:10] you go beyond basic click-through metrics and instead use your north star metrics like activation, retention, subscription, and payments. EPPO supports tests on the front end, on the back end, email marketing, even machine learning clients. Check out EPPO at geteppo.com, that's getepo.com, and 10x your experiment velocity. [40:31] Maybe just one last question along this specific thread. Is this framework of having everything translated into a North Star metric something you bring to every place you work now? And is this just something you recommend? [40:42] For example, does Ramp approach things this way as well? I think it depends on the size of the company, right? I think this actually becomes much more important as companies get bigger because there's more teams to prioritize and more resources to cross-allocate. And having a common currency makes that a lot easier. And so we do something similar at Ramp as well where we have translation factors for all of the various things the teams are doing that translate back to the North Star for Ramp. [41:06] Cool. And then are you up for sharing the RAMS North Star metric or do you want to keep that? Yeah, I mean, like I can tell you what we used to do in the recent past. We're evolving some things, but in the recent past, it was for the growth team, the North Star was dollars of SQL pipeline. [41:23] So anything anybody did, we would try to estimate the impact into what would be the dollars of sales qualified lead pipeline generated for Ramp. [41:33] So if the website team wanted to change language, the cards landing page.

[41:41] their direct impact would be conversion rate, right? Of email submission or something like that, would be what they would be optimizing for. And then we would have, okay, what does two bits of conversion rate mean for dollars of SQL pipeline? [41:53] A lot or not a lot, and depending on that, it's like, all right, don't waste your time doing that project. Let's do something else instead. So that just helps us score and prioritize efforts. [42:03] Here's a fun story. I actually tried to sign up for Ramp when I was starting this newsletter and business, and it didn't let me because I had a Gmail. For Gmail? Yeah. So I moved on, and that would have been such a huge revenue opportunity. I'm just joking. I know, I know, and I'm glad you brought that up because we are obviously aware of it, and we are working on something for users that have put in a personal email address in terms of how to re-engage. You're about to 5x growth. [42:33] Because I had no other domain at that point. Now I have Lenny's newsletter and stuff. [42:37] So I was like, shit, I'm stuck. - By the way, for anybody else that has that problem, they can just reach out to me. We'll figure it out. The reason we don't allow personal emails is because it's just [42:47] Typically, very low intent users that are coming to the website that are putting in personal emails. Makes sense. I totally get it. [42:53] I was not offended. I had no way around it. That's the problem. So I like that you guys are adding some path around it. And you're saying email you or reach out to you. Yeah, you can find me on Twitter or email me. I'm just sboccio at Ramp. All right. You're going to have the most sales leads of any person at Ramp.

[43:11] when this comes up. Okay, one other thing I want to touch on is success metrics. You talked about one of the keys to [43:16] success and this kind of repeatable growth engine is clear success metrics. [43:20] Is there any just learnings and tips you have for people when they're thinking about success metrics? [43:25] - Finding the right success metric, there usually should be two. There should be one on volume and another one on efficiency, and we can talk about what are good efficiency metrics and what are good volume metrics. On volume, I think the right success metric has a couple things that are important. One is there's a clear linkage to value creation for the business. So if I move this metric, that will drive revenue, and which will drive equity value for the business, [43:55] particular metrics, right? And for Facebook, it was Mal. For Instacart, it was effectively monthly active orders. And it's something that we know is important that will really drive the value for the business. But it needs to have the other component of it, which is it's very intuitive for all of the people working internally to the company. And it's also clear how if they're [44:25] So it's usually like you have to find something that's somewhere in between, not too far, too lag, you know, towards revenue and value creation, but also not, you know, something that's actually like translatable. [44:37] to the efforts of various teams. [44:39] Is there an example of a good success metric that just comes to mind to make this a little bit concrete for people?

