🔑 Key Takeaways
- For B2B startups, understanding customers through founder-led sales is crucial in the early stages. Gradually switch to targeted marketing efforts like content, community, small-scale events, and PR before moving on to expensive channels.
- Ramp's early success was due to a strategic cap table and great product quality, but their ongoing growth is attributed to their customer experience approach and focus on saving companies time and money.
- Ramp's Growth Engineering Team takes ownership of sales efficiency through automation, AI, and data to prioritize leads, craft messaging, and improve response time. Their innovative approach tests new channels and events for better results.
- Ramp's emphasis on reducing cycle time, bias to action, and efficient communication has resulted in unprecedented product velocity and success in attracting and retaining A players.
- Ramp emphasizes time management, quality work, and work-life balance to cultivate a happy and engaged team culture. They prioritize openness and gratitude, celebrating successes and valuing employee happiness.
- Startups should focus on diversifying their portfolio, leveraging PR as a growth machine, and fundraising with clear goals to drive non-trivial amounts of top funnel growth. All growth channels should be optimized with a dedicated team.
- To build a growth engine, prioritize data-driven hypotheses and product/non-product projects with a culture of quick experimentation and learning. Motivate growth teams with intuitive north star metrics and establish rituals to foster a productive culture.
- Teams benefit from a translation layer that allows them to prioritize and allocate resources, focusing on significant impacts rather than perfection. Segregating teams by customer journey and using regression analysis aids in measuring success.
- By holding out groups and using methods like A/B testing and regression analysis, companies can determine the cumulative impact of changes. A common currency, like a north star metric, becomes increasingly important to score, prioritize, and estimate impacts of efforts and determine what projects to pursue. Next-generation A/B testing platforms help modern growth teams to 10X their experiment velocity.
- The right success metric for a business should be focused on value creation, intuitive, and aligned with organizational goals. Prioritizing one goal at a time can also make the strategy more effective.
- When measuring investment ROI, focus on the customer's LTV and use the payback period method to measure the time it will take to recoup the cost of acquiring the customer. For B2B growth, start with founder-led sales and low-cost marketing efforts before investing in paid marketing and SEO.
- Failure isn't a setback but a chance to design better tests. B2B companies must maximize treatment effect by experimenting with all possible tactics and celebrating failure to optimize their strategy over time.
- Consider all potential factors and test them together to improve touchpoints. Failing fast and redoing is better than wasting time. Use third-party tools for growth and experimentation. Personalization tools like Mutiny can have a significant impact on website experimentation.
- When hiring, consider the network search and data-driven approach, and prioritize rewarding top performers with higher compensation over equality. Retention and performance management are also important for long-term success.
- Actively listen and understand underlying motivations in negotiations to maintain a high talent bar in any company. Use mutually exclusive, collectively exhaustive framework and Never Split the Difference by Chris Voss for valuable negotiation tactics.
- Focus on understanding the other person's priorities in negotiation, look for well-rounded interests in job candidates, align team cycles, and always try to negotiate for savings in business contracts.
- Try to negotiate software contracts and be aware of quarter-end sales pressures. Focus on hiring based on slope and stretch, and consider Ramp's services or negotiate on your own. Small teams can accomplish more, as shown by Ramp's success. Reach out to Sri Batchu on Twitter and check out Ramp's career opportunities on ramp.com/careers.
📝 Podcast Summary
Founder-led sales to targeted marketing: A step-by-step guide for early-stage B2B companies.
For B2B companies, founder-led sales is crucial in the early stages to understand the customers better. Once the team knows how to sell, the next step is to hire a few salespeople and then begin targeted marketing efforts like content, community, small-scale events, and PR. After understanding the customers and the market better, companies can switch to expensive channels like paid and brand efforts, and SEO. Sri Batchu, the head of growth at Ramp, believes that as companies progress, the channels get more effective, but they also get more expensive. Ramp, one of the fastest growing SaaS and fintech businesses in history, as per Packy, achieved this success by setting ambitious goals for growth consistently and working very thoughtfully under a lean team.
Ramp's Growth Strategy and Customer Experience Approach
Ramp's initial growth was due to a combination of great product-market fit and a unique growth strategy. The co-founders' successful past experience and reputation helped them build an impressive cap table of early stage founders and influential operators. Many of Ramp's initial customers came from these companies or founders. Despite the majority of their revenue coming from mid-market and enterprise customers, Ramp's early success within the tech founder community was due to their strategic cap table and excellent product quality. While Ramp does have multiple channels for growth, their secret sauce is not found in a unique channel but rather their overall approach to customer experience and finding ways to save companies time and money.
