Invest Like the Best with Patrick O'Shaughnessy - Eric Glyman - Reimagining Corporate Finance - [Invest Like the Best, EP. 275]

Episode Date: May 3, 2022

My guest today is Eric Glyman, co-founder and CEO of Ramp. Ramp is best known for its corporate cards but it has a range of software products to help finance teams save money and time. Since its founding in 2019, the business has grown rapidly and was last valued at $8 billion. Eric and I discuss Ramp’s initial marketing wedge, how the business has dealt with such fast growth, and why they hold stablecoins on their balance sheet. Please enjoy my conversation with Eric Glyman.   For the full show notes, transcript, and links to mentioned content, check out the episode page here.   -----   This episode is brought to you by Canalyst. Canalyst is the leading destination for public company data and analysis. If you're a professional equity investor and haven't talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.    -----   This episode is brought to you by Lemon.io. The team at Lemon.io has built a network of Eastern European developers ready to pair with fast-growing startups. We have faced challenges hiring engineering talent for various projects - and Lemon.io offered developers for one-off projects, developers for full start to finish product development, or developers that could be add-ons to the existing team. Check out lemon.io/patrick to learn more.   -----   Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.    Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @patrick_oshag | @JoinColossus   Show Notes [00:02:41] - [First question] - What was most notably awry about the industry before Ramp [00:04:45] - Breakdown of Visa; The business model of the Black Card compared to the business card offering of Ramp [00:08:40] - Causes and what he attributes their early success to [00:11:30] - Description of Ramp’s software in the beginning and the evolution of co-building it [00:16:34] - How he’s gone about building the company and team fast enough to handle their explosive growth curve [00:19:47] - Approaching all aspects of recruiting and acquiring such great talent [00:21:39] - Thoughts on the biggest mistake he’s made while building Ramp [00:24:05] - Lessons learned about marketing that this journey has taught him [00:26:13] - Learning to manage a senior team and advice for managing rapid growth [00:28:58] - Unique aspects of Ramp’s approach to the financing side  [00:32:56] - Why they are storing some of their balance sheet in stablecoins  [00:34:47] - What the idealized end state of Ramp looks like [00:37:26] - How the data and information he sees indicates trends in the economy writ large [00:39:33] - Providing secondary liquidity to employees in a world where companies stay private for longer periods of time [00:43:03] - Aspects of company building that are still unnecessarily hard [00:44:55] - What has him most excited about Ramp in the next 12-18 months [00:46:42] - The kindest thing anyone has ever done for him

This episode of Invest Like the Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. Founded by a former byside analyst who encountered friction sourcing, building, and updating models, Canalyst is now used by over 400 institutions, including the largest money managers globally, and by a number of guests on the show. With detailed company-specific models and data on virtually every public company, panelists clients are able to ramp up faster, update models instantly, and incorporate the highest quality fundamental data into any workflow.

If you're a professional equity investor and haven't talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com slash Patrick. That's C-A-N-A-L-Y-S-T dot com slash Patrick. Stay tuned after the episode for my conversation with Canalist customer, Giuseppe Coco, of LK advisors. We talk about how Giuseppe has built Canales into his process as an international investor and much more. This episode is brought to you by Lemon.io.

The team at Lemon.io has built a network of Eastern European developers ready to pair with fast-growing startups. We have faced challenges hiring engineering talent for various projects, and Lemon.io offered developers for one-off projects, developers for full start-to-finish product development, or developers that could be add-ons to an existing team. Check out Lemon.io slash Patrick to learn more. Hello and welcome, everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest like the best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy asset management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the

opinion of O'Shaunsi asset management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy asset management may maintain positions and the securities discussed in this podcast. My guest today is Eric Glyman, co-founder and CEO of Ramp. Ramp is best known for its corporate cards, but it has a range of software products to help finance teams save time and money. The business has grown rapidly since its founding in 2019 and was last valued at $8 billion. Eric and I discuss Ramp's initial marketing wedge, how the business has dealt with such fast growth, and why they hold stable coins on their balance sheet. Please enjoy my conversation with Eric Lyman.

Eric, I'd love to begin our conversation by hearing what this industry that you're building in was like when you first approached it. What were the things looking back on the early days that were notably awry about the existing incumbent solutions that motivated you to want to build a company here in the first place? happy to go into it right away. I mean, so Ramp is a relatively young company, and it's stark how quickly things have changed. So we incorporated in March of 2019. And I think the theme of not just the year, the day, the decade, frankly, was one of excess. The way to compete in the credit card industry, which is our first flagship product was buy our card. We've got amazing sign of bonuses. We might have great lounges for you too. We've got points and rewards. We understand you uniquely. It was very marketing forward. It was very centered around EOXS, metal cards, black cards,

all these kind of things. It was very much the idea of what credit cards could be and what they represented. What was strange to me about this was, first, I had a funny purview to it. It started coming to folks on savings. It was bought by Capital One. So my job was to ask people what they were looking for. Turnout. It wasn't points. It wasn't cashback. It was more in their bank account. Next, when we started talking with finance teams, they weren't looking for points or sign up. bonuses, these were marginal differences. It didn't fundamentally change the outcomes of businesses. They were looking for more control. They were looking to be more profitable. They were looking to go of them earlier. And so it felt there was a large and fundamental misalignment where the large

scale credit card issuers were thinking a lot about how to get people to spend more money, earn more points, show off the brand, whereas most business owners, people operating companies were more simple, straightforward and actually wanted to be more successful to do what they actually cared about. And it felt like business owners, the customers wanted something different than what the core partners was. I would say it started with the fundamental misalignment that got us very curious and obsessed with, we're eventually led into this focused on helping business owners, spend less money, spend less time. Maybe you could describe and summarize, we've done elsewhere with like a breakdown of visa that I encourage people to listen to, but maybe you could describe the

core business model behind that black card, behind that Chase Sapphire model, and then contrast that against Ramps' conceptualization of its first model of offering a card to businesses. I would just love to understand the wedge, the business model wedge. People know how a credit card works. We'll get into some of the details. But I would love, yeah, you to describe sort of what you saw in a business model and what you hoped to design early on the Ramp side. Definitely. Every time a card is swiped, a series of transactions go off extremely quickly. First, on the merchant side, there's a request, let's say, for $100. If Ruber tonight, it, thumbs up, thumbs down.

Sent through the merchant acquirer, card network down to the issuer process or eventually the issuer. And within six seconds, the issuer has to say, yes, this is good or not. It's good to go. They get the clearing back. Effectively, the merchant, so long as they meet core conditions, is credited for this. They're credited not for the full 100, but for a portion. And what's taken out of that is effectively interchange as well as network fees.

