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Ramp founder Eric Glyman on the many ways AI is changing corporate spending · Cheeky Pint

• John Collison (00:00:17): Cheers. Can you describe maybe a good framing, just the Ramp business today? What's the biggest part of the business in terms of where you make money? What are the new growth lines? Any metrics you can share on the scale? Alex and I have a million questions, but maybe you can start by just framing it up for us. Eric Glyman (00:00:34): Yeah, of course. So first, just the pace that this has come together has been pretty remarkable. Alex Rampell (00:00:42): Seven years. Eric Glyman (00:00:44): I think by the time we were six years and change, the company had passed over a billion a year in revenue. The largest portion of that is card. And so that might be a classic kind of interchange-based model, but behind it— John Collison (00:00:59): This is people in their business, they have spend cards, everyone walking around the company has a Ramp card and you earn interchange on those. Eric Glyman (00:01:05): That's right. Next, you can think about bill payments and software. Software, it's a two-something-year-old business line, just about two years and some months. That's over a hundred million a year business line in and of itself. And that can be advanced functionality to maybe manage lots of entities to automate aspects of accounting, maybe aspects of procurement, bill payments. So this can be sending checks, wires, ACH, and that's predominantly a float as well in some cases, foreign exchange transaction business. Treasury. That's a product that is about a year old, several billion dollars of deposits. Some of that is checking-like products. Some of that is more of an investment and money ladder type product. And then the last, the other ones are procurement and then travel, which is a bit of an in-kind. And what's been so interesting is that if you break down and look towards, maybe let's say contribution profit, gross profit of the business, a few years ago it would've been 90 plus percent card. I think by the end of this year, the second, third, fourth, fifth lines of business will comprise and aggregate the majority of Ramp's business. And so it's evolved into this platform by which, if you're trying to operate your company, it's just a lot more efficient. You spend less. I think people know Ramp for… We help the average company cut their expenses by about 5% per year. The thing that's been really fascinating is people are starting to use these products in aggregate. Not only are they not paying for five, six sets of point solutions, but they're also not wasting time. They're growing faster. The average customer last year on Ramp grew their revenue by, I think it was 16%, which compared to, in the United States, the average business— John Collison (00:02:59) Much higher than that. Eric Glyman (00:03:00) Yeah, I think it's 5% in the US. And so, in some sense what we're trying to do is be not just a better platform, but a better, almost kind of digital brain for organizations to allocate resources and make sure spend is not wasted. John Collison (00:03:16): So you start by selling, say, spend cards into a business. The CFO likes it, the employees like it, and then that gives you permission to go sell some of this other functionality. And so it's kind of a classic multi-product cross sell. Is it always starting with spend cards or do you now have multiple front doors into the business? Eric Glyman (00:03:37): It's been the big story of the past year. I think there were, over the last quarter, thousands of businesses that came in just for bill payments. There's accounting firms that are becoming… They say, “We're a Ramp shop here if you want to work with us. We’ll bring in bill payments, treasury…” We use Ramp to go power that and they can manage 10, 100, 200 clients all through one platform. And we're excited. I mean probably the fastest growing line of business is procurement. Or, they're single clients that are looking to bring in and do full-scale purchase orders across whether it's single or a dozen-plus entities all the way through. And so that's been the really fun story of the past year. John Collison (00:04:27): Do you have a view on what the right policy is for employee spend within a business? Eric Glyman (00:04:32): I love that you ask this, yeah. John Collison (00:04:35): 37signals or someone will say, “Companies are so lame, you just give everyone a credit card and trust people and it's fine.” And then meanwhile, large companies are like, “Well, this hotel is in a Tier-2 city and therefore there's this dollar limit and it must be booked 14 days in advance.” And so you see companies operate at really two ends of the spectrum in terms of how much flexibility they give people. What is correct for a company, or does it just vary by size? Eric Glyman (00:04:57): I love this question. The interesting part, if you really dig into Ramp’s businesses, we have ways of back testing and actually understanding based on how strict your policy is, how things are running, does that have an impact on how much time your employees are, let's say doing expenses, how quickly you're growing. And you can start to actually compare based on the operating hygiene of the company. What are end margins? What is a pace of growth that occurs at the company? And I bring this back to— John Collison (00:05:35): So you do a correlational study between expense policies and company growth. Eric Glyman (00:05:41): Yeah. And look, it's pretty interesting. I mean the first, there's an aspect of in most companies, particularly high growth companies, it tends to resemble something closer to the “no rules rules” Netflix approach of we're going to trust but verify and shine a light on it. Spend tends to be reasonably permissive. But then part of the breakthrough of the past year is you could basically take an expense policy. Let's say it's written in plain English, “If the flight is more than five hours, you can take business. If it's under…” Things that would've been horrible to go and have your managers go and verify this stuff, now you can run that through an LLM. I think that we're processing over 100,000 expenses a day that are being reviewed agentically. This is a very fast-growing subset of the business. John Collison (00:06:30): So you give the Ramp agent this company's expense policy and then it applies it to the transactions that are coming through. Eric Glyman (00:06:37): Exactly. And so you can start to do things, I think about the episode you'd had with Susan Li. It was incredibly instructive where she sort of says, “It would feel so silly and it's not a great use of my time in some sense to be a very expensive machine learning algorithm to review expenses.” But yet somehow a lot of people in companies are reduced to that thanks to Sarbanes-Oxley and the rules around it. Now you can have an agent functionally that takes that aspect of the job. And so it has access to the full set of data that you would… All the transaction related metadata, the receipt data, the timing data, the policy data. It then can go in real-time review. Was this in or out? Can have the full audit trail explaining its reasoning, and today it's over 99% accurate, which turns out it's much more accurate than people are. So people don't know the expense policy and expenses are pretty automated. And I find this thing super interesting, in part because I don't think it really should be anyone's job to go and review people's expenses, but somehow, while it's in no one's JD, the law kind of requires everyone to waste an hour of their time every month if you're a manager. John Collison (00:07:47): Does the law allow for it to be reviewed agentically and then just signed off on by the human? Eric Glyman (00:07:51): It does. The goal of this is separation of duties that you yourself are not reviewing your own expenses. There needs to be a set of procedures that govern and actually are effective through the action of, okay, the rule says this. Did you take some steps to do this? John Collison (00:08:09) Yeah, you can’t self-certify. Alex Rampell (00:08:12): One way of doing this, actually we used to do this, is why not just post your expense reports in the public eye? And the reason to do this is… Actually it could go wrong. You could say, “I'm going to spend… You stay at the Four Seasons, I'm going to stay at the Five Seasons”. You could go that direction, but what you actually want a moral code. It's like, if you were the owner of the business, it is your own money. Eric Glyman (00:08:33): Yes. Alex Rampell (00:08:34): So, if you were staying at the Five Seasons, I've just made that hotel chain up, it's like you're— John Collison (00:08:38) Sounds pretty nice. Alex Rampell You're stealing from yourself. Why would you do that? The problem is that once you get to tens of thousands of people, how do you impose that moral code? And actually, the two tent poles that you just mentioned, they're both bad. Because if you have to stay at a crappy hotel and you're about to sign a two million dollar contract and you didn't get any sleep. It's the Motel 6 and you take a two-hour taxi, it's like, all right, you saved the company money. That does not make sense. Stay at the Four Seasons. But you can't really embody that in, “if this, then that”. Because what you want is this moral code. And how do you actually instill that? And there's almost a behavioral psychology way, which is like, we'll just show what people are spending. If you're at the top of the leaderboard, we might trust but verify and verify a lot more. But that's the hard thing to do. And actually preserve as the company goes from the founder to the founder plus the founder's brother to many, many more people. How do you keep that same esprit de corps or this informal code? Eric Glyman (00:09:39): I think it comes back to, what was the name of the movie? 