Delian Asparouhov on Ramp vs. Brex culture: focus beats diversification when building a monopoly

Up next, who we got?

Do we have anyone in the reream waiting room?

Got Delion.

I think we got coming through

of coming in [music] from Founders Fund. Is he available in the reream waiting room? Let's bring him in to the TBPN Ultra Dome. Welcome to the show, Dian. How are you doing?

You know, just great day. Great day. I got to be here. What are you hitting me with? No, not the flashbang. [laughter]

Did this hit you like a flashbang or were you expecting this?

No. I mean, how was I supposed to know the 70s? They did a good job of, you know, sort of keeping it keeping it down low. And I want to start where it ended. Common ground with Eric and Kareem, right? There is some common ground. They both have now sold a company to Capital One.

There's a lot of distance between the two of them.

Kareem and Eric realized it is impossible to have a significant influence on the world by being within the structure of Capital One. the only way to save customers time and money was to go out and build an independent generational company.

Okay.

Pedro somehow believes the exact opposite.

He believes the only way for him to accomplish anything is to go into an old stodgy bank, convince them to overpay for his company by 50% and probably accomplish nothing with the rest of his life.

Whoa, whoa, whoa, whoa, whoa. Okay, so we're not we're not Yeah, we're not we're not doing we're not doing uh we're not going to do any grave grave dancing here as much as

But uh who who knows? I mean, uh, you know, what if he what if he does his earnout, he leaves, he starts a new company. You know, are you are you going to sign up? You say, "Hey, you know, I've backed people that have sold to Capital One before. I've seen this story before. His next company might what if you end up inspiring him to go do the earnout, come back, start a start a ramp competitor.

What if he starts a movie with a mass driver? Couldn't possibly." And you're just like, "Wow, he actually cracked it." You know, this could happen. I don't know.

Look, as Josh likes to say, chips on shoulders, but chips in pockets. So I'm just trying you're putting a chip on his pocket. you are.

Exactly. Exactly. The thing that I'll also you know sort of point out and this is more of like a you know sort of you know general company building you know sort of macro point but it's an analogy that I um you know learned from Keith back in the day which is uh building companies is a lot like laying cement

in the early days you have the ability to like you know manipulate it shape it etc right it is you know sort of soft and malleable the moment that it starts to harden though trying to change company culture requires like a jackhammer it's loud it's painful it's disruptive it breaks your structural you know sort of integrity and so I think the thing you was kind of listening into you know sort of Pedro's interview and it's a little bit of a you know sort of joker quip but it's still funny to me that throughout the entire interview there's never a time where he like really deeply was focused on how this is impacting his customers in particular is it going to save them time and money right and I think that just comes down to what the early days of the two companies were like in terms of focus areas the early days of Brex were focused on celebrating go to market celebrating basically like signing up logos celebrating wins I'm not saying that's like necessarily a bad thing I'm just saying that is what the culture was they celebrated the champagne campaign they set up the you know sort of South Park, cafe, and those types of micro decisions feed into what employees want to work on because they see what the, you know, sort of founder celebrates versus, as you guys know, what ramp celebrates from the get- go has always been saving customers time and money through better product, better automation, better savings. And that's what ultimately the individual employee on the line, you know, celebrates and thinks about every single day because they see that that's what the founder is celebrating. And so I think as you see this like, you know, the two sides of the story basically play out, I actually think it comes down to those early early cultural micro decisions. And I think companies and founders should be thinking about that a lot even in completely unrelated you know sort of categories of like what is going to be the penultimate you know sort of winning culture. You know when I think about the space industry are you relativity space and you're celebrating like renders and capital raising or are you SpaceX and you're celebrating like technical accomplishments and actually like landing rockets and ultimately that's going to be what you know sort of plays out. Relativity goes and raises $3.5 billion never launches a rocket. SpaceX obviously launches their first rocket on like you know I think $60 million total raise. Um, so

on the on the question of like ramp strategy, I'm interested to hear your thoughts on like the actual structure. Like if you think about Brexen Capital One, they now have like that combined entity has a consumer business. Uh, I've pushed Glimman, get me a personal ramp card that I can pull out for my personal finances. I actually talked to some people who set up like whole LLC's just to run their personal finances through RAM. It's like very cumbersome because RAMP does not have a a consumer business. Is that in the cards? Is that do you think that there's a world where ramp grows into a bank or is or is focus like the actual correct strategy for now forever? How do you see it progressing?