Ramp's Growth Engineering Team Improves Sales Efficiency Through Technology and Data
Ramp's focus is on driving investments through technology and data to make sales teams more efficient. They have a growth engineering team that automates workflows, adjusts third party data, and uses AI to improve efficiency. The engineers take ownership of the quota and are accountable for pipeline-driven and efficient-driven success. This leads them to come up with projects that will have essential impacts on efficiency and top line. The team helps sales teams prioritize leads, find the right prospects, and craft messaging as well as prioritizing responses and drafting possible responses for teams. Ramp has channel-based teams, a product engineering team, and a small innovation team focused on cross-channel experimentation. The innovation team focuses on testing new channels like TikTok and Reddit, referrals, and first party events.
Ramp's Culture of Velocity and Efficiency
Ramp prioritizes velocity in their work culture by instilling a razor-sharp focus on reducing cycle time and a bias to action. They reinforce the importance of smaller units of time and remind employees that each day matters. This culture has resulted in unprecedented product velocity that has been praised by investors and maintained as the company grows. Ramp's responsiveness is notable, with quick responses on Slack and clear action items for each task, even if not completed. This allows for efficient work across teams and maintains the culture of reducing cycle time. Ramp's success in attracting and retaining A players is a testament to the effectiveness of their work culture.
Prioritizing Work-Life Balance and Celebrating Wins at Ramp
Ramp focuses on effectively managing time through focus and response times, calendar blocking and calendar audits to prioritize tasks. While hard work is important for success, it is crucial to maintain work-life balance by emphasizing quality work and celebrating wins. Ramp's culture of autonomy, flexibility, mission alignment, and gratitude for hard work and impact contribute to the team's general happiness. Ramp builds a culture of openness by sharing wins publicly and tracking team engagement during all-hands meetings. The company's IT team tracks participation percentages in chats and reactions as a measure of content delivery, not mandatory engagement. By prioritizing work-life balance and celebrating success, Ramp maintains a culture that values quality work and employee happiness.
Efficient growth strategies for startups
Efficient growth in a diversified portfolio of bets at a reasonable ROI and building a system that's designed around experimentation and data-oriented is crucial for startups. Ramp's ability to leverage PR as a growth machine and fundraising as an effective way of creating a market moment helped them drive non-trivial amounts of top funnel growth. To make each growth channel more efficient, companies should focus on pushing customer awareness via owned and earned media. Thoughtful PR moments and clear goals for fundraising can make it a successful growth lever. Every company should eventually end up doing all the growth channels and then has a team dedicated to keep optimizing them.
Importance of Unique Information and Traditional PR in Fundraising
When raising funds, adding unique information about the business can provide more value to readers and improve the company's reputation for recruiting and hiring. While channels like newsletters and podcasts work well for certain audiences, traditional PR remains an important piece because it targets a different audience. Building a growth engine in a company requires a culture of defining hypotheses that are data-driven and executed quickly, with a mentality for product and non-product projects where failing and learning quickly is encouraged. A good growth team is motivated by simple north star metrics that are intuitive and directly impact what the growth team can influence, such as monthly active orders. The team's structure and design are less important than having a culture of rituals and cadences.
Using Metrics like Monthly Active Orders to Directly Influence Teams
To ensure accountability, it's important for teams to have metrics that they can directly influence. By creating a translation layer for every team's metric into MAO, or monthly active orders, it becomes easier to cross-prioritize and allocate resources. The translation layer may not be perfect, but it's meant only to guide marginal decisions. To reduce cognitive overload, only decisions with big impacts are made clear, despite the measurement framework not being perfect. Teams are segregated based on the customer journey, where they optimize load time, number of searches, number of items in cart, and time from cart to checkout. Regression analysis and long-term holdouts help in determining the impact of various surface areas on MAOs.
Using A/B Testing and Regression Analysis to Determine the Impact of Changes.
Holding out certain groups or experiences and comparing them to others helps companies determine the cumulative impact of changes or additions they make. A/B testing and regression analysis are two commonly used methods. Having a common currency, like a north star metric, becomes increasingly important as companies get bigger, allowing for easier cross-allocation of resources. Translation factors for various teams' efforts can be established to translate back to the north star. This helps score, prioritize, and estimate impacts of efforts to determine what projects to pursue. For example, Ramp's growth team used dollars of SQL pipeline as their north star. Companies like Eppo offer next-generation A/B testing platforms to modern growth teams to 10X their experiment velocity.