12 Angry Men, I think it was. Where as you're watching the film, you get some level of detail and someone seems very guilty. It's a dead shut case. And as more evidence emerges, you realize actually this may be different. And you need more context in order to arrive at a moral conclusion. Did it relate to closing a project? How does it relate to an outcome that maybe you'll see emerge one month, two months after you stayed at the Five Seasons and closed the deal that changed the company, whatever the example is. I would argue in favor of tools that have more context, that do more jobs of work. Because not only can you do the narrow job better, but you can start to get at the answer of what actually is right for shareholders. Where should we be allocating capital? Alex Rampell (00:10:35): It's so interesting to hear because every company approaches this differently. I'm on the board of Wise and Kristo flies coach everywhere, everybody flies… That's just the policy. But it might be penny-wise, pound-foolish. Again, not for me to say, but I also really admire the corporate code. It's just like you actually, that is cultural. It's kind of weird to say expenses are cultural, but they are. Eric Glyman (00:11:00): For sure. It's shared— John Collison (00:11:03) It's a shared belief system. Eric Glyman (00:11:05) It's a shared belief system. It's like, what is the culture of the company? John Collison (00:11:06): You talked about your expansion into Bill Pay. It seems like bill payment has proven, over the past 40 years, uniquely resistant to automation and modernization. If you look at how a typical business pays their rent or if you order a keg of Guinness, you'll get a PDF emailed to you by some person who has a relationship with you. And there will be bank account details, which hopefully are correct. And you send a payment to those. And even bill payment products, you guys have a bunch of technology here, but it's like, we scan the PDF in an automated way or we ensure that the bank account details weren’t mistyped or something. But it's kind of like “putting a little bit of lipstick on the pig” of the whole system being super antiquated. Why is the system so antiquated when it comes to bill payment in particular? Eric Glyman (00:12:03): I think this is some of what Alex was bringing up. The constraints of programming things in an “if this, then that” kind of world are very heavy. There's a lot of complexity. And when you think about the nuance and algorithms that govern, why do companies spend money under some circumstances, how hard it can be to record? I wouldn't overlook… Let's say that you're a manufacturer and you're buying some asset which you're going to use for five years and it's going to depreciate. It's a very different accounting treatment versus I'm buying a pay-as-you-go SaaS app. All the complexities around that might govern whether or not you decide to spend. Then finally, once you get all this detail, how do you review this and decide where to allocate your next marginal dollar is very complicated. John Collison (00:12:52): But many systems are in-place upgraded despite the fact that that's pretty complex. So credit cards started with no real-time authorization system, which is crazy. And you just hoped that they were good for— Alex Rampell (00:13:04): Carbon copy. John Collison (00:13:04): Exactly. The machine with the pleasing sound. They’d do great in the current ASMR environment. That's true. But then they added, you could call up and get an authorization and then they obviously added to the current systems we know— Alex Rampell (00:13:18): The modem. You forgot the modem. John Collison (00:13:19): Exactly. And then the modem. And so in place, credit cards were upgraded with much better capabilities. And similarly, if you look at checks and how they work, even though we think of checks as antiquated, it used to be the case that physical checks had to be flown all around the country to be physically settled. And then there was the Check 21 Act in, what was it, the year 2000? Where they said a scan of a check is good enough and so they could be digitized by the banks and then shredded. And then you could take a photo of a check with your phone. And so we've managed to take this super old-timey check system and despite the fact it's super old-timey, in some ways it has actually been meaningfully upgraded. And if you looked at the bill pay system from the outside, you would say, we should have DNS for companies. So rather than a company sending you their bank account details, you should look them up in some central clearinghouse. And that way you confirm that you're not being phished. A lot of spear-phishing attacks work that way. Alex Rampell (00:14:10): Although you referenced this. So there's actually an indifference point that you can graph. If interest rates go up high enough, if I send you a check, like a paper mail check, and that takes five days, and hopefully the USPS goes on strike for two more weeks so I've got the postmark. I actually benefit, it's actually cheaper for me. Eric Glyman (00:14:29): You legally paid, right? Alex Rampell (00:14:30): It's crazy. So this is the problem. Credit cards, everybody… I am in the store, I want the TV. You want to sell me the TV. We both want this done right away and in the knuckle-crunching, ASMR, carbon-copy days, they might not have been willing to sell that to me because they didn't know if I was good for the money. They'd never seen me before. And the interesting thing is that AR and AP are almost an adversarial process. You mentioned this. What do you want to do as a controller? Well, you want to pay as late as possible and you want to collect as early as possible. Alex Rampell (00:14:59): And then you have this weird thing where checks… It's not just an accident that they stick around for a long time. It's like there was a financial incentive for one party. John Collison (00:15:10): So that's true on payment timing, I agree with that. But there are some things that are just a dead-weight loss, like the ability to fat-finger a bank account. No one benefits from that, everyone has a horrible if that happens. Alex Rampell (00:15:22): No, that Nigerian guy. There’s some people that benefit. John Collison (00:15:26): Nigerian princes. Eric Glyman (00:15:26): Let’s think of everyone. John Collison (00:15:27): I will posit that many networks have been upgraded in place, but somehow the loose network of businesses paying each other via PDF invoices has proven very resistant to in-place upgrades. Alex Rampell (00:15:40): Also, I love your notion of DNS for payments or for expenses. So I don’t know if you saw this, Google wanted to issue a 100-year bond. Eric Glyman (00:15:49): Yes. Alex Rampell (00:15:49): So why is that interesting? Imagine that I am owed money by Google. I'm one of the small businesses that you reference. Their job is to pay me as late as possible. Eric Glyman (00:15:59): Yes. Alex Rampell (00:15:59): They can borrow money for a hundred years at like 3% or whatever it is. Cheaper than the US government, probably. John Collison (00:16:06): T plus a hundred, yeah. Alex Rampell (00:16:07): A little more expensive than the US government, but they are borrowing… That's crazy. I can borrow money at 20%, but why do I need to borrow money? Because Google's paying me late, those jerks. So I should be able to borrow money at the rate at which Google is borrowing money because my AR… My AR is their AP. But the problem is, unless you put all this together, you would just look at me and you're like, “Well, you're just a little schmuck. I'm going to charge you 18%.” It's like, yeah, but it's Google. They could borrow money at T plus whatever. SOFR plus a hundred. That's not fair. But the only way to really solve that is with more data and actually entangling…. Not entangling, but just kind of connecting these things together. John Collison (00:16:52): What's your vision for once AI is doing a lot of software engineering, what does that look like in three or four years time? Is the competitive equilibrium similar, but the expectations for the amount of software and functionality businesses are shipping is much higher? Are software teams similar looking, different looking? Again, you're doing a lot of AI engineering. What does the future hold? Eric Glyman (00:17:19): It's all blurring. It's totally crazy. There's a designer shipping code. Marketing at Ramp reports into our CTO Karim, my co-founder who's doing some of the best marketing I've ever experienced and seen. We have customer support agents shipping code to production too. I just think that the half-life of, you see a problem, to how long it takes for you to go fix it and do something about it is shrinking immensely. Or if you want to