Eric Lyman

Ramp set out to build a billion-dollar company in 18 months

Eric Lyman and co-founder Kareem Amin explicitly decided before starting Ramp that they wanted to either build something huge fast or fail fast. They actually hit a $1B valuation in 2021, less than two years from incorporation.

“And so we knew that if we wanted to leave, we wanted to go and make this company big and either make it huge quickly or fail really quickly. And so, yeah, Kareem really did have that conversation. I think he had it with Calvin, who, you know, later he cracked me up. I think when we finally did become a billion-dollar company and it did occur in in 2021. And so it was less than 2 years from incorporation of the company.”

Sometimes it's best not to know the odds

Ramp's co-founder Calvin argued that ignorance of the odds can be an advantage: had they researched it, they'd have found no NY company ever reached $1B inside 18 months, which might have stopped them from trying.

“And Calvin said, you know, look, sometimes it's best not to know the odds. You know, if I had looked it up and known, I would have seen that there was no company in New York's history ever that was worth $1 billion within 18 months or 2 years or 3.”

Steal thisWhen chasing an audacious goal, skip the research on how rarely it's been done so it doesn't talk you out of trying.

Ramp grew revenue ~70x year-over-year, ended 2021 at $8.1B valuation

Ramp launched publicly in February 2020, grew revenue roughly 70x year-over-year, and finished 2021 with an $8.1 billion valuation while approaching but not yet crossing $100M in annual revenue.

“I think that year revenue grew something like 70 times year over year to the point where— in a small denominator, but we had hit— it was, it was approaching $10 million a year before the company was out for even a year. And by the end of 2021, again, I think the multiples really hadn't changed too much. But the company ended with an $8.1 billion valuation and we were coming up to but hadn't yet crossed $100 million a year in revenue.”

Ramp went from $1M to $100M revenue in 15-17 months

Ramp hit its first $1M run rate in spring 2020 and reached $100M in revenue roughly 15 to 17 months later, one of the fastest such climbs ever recorded.

“I want to say like 15 to 17 months from $1 million to $100 million. It was explosive.”

How credit card interchange actually splits up

On a swipe of roughly 2.9% plus $0.40, processors like Stripe net only 0.1-0.5%, the merchant bank keeps about $0.10, Visa/Mastercard keep 0.1-0.4%, and the card issuer keeps most of the interchange because it carries the credit risk.

“So, um, you might see headline on some of these sites, you know, 2.9% plus $0.40 or something like that. At the very end of the day, they might keep You know, it varies anywhere from like 0.1 to 0.5% is ultimately their net take, but the gross is much higher because they're collecting.”

Boring B2B 'paper cut' businesses make incredible companies

Lyman argues the best software businesses abstract away the many small operational headaches of running a company. Ramp (cards), Rippling (HR/payroll), and HubSpot all win by removing little paper cuts owners deal with daily.

“There's a lot of these tools. HubSpot, you know, you mentioned them like they're an incredible company that takes what used to be— there's lots of little paper cuts that generally need to deal with as a business owner and abstract those away. And so I think kind of these boring business models can actually be very good.”

Design the company around velocity and count the days

Because legacy card competitors (Amex, Citi, Chase) move slowly, Ramp's edge was explicitly designing for speed. Lyman tracks the company's age in days (2,310 at recording) to stay obsessed with shipping faster.

“And so a lot of our view was early on we needed to count the days, move at incredible velocity, and simply be designed to ship things faster. And so today we're 2,310 days old. We're 6 years.”

Steal thisPick velocity as your durable edge against slow incumbents, and literally count your company's age in days to keep urgency high.

Hire people who find joy in their craft, not low-cost grinders

Lyman's contrarian hiring view: rather than pushing cheap labor to burnout, find people who take extreme joy in their craft and set them up to do that all the time, paired with extreme company-wide focus on one or two things.

“I would rather find people who like just find extreme joy in their craft, uh, and just set them up where they can be doing just that as much as possible all the time. But I think that you have to, if you want to move quickly, you can't do everything. There's only one or two things you can pick and you try to have like extreme focus as a company on that.”