Choosing Effective Success Metrics for a Business
When choosing success metrics for a business, it's important to have one focused on volume and another on efficiency. The right success metric should have a clear linkage to value creation for the business and be intuitive for all people working internally. It shouldn't be too far from revenue and value creation, but also not something too trivial. Examples of good success metrics are users for companies trying to drive more users and engagement for companies trying to drive more engagement. It's also important to prioritize one goal at any given time, whether it's growth, engagement, or monetization, and align everyone in the company towards that goal.
Focusing on LTV and Payback Period for Better Investment ROI and CAC Reduction
When measuring investment ROI versus CAC, it's better to focus on LTV rather than on reducing CAC. Payback period is a better method as it focuses on contribution margin, which is the profit made on a customer after subtracting variable costs such as production and support. Payback period measures the months it will take to earn back the cost of acquiring the customer using estimated profit per month, making it a more reliable method. For B2B growth, start with founder-led sales, hire a few salespeople, engage in low-cost targeted marketing efforts, PR, and brand efforts, with paid marketing and SEO coming later as they become more effective as the company grows.
Experimentation and Failure in B2B SEO
To succeed in SEO, it's crucial to double down on efforts and experiment. Failure is not a setback, but an opportunity to learn and design better tests that fail conclusively. In B2B, experimentation may take longer to yield results, so companies must maximize their treatment effect by throwing all possible tactics and resources at their hypotheses. Account-based marketing is a common example where companies touch high-priority customers in as many nuanced ways as possible to drive conversions. The hypothesis being tested is the strategy itself rather than a specific email or tactic. Celebrating failure and learning from it is essential to optimize over time and avoid repeating unsuccessful experiments.
Conducting Effective Tests for Touchpoints
When conducting tests for touchpoints such as websites or emails, it's important to consider all the potential factors that could be wrong and test them together to improve the touchpoint. While there are trade-offs, failing fast and redoing is preferred over spending a lot of time and money on planning for tests that may fail. Using third-party tools for growth and experimentation is preferred over building in-house for things that are not proprietary or strategic, which allows for speed and efficiency. Ramp is thoughtful about what they build in-house versus what they buy externally. Additionally, personalization tools such as Mutiny can have a material impact on website experimentation.
Two Approaches to Hiring and Compensation for Top Performers.
When hiring for specific roles, there are two main approaches - a network search and a data-driven approach. The network search involves asking your network to introduce you to the best people at companies one or two stages beyond your own. If this doesn't yield results, you move down the list until you find a suitable candidate. The data-driven approach involves looking up information on companies doing well in the area you're hiring and sourcing from their teams. When it comes to compensation, it is more important to reward 10X performers with 10X the compensation, rather than focusing on equality and narrowing the gap. Companies should also consider retention and performance management, as hiring has a high rate of false positives.
Investing in Talent and Problem-Solving for Company Success
Investing in the growth and success of talented employees while managing out those who are not a good fit is key to maintaining a high talent bar in any company. Sri Batchu emphasizes the importance of using the mutually exclusive, collectively exhaustive framework to ensure comprehensive problem-solving and solution development. He recommends the book Never Split the Difference by Chris Voss for learning negotiation tactics that apply to business and life decisions. Additionally, Sri enjoys sci-fi short stories by authors like Ted Chiang and Ken Liu. The core takeaway from Voss's book is to listen actively and understand the underlying motivations behind negotiations.
Negotiation, Interviewing, and Team Alignment Tips for Success
When negotiating, focus on what the other person wants and try to change the conversation towards that, instead of always trying to split things evenly. Also, when interviewing candidates, ask them what they're bad at but still do and why. Look for answers that show they have interests outside of what they're successful at. Additionally, align the sprint cycles of different teams to improve their ability to work together. And finally, remember that everything is negotiable when it comes to contracts, so don't be afraid to try and save some money.
Negotiating Software Contracts and Smart Hiring Strategies
When dealing with software contracts, always try to negotiate and be mindful of quarter ends for salespeople. Hiring based on slope rather than intercept and only hiring when people and teams are really stretched can save costs and increase impact. Ramp is constantly hiring and looking for best-in-class growth and marketing folks. To scale up, Ramp offers a service, but negotiating on your own is also possible. You can push something out until near the end of the quarter and ask for a discount. Small teams can accomplish more and Ramp being a fraction of the size of some of their competitors with similar revenue shows that. Sri Batchu can be reached on Twitter and Ramp is hiring, the URL is ramp.com/careers.