Mike McDerment is Co-founder and CEO of FreshBooks, the world’s number one cloud accounting software for self-employed professionals. He talks with Brian Ardinger, Inside Outside Innovation Founder, about building and scaling a company, product development, and his free e-book called Breaking the Time Barrier.
Mike built a simple tool to solve his accounting problem, and now 20 million people have used it. After building the first version,, Mike soon hired a software designer. They worked on the product for nine months, then added another co-founder and employees. The team valued the connection to their customers, always showing the product early in development. By understanding the market, the team knew what to build first.
Bootstrapping the Company
- Raising capital is not success. A better strategy is to find customers and fund yourself
- Over ten years, FreshBooks de-risked the market, product, team, and model.
- The first round of venture money was $30 million.
Obstacles and Things That Almost Killed FreshBooks
- Check out Blog post: https://www.freshbooks.com/blog/7-ways-ive-almost-killed-freshbooks
- Listen to advisors, but trust yourself.
- Sometimes you move fast, but some areas you need to slow down, especially with product-market fit. Don’t Rush.
Breaking The Time Barrier
- Breaking the Time Barrier, Mike’s book for his customers doing client services work explains how to price services.
- Focus on value-based billing instead of on the number of hours worked. Understand how big the problem is and how expensive it is.
- Nobody cares about tech. They care about the value they get from tech.
- Better to focus on building benefits like time savings, revenue generation, or performance. Brings more value for your customer.
- Frame pricing on value. e.g., $50 a month will save 20 hrs, or for less than a cup a coffee, you can have this service.
What’s different for a company at scale?
- Culture – How does a company respond when challenged with something?
How do you maintain the freshness of a company?
- Combo of direction and constraints for motivation.
- Creates a condition for taking chances.
For More Information
For more information on Mike McDerment or FreshBooks check out freshbooks.com.
If you enjoyed this podcast, you might also enjoy:
FREE INNOVATION NEWSLETTER
Get the latest episodes of the Inside Outside Innovation podcast, in addition to thought leadership in the form of blogs, innovation resources, videos, and invitations to exclusive events. SUBSCRIBE HERE