[44:44] It just depends on what goal at any given time is. Sometimes you're trying to drive more users. Sometimes you're trying to drive more engagement. And you can reorient the company on what you're trying to do as the North Star for growth during that period of time. And so users obviously we've talked about as a good one. [45:14] a given company, I think. I don't think you phrased it that way, but that's probably for a given user, which is, you know, what does it take for somebody to become an engaged and active, you know, user or customer of a platform? And at Facebook, it was like, what, 10 friends the first seven days at Instacart. It was, you know, [45:33] three orders in the first month. And at RAMP for our activation, we've got like, I mean, it's like very specific to RAMP, but we've got like four events that the customer needs to do in the first 30 days. And if they do that, they have a high likelihood of being activated and successful. So our activation team focuses on that. [45:49] The framework you just described reminds me, Gibson Biddle has this [45:53] really simple framework of [45:54] gem where you can basically prioritize one of three things: growth, engagement, or monetization. [46:00] And his advice is always just like, [46:02] All of them are great. Just make sure you're all aligned on which one matters most at the time. [46:06] Yeah, and it's very similar to, you know, we used to have this at Opendoor, and I think DoorDash also uses a similar framework, which is,

[46:14] speed, quality, and cost. All three are important, but it's very hard to optimize all three at the same time, so you need to have a particular prioritization. And I think growth teams can also use that. The way I think about the growth team's journey is step one is build a system that can move fast [46:34] and then work on improving the quality, and then work on optimization of costs after. So similarly, you pick which phase you're on, because you can't do all three at the same time, whether it's growth engagement, monetization, or just the other way of framing that. [46:49] Speaking of metrics, I have this note here that [46:51] You're a big fan of Payback Period? [46:53] for measuring investment ROI versus CAC. Can you talk about why that is? Yeah, so a lot of people, you know, CAC obviously gets thrown around a lot. A lot of people are like, okay, you have to be reducing your CAC, CAC, CAC, CAC. There's a fundamental flaw to it, which obviously is that you're focusing on cost and not the value drive, right? And so when you focus on CAC and reducing CAC, what tends to happen is you... [47:21] actually might be doing something very damaging where you're succeeding in reducing CAC, but you're actually bringing in customers that are less valuable. [47:29] because those are the ones that you're able to attract with the lower CAC. [47:35] reframing it away from CAC towards LTV is helpful and that's better, right? So thinking about, okay, [47:41] For better customers that are bigger, we want to spend more. So you might think, okay, well, LTV to CAC might be a better way of looking at that. I think the challenge with LTV to CAC, especially for a lot of, even Ramp, right, is only four years old.

[47:54] is it's really hard to predict LTV. It's like a DCF. It's extremely assumption laden and it's hard to know. [48:01] what the defiant value will be. And especially if you think your churn is low, and your LTV is very high, you might end up spending a lot of money, because you're like, "Oh, my LTV to CAC is great." And then a year or two into the business, you realize actually your churn is higher than you thought, your initial customers aren't representative of your long-term retention, and all of a sudden you've destroyed a lot of value by looking at LTV to CAC, which is why I'm like, [48:27] a big, big fan of a payback period and, you know, and actually being really thoughtful about that using, you know, contribution margin, not revenue or gross margin. Like how long of contribution margin from this customer does it take to pay back their cost? And, you know, setting this obviously is typically a mandate from the executive and board level. Like what is the payback period that we're comfortable with? And then just orienting everybody towards driving that blended payback period down as much as possible. [48:55] For folks that aren't familiar with the concept of payback period or contribution margin, could you just briefly describe what those mean for listeners? Yeah. So contribution margin is basically the profit that you make on a given customer after you take into account all of the variable costs. So including the cost of production, as well as any other variable cost to serve that customer. So that might include [49:20] support and other things that scale with your revenue. And then payback period is literally just,

[49:26] how many months of that profit would it take [49:30] to pay for, let's say it costs you $5,000 to acquire this customer and your estimated profit per month on the customer is $500, that is a 10-month payback period. [49:40] So as I say that, I'm sure you've heard, you still have to make assumptions for payback period, but at least they're more based in recency and you can evaluate them more quickly. [49:49] Awesome. Thank you for doing that. [49:50] Just a couple more questions around growth specifically. So there's a lot of [49:55] ways to grow through the history of a company. [49:58] You can invest in SEO, you can invest in paid and sales and referrals and influencer marketing, brand marketing. [50:03] billboards, all these things. [50:04] Do you have an opinion on how to sequence these sorts of bets for companies, especially in B2B? [50:10] - Of course a lot depends on who your customers are, what your unique value propositions are, and how competitive the space that you're in. But I do think there's actually a general path that most B2B companies, [50:23] take and should take, frankly, which is like my view is you start off with like founder led sales, like the early team needs to know how to actually sell. Then you hire your first couple of sales people. Then you start some very kind of low cost targeted marketing efforts. So whether it's like content, community, small scale events, and then PR. And after all of that is when you start paid

