Invest Like the Best with Patrick O'Shaughnessy
· Karim Atiyeh, Patrick O'Shaughnessy
[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. [00:00:00] S0: Through this process, I love the billboard example. So I'm curious: what are the next three like that? What are the most surprising things you discovered about different channels or different ways of doing things? Anything else come to mind from the year of marketing adventure?
· Karim Atiyeh
[00:00:00] S1: Yeah, there are things that have always been true in paid marketing or what happens in social media—you get a lot of these concepts and patterns that work incredibly effectively in paid advertising for a very short period of time and stop working. So it's very important to always be at the forefront of what is happening there and why it's working, until all the alpha space starts being taken away and it stops working. And I'll give you actually an example from the Paribus days, because I don't want to give away all our secret sauce either, because I think that was a very powerful one. But when Facebook introduced video ads in the news feed, I think in 2014 or '15, that was a new thing at that time. When they first introduced it, you'd scroll through your news feed and the videos would just play immediately with the sound. And people were really annoyed and bothered. And Facebook then decided to make those video ads not play the sound by default. And when that happened, the effectiveness of video ads on Facebook dropped drastically. So they got cheaper as a result. But the videos that became really effective were the ones where you could tell what was happening essentially without the sound. So one of our most effective video ads at Paribus we ran very early when that was starting to happen, when Facebook had made that change—Eric and I were dressed in banana costumes holding signs with text on them. It's a great silent video because you look at that image and it's, what are these people doing dressed in banana costumes? And you're holding signs with text on them, so you can actually tell what's happening without having to listen because you can read. And that ad became very effective and it worked very, very well for three or four months, and then it stopped working. And that is very true in online advertising. It's moving so quickly, and the platforms that you're doing ads on top of are changing so quickly. So being at the forefront of what's happening and how you can get alpha is super important. So we want to hire people who are obsessed, aware of the changes happening with those systems, et cetera. That's also true in SEO, right?
· Karim Atiyeh, Patrick O'Shaughnessy
Google every once in a while will publish articles about how they're changing the way that they prioritize SEO to, for example, reward websites that load incredibly fast or reward websites that are very mobile-friendly. And they do that every couple of months. So being aware of what's happening and moving very quickly—super important. Speed, super important. [00:00:00] S0: So this is happening everywhere. There's so much vying for our attention that I'm really curious: what have you learned about getting people's attention in the first place? What things, what are the principles of getting attention? Something that comes to mind is our friend Scott Wu at Cognition and his team did this amazing launch video when Cognition first came out, and there really weren't many launch videos at the time. So everyone watched it and it had this incredible reach. Now literally anything that gets $10,000 of funding has a launch video. And so there's 10 million of them. And as a result, I personally literally did not watch a single one, no matter how big the company is, because it's just this sea of slop of launch videos. And so I don't care anymore. So I'm curious: what have you learned about the principles for getting attention in the first place?
· Karim Atiyeh
[00:00:00] S1: It was funny—I was re-listening to one of Senra's episodes on Dyson recently, actually found a lot of the same principles we try to apply for this in the way that Dyson ran his business, which is seeking differentiation for differentiation's sake. We are always looking for ways to be different, and the very first way in which we've done that really well—a lot of credit goes to Diego and our team who runs the design team and how they think about design. In the very early days we were thinking about what the right color for Ramp should be, right? And we're working with brand partners on it. And I remember this color wheel that you look at and you see all these companies that we aspire to be like and where they are on the color wheel. And all the finance-related apps are somewhere in the blue or green. It's green for money, blue is trust, and there's no one in yellow. The only thing in yellow was Snapchat—consumer company Snapchat. And the primary reason why we chose the yellow was because it was different. That's it. And you could have argued at the time, and certainly some people did, that oh well, if you go yellow, you're not going to get anyone's trust. And you want to start with things that they associate. It was, no, we are going to change that. We're going to be different. And if we do that really well, it's going to pay dividends for a very long time. And I think it does. You see a very yellow ad, or you assume it's Ramp. That is what brand is. Ultimately, when you think about what is brand, it's—well, if you're watching a movie and you see a red can in the distance, you might not be able to read Coca-Cola, but you know it's a Coca-Cola can. That's very, very powerful. So I think one way to grab attention is to seek differentiation. And with enough repetition, eventually you're, well, okay, I see the pattern here.
· Patrick O'Shaughnessy
[00:00:00] S0: You're a man attracted to extremes and differentiation. Talk about that same concept in recruiting, and recruiting for what you would call spikiness.
· Karim Atiyeh
[00:00:00] S1: I love this framework of hiring for slope and for spikiness as opposed to, let's say, people who check the box on 10 different things. And we've applied that since very, very early, even at Paribus. I remember one of the early things at Paribus was, well, we are a small company with very limited resources competing for talent with the Facebooks and Googles of the world. We can pay them less money. We have less of a brand. We have in many ways less large-scale problems to work on. How do we really differentiate? And there were a couple of things. One is, I'm going to look for very spiky people in areas where I have asymmetric information. We were recent college graduates in some way. We knew a lot about the people who had gone to the school that we had gone to or the schools that we had experience with, so namely, yes, Harvard and MIT for Eric and I. And not only that, we knew about a lot of the hardest classes that students were taking. So we could go and look at, let's say, freshmen in college and the classes they're taking and the level of extreme talent in one area and recognize that very quickly. So it was less about what is your total GPA and your total sum of experiences and other interviews you've done throughout your four years in college. But I know that in year one of school, if you're taking that class and got a really good grade in that one class, it must mean that you are extremely talented at math or computer science, whatever it is. So we're looking for these spikes very, very early. So a couple of ways that we're looking for extremes: we're looking for freshmen where other companies were trying to hire juniors. We're looking for people who had maybe taken and excelled in very specific classes. And in my case, having gone to RSI and knowing how hard it was to get into RSI and the level of talent at RSI, I was looking for programs like that that give you an early signal that someone was very spiky even before college in many ways. One of the people we hired very early on at Ramp was Calvin Lee, who had interned with us at Paribus in January for one month. Not a lot of companies offer one-month internships. Had less than one year in college, but clearly even then looked incredibly spiky. He had left high school early to prepare for the Informatics Olympiad. He ended up finishing college in two and a half years.