Recession-Proof - a podcast by Ramp

Speaker 1:
You are listening to FinOps today, a podcast room ramp where the world's most innovative finance leaders share what's on their agenda. Here's your host, Ramp's own head of finance and capital markets, Alex Song.

Alex:
Hi, welcome to FinOps today. On this week's episode, we are speaking with Aron Susman, who is the CFO of Ro. Hi, Aron, how are you? Welcome to the podcast.

Aron Susman:
I'm good, Alex, how are you.

Alex:
Doing really, really well. First of all, obviously we're very, very happy to have Ro as an early customer of Ramp. We've known you guys for quite some time. I know that amongst the executive team, there's a lot of cross pollination. We've known each other for quite some time. And I also want to congratulate you guys as well on a recent round of financing that you guys announced consummated. I think it was maybe a month or two ago. So, really excited for the episode today.

Aron Susman:
Thank you. I'm excited as well.

Alex:
Why don't we start off. Tell us a little bit about your background, what you do and also what Ro does?

Aron Susman:
Sure. So I'll start with what Ro does. Ro is building a patient-centric healthcare system and it's completely vertically integrated and the goals to deliver accessible, impactful, and trusted care that people want. We started originally with erectile dysfunction, online diagnosis to delivery of medication. And we have since expanded Roman into Row, and Row now treats a lot of different conditions and we have multiple pillars inside the Row brands. So we have Ro man, we have Ro DM. We have Ro in modern fertility. We have Ro mind and we have Ro metabolic. And addition to that, we have something called Ro platform services, which is made up of two separate business lines. One is kit for the ability to do in-home labs and a work path that lets us do in-home visit. And the Ro businesses use our kit work path, and third party businesses have been opened up and they also use kit work path.

Aron Susman:
So we really believe that we have the best direct patient business that is the longest product roadmap in terms of what we can diagnose and treat. And we believe we're laying the groundwork for other digital health companies to innovate on the back, opening up work path and kits such that they can extend conditions as well. Yeah. So in my background, I actually grew up in Texas and I went to the university of Texas and did their five years master's program. I got my CPA. I really wanted to understand the building blocks of business. And I thought the best way to do that was accounting. I worked at Deloitte early in my career, which was a great time to get experience and really learn how the P&L worked and the balance sheet, but public accounting was not for me. And so I moved to New York in 2013 and actually founded my own startup called SquareFoot.

Aron Susman:
The idea was really to be like a compass for commercial real estate. SquareFoot still exists today, has about 70 employees and still helping folks across the country find office space. But I ultimately left that business and I went to go work for a company called MM.LaFleur. MM.LaFleur is a professional woman's workwear brand. Their mission is that the more women in the workplace, the better the world will be of which I definitely agree with. And that clothing was a form of armor. And I really thought that it was an amazing mission. And so I joined that business in 2017. I learned a lot about direct to consumer, a lot about inventory, a lot about advertising channels. And so after about a year and a half there, I met Z, the CEO of Roman at the time. And I was blown away by what he wanted to build. And I joined from there. And so I've been fortunate enough to be at Ro for almost four years now from about 10 folks to where we are today. So it's been quite an incredible journey.

Alex:
It's been an incredible just observing you guys from the outside in and just reading the news and seeing the growth and also seeing a little bit of the advertising as well, maybe to level set a little bit, I'm sure a lot of our listeners are probably curious, how big is the company today? Are there physical locations? Is it online? Is it all eCommerce? Do you have warehouse? Do you have doctors on call? What is the company itself look like in terms of scale scope?

Aron Susman:
Yeah. So the company is about 700 folks today. We have a very large pharmacy footprint. So we have 10 fully owned pharmacies across the country. And then we also have about three to 400 folks in HQ, including our physicians which are also a full-time salaried physicians that only work for Ro patients. And so that's the scale of the business. We are entirely online from the standpoint of usually most of our experiences start with people coming to one of our brands or pillars for specific condition. And then speaking with a doctor, whether through a phone video or asynchronously, and then being mailed a medication or product that helps them deal with that chronic condition. Now we do work with work path which is one of our subsidiaries who do in home appointments. So there is where the physical meets the virtual, but we do not have any retail settings.

Aron Susman:
We believe that the care delivery model is really changing to online in home and at home. We are trying to facilitate that through complete vertical integration. And so we own the doctor's work for Ro and so we built our own EMR. We own and operate our own pharmacies that are built with our own pharmacy fulfillment software. We own and operate our own labs. And then we also own and operate work path which is for in-home visits. And so what we found is that by vertical integration, really to able to control the patient experience and give them the best possible experience in the best healthcare, because all the systems are linked and all the different clinicians can share information on that patient, which gives them ultimately the best experience.

