#ExpensiCon, in One Chart

Last week Expensify hosted its very first conference, eponymously named ExpensiCon.  We are still stunned and humbled by its tremendous success, and I need a bit more distance before I can really talk about it in a broad way.  (Read “Expensify is the Slack of Accounting” if you want a taste.)  But I wanted to quickly share a chart that was created at the very last moment, and which became the central focus of the entire conference:

There’s a lot in that graphic, so let me unpack it: 

• First, the “thumbtack” shape represents the distribution of businesses by employee count: there is a very wide base of small companies at the bottom (1-10 employees), and a very small group of large companies at the top (10,000+ employees).  This is no surprise; everybody knows there are more small businesses than big businesses.
• But what many don’t know is that 50% of all employees work in companies under 500 employees.  The other half obviously work in larger companies over 500 employees, and this is what creates the “enterprise space” — a small group of companies employing half the workforce.  And the entire “enterprise sales model” has been created to target that space.  Indeed, nearly all of our competition is focused exclusively on that space.
• That enterprise focus leaves half of the market almost entirely untouched, a “greenfield opportunity” in a market typically seen as very mature.  That opportunity can only be captured with a non-enterprise sales model (due to the harsh realities of unit economics), which is Expensify’s speciality.
• In case you don’t already know, Expensify’s #1 differentiation is that while everybody else is focused on building a product for an enterprise buyer that will never ever use it, we are focused on building a product for the actual end user employee — empowering them to pull us into the organization from the “bottom up”.  This means our cost of sale is dramatically lower than the competition, as we do no advertising, and no outbound calling.  We’re 100% organic — in true San Francisco hipster fashion.
• Even better, our bottom-up leadgen model works not only in the lower half of the market where the enterprise sales model struggles, it also works in the upper half.  Which means we sell all the time against enterprise sales forces who paid top dollar for the leads that we got for free.  Not only that, we enter every deal with employee enthusiasm at our back, giving us an unfair bias in any “bake off” scenario.
• As for the shaded bubbles, they represent the portion of the market where each player has strong market fit.  That’s not to suggest that each player has that market share, or even has customers limited only to there: many of those players can and do sell everywhere in the market.  Rather, the bubbles represent each player’s addressable market — the intersection of where their product can actually win against the competition, and where the unit economics of their business model can cost-effectively close customers.
• This is interesting because every business must focus their product development on the subset of the market they can address in a cost effective way: you can’t build an enterprise product if you have no enterprise leads or sales force, nor a SMB product if you can’t acquire and support there at scale.
• And this is why Expensify’s bubble is so much larger than everybody else’s: our business model enables us to acquire virtually everywhere in the market — both at scale, and cost effectively.  Which means our addressable market is substantially larger than everybody else’s, which enables us to build a product that can fit a much broader range of market needs.
• If all that sounds implausible, I should mention that (if you take out Concur) we have more paying customers than all the other players combined (and this isn’t even including our 4M freemium users, who are in the process of slowly championing us inside 600K companies around the world).  Our customer page gives a sense of the sheer range of sizes and industries we span, and all that is a direct consequence of a business model that has the largest addressable market, the lowest cost of sale, and (not described here but also true) highest lifetime value among our peers.

Anyway, I thought the chart came out very nicely, and most of the content portion of the conference was spent just building up that single image one block at a time.  Obviously, I’m biased so anything said about the competition should be taken with a grain of salt.  But I think it’s a fair assessment of where we all stand in the market, and you’re welcome to use it as you like.