I think focus really matters, right? Like we have a like you know sort of core ICP which is just like you know you know the um all basically enterprises of America and I think like there's so much more that we can do to serve our customers even better. you've you know sort of seen us you know basically spin up you know sort of ramp labs and you know today we just you know they launched you know a new version of you know sort of ramp budget and I think any additional energy spent on just continuing to develop next generation products especially ones that obviously utilize AI that is focused on the core ICP for ramp is a far better utilization of our time and you know to take it back to like the Peter Teal philosophy we believe in building monopoly right and ultimately anything that isn't serving that core ICP is a distraction from the potential to build a monopoly I think what I find particularly exciting about today and about the news about Brex is that it is probably the strongest monopoly thesis for ramp that has existed since the company's basically start if you remember when we funded it you know and it like you know came out and launched in 2019 and 20 amme still had like a really big you know enterprise business was a multi-billion dollar company Divvy was still super you know sort of fast growing bill.com was still super you know sort of fast growing expensify was fast growing like there were so many players in the market you fast forward today divy basically got acquired is barely around anymore more Brex obviously, you know, got acquired. AMX has almost entirely shifted their focus to their consumer business, right? If you look at how much of their gross profit basically comes from consumer business and how rapidly that's growing relative to enterprise, it's all the CEOs basically talking about on quarterly earnings calls. Their entire basically like you know, you know, FMV basically growth over the past three years is entirely based on the consumer business. And so enterprise corporate spend card spend management budgeting just the like smartfo suite that smart CFOs use dude the like field is somehow more open today than it was 5 years ago there's less funding going into it less like super competent teams that are you know sort of focused on it and so why would you ever like give up focus on just continue to maximize that when like you know we're still only 1% of the way there there's so much more basically to do and so yeah would I as a consumer like love to have that level of power like in my hands. Sure. But like as a ramp shareholder, why would we not give up the fact that we literally have the best monopoly opportunity since the company got started that we need to continue to go capitalize on?

Jordy, anything else?

No, I uh I'm I'm happy uh I'm happy for the Brex team. Uh and uh I think it's I think it's a great outcome and I can also see why you are excited about this moment simply because a lot of people uh probably mocked you for you know investing in a corporate card company. Yeah,

when you initially led the round into ramp, even with the quality of the team, it seemed, you know, like you were saying, it seemed like the the uh the cards had already been, you know, fully dealt and and there wasn't, you know, some type of uh green field opportunity. So, um uh I I guess congratulations to you too.

Congratulations to everyone.

But yeah, congratulations to everyone. Honestly, like I hope I hope the the industry uh can just like move past this like kind of like rivalry. It's like we're all we're all like serving to to we're all building tools to to grow

uh grow grow the economy and uh that's something I can

Delian's got to say something nice. Aren't you a YC founder, Delian? [clears throat]

Uh you know, summer 2014, but you know,

so you're a YC founder. This is a good outcome for the YC community. Let's give it up for the YC community. [applause] Deliver returns.

Jordy and Kugan, you guys are much better people than I am. I think that's why you have much better hair than I do. I unfortunately am incapable of not being anything but like a vengeful paranoid. [laughter] So that's all I've got in me. And you know, I'll say the um you know, the ramp story, as you guys may know, started on Fortnite. You know, Kareem and I playing together, seeing his brilliance. I'm happy to, you know, sort of end the Bre story and the rivalry on my favorite, you know, basically saying in, uh, you know, gaming, which is GG, WP, uh, you know, Ezre, which stands for good game, well played, easy game, no rematch.

No rematch. Savage.

Who knows, there might be a rematch. We'll see what the next company is.

Anyway, have a good rest of your day. We'll see you later, Dian.

Cheers. Bye, boys. [applause] And that concludes probably the most chaotic stream of our show.

Definitely the most chaotic. We had technical difficulties. We had flashbangs. We had

surprise guest $5 billion deal get announced live. We had bootleg merch.

Bootleg merch. We had a good time.

Uh but uh but no, this is uh a fantastic moment for Capital One and Brex and uh we are we are excited for them. So

um I think that's it. I think that's it. Um uh chat the the the concerning thing is the chat knows that now they can just

say start spamming flashbang into the chat and I'm not going to be able to keep it together.

Nope. It's going to have to happen every once in a while. Anyway, thank you for tuning in. Leave us five stars at Apple Podcast and Spotify. Subscribe to the TVPN newsletter at tbpn.com. Uh we have a great show for you tomorrow. I think we're a little bit lighter on the guests as we've been doing on our Friday shows. We'll be hanging out, bringing you the new

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Doing the mansion section,

of course.

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Goodbye.

Goodbye. is win.