Ramp Co-Founder and Co-CEO Eric Glyman on AI Adoption, Jobs, and Token Spend

[00:00:00] Eric Gleiman: I think so many times in marketing in companies, you have brilliant people, and then the question that gets asked is, how do we get our message out there? And it kills so many ideas, because you have a message and it's about distribution. And the question the team asks is, how do we be interesting? Who's doing interesting things in the world? [00:00:30] Speaker 2: That was just Eric Glyman, co-founder and co-CEO of RAMP, a finance automation platform now worth $60 billion. Stay with us to hear what the spending patterns of more than 85,000 companies tells us about the economy, corporate AI adoption, and employment. I'm Christine Anderson, Global Head of Corporate Affairs, and this is Inside Blackstone. Here's this week's lineup. First, Winfield Sickles is back with the economic weather report. Next up, the main event, my conversation with Eric. And finally, I invited my colleague, Tim Kulikin, to the debrief. He's an operating partner who works with companies on brand and marketing. We're going to unpack some of RAMP's very unconventional marketing tactics. [00:01:16] Speaker 3: Thanks, Christine. Last week was the busiest week of Q3 earnings season, with S&P 500 earnings tracking 29% growth and revenues up 14%, both reflecting resilient corporate fundamentals. That said, equity markets were under pressure last week with earnings from hyperscalers mixed versus expectations, driving the NASDAQ 100 down nearly 10% below its early October peak. Despite this volatility, the key takeaway is that underlying AI demand trends remain strong. Microsoft, Google and Amazon saw between 40% to 100% cloud revenue growth last quarter, combined with a revenue backlog of nearly $2 trillion. The latest macro data tells a similar positive story. Preliminary Q3 GDP showed the US economy grew an impressive 3.4%, supported by continued consumer spending and strong business investment, particularly around AI CapEx. And then against that backdrop, the Fed held rates steady on Wednesday as expected, highlighting strong productivity growth, CapEx, and economic activity. At Blackstone, what gives us conviction is that we're seeing the same thing in our own portfolio. Revenue growth across our global private equity operating companies grew 10% year-over-year in Q3, with continued margin expansion. Energy was our strongest performing sector with revenue growth of 21%, followed by industrials at 13%. Both are benefiting from extraordinary AI-related demand. We can also see the scale of that demand directly. Large language model spending across our portfolio companies is up approximately 20 times year-over-year. And importantly, this isn't just a backward-looking story. Despite all of these noisy headlines, almost 100% of our CEOs, when we survey them, expect business conditions to improve or remain stable over the next 6 to 12 months. So the bottom line is this: We're heading into Q4 with plenty of external volatility, but the signal underneath the noise remains remarkably consistent. Healthy growth, strong corporate fundamentals, and an AI investment cycle that continues to accelerate and is beginning to drive tangible business results. Looking ahead later this week, in addition to more corporate earnings, we'll get fresh reads on the labor market and business activity. All of this will give us more insight into the underlying health of the economy as we head into year-end. And now, over to Christine's conversation, and I can't wait for this one, with Ramp's co-founder and co-CEO, Eric Gleiman. What is... Oh, I see your pens. That's what they are. Yeah. Yeah. I'm very nerdy. It's like, who is this guy? [00:04:12] Speaker 2: And now for the main event. My guest today, Eric Gleiman, co-founder and co-CEO of Ramp. Ramp makes software that helps companies manage expenses. Sound a little dry? Well, there's way more here than you might think. Ramp has grown extraordinarily fast, becoming one of the world's most valuable private fintech companies. More than 85,000 businesses use Ramp, giving it a fascinating window into how businesses are spending money, including how quickly they're adopting artificial intelligence. Along the way, Ramp has also made waves with some very unconventional marketing, which, of course, I can't wait to discuss. Eric, welcome to Inside Blackstone. [00:04:49] Eric Gleiman: So nice to have you here. Thanks so much for having me, Christine. [00:04:52] Speaker 2: All right. Well, you took the subway up to be here. I really appreciate it. Gorgeous day out. [00:04:56] Eric Gleiman: Thank you. Yeah. And public transit is working fast as usual. [00:05:00] Speaker 2: I'm so glad. I'm so glad. So seven years ago, you found Ramp. Give me the short version of Ramp. [00:05:06] Eric Gleiman: If you've ever done an expense report and didn't like it, we might have good news for you. I have. Yeah. But we have good news for you. You can think about it as a better way to