change the color of a button, you can just say, “Hey, at Ramp Inspect, can you change the color of this button?” And it goes and spins it up and it does it within minutes. It verifies and validates it. And so I actually think in some sense, these classic barriers that software businesses had are clearly going to erode. John Collison (00:18:14): Yes. But the old joke of, “It's much more fun to write code than read code,” explains a lot of software engineers’ behavior. And it becomes easy to change the button. Is that another instance of it being more fun to write code than read code? Where lines of code are a liability and not an asset because they're something you have to reckon with. And so are companies at some level incurring some tech debt now where they're adding a bunch of code which will maybe be harder to reason with later? Or do you just get bailed out by the models getting better? Eric Glyman (00:18:46): It's really interesting. By the way, one of the other interesting sub-conversations I'm hearing a lot too is when you think about where tech debt comes from, there's a set of conditions and trade-offs you make. You write things in a discrete and deterministic way. Under these circumstances, follow this code path, under this circumstance, follow this other one. In a world where there's LLMs and kind of the models themselves are improving, I think it's entirely possible that the way that code is written is you say, “Here's what I'm solving for. Under these kinds of conditions, here's what I want to occur. Go write the code that drives this outcome.” And maybe with the models such as they are today can get it done in sort of a spaghetti code written fashion. But it kind of works even though it's some kind of Rube Goldberg machine underneath the hood. But as these models get much smarter. You might write your code base in such a way where you say, “Every year, rewrite the underlying code, but here's the outcome I can drive.” And today you accomplish my outcome 90% of the time, 95, 98, 99, 100. And do you just have kind of self-healing and writing code all the way through? And this notion of underlying code does go away because we're writing things in this different manner. Obviously there's real conditions in which that won't occur. If you're writing code that needs to have four nines of accuracy and uptime, that's probably not the methods you're using. But if you're a growth engineering team, that's probably what you're doing today if you're kind of on the leading edge of this stuff. And so, I find this stuff very fascinating. When I think about the deeper implications, I think that if you are completing a small amount of cognitive work… Let's say you just are an expense app. The spend has occurred, it needs to go get the… Write it down somewhere and get someone's approval. And that's all the knowledge work that you're doing. That's very few tokens in order to accomplish that, both to create the infrastructure in order to facilitate it, that probably evaporates. I think anyone can probably custom write that kind of app. Whereas if you're doing much deeper kind of work, such to underwrite a company, provide financing, automate areas of accounting, I think the fitness function for companies becomes can you actually do things in such a way where even if you could spend tokens on it, it would take more tokens to create the thing or do that work than the system maybe that you've built to drive that outcome. I just think the rules of what it means to be a software company are changing. I think network effects and what you're building is more important than ever. If you think about the classic set of moats that are there, I think that this question of where are their moats in a world where… I like Dario’s way of putting this, if you have a country of geniuses living somewhere and they're writing code and they're incentivized to compete with you, too. If you're not really following what are the classic four moats and building towards that I think life gets a lot harder. John Collison (00:21:57): Yes. Do you guys have a house view on the new competitive equilibrium with a lot of AI engineering really working? Alex Rampell (00:22:08): I think there are a couple things. I think Marc talked about this a little while ago, but what is an EPD team? Engineering product development team. So you'll normally have one product manager, maybe you have five to eight engineers and one designer, and now everybody has Cursor and Claude Code. So the designer is like, “I don't need any of these bozos.” The product manager says, “I don't need any of those bozos.” And each of the engineers are like, “I don't need any of these bozos.” John Collison (00:22:34): It’s like the start of The Dark Knight. Alex Rampell (00:22:35): Yes. And they're all right. It really is… Exactly. And they're all right. It's like they're all wearing the Joker mask. Or the Joker mask is Claude Code or Cursor. But the problem is because I was talking to one of my CEOs, this is a pretty scaled company, lots of revenue. And they use all these tools, they're not more efficient. And he is like, “Why aren't we more efficient?” And it's two things. Number one, it's a real company. They have real customers. They can't just push things and hope for the best. But it's like actually you have an HR problem in that if you're building from scratch, granted you have nothing, you have no tech debt, you don't really have to worry about customers, you don't have any, but you wouldn't have an eight-person EPD team. You would probably just have each person… We have eight different product managers/engineers/whatever. Each one is a pod unto themselves. So that's one thing. I totally agree on the data moats, where that has become more important. I'll tell you a story that you might like. I met this company vLex. It's a 25-year-old company. This guy Alex bought up every legal record in Spain, probably going back to 1492. Buys the Ferdinand and Isabella… Here's the document, I'm going to take a picture of that, I'll sell it to every law firm. And he built, like a $20 million a year SaaS business, bootstrapped for 25 years. And then it went to like a hundred million in one year. Now why is that? Because he used to sell this document or he used to sell a subscription to Kirkland and Ellis and Latham and Watkins and all these big law firms. And, a paralegal would take that, they would turn it into a document, they'd charge the client $10,000 and ChatGPT can't do that. Gemini can't do that. But you know who can do that, is vLex. Another good example of this, of who has proprietary data? A lot of times the data is free. This is the really cool thing. Or it's sitting, I wouldn't call your data free, but it's not like for-sale data sets. Do you know domaintools.com? This is my favorite business. So DomainTools runs a cron job every day on every single internet website. They do a WHOIS lookup every single day. John Collison (00:24:46): And they build a historical record of that which no one has. Alex Rampell (00:24:48): So if you want to see who owns stripe.com in 1999, well it was free in 1999. If you invented the time machine, go run that WHOIS query in your terminal. But you can't do that. So you have to pay them. But all that data is free, or FlightAware with ADS-B data. So you have a lot of these weird businesses and of course this is not a new idea like FactSet, Bloomberg…You have aggregators of data, but that becomes so much more valuable. Because your 10,000 geniuses cannot do that. Eric Glyman (00:25:16): 100%. And you always experience this if you hire someone extraordinarily talented, top of the class at MIT and you say, “Alright, join the engineering team and go ship the code.” And they ship something kind of crazy on the first day and it's sort of slow. And it's like, you can have someone who is intellectually an absolute giant, but learning how a company does things the way it does, learning the procedures and nuances of an organization takes time. It's part of what makes working with interns or junior engineers fun. I think their learning curve is obviously immensely steep. And I think the speed at which, with sufficient access to the data and the procedures of a company, they're going to get there very, very fast. But these moats are real, you know? Alex Rampell (00:26:04): Well, the other moat I would argue is the dark mattered moat. Eric Glyman (00:26:07): Yes. Alex Rampell (00:26:08): And what I mean is the Milky Way? Nobody could figure out why the mass is the mass because it's like all the observed stars and planets and everything else. No, actually the vast majority of the matter, or energy, because they're the same thing, is dark matter, dark energy. And what does that mean? Nobody the hell knows. But it's just like, we don't know it. And for products, it's like you built, if I go tell Claude, “Go clone Ramp.” Because this is the SaaSpocalypse that's happening right now. It's like, oh of course. Well I just went to the website and now I have a website that looks like Ramp. No, no, no. There are like 9 million edge cases. The tech debt sounds bad because it's a pejorative, debt = bad. But actually it's good because what you've done is you've uncovered every single problem that can go wrong. The fact that… I mean a great example, remember when the power went out in San Francisco a month and a