Depending on the type of card use, that can vary anywhere from debit, call it 30 cents, to corporate, or high-end premium consumer cards could be fees of up to call it 3%. A small portion in that merchant processor or the merchant bank, some portion will go to the network, but the lion's share of that will go to the funding party, which is the issuer. And so those would be your credit card in your wallet. It's typically taking that. And the historical reason is they're taking the risk. Effectively, the funds have cleared if there's a problem with the payer who sent the

funds, it's on the issuer that they have to hold through to this transaction. If there's credit involved, which is really the dominant product, most card tie in like that, they're taking the underwriting list as well. And for that, they're able to keep the majority. And so this can vary call it from two, two and a half, two point six percent. From there, you have a set of fees. You might have the cost of financing that. Maybe you're borrowing, maybe you're using deposit, but there's some amount for every rolling period. You're fronting that. There's credit losses, fraud losses. You have anything to account for that. And there's also rewards and rebates, which for most of the industry has become this number one big thing of the

biggest cost of doing business was actually rebating it back to the customer. For the past 30 years, you really couldn't enter this industry unless you were a dominant player, FDIC and Shirt Bank. Not a whole lot of innovation, but great marketing organization. And so it started this race to who's going to give away, make people think the points are worth more, and in the background, trying to devalue this. And so there was a fundamental game going on where both consumers and credit cards are trying to help smart each other. One of the things, things that we felt was back to that original premise, people aren't looking for more cashbacker points or looking for more in their bank account. When you follow that through, you realize that

1% back, 2% back, whatever it could be sounds great, but not spending that dollar in that first place for the end consumer is 50 to 100 times as powerful. And there's just a lot of ways. People do spend things on subscriptions. They're no longer using on services that they could get for less, whatever it may be. And so one of the fundamental premises of Ramp was, could you identify that? And if so, you might actually much have a better claim to make a product that an end customer, a business owner, consumer want to use because it's much more powerful for them. You go from a startup company with literally 0.000% of the market share to suddenly be able to take things on and do that. So first was around savings. It fell further into monetary savings was great, but saving time for business owners even better.

If you could replace software that wasn't so useful to do that. And so could you actually use interchange, not just as a mean. of divvying up rewards, but as a fundamental pool to go and create great software that creates a flywheel of value for your end customer. And so the premise was, let's make things, if you can make things that people actually want to use, that people want to pull out user card more than others in their wallet, that'll create more volume, that'll improve the economics that you keep on the funds flow. In the early days, I'm always really curious what you attribute the success to with new customers that are trying ramp, which is not an established brand. And

He said before we record the founders of most of your competitors or top hats. These are old, old companies, and this is a brand new one. So how did you win early on? What was it that caused those early wins? Because Ramps founded in 2019, I think it's one of the fastest growing companies by market value ever in the many billions of market value today in 2022. So what do you attribute that early success to? For me, building with and having real relationships with people building businesses,

actually listening to them from the get-go before we shift a single card or a single product. We talked with 100 finance teams and founders. Rather than going and saying, would you buy your product? We're coming out with you said, we're trying to build a product that's focus on helping your business, spend less money, spend less time. Can we get your advice? And it shifted the relationship from being on opposite size of the table, so to speak, or I'm trying to get something from you, would you buy to let's sit on the same side of the table together and problem solving, talk about what real issues you have in your business. And we started to learn things. We thought it was all about saving money. It turned out that actually for many finance

teams. The problem was not, can I get a card? It was, I've got cards. I have seven. People don't turn in their receipts on time. I'm paying for things that are more expensive than what friends and other companies are getting charged. I feel like I'm getting ripped off. I could be running a lot more efficiently and my partner is trying to get me to spend more and outsmart me. And so there's not many people on the side. So even that relationship of we're here to build and align our business with you and the sincerity of I'm here, we've got a team almost entirely engineers, at the time. And we want to build together with you was very different in refreshing than what most finance teams and the like we're used to. And a card is it's somewhat different, even from

business model than in traditional SaaS. It's not, here's a contract, would you buy? And if you have seats, you kind of go with it. It's invisible. It almost pays you. And our monetization effectively grows with people's growing trust in the business. And so the whole premise was, how do we grow trust with you, build with you? And so that was the initial wedge in, and why we're able to grow. It turned out that a lot of people who went were building great businesses. This wasn't a product where there was low awareness. People had heard of credit cards.

In fact, they wanted to stop hearing about it. They had other problems to solve in their business. But when you make a decision, they would call up other finance teams, founders, people in their network. And for the first time, people were hearing actually this product is different. It's aligned with us. It's saving us money. It's replacing other sets of software as you should use it.

So that was the initial jump. And then the pandemic was a huge accelerator for us. And that just went from the premise of savings went from, okay, sort of interesting to fundamentally important. If you didn't know what happened to the financing markets and having to deal with remote meter or kind of digital product first, important. I really like this concept of like almost the invisible business where if you're successful because they're using your software, which presumably you're not charging for some or all of it, just comes with use of the cards. No one has to make a big buying decision. Right. Like it start at zero and ramp, sorry, for the pun.

it could ramp very quickly and aggressively. So describe that software in the early days. If really what you're selling is an easier life made possible by easier software and then you're making money on something that they're used to, but it's sort of invisible, what was that early software and what was co-building like? I love when, especially enterprise companies, do this. But the actual literal tactics of how you do it is very interesting to me. Like, what kinds of questions were you asking?

How often would you show them an iteration of the thing before it was shipped? the details of this co-building are really interesting to me, down to the most granular, if you can share them. Happy to do. Let's follow that premise through. We're building this together. We're trying to seek advice for people, and people would give you advice and that it was excellent and you were seeing common themes, and a lot of the art was, you went back to

this Henry Fordism of you want to build a car, not a faster horse. Trying to really understand what's the problem, what's the job to be done, and how do you build products that ultimately align to solving it in a problem, not necessarily solving it in the way or in what people are asking for it. is often they were going to the familiar. The first product that we came out with was this corporate card design to help you spend less was the moniker. And if you look through it, it actually was a set of products streamlined all around helping people close their books faster, going from card, which would trigger IRS requirements if you spend over $75 to collect

receipts, label that, getting into accounting, software, and alike. And then trying to give insights around ways that you might spend less. That was the first product. The way that it was built, give you a couple of examples. So one of our early customers was the direct-to-consumer business called Candid. I think Nick Greenfield has been on one of your early episodes, and they were scaling incredibly rapidly at that time went from, I think, 10 people to 250 in the time period of, I want to say, a year and a half, two years.

