GE 296: How CEO David Barrett Gained 6 Million Users for Expensify Through Word-Of-Mouth Advertising (podcast)

Eric

6 years ago

David Barrett Expensify

Hey everyone! In today’s episode, I share the mic with David Barrett, CEO of Expensify, the world’s leading application for expense management with 6 million users.

Tune in to hear David share why Expensify relies only on word-of-mouth advertising, why he believes that focusing on top-line revenue growth isn’t actually good for business, and how the Expensify team proved the naysayers wrong when they said the business couldn’t scale.

Time-Stamped Show Notes:

[00:39] Before we jump into today’s interview, please rate, review, and subscribe to the Growth Everywhere Podcast!
[01:25] Expensify does expense reports that “don’t suck”.
[01:33] Impressively, David has been programming since he was six years-old.
[01:40] At University of Michigan, he worked in the VR lab.
[02:10] Expensify is built for business travelers.
[02:30] They were the first mobile app for expense reporting and the first to integrate receipt scanning.
[03:02] Expensify reads receipts, categorizes it automatically, and analyzes the information.
[03:23] It is a completely automated service.
[03:57] Expensify charges $9/month/active user.
[04:12] You only pay for active users, not all registered users.
[04:27] They have 6 million users.
[04:57] Expensify is used by more businesses than anyone else in their industry.
[05:42] David thinks there is a playbook and everyone has been focused on top-line revenue growth, but that this isn’t actually good for business.
[07:50] Profitability is just as important as revenue growth.
[08:09] You don’t need to go IPO when you aren’t solely focused on raising money.
[08:50] Check out Fuel x McKinsey.
[09:20] When you maintain total ownership of your business, your most valuable asset is a successful business.
[11:15] Expensify does not advertise. Everything is word-of-mouth.
[11:34] Acquiring their first customers entailed focusing on what was effective and ignoring bad advice.
[13:35] Even though everyone thought the business couldn’t scale, the Expensify team proved the naysayers wrong.
[15:30] Initially, they weren’t charging, because they were trying to find product-market fit.
[15:50] Not charging was actually what was hindering their growth.
[18:04] Everyone else loses their nerve and hires on advertisers.
[20:15] Developers often grapple with Imposter Syndrome.
[22:06] David’s approach to culture is the same as his approach to programming: he asks, “what would be the most amazing system possible?”
[22:20] It’s often hard to travel when you have a job, so Expensify takes the whole country overseas for a month every year.
[24:18] They are the only company that does it, even though it’s not hard to do.
[26:25] Expensify offices are modeled after cafes they have been to around the world.
[27:09] They feel that fair compensation is important.
[27:26] In theory, you shouldn’t have to ask for raises, because you should just be paid fairly.
[27:44] Expensify has a committee that handles the assessment of salaries.
[28:10] They put a lot of effort into competition, culture, and fairness.
[30:48] One major struggle Expensify had was during a time when they set out to raise money and could not.
[31:15] People they were pitching had trouble understanding the business model.
[33:08] David prefers to cut down on app use instead of adding more in. Gmail, Google Docs, Github, and other basics are the best tools for him and his team.
[33:45] They dropped CRM and javascript apps.
[34:09] David thinks business books are all garbage, except for The Innovator Dilemma. He also likes the books, Guns, Germs, and Steel and Carnage and Culture.

Resources from the interview:

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