[50:53] time that you start paid marketing efforts. The reason for the progression the way I've described it is the channels get more expensive. [51:01] as you go farther along and they get more effective as you understand more about your customers. And they're more scalable as well as you go farther along the list that I've described. And so that's the intention behind sequencing in that way. SEO is a bit unique and the reason I recommend it later rather than earlier, even though it's not necessarily that expensive, is just take some time to build. And without domain authority or backlinking or any media presence, you can end up just like flailing with SEO, creating a lot of things. [51:31] content and not getting any actual traction for a long time. So there's usually a good inflection point for your company to double down on SEO efforts. And it's somewhat a little bit later than some of the other times. [51:43] This touches on a great line that you have around experimentation. [51:47] where you talk about how you don't want to just fail fast with an experiment, you want to fail conclusively, if that's the word. Can you, is that right? And then can you talk about that? I talk a lot about that with my teams, both here and other places. [52:03] which is, A, we celebrate failure. Growth experiments in my history are typically like [52:10] 30%-ish success rate. So the vast majority of things that you try don't work. And so you want to create a culture where people aren't afraid to take risks and aren't afraid to fail. And for me, failure is... [52:22] Not that you didn't drive revenue, failure is not learning.

[52:26] So it's really important that you learn when you fail. And so we celebrate failure as long as you're learning. [52:33] And you can only learn if you've designed the right test and you failed conclusively. [52:38] Because otherwise, I think many of us have been in situations where there's intuition that something might work. [52:44] and it doesn't work. And then you end up doing it over and over for years. Like, cause every time a new executive or somebody else has the same idea, you try it again. And, uh, and it's because you haven't been able to design the test to fail conclusively. And it's, it's, [53:00] Hard to do, but at the end of the day, there's only two ways to make an experiment successful. Either you have a very large N, or you have a very significant treatment, which is what you're doing in the experiment itself. In B2B, you don't usually have the luxury of large N, which you do in consumer. [53:22] Facebook can get stats in two hours. You know, a B2B company could take two years to get to the same number of touch points. And so to counteract that, I recommend people just [53:35] Trying to maximize the treatment effect which is like if you have a hypothesis that you're testing just throw all of the possible tactics and resources that you think would move that needle because you can always cost rationalize later if it works right and so maximize the treatment effect and if with all of that it didn't work then you can say hey [53:56] "We're not gonna try this again," because we literally did try it.

[54:00] everything that we could to test this hypothesis. And if it doesn't work in the best version, and it's expensive as it is, [54:06] This is not worth spending more time on. But if it does work, great. Then you do another version of the test with like half the tactics or whichever tactics you think work better or worse. And you optimize over time. [54:17] Is there an example you could share when you did that? [54:19] I mean, account-based marketing is something that is very common in enterprise software, right? [54:26] selected certain customers that you think are high priority, and you're saying, [54:32] I want to touch them in as many nuanced ways as possible to see if that drives conversion. And this is something I've seen tried many times where [54:45] People do it, but they kind of do it halfway, where they're like, okay, we tried these three things, conversion as a control group wasn't higher, and so we think it's just not gonna work. And then a new go-to-market executive comes, and they have to do it again, they have to do it again, they have to do it again, it's a very common one wherever this happens. And so when we did it at Ramp, we did exactly what I just described, which is like, [55:15] Let's really be thoughtful about the experiment design, both in terms of maximizing the number of people as well as maximizing the number of ways and types of ways that we're effectively touching these target customers to show the value one way or the other.