And there was a lot of chaoticness. Like anything, when you're hiring new product teams, and if you're new design teams, they would have problems. like they're spending on lots of project management software. They're spending on lots of new design software in suites. Our statement to them was, we want to save you time and money. Are there areas that you know are wasting time for you guys or money? Some years they knew others they didn't.

On the second part, we wanted to save you money. We said, okay, would you send us your past 90 days of transactions? We'll go through and see what you can do. And at the time, it was very much done by hand. We were trying to figure out based off the credit card descriptors, we see it was super not clean. Could we build some scripts to help clean that up? And so things like TRL Star, 1,0,11, you could see, okay, that was Trello, SMRT, Star, the invoice number. That was smart sheets, so on and so forth.

And we started to see patterns of merchant. If you actually understood what the merchants where you clustered them, it turned out for them. They were paying for, I think, on the order of five sets of software that did the same thing in project management. They were paying for some vendors where they were grandfathered into an old annual plan, and the new plans were actually materially less. And we came back to them early on, not just, hey, if you use this card, we'll give you these insights and on an ongoing basis. We found a $4 million in savings. Let's talk through it.

And it went from, okay, this is a vendor trying to sell me some product to use. They just spent time going through our data showing us how to spend less. We'd be happy to switch parts spend over. And it was lots of moments like that. It was both putting in the elbow brief and the manual work to figure out what were the patterns, what could you automate through software to take what was a wrote manual process and have a lot. and have that done through code to next starting to build patterns within the software that would save things. So that was money.

Other ones were focused on time. Most painful experiences for anybody who's worked is like this weird relationship on getting receipts in. It sort of fundamentally doesn't make sense. I tend to believe that if the credit card issue was actually just collected receipts, did it, concurred and expensive. I shouldn't exist. You could actually pull out of data from the merchants and getting into your books.

It's sort of a bizarre thing that's there in the first place. And because they didn't, there's all these bad, design decisions that follow from it. If you want to get a transaction from Amix to concur, it takes 24 hours. It means that if you're an employee and you're at dinner, you're not going to take a photo and wait the next day. You usually kind of put it in your wallet and forget, and the average receipt is turned in a month later. So we're hearing this all the time for finance teams. We said, okay, well, the problem is you can't close your books. You have to restate things constantly or ask for your bad hygiene. Let's just do this. We're in the authorization layer.

Let's text a card holder when they have a receipt in their head. Let's build some OCR, to be able to match it to the right transaction. From then to today, the average receipt is turning within 30 minutes on ramp. The question was not, again, how do we design something that will get people to use a card that was one of the byproducts? It started with what's costing business money they shouldn't be spending, what's costing them time? And then how do we either manually or through the software process line and experience help them achieve these goals? And then that became the product. If you look at the website today across the four categories, start, scale, streamline and save. It's more than a dozen individual things. I don't know how many of those live in

the same screens of software or something, but there's a lot going on in terms of the functions or the jobs that you're doing for your partners. And again, the business is less than three years old. So talk me through how you've gone about building the company itself and the team fast enough to be able to do that many different things well, because typically the story in this world would be you might build the initial product for three years and not even launch it to make it really tailored to the customer. It seems like you've built much faster and in more directions. And so I'm really curious, what made that possible? Yeah, that was an explicit design decision around fundamentally what the company needed to be. And some of this came from, we sold their last company to Capital One

and saw what were they extraordinary at, but what were they not great at? Spent a lot of time at the American Express with their prior company, got to know Chase in a lot of ways. In our view is they had fundamental things they were excellent at, whether it was extraordinary brand, extraordinary credit, or writing ability to determine distribution, but they were incredibly slow. Form factor of a card has hardly changed in 30 years. Compliance functions that were set up for real and important,

I think regulatory view purposes were extended to become effectively a bat that made development take three months for even changing a webpage or the color of a button because of real and mostly perceived plausible risk. And so a lot of the question was, how could we design parts of our own, organization that dealt with regulatory, potential legal, or even financial services that could not and could never go down to be extremely methodical and deliberate. But for most of the rest

of web page generations of software services on top, it didn't involve the movement of money directly, how do you make that go really fast? How do you actually deliver what we hope that the first kind of really engineering and product-driven organization in the credit card space? And so that was a lot of the initial premise. And to do that, we put our money where our mouth was. The first 10 people, seven were engineers. One was on design, came from IDO. One was on talent. It was people who could build things of structure, who endeavored to try to find extraordinary talent. And even from the first pool, we worked really hard to find really outlier levels of talent, whether it's some of the team Paribis bat best up to folks like Calvin Lee. Calvin was top of his class. MIT finished in two

and a half years, Google Brain, Facebook AI research, came on over time team. Virol Patel, Virol extraordinary. I think was going to WWDC from the time he was 14 building apps. Pablo, who built out the engineering office for Lyft in New York and the like. And so we tried to have a team that was extraordinary and capabilities from the get-go that would attract other people who wanted to work with other great people, wanted to build and created processes that for areas of engineering, we needed to go super fast. We would do this and operate and shift consistently and parts of the infrastructure that needed to go slow, have very low latency, can never be taken on, do that, but isolate them and have separate processes around and make sure the engine around talent was really a forefront of the company.

I think about recruiting as being about pitching who you're going to work with, what you're going to work on, how much cash you're going to make, how much equity, and therefore potential upside are you going to garner? How would you say ramp approaches those four things in balance? Are there some that you emphasize more than others? Why were you able to get those people to all say yes? Just trying to understand what was important to them. Everyone has dreams, aspirations, things they want to do. Some want to work on and build great companies, be a part of great organization

to having a strong talent density is just, you know, why does so many people go to McKinsey? Why don't think he'll go to Goldman? Why does he make good decisions? Because other good people are there. So trying to explicitly have an interesting mix of people and sort of this talent density was important as a goal in it of itself. Next was ownership, especially for people going on and taking that much risk.

They either want to work really hard and be able to sit on the upside. And so compared to others, we allocated a lot not only to the pool, but even actually delayed the founding of the company, put debt on it originally so people, the first cent, effectively could buy founder shares and be thinking not just about ownership, but also tax optimization, things you could do for people early at the company. And so it's thinking of the long term from their perspective, what could be great. next giving of a lot of responsibility and then having no illusion about the long term, it's possible that we'll all work together for 20 plus years building this company. That'd be

great, but it's possible some want to go there, see what it's like and go and start their company later. And when I look at some of the first 20, too, have gone on to do that and we've been there to support them. And so I think a lot of this is around having like a real exciting mission that feels worth pursuing credibility, not just in what you're doing, but that you actually asking or listening to what's important to them in their own life and career. following through on that and as it changes, not just having a relationship from building the company, but helping them actualize what they care about and believe in over the course of their life.

