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Alex Rampell

@arampell

Jun 21, 2024

1/ Can’t wait to see the first “incumbent” (in a large software field…like support, CRM, HR, etc) switch from “per-seat” pricing to **per-outcome** pricing.

I’m writing an essay on this now, but consider Zendesk at $115/seat per month…or ~$1.4M/year for 1000 agents:

2/ Let’s say an agent is paid all-in $75,000/year and answers 2000 tickets per year.

This makes the human cost of a ticket $37.50, and the software cost $.69.

3/ The human cost obviously massively outstrips the software cost…and unlike software licenses, it can take months to “install” (find, hire, train) a human to occupy that seat. And in many areas there is simply a dearth of qualified humans given licensing latency

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Alex Rampell

@arampell

Mar 11, 2023

1/ We no longer live in the “It’s a Wonderful Life” bank era. Fear can spread at the speed of WhatsApp and iMessage and Twitter, and electronic transfers can instantaneously render a bank insolvent.

Branches and branch-centric thinking are anachronisms.

2/ At the same time, banks in 2023 do MUCH MORE than just lend and deposit money. They provide pipes and technology for *everything.* Payments are mostly electronic, not cash. Payroll goes to a payroll company which…has its own bank.

3/ The Great Depression rendered a whole generation skeptical of banks. Money under mattresses was a thing. But that’s before commerce was entirely electronic. Most people can’t live life “cash under a mattress” even if they try. Lots of places won’t even accept cash!

Read 5 tweets

Alex Rampell

@arampell

Mar 6, 2023

1/ When starting a company, can you get to *5 customers*? Who are they? Why will they trust YOU?

As a VC, these are questions I always try to ask (selling B2B). I’ll tell my story of how my company got our first 5, and why 5 seems like a good heuristic of “you’ve got something”

2/ I love the term “productize” — it effectively means turn a “service” or “consulting” project into a repeatable widget. Does a large n of customers need/want the same thing, or *roughly* the same thing with few customizations? Then…it *might* just be productizable

3/ If you get your Uncle or Cousin to use your product, maybe it was a favor…which is a feature (not bug) if it indeed is the SAME product you can sell to a few other strangers. But a lot of times a “few” customers is just a collection of favors and is Fool’s Gold…

Read 19 tweets

Alex Rampell

@arampell

Jan 27, 2023

1/ What is the “Finance” and “Financial Opportunity” of AI?

If “Bit Manipulation” is a key part of your COGS or SG&A, there’s a huge opportunity or huge disruption coming your way (or a PE firm that might just buy you).

Two sections follow: “Known Knowns” and “Known Unknowns”

2/ Known Knowns: There are companies already doing X, and thus there are two opportunities:
-sell a tool to turn “bit-manipulation-by-people” costs -> GPU usage (AI base marginal cost)
-create a vertically integrated company that competes with a legacy player…by doing the above

3/ Financial services (unlike, say, Campbell Soup or Boeing or Fedex) are primarily “bit manipulation” — little atom moving needed!

How do you apply for a mortgage? Insurance? Reinsurance?

A lot of the cost is…movement of bits. Move info from here to there, validate X, etc.

Read 9 tweets

Alex Rampell

@arampell

Jan 12, 2023

1/ The Future of Payments…is Red?

What could disrupt Visa/MasterCard/Amex? How might a new payments Goliath start?

Let’s talk about the Target Red Card. Target did >$100B in revenue last year, 20% of which happened on its own cards:

2/ You’ll see “Target Debit Card” and “Target Credit Cards” (source: Target 10Q)

Many retailers have what are known as co-branded credit cards. Target’s is issued by TD Bank; Amazon => Chase; American Airlines => Citi. Some retailers make more on cards than on their core biz!

3/ But what is extremely interesting, and has compelled me to scan every Target 10Q for years, is the Target Debit Card, which makes up over 11% of Target’s entire revenue. The Debit Card just pulls money directly from your bank account — allowing Target to not pay interchange.

Read 22 tweets

Alex Rampell

@arampell

Jan 4, 2023

1/ Thread: How to sell your company

Companies are (almost always) bought, not sold. This means somebody needs to *want to buy* your company.

Ideally this happens organically. But how do you, as a founder/CEO, expedite this…particularly when you KNOW you’re hitting a wall?

2/ “Planting an idea”

Inception is one of the greatest movies of all time (watch the clip). The whole premise is about implanting an idea in somebody’s mind…the inception of an idea.

“If you're going to perform inception, you need imagination”

3/ There are probably three types of acquisitions:
A. Acquihire (want team, not business or product)
B. Product/“Trade Sale” (want product or to repurpose product, acquirer has distribution)
C. Business “left-alone” (give existing business more resources to grow faster)

Read 24 tweets

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