Beyond 8 Figures
Beyond 8 Figures
Dec 17, 2018
$50M in annual revenue – Mike McDerment, Freshbooks
Play • 55 min

Mike is the co-founder and CEO of FreshBooks, a provider of accounting software in the cloud for self-employed professionals. Built-in 2003 after he accidentally saved over an invoice, Mike spent 3.5 years growing FreshBooks from his parents’ basement. Since then, over 10 million people have used FreshBooks to save time billing and collect billions of dollars.

What did Mike find didn’t work while starting up? (3:52)

  • There are trade-offs. Pricing is one of the things you can do to do your business, and business model work differently depending on which customers you are seekings.
  • Mike’s company started with a freemium model before moving to a free trial. They could change it up again according to what objectives they had at the time. 
  • They also like to focus on what would be best for their customers.
  • They found that having a free trial is an excellent way to have people experience the product before actually buying it.
  • They are giving people time to experience their product to be sure that they do want to adopt it and change their behaviour coming from Word or Excel. 
  • It helps people find value in your product and give them a goal to work towards. Many people then choose to stay a customer for years after if their experience is positive. 

What started the idea in Mike’s mind? (6:32)

  • Mike was using Microsoft Word one day and his clients, and he saved over a prior invoice for reasons unknown. 
  • Mike snapped and figured there must be a better way to do this.
  • So he started building on that idea mostly for his convenience. 
  • It was a scratch your itch, write your book endeavour. 
  • He did not have global ambitions, but today they have to pay customers in over 120 countries, more than 20 million people have used the software since Mike started it. 
  • He was just building it for himself to get invoices in front of clients, and he made a simple web application to do that. 
  • Over time he figured other people could use the software too. So he figured out how to market it towards them, and now Mike’s company is a successful Software as a Service business. 

How did Mike differentiate himself from competitors? (19:01)

  • They did and are still playing the field with competitors. 
  • What they do is they are invoicing and accounting software that solves your billing issues.
  • Firms with billing problems related to invoicing, not point of sale or retail restaurants can find use from Mike’s software. 
  • When they started, they were only doing online invoicing. Mike felt like an Attack Vector on a big platform. He found a sliver of the tech and made it better. 
  • Some people did not like the desktop software, but no one else was doing online invoicing as comparably well as FreshBooks were. 
  • That was their hook that got customers coming back and eventually. They grew to know their customers and what they expected from the software. 
  • They adjusted it accordingly and started adding other things customers might need like estimates and quotes.

What was the most challenging period for Mike? (26:46)

  • Challenges change according to each stage of your business. 
  • You need to morph and contort yourself to solve the different problems that arise. 
  • It is always challenging, and the challenges will always be present. 
  • The whole, while you learn how to lead and what running a company, is really like. 
  • There are many different problems to solve many other vectors, but it is also the fun of starting a company. 
  • It is not for everybody, but it can be a gratifying process. 
  • If mike went back and did it again, he knows he would be able to do it so much faster than before, and that is why so many people back repeat entrepreneurs. 

FreshBooks

FreshBooks is an online invoicing and accounting software designed for self-employed professionals and small business owners and their teams. As a cloud solution, it is highly accessible but secure enough for sync and integration with banks, credit card companies, payment centres, and other cloud productivity apps.

Resources

Connect with Mike: Twitter

FreshBooks: Website

Beyond 8 Figures: Website

See omnystudio.com/listener for privacy information.

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