Alex:
It's a lot of people. It's a lot of growth in just a few years. We are definitely going to come back to this topic. By the way, we're going to be talking about growing pains and getting operating, leverage and scaling. But for now, what is your current scope and responsibilities look like? What does your day to day look like as CFO?

Aron Susman:
So my day to day as a CFO, is I really manage my two main tasks are managing FP&A and accounting. And so we have about six or seven folks on the FP&A team. And then we have about 12 folks on the accounting team. We make sure that we are PCAOB audited through public accounting firm. And so making sure that we feel great about our financials, our data, we recently hired a chief accounting officer who's worked at public companies to help us think about things like SOX compliance, internal controls, all those fun things. And on the FP&A side, we really make sure that we go beyond just creating the budget, but we really make sure that we are helping, each of our business lines has a separate GM or business owner. And a lot of our FP&A folks actually act as a mini CFO to those GMs.

Aron Susman:
And we want to make sure that we are doing a great job of helping understand the business levers, helping them make the decisions, helping them give them the financial data they need to understand, where they can move the business. We like to think about everything through the lens of gross profit LTV and helping make sure that we're translating all the different initiatives they're taking into that lens. So that those are really my main areas of responsibility. Obviously, we work very closely with the data team, but the data team reports up to the CTO. And then obviously we work very closely with Corp Dev in terms of M&A and other things and we're obviously very involved, but that's a separate team itself. And so my task it's really making sure that as an organization that we're financially literate, everyone at the leadership team understands where we're headed and why, making sure that from an investor fundraising perspective, board decks, all those things.

Aron Susman:
And I really view myself as my main role is to be that steady hand that helps the founders and the leadership team make decisions and making sure that the CEO and founder should be thinking about in my opinion where we're headed on the horizon. And my goal is to make sure that I'm looking down at the ground and making sure that I can see couple miles ahead of us to make sure that trajectory is there and mixing that long term and short term thinking so that we can be making the milestone progress we need to hit where we're going on the horizon.

Alex:
That's great. I think the evolution of the CFO suite and the responsibilities certainly is an area that we, here at Ramp, we spend a lot of time focusing on. I'm sure your job probably has changed quite a bit over time. I mean, you guys weren't always as big as you guys are today, would love to hear just what did the first few weeks or months on the job look like? What did the team look like? Who was on the team? What were you doing? And maybe you can take us through the trajectory of then and now, what are some major changes in terms of who you hired, quality of people you were looking for, responsibilities, roles and I'm sure it's probably pretty drastic from when that initial spark began.

Aron Susman:
Yeah. So when I joined Roman, Ro at the time, I think we were 10 to 15 people. I was the first finance hire. So I was doing everything from journal entries to cutting checks, to making the board deck, to putting together a financial model. We did have one person who was more part-time who proceeded me who's now integral member of the team was helping out. But we were a very tiny finance team that had to do it all. I learned that I think something that was really beneficial to me was that having CPA and accounting background actually helped me make sure I understood how to manage and scale that side of the organization. And so the first actual ever hire was a director of accounting. I just had learned and saw too many businesses where if you lose your through line on accounting, people talk about technical debt in engineering, but the technical debt in accounting can be quite brutal.

Aron Susman:
So if you're not doing that from the very beginning, and we believe an ounce of prevention worth of pound of cure, and that stuff can get pretty hard to unwind and end up sucking up a lot of time that can be used thinking about, for looking our proactive levers on the business. And so our first hire was a director of accounting because I could keep doing the FP&A work myself. And that was really our first hire, and we put a big emphasis there. And one of the things we did that I credit the leadership team for letting me do was that we were on a worse version of QuickBooks, but we were scaling very quickly, well past couple million dollars of ARR. And a few weeks I knew that with the system we were on was not scalable and sure we could move to QuickBooks, but I knew we'd probably very quickly then scale out of it.

Aron Susman:
So we actually put in NetSuite, within the first year being there and found auditors within the first year of being there, because I just believed that those things are tough enough when you have a lot of debt and you aren't sure you have a great handle on it, but if you do it super early, it just infinitely easier. And so credit to the organization for giving me the resources and allowing me to do that because it's obviously not revenue generating and not always the first thing people think of doing. And then once I felt more comfortable on that side of the org, I started hiring on FP&A mainly because I could do the FP&A work myself, I could work with all the different leaders in the business. I could be the operational partner to the CEO, the leadership team in every part of the business, but obviously as the team grew and scaled, we opened up more and more service lines that became unscalable.

