Expensify is the Slack of Accounting

Last week at ExpensiCon, David Barrett said something remarkable.

Since it started in 2008, Expensify has spent almost nothing on promotion.

At the same time, it's grown to serve nearly 4 million users. Some of those users work for the 18,000 businesses that pay for Expensify subscriptions.

That’s a lot of growth for not a lot of money.

It begs the question, how is this possible? How could Expensify grow so much without spending lots of money to acquire new customers?

The answer is that Expensify is a “viral enterprise app.” It’s a term that appears to have been coined (at least online, anyway) by Marc Andreessen, who used it in a Tweet back in 2014 to describe Slack.

Slack is a cloud-based team collaboration tool. In other words, it’s a chat app. It’s also the darling of the tech world and is valued at $3.8 billion.

Slack owes much of its success to word-of-mouth within enterprises. Stewart Butterfield, Slack's founder, described this effect to Business Insider:

It’s been very much a bottoms-up adoption model. A company like Adobe, there are dozens of different teams that are using Slack. Each of those elected to use Slack independently. A company that isn’t so big, like Rdio, they started using in the front-end engineer team, and then they brought it to the designers, and then slowly more and more engineers started using it, until suddenly it’s taken over the whole company.
— Stewart Butterfield

This growth by word-of-mouth within businesses is what Andreessen means by “viral enterprise app.” A single user becomes a whole department, which then becomes the whole company.

Expensify acquires enterprise customers in exactly the same way. And I’m pretty sure they’re the only cloud accounting app that does.

Here’s how they do it:

1. The app is designed first with the end user in mind.

expensify-mockup

In full disclosure, Expensify paid for my trip to ExpensiCon (as they did for everyone who attended). But I do believe I can objectively say that the Expensify app is really, really well designed.

I was saying it before ExpensiCon, so you have to believe me! If you don’t, try it yourself for free. You’ll see.

Good design in apps is nothing special these days, but it is still uncommon enough in enterprise applications.

That’s because lots of apps are built for the buyer (the boss), not the users (the employees).

The boss typically doesn’t have to use the app on a day-to-day basis. He’s more concerned with stuff like reporting. So user interface design comes second for the developer who sells to the boss.

In contrast, Expensify is all about the end user.

Even the company slogan, "Expense Reports That Don't Suck," is aimed at the end user. Personally, I love the idea that executives in suits sitting around a boardroom table have to get over the fact that their new expense management tool has the word "suck" in the slogan.

Slack owes its success to the same approach.

2. The core product costs nothing.

Anyone can sign up for Expensify and use it for free. Individuals can use it. Even whole departments can use it without paying.

Slack has the same “freemium” model as Expensify. Many teams will never pay. But some will — especially the big ones.

What you do pay for with both apps is advanced features. Usually the ones that matter most to managers.

With Slack, you have to pay to search beyond your last 10,000 messages. You pay to integrate with more than 10 outside services. You pay even more for compliance exports of all message history.

With Expensify, you pay for features such as auditor access, accounting integrations, direct deposit reimbursement, and corporate card reconciliation.

All these paid features are highly valuable to management, but aren't typically a requirement of end users.

In essence, management decides to pay in order to control an application that the employees have already adopted. The IT department is left scratching its head, having been excluded from most of the purchasing process.

3. The app serves a broad market with a narrow problem.

David's "Expense Management Landscape" slide from his presentation at ExpensiCon

David and the Expensify team are ambitious. They want to completely dominate the expense reporting market, from small business to big business.

During the Q&A portion of David's presentation, I had the chance to ask him how Expensify could possibly serve such a large market. Small businesses are very different than enterprise customers, after all.

David Barrett

David Barrett

The answer was surprising.

David said that he doesn't see small businesses and the enterprise as being all that different as far as expense reporting is concerned.

Just about everyone has to do expense reports, and the process of creating and submitting one is pretty much the same whether you're working from your garage or from a boardroom.

He’s right. Expense reporting is a narrow problem to solve, and that makes it the same up and down the market.

Team communication is the same. We all use email, which is what Slack aims to replace. So it works for both small and large companies.

The difference between small and enterprise customers in both these areas is the need for features that only really matter to accounting, IT, and management. Just add those features and you’ve expanded into a whole new market.

Combine these 3 tactics and you get a viral enterprise marketing strategy.

Just like Slack, Expensify is designed for a positive end-user experience above all else. Its freemium pricing model allows it to grow quickly and infect large corporations from the bottom up. And it can serve a broad market because it solves a narrow problem that troubles employees in businesses both big and small.

It's a brilliant marketing strategy.

I was curious if this strategy was part of some grand master plan for Expensify. So I asked, and David sent me this reply via email. As with many great things, it was a happy accident:

My initial strategy was to build a product that employees loved, and only after doing that did I realize (though it’s obvious in retrospect) that expense management is inherently viral: the act of submitting your expense report promotes Expensify directly to the decision maker. But even better than merely promoting it, it’s an endorsement from an actual employee — the most valuable endorsement you can possibly have. Virtually all of our customers came through some variation of this “bottom-up” adoption process, where individual employees discovered and internally championed Expensify before the decision maker even knew we existed.
— David Barrett

This is why Expensify is the Slack of accounting. Or perhaps, because Expensify was first, it's more accurate to say that Slack is the Expensify of team communication.

The thing is, Slack is a unicorn and Expensify is not.

Why is that? Is team chat just super sexy? Is accounting really all that boring?

Maybe it's just that Expensify has been hiding in plain sight, not making a lot of fuss, operating a sustainable business model for years, slowly taking over expense reporting workflows in hundreds of thousands of businesses in all sorts of markets.

According to data from Expensify, there are 600,000 companies using their app right now for free. That's a lot of free accounts that could be converted to paying customers.

Watch out for Expensify.

Blake Oliver

Los Angeles, California, United States