May
10
2021
--

How a band of P2P hackers planted the seeds of a unique expense management giant

Individuality often has no place in the enterprise software space. In a market where a single contract can easily run into the millions, homogeneity is the herald of reliability and serves to reassure buyers of the worth of their potential purchase.

So it’s natural to think a company in the expense report management business would keep it simple and play it by the book. But one look at Expensify is enough to tell you that this is a company that never even looked for the book.

Expensify’s origin story is one of a scrappy group of developers who turned travel into a catalyst for ideas and stuck together through highs and lows, ending up building one of the most unexpectedly original companies in enterprise software today.

Right from its famous “workcations,” to its management structure and its decision-making policies, Expensify has it in its DNA to eschew so-called best practices for its own ideas — a philosophy rooted in its founder and early team’s P2P hacker background and do-it-yourself attitude. As a result, Expensify is atypical of startups in many ways, inside and out.

Founder and CEO David Barrett made it clear his company was different in our first call itself: “We hire in a super different way. We have a very unusual internal management structure. Our business model itself is very unusual. We don’t have any salespeople, for example. We’re an incredibly small company. We focus on the employees over the bosses. Our technology stack is completely different. Our approach toward product design is very different.”

That description would make some people call Expensify weird even by startup standards, but this essential difference has set it apart in a space dominated by giants such as SAP Concur and Coupa. And that’s ultimately been to its benefit: Expensify reached $100 million in annual recurring revenue in 2020, with hefty 25% EBITDA margins to boot. There were also rumors of the company planning to go public during our interviews for this EC-1, but they stopped speaking to us in March, and now we know why: Expensify confidentially filed to go public on May 3.

Expensify’s origin story is one of a scrappy group of developers who turned travel into a catalyst for ideas and stuck together through highs and lows, ending up building one of the most unexpectedly original companies in enterprise software today.

When David met Travis …

To truly understand Expensify, you first need to take a close look at a unique, short-lived, P2P file-sharing company called Red Swoosh, which was Travis Kalanick’s startup before he founded Uber. Framed by Kalanick as his “revenge business” after his previous P2P startup Scour was sued into oblivion for copyright infringement, Red Swoosh would be the precursor for Expensify’s future culture and ethos. In fact, many of Expensify’s initial team actually met at Red Swoosh, which was eventually acquired by Akamai Technologies in 2007 for $18.7 million.

Barrett, a self-proclaimed alpha geek and lifelong software engineer, was actually Red Swoosh’s last engineering manager, hired after the failure of his first project, iGlance.com, a P2P push-to-talk program that couldn’t compete against Skype. “While I was licking my wounds from that experience, I was approached by Travis Kalanick who was running a startup called Red Swoosh,” he recalled in an interview.

Mar
20
2018
--

Travis Kalanick is already back running a company with a $150M investment

Travis Kalanick, the former Uber CEO who was shown the door in June last year amid a series of major controversies, has already found his next leading role following his announcement of a new investment fund just weeks ago.

Kalanick said on Twitter that his fund would be investing $150 million to take a controlling interest in City Storage Systems, or CSS. He will also be running the company as CEO, according to Recode. It’s a holding company focused on redevelopment of distressed real estate. Kalanick resigned from Uber after facing a lawsuit with Waymo over trade secrets, an ongoing battle with existing shareholders Benchmark Capital, and the fallout from a harassment probe led by former attorney general Eric Holder. Uber brought on new CEO Dara Kosrowshahi in August last year.

Travis announced that he would be starting a new fund with his windfall from Uber shares sold in its most recent major secondary round. At the time, Kalanick said the new fund — called 10100, or “ten one hundred” — would be geared toward “large-scale job creation,” with investments in real estate, ecommerce, and “emerging innovation in India and China.” CSS has two businesses, CloudKitchens and CloudRetail, which focus on redevelopment of distressed assets in those two areas.

The former is pretty interesting given that Uber has its own food delivery service, UberEats. Should Kalanick’s new venture find ways to acquire distressed food-related real estate — kitchens around a city, for example — there may be a natural overlap with his experience at Uber as it started to explore food. Having massive operating kitchens located in one area with a delivery fleet associated with it is one thing, but having an array of smaller kitchens redeveloped through a company like CSS could provide a kind of distributed network that might make it easier to get food from one kitchen to its delivery in a shorter period of time.

It’s not that we know CSS is focusing on that explicitly, but Amazon also bought a bunch of buildings for $13.7 billion, and now it has a two-hour delivery service in major metropolitan areas. Of course, Travis was shown the door at Uber, so it remains to be seen how this one is going to play out. The Information notes that CSS was owned by a friend of Kalanick’s as well as having a loose connection with Uber.

Powered by WordPress | Theme: Aeros 2.0 by TheBuckmaker.com