How do you think about the biggest mistake that you've made so far in ramp and the lessons that it taught you that might be portable to other entrepreneurs out there? Generally, the moments when we found ourselves in like the most trouble is when like when we knew there were problems along the way or there was something fundamentally broken. we are getting signals we didn't act on it quickly enough. I think that this can happen sometimes, and whether it's talent is probably one that can be broadly related in building a company if it's doubling for the revenue of 65 times over here,

we're in 2020, seven and a half in 2021. At that scale, people who were really proficient and great, getting 10% better or 5% better every month, mathematically, we're not scaling, keeping people in roles or actually expecting that people who are ahead of to be able to take things on, large and large scale, either resulted in teams having to work around and getting effectively parts of the organization crashing each other or extreme stress on people who probably would

have been happier and better off. We just said, look like you're great, but being able to work with someone who's seen it, done it, you're going to get further in your career. And so not addressing those. And then similarly in some customer conversations, we have some extraordinary relationship with, whether it's from potato farms, companies, setting things quite literally in the space, multi-thousand carholder deployments at single companies, public, late-stage private, you name it.

But for some of our larger customers, so I'm in this enterprise relationship, like I come from a consumer background, where it's generally simple, we want to have a product, let's do this. I think in some enterprise relationship, it's really complex, it's buying trust, it's whatever. And so I can think of one,

without giving that the specifics, one relationship where we were in a pilot with a large-scale public company for a year and a half. And there was a never-ending list of like asks of different things that people wanted. And I think that the team, I think on both sides, there was mutual trust loss because you couldn't get actually what people were looking for. They were making ass. We were getting the team working on is getting exhausted from you've asked this for, you know, this is the fourth RFP.

You've asked this for 40 sets of things. You're tired of it. And then rather than working through the problem, people gave up. I generally think that the failure modes are when people work around each other and don't actually address something here is broken. Do we want to take this forward or not? Like we're adults who are as a company. How do we actually get to the heart? part of the problem. I think it probably stemmed, both of those stem from avoidance or not actually

facing what is a fundamental breakdown in a problem. And typically, that's for the most problems and bad things have happened for us. What have you learned most about marketing? Obviously, you've been an entrepreneur before RAMP. So I guess this could be a holistic question, but at RAMP specifically, what lessons in marketing has the business taught you? I think a couple. And it's evolved pretty heavily over time. The first one is that you need to test things. and actually show it to people. So this is not like go out and do studies and try to go and get people's perspective. In many ways, Ramp is a large-scale relationship business.

We have over 100,000 cardholders, but these are 5,000 businesses. And if you want to, you can talk with a ton of them every month, week, whatever. And if you're putting ads out, not only do your resistant customers see it, but others. And I think one of the best things that you can do is as you're going and creating, actually show it to people and say, you've got three different versions. What do you think about this? What do you see? Because you can actually start to go and get real.

insights and perspectives. What you're doing. So that's one, like real earnest showing it to people. You can generally arrive much better. And your best ads are never the first. It's usually like the 10th or 15. And you need to cycle to get real honest reactions, not just hear people say, but also like look at their eyes, look at their face.

Are they smiling? These subtle things, you only get one first impression, but you want to see those first impressions on people is one. The next, I think that there's a tendency. Certainly I had it, but I think a lot of founders have it, to focus heavily on. on product and tell you about all the features and things that can do rationally. And organizations are bizarre ecosystems. The map of what people are looking for is unfortunately not always rational.

And your model of rationality is necessarily even the reality of it. And so thinking less about marketing the product and the features and getting more into how to create desire. What are people looking for? How do you kind of tap into that and think of it less of about informing, showing what product could look like what are the features of the ROI, but what are the things that make people want to do things like get stuck in their head? They can't stop thinking about it, these concepts that just stick with people. And so I think that those are the key things for me that

this is a significantly larger dollar scale last company we had. And I think that if you can do those two things, you can go a pretty long way. It reminds me my friend Jeremiah's note that for any company you should understand what they make versus what they sell. And the gap between those two things is often the story of their margins, which is really, really interesting, basically saying the same thing. What have you learned about managing a senior team? I'm curious how many people report to you, but more generally, in something growing this quickly, you must be very good at delegation by definition. But how have you done that well? Like, what advice would you offer others trying to manage growth of this speed, 65x in the year? Sounds great from the outside,

but I know having seen it from the inside of companies that it's hell on earth in certain ways, growth is very hard. So what have you done there to improve the way you manage people in the senior team? Something that was like a framework shifts. I feel like people's first company. It's don't go out of business. Be terrified. Don't let dollar go and it's the top of the scarcity mindset. I think people say it's talk about this abundance mindset. But for me, what really internalized was there was a day when I was quite literally 33% of the head count today. I'm like 0.3%. I'm just quite literally not as helpful and not as impactful as what I used to be. And I think that the larger that companies get, I think that the more the role of a founder and people managing shifts to one, really clarifying

where are we trying to go and what is the vision. And so making clear what is it that we're trying to solve for, can you go down to the of more concrete in this sense that people can say, I understand it, nothing is left to ambiguity. Let me go and propose different ways and paths that I can get there. I think part of my job is clarifying that vision, some of the quantitative goals, some of the versions of how. And so people can start to trade up and you can actually create the, alignment among larger organizations. And the second, one of my favorite business thinkers ever,

often were coaches, so whether it's like John Wooden, UCLA, Bill Walsh, will score takes care of itself. I think a lot of my job is not to do. There are moments we'll have to go into the Oregon, break things apart and even just work on things together. It's much more about helping people live up to their potential. If you're trying to hire extraordinary people, there's a reason in leadership roles, they're capable of great things. And I think a lot of the questions, generally failure mode happens for me when I try to go and solve what is the functional problem versus what makes this person great and how do I put them in scenarios that tap into their strengths, help them see some of their blind spots and allow them to do the things

that make them great. And so I think a lot of my management cell comes back to trying to remember what are the strengths, go over that, identify what are the gaps and say, like, this is painful. You're spending a lot of time. How do we find someone to compliment you? Should this be your responsibility or do we want to give this away? And generally, when you do that, that things start moving a lot better. Do you think that Ramp has done anything out of the ordinary worth talking about on the financing side? I mean, you already mentioned the notion of delaying the founding of the company, which is more

on the employee side, which is super interesting. I hadn't heard that before. But when it comes to investors, you've got a great cap table, many of whom are familiar to our audience. What have you done that's unique or differentiated here? Or do you think you've just really tried to run a best in class cap table process every time? There's definitely some things that are unusual, both on the cap table and assembly of capital, as well as also some of the use of it.

