In this episode of the 20 minutes VC, host Speaker A engages with David Barrett, founder and CEO of Expensify, a company streamlining expense reporting for over 5 million users. Barrett, a programmer since age six, shares his unconventional journey from 3D graphics to peer-to-peer technology with Travis Kalanick, and eventually to tackling the seemingly mundane world of expense reports as a means to develop prepaid cards for the homeless—a project that banks deemed too risky. Expensify's origin, disguised as a corporate expense solution, reflects Barrett's contrarian approach to Silicon Valley's startup culture. He criticizes the "pump and dump" mentality, advocating instead for sustainable, profitable growth and problem-solving at scale. Barrett emphasizes the importance of independence from investors, the pitfalls of hiring as a growth strategy, and the value of nurturing top talent internally rather than poaching. His refreshing perspective challenges the traditional metrics of success and growth in the tech industry.
"And so I'm beyond excited to welcome David Barrett to the hot seat today. So David is the founder and CEO at Expensify, the startup relieving the world's frustrations one expense report at a time."
The quote introduces David Barrett and his company, Expensify, highlighting its aim to simplify expense reporting.
"I fell into it a bit unusual, and I'd say so my background. I've been a programmer since I was six, computer graphics and video games."
The quote explains David's early start in programming and his background before entering the SaaS industry.
"And so I wanted the card to have no money on it. So I said it'd bill back to my personal credit card whenever I used it."
The quote details David's innovative idea to create a prepaid card that would bill back to his credit card, aiming to help the homeless responsibly.
"Success in Silicon Valley more often than not, and I would say vastly more often than not, is building something that gets flipped and destroyed and then people make money in the process, but very little about the world gets sort of improved."
The quote captures David's critical view of the Silicon Valley trend where startups are often built to be sold rather than to create lasting value.
"I think that this sort of engenders kind of this idea of the serial entrepreneur that it's like, wow, yeah, I've done ten startups, ten startups. Each time I did something, I flipped it and I moved on to the next thing."
The quote illustrates David's perspective on the 'serial entrepreneur' culture, where the quantity of startups created and sold is often celebrated, regardless of their lasting impact.## Venture Capital Cycle
"I mean, it's been like this for decades. I mean, maybe I'd say starting in the 2000s with like SaaS when it just became so cheap to start startups and everything was so fluffy and bubbly..."
This quote explains the historical context of the current venture capital cycle, highlighting the ease of starting businesses in the SaaS era and the subsequent trend of quick sales.
"Yes, nine times out of ten they're terrible, but sometimes they're awesome."
This quote reflects the acceptance of failure in the venture capital process, acknowledging that while most funded ideas fail, the rare successes can be significant.
"I think that for me, it's all about solving a real problem at scale and doing so in a sustainable fashion."
This quote defines success from the speaker's perspective, emphasizing the importance of addressing real-world problems sustainably and profitably.
"It's just good business, it's just good money."
This quote reflects the pragmatic view of investors who prioritize financial gains from the quick turnover of startups, rather than investing in long-term business growth.
"Man, I have no idea. It's only knowable in retrospect."
This quote acknowledges the difficulty in identifying a good idea and the retrospective nature of evaluating entrepreneurial decisions.
"I don't want to leave. I want a company that gets better over time."
This quote challenges the conventional goal of an exit strategy, advocating for building a company with enduring value and improvement over time.## Mindset Perspective
"How did you then look to build Expensify with this notion and core element of profitability being an aspect that you wanted to have inherent within the company from the start?"
This quote is Harry Stebbings asking David Barrett about incorporating profitability into the foundation of Expensify, which is central to Barrett's business philosophy.
"We just made sure we just were never in a situation where we absolutely depended upon the investor."
David Barrett explains the strategic approach of ensuring Expensify never depended on investors for survival, allowing them to choose investors who align with their vision.
"Great wine doesn't happen when you take great care of your grapes. It means you have to stress your grapes. You need to make them work hard to find the resources."
Barrett uses an analogy to describe how challenges and constraints can lead to excellence, comparing the nurturing of a startup to the process of making great wine.
"The only way to get super awesome people is to build them yourself."
David Barrett expresses his belief in developing talent within the company rather than relying on hiring established individuals from top companies.
"If your revenue growth is tightly coupled to your headcount growth, then that means you can never grow faster than you can hire."
Barrett criticizes the traditional SaaS model where revenue is tied to hiring, advocating for a more scalable approach that doesn't rely on increasing headcount for growth.
"Yeah, and that's why they suck. I mean that's why entrepreneurs always leave those companies and go somewhere else."
David Barrett provides a blunt critique of traditional SaaS companies' growth strategies, suggesting that their limitations are why entrepreneurs often seek opportunities elsewhere.## Disrupting Through Talent Density and Innovation
"you can't just copy all of the so-called best practices of the companies that you're leaving and the competitors that you're disrupting." "you have to do something different." "ensure high talent density at scale and to make sure that you can maintain that density even as your growth accelerates."
The quotes underline the argument against imitation as a strategy for success and the need for originality and a strong team to sustain growth.
"I would say maybe Ender's game has a great book, or maybe a guns, germs and steel. Perhaps another one's called carnage and culture, which is really good." "carnage and culture is interesting because it shows the rise of defining what the west is." "guns, germs, and steel talks about sort of like the origin of civilization of the past 30,000 years."
These quotes provide insight into David Barrett's literary preferences and the reasons why he finds these particular books compelling.
"I wish I knew that people don't know anything." "the people who speak the loudest and seem the most expert just are generally the biggest distractions." "copying the past is not the way to sort of disrupt the future."
The quotes reflect Barrett's realization that self-trust and skepticism of so-called experts are crucial in the entrepreneurial journey.
"Travis is a great guy, I think." "business is not nearly as hard as people make it out to be." "it's like these roles don't really mean anything in an absolute sense."
These quotes express Barrett's perception of Travis and his belief that business complexity is often artificially constructed.
"don't tell anyone and don't talk to anybody. Just do it." "work hard in secret because it keeps your failures private."
The advice given emphasizes the value of discretion and self-reliance when starting a new company.
"I don't worry about a whole lot, I guess." "I worry about Donald Trump." "I worry about this gerrymandering case in front of the Supreme Court."
These quotes reveal the types of issues that Barrett considers worth worrying about, which extend beyond his immediate entrepreneurial sphere.
"I would say more of the same." "we are disrupting the enterprise." "we have more customers than concur, and we're the fastest growing in our space."
The quotes highlight Expensify's successful business model and Barrett's optimism for its continued growth and influence.
"Well, I'm going to go out on a limb and say that was one of my favorite ever founders Fridays." "It's genuinely changed the game for me." "It's the most advanced mattress in the world."
Harry's quotes show appreciation for the interview's unique content and his personal satisfaction with certain products, which he recommends to listeners.