[55:31] So what it sounds like is the hypothesis isn't like... [55:34] this email will have a big impact on conversion. It's like this strategy of coming after customers. [55:42] is what we're testing? - That's the example there, right? And I think, for example, if you have the... [55:50] this kind of framework is more important for cross-functional, larger scale, bigger tests, rather than like, you know, an email modification, right? But we can even use it on a micro example, like an email modification, right? Where you are like, okay, I think, [56:07] this particular email is underperforming because it's not talking to this part of the customer's pain point or journey or whatever. And, uh, and you could just, [56:17] The simplest test would be, okay, let me make some tweaks to the text. [56:21] and edit that, and that could be the end of that test. And if that doesn't work, you're like, "Oh, maybe those weren't the right text edits. "Let me do a different text edits," or whatever. And that's fine, that's low cost, it's not the end of the world, and it's for you to be wrong there. But an alternative that you could do is like, "Oh, [56:37] what are all of the things that I could change about this email, in the same test? Is it the trigger of the email? Is it the text content of the email? Is it, you know, additional personalization? Is it the design of the email? Like, trying to think about what are all of the various levers that you think could be wrong? [56:55] and put them all together to test your hypothesis of this touch point is wrong and how do I improve that?

[57:02] Obviously, the downside of that is if it doesn't work, you don't know if it's like, "Oh, maybe it was this thing could have worked in the subject." Yeah, yeah. There's always trade-offs on this. But what you're hoping is like you've done a complete refresh where you did all the things that you thought were intuitive that should work. And if it doesn't work, then you're like, "Okay, maybe my hypothesis is wrong." But you're right. There's always going to be a challenge if maybe the execution is wrong. And I did too many things potentially in that case. [57:29] How does that go with the velocity culture? Is it just do those things real fast? [57:33] Even though it's a lot, it's not like micro optimize, it's like go bigger but do them fast. Yeah, yeah, yeah. So that's why I think it's important to frame where this matters, right? And so I think I'm less worried about failing conclusively for things that are, you can fail really, really fast and just redo things like [57:57] website conversion, email, et cetera. I'm more worried about that for things that take a while to plan and cost money, et cetera. [58:05] Got it. Okay, great. [58:06] Maybe one last question around growth specifically. [58:09] What are some of your favorite tools? [58:11] for [58:12] the growth team, either internally, whatever you can share, or externally, that just allow you to operate efficiently and effectively? A couple of things that we've used. One simple thing is for sprint planning, actually, we use Airtable because the planning process and the scoring is so much more analytical in the translation layer. We've got a template on how we do our sprint planning and how we translate the various impact metrics into the common currency, which

[58:41] which I enjoy, but I don't think it has to be Airtable. It's just some form of organization that works well for that. In terms of a very tactical growth tool that we've enjoyed recently is, we use this company called Mutiny, which is also a round customer, which is a tool for website copy personalization. [59:00] So they hook up with our third-party data sources that we pay for. And based on what we know about the customer as they're landing on our page, we can personalize copy InDesign based on that. And that's had material impact and allowed us to scale website experimentation. [59:18] Amazing. And then are there internal tools you've built to help with experimentation or... [59:22] I don't know, sharing data, dashboard, I don't know, is there anything else that's just like, wow, this really helps us move fast. [59:27] Eric, our CEO, has publicly talked about this. I think we as a company are very thoughtful about what we build in-house versus what we buy externally. I think a lot of engineering teams are often excited about building things in-house where there's off-the-shelf products that could basically work externally. And Ramp has historically been good at not falling into that trap. [59:57] for things that are not, you know. [59:59] proprietary, strategic, et cetera. Obviously, like some of the automation stuff that we've talked about, we've built all of that in-house in terms of, you know, [1:00:06] prospecting, lead scoring, and how we talk to our customers. But for the most part, we use external tools. Instacart and Opendoor were not like that. We built our own internal experiment tracking systems, A/B testing frameworks, and all of that in-house.

[1:00:25] That's what I would have guessed about RAMP, that it's with speed, you've got to not build stuff you don't have to build. [1:00:30] so that makes a lot of sense [1:00:32] Okay, maybe one last topic to talk about. I want to talk about hiring. You have some really interesting... [1:00:37] approach just to how to think about hiring. [1:00:39] One is, I think you have a really interesting... [1:00:41] strategy for how to find the best companies and also the best people at each of those companies to go after if you're hiring for specific [1:00:48] Roel, can you talk about how you think about that? Google on Twitter has talked about some of this, which is like there's kind of two ways to go about hiring great people. One way is basically a very... [1:01:02] thoughtful and tactical network search where, like, let's say you're hiring for a head of SEO. You go ask your network of who is the best SEO person you know. [1:01:11] get introduction to each of those folks, and then ask them who the best person they know is. And you have a mapping of, you know, where are the best SEO teams and why. And if you can't get one of those people, 20, 30 people on your target list, you kind of go down the list of, okay, like, what is the next best person? And you typically want to limit it to companies that are one to two stages of growth after you. [1:01:41] and beyond at a company that has a reputation for craft in the field that you're looking for. [1:01:46] So that's a very classic way of doing that, and I think that works really well for people and companies that are really well connected, right? And then, so there's another approach that I've actually used successfully is, you know,

