Expensify's Growth Playbook From 0 to IPO with Anu Muralidharan, Expensify

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And if after you do your own homework, you decide you want to do X and someone in some position of power or authority tells you to do Y instead, don't just take their word for it. Ask the right questions, push back on their assumptions. And yes, doing your own research, coming up with your own ways to do things, probably is going to take you more time up front, but the output is going to be exponentially superior. I need some traction. You need some traction. Let's get some traction.

Hey, what's up, innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host, Lloyd Lobo. We're a community of over 100,000 people just like yourself, on a mission to help you get the methods, the money, and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana, and many more.

The headliner slide. And I bet as you look at that backdrop, you're all probably a little bit curious about what this is about. So let me get into it and tell you the backstory. I think it was in 2018 that at Expensify, we created our very first ad campaign. It was a TV ad. It aired during the super bowl that year. As part of that project, just for funsies, we also made a music video. It was called Expensify, this with 2 Chainz and Adam Scott. And the music video included this very colorful, fun cast of characters. And these two guys were part of that cast. We had a really good time doing this. It was a landmark project for us as a company. So fast forward a couple of years when we were taking our company public, we were writing the S1, which for those of you that are unfamiliar, is basically your company saga in this document that talks about who you are, what you're selling, who you're selling to, how you got to be where you are, the whole nine yards. And we wanted to include this cast of characters in our S1 because break the document up, give it some color, and pop. Our bankers and their lawyers were really horrified by this idea because people don't put personality into their S1s. It is a highly regulated document. The SEC reads this document from COVID to cover, which, of course sounds scary, so that makes sense. But their stated concern, though, was that this guy was sitting on a rocket. And if we put him in the S1, it's we are telling the market that our shares will take off like a rocket when it launches, which was, of course, not the intention. And we totally understood that doing that would be a huge no, no. We thought that this was a really conservative point of view. We didn't share the concern at all. So we asked our lawyers to negotiate with our bankers to try and get us what we want to truly appreciate how hilarious this situation was. I have to tell you a little bit about our lawyer. He is a cool guy, but he's a big deal. He's probably the foremost SEC IPO public company law expert in the country. He's a very serious guy. I think he basically invented the dual listing or something like that. Like, he's big deal. But this big deal, serious guy now is spending hours negotiating with our bankers to get this dude on the rocket into the S1. So sometimes with an IPO, you can't make shit up. It gets very ironically comical. So on this phone call, which was probably the Nth call on this subject, he has this moment of pure frustration and says, yes, I understand this guy's on a rocket, but clearly that rocket is going nowhere. And apparently this was the clincher. Our bankers totally backed off. We got the dude on the rocket into the S1. And perhaps this is no surprise to any of you, the SEC did not give a shit. Basically, they have much bigger fish to fry, of course. So I tell you the story, and I put this up here because there is a moral to the story as much as it's a funny story. One, don't take no for an answer without a fight. Two, use every argument you can think of, because who knows which one works? But here's the most important one of them all. No matter what you do or don't do, definitely build a rocket that goes somewhere. Good morning again. I'm very excited to be here with you. And there was crazy energy out there. Everybody trying to register as fast as you can to get in here. And, you know, Lloyd and his colleague very kindly introduced me as the chief operating officer of Expensify, which is today. But what I'd really love to do is take you guys back with me perhaps 25 years and introduce you to the 15 year old version of me. I come from a very middle class family in India and and my parents drilled it into me very early on that if I wanted the finer things in life, then I would have to work doubly hard for them because I didn't have quite the same financial opportunities available to me as a lot of my peers. I definitely wanted the finer things in life and I took this advice very much to heart very early on. So I worked super hard and as a kid I used to study all the time. If there was ever a scholarship to win, I would win it. If there was ever a sought after job and they went to campus interviews, then I would get the job. All because I just made sure I was that much more prepared than everybody else. Largely, other than a few setbacks here and there, I think my efforts were successful and I think on paper most people would have called me successful. But I never really had this lasting sense of accomplishment from any of it. In retrospect, I think I was chasing this feeling of motivation. I wanted to feel joy, excitement, inspiration in what I did, but I couldn't quite get there. I think it was Albert Einstein who said the definition of insanity is doing the same thing over and over again and expect expecting a different result. And I always thought that was very on the nose. So a few years ago I decided that if I ever had a shot at kicking myself out of this rut of averageness that I experienced, then I would have to do something different. But I didn't know exactly what to do. That said, I had this idea. If all of my natural instincts, which have