half ago? So we have this amazing thing called Waymo. Waymo had not figured out this corner case of what if the power goes out? John Collison (00:27:02): It was a thundering herd problem with the customer, or the human overrides. Alex Rampell (00:27:05): But they had no idea. And it's actually great that happened. You need these problems to happen. Eric Glyman (00:27:11): For sure. Alex Rampell (00:27:11): And just because of my background, I used to write shareware, this try-before-you-buy software. Shareware was a big thing. It's a blast from the past. So there's a website that's part of CNET— Eric Glyman (00:27:21) That might come back, you know? Alex Rampell (00:27:22) Well, it's freemium, but this is where I'm going with this story and you'll like this. Download.com was the preeminent site for downloading shareware. CNET was one of the most popular properties in 1999, 2000. So all of the top downloadable software products were there— John Collison (00:27:38): Download.com sounds like a company that had a Super Bowl ad. Alex Rampell (00:27:40): They would've, I bet they did. Eric Glyman (00:27:41) They probably had two. Alex Rampell (00:27:43) I'd be shocked. They probably had five. Between Pets.com and something else. So Download.com had all the popular products and then this site called Elance shows up and Elance is now called Upwork. This connected you with work that you would want done by very smart people, basically in the developing world. So I want a software product built. Here's everybody in Romania and Russia and India. I want translation, I want graphics. So what ended up happening is people would look at the Download.com top list because before it was a very cottage industry of who wrote shareware and it was very profitable. Like ID software shareware company, McAfee shareware company. Actually, Cybersource started off processing payments for shareware companies. That's how they got McAfee. There’s a very interesting history to this we talk about some other time. But basically what happened is people found Elance like, “I could pay anybody $500 to clone anything on this list. Everything on this list makes tens of millions of dollars a year. Let's go.” And the cloning never worked. It functionally worked because if I say, “I'm going to clone Eric.” I might not know that you have a pancreas. I'm sure you do. I might not know that you have two kidneys. So the problem is that cloning just goes skin deep and that's the embedded advantage of these companies. John Collison (00:28:59): Do you then think the SaaSapocalypse is kind of irrational? Alex Rampell (00:29:02): I think it depends. I think some of it is very rational. Because if I have a feature that became a company, and I know this sounds like a very negative thing to say, but I want to get paged if my server goes down. It's a very logical reason to build a company called PagerDuty. That now has a lot of stuff around it. But I might just say, “Hey, whenever my servers… “There are corner cases, there is the proverbial power outage in San Francisco, do something differently. That's very, very different from NetSuite, which is, I have a saying that I like, “the best companies have hostages, not customers,” at least in enterprise software. Not for you, because you actually have INPS. But they're much, much harder to go rip that out. And a lot of it is like the “Goldilocks zone” that you operate in. If you're too expensive, of course I'm going to try to rip that thing out. If it's so cheap then I forgot nobody even used it. So you have to be in this Goldilocks zone, you have to have enough complexity and ideally the front end is different than the backend. So, Workday I think is… Nobody's going to get rid of Workday. And I actually credit David Ricardo with this. Comparative advantage. Sure, you could grow your own food, you could plumb your own plumbing, but you're not going to do that. John CollisonJohn Colllison (00:30:18): And somebody could do your own HR system. Eric Glyman (00:30:21): The one maybe pitch for Stripe and others that I would say here is, I do think that that is right. And there is a lot of complexity and local tax law for payments and things that make Workday an extraordinary business. There was this overarching macro question of how does work get done? If you believe that, work can get done through tokens and models and presumably it doesn't go through payroll, probably goes through a credit card or check to these types of companies. And so if the share of, it's almost this sort of simple math. If you X-rayed the P&L of most companies, the majority of it classically, at least for asset-light firms, is payroll. You're paying for people to do things. And SaaS is maybe a small percentage of a company's income or a company's cost base. Does that share suddenly grow to high single digits, low double digits, significant double digits? And does the share actually move where the payroll economy itself, even though maybe it grows, becomes less relevant? I think this is the really funny part of even as this has been going on, what do I know as a private company other than seeing our own payment data? But you start to see these companies beating their earnings in a way they never have before where the terminal value perhaps is falling out. But they're saying, “Shareholders, we’re reaccelerating.” We haven't seen this since 2021. We're going faster and you're going to have multiple progressive quarters of this actually occurring for certain types of businesses. And so it's a really interesting time to… I very violently agree with your view, it depends. It depends, but it's doing really well. Alex Rampell (00:32:15) That's my brilliant comment. It depends. John Collison (00:32:17): You mentioned… Very Howard Marks of you. As you're hearing from Eric, Ramp has become the default way a lot of American companies manage spend. Stablecoins allowed that functionality to work in many countries all at once. With Ramp’s stablecoin-backed corporate cards, businesses can fund a balance with stablecoins, issue cards against those balances instantly and allow employees to spend anywhere cards are accepted without the business having to think about stablecoins all the time. Same card experience, same controls, just a much more global set of rails underneath. This is one of the many practical ways we're seeing businesses on Stripe use stablecoins by launching card programs in many more countries and doing so in much less time than it would've taken otherwise. If you're thinking about using stablecoins to expand, Stripe can help. You mentioned your spend data. What does the spend data that Ramp sees tell us about the economy? Eric Glyman (00:33:14): I think it is stronger than many people understand in lots of ways. I mean first, I'll go back to one of the things that perplexed our team for a long time and our economists on the team saw this data even as recently as last year. The Census Bureau would do these periodic surveys where they'd go out and ask, “How much is your business using AI to produce goods or services?” A very refined economic way of wording the questions. And they would come back with these pronouncements saying a single digit percent of businesses in the US have adopted AI. And we looked at our data and we support over 55,000 businesses. We lean a little bit towards tech, but not heavily. It kind of resembles the distribution of businesses you would see in the States. And well the majority of businesses have used AI. You look at businesses, whether they're paying— John Collison (00:34:16): As in they subscribe to ChatGPT or Anthropic or something like that. Eric Glyman (00:34:19): Exactly. Or maybe a business that is a true agentic, a Cognition or a Cursor, something like that where there’s this kind of vertical application. And so one, there is this disconnect between the use of tools if you look at how quickly businesses are adopting and responding to these new tools versus what maybe people report on. Next, growth. I think it's been clear over the last few quarters that the US itself is reaccelerating, GDP growth has gone from maybe the one to 2% area to four to five. And you could argue how much of this is a little artificial with subsidies, but it's been pretty significant. Alex Rampell (00:34:59): But subsidized by what? Eric Glyman (00:35:00): Some of the Big Beautiful Bill as well as some of the tariffs and where that's been reallocated. I think some people, I would argue on the whole, maybe unfairly said this. I think that there's more durable growth inside of the businesses, but I would say overall business health is much stronger. And I think that the really interesting thing, and again some of this is specific to the data that we see, but I think that businesses are generally getting more and more savvy about finding tools that help them be more efficient. And I think what skews our data is maybe the savings we drive for people. Seems the way of explaining it is people know that Ben Franklin would say this phrase “a penny saved is a penny earned” and this awesome aphorism, but the average American business has an 8% profit margin. And so mathematically speaking, a penny saved is equivalent to 12 pennies of revenue earned. And so if you save businesses a lot, you end up with these outcomes of the average Ramp bases materially outgrowing the regular US