[1:02:01] is much more kind of [1:02:04] data-driven and kind of external and not as network-based, which is you can often look up [1:02:12] Thank you. [1:02:13] a lot of it is somewhat public, right? So you can look up information on [1:02:19] which companies might be doing well. So for example, I'll just pick like, if you're looking for great email marketing folks, like CRM marketing lead or something like that, you can actually look up on similar web, like what percentage of traffic shows up via email to companies' websites. So you've got your target list of companies that are one or two stage beyond you that you respect as general companies. And you can go and see, okay, which ones of these are actually really effective [1:02:49] via their email. [1:02:50] and then go [1:02:52] try to source from those teams and companies. And I think people underutilize that, even though it's very intuitive, right? It's just not something that occurs to people to do. [1:03:03] I love that. I've not heard that tip right there. [1:03:06] The first piece, Gokul definitely recommends this, and I think the core part of that is [1:03:11] Like the core theme here is find the companies that are the best at the thing you're trying to hire for and then figure out who at the company is the best once you start talking to people. [1:03:20] I love it. Another strong opinion that I think you have is around paying people and how much [1:03:26] to pay the best. Can you talk about that? Yeah, I think there's a lot of conversation around compensation is very much focused on like,

[1:03:39] equality and narrowing the gap and bans for compensation. And I think personally, I know it's a bit of a spicy take maybe, but I think it's like the exact opposite direction of the conversation that companies should be having about compensation. [1:03:55] which is I strongly, strongly believe that small teams of successful people can drive a lot more impact than larger teams of mediocre people. And so I strongly believe you have to design a system where you're able to reward 10X operators with 10X the comp. And I actually do think that you certainly see that at the executive level, right? So if you look at the same executive at different companies at similar stages, [1:04:22] The comp can be wildly different based for a variety of reasons. But one of them is the perception of performance and potential by the management team. Right. And I think people need to be thinking about how to do that across more levels, which is if you can do that and if you do that, well, I think you're able to differentially hire and retain the best talent. And that'll be a great competitive advantage for companies that can do that well. [1:04:47] And do you think about this within a team? [1:04:50] pay the best people the most or is it more [1:04:53] only hire these 10x people and then pay everyone. [1:04:57] The most, you know, people think of like the talent density of your company as dependent on hiring. And that's obviously true. It's an important part of the ecosystem and the first part, but it's equally dependent on retention and performance management.

[1:05:14] A lot of companies can be good at hiring, but hiring has a pretty high rate of false positive. Interview is the worst, best way to hire somebody. And then there's lots of ways you can make the interviewing process better, make it more interactive, make it more effective. But at the end of the day, you still don't know anything about it. [1:05:33] someone until you really work closely with the new team, with the new mandate at your company. So I think it's not about necessarily hiring 10x operators. Obviously, you're looking for that. But it's also about investing in people that are doing really well and accelerating their growth and rewards based on impact once they're there. And as well as, you know, managing out people directly that didn't work out. [1:06:03] almost never when I've had to part ways with people is because someone's a bad actor. It's almost always that it just wasn't the right fit for whatever reason, for their skill set, for their life goals, whatever it may be, and it just wasn't a fit for that role. And I think a lot of companies are hesitant to make those changes, and I think that's how they bring their talent bar down, frankly. [1:06:28] Absolutely agree. [1:06:30] Shree, is there anything else that you wanted to touch on before we get to our very exciting lightning round? I don't know how many people use this. I'm still surprised when new folks come to me. I need to write, by the way, a document of how do you work with me because I know it's