I think we're one of the largest companies that holds a material portion of stable coin or a balance sheet. So there's some interesting things on both portions, but we've never actually made a fundraising pitchback, whether it was a seed to even the most recent rounds. We've never gone out to race. Typically, we've, in the same way, went to customers and said, we never said, would you like to buy this product? We would say, could we get your advice on this?

We would meet with investors to say, like, we're working on this. how do you think about this? We would show progress and get their advice. And so we transform the relationship from the get-go. They're not trying to go in raise funds for me, even though, who knows, maybe they would entertain that to, they're trying to solve a problem. You're an expert in the business or in the industry you see things.

How can we go and sell these problems together? They create almost a pool instead of people to pitch with people that potentially you could fill it out and see if you would want to work together on some problems where there's closing customers, think your business challenge, hiring people. When you saw things were working, parties wanted to work at each other. So a different kind of design premise. Next, I think that a lot of founders think in terms of you need to go out and run a process, whoever has the highest price,

go do that. And I think that people optimize locally of the highest price and the least solution surely must be the best thing. Argue there's a wrong optimization. It's about maximizing long-term total enterprise value. And doing that is much more about assembling a world class of investors who want to be there with not just now, but are at the course of many, many years, people who trust you throughout the industry and want to build together with you. And the way to do that is not by trying to stretch and squeeze every last dollar and save every last share, but trying to foster like love and trust. And so we'd meet with a lot of people, build relationships.

And then when it came time to do around, generally it might be someone was thinking about it. We'd say, look, we appreciate it. I'm not going to, obviously, shop or share, but for folks to say, like, something is happening, would you like to think about it or get some range of people come together. We would never pick the highest price. And that was for a reason. I mean, first we never get the highest price, but we would try to figure out how do we get a collective of people working together, find people with unique skill sets that we can go into, whether it's for advice or on certain components of our business.

Once we had done that, we would say, okay, well, sounds like people wanted to buy, call it 20%, 15% of the business. We would like to do it at a lower price, but we would also like to sell less to the company. And so our rounds in the past are very different than the typical 20% round or it's 15%. there's one lead than everyone else. It's often much more of a collective pattern. And there's a few of the things that we experienced that happened about first because you're not taking the highest price for employees. It's much more about, okay, wait a minute, maybe the four and a n a lower again. So for employees, there's a long-term benefit, but a feeling of there's excess value on the table, I can have some comfort in this for investors. Maybe it was a lower amount, but you want to talk about it.

If you invested in this thing, it was a hot round you bought in. And actually, the true value is probably above it, which demonstrates your ability to get into great investments. And more people talk about it, the more people hear about it. If you way overperform, you course can always raise. If things don't go perfectly to plan, you have some operating room in leverage. And it starts to create, I think what it adds up to is the sense of inevitability. I think at least in the entrepreneur world, Elon Musk was sort of famous for doing this with SpaceX, where they would never take the highest price, kind of slowly build this up over time. You knew if you were buying SpaceX stock, it was going to be great investment. And so in many ways, it was modeled after that philosophy of how do we go

and bring the right people together. You know this as a team effort, not as an average of relationship, and just try to build a great long-term company we're here to do. You piqued my interest with the stablecoin thing, too, in terms of use or storage of funds in this case. Why are you doing that? Like how much of the balance sheet is in stable coin? What's the benefit to ramp of thinking about that? It's twofold. I mean, single-digit percentage can say that, can say more, but it's substantial. It's meaningful eight figures, funds that are in it. There's very interesting characteristics now. If you actually think about it from a treasurer perspective, your alternatives are earn one to two basis points, your bank, which is fun. Can do that. And I think the predominant

use of that is there because it should be defensive. What's interesting about this is you can use a small portion in 30s that functionally almost like a covered bond where it's asset backed one for one with dollars, collateralized and audited to by professional orders, but yet the yield on it can be high single digit percentage points. Very month to month, it can wear from 5 to 9% was your highest one-month yield. And effectively, you can buy this in one-month rolls. And if you do this, we'd call it a small portion of your balance sheet.

You can make what the next 95% plus would do in terms of yield. And so one, it seemed interesting in from a defensive ability to start to go and get yield and get a little bit more. And this we only did later once we had hundreds and millions on the balance sheet. But second, we serve fast-growing businesses and daring businesses across different industry. And the amount of growth in the cryptocurrency industry has been really substantial. And so what better way to have credibility in it than to actually be a real market participant? And first, it's financial.

But the second is you start to think about what are the problems that you run into and being a cryptocurrency-related business. And so today, beyond it being useful from a boundary perspective, some of the fastest and growing in the largest cryptocurrency companies use ramp. Today, we don't offer any cryptocurrency-related services for product. but it's a realness of saying it's sort of walking the walk. It's like, I understand your business. We're holding part of it. We're exploring and thinking about it and it creates its own opportunities. I often like thinking about not the progression of business, not as kind of marching forward from here, but continuing to work backward from some sort of idealized end state. Love that.

What do you think that story is for ramp? Like what is the beautiful, incredibly frictionless, amazing experience at the end of the rainbow that doesn't exist yet? I think about it almost, what if your card, your bill payments, your software was quite literally so smart that if you were spending through the software, a dollar elsewhere accounted for a dollar five. What used to take days, hours could be totally automated away. And so first, you have more financial leverage on every dollar that comes through. You have time back. You can quite literally be more profitable or have your team working on strategic work. And then last, starting to really use data to benefit not just the single one-to-one relationship with which cards built.

news historically have done, but you start to get the benefit and wisdom of the crowd, just as ways in many ways revolutionize navigation in traffic. It wasn't about having a map and knowing where things were. The most interesting data was other cars of the network, where were they stuck in traffic and how could you use it to help the system be more efficient? And we think about that for our customers. Could you go and see what the highest performing finance teams, how do they run their company, spend on their own things, close their books quickly,

and how do you bring those insights to the thousands, tens of thousands of other companies use that and collectively make them all more successful. And so I think it comes from focus in a general line that we want to help your business be more successful, spend less money, spend less time, have frictionless and automated processes, and then using data actually help you be there. And so some of the manifestations of that have started to become clear. It's fully automated expense management where 6% of our companies that are enabled all of our integrations with Gmail, Amazon for Business to lift.

