How Expensify CEO David Barrett grew Expensify to $134M revenue and 50K customers in 2024.

hello everybody my guest today is David Barrett he started programming at the early age of six and has been aspiring to become an expense report magnate ever since enough I believe him by the way on that we'll check it we'll check that a second he attended the University of Michigan where he worked in a virtual reality lab before moving to Texas to write 3d graphics engines for the video game industry next he moved to California to join Travis and building a peer-to-peer file transfer technology technology called red swoosh that's obviously Travis remover and that company was acquired by Akamai in 2007 in 2008 he left that company to start Expensify and has since been relieving the world's frustrations one expense report at a time David are you ready to take it to the top I'm ready so you just you popped up a room and you're said give me the P&L mom let me see the balance sheet let's do it's been supporting baby that's right I just got into it for the chicks you know it's obviously prints that tell us about the company what do you do it how do you make money so it's been safai is pretty straightforward it's a mobile app for business travelers you take a picture of your receipts we read all the information off the receipt automatically so there's no typing involved and then it will submit your company for reimbursements and so we get you paid the very next day for the Starbucks purchasing me today okay that makes good sense and what like tell us the origin story here when did you launch the company and what turned you onto it well origin stories are always complicated and I would say the summarized nine I initially I had no interest in the expense reports whatsoever I was doing something just completely different to the prepaid debit card space and the bank's just had no interested me there suddenly is just way too risky and so my guy I needed some low risk and there's some boring I'm like where does the most boring thing I can think of oh my god she bore it so that's how I got into it was as a Trojan horse to get permission for the banks to launch an Italian product and then after we launched this product everyone's like yeah your prepaid debit cards are cool and all but your expense reports are amazing and up until that point I actually hadn't intended to build it I was just it was a fake product that I was just making up so they went along and I think I developed the story around it's like oh this mobile app where we use your camera to scan receipts then we reimburse you the next day and the important credit cards and expert your accounting package and all this stuff and everyone's like if you just if you just did that that would be amazing oh my god well maybe wishes do that so how again that's interesting and the business model now you know you mentioned last show that you're on guys if you wanna listen do the last episode David came on Oh his episode 844 and actually he was on in episode 655 which would have been about a year ago as well David you start with even with the janitor on a free plan and you said they go up to an average are proved about nine bucks a pop is that accurate uh yeah that's right because I would say the entire business model and I would say the way that we differentiate is by acquiring the individual first and then so that's why the product has to be so good for the end user is because the end user is our champion they're the person who pulls us into the organization and then promotes us to the top of the organization yeah would you go so far as to say that you actually you're onboarding is a consumer app absolutely I mean yeah I think that was very weird sort of middle ground between service can wear these really consumer great enterprise application yep that this is a model that I you're the second one in about a week I've had on so Malwarebytes is I mean they'll be pushing 100 million here soon in ARR but they do the same thing it's bottoms up they have a consumer approach then they land and expand based off logos they seem naturally coming in on their consumer product and it works really really well for them you're doing the same thing huh yeah that's exactly right because you forget a differentiator you can't differentiates the functionality alone it has to be through acquisition to business model yep and how many let's not use number of companies although I'm sure that's obvious that's probably well into the thousands or tens of thousands but employees so so how many seats are being used on Expensify today you know honestly I don't know that number I would say like so we think about 45,000 paying companies so there's not many incomes adapted oh yeah so we've met more more companies is Expensify than the next four expense reporting companies how many did you say David about 45,000 oh that's amazing yeah I mean you were just on four months ago you are at 42,000 so yeah yeah I mean that's your growing quick yeah and so this year especially has been crazy it's been actually use is crazy keeping on top like this year yeah yeah so it's been great and then before we get more of the origin story and kind of where you see this space going I want to talk about Matt and the TSheets deal as well and just film Tech in general especially some data related to this space can we put a general bracket on your thing so I mean you guys are somewhere between the call at sixty and a hundred million dollar a hour range is that fair yeah we're still under 100 that's right yeah do you I mean are you are and the reason I'm asking is just for the significance in term when people start thing about IPO and other sources of capital mean do you think you'll break a hundred and twenty eighteen or do you think it's more 2019 yeah okay got it I'm interesting so let's talk about the space and guys by the way I'm not gonna focus on David's backstory cuz you can get that in the other interviews you know launch the thing in 2008 they were at 120 people about three months ago or you're still at about that size David yeah actually that numbers may be a little bit off it's more like maybe 110 right now hundred I think that probably gave you the bad numbers before that's okay no worries so let's talk about this space so a lot of people I mean especially when you start hearing people go man I should do an expensive like concept on blockchain right where's your head in terms of just FinTech in general and blockchain wow that's interesting so I guess I would say I think right now is a really hard time to start a company because any company that just involves like the Internet and mobile and through that it's like it's been done it's been done like ten years ago and so any we're seeing like this whole series a crunch it's because so many the early stage funds in the past few you are doing terribly because again all these kind of need to want to be is basically have come around you haven't raised any more right you're at twenty five million still super more time you haven't raised additional capital since we last spoke right you're at 25 yeah we're profitable so we just we're off that whole band way yeah are you but you only raise 25 today right in 27 I think it is do you regret it raising that's tough I mean it's easy to say yes because I give I regret the dilution the other hand I spend it's tough to say like one of the challenges as money got so cheap for a while I wish that I had raised a few years later but then now I realize those companies have raised a few years later maybe they got good terms but they're all gone they're just done because they came too late and say yes we came in to time and capitals more expensive but there's also much earlier and that's what enabled us to kind of take over the market so it's hard to look back and say what you do different yeah the whole funding thing is tough I mean I'm looking at you here cuz we're doing this on a Skype interview I mean you look like a guy that doesn't have ego I mean you're you're showing up your natural sobbing your hat you know how they're ripping it up here I mean you haven't shaved in years your shirts you know you look good but you're like Portland and you're like I don't give a and I'm just doing my thing so it's great so you don't seem a guy that would raise for evil purposes oh well no I think that's really kind of stupid you like to celebrate raising money is to celebrate that you took out a loan it's like so like what butch kills the edge that when you did raise you just saw a path to spending the capital to get number one in market share or what yeah I don't know I mean I things get more refined number time and I'd say we raised because it was possible because everyone thought yourself had to we took some big swings that missed and so it's again it's time to know one of those swings um I would say like advertising like advertising is tough everyone everyone will tell you it's like oh yeah everyone knows how this works you raise a bunch of money you spend it on ads and then you get this you know high performance sales team and then that's how you build your business with the exception that no business you cared about was ever built that way like every business every all the top names industry have built through word of mouth and but no one talks about that because it's not possibly funded with capital and so therefore VCS don't care about word of mouth because it's not their business...