[1:06:47] A lot of people have been talking about it, I think Clarebys Johnson's talked about it in Zoom. But I say that my love languages are like spreadsheets and frameworks. And one very simple one that I've always liked, that sometimes it was quite severe, but it's most consultants know, is what we call MISI, Mutually Exclusive Collectively Exhaustive sort of thing. So whenever you're trying to attack a problem and [1:07:14] trying to brainstorm solutions or what have you. I really like to remind the teams to think about MISI, because when you kind of think about that and then evaluate your set of solutions with that framework in mind, I think you tend to find that you've [1:07:30] you'll catch more potential solutions. And also you'll feel comfortable that you've been, you know, [1:07:38] comprehensive in your solution development. So anyway, just a little thing for people that are earlier in their careers to not forget. [1:07:46] So let's make it a little bigger than a little thing. So me, Seek. [1:07:50] Mutually exclusive, collectively exhaustive, [1:07:53] Is there an example of what that may look like in... [1:07:56] and/or [1:07:57] visualize for people to think about what this means in practice. Yeah, and I mean, I'll give a really dumb example, but it will make the point, hopefully. It's like, okay, you're like... [1:08:09] our profitability or our revenue growth has slowed down, is the problem that you're trying to solve. [1:08:17] And so, okay, you start with, okay, what does this mean?

[1:08:23] You've got... [1:08:24] Revenue per user has gone down or customer has gone down or number of customers have slowed down. Okay, that's step one of the Nisi framework. Then it's like, okay, where does the revenue come from? What are all the various products that revenue could be coming from? Has it changed on any of them? [1:08:40] And then customers, why have customers gone down? Is it new customer acquisition? Is it activation of customers that have signed up? Is it retention? And just kind of breaking that problem. So at each layer, you've collectively exhausted all of the possible ways that this problem could have arrived. And just having that framework whenever you approach every problem, [1:09:02] will prevent you from missing something important and also just more generally give you and others confidence that you're being comprehensive in your solution development. Got it. So one way to think about this in this specific case is just like make a formula, [1:09:15] of all of the variables that play into the question you're trying to answer. Yeah. Awesome. Well, Sri, with that, we've reached our very exciting lightning round. Are you ready? Yeah, let's do it. [1:09:28] What are two or three books that you've recommended most to other people? [1:09:32] I tend to find most business books can be decks, but one that I really like actually is Never Split the Difference by Chris Wallace. I found it super helpful for it. It's a negotiation book. [1:09:42] financial development negotiation, but also for, uh, [1:09:45] A lot of business decision making, generally, to be honest, and life. And then another, I'm a big fan of sci-fi short stories. So anything by Ted Chiang or Ken Liu, I highly recommend it.

[1:09:57] I love those both. On the first one, I'm actually in the process of listening to it on audio. [1:10:01] And every time I'm in a place where I can negotiate something, I never remember anything that I've learned. Is there one thing that you've taken away from that book that's stuck with you? Like, I use this. I think that the core of the book really is about listening behind the problem of negotiation and what is the person really asking for. So as an example of like, you know, if you're always trying to split things evenly, you'll end up with one brown shoe, one black shoe, where neither of you are happy. And so like, what is the... [1:10:31] said, [1:10:32] A, rather than thinking about Batman and Zopa and all the other physical frameworks on negotiation, I think focus on like deep down, what does this other person want? And how can I change the conversation about that rather than the thing that we're, you know, arguing over? Awesome. Great. Next question. What's your favorite recent movie or TV show? [1:10:51] I mean obviously won the Oscar, but I really enjoyed everything everywhere all at once. I thought it was such a wonderful story and and it really [1:11:01] I think it's one of those, it's funny, the movie can also be, I think, everything, because there are just so many different reads that you can get about that. You know, it's about family, it's about immigration, it's about... [1:11:13] queer love, like there's a lot of really interesting themes explored via one movie. [1:11:18] What's a favorite interview question you like to ask? [1:11:21] I was going to say, oh, I like to ask other people. You like to ask? What did you think I was going to ask? Oh, I thought what was my favorite interview question that you've asked or others have asked. Oh, I got to clarify this. Okay. Both are acceptable answers.