90% of all their receipts are totally automated, no human touch at all. It allows them to be employees to be really productive. They don't need to spend time hoarding receipts, snapping photos, and stuff. They can just go back to their work. And so that's simple versions to, you can imagine extensions where you're buying a set of software and suddenly you see their sales team got you and you're about to pay far above market. But ramp could help to just running through ongoing procurement processes, through travel and entertainment processes where when people are buying hotels,

could your car be smart enough? Could your bill payment software be smart enough to deliver not just the movement of funds to where you want to go, but to make sure that your dollars and your hours actually go further? So that's the type of future. I know it's probably more in spirit than and can clearly hear what that looks and feels like, but those are the things that get us really excited and in focus. We've so long to go to get there. You're lucky to be able to see tons of the finance activity at, you said, more than 5,000 different client customer companies now. What is all that information telling you about the world and the economy? It's obviously been a tumultuous period here for the last six months.

Let's call it a bit longer than that in some areas. What insight can you share with us on how businesses are thinking about their own challenges or just any trends or data that you've seen as a result of your unique perch? What I can say that's been very clear has been kind of a sudden return and rapid growth of travel and entertainment spend where it's not the way that it used to be, where people People are booking all the time to go see clients, and it's from one kind of central node, but heavy degree of companies are having constant off-sites. They're moving, so we see it in the lift of travel, of hotel spend, of Ubers, and things like that.

But it's much more distributed. It's moving from Tier 1 to Tier 1 city to Tier 2 to different kind of destination. And even the relationships that people have within companies are much more, not just even hub and spoke, but it's often just spoke, companies moving from different centers across the country, traveling more often and more frequent kind of hybrid offsets. And so that's been one, still a far cry from what it used to be, but the travel patterns are differing quite a bit. And that's, I think, because financial products have been improved,

the efficiency is possible to get short-term, long-term. We're seeing more elements of efficient balancing the capital. Your solution is not no funds raised or a $2 million term loan, but you'll see companies starting to go and whether put things on card or flex payments on, call it 30-day, 60-day products, and more efficiently map if you're directing consumer e-commerce inflows and sales versus your inventory timeline of getting shit. And so I think just a lot more capabilities even for small companies to engage in

financial engineering, whether it's through products like Ramp or others. And so just different movement patterns as well as to more efficient capital matching and ability to maybe this is just Amazon's philosophy of being cash flow efficient wearing off on the rest of the world, but thinking not just an income statement, but in matching cash flows over the course of a company's life or the two things that we're seeing is just happening more at small and mid-sized businesses that I quite frankly don't think happened or they weren't empowered to do in years before. You mentioned SpaceX earlier as an interesting example of innovation in sort of how they deal with the private markets.

And I'm curious how you think that another thing they're known for is running this very clean internal process for getting liquidity for people that own equity that are employees or whatever over time to finance their life, just like anybody else would. How have you thought about that for yourself? for your teammates with a market value that's grown so quickly in a very different business, like you said, than when it was three people, a real thing that's going to be around. How do you think about providing secondary liquidity to employees? Because it seems like the philosophy of that is going to matter for a lot of these companies

that are staying private for longer, potentially keeping their options open for longer. What has been your strategy? How do you think about it? It's all now starting to get quite relevant. So I'd say it's very top of mind. I don't think that we're fully settled in the view of what this looks like. I think that principles basis, first, it's important. I think that people are obviously here to create value over the long term.

And sometimes for people being able to take a little bit off the table so you can really focus, full stop over many, many years matters to people. I think as a premise, especially for companies that are getting over, have vested stock been with the company for a period of time, it is time to do that is one. And so I think viewing just talent is a key. but making sure that people in their life continue to be really happy as important. So that's one. Next, there's a lot that goes into just the design of this problem,

whether it's a private placement or tender offers. There's different time duration of tender has to take place over three months plus. It has to be broadly marketed, attributed to be balancing kind of supply and demand. And there's some platforms to do this, but there's a lot of different rule and design decisions with it. Space Six was, I think the market will talk is a good one. But we'll know it as well. I understand that Airbnb was another example that said if you're at the company, and you can't sell secondary and it created this negative incentive for people to say if you need

to go sell it. There's been a bit of growing up in the industry of, okay, you need to think about how you can give liquidity to people who are there, keep long-term aligned incentives. And often that comes in the form of can't sell more than X percentage of your stock of long-term invested or no more than Y percent per year trying to do that and then run regular processes. And so I think space is the old, I think a lot of people today talk about how Andrewville does this. where I think they call it on the order every half a year, just about so long as there's sufficient interest, people can go and say what they're thinking about. And that's been such a hard stock for investors to buy that there's generally requisite interest that effectively there's matching

processes to go on through. And so I think it's going to evolve a lot over the coming years. I think the other trend as well has been loans that people can take against it, sort of going from only Silicon Valley Bank, First Republic, to even companies being built specifically to provide this. And so we're fascinated. by it, I wish I could give you a conclusive of here's what we've settled on, but you can't run around it. And I also think, too, if you're sort of asking what are people's desires in the same way, people's impact, but they'll take care of their families. You need to be a party to that.

And actually, I do think it's an obligation of management teams to get to. And I think it tends to happen in probably the third to sixth year, depending on the stage of the company. And I think we've fallen into it. So in the coming months, let's talk about it. It's a fascinating one. It raises the question for me of if there are other areas. of this company building art and process that you think just should be much easier for the founding

leadership team. Are there aspects of building a company still that you find just crazy unnecessarily hard or look back on it? It's like, I can't believe that was so difficult. I think one of the fundamental premises is like you cannot be good at that many things at once. Even the greatest company in the world can pick a couple of things that they are extraordinary at. The rest maybe are halfway decent and hopefully not too many terrible. But if your plan is to be excellent at everything. It's a fundamentally crazy plan. And in the same way, it is a little bit nuts that for most companies, it's like whether you're like a deep tech company working on self-driving, fundamentals and machine learning, data sets to delivery company to a farm,

one of the core first challenges you need to figure out your credit card software, your management software, your accounting software, your HRAS software, all these different sets of suites are kind of manual processes. And so I think that this trend of the standardization of if you use the stack to be more successful as a good thing, you like to be a part of that. I would say that for me, generally, like the things that I've hated come in these sort of sets of TDM. And so we've been better, I think, on the financial side of automating away some of these sorts of challenges. But one that I think is very interesting. And now we're seeing it with larger and growing sales stack. There's even basic things. Like, if you want to manage

to the inputs, it's very hard. So while it's great that there's CRMs like Salesforce, I think all the wrettes of the things of like how busy your calendars, what's the productivity, the calculations around specific people. If you actually dig into how I would say for me, this is top of mind, sales apps, revenue operations. It's very bespoke, I think, in a lot of companies right now and a little bit chaotic. And so that's a space that I think is important, particularly the context of companies can grow faster than ever. There's still, in my mind, is not correct stack. And we can get there is by heavily constraining it and trying to pursue that. So that's the space that for me, I think someone solves it. We'll buy it. Other people would use it. That's just my

What has you most excited about Ramp specifically in the next 12 to 18 months, sort of that intermediate term, probably edge of your near-term planning? What gets you excited? What's getting you out of bed? Just feel lucky and giddy, frankly, just to have the chance to, this is sort of the moment that many of us had dreamed about years ago came sooner than it anticipated, but to nine figures in revenue and less than two years from launches is a little bit wild. And to some of this is just don't screw it up, stick with it and stay humble.