average. And we can clearly see this and demonstrate this for our own set of customers. I suspect these types of things are occurring at businesses adopting these new sets of technologies, I would argue probably faster than what the US is, maybe the classic sources are seeing. (00:36:19): So I think it's much healthier. John Collison (00:36:25): When a business saves money on Ramp, what happens? The CFO comes in and says, “Oh my God, we're spending—” Alex Rampell (00:36:33) Confetti. John Collison (00:36:35) “Way too much money on confetti. We don't need this much confetti.” Eric Glyman (00:36:37): Who is buying the confetti? John Collison (00:36:39): “We have huge stockpiles that we don't need.” What happens when a business saves 5%? What are they actually cutting? Eric Glyman (00:36:44): Yeah. So there's two pieces of it primarily. One is these hard-dollar cost savings and then some of this is time, and I'll start with the time because it’s the squishy one, but I think that it's in some cases actually much more important. John Collison (00:36:57): Oh sure. They save time on their expense reconciliation. That makes sense. So they're no longer going through line by line and therefore there's one person who is freed up to go do something else. Eric Glyman (00:37:06): Yeah, and I think one of the classic biases that people forget is people chronically undervalue their own time. As a principle of business, everyone has an hourly rate. John Collison (00:37:21): Within a business, human time is incredibly expensive. I think the lean companies got this right and eliminated the bottlenecks there. Okay, that's one form. What else? Eric Glyman (00:37:28): Next, when you start to have these fine-tuned controls. This part has been I think probably the biggest lion's share of this. Let's go back to one of the earlier conversations of why do people use checks, this horrible system and purchase orders. Well, one of the advantages of checks is unless you mail it to someone and you sign it, no money can leave your company. And what every person knows, who's ever had a credit card and gone to a gym once and had a good New Year's resolution. But you go a couple times and you're like, “Goddammit, this gym is charging me.” John Collison (00:38:02): The difficulty of sending a check is a feature, not a bug. Eric Glyman (00:38:04): Yeah, exactly. But it's part of what Ramp was the first to build. John Collison (00:38:09): One-time use cards. Eric Glyman (00:38:10): Single-use cards but also more than that, merchant blocking. So you can, whether it's on one card or 10,000 cards at once, build in a kill switch to say, “Okay, we've signed this new deal with this merchant. We are only on Uber, we are no longer taking Lyfts. And anytime someone goes and tries to go on merchant A or B, you can do this.” Or you sign a new contract and you say, I'm going to spend $10,000 only with Salesforce and on the 10,001th dollar they try to charge you, it declines.” And what gets to happen, you get to have a conversation with their sales team who really wants to make their budget. And if you look at this mathematically, for most companies that come over a low end, maybe a very hygienic company that is giving out fewer cards and the old world could durably cut their expenses about 2% a year by doing this. Some of these very laissez-faire businesses are saving just 10% just through these things. Next, you start ending up with these more fine-tuned kind of controls where you can say, “Under these circumstances I want to go and have kind of charges occur.” Maybe you have an engineer stay till 8:00 PM at night, you can go and buy a meal. But if you take an Uber on a Saturday, that should turn off. And so you have the cards if it's like an Uber on a Saturday auto-decline. But you can text and say, “Actually it's for work.” You send back a yes, it turns on. And so it's all these little tiny paper cuts that actually start to go into run. Next, it's vendor data. One of the unique assets of Ramp is anytime you spend money, you upload a receipt, maybe you upload an invoice or an MSA. This takes us back to the Paribus days. We know across hundreds of millions of purchases every year, not just that you spent money at a software vendor, but what did you spend per seat? And so if you're a customer on Ramp and you're about to go and pay this large bill on a random SaaS vendor, we can show you in real time before you send the funds, you are paying 20% more than the rest of the market. Here's kind of the cost curve of what others are paying. And actually by going and empowering your procurement team— John Collison (00:40:16): Do you have enough data to do that? Because my AWS bill is not like your AWS bill. And so, don’t you need to know how many instances we're running to know if this is a good deal or not? Eric Glyman (00:40:27): You can, but you can still get down to the level of is there a bulk discount or not? And start to know if there is a negotiated aspect. There's other types of things where I'd argue maybe a lot of classic software-as-a-service ends up in this way. It's like your pricing is really dependent on did you sign that deal on January 1st or on December 31st when the sales team really needs to hit the quota? And you can actually see, down to the seat level, you're paying $30 per seat. John Collison (00:40:55): It's a great time to be signing a Salesforce contract. Eric Glyman (00:40:58): Exactly. And so you can actually get down to the seat level and say, okay, “You're about to auto renew. The market prices actually move for this set of services.” And so it can be very, very useful to procurement teams to know where they compare with the market. Alex Rampell (00:41:13): That was actually my question for you, which is, so if you remember Groupon. The much beleaguered Groupon, but Groupon started off as a site called The Point.com/groupon. Originally it was like, “Hey, I don't like the fact that Starbucks uses paper cups. If I get 10,000 other people that donate a dollar, we'll fly a plane in front of Howard Schultz’s house,” which also emits carbon. A bad example, but it's a collective action thing. Alex Rampell (00:41:39): Then because I met Andrew Mason and Brad Kewell when they were first starting this business. It was like eight people. It was The Point. And downstairs there was a pizza restaurant or something like, “Oh, if we get like 50 people to agree to buy pizza, maybe they'll give us a lower price.” John Collison (00:41:54): The cause became discounts. Alex Rampell (00:41:55): Yes. But then the thing is, Groupon wasn't known for this “it has to tip” because they always had the demand. So they never had to worry about it because before it's like you've got supply, you've got demand. So I guess my question for you is can you be the arbiter of pricing? Can you aggregate the demand? In the same way that Costco, who shops at Costco? Every small restaurant shops at Costco. And Costco uses that collective bargaining power, if you will, to say, “Hey, Coca-Cola give us a very, very low price.” They take very, very little of that because right now I'm using Ramp to buy stuff. But I would imagine that if you could say, Hey, “I have $100 billion dollars,” I didn't know it was that high. That's amazing. “I have a hundred billion of spend. I can hopefully direct it this way or that way. Please give me a 20% discount.” Can you do that? Or is that further in the funnel of the purchase process? Eric Glyman (00:42:45): There is this large swath of businesses that I've been fascinated by called group purchasing organizations. A lot of these came out of the healthcare world where it's a very small set of— John Collison (00:42:59) APMs. Eric Glyman (00:43:00): Yeah, exactly. But if you can go and aggregate demand, you could say, okay, for these types of purchases, you're going to offer this procedure at this account for this type of equipment, you're going to give this level bulk discount. And you've gone and you've done that. And I think these are very popular now in the private equity world. Even when I look at Ramp data today, there are dozens of, more and more every year, of merchants where we were sending billions of dollars. It is truly, it is the client's money. They are going where they're going. But we have a sense of actually, okay, where is this actually going? And can you go and say across the Ramp buyer base over the next 12 months, this is how many dollars we'll go towards you. Can we negotiate a discount? The other way, which maybe starts to… Sometimes these businesses veer closer to advertising. But where it gets really interesting is we see the fastest-growing businesses. What are the businesses that people are getting really excited and are adopting really quickly? And we might have a signal of these are actually good businesses and good tools, and actually most businesses should move towards that. Could you go and actually start to say, “Hey, your renewal is coming up in 90 days. Have you considered this other business who has provided a 20% complimentary welcome lower price to you?” And so there's multiple forms that can take place. But a short version of it is, I think one, it's yes, I think you can offer a bulk discount. But two, you end up almost getting closer to this other theme of, can you start to go and show businesses that directing their next marginal dollar