been programmed by social conditioning really had gotten me to that point in time in my life, then perhaps I could very deliberately go against it and do the opposite and see where that got me. And yeah, if any of you, I don't know if I'm dating myself, but if any of you are Seinfeld fans out there, then probably recognize this as a classic Costanza move. So at the time I was VP of Business Development at a successful company and those titles really mattered to me. But I quit the job. I took this gig at Expensify, I took a pay cut, started at the bottom of the totem pole. No title, no team. But they were one of the few people willing to let me do whatever I want, give me free reign to do it. However I wanted to do it, so long as it furthered business goals, which was very appealing to me to Say that over the next few years my life changed is still an understatement. I learned so much. I just went from being this not sure of myself person to an empowered, confident woman. And what I'd love to do is try and distill what I learned over the next six, seven years into three core principles and share them with you today. So let's get into it. The first one is trust no one but yourself. Have you noticed we all have this incredible human urge to take confident people at their word. So if someone said something to you with a great degree of certainty, you never really question it. You kind of assume they're correct, don't you? I always thought that the so called experts and industry best practices that they came up with was just sacrosanct. Like clearly someone has done a lot of great research and it's based on a lot of logic and what is the point of me doing the same research just to verify if it is correct? I kind of took them at their word. I didn't think I had anything more to offer. Now the whole point of taking this job was to sort of reprogram my instincts. So rather than use that natural instinct that I had when I set out to solve a project or a problem, I started to do work from scratch. And I'll admit in the beginning this was super uncomfortable because A, I was constantly spending a lot of time seemingly reinventing the wheel. But also B, I had really no faith in what I was doing. I had no confidence. So I come up with a way to do something and then question it myself and blunder along. But over time, something really started to shift for me. So I want to give you an example. I think it was 2016 or maybe 2017. I was working to get expensified to GDPR compliance. And this was for those of you that aren't familiar, just this pain in the neck. Privacy regulation that Europe launched passed. So generally what everybody did was hire these consulting companies. They would come in, look at your product, look at your processes, and then tell you here are the gaps. And people would fix them and then get stamped GDPR compliant, which is really what I would have done in general. But instead this time I spent a few weeks just boring myself to tears reading all of the regulatory literature in an attempt to understand what it was trying to accomplish. Then I came up with a list of gaps based on that research, fixed it, submitted it for review. Like a cold hard slap in the face. They sent me back this long list of deficiencies and said, you still need to fix all these other things, which of course was very demoralizing. But this time, because I'd done all of the underlying research, I knew the right questions to ask and I knew when to push back because something didn't make sense based on what I actually knew on the subject. And something incredible started to happen. I was right more often than not. To give you a sense of the scope, they sent us back a list of probably 30 deficiencies, and we ended up having to fix less than 5. This just blew my mind. Like all the times that I thought that whatever someone gave me, whatever experts said, whatever piece of information, and I took it for granted. I took this approach more and more and I realized this was not a one off. This was really the norm, which, again, was very surprising to me. Through this experience and many experiences along these lines, I started to have a lot more faith and confidence in myself. I became really empowered to make my own decisions. And when it went counter to what everybody else was doing, that didn't, at least eventually, that didn't really make me scared or unsure of what I was going with. So the takeaway here, the message I hope you can take away from this, from me, is do your own homework. And if after you do your own homework, you decide you want to do X and someone in some position of power or authority tells you to do Y instead, don't just take their word for it. Ask the right questions, push back on their assumptions. And in reality, you'll always end up somewhere between X and Y. But I'll wager you'll end up closer to X more often than you think. And what's more, I think every entrepreneur's dream is to really create something totally unique, to capture the market in some totally new and innovative way. But everybody's doing why blindly? And if you do what everybody else is doing, then how can you hope to get someplace new? It just wouldn't work. And yes, doing your own research, coming up with your own ways to do things, probably is going to take you more time up front, but the output is going to be exponentially superior. Which brings us to the second principle. Take your time. I don't know how familiar you guys are with Expensify, but we are an expense management app for businesses. Companies pay for it. But we are very unique in that primarily we don't sell directly to companies. What we do is offer a free version of our product to employees. And it solves a real pain point for employees who nobody's really thinking of because everyone is selling to Companies and their admins and they are their focus. You don't have to. Your company does not need to use expensify for you to use it as an employee because it solves the real pain point for that user. They end up talking to their