[1:11:37] I was going to cheat on that one and say the one that you asked me right before because I'm a big fan of actually movies and TV shows. People rarely ask about that in interviews like this. But favorite... [1:11:49] interview question that I like to ask candidates actually is, what's something that you're really bad at but you still do and why? [1:11:58] What do you look for in their answer when you ask them? Yeah. A lot of people actually struggle with that question and can't answer anything that they do that they're bad at, which is a little bit of a yellow flag, which means that they're only used to doing things that they're successful at and they haven't cultivated interests that are not correlated to their own success at doing something. And they haven't taken the time to do that. [1:12:28] And what I really want to see is people that show examples of things that they're not successful at that they do for other motivations and goals and interests. [1:12:36] And so if you can tell me a compelling story like that, it's usually a winning answer. [1:12:42] What is a favorite product or two that you've recently discovered that you love? I already mentioned Eight Sleep once in this call. I love my Eight Sleep. I'm a big fan, and they're around customers as well. That's been a great pandemic purchase, so it's maybe not as recent. And then maybe another one is like, [1:13:02] fellow coffee, they're kettles. [1:13:06] or I think just designed so beautifully. I don't drink coffee, I drink tea, but I use my fellow kettle for tea, and I think it's just a delightful product to use.

[1:13:15] I got a fellow kettle for my tea also, and I found that the flow of the water was too slow. I was just standing here pouring this cough pour over. [1:13:23] - Yeah, yeah, yeah. So they do have a non-portal vertical, which is what I have, which makes it easier. - Oh, I guess it's a real one. - Damn, okay. [1:13:31] My mistake. [1:13:33] Next question: What is something relatively minor you've changed in your product development process that you found to have a big impact on your ability to execute? [1:13:41] Yeah, I mean, I don't know if this is minor or not, but one of the things that, you know, on the growth side we used to have. [1:13:48] separate spring planning for the product team, for the marketing teams, and each team had their own planning cycles. And one of the things that we did is [1:13:57] we brought them all together into one. So like the lifecycle marketers joined the product activation team sprint cycles. And so their projects and work are very tightly aligned and work in the same pace and system as the rest of the product team. [1:14:16] tremendous impact in our ability to work together. [1:14:19] Final question, Ramp is all about helping people save money. [1:14:22] I'm curious if you have any pro tips on just saving money. I mean, it seems obvious, and I feel like negotiation's already been the theme of this lightning round, but everything is negotiable when it comes to contracts. People think contracts are standardized for software, and usually not. People are trying to sell you something they're trying to grow to. They have their quotas to meet. They have their goals to hit. And so, I mean, Ramp obviously has a service for this, so if you want to scale, you can use Ramps.

[1:14:48] but you can do this on your own, right? Always try to negotiate, be mindful of quarter ends for sales people, right? And so if you can push something out until near the end of the quarter, you can ask for, hey, I'll sign it by the end of the month if you give me a 10% discount. [1:15:04] will often work. So there's tips like that that you can do, but remember that you can always negotiate. And then the second one is, I would say, is just hire slower. [1:15:15] I'm a big believer, and Jeff talks about this too, in your other interview, like hiring based on slope rather than intercept. [1:15:25] work well for you and only hiring when people and teams are really stretched. I think this will serve you well, both on cost and on impact. There'll be plenty of scope for the people that you hire and as I said, I'm a big believer in small teams accomplishing more. [1:15:40] Ramp being a fraction of the size of some of our competitors with similar orders of revenue. [1:15:47] Sheree, we've covered velocity, growth, hiring, so many topics, everything I was hoping we touch on. Two final questions. Where can folks find you if they want to reach out and learn more? And how can listeners be useful to you? [1:15:59] Yeah, I'm a big fan of, you know, the fun place of the cesspool of Twitter. So I have a public Twitter account that, you know, you can DM me. My DMs are open. It's just my name, Sri underscore Bacu. And in terms of how listeners can be useful, honestly, I think, you know, I really enjoy meeting like-minded folks.

[1:16:29] constantly looking to hire and we're still hiring. So, you know, best in class growth and marketing folks that they can recommend that we hire around. I'd love to hear. [1:16:40] And I think the URL is ramp.com slash careers. I just pulled it up. [1:16:44] That's it. Thank you. All right, Shree. Well, thank you again so much for being here and for sharing so much. [1:16:49] Yeah, of course. Thank you. Bye, everyone.