run your business. From one place, you can issue smart cards that know your expense policy. They'll do your expenses for you. You can make payments of all kinds, check wires, ACH, and even automate accounting. And so part of what we're trying to do is have financial products that take care of all of the work in the background. And the effect is not only do you need a lot fewer tools to run your business, but you spend less. And a typical business is able to cut their expenses by seven and a half percent per year. And so we're helping [00:05:44] Speaker 2: businesses run leaner and faster. So one of the counterintuitive ideas you had was that a corporate card could be used to help businesses save money. Yeah. So why was that such a different concept? [00:05:54] Eric Gleiman: Well, if you just think about it, you know, most of the large providers out there are essentially marketing of spend more, get more. What if we designed a business model where the more we help in terms of money and time, perhaps the faster we would grow? And so our net promoter score is in the high 50s, you know, comparable with a company like Apple. And maybe our head of design says something of, you know, we're trying to make a product people love in a space people usually hate. [00:06:24] Speaker 2: Pretty amazing for an expense management platform to have that kind of followership. Okay. So you've had this rapid growth, you know, went from $44 billion valuation in June of this year to $60 billion four months later. So is that sustainable? [00:06:40] Eric Gleiman: You know, RAMP is doing, you know, well over $2 billion a year in revenue, growing more than 100% a year. And we're growing faster this year than we were this time last year, 25% faster. But zooming out of this question of, is it sustainable? And consider this, about 1% of all corporate payments in America flow through RAMP, which is remarkable. But it's the version which I like better is 99% of payments are not on RAMP. And if we doubled again, we'd only be 2%, doubled again, only before, only 8%. There's such a long way to go. We're still very early in the journey. I think [00:07:16] Speaker 2: that's part of what gets investors excited. Eric, was there a moment where there was a real inflection [00:07:21] Eric Gleiman: point that you think back on? Oh my gosh. In 2020, we launched. A month later, we were in the pandemic. [00:07:30] Speaker 2: And so... Not a great time to be launching an expense management company. [00:07:34] Eric Gleiman: It didn't seem that way. It didn't. No one traveling. But it turned into this absolute blessing because everyone needed to figure out, how do I manage expenses remotely? I can't just bring the receipt over. To 2022, when interest rates spiked, it really slowed down and killed a lot of the businesses that we competed against. While it's true that businesses were spending less, our value proposition of reduced waste resonated more strongly. And so we've tried to use tough moments as a chance to sharpen our value proposition and be there. Do you feel like you learn more through those tough moments as a team? Definitely. It forces you to really understand why you're investing where you're investing. Not just how fast you're going, but how durable that growth is. I think one of the most famous F1 drivers had said, "On a sunny day, it's hard to pass cars. When it's raining, you can pass 20." I think back to when Ramp... We were late to this industry in many, many respects. And during that time in 2022 and three, we raised more money, even at a lower price. Took a down round. We hired more people. And we invested in technologies that kept saving people more. And so that allowed us to pull [00:08:49] Speaker 2: ahead when others were declining. So really course corrected and focused more on the technology we're building in the team. That's right. That's incredible. Where have you changed where you're spending your [00:09:00] Eric Gleiman: time? I feel like my job is to answer the question of how do we create the conditions for my team to do their lives work. I think in lots of organizations, they're filled with unbelievably talented people who something about the organization is just... it creates conflict. People aren't getting the best out of each other. And so I'm constantly going in, trying to debug, understand how we can speed things up, get to decisions faster. Any tricks for how you do that? I try to look at metrics. How fast does it take to do things? And so often a simple metric I'll go in with companies is, let's say it's a 24-year-old. They have a bright idea. If they want to go buy a new piece of software, how long does it take? Does it take like an hour? Does it take a day? Does it take three months? How many decisions are we making? How many lines of code or new features are we actually shipping? I'll even look at to the percentage of time that my team is in a recurring meeting. And one of the things we like to do is, often it's at the start of the year, we just cancel