Aron Susman:
And so then started to scale up the FP&A team. And yeah, I mean, in terms of what we were looking for, I think obviously as we get bigger, we move from more generalist specialist, but mainly on FP&A we're really looking for folks who are more operational in nature. I think, being smart and understanding how to model and is table stakes and the hard, I think part about being a financial leader, especially on the FP&A side is learning the soft scales of how to work with people, how to say no with empathy. How to be really more of an infrastructure, a support mechanism and not a no factory and doing finance budgets and variances is the easy part of the job. The hard part of the job is working with people and inspiring confidence, and knowing that you have your hand on the wheel and you know where the organization's heading.

Aron Susman:
And also that you have the instincts to know what's happening now. And maybe you don't have the full data yet, but you can separate the signal from the noise and have a really good understanding of where this might head and also know how to disagree and commit. I tell this story a lot, but one of the things that convince me to work at Ro early on was when I met with Z, I said, you willing to hear contrarian take, which I think is anything, a question to any finance leader should ask if their CEO when they join. And because I think people can get caught in the, you can create a model that will tell you anything can happen. And if you acquiesce to what a leadership member want, so the management team wants in terms of a forecast that you don't feel great about, and you end up kicking the can down the road and it ends up becoming a vicious cycle.

Aron Susman:
And so I said, you're going to hear from contrarian take, and he said, yes. And a lot of folks will say that in interview process, but what he said to me back that it's really enlightening. And actually probably one of the main reasons I joined is he said, I will listen to a contrarian take, I will go over the data with you. We'll talk about it together. However, if after I've taken all the data, I still believe this is the right decision for the org, I will need you to disagree and commit because ultimately we have to follow my vision and if it's not the right call, we'll all assess it together and we will adapt.

Aron Susman:
And it showed me that he was actually listening and really understood what I was asking and was willing to be clear that he would make the decision that he thought was best for the organization after taking in all the data and in order to build a big company, you have to be contrarian and right. And there would be times where we have to take bets together. And so I believe that those are the folks that's what I'm trying to teach the team as well, because I just think it's such an important ability to do that and become that trusted partner. And then, similarly as the accounting team scales, I think that's also really important because a lot of the work the accounting team does while it's so vital, it just doesn't feel as exciting as product launches or other really amazing things, but it is the infrastructure and it is the data that allows the FP&A team to do what they're going to do. It's what allows us to continue to build the business and fundraise, and which allows us to put capital into the business and grow in scale.

Aron Susman:
And without them doing their job extremely well, we're unable to do any of those things. And so as they get more senior, I think it's super important for them to understand how to work with people, how to understand their relationship between revenue generating and non revenue generating activities and how to make sure that different leaders of the organization understand how important certain projects are, even if they take place of short term growth. And then I'd say, there is more specialization on the accounting function as you get bigger, as you think about SOX compliance, internal controls, all that fun stuff. It is easier to find someone who's really done that before, especially when you have folks who have never been at a public company. And we're trying to make sure that we're bringing in leaders, like our new chief accounting officer who have had that to help teach us what we need to know as well, because we obviously want to shorten that learning curve as much as possible.

Alex:
That's great. I have to say a lot of what you said definitely resonates with me. I actually want to double click on both pieces of that, both the technical stuff as well as the so touch. In terms of just the challenges, the most challenging things that you guys agonize over or lose sleepover. So maybe number one on the technical front. From an accounting and FP&A perspective, what are some of your biggest challenges, I know you've done a number of acquisitions in your past. Is it the multiple entities managing acquisitions? Is it the legal compliance portion? Is it revenue recognition, I guess on the technical side of what's bugging you guys? What's been the toughest to manage as you've scaled from 15, 20 folks to 700.

Aron Susman:
I think the toughest thing has just been the complexity of the business. We've moved from 100% of our revenue coming from online diagnosis to delivery of medication for one condition, to having multiple pillars, multiple subsidiaries. We now do in-home labs, which has different revenue recognition. There's a work process, so putting the kits together, owning that inventory, hormone testing, sperm testing, there's just a lot of different pieces of the puzzle. Medication is one skew and turns extremely quickly. You don't have to buy very far upfront, so you don't have a lot of inventory holding costs. And don't have a lot of different components there and as you end up going to make your own formulations of vitamins, and as you do more diagnostic testing, all of those components just become infinitely more complicated and making sure that we are addressing that as we stay out.

Aron Susman:
If this piece of the business is only 5% of the business, although we do think it's going to scale, let's not make sure we're devoting 100% of our resources to figuring out what that looks like over time. How do we balance difference between making sure it's perfect versus understanding what it takes to scale, but what's good enough to be audited for now while looking towards the future, I think is definitely like a tough balance on the accounting side. On FP&A side, I think the challenge that I think has been consistent across and something that has always been interesting in my career is that, I think what's interesting is as FP&A folks and folks who've like, I never worked at a bank, I worked at bank or I worked in accounting. You really always want to be extremely precise and you want to be detail oriented and you want to show all your work.

