Invest Like the Best with Patrick O'Shaughnessy
· Karim Atiyeh
[00:00:00] S1: Yeah, of course. I'd say the most obvious one is what we call internally the policy agents. So most companies have a travel expense management policy. It's generally a document. Sometimes it's well written and clear, and sometimes it's not. But that's essentially a document that you write to drive the behaviors of people in the company and how they manage their expenses. In the old world, people make transactions, and before they make the transactions, sometimes they'll go and check the expense report, sometimes they try to remember it from memory. They'll make a transaction, they'll file an expense report, and some manager will try to make sure that some manager or someone on the finance team will try to make sure that the expense that was made by the employee actually abides by the rules of the expense policy. It's very manual. Generally, the transactions are missing context. So there's a lot of back and forth between the people enforcing the policy and the people who made the transaction. Takes a lot of time. So we've built our policy agents in a way that it has more context about the transaction than most people reviewing those transactions today. So it's integrated with your calendar, it's integrated with your email, it knows your expense policy, et cetera, and more context about the policy than any employee. So it can run 24/7 as transactions come in and apply the logic of the expense policy against these transactions and decide whether something is in policy or not, and do that a lot more efficiently than any human. So you have a 24/7 live enforcement of your policy. And not only that, but as it runs over time, it gets better at advising how to make the policy a little bit clearer or easier to interpret, and your policy becomes better and better over time. Maybe to make that a little bit simpler. Instead of having deterministic codes tell software what transactions are in policy or not, you essentially have this living, breathing text document that can evolve over time that's guiding an agent that has access to tools like your calendar, email, et cetera on how to classify transactions. And that same principle applies in so many different parts of the company. Now the good thing about expense policies is most companies have them.
· Karim Atiyeh
But companies do all sorts of things that sometimes are not written down that can be very easily automated by agents. So for example, when you receive an invoice as a company, what do you do? It's like, well, you do a couple of things. One, you make sure that the invoice is not fraudulent. Maybe you make sure that you're being invoiced for a product that you've actually ordered, a product that you've actually received. You make sure that the price matches what you had negotiated. So there's a lot of steps that actually happen before and after any payment that a company makes. And most of the time they're not very well documented. A lot of work that we're doing right now is because we have so many interesting customers and they're using the product to run their finances. We can infer a lot of these policies through their behavior. And a lot of those policies that we're inferring are driving the next generation of agents that we're building.
· Patrick O'Shaughnessy
[00:00:00] S0: I was with an old friend last week who was in town for, I think Visa had some sort of big conference in New York last week and all the various players from your competitors and people in your industry were there. And he told me that he had no affiliation with you or with me, that everyone there was bitching about Ramp taking all their customers. And I'm curious what you think the most common reasons are for that when you're beating whoever it is. What are the most common attribution reasons when you study why a given customer is picking you over somebody else? Because it seems a little bit slowly, then suddenly thing is happening with Ramp. You and I have talked about this offline and I'm curious why it feels that way to you. I think it relates to the speed of product and everything else, but I want to hear it from you.
· Karim Atiyeh
[00:00:00] S1: Let's go back to the early days and why a lot of people even picked us when we didn't have that much credibility or social proofing. I'd say a lot of it was our obsession over wanting to build consumer grade user experience for a business product. You think about a lot of the business products that were built in the previous generation, they were essentially built for decision makers. So you think about building an HR tool or anything, it's well, who's a decision maker? It's that person on the team. Great. It's we're going to build it for them, we're going to pitch it to them and we're just going to convince them to switch to us. And once they do, we're going to care a lot less about them. And then you end up with these business software that is used at a company that maybe solves the problem of the one decision maker, but makes everyone else at the company very miserable. You solve one person's problem, but you give everyone else at the company just a small paper cut every day. And we wanted to reverse that. I would challenge you to find anyone who enjoys using Concur, for example. There's a lot of business software that was built in that way. No care for the user experience. And when we set out to build Ramp, we wanted the user experience of an Instagram, but applied to business software in it. Design obsession has helped us a lot. And just polishing every single interaction, making sure that we only ask questions that are absolutely necessary, that we can pre-fill any form that can be pre-filled so that you have as little work to do as a user of the product. And over time we got even better at this because we get even more data about how people want to use the product and we can skip even more steps. And that obsession over design really turned into an obsession over minimizing the amount of time people spend in our app.
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: I was going to ask what the process is to make that possible. So someone else listening wants to build a consumer grade app in some other business area, what is the actual practice of doing that over and over and over again? [00:00:00] S1: You keep looking at every interaction that you have with a customer, it could be an email, it could be a form. And then you ask yourself, how can I figure out the answer to that question myself without asking the customer? Or if I'm telling the customer to do X, why can't I do it for them? So for example, I'm sure you've gotten one of those error messages from a product that you've used that will tell you, hey Patrick, you tried to do X, it didn't work. You might want to try one, retrying the payment or the transaction, two, changing your bank account details or something. Well, instead of doing this, we could retry it ourselves, for example. And if we are asking you to change your banking details or to submit a piece of information, instead of just telling you an email, go to our website and submit your information, we could have a form right there that allows you to submit your information in the email. So there's always a way to skip a step and make it a little bit faster. We're essentially always obsessing over that.
· Patrick O'Shaughnessy
[00:00:00] S0: Can you talk about—I feel this is rooted in your personal psychology. I was talking to our friend David before this and he uses the phrase all the time, divinely discontent. He told me the story of the day that you announced the $13 billion valuation round, which of course exciting moment in the company's history, that he was with you and all you were doing was screaming about problems in the product and the team and things not moving fast enough and zero enjoyment on a day that you would have had a good excuse to be a little bit more relaxed and instead just pissed off about something in the product not being good enough. Can you talk about where that comes from for you, how long it's been that way?