141: How FreshBooks became a Successful SaSS Business… with Mike McDerment of FreshBooks

Background on Mike McDerment of FreshBooks:

Mike McDerment is the Co-Founder and CEO of FreshBooks, the world’s #1 cloud accounting software 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 24 million people have used FreshBooks to save time billing, and collect billions of dollars.

The FreshBooks story begins back in January 2003, when Mike was running a four-person design agency. When it came to billing clients, Word and Excel were frustrating to use and weren’t built to create professional looking invoices. Then one day something happened that made every small business owner cringe: he accidentally saved over an old invoice. Knowing there had to be a better way, Mike decided to create it himself. Over the next two weeks, he coded up a solution that became the foundation of what is now FreshBooks.

Since these humble beginnings, FreshBooks has moved out of the basement (and then moved 3 more times) and now consists of over 300 employees. More than 24 million people have used FreshBooks to send, receive, print and pay invoices. Today, FreshBooks has paying customers in over 160 countries. If you look at just North America, no one except QuickBooks Online has more paying subscribers than FreshBooks, making FreshBooks the #1 cloud accounting solution designed exclusively for small business owners; whether you’re venturing out on your own or have been running your own agency or firm for years.

Time-Stamped Show Notes:

[1:50] Mike McDerment is the Founder and CEO of Freshbooks, which is the top 2 accounting software for small businesses in the US.
[3:06] Mike is not an accountant but he likes the idea of solving problems that could make things easier for people.
[4:26] After dropping out from college, he started his own business. During this time, Mike thought of a way to have a better accounting system for his business.
[8:21] For Mike, the best part of starting the business was the uncertainty of it. It feels like an adventure for him.
[10:51] For the early years of the business, they did better with their pricing but the packaging was quite a challenge for them.
[11:48] Mike offers some tips about the pricing and packaging of a product.
[16:46] During the early years, the business may not look like a huge success financially but many were signing up and they had a very good affinity with their customers.
[22:39] Internet marketing was a big factor in the growth of the company.
[23:46] When growing the company, Mike didn’t necessarily have major expectations. He does not dwell too much on setting expectations for where the company will be in the future.
[25:52] He talks about his work-life balance and fostering friendships with the people in his business.
[28:39] Before FreshBooks, Mike learned that being overworked and running himself into the ground is not good for him. He was able to apply this lesson to FreshBooks.
[31:03] The strong will to persevere, their firm belief in the product, and loving what they are doing are the biggest things they’ve done for the company.
[32:52] As the company grows and adds more people every year, the communication channel within the company is significantly affected.
[35:59] Growing from 150 to 200 people within the company, Mike implements a company culture that can foster better communication for everyone.
[38:21] Mike offers some motivational words and key suggestions that could help entrepreneurs on their journey towards growth and success.

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Fabulous 4 Questions:

📖 📚 Favorite Book(s)? My Moleskin
🙌😎 Favorite Amazon.com purchase? Granola
🌱💸 Favorite Tool that's GROWN your Business? iPad Pro Pencil
💭💡 BIGGEST Challenge keeping your Business from GROWING? Scaling from Canada – senior leadership talent

Key Point from the Interview:

“A huge part of the satisfaction for me, still to this day, and for years and years, is actually being in the service of others and creating and delivering to them things they find value.”

Resources Mentioned:

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