all the meetings. And if it's important, add it back. No problem. What can start happening to people is their calendar is happening to them. And you lose [00:10:11] Speaker 2: so much of what makes people brilliant. Ramp cancels all its meetings in January? [00:10:16] Eric Gleiman: Yes. Yeah. Fascinating. It's a jubilee day. The team is cheering probably in the background. [00:10:24] Speaker 2: That's amazing. Yeah. A real focus on prioritization, which is a good unlock. Okay. So let's talk about your data. So like Blackstone, you sit atop just a tremendous amount of customer data and you see all of the payments and where they spend money. So what are some of the things you've learned that might surprise people about how businesses spend money? [00:10:44] Eric Gleiman: What has been most surprising to me when we look at the aggregated data is what feels at times is there's almost two economies has been the biggest change from what we saw years ago. Maybe just to jump to the topic that's on the mind of a lot of people is AI. We were looking about a year ago and this set us off to creating an economics lab focus on AI spend in particular. But at the time we had about 50,000 businesses and we were trying to separate, okay, this AI line item is getting big. Does it matter? Are these businesses growing quickly or not? And it turned out that the top quartile of businesses, about 12,500 businesses of most intense spend over a three year period after ChatGPT came out, roughly doubled the revenue. And these are not just tech businesses. It's like a roofer in Utah, construction firm in Florida. They were growing a lot faster with a lot less overhead. And then there were the businesses that didn't adopt AI, the bottom quartile. Over a three year period, they were roughly flat. They grew about 10 percent. Okay, I want to break this down a little bit more. [00:11:46] Speaker 2: Let's go. Let's start at the top around your monthly AI index that you put out. So it's a real time snapshot of how businesses are adopting AI. What are you seeing? [00:11:56] Eric Gleiman: It is happening very quickly and it is happening at a rate that's faster. If you look at kind of census estimates, I think that the most recent census estimate, which is survey based, says roughly 22 to 25 percent of businesses are spending and we see when you actually- On AI. On AI. But when you look at actual spend data, we think it's significantly higher. So your data is ahead of government data in terms of AI adoption across corporate America. Yes, and we believe they pull from a variety of resources, but the Federal Reserve and the FRED database started pulling in ramp data directly because it was this more real-time indicator of what's really happening in business spend. You see different types of spend in different industries. You see very heavy adoption in more tech forward. Exactly. Financial service businesses are very heavy, but even businesses you wouldn't typically expect. Healthcare, restaurants and food service, manufacturing can be anywhere from 25 to call it 40 percent type of adoption. So this is something that's happening and it continues to grow. [00:13:00] Speaker 2: But in terms of corporate AI adoption, where are you seeing it accelerate the most? [00:13:05] Eric Gleiman: Today estimates are that there's about 160 to 180 billion roughly in spend on inference. That's just really on the models themselves. If you think about that, about 8 to 10 trillion a year is spent on white collar labor in the US. And so this is almost saying that the spend on inference is already about 2 percent of that already. And so it's quite large and growing very quickly. Some businesses are spending even more on inference than they are on their team. But when you look at the median company in our data set, and I would say most, I think about 55 percent of businesses do spend on AI already. The median dollar spent per employee is about 12 per employee per month, whereas in that top 1 percent, it's almost 10,000. And so you really kind of see there's some people that are all the way in and others which are just dabbling. [00:14:05] Speaker 2: Do you see this all leading towards a productivity gain? [00:14:08] Eric Gleiman: The way I think about it is that the future is here, but it's not evenly distributed. There are some businesses that, you know, I'll take RAMP as an example. We are growing 25 percent faster this year than we were last year at, you know, over $2 billion a year in revenue. And that's happened in part because we've seen AI has made our sales team more productive. We've seen it make our engineering team more productive, our product team more productive. And we're simply, I think it is allowing heavyweight companies to start [00:14:40] Speaker 2: moving like lightweights again. Your data also challenges the idea that AI is eliminating entry level work. I thought this was really interesting. Yes. Tell me a little bit more. At the start of [00:14:51] Eric Gleiman: the year and towards the