Aron Susman:
And that's great. However, folks who need to absorb and digest and act on that data have the same level of financial acumen as you do. And they're looking for digestible pieces to understand and help them learn and grow and make the right call. And there are times where you present so much information because you want people to feel really good about the work that you've done and how canonical it is and how much it's tied together, that you might lose the plot because it's too hard to follow. And so you really have to adapt this 80-20 rule where understanding where you have to be 100% precise, if it is accounting or auditing, and then other areas where you're trying to estimate the payback of a lever or the gross profit LTV of a certain experiment where the team already trusts, or hopefully already trusts your ability to do the work and trust your instinct.

Aron Susman:
And your job is to figure out the way to come up with the most precise, but simplest process by what you get the best answer within a range and be able to present that and then be able to clearly concisely communicate that. I think one of the superpowers of our team, of our broader management team is actually this ability to write amazing pre-reads, amazing documents, amazing communication. And we have to be able to take financial narrative and put it in that same lens because you can overwhelm people with just the level of preciseness. And also I think as a finance professional, you can actually get yourself spun up because if you're trying to control too many variables at one time, you end up spinning yourself around and you really have to figure out what variables to isolate, what not to isolate and then figure out what you're actually trying to solve and then go from there.

Aron Susman:
But I think just understanding the 80-20 rule where to be precise, the way to make that information digestible in a business that's growing and scaling at our level when you're also trying to make people feel really good about the rigor that you're going through to present the data is a challenge. And I think it's what actually separates a really good finance person from a really great one. When you can give people information digestible chunks that give them the literacy they need to make the decisions they want and build an allianceship there, that's when you've really, I think crossed into good to great, for lack of a better saying. And I think that's one of the hardest challenges that is similar, whether you're a company of 10 million of revenue or 500 million of revenue, I think that challenge is the same, no matter what, now the scale is different, the complexity is different, but the challenge remains the same.

Alex:
I love it. Yeah. The 80-20 thing is super, super critical. Even our CEO, Eric is actually pretty good at that which is you're working on a bunch of stuff. It's all important, but at the end of the day, you got to cut through the riff raff and isolate down the few things that are most impactful, what's the message you're trying to deliver. That's actually a good segue to the other portion right of growth, which is some of the softer stuff, some of the softer skills that you mentioned in terms of managing up, managing down cross functional stuff, there's a lot of ways that we can go with this topic. So I'm happy just to listen at this point, as you navigate growth and as you navigate increasing complexity of an organization, what are some best practices? What are some pitfalls with respect to managing a lot of this cross-functional work, navigating investor relations and communication and folks are working remote. And would love to hear some of your thoughts on that?

Aron Susman:
Yeah. It's been interesting living in a remote world. I think the benefit of something like that is amazing for myself is that I have a three year old and a one year old and being able to see them a lot more. And if I have a break between meetings between 12 and 12:30, instead of walking around the office grabbing a coffee and saying hi to folks, I can go outside and see my one year old and get a lot more time with him and that's pretty amazing. And I think something I will never regret. On the flip side, I think what's tough about it is that there were times that same moment where if something will was going on and there was a miscommunication or the people were hearing different things, I could pull four people together. We could have one conversation and make sure everyone was clear on the initiative and what we were doing.

Aron Susman:
In today's day and age, it takes four different zoom meetings or Google meet meetings to make that happen. And I think that's tough. I think, ultimately there's just this human relationship element of work that is so important. How to finance offsite recently, just dinner and bowling, just to have everyone get together and chat and hang out and enjoy each other's company. And I think that just goes a really long way where when everyone's meeting on a screen, I just think work sometimes becomes more transactional and you forget, these are other people, they also have families, they have other things going on. You don't know what's happening in their life.

Aron Susman:
That could be going on and I think when you build those relationships, it just makes things easier and work more efficient. So I think the remote world has its benefits. It also has its challenges. And for us, the other benefit has been that we've been able to hire amazing talent all over the country. So we're definitely a forward company and will continue to exist. And we'll continue to make sure that we're developing and putting in place things to make sure that the company also gets that physical interaction that I think is important to company building.

Alex:
One thing I wanted to ask you about is specifically on the cross-functional front. I mean, obviously you have a CEO, CTO, you mentioned that you have a chief accounting officer. I'm sure you have folks on the strategy, on the revenue, on the business side as well. How do you all make sure that you are able to develop consensus, disagree, communicate effectively? Do you guys do anything like what you just mentioned, which is like an offsite or get together a powwow, how do you manage something where maybe you don't work day to day with X, Y, Z other person, but obviously collaboration is important over the long term?

