Building A Profitable, Steady Growth Subscription Business: Expensify CEO David Barrett (Part 4)

Sramana Mitra: Who was your co-founder? How did you know him? Why him?

David Barrett: His name is Witold Stankiewicz. He was my first hire at Red Swoosh. After I got fired, within a couple of weeks, everyone else quit. I was what was really holding that team at Akamai. They brought in some other manager and everyone else left.

Sramana Mitra: That makes a lot of sense. What did you tell him about Expensify? Did you tell him the whole complexity around prepaid cards, expense reporting, and banking relationships?

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Building A Profitable, Steady Growth Subscription Business: Expensify CEO David Barrett (Part 3)

David Barrett: Since they thought they were approving something else, they went along with it. In the first year of getting through that barrier, there were many false starts. It was a very depressing and difficult time. The most important piece of advice I would give anybody while going through this difficult time where you’re trying to come up with ideas is don’t tell anybody. The only person who knew what I was doing was my wife. No one in my circle knew anything about the prepaid debit card space, banks, or any of the stuff that I was working on. How could they be helpful? When you ask people who don’t have the ability to help to give it their best shot, they do a bad job. Most times, despite their best intentions, they just come off demoralizing. I’ve concluded that people can’t be helpful if they don’t have the capability to. >>>

Building A Profitable, Steady Growth Subscription Business: Expensify CEO David Barrett (Part 2)

Sramana Mitra: You joined that company in what capacity?

David Barrett: Titles in startups are pretty meaningless, but I was the technology guy. I guess you could call me Head of Engineering or CTO. Travis wasn’t the programmer. I started off doing everything, and then I hired a team under me to help me out.

Sramana Mitra: In 2009, when Akamai acquired Red Swoosh, did you have to go to work for Akamai for several years? >>>

Building A Profitable, Steady Growth Subscription Business: Expensify CEO David Barrett (Part 1)

VCs in Silicon Valley want financial levers that allow you to grow with a hockey-stick curve. Expensify doesn’t have that. In my opinion, however, they have built an excellent, profitable, steady growth subscription business that has an attractive viral characteristic. The business, at some point, may accelerate naturally, but as David notes, the levers are not financial. Very interesting case study.

Sramana Mitra: Let’s start with your personal background. Where were you born and raised? Tell us a little bit about your childhood.

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Thought Leaders in Cloud Computing: Assaf Rappaport, CEO of Adallom (Part 5)

Sramana Mitra: How did you fund the company?

Assaf Rappaport: The company started with an investment from Sequoia Capital.

Sramana Mitra: So you raised concept financing from Sequoia?

Assaf Rappaport: Yes.

Sramana Mitra: That’s very unusual. How did you manage to do that? That’s happening very rarely nowadays in the industry. >>>

Thought Leaders in Cloud Computing: Matthew Dornquast, CEO of Code42 (Part 6)

Sramana Mitra: Where do you see services like Shutterfly going?

Matthew Dornquast: People who focus on everything will ultimately win over the specialization. There is always some new temporal period where a new format will get off, but then the large platforms absorb them.

Sramana Mitra: If you were to ask entrepreneurs to look at opportunities in the space that you really understand deeply, where would you ask them to focus? >>>

Thought Leaders in Cloud Computing: Assaf Rappaport, CEO of Adallom (Part 4)

Sramana Mitra: If you look at the security budgets, security has always been an active area. Part of it is because there are all sorts of creative ways in which hackers tend to find ways to penetrate organizations. Also, there’s the constantly changing architectural issues. The whole cloud thing is relatively new. There is a constant flow of innovation that happens in security. As a result, the security office at large enterprises have to deal with a lot of different things all the time, and buy technologies from startups like yourself all the time. They’ve been quite comfortable doing that.

However, one thing that has always been true about the security purchase process is that there are priorities. >>>

Thought Leaders in Cloud Computing: Matthew Dornquast, CEO of Code42 (Part 5)

Sramana Mitra: There’s another question on something that I asked you earlier about. Google has an incredible P&L. They have a business model that just throws out cash. They don’t want to pay that cash as taxes so they’re doing all sorts of things for the consumers and small business to benefit them. They certainly have the profitability and free cash flow to invest in enriching the feature sets and the functionality of their cloud drive offering.

There is a possibility that a lot of the low-end consumer and small business functionality requirements are going to be handled by Google just because of those dynamics. That puts some pressure on the players who actually have to make money to justify being in those businesses like yourself.

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