middle, there was a lot of fear around this. And so we got curious to ask. And so in the RAMP dataset, we could see who was spending. And we partnered with a company called Revelio Labs that looks at jobs data, pairs it with LinkedIn to a variety of other sources. And it turned out that if you get to high intensity usage, which is not that high, turns out $30 per employee per month, that's like a license or two, you suddenly start hiring more. And that these firms, despite growing at the same rate, were hiring 12 percent more people than ones who did not or would adopt it later. And so it was very clear and it was the first quantitative fighting showing very clearly that spending on AI actually is leading to more job growth. So not the conventional wisdom, [00:15:40] Speaker 2: but so interesting to hear and really does jive with what we're hearing at our companies as well. For sure. Let's talk about token spend. Yeah. This is essentially what companies are spending for their AI usage. That's right. I think it's something that we're going to be talking a lot more about in the future. What is your data [00:15:55] Eric Gleiman: pointing to, and where do you think this goes? The last two months have been among the most fascinating in all of the data. So for many years, what you would hear in the narrative about this was this idea of Jevons Paradox. He's an economist from, I think, 100 plus here who observed that if you reduce the price of certain commodities, that the increase in consumption, the increase in quantity demanded could more than offset. But differently, you discount, you sell a lot more. And that was happening for multiple years. And you'd see the explosion in revenues of these companies. These models are incredible for coding, but many companies today who've used it saying, "I'm paying for more stuff." And maybe they've made individuals somewhat more productive, but the companies still have bottlenecks. And so CFOs are saying, "Hey, we're in our ROI era and we need to see the return on this before that." You're starting to see companies saying, "Okay, wait a minute. I want to use AI, but maybe I don't need an Olympic athlete to walk my dog. I don't need to rent a Ferrari to pick up groceries." And so you're starting to see businesses assess, "How do I use the right model for the right job?" And while I think it's an incredible opportunity for businesses, it's led to both excitement but also new questions for the labs that weren't there before. [00:17:16] Speaker 2: So you talk about token spend as being the third pillar of business spending. [00:17:20] Eric Gleiman: Yes. Yeah. [00:17:21] Speaker 2: So obviously you're saying that companies are going to start to really have to evaluate how they spend money on tokens and where and to what task. [00:17:29] Eric Gleiman: Mm-hmm. That's right. And if you think about it from a CFO perspective, you start with there's a company and an idea and there's some money and then what happens? You can hire people, classically, or you can hire a vendor, go take care of stuff. And that was kind of about all you could pick. The first two pillars. That's it. The first two pillars. And intelligence came on. And in some sense, it's not quite like the first or the second. In some sense, if you look at most of the dollars you're going to spend, that's called agentic. You ask a question and there's a session that gets spun up and a computer basically hires an agent. It may hire another agent. They go debate it out. And a question could cost you 10 cents, a dollar, $20. Who knows? It depends. It's almost like you hire a contractor to fix something in your house. You don't know what the bill will be. So in some sense, it's kind of like you're hiring people. But in other ways, it's like a vendor relationship. You don't own the intelligence. You're renting it. This is an outside party. And so while this is going on and businesses want to spend more on this, and we've seen our own data spend on AI grew 21 times over the last year, many CFOs are lacking kind of the core capabilities to manage this third pillar of spend. And so I think it's new and different. It will be an input for how companies operate. But it's not well understood about the best way to manage this kind of spend. [00:18:52] Speaker 2: You see billions of dollars of business spend. What does that tell you about the economy right now? [00:18:57] Eric Gleiman: I think the economy is in a surprisingly healthy place. I grew up in Las Vegas. And so I went to college right as the financial crisis was going on. I think about this a lot. We think that businesses are in a relatively healthy place. And I think that American businesses are more competitive. We also see more new businesses now than we've ever seen. It's so hard to be a small business owner to have an idea and go out there because you're like, I need to find a lawyer. I need to find someone who knows how to do the books. I need to find someone who knows how to do sales. And we are seeing more small