The ones for me very specifically, some of my background was around turning data into savings for customers. The last company, we processed 100 million emails a day to generate nine figures plus savings for our customers. And I think that placement in some of the workflows that Ramp is in combined with the value can present back, I want to go a lot deeper there to go not just from laying of best in class tools, but real interesting data products and savings, time, money, everything on top of it is a big space that we can do.

a lot more of is one. And I think that the other one for me is overlaying of if you're deeply embedded close to the metal in the movement of funds, you have insights about what best in class looks like. Could you make recommendations and build more efficient processes for people? And so

when you think about the card, it's fundamentally, it's a 30-day fixed product with interchange as a way to pay for it. But we're moving over a matter of months after launching bill payments over a billion dollars a year and through bill payments rails and the light. Could you go and start to help people no matter how they're paying, get more balanced cash flow is more of every dollar an hour.

So it's starting to take our fundamental components and mixing and matching them to new form factors, simple ways for however companies want to financially improve their company, ranking partner for doing that with high precision. Eric, it's been so much fun. What a crazy business story. He said zero to 100 million in a couple of years is not common. So really cool to hear the story and how it was accomplished and we'll keep going from here. I ask everybody the same traditional closing question.

What's the kindest thing that anyone's ever done for you? I mean, this is going to sound really trite. And I think it's believing in in me and checking in. And I think that one of the hardest things about starting and scaling a company over many, many years is it's a constant battle of it's not going to work or come back with proof. And to have someone, and there's probably a dozen people who I'll never forget it at different moments, you took a shot and said, you know what? I'm going to trust you, go give it a shot and prove it and gave the rope, gave the possibility

a chance for me to go and try it. What else can you ask for? This fundamental, most unkind things that someone can do in business and also people's life is, as far as I know, people only have one shot. And the worst thing you can do is say, no, I don't believe in any work or don't do this. And there's times when it's too busy, it's not good fit. But I think that giving people that shot in that opportunity, whether it's investing in them, it's spending time, it's simply saying, you know what, I believe this can work. How can I help? And being sincere about that is really rare. It's one of the most common answers. I just won't surprise you, you know, taking a bet. Maybe beyond the current evidence or beyond some need to or whatever, it's obviously something we should all do a lot more up.

So wonderful conversation, Eric. Thanks so much for your time. Thanks, Patrick. Appreciate it a lot. Next, you'll hear my conversation with Canales customer, Giuseppe Coco of LK advisors. We talk about the good, the bad, and the ugly around proprietary models and how do you have you Giuseppe has made Canalist a key component of his investment process. So, Giuseppe, I think the place to start is with the concept of a deep economic model on a business. You've got a unique background in banking where I think you spent, God knows how many hours building complex models. And I'd love to just begin there. Just talk us through your early experience, building models, sort of the good, the bad, and the ugly.

Yeah, so we started out with investment banking, which is very much on the private side. And there, obviously, you have a lot more information, and so you can go in a lot more detail. So you would look at the models that we were building for deals were frequently 20, 30, 40, 50 taps, thousands of lines long, only like to get to a very simple output. And, you know, you would spend hours just changing this, changing this, updating this. It would literally take forever. And it was very difficult, almost like to audit. You would find something, okay, you know, this number should be this, this number should be that.

you would literally go back and spend hours and hours and nights just trying to reconcile that just because most of the times people are just adding more and more complexity to those models and always ask for incremental complexity. What do you think is the most useful and the least useful part of how those complex models are built on the banking side? Obviously, precision is good if you can get to it, but false precision is bad. What do you think the good and the bad is of that style of model building that's so complicated? I think to a lot of people that provides Paul's comfort because it's more like the more of the

area. But it's actually not the case. It's more sort of, you know, what are the relevant things? What are the key things that actually make a difference? And frequently, that unfortunately just gets lost in the detail. On the good side, to be frank, I don't think there is actually much because you think of a solution like Canalist, which the first time I opened a canalist model, I was amazed by the level of detail and precision that they could get basically into their one-tap models. I was totally amazed by that, that it was even possible. You know, until that point, I mean, that hasn't even crossed my mind that it was really

possible to build such a detailed and sophisticated yet simple model in a manner that they do. If you think about those early days and what Canalist does or when you first encountered it, what did you like about the service when you first encountered it? Like, what did it replace for you? And because you didn't no longer have to do those things, what did it open up or unlock for you with your time? When I first started on the by side, you started out by the sort of models manually. My former boss asked me, you know, to build out like models manually into this and

that. I mean, obviously, like, your work basically piles up. And I mean, it just takes hours. It can easily take a few hours until, you know, if we don't want to potentially even like three weeks, depending on the degree of complexity to build a proper and running a fully integrated model for any of the companies. What Canales does is basically condense all of that process. So it's as simple as downloading any PDF file just from the internet.

And you have the whole model there with all the relevant KPIs, with all the relevant drivers, so you can overlay basically your inputs. I think from all the tools I have been using on the BySert and I'm using today, it is the one that reduces friction the most. Giuseppe, I'm curious, where did you first hear of Canales? Funny enough, I actually heard about Canales on your podcast in an ad. And, you know, it was one of those evenings. I was at home listening to a podcast and, like, you know, I heard automated models,

auto-opdating. I was like, oh, my God, this is exactly what I need. And I'm curious if you've interacted with others in the investing industry, too, that are using it more and more. Like, are you seeing more colleagues or even competitors or friends using it too? Is that part of the growing network of it? Here in the UK, my previous firm, I started using it and our team started using it. And then, you know, a team that was sitting like next to it was like, okay, hey,

what are you guys doing? you know, how are you doing this so fast? And then they started using it as well. So it became sort of viral. And then when I joined here, so RSIO, funnily enough, you know, when we first met, we talked about it. Like, you know, hey, there's this amazing solution which I'm using as part of my process. He was like, oh, yeah, he's ex-fidelity. One of the Canadaist founders is also ex-fidelity. So he had it very much on the radar. And, you know, it wasn't even a discussion to get up and running when coming here. Maybe just talk about your day-to-day life at LK advisors. What exactly is it that you are doing, what is the daily workflow so that we understand how it slots in?