Manufactured housing: the bottleneck is zoning, not the factory

Lyman considered building a manufactured-homes company but concluded the real constraint isn't manufacturing (Japan/Tokyo proves cheap standardized homes work) but US zoning rules. He still thinks whoever cracks the zoning problem has an enormous opportunity.

“But then the more you read about it, the constraint and the bottleneck was not around manufacturing at all. It was all the zoning. And it was that you could manufacture a house that was zoned to go nowhere unless you could go and see it. There was a lot of complex problems. And by the way, I hope someone solves a lot of this.”

Steal thisIf you tackle manufactured housing, solve the zoning/permitting bottleneck first, not the factory line.

How Bank of America invented the credit card by mailing Fresno

In 1950s Fremont (Fresno), where ~60-70% of residents already banked with Bank of America, BofA mailed everyone in town a 4-5 digit card to buy on credit anywhere. It exploded, then they franchised the BankAmericard to other banks.

“Let's get everybody and we're going to send you cards. I think they mailed everybody in the town was like a 4 or 5-digit card, and you could go use this, and you could say, put it on my card, and you would go and pay the bank back later. And it just exploded.”

Grow 30% for 30 years and you become a giant

Lyman and Sam agree the core of great businesses isn't a single 100-200% year; it's sustaining ~30% growth for 30 years. Compounding at that rate makes any company enormous.

“It's that which businesses can grow 30% for 30 years. And if you do that, you will be a giant business.”

Steal thisOptimize for durable ~30% annual growth over decades rather than one explosive year.

Don't sell: never interrupt the power of compounding

Lyman's biggest takeaway from the Founders podcast about old-money families is that they simply don't sell. They hold through every recession, while most people sell at the bottom and interrupt compounding.

“And a lot of these families just like don't sell. That's the biggest takeaway from the Founders podcast is don't sell, don't fight interrupt the power of compounding. You want to find a business where you can just compound for a long time.”

Steal thisFind a business you can hold for decades and refuse to sell through downturns so compounding never resets.

Pre-suffer your problems 3-12 months out

Ramp's antidote to a near-fatal early failure (losing 75% of revenue overnight at their first company) is to constantly argue internally about problems that are 3-6-12 months in the future, so growth stays smooth on the outside.

“And one of the things in Ramp that we resolved to do is like Kareem and I and others are just going to beat the shit out of each other all the time, worrying about problems that are 3 to 6 months to a year out in the future.”

Steal thisSpend leadership energy fighting over problems 3-12 months out, before they actually hit you.

Read 'Becoming Steve Jobs' over the Isaacson biography

Lyman recommends 'Becoming Steve Jobs' as a deeper portrait of how Jobs changed over his life, calling the Walter Isaacson book more 'pop culture.' He also loves 'Insanely Great' by Steven Levy.

“And I would say like, I super— I really highly recommend that book. There's other great, great ones too on other aspects. Like I love Insanely Simple. I love Insanely Great, Steve Levy.”

Blow up your calendar regularly to audit what you actually do

Lyman argues founders lose control of their week and stop doing the thing they were great at. He periodically 'blows up' his calendar to check whether he's spending time on what he's good at and wants to do.

“And so, and I pretty regularly try to go and like blow up my calendar and be like, all right, I actually love doing this thing. Am I spending any time on it? No. And I promise if you spend too many weeks in a row doing something you hate, you're going to be miserable.”

Steal thisPeriodically wipe your calendar and rebuild it around the work you're best at and actually enjoy.

Design around your flaws instead of fixing them

Lyman admits he only acts on the top 5-10 priorities and ignores the rest. Rather than fix it, he surrounds himself with operationally elite people; on a team you can change yourself or change the team's construction.

“And what I would say is like, it's actually totally fine to have huge flaws. And you could decide to fix them, or you can say, I'm actually going to design, you know, my life or the company or whatever to be performant in that context.”

Steal thisInstead of fixing every personal flaw, hire and structure your team so the flaw doesn't matter.