businesses start and succeed than we've seen in the past. [00:19:35] Speaker 2: Okay. Talk to me about software. Yeah. Obviously in the news a lot lately, you know, AI, there's all this buzz that AI would be the death of software. But enterprise software seems really here to stay. What are you seeing? [00:19:45] Eric Gleiman: I fundamentally believe that, you know, access at a low cost to intelligence is going to create a lot of goodness in the world. It's going to allow people to pursue things that they want. But so much of what enterprise software is doing is trying to help businesses set governance, storage, define their business processes and how they want things to interact. People experience this all the time. You hire a precocious college student or high school student to come into your business. They're really smart and they do really dumb things on day one. And it's great. They're going to get there. I was there too. And they kind of learned the ins and outs, how the business works, why the structure is that way. And we're in that moment right now with these models. [00:20:32] Speaker 2: Okay. So let's switch to marketing for a second. You have taken a very unconventional approach to marketing, almost like a consumer brand. So you had one where you took Kevin from the hit show, The Office, Brian Baumgartner, and you put him in sort of like a glass office in the Flatiron district for eight hours and had him do sort of like bill pay. So like, where did that come from? And what was the [00:20:57] Eric Gleiman: origin of that? Brian's amazing. Like unbelievable talent. Long day for Brian. It was, you know, I think he said it was one of the most exhausting, but I think rewarding days. Like that was the most viral thing we've ever done. I think when all is said and done, we had three, four hundred million people watched it. It's wild. I think so many times in marketing in companies, you have brilliant people. And then the question that gets asked is, how do we get our message out there? And it kills so many ideas because you have a message and it's about distribution. And the question the team asks is, how do we be interesting? Who's doing interesting things in the world? And you start exploring. If you actually do something interesting, if you stand out, people get curious. Wait, what do they do? Tony Hawk and Bam Margera on a ramp, you know, and you start going. And so it's been an amazing way to to stand out and, I don't know, make people feel something, uh, in something as state as spend management. Um, how do you start to bring that world to to life? How do you show a wink? [00:22:07] Speaker 2: Well, I agree. The wink is so critical and, and you just hats off to you and your team. I think I really admire what you've done. I think it really is unique and stands out. So very cool. I wanted to talk to you a little bit about culture at ramp. Um, you have a hiring philosophy around hiring people that are sort of earlier career and also hiring people that spike in certain areas. Tell me a little [00:22:29] Eric Gleiman: bit about that. If you kind of start with a lot of job applications, often they start with an idea. I want someone who does this. And someone says, that's great. Did you consider this? Good point. This requirement. Did you consider this? This, this requirement. And before you know it, you have a job description that's really long with all these requirements and you're filtering and filtering and filtering people out. And so you're finding in some sense, almost someone who is checks all the boxes, but maybe is average across a lot of dimensions. I'm sure they're exceptional in their own ways, but you, you're not asking for this one thing we're really looking for. The thing which is most important, who's great at that? Who's the best in the world at that? And so when we say spikes, part of what we're trying to really ask is if there was one job this person is doing and there was one way we're going to go and measure that. Could we find people who've shown extraordinary ability in this? Turns out one of the best hiring pools for finding young engineers is people, kids, when they were 14, 15, 16 years old who played Minecraft. They learned how to code early on. They'd make their own private servers. You'd find these incredible people who didn't just talk about building great systems. They've been doing it. They've been doing it for 10 years. And so it becomes a different type of hiring exercise. And how do we find people that others have missed or overlooked? [00:23:48] Speaker 2: Was there a story that led you to that? Was there a moment where you figured out how to do that or why you took that approach? [00:23:55] Eric Gleiman: It's, some of it is, is just how I grew up. Like I think about, you know, my, my older brother, right? He had a lot of learning difficulties, um, uh, growing up. And I, I was, he's my older brother, right? So when you're younger, like your older brother is your, your hero, you look up to them. And I saw