Aron Susman:
I think, well, so we do a leadership offsite once a month where we get together in person and we talk about whatever's the most pressing the issue that is going on and making sure that everyone is doing a great job of communicating and all having a job there. We do have a leadership meeting once a week. And as I talk about, we do a pretty amazing job as having an agenda and having those pre-reads to make sure that we are all in conversations with each other. I also think ultimately what it comes down to is like culture starts from the top and I think our CEO and chief growth officer and chief product officer, all three of them are extremely smart people that don't have an ego and really just want to build the best possible company.

Aron Susman:
I think that there are some, at least from the folks I've met at Ramp, it seems very similar and that trickles down from the top. And I think for instance, people just, they want to do what's right for the company more than they want to do what's right for themselves. And I think that is what lend to great thinking. For example, I don't own Corp Dev, a lot of finance CFOs do. I have no issue with that? I've learned in my career that oftentimes when you try to take on too much responsibility and that is driven, at least in my experience, sometimes through ego and ultimately can lead you to fail because you're trying to do too many things. You can have a narrow focus to the things you're doing really well. That does not mean you are less valuable or does not mean you are not providing what you need to provide to the organization, but I just given everything we're trying to run, I don't have the time to also own the Corp Dev function.

Aron Susman:
And so we hire an amazing person to do that now. Him and myself have to work very closely together to make sure our long and short term goals are aligned and that we're talking the same language and that we can have those conversations. But I think it comes down to keen understands like where his scope and purview lies and where he's the accountable and where he wants my consultation. I understand the flip side. I think similarly, we have amazing chief people officer, and we can have dialogue around like, the different things that she owns versus I own, but where we want each other's consultation, I think there's also an ability for that leadership team to actually develop again that personal relationship where you can be vulnerable and say like, Hey, I feel a little lost on this topic.

Aron Susman:
I don't understand why we're doing this. Can you help me here? I'm managing my team and I'm worried about X, Y, Z, what's your thought process here? And I think what ultimately happens sometimes is people feel so afraid to not be perfect to everyone around them, that they're afraid to say like, Hey, I'm struggling with this thing, can you help me? But I think what happens there is then I get advice. You get that empathy that person's willing to be vulnerable with you. And then ultimately you can develop that relationship where you have psychological safety, because if you don't have that and you feel everything's a threat and you feel you have to be perfect and everyone's coming after each other, it doesn't matter how many meetings you have. It doesn't matter how many offsites you have. You'll never develop that level of trust.

Aron Susman:
I mean, I think part of it's just that it's okay to say that we failed. It's okay to say we messed up. It's okay to say we made a mistake. We try not to make the same mistake twice. But it's okay to make mistakes. And if you're vulnerable with folks and you share that with them, you will earn their trust. And I think ultimately that psychological safety and trust is what allows for great collaborative, cross communication. And wasn't great at that early in my career. That's something you really have to learn and experience. And I think it's something that we do really well at Ro and has helped us and a lot of our folks, our leadership members have been with us for multiple years and have scaled inside their role. And I think that's relatively rare. And I think that's one of the reasons we've been able to do that.

Alex:
Yeah, absolutely. That's great. That's super inspiring. Ramp is at a stage where we're roughly 280, maybe almost 300 people. And we're navigating through a lot of these challenges today, figuring out how to collaborate effectively, how to figure out common ground and work across different functions and whatnot. That's really inspiring. One of these days, hopefully we'll be 700 people and communicating and working well together, coming back to the question of operating leverage and scaling, what's been effective at making you better at your job, but more effective. Again, we can take this in whichever direction you want to talk about. Is it outsourcing? Is it using great vendors, hiring smart people? What are some of the things that you've found really helped you out over the last few years?

Aron Susman:
I think of a few things. I think some of it touches on what we just talked about, which is again, having the trust of your team and your CEO is just so important because I believe just if you think about it in sports or other areas, when you feel like you have to be perfect all the time, and you're unable to make a mistake, you are on edge and you are really unable to perform at your best. And so if you feel like there's no margin for error for you. In some areas, obviously there are, but in general, if you feel like there's no margin for error for you and you're unable to make a mistake, I think that's where people get themselves in trouble because either that's where mistakes get made because haste makes waste. And I think oftentimes what happens to folks is like they make a mistake in a model.