friends, their family, their colleagues, anyone with a job, because odds are they have the same problem. Slowly this momentum starts to build and the company ends up adopting us because so many people within the company are already using the product. And it works. Now imagine though, this is all a very deliberate strategy, like very well thought out vision. But imagine at the start when we went to VCs, when we went to investors and said we're going to sell a business app, but we're going to sell it through employees who are going to convince their companies. Mostly we just got skeptical looks and they would say something like this, that sounds cute. But you know what else you could do? You could just hire a bunch of salespeople and you could buy a bunch of lists and you can sell directly to the company. In other words, the thing that literally every other business sells, SaaS, enterprise companies doing, you could do that because that works. The one thing we have as a company going for us is we have total conviction and total commitment to our renegade ways. The more renegade, the more we believe in it. So we kept our head down, kept doing what we thought was right. And little by little, that virality, that word of mouth that we were pitching started to show up in our results. Today we have millions of users, we have tens of thousands of companies paying us monthly, we have hundreds of millions of dollars in revenue quarterly. But here is the kicker. I still talk to potential new investors all the time. And all the time, I'll get the same skeptical response. And that blows my mind, because clearly the proof is in the pudding. We've already proven it out. And they want to talk to you because you're unique, but they always reject your unique idea. So where I'm going with this is your idea needs your total conviction and it needs your time. If you look to the market to validate your idea, more often than not, you're not going to get it. You're definitely not going to get it in any consistent way. And that fuel, that gas for your idea needs to come from you and your team. Which brings us to the third and probably the most important principle of all. Team up carefully. This is a huge trend in Silicon Valley. Like with tech startups, at least as soon as the company has a modicum of success, they'll immediately turn around and hire a whole bunch of people. And on the face of it, that seems like a really good thing, like you should hire more people. If you are scaling out your business and you have money, that sounds like a positive thing. But to me, it's actually a really scary thing. When you have a small team, every person in your team is collaborating nearly perfectly with everyone else. And as a result, everyone, or at least most of them, have a very good strategic 360 view of the business strategy. So they are very high functioning. And lastly, everyone is always constantly questioning the value of what they're doing. Because who has time for low roi, busy work? But when you suddenly hire a ton of people, say you hire 600 people, thousand people, within months, all those people are not incentivized to ask the question, is my job truly worth doing? Because that's their job. And they're definitely not going to be collaborating with most of the other people in the company. They get very siloed. They become cogs in the wheel. At expensify, we have 140 employees and we've actually been at that size for, for a very long time. During which time during those years, our revenue has grown, doubled, tripled even. And we do this on purpose. Every company has job breaks out there that they need to hire for. And we do too sometimes. When we do hire, we look for three core qualities. Talent, ambition, and humility. And we hold those qualities to a very high bar. When we promote someone, when we need someone to lead something really complicated, we don't hire from outside. Because the fact that you accomplished great things in other companies is really good for you, but it really doesn't tell us anything about your potential to lead in our unique environment. So we always grow our leaders from within. The takeaway I want to leave you with is really think about whether you need to grow your company at all. Do you really need to hire for this job that you're hiring for? Is it a job worth doing by somebody full time? And if you ask that question and the answer is still yes, then identify the core qualities that are critical for success in your unique organization, because no two companies are alike. And then hold it to a high bar because the cost of hiring the wrong person is so much higher than the cost of saying no to one right person. Because all of these people are going to come into your company and interact with each other. And the wrong person will quickly pull down your overall productivity. In closing, I want to say there's a lot of recessionary news out there which can be very scary. We actually our company got started in 2008, 2009 crisis, definitely unideal. But it's it had a very interesting side effect. It made us really think about not just growth, but scalable growth. We care a lot about profitability alongside growth. We're one of the few companies out there that is cash positive. And that cash positivity because we can fund our own projects has allowed us to do cooler and cooler things, like that super bowl ad I was telling you about. This recession can be an opportunity for you rather than something to fear. If you use this time to think about your unique strategy, to think about your team and what culture you want, and most importantly, if you build up core business fundamentals, then when the market turns, as it eventually always does, you're going to emerge much stronger than all of your competitors. And we're really here for that, aren't we? It's been an honor to have this time to speak with you here today. We have a booth, so if you want to continue the conversation we hear have a great conference. Cheers.

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