someone who was brilliant. Um, if you wanted to, uh, he knows way more about history than me. Um, uh, his ability to do research is really extraordinary. Um, uh, and yet because, you know, it was harder for him to, to write. We get held back, right? From a school that would, was looking for people to be perfectly well-rounded, um, or to be at a sufficient, efficient level. And yet when I thought, uh, about him, there are some kinds of problems where like, he's better than anybody I know. The world is filled with people like this. Like someone on, on the team went to community college. They were part of this Minecraft group. Uh, they have autism and yet this engineer is able to focus on and obsess over systems and go deeper and deeper and deeper and focus in a way that most engineers can't. And so when we're trying to build, um, systems of extraordinary scale, this is who I'm calling first. That kind of intelligence really matters. I think there's a lot of people with great talent that are, uh, not, uh, given a fair [00:25:16] Speaker 2: shot to, um, to show what they can do. Ramps looking at an IPO. Is that in your future? [00:25:22] Eric Gleiman: It's, uh, you know, one day we, uh, aspire to be a public company. Um, you know, today we're, we're, we're just trying to build a business that stands the test of time. Uh, we generate cash, um, growing faster and, uh, we intend to be there. Well, it was so nice to have you with us. [00:25:37] Speaker 2: Thank you so much for being here. Thanks again. I'm joined now by one of our portfolio operating partners, my colleague, Tim Kulikan. Before joining Blackstone, Tim spent his career building some of the world's best known consumer brands, including running L'Oreal Paris in the United States. Today, he works with our portfolio companies on brand marketing and growth initiatives. Tim, welcome to Inside Blackstone. Thanks so much for having me. All right. Well, what a captivating guy, Eric, um, fascinating on so many fronts, but I wanted to talk to you about all things brand, but maybe also talk a little bit about their data and how that syncs with what we're seeing across our portfolio. So first, AI adoption. [00:26:18] Speaker 4: What did you think of what he said? We're seeing exactly the same thing. You know, the pace of adoption is moving at light speed. And as John shared in the Q3 earnings, our companies are spending 20 times what they were a year ago. So the adoption is moving very fast and it's all about turning that adoption into productivity and real business results. And [00:26:36] Speaker 2: we're really seeing encouraging signs. Well, it's so interesting what their data is showing about AI adoption and what that means for employment numbers. Yeah. I thought that was really interesting [00:26:45] Speaker 4: because it challenges the conventional narrative that AI adoption equals job loss. And in fact, our employment numbers grew by 2.7% across the North American portcos. So our data is showing [00:26:55] Speaker 2: something pretty similar. 100%. All right. Now let's get to brand. So interesting what Ramp is doing. When you think about it, B2B companies sort of acting more like a B2C company with all these marketing [00:27:07] Speaker 4: stunts and tactics that they've tried. What's your take? I think it's fascinating because he really takes the perspective of the consumer and of how the brand is going to connect to the consumer and everything he does. So their why is so clear. Who doesn't want to save time and money? It's an eternal need. And the way that he thinks about it through the product, it's really delivering and delivering in a really [00:27:29] Speaker 2: engaging way. Well, he talked a little bit about, you know, how do we be interesting is the first question he asked, not sort of how do we get our message out, which is a little bit different. [00:27:37] Speaker 4: I love that framing. We're in a new era of how people discover and how they make decisions. And there are a lot of ways to reach people. It's really hard to get their attention and to keep it. So I think the fact that Eric is taking that perspective of how do we get people to care, it's unlocking so much creativity. And that creativity is driving interest and engagement and [00:27:56] Speaker 2: ultimately trust and loyalty. Okay. So when you look at Ramp's tactics, what do you think are the key [00:28:01] Speaker 4: lessons from that? I think the greatest brands are inside out. And with Ramp, their mission and their why is so clear to save people time and money and who doesn't want that. And their product does exactly that in a really unique way. So who they are on the inside is what [00:28:16] Speaker 2: you see on the outside. Kind of like Inside Blackstone. Absolutely. I love that setup. All right. Well, thank you so much for joining us. I hope you come back. Thank you so much. And thank you for joining us on this week's episode of Inside Blackstone. Remember to follow us and subscribe wherever you get your podcasts.