Aron Susman:
It was innocuous. It's hard to build a 50,000 tab model and not have any review and not make a mistake, but then revenue's off by a million bucks and so instead of just owning up to it saying, Hey, messed this up, how do you want to deal with it? It's like, well, we could end up re forecasting something different here. And then you just end up in this long web of areas where you're ultimately trying to chase your tail, and it's really hard to scale when that's the case and so that's why I think, when CEOs ask me what they should look for in CFOs or CFOs or finance folks ask me what they're looking for in the company. I just think it's, you got to find someone that you can trust.

Aron Susman:
And I think ultimately you can become, my goal is that our management team can worry about all the things I need to worry about, but they'll know that from a financial perspective that I have this, I have my hand on the wheel when things come up, because they will, I will alert everyone, I'll make it clear as to what's going on and why, and we'll address it, they don't have to be thinking that in three weeks, they'll find out that revenue did X, Y, Z.

Aron Susman:
So taking that like worry off of their mind and being that mind share for them and being that trusted partner is what will give you scale because you need people to trust you and you need to be able to trust in your team and you need to be able to have that honest conversation back and forth. And then once you have that, I think it's tying great people. It's such a cliche, but we have an amazing finance team at Ro. We have an amazing group of FP&A folks. They have amazing group of accounting folks. They all work so hard, but they're all so empathetic. They all truly care about their career. And they care about like each other. They care about not letting each other down and they're willing to go the extra mile to make sure that they are, and they take a lot of pride in what they do.

Aron Susman:
And I think that they don't have ego. And again, I think that starts at the top as we talked about earlier, where we hire folks, it doesn't really matter how smart you are. You have to be empathetic. It's one of our values and you have to be compassionate and kind, you can hold people accountable, you can run a great business and you can give people feedback and make them better, and you can still do it in a compassionate and kind manner. You don't have to be harsh about those things. And I think that is one of the areas where the team has done amazing.

Aron Susman:
And I honestly just feel extremely lucky that they work with us and that they come to work every day because the scale that you get in the mind share that opens up when you have an amazing team. And I think that also comes down to, I've met folks who are afraid to do things. So I'll give you an example. One of my past roles, the person above me was out on leave for, I don't remember for what reason. And I was part of these meetings they were a part of. And I think everyone said I did a great job and it was great. But then when they came back, I was immediately taken out of those meetings and he went back and to do those things. It made no sense to me, if that happens on our team, great, I can go do a million other things.

Aron Susman:
And now I've just gotten scale. I try my best to make sure that my people are getting the credit and they're presenting to the CEO, they're presenting to leadership team. I don't need the credit for what they do. They deserve that credit. And I want to make sure that when there's blame, I take it, and when there's credit, I give it. And I think, again, it comes back to ego, but that's what helps them believe they're pushing their career. That's what gives use scales. You can't have this feeling of like, well, if I'm not doing all these things, how valuable am I or does the person below me, can they take my job? That's just not how it works. The more you're able to lever down, no matter how important it is, the more mind share you have and the more ability you have to create value and that's the only way you can see scale, but people in my opinion can get in their own way by overthinking the situation, by thinking that somehow they've become replaceable because they've scaled themselves out of a job.

Aron Susman:
If that's the case, then, go, there's just other I think issues going on. And so I think that's a second big one is just having an amazing team, but also facilitating the ability for them to grow and scale and get visibility across the organization. And I think those are two of the main ways that we've been able to do it. And then I think just in addition to that, I have a little bit of a contrarian take than some in terms of, I think about things sometimes in implicit versus explicit costs. So that can be vague. So I'll give you an example.

Aron Susman:
When we put in NetSuite, I don't remember, but we found a consultant. It was not cheap to do. And there were cheaper consultants. We could have gone with no consultant. We could have tried to do it ourselves. And we paid a more expensive consultant to help us get it done. Now, what happened was the project was done on time within budget and we were good to go. Now, granted, we did it really early, so it's less complicated. So that probably helped and that cost money, but what we could have done is not done that, and myself and our director of accounting could have tried to do it ourselves. And I guarantee you, we would've cost us way more in time, energy and knock on it. I mean, I think folks sometimes get, and I mean, I understand it, but get really fixated on the explicit costs and don't ever weigh the implicit costs.

Aron Susman:
It was interesting I was at a CFO round table recently and this concept came up of like, Hey, we give everyone at the company a $500 work from home budget. And this one folk first one was saying, yeah. And we decided to track it because you add up $500 times, a thousand people talking about a big number. And this was a massive company. And they were like, yeah, but then the problem is now we have to track all our fixed assets. We have to depreciate it. We have to go get it back when the employee leaves. And I was thinking to myself like, how I asked, I was like is that honestly worth the cost that you did to just not let someone write off $500 for work from home? And they're like, absolutely not. And I just think like there are times where you have to think about these things in an implicit explicit way, because if you get too caught up in those weeds, you will be harmed strong and pigeonholed, and you'll never be able to get out from under it.