will lead to this outcome? Alex Rampell (00:44:41): Well, it feels like there's even a third thing, which is I would call it merchant-specific balance. So imagine that it's December 31st, I'm buying something at Whole Foods and then I see an offer, not to donate a dollar to whatever charity they're pushing, but it's like, why don't you commit $2,000 of spend for 2026 for $1,800? And the nice thing there is that they lock in that spend for me. They actually collect it. I mean, I know there's a stupid law and all this complicated stuff, but the key thing is it's almost a risk management and a loyalty play for them at once. Because the problem is that they don't know how much celery to buy. They don't know how many… So it kind of goes back to the AR/AP thing that we were talking about earlier. Eric Glyman (00:45:26): You nailed it. Yeah. Alex Rampell (00:45:27): Because the other thing is not just saying, “Hey, I'm going to group bargain on behalf of all the different customers that I work with.” But it's an ancillary thing, which is you might want to just pre-commit your spend to a particular vendor. And that vendor would love to have that spend pre-commited, even if they're Amazon and their cost of capital is very low. Eric Glyman (00:45:46): For sure. Alex Rampell (00:45:46): Because they know they don't have to worry when they're planning their budget for the next year that you're going to churn in month nine. And that seems like the closest that you can get to that is gift cards, strangely enough. Which I'm sure, you know well from your— John Collison (00:45:59): It’s gift cards for business. Alex Rampell (00:46:00): Yeah, because it's like you go to Costco, this is actually a big business at Costco. You go to Costco, they sell gift cards. We were just talking about this. So they sell gift cards. You can buy a hundred dollars of Starbucks gift cards for 80 bucks. Is Starbucks dumb? Why are they, if they're worth a hundred dollars? No, because they basically have in the ecosystem money that is going to be spent at Starbucks. And yeah, there's breakage and other stuff, but it's actually, it's quite a valuable value proposition for the receiving merchant because they know that you're going to spend your money with them. John Collison (00:46:28): But I want to go back to your previous idea where McDonald's, every five years or whatever, does a big bake-off between Coke and Pepsi. And they always renew Coke and they have a long time, or maybe a movie theater chain is a better example. John Collison (00:46:39): All the big chains, they don't serve Coke and Pepsi, they only serve one and they do a big bake-off between the brands every five years. And you have lots of small businesses that are buying from Coke or buying from Pepsi. And so it feels like you could just do a bake-off between them saying Ramp is going to have a preferred vendor and you can obviously use a Ramp card on either, it'll work, but we have preferred rates with Pepsi. Is that a thing Ramp should do? Eric Glyman (00:47:05): It's a really interesting question. The short answer is, I think over the long duration of time, I'm kind of a bit of a crazy person. We should try everything is my actual answer. Alex Rampell (00:47:16): Claude Code. Eric Glyman (00:47:17): Yeah, Claude Code, let's go. Let's do it. Alex Rampell (00:47:18): Pepsi. Make money from Pepsi. Eric Glyman (00:47:19): Go and negotiate the cost of a phone call. A negotiation has never been lower, but there's this almost philosophical question of, alright, where is the differentiation? What makes Ramp different? John Collison (00:47:32): But isn't that increasingly the scale? Eric Glyman (00:47:34): It is. And I think that you're right in that at the very beginning of the company, the answer was very easy of like, look, our cost of capital is nowhere close to a bank's. The interchange that we could make is nowhere close to it. We have all the disadvantages of scale. And the only thing that we could do to compete with these people was everything was slow. At the bank that I worked at before, it was hard to ship things. We need to move fast, we need to have this emphasis around velocity to ship product and just kind of blitzkrieg faster than maybe others could respond. What it's evolved into and I think is today probably the largest point of differentiation at the meta level between Ramp and maybe the financial service providers that we compete with is they sell money and we sell time. They'll sell you a loan at a lower cost of capital. Rewards at wherever they set it. We will sell your expenses. Done. John Collison (00:48:40): And so are you naturally skeptical of this idea because it’s selling money rather than selling time? Eric Glyman (00:48:44): I wouldn't say I'm naturally skeptical. I would say that— John Collison (00:48:47): It's okay. We're not precious. We have lots more ideas. Eric Glyman (00:48:49): No, no, no, it's good. There is this question of, I think back to our roots. I don't know. How do you build a product that is 10 times better than other folks? And I think when you get really large, actually just a line drive is good and a 2x or a 3x is better kind of thing is actually good. But how do you find these sets of things that your product offering is so different from what you can find elsewhere? And I think that we can conceivably, and I know this, you can negotiate with the large logistics companies. A deal with a FedEx, that would be better than what most companies are paying. And I think that that's interesting. But you have all the sublevels of how do you get people to know about the offer to sign into the offer to deal with all these sub things. Or you could just go and spend that next marginal hour to go and say, let's just automate all of accounting for these customers. Let's go and start doing financial work for these customers. No financial institution is able to compete on that kind of vector. And so I would say it, in the fullness of time, we want to do both. I think that you want to save people the maximum amount of time, the maximum amount of money that you can. But I think part of what makes us so different in this kind of world that we operate in is we have this obsession of sources of drag, of the things that slow down purchases that lead you to overspend versus other companies. John Collison (00:50:13): But just to push on that. I feel like the differentiation for companies often has to change as time goes on because they start in one competitive equilibrium and then as time goes on, they're in another competitive equilibrium because it's dynamic. And it feels to me that Ramp got its start with very fast product velocity and having this great product experience. And as you grow up, you can just build scale into the product and scale-derived product advantage. It's not just like we're big, but Costco, the advantage comes from the scale and they really pass it on to the customer. And it feels like there could be a second stage to this rocket where you get going with faster product velocity, but then there's actually a pretty different set of product differentiations as you scale up. Eric Glyman (00:51:03): I think it's true. I think it's well said. And there's this almost question of, in every line of business that we're building, where are we in the S-curve? How far is this a product that is serving these tinkerers, early adopters? Are we in the early majority? Are we late where we need to shift the business to harvesting contribution optimized price, not quantity in it or towards the end? And the thing which is so shocking, and I think maybe as part of why I love this business, and I think even too, I think about Stripe and many of the great businesses and payments that have been built. I believe today, Ramp powers more than 2% of all corporate and small business card transactions in the United States. Which is amazing for a business that, the product, you couldn't even sign up for six years ago. And yet, that's a really fancy way of saying 98% of spend is not on us. Let's say we do it again. We grew faster last year than we did the year before. I feel very good about the way this year is starting off and maybe it's closer to four. 96% is still big. 92% is still big. It is so large. And by the way, there's more ways to buy things than just cards. You think about bill payments. And so I think that is an aspect of, for most people, A, there's so much drudgery around, I think people are doing artisanal expense reports. It's fun to be like a hipster and spend an hour making coffee, but it's a little crazy that— John Collison (00:52:44): It's the Blue Bottle of expense resorts. Eric Glyman (00:52:46): But unfortunately you're in Concur and you have this spinning wheel. John Collison (00:52:50): It's a pour-over expense report. Eric Glyman (00:52:51): We love it that way. John Collison (00:52:53): Single origin. Eric Glyman (00:52:54): You try, it's the experience. Alex Rampell (00:52:57): You're the Nespresso. Much more efficient. Eric Glyman (00:52:59): That's right. But what I would say is, this aspect of time most people have not experienced is this thing is just a fact of life, or building a business that's been hard doesn't need to be hard. Doing your books doesn't need to be hard. And so I still think in some sense in where we are on the S-curves of our business, I lean that