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David Barrett. He started programming at the early age of 6 and has been inspired to become an expense reporter ever since. He attended the University of Michigan where he worked in a virtual reality lab before moving to Texas to write a 3D graphic engine for the industry. Then, he moved to California to join a name that is probably familiar to many of you, Travis Kalanick, in building a peer-to-peer file transport technology called, Red Swoosh, which was acquired by Akamai in 2007. In 2008, David left that company to start Expensify\u2014where he is today\u2014and he\u2019s trying to figure out the world\u2019s frustrations, one expense report at a time.

Famous Five:

• Favorite Book? \u2013 The Innovator\u2019s Dilemma
• What CEO do you follow? \u2013 Travis Kalanick
• Favorite online tool? \u2014 G Suite
• How many hours of sleep do you get?\u2014 6-8
• If you could let your 20-year old self, know one thing, what would it be? \u2013 \u201cI wish I had dropped out of college\u201d

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Time Stamped Show Notes:

• 01:13 \u2013 Nathan introduces David to the show
• 02:36 \u2013 David was working on a debit/credit card idea and the banks weren\u2019t happy with it
• 02:50 \u2013 Expensify is the corporate card for the masses
• 03:08 \u2013 David got into the space when there was so much room for disruption and pain points
• 03:40 \u2013 Travis\u2019 first company is called Scour, which is an early file sharing network that got sued
  • 04:06 \u2013 When David got into Red Swoosh, Travis was the only guy there
  • 04:48 \u2013 David thinks that Travis is very articulate in communicating his vision
  • 05:12 \u2013 David had equity from Red Swoosh
  • 05:31 \u2013 Red Swoosh didn\u2019t have a big exit
• 06:14 \u2013 Expensify charges $9 per active user per month
  • 06:20 \u2013 Expensify is a mobile app\u2014you take a picture of your receipts and the app will read all the details on the receipt, automatically
  • 06:29 \u2013 The information will then be categorized, sent to your account, and you\u2019ll get reimbursed the next day
• 07:10 \u2013 The company is only paying the active users
• 07:29 \u2013 Expensify\u2019s price points are $5 and $9
• 07:40 \u2013 David started Expensify\u2019s idea after Red Swoosh\u2019s acquisition
• 07:56 \u2013 David left Akamai in 2008, then he worked on Expensify
• 08:00 \u2013 Expensify\u2019s official launch is 2008
• 08:05 \u2013 Expensify\u2019s team size is around 110
• 08:18 \u2013 Expensify has raised capital
  • 08:27 \u2013 Expensify has raised a total of $25M
  • 08:36 \u2013 Expensify has been a break even business for a long time
  • 08:39 \u2013 \u201cWe grow primarily through revenue\u201d
  • 08:52 \u2013 The vast majority of Expensify\u2019s growth is through self-finance
• 09:54 \u2013 The business itself is breaking even, but they\u2019re always raising and experimenting on big experiments
• 10:31 \u2013 There are about 25K companies who use Expensify
• 11:03 \u2013 There are millions of individuals who use Expensify, too
• 11:32 \u2013 10% of Expensify\u2019s user base are paying customers
  • 10:43 \u2013 10% of 4.5M are paying customers
• 12:12 \u2013 \u201cChurn is complicated\u201d
  • 12:33 \u2013 Expensify has a net negative revenue churn
• 13:05 \u2013 Expensify doesn\u2019t advertise and they have 100% organic traffic
• 13:37 \u2013 Expensify had a few fundraising rounds
  • 13:41 \u2013 In 2008, they had their first $1M round
  • 13:43 \u2013 They did a few more in a couple of years
• 14:25 \u2013 David doesn\u2019t talk with investors and hasn\u2019t talked with them in years
• 15:27 \u2013 Expensify is something totally different from Salesforce
• 15:53 \u2013 Expensify doesn\u2019t have salespeople
• 16:16 \u2013 Expensify\u2019s primary revenue generator is their support team who follow up on deployments
• 16:43 \u2013 Pricing has been difficult and Expensify is still working on it
  • 16:53 \u2013 Expensify was originally free and customers didn\u2019t understand why
  • 17:18 \u2013 David thought they needed a reasonable price point
  • 17:31 \u2013 After choosing a price point, people became more comfortable and trusting
  • 17:51 \u2013 Expensify\u2019s competitors followed their pricing
  • 18:37 \u2013 Expensify\u2019s focus is on mastering the dynamics
  • 19:06 \u2013 David thinks that, realistically, their pricing should be much higher
  • 19:34 \u2013 David is planning on increasing their pricing
  • 19:52 \u2013 \u201cBecause we don\u2019t need the money, we\u2019re focused on something else\u201d
  • 19:58 \u2013 \u201cMaintaining an incredibly low price right now for the industry actually helps keep the competition out\u201d
• 20:29 \u2013 People find Expensify through word-of-mouth
  • 20:51 \u2013 \u201cAll of our emphasis is on building a product in a brand that generates an incredibly strong word-of-mouth\u201d
  • 21:34 \u2013 99% of Expensify\u2019s traffic is people searching for us
• 21:40 \u2013 The Famous Five

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3 Key Points:

1. Adding a paid option to your product can actually make your customers more confident in your product.
2. Word-of-mouth is one of the best and cheapest ways to grow your traffic and client base, but your business has to be valuable for people.
3. A college degree is NOT the only road to success.

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Resources Mentioned:

• The Top Inbox \u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi \u2013 The juice was Nathan\u2019s life saver during his trip in Southeast Asia
• Klipfolio \u2013 Track your business performance across all departments for FREE
• Acuity Scheduling \u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible\u2013 Nathan uses Audible when he\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks \u2013 Nathan doesn\u2019t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW

Show Notes provided by Mallard Creatives