Aron Susman:
And I think those are three areas where we've done a good job. And again, you have to have the team and the leadership to be able to trust you to make those types of decisions because it's more practical to be like, yeah, let's track all those costs. I'm talking about where it matters and where it's material, but you have to have a leadership team that believes that you are willing, you are able to make those calls and they trust in you to know what's best. But yeah, that's, I think how we've been able to develop great leverage here at Ro.

Alex:
That's amazing. I have to say, by the way, Aron, you're really good at this. The last, whatever 5, 6, 7 minutes is absolute gold. I think it was tremendous advice. I think a lot of our listeners probably will find, some of these examples to be very valuable and very instructive. Have you thought about starting your own podcast?

Aron Susman:
No. I'll just join yours. Unfortunately, between a three year old, a one year old and Ro, I'm pretty busy, but maybe one day I've thought about, interestingly, the one I thought about would be more interesting in terms of content would be, I think what I have a lot of folks ask me interestingly is do they, on my team is to be a CFO. When now we're going on a bit of a riff, but to be a CFO, do I need to get an MBA? And I don't have an MBA, so I'm probably biased. But my answer's, no, I think if you are a physician who wants to then be an entrepreneur or join a startup and be more of a medical clinical officer and you don't have any business training then maybe I don't even think it's necessary, but then yeah, maybe that makes sense.

Aron Susman:
But in my opinion, if you're an FP&A folk or an accounting folk and you want to grow into that role, I think the operational experience is way more important than going to business school personally, although I'm sure that's not a popular opinion. And obviously again, I've never been to business school, so I'm a bit biased, but the question then they'll ask is, do I need to go get a master of accounting or a CPA? How do I go to an organization, own finance and manage the accounting work if I don't know anything about accounting and my advice, which I don't have a perfect answer for which is where this answer comes from is I don't believe I happen to know how to do debit and credits. I happen to know the tech, how revenue recognition, rules work, how least accounting rules work, all that stuff.

Aron Susman:
Although not the way I used to, but that's not necessary. What's necessary is knowing how to be a mentor and guide someone that you hire that is a really good at what they do and helping them scale. And that's where my experience was beneficial because having worked in a public accounting firm, having my CPA, I was able to actually guide and understand where people come into trouble and provide guidance where possible and lead that org until we hired someone and folks who knew a lot more than I did, and then just help provide, remove blockers for them. So I do think there is somewhere there's content out there that doesn't exist that could be created around helping folks under accounting for non-accountants. How do you really understand the principles of accounting, what you need to build, why it's so important?

Aron Susman:
Because I do think that is a missing link for folks who aren't CPAs, which is like, even if you come straight from banking or you come from FP&A to big company it's just, how do I manage and scale and accounting team, because it really does become, if you don't do that well, it allows you not to be able to do FP&A well, and then I think it's hard. So I think that's one area where I would advise folks. There has to be something out there. I don't know what it is, but I think understanding how to manage the accounting process and how that scales is important, that's something that we're trying to do better on our team is like have our accounting team work closely with the FP&A team, not just on the close and the budgets, but why are they doing the things they're doing? Why is it important?

Aron Susman:
Why do they have to go get evaluation for fundraise? Why do we have to do a 49A? Why do we have to write off certain things, why do we have to, for instance, on our sperm testing, people are buying multiyear packages of storage, and obviously that cash comes in today, but we have to recognize that revenue over time, we didn't have the capability, how do we work with the data team to build all that capability, those sort of processes to manage. So yeah, that I think would be some interesting content.

Alex:
Interesting. Maybe I'll leave you with one last question. We've had a little bit of a crazy year. 2022 has been pretty nuts. Stuff happening in Europe, stuff happening in market volatility. There's inflation, we're recording this in mid April right now, anything that you're looking forward to, anything you're worried about in terms of 2022. I mean, it's been a bit of a big year, but what are you focused on for the rest of the year?

Aron Susman:
Yeah, it's been a crazy year. We've been very fortunate that we, as you mentioned, fundraise out ahead of this current cycle going through the capital markets. I think, one thing that we are very fortunate is that having multiple pillars allows us to have folks who sign up for multiple products, which means we can lengthen LTVs, which means we don't have to be as worried about the immediate IDFA, Apple changes cat headwinds. And I think also that opened up our two other service lines to other businesses allows us to move into the B2B space, which doesn't face those same type of headwinds as well. And I think, for us on the supply chain side, we don't have quite as many supply chain challenges as other folks do and medication healthcare. Although some of the things we do could be viewed as discretionary, they're clearly not surgeries for cancer.