way. But you're totally right when you're at this level where in the not too distant future, I mean you're there processing trillions of dollars per year in economic activity and we aspire to be there in the not too distant future. John Collison (00:53:38): Sounds like you'll be there pretty soon. Eric Glyman (00:53:40): We're working our hardest. Alex Rampell (00:53:42): Exponential growth is a powerful thing. Eric Glyman (00:53:43): It's definitely given me good things to think about and work towards. Alex Rampell (00:53:47): So I was thinking about when we met, when you were running Paribus. And it kind of feels like one of the first or second or third order effects of AI is the marginal cost of arguing has gone down to zero. Eric Glyman (00:53:59): Yes. Alex Rampell (00:54:00): I'm serious. My wife got into an argument with some company and it's like she used ChatGPT to argue with them. They used it to argue back with her and it's like, I just saw the future. This is incredible. And we won, which is great. John Collison (00:54:13): Your agent will talk to my agent. Alex Rampell (00:54:14): But you think about this from a chargeback where it's like, “Hey, this price went down.” I mean, this is how I remember. This is such a good idea. It's like the price went down. You have these breakage models that the card networks had and Best Buy has to write you a check or Visa has to write you a check because that TV fell by 20%. But nobody does that. And now everybody's going to do that. Eric Glyman (00:54:35): 100%. Alex Rampell (00:54:36): Or it's like you do a chargeback for $5, it's just not worth it. I thought it was Pepsi that I was buying at McDonald's, it was Coke. Chargeback, right? Nobody's going to dispute that because the cost is too high. But now the cost goes to zero. Alex Rampell (00:54:51): What do you think, I mean it's hard to picture five years from now what the actual full effects of this are, but if you kind of think about that as the macro abstraction the marginal cost of arguing goes to zero. What changes? Eric Glyman (00:55:04): I think to be really explicit, I think what's happening is the marginal cost of time, of knowledge. Alex Rampell (00:55:09): Yes. That is a much better abstraction. Eric Glyman (00:55:11): It’s what's going down so rapidly. And I think about our customer base. Most of our customers don't have a single software engineer, let alone a software engineer for their finance team. And if what we are very good at doing is selling, functionally, sets of work, maybe it's embedded in a financial operating platform, but expenses done accounting, some type of knowledge work done, and you can deliver that. That is immense, high-leverage value for these customers. Let's say it costs $5 before they didn't do it, now they can get $5 of value, but maybe the cost of it's a software type cost, maybe it's pennies of tokens to actually go and do that. That is a great business to be in because it's very high customer value. We can capture just a small amount of that and build this business. And when you go back to kind of the original insight of Ramp, we entered into this industry where it was very profitable, but not only was it misaligned, but people were fighting over basis points. Every last dollar that went into rewards could have meant tens or hundreds of millions of dollars in profit for the business for them. But if you think about a customer, let's say that in order to make one extra basis point as a business, you would try to incent them to spend a hundred more dollars for that customer. And let's say they buy something, that gym membership they didn't need, or that subscription keeps going, they have lost a hundred dollars, it's gone out the door. Maybe they go to the gym, maybe they don't. But that is out of their bank account. And if you just try to say, “I'm going to have a better rewards program…” Sure, maybe you can get that customer a dollar or a $1.10 back or some amount. That pales in comparison to just helping them just not spend $100, to cancel the subscription. The economic leverage of that activity is much higher. John Collison (00:57:08): You sold your last business Paribus to Capital One. Capital One is one of the biggest founder-run financial firms that people in Silicon Valley don't talk about. What should we all be… And has been extraordinarily successful. What should we all be learning from Capital One and their success? Actually I should say, how did they? What product really broke out for them? Just what is Capital One success? Eric Glyman (00:57:34): I think there's a lot that makes them amazing as a company. Both the founders are excellent. Rich Fairbank, Nigel Morris. I think it's worth people reading up on their stories. John Collison (00:57:46): It was founded in the ‘90s, is that right? Eric Glyman (00:57:48): So, not quite. From a legal standpoint— John Collison (00:57:53): I'm very wooly on my Capital One history. Eric Glyman (00:57:54): I think that legally the incorporation in some sense for Capital One Financial… I think it was in 1994, but the actual start traces back to the eighties. At the time Rich and Nigel had met, they were consultants and they had this insight that the business of credit cards was… While it was lucrative, was not serving most of the country. The way you could kind of think about credit cards back then. You know Diners Club, maybe others have heard of it. It was a way for rich business people to get together and have lunch and they put the card down and the restaurant would pick up the tab and they could go and pay the restaurant back later. And they had kind of navigated that. And the simplification is, if you had a very high credit score, you could get one of these cards with the benefits that it had. And if you didn't have a credit score that met that, you could have a debit card. And that was basically it. It was a very linear cutoff. And what Rich and Nigel, the insight that they had had is there must be some curve. We should be able to test this. Maybe we give people cards who have above an 800 credit score or something like that. But what about 790? There might be people there that can go and pay for this. And the way we could go and take on the cost of this, maybe we charge them a somewhat higher interest rate until they prove their efficacy. If 790 works go to 780. John Collison (00:59:28): So it was kind of the BNPL of its day. There is a population who are for whatever reason, just below the threshold where banks are giving them good access to credit where you can actually very profitably lend to them. Eric Glyman (00:59:38): This is right. And so they, in the ‘80s, were functionally pitching all these different banks to say, “We should go on this exploration. (00:59:50): We'll even run this for you. Let us go and run this.” And they went door to door to door to door to door— John Collison (00:59:55) And the banks didn't buy it. Eric Glyman (00:59:56) They didn't buy it. And then finally there was a bank in Virginia, Signet Bank, that said, “Fine, we'll let you run it. You can come join. We'll give you this group and some resources to go build this.” So they built this as this division inside of it. And it started to work as this was going on, the computer revolution was taking off and it was sort of an unfortunate acronym, but they called it IBS. Alex Rampell (01:00:24): Irritable something something. Eric Glyman (01:00:25): No, it's Information Based Strategy. And they said, “We could use different pockets of data and run these.” It was before there was big data, there was this kind of data of we could go and test of maybe this person has a balance of $8,000 at this bank. We could send them an offer at this interest rate or this kind of, you don't need to pay back interest for six months or 12 months. And they could start to go and see the mathematical return against this. And this division started really working and it got so profitable, it became a problem for the business and they convinced them to spin it out. And so in 1994, that is the founding as people know Capital One today, but it actually was almost a decade in building to actually go and do this. I think that there was a lot that they got really right. One, I think that they took a much more of a first-principles view of the business, whereas others said, “This is a profitable product. I'm going to do it like the other person and use scale and distribution advantages.” They said, “Well, let's think about the product nature itself.” There's different, everyone's making money on interchange. Maybe there's lending, could work and you could kind of have different strategies for different types of populations. They did this so large where at one point they were the largest customer of the US Postal Service. They would send out so many offers I think until Amazon took them over. There was a period of time that they did this. So it's incredibly experimental. They carved the path and showed how you go from credit facilities for fintech founders eventually, maybe you become a bank or buy a bank and carve that path. So there's some tactical lessons. I also think they've done a great job of building a great and durable brand. One of the things that Capital One has done very, very well, I think, is focused on what is the consistent visual message? What is the aesthetic and how do you stand