Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: Yeah. [00:00:00] S1: And you're like, okay, conversion is getting really good. We've gotten better at monetization, but conversion can't get better than 100%. There's some kind of upward limit. There's some kind of upward limit to monetization as well. Some percentage of the value that we're driving. Okay, there is no upward limit or the upward limit to how big our TAM is is a lot further because we're still to this day sub 2% of corporate card alone. And it just felt like we were starting to slow down maybe a little bit in our ability to generate leads. And while these two other things in terms of conversion and monetization were going really, really well, there's an upward limit to them. And if we didn't figure out how to re-accelerate our ability to generate leads, we would be in trouble today. That was a year, year and a half ago. And I started obsessing over that problem and I guess I turned to some sense of paranoia. When everyone else around me feels like things are going great, it's like, okay, what is the problem? And for me at a time that was the problem. How do we make that better? And around that time there was maybe an attitude in marketing broadly of we would try things and if they didn't work, we would maybe assume that. I was like, well, those things don't really work for us as opposed to, no, they have to work. We just haven't figured out how to make them work. [00:00:00] S0: What's an example of that?
· Karim Atiyeh
[00:00:00] S1: So let's say we would try to, I don't know, run an ad on a podcast or partner up with a podcast, and it doesn't work. We're like, well, podcasting doesn't work for us. My attitude would be, no, you picked a wrong person to partner with or you picked the wrong format of an ad. Why is the thing broken? It's not that the thing doesn't work. It's you haven't figured out how to make it work. Clearly all these forms of advertising do work, otherwise other good companies wouldn't be doing it. We just need to figure out what works for us and how to make it work for us. That was the lens that we brought to really everything. Direct mail, paid advertising, brand advertising, all the different things in marketing, product marketing, and how we launch products. So I went into it with the attitude of we're going to fix the experimentation mechanism and the system through which we do work and in many ways, apply the Elon algorithm to it. So in a lot of parts of marketing, you need to work with the brand team to, say, generate an image or an asset, whether it's for a product launch or an ad. It's like you want an image, an asset, some copy, and you, as part of marketing, you tend to work with the brand team on those. The way it used to run before is for every single piece of content that you wanted to generate, you had to write a brief. So you would write a brief to explain to the brand team what you're trying to do. That brief would get reviewed by the brand team about once a week. The brand team would decide who to assign to it based on skill set, and then you would get some output two weeks later or maybe a week later. So that meant that no matter what you wanted to do in marketing, if you're working with a brand team, it would at the very least take about two weeks, which is kind of crazy. What if you need to work on something that, I don't know, should take 10 minutes or 20 minutes, it doesn't matter. It'll take two weeks for it to be in front of somebody, and then they'll do the work for 10 minutes. And with that kind of clock speed, it's impossible to get anything done. And while a lot of people would have gone into marketing with, okay, great, the way to fix this is let's come up with a better campaign idea.
· Karim Atiyeh
I went into it with, let's just look at the actual system that generates work and focus on how we can make that system as efficient as possible. I didn't go into it with, oh, I have better creative ideas than the people on those teams because we have amazing people. I just want to put their ideas in front of the world as quickly and as efficiently as possible. That's what I'm focused on. We have great creative people. They'll still come up with the ideas. But when they have an idea and I want to put it in front of someone, I want it to take 10 minutes, not two weeks. And if we do that, we can take a lot more shots on goal. We can take a lot more risk with the things that we do, because we know that if it doesn't work out, we could try something else tomorrow. And that's really the type of attitude that we went into it with. And I think that's helped us a ton. I actually have another example that I love. You could think about billboard advertising. If you want to put a billboard in New York, let's say it costs you $100,000. Funny thing with billboards is you don't really get that much economy of scale. If you want to put another billboard, it costs you $200,000. You want to put three billboards, $300,000. But if you want to change a billboard that you've already bought, it only costs you $1,000. So that means that if you have one billboard in Union Square and you want to change it tomorrow, that costs you another thousand dollars. You want to change it after tomorrow, that's another thousand dollars. So you can essentially have a billboard in Union Square that changes seven times in a week, and that's $107,000. Or you can have two static billboards for $200,000. I would argue that one billboard changing seven times in a week is a much more powerful way to drive a message and get a story out than two billboards, and it's a lot cheaper. So a lot of the attitude that we brought in is, how can we find these hacks and ways to get more out of the systems that exist? The creative is not really changing. I'm not trying to influence that, but the system through which we are doing marketing work is a lot more inquisitive and experimentation driven.
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: I love that one side of the system is getting more at bats. Let's call it the other side of the system is where are you getting hits? That feels also very complicated. Especially when it's like, we've talked about this, just to break the fourth wall, Ramp's our biggest sponsor, Senra's biggest sponsor. We've worked together very closely. Typically what we found in podcasts is the value—you just hear the name 4 million times and then eventually you need to solve the problem, you're like, oh yeah, Ramp. That feels harder to measure than an ad in Facebook or something where it's incredibly tight, the feedback loop. You're an engineer, I know you like tight feedback loops. How do you balance stuff that's harder to measure and assign value to it? [00:00:00] S1: You can either figure out what the exact value is, or you could think about it comparatively. So the way we've thought about it in working with you, which has been amazing, versus working with another random podcast is—I listen to your podcast a lot. I love it. I think a lot of people like me listen to your podcast. I think a lot of our audience is people like me who are building businesses and obsessing over businesses. If we decided that we wanted to work with podcasters who are the best in the world that we can work with, that have the right audience for us, and that's the lens, it's more about targeting the right audience than it is a higher-level metric—how many clicks am I getting or how many views am I getting? It's about getting the right views, and that's the way to think about it for us.
· Karim Atiyeh, Patrick O'Shaughnessy
[00:00:00] S1: You can either figure out what the exact value is, or you could think about it comparatively. So the way we've thought about it in working with you, which has been amazing, versus working with another random podcast is—I listen to your podcast a lot. I love it. I think a lot of people like me listen to your podcast. I think a lot of our audience is people like me who are building businesses and obsessing over businesses. If we decided that we wanted to work with podcasters who are the best in the world that we can work with, that have the right audience for us, and that's the lens, it's more about targeting the right audience than it is a higher-level metric—how many clicks am I getting or how many views am I getting? It's about getting the right views, and that's the way to think about it for us. [00:00:00] S0: If you were to step back and describe once more holistically, the system that you installed, how would you describe it? There was a diagram of the system that you came and installed in marketing to do everything you just described. What does the diagram look like?
· Patrick O'Shaughnessy, Karim Atiyeh
[00:00:00] S0: If you were to step back and describe once more holistically, the system that you installed, how would you describe it? There was a diagram of the system that you came and installed in marketing to do everything you just described. What does the diagram look like? [00:00:00] S1: It's more about a principle. It's fast iteration cycles. It's scientific, where there's experimentation and feedback loops. It's letting the person who came up with the creative idea be accountable to that idea. It's not done by committee. You don't get to ask 10 people what they think and come up with a watered-down idea. You just do it. And if you do it well, you get credit for it. If you don't do it well enough times, eventually you will no longer be at the company—that needs to be known. People have more skin in the game when they're making those decisions and making sure that the tools that team has access to are not getting in the way, but are empowering you. We make a lot more use of AI tooling now in marketing than we used to. And today, if you want to put together an article on Ramp and you are on the SEO team or on the content marketing team and you want to generate an image for that article, we have a tool that was built internally that allows you to generate an image that is on brand within seconds. So it's quick experimentation, accountability with the person coming up with the creative, and tools that don't get in the way but allow you to get your work done very quickly with as little dependency as possible.