Invest Like the Best with Patrick O'Shaughnessy
· 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?
· Karim Atiyeh
[00:00:00] S1: There are probably two reasons for it. One is I forgot the exact quote from Jeff Bezos in one of his letters. I really believe that a lot of the results that you are seeing today at Ramp are due to the efforts that we put in, in solving the problems six months to a year ago. So the current quarter was baked in a couple months ago. So I always find it a little bit weird to celebrate lagging indicators today. And I don't know, I often think that they put at risk some of the very important work that we are trying to do today in solving the problems that we have today. Because people might feel, oh, things are going amazingly well, we don't really have any problems. And that's not true. There are always problems and always ways to make things better, faster, more efficient, et cetera. So just this element of, hey, we're working on such important things and if we don't realize that they're really important, we might mess up the next six months and the next year. So that's part of it. The other one is I feel if things were good and we didn't really have problems, I wouldn't know what to do with myself. What are we doing here? If the job's actually done? And the good thing is the job's never done, we could always push it further, do better. There's always more time that could be shaved off of every single user interaction experience. As I'm talking, I'm visualizing these charts that I'm sure you've seen. Every time I look at them, I get a bit frustrated of amounts spent in the US on healthcare in total or on education. And you see these charts that have been going up every decade for the past couple decades where we spend more and more and more. A lot of people would say that the outcomes are not necessarily, they're probably better, but not as much as you would expect given the spending. If you dig in a little bit deeper and where's all that spending going? It's very obvious that it's just being wasted on administrative BS and things that don't move the needle. It's not being spent on more training for doctors or healthcare providers. It's not being spent on more training for teachers and better educational outcomes. It's being spent on a lot of bureaucracy. And yes, that doesn't move the needle. And I think a lot of that is what we are trying very hard to reduce.