out in this busy and different world? And so there's a lot of pieces to what's made that company work. John Collison (01:02:23): And they've also remained focused, which a lot of banks haven't. Eric Glyman (01:02:27): Well, I think that is a rewrite of history. They were doing cell-phone financing, healthcare financing. They were a part of this thing. John Collison (01:02:39): They've come back to focus after wandering in the woods. Eric Glyman (01:02:41): They had some JV, it was like America One, I think it was called, to compete with Amazon. They were actually the most experimental business ever in a lot of ways. I think it was Hibernia Bank in Louisiana. And this was after Hurricane Katrina. I think it was maybe during it or just after they were able to buy. And it was an existential question for them. And I think that many people worried about, you knew this well too from the BNPL businesses, where if you're a lending based business, and it's fine when interest rates are low, but if there's a crisis and people don't want to lend to you, it can just break your business. And so they had these kind of scares and they said, we need a stable cost base. Eventually they bought a bank, which was in a lot of ways very good. They had kind of the deposits as this durable, stable, low cost of… Consistent capital base. But the flip side of buying it was they had to reconcile their culture of crazy experimentation, of trying everything to, we're a regulated bank now. We got to be bank people. And it's more than just an attitude thing. If you are a nationally chartered bank— John Collison (01:03:55): Yeah, it's real strictures. Yeah. Eric Glyman (01:03:59): Look, it's to the level of let's say the bank fails on Monday night. There is personnel— John Collison (01:04:08): These guys in windbreakers in your office next day. Eric Glyman (01:04:10): And they've probably been working there for some time before. And so I think there was a change in some sense. There is experimentation, I think, within certain constraints would be how I would describe the Capital One post-buying a bank versus before would be my read of it. But when you look at them in the ‘90s and 2000s, it was them and name the high flying tech company. They were right up there in terms of share price growth. And they started re-achieving it, I think in the late 2010s. But it's a fascinating company. Alex Rampell (01:04:48): I mean, I think the talent pool. So at Affirm, our first really good risk person, but this is true for every fintech company, it's just like, actually this is kind of cool. John Collison (01:04:57): Billy Alvarado, our first COO, grew up at Capital One. Alex Rampell (01:04:59): I had played the piano and my teacher was taught by somebody who was taught by somebody who's actually a chart. You can look this up. Czerny and Beethoven taught everybody who ever taught anybody. So like Lang Lang or Yuja Wang, any famous pianist today, they can always trace their lineage 100% of the time to Czerny, Carl Czerny, or Beethoven. Eric Glyman (01:05:20): Yes. Alex Rampell (01:05:21): And Capital One is like the Czerny. Eric Glyman (01:05:23): Our Head of Risk, Sri Srinivasan, he's amazing, came from Capital. We had the same boss 10 years apart, actually in some sense. And all the Heads of Risk for all modern fintechs that came from Capital One. Alex Rampell (01:05:39): Well, because it's one of these things where you know that you don't want to just hire for intercept, you want to hire for slope. And this is the problem. You find… Not to pick on Bank of America or Chase or somebody, but it's like, alright, this person clearly knows how to do their job. The bank that they work in is worth a lot of money. But they don't necessarily have, how do I put this delicately, the slope. They won't know what that means because they don't know what slope means. But seriously, the guy that we hired just so he was very, very smart. And that was the key thing about Capital One is that they didn't hire banking people. They just hired smart people. And it became known as the place where smart people went. And actually the fact that companies would poach people from Capital One actually added to the allure. It's like, I want to work at McKinsey because at the end of McKinsey, I'm going to get a better job somewhere else. Capital One actually had, it did have that. And I think part of it is that it's the only founder-led institution. John Collison (01:06:32): Last question, Eric. We're talking about banking here. You have a treasury product. In five years. Where do businesses keep their money? Is it with, I mean statistically mostly you mentioned 2% on Ramp. It's even higher today in traditional banks like a Chaser Bank of America. There's also neobanks, the bank-like entities like Mercury or Revolut or Monzo or things like that. There are companies like Ramp where you started in spend cards, but maybe moving more into treasury. How do you think that shakes out as a market? Eric Glyman (01:07:08): As a macro point, I think there is an incredible amount of money made by institutions who are enjoying the profit pool and sharing very little with their end customers. If you think about the implications of the federal overnight funds rate. John Collison (01:07:26): Yes. Eric Glyman (01:07:27): This is basically saying, “Hey, if you want to go, and—” John Collison (01:07:30): It's insane that there's so little yield sharing in the current market. Eric Glyman (01:07:32): Yeah, it's crazy. I think that the national average for businesses, these are sophisticated entities with personnel. They're supposed to be able to manage and put their funds in some place that's more high yield. I think the national average on checking accounts is 0.07% in the US. John Collison (01:07:50): And so I'm guessing you don't believe that Bank of America and JP Morgan and all these folks will wake up more altruistic one day. And so what is the competitive process by which you think we'll get there? Eric Glyman (01:08:00): I think that new businesses, whether it's they have their own charter or they work with banks too, that this is not a monopoly. Everyone has competitors and it is a market that evolves. That rate will go up, the easier it is for people to, whether it's to create depository institutions, create accounts at these institutions, or create stores of value, maybe even outside of these systems, maybe in a stable currency. And so I think that rate goes up. I think part of what's driven the extremely rapid growth of Ramp Treasury is it is just a vastly better deal for customers. Maybe you keep three months of just walking around money in your checking account, but if you know the funds you're going to receive and what you're paying out, well, we can move funds on the day payroll is coming due into that account and then every other day make sure the funds are earning the highest rate possible. And so I think from a macro perspective, these things tend to go up in terms of the relative yield. I think there's another question of slack in the system. If you have more and more… Money can think. If the dollars in your company have some level of intelligence, it's able to determine when can it be spent under what circumstances? It's increasingly recorded in real time and there's some reasoning around this, some ability to kind of opine on where should the next marginal dollar go? And you have systems that are able to think infinitely about these things. Even at 3:00 AM in the morning when most of your team is asleep. Well, maybe you'll determine I should keep the funds at some level in a 2% or a 4% yielding account. But I think more of those dollars will go in flight, actually to go spend to, if you have a business that makes an 8% profit margin a year, that's a lot higher than what you can earn in the overnight rate. And so in some sense, I think you have the dual effect, John Collison (01:10:08): Smarter capital allocation. Eric Glyman (01:10:09): I think more dollars will be put to work. I agree with Alex's macro point of, if you kind of understand counterparties, you understand more information. I think that one, the cost of financing should go down. And I think more dollars should be in the system. In some sense. It's actually a waste for everyone to have your dollars just sitting in a bank account. Who does that benefit? Alex Rampell (01:10:29): But it goes back to your time point. And it's like the reason why I got mad at Chase a while ago and I still have a Chase account. And why is that? I have a life insurance policy. I don't remember the login for it. It's just too much work. This is a true story. John Collison (01:10:43): Isn't this an issue if you die? Alex Rampell (01:10:44): Yeah. Mean well, but they'll pay my wife. I just don’t know how to log in and change the bank account. So they'll send her a nice letter, I'm sure some flowers. But why? Actually this is a true story. I wrote a check for somebody's bar mitzvah. Eric Glyman (01:10:58): Mazel tov. Alex Rampell (01:10:59): Has not been deposited. Do I want to be the schmuck who has the bounced check? No, I don't. So it's like I have to— John Collison (01:11:06) This kid is keeping you at Chase. Well great to see you. Eric Glyman (01:11:11): You too. Alex Rampell (01:11:10) Eric, thank you. Eric Glyman (01:11:12): Thanks for the Guinness. It was a great time.