Depends on the time of the year. Currently, you know, we're going into earning season. So what we're doing right now is lining up our numbers across the models for the companies that we're holding, seeing where our estimates are. And then obviously, there's just like preparation work at the moment. The rest of the time is screening for real ideas, speaking to management teams, attending conferences, setting up calls. And for all of this, Canada's is extremely helpful because you know, you always have a single source of truth which we can refer to look at the numbers and to get a better sense for where that is and how, you know, something that a management team may say something that we like learn may impact our estimates and where and how they could potentially translate

into value. That single source of truth thing is interesting. How historically in firms like yours or in your experience knowing other analysts and PMs, how is ownership of the model typically handled? Because it seems like one nice thing like you said about panelists is it's a single source of truth. Like, it's almost its own ownership. You don't have to worry about it as much. But how, in the absence of something like Canalist, are models typically shared and responsibility for them shared between teammates? Maybe like even going back to the previous experience, I think generally in finance and I think most people will agree that models are sort of, the model on a company, the idea, or whatever it may be, is sort of viewed as the holy gray, the numbers that people

use based their estimates on of value. And it's sort of like the most thing, sort of, you know, what is the impact of fill in the blank get x-y-zat. So people hold it a very, very high regard, and people are very, I want to say, almost jealous of their model and everybody thinks that if you own the model, you own the process and you ultimately like have to do. But the model also is, it's usually in pre-canalist type of times, it is extremely time-consuming and inefficient to maintain. The way it's normally shared among sort of like teammates is usually it's quite easy for mistakes to sort of sneak in. Canalist is great because there are no mistakes in their models.

If you want to have something added, right, you can just read out to the support team and product analysts and they were meant it to your satisfaction. So thereby using Canales, you don't need to worry about maintaining your single source of true. How would you compare how you use Canalyst from your sort of hedge fund days to what you're doing at LK advisors. Is it different? Is it similar? Is it highlighted anything for you about the product or products? It's a bit different. I think in my previous role, the coverage universe was a bit more fixed, a bit more Europe focused. So it was more about updating, maintaining, forming a rolling view.

I think in today's role, it's very different because our coverage and our universe is basically global. So when I came in, I had to think of, okay, so how can we actually like leverage this? And One of the thinking was, for instance, I was very keen to build a what I would call a quality scorecard, which would allow me basically to, when you have to think about across developed markets, what is what most of what we do, potentially even like some emerging markets. How do you compare, cross-compare companies on a qualitative basis? So we started building out this process, which looks at more than 250 KPIs, to help us build sort of a scorecard, which has to score any company along those KPIs.

is from one to 10. And this is a process that we found very well working for us. And that without Cannibalist, I mean, it would have been virtually impossible. Taking years or something. Yeah, it would have taken multiple years, multiple years. What do you think is interesting about where you sit? You know, you're in London, obviously a global coverage in universe is probably a little bit more important to you sitting there than if you sat in New York or something. How does that transfer into the use of Canales and the global nature of what you do. Canales over time, since I started first using the product, they have expanded massively, you know, and wider into, especially like European companies, as well as EM and developed

Asia companies. So the universe has expanded tremendously. The other great thing is, you know, we work closely with their product team to make suggestions on sort of, you know, companies that we care about and companies that we know, sort of, you know, people here in Europe care about. And they are extremely reactive to initiating and launching on new models when we ask them to. That gets put on sort of like a wait list. So, yeah, we continue doing that as we, you know, take an interest in different companies here in Europe.

And I think the roadmap is sort of, you know, to get to like sort of 10,000 companies slash models, which is a pretty wide scope. What do you still do that's, I'll call it very manual that you don't think is too high value and you wish could be automated? Another way of asking is, like, what do you hope is on candleless products? roadmap. I think it would be nice to have something what I would call a by-site consensus. If you ask many people in the industry today, by-side consensus is this very elusive concept of whisper, what some people may even call, right, it's like an sort of unformed expectation and it may vary. What would be amazing would be to have some sort of panelist user-weighted,

anonymized average of what actually the users on the other side thinking and then you know sort of providing an opt-in or an opt-out whether you kind of think you want to participate in that i think that would be amazing the other thing is they're currently working on this canis platform and we have like an internal developer who's working with their team to scale this scoring mechanism that i have just mentioned to you through a python-enabled web platform to basically like run that even at larger scale through the entirety of their platform. And as that becomes basically more life and more consumer-friendly as their website, I think it could open up very exciting opportunities and use cases down the line. I'm curious, Giuseppe, if there's anything that you think is

lost in the process of outsourcing some of this model updating, another way of asking it would be, you know, if you're updating these things manually, does that give you some sort of felt sense for the business that you can't get just by looking at the numbers? And do you think that's worth that at all. I mean, obviously, you're a big catalyst user, so I can guess your answer. But I'm just curious whether there is a downside to, I'll call it, outsourcing some of this manual work around updating the models. I think the first part is that once, you know, when I, remember when I open my first tenant is more, you see all these things and it's more like, okay, how does this work? Right, you look like an introduction. It's like, hmm, you know, I like it, do I trust it? And I think it's more

when you have your sort of, you know, the companies that you know and you follow them and you have a sense for the history. Obviously, you know, you need to look at the numbers and you just anecdotally get a feel for what it is. But I think the beauty of catalysts is again to mention, right? So you open a cannabis model, there are five tabs and they have these like beautiful summary sheets. And I almost find it a lot easier to just look at those trends and get a sense for how something has performed, what is driving X, what is driving Y. They actually enhance, in my view, that process of understanding what is going on. I had this debate with multiple friends and my view is that it's totally overrated to say, sort of, you know, you need to build

the model to entirely understand the business. I think you just need to like look at the numbers, understand and how they flow, which is, you know, what Canada helps you with and do. I think the other thing that I found super helpful that initially wasn't as intuitive is their custom templates. So Canada says like, template or an LBO, a DCF, comms, all these usual things. We have our sort of proprietary process of how we look at things, how we value things, the score cut that I've mentioned to you. So we spent, we invested a decent amount of time into building our own templates that

correspond to our process that work exclusively on the kind of platform. Once we scale, we put in that, you know, it incrementally helps us understand and make sense of a business and wise we can, you know, continue to comply. with how we do things and how we think about things. Awesome. Well, Giuseppe, thanks so much for taking the time to do this today. Really interesting career arc that you've obviously done a lot of modeling. So a great set of experience to understand why this is valuable. Thanks so much for your time. Thank you. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast

complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.