Aron Susman:
But our one of the last discretionary items to go. And so I think we are fairly well positioned. And I think one of the things I tell our team is that our leadership team, our accounting team and the broader team, like for us specifically, all we can do is put our heads down and execute against the business and grow sustainable. We might not be able to invest as fast ahead of the curve as maybe we did a year ago or two years ago. We have the longest runway we've ever had in our company's history. And maybe instead of growing 50%, if we grow 40%. But we think about that in terms of maybe investing ahead of the curve a little bit more slowly, that is something we will look at slightly differently this year.

Aron Susman:
But ultimately for us, what we have to do is make sure that we grow with discipline and we put our heads down and given the amount of cash we have work over the next handful of years and just execute across the business and grow and open up that roadmap and continue to prove that we can be a massive business with a huge team with unlimited opportunities. And in three or four years, if we triple, quadruple our revenue and do it in a sustainable way, showing that our unit economics are strong and showing that we're investing where necessary, but there are other places where we've invested that we've become cash flow positive.

Aron Susman:
Then we will have the ability to go do whatever we need. Now, I can't predict the multiples we're going to be in three or four years. Maybe they're 50, maybe they're three, maybe they're five. I can't control that. So to worry about that today, I think is worrying about something you can't control. Multiples could be a hundred, but if we don't execute the business, it doesn't matter. So let's go execute, put our heads down, grow, know that we have an opportunity right now while other business might have to cut back, other businesses might not have the ability to lengthen LTV the way we do, other businesses may need to fundraise where we don't.

Aron Susman:
It gives us an ability to be strong I think when others are weak, and in order to do that, we have to just make sure that we're executing sustainably and be proactive. Don't operate in the same environment we operated two years ago, even if business is exactly the same. If we think that we want to make sure as a conservative person, although at a high growing startup, we just want to make sure that our board calls fully financed or default alive, which means we can get to profitability on our current cash, which means that at our destinies is our own hands. And as long as we continue to do that, we will be in a great place. But I do think there will be ups and downs and it is a crazy world, but I do think like really, really, really strong companies are built during these cycles. I was going to college and grew up in Houston during Enron.

Aron Susman:
So I remember that cycle, had just joined the workforce three or four years in 2008. So I'd seen that cycle. I think a lot of folks, I'm not that old, but a lot of folks hadn't been through that, even a recessionary period or at tightening cycle or an inflationary cycle before I've never been through flushing cycle. And so I think we just have to remember to be smart, make sure to understand that capital may not be as available as it used to be, but that may end up becoming what separates suite from the chaff. And I think we have an opportunity to really continue to be strong, potentially be, the industry might consolidate, they continue to be acquisitive, which is one of the reasons why even if we think the business is growing at an amazing rate with amazing unit economics, having a little extra dry powder to be able to be acquisitive when opportunity is presented themselves, I think will put us in a position where when we can press and grow an amazing way where we think it opens up long term growth and really expands the roadmap and expands the term

Aron Susman:
We want to have the cash available for that. And I think those opportunities will present themselves. So what I tell the team is just heads down, execute the business. We're very fortunate that we get to ignore a bit of what's happening in the macro environment. With that said, while we can ignore it, we should also be smart and make sure that we are reacting to the data that we see and reacting to the world that exists around us and not operate. I think there's some businesses that as we've seen operated if COVID was around forever and at some point that is not sustainable.

Aron Susman:
So we are fortunate that for us, what COVID did was really change the behavior about the acceptance of telemedicine. Our business was growing similarly pre and post COVID. But what it did was change regulations, change behavior, change attitudes towards what telemedicine could become and pull that feature forward for us. And so we want to make sure that, and I think to one of your challenges is even if the macro environment is different out there, you don't want to cut your nose to spite your face. You don't want to choke off future growth by not investing, but you also want to be smart about investing and just make sure that when the world's different, you operate appropriately and potentially act a little more cautiously.

Alex:
I love it. That definitely resonates with me. It definitely resonates with the broader Ramp community and our investors as well. So I think definitely in a fortunate situation, I think with that, we can probably wrap up today's episode, Aron once again, really, really glad that you're able to join us here today. Certainly on behalf of all the folks here at Ramp, I appreciate the partnership and appreciate the collaboration over the past couple of years and congrats again on the recent fundraise. It's been tremendous having you as a guest on the podcast.

Aron Susman:
Thanks, Alex. I really appreciate it.

Speaker 1:
Thanks for listening to this episode. If you enjoyed it, please rate and review us on Apple podcast, Spotify, or wherever you listen to your favorite shows. It really helps to spread the word. Until next time, this is FinOps today from Ramp.