Welcome to the Join Up Dots business coaching podcast interview with Freshbooks founder Mike McDerment
To subscribe to the podcast, please use the links below:
Introducing Mike McDerment
Today’s guest joining us on the show is the founder of Freshbooks, the cloud accountancy company that you hear advertised on many podcasts across the globe.
Now this isn’t just a cloud accounting firm, but the world’s #1 cloud accounting software for self-employed professionals.
Its a global hit, but his journey to creating this success was far from assured, even to the point of perhaps not even being part of the plan.
You see most businesses are started from the position of an individual’s pain with the service that they are getting, and deciding to go and do their own thing to solve this problem.
And this was the case with today’s guest.
He was running a small design firm in 2003 when the frustration of billing his clients overwhelmed him — so he built his own solution.
How The Dots Joined Up For Freshbooks
He moved into his parents’ basement for 3.5 years to save money and completely revamped how he ran his design firm (to the point where he worked 19 days in one year and generated over $200,000) to bootstrap FreshBooks to what it is today.
Since launching in 2003, over 10 million people have used FreshBooks to save time billing and collect billions of dollars.
As he says ” I went through an incredibly scary time for 2.5 years while FreshBooks was rebuilding their entire platform, which is typically viewed in the software industry as the worst strategic mistake that a company can make. I even bounced back from a $1.5 million disaster — proving overcoming failure is possible, and often how to succeed in business to begin with.”
So its ok to say let’s build this thing and solve this issue, but how do you start, where do you get the funding?
And with more and more similar platforms being built, does this just increase his enjoyment everyday, or leave him in a whirl of panic?
Well let’s find out as we bring onto the show to start joining up dots with the one and only Mr. Mike McDerment.
During the discussion with the Mike McDerment from Freshbooks we hit such deep subjects such as:
Why you need to ask the question “Does the destination appeal to me” to truly work on the legacy of a passion project.
We chat about the funding that you never thought you need when you start a business, but comes at you from every corner.
Mike reveals why many of the metrics he chose to look at as success, are based around his employees happiness. Great way of operating in a business.
Why life is a series of hard lefts no matter how much you try to make it a straight path. You just have to cling on and do your best.
How To Connect With FreshBooks Founder Mike McDerment
You can also check our extensive podcast archive by clicking here – enjoy
Audio Transcription Of Freshbooks Mike McDerment Interview
When we’re young, we have an amazing positive outlook about how great life is going to be. But somewhere along the line we forget to dream and end up settling. join up dots features amazing people who refuse to give up and chose to go after their dreams. This is your blueprint for greatness. So here’s your host live from the back of his garden in the UK, David Ralph.
David Ralph [0:23]
Yes. Hello, good morning, everybody. Good morning to another interview based episode of join up dots. Yes, none of the solo ramblings but I take you on this is a professional like a professional on the other end of the line who, who can literally do anything as we will see, as we get through the show, he’s the founder of fresh books, the cloud accountancy company that you hear advertised on many podcasts across the globe. Now, this isn’t just a cloud accounting firm. But by the world’s number one yes, the number one cloud accounting software for self employed professional was getting his head global hit. But his journey to creating his success was far from a short, even to the point of perhaps not even being part of the plan. You see, most businesses are starting from the position of an individual’s pain with the service that they’re getting, and deciding to go and do their own thing to solve this problem. And this was the case with today’s guest. He was running a small design firm in 2003, when the frustrations of building his clients overwhelmed him, yes, he was overwhelmed. So he built his own solution. He moved into his parents basement for three and a half years to save money, and completely revamped how he ran his design firm, to the point where you weren’t 19 days in one year and generated over 200 grand to bootstrap fresh box to what it is today. Now, since launching in 2003, over 10 million people have used the service to save time billing and collect billions of dollars. As he says, I went through an incredibly scary time for two and a half years, while fresh box was rebuilding their entire platform, which is typically viewed in the software industry as the worst strategic mistake that a company can make. I even bounce back from a one point 5 million disaster, proving overcoming failure is possible and often How to Succeed in Business to begin with. So is it okay to say let’s build this thing and solve this issue? But how do you actually start? Where do you get the funding? How do you get the ideas? And with more and more similar platforms being built? Does it just increases enjoyment every day? Or leave him in a world of panic? Well, let’s find out as we bring them to the show to start join up dots with the one and only Mr. Mike McDermott. Good morning, Mike. How are you, sir? Good morning, David.
Freshbooks Mike McDerment [2:31]
Thank you for having me.
David Ralph [2:33]
It’s an absolute delight to have you here. We’ve had a few techie issues. But you know what you’re doing from your end? I’ve got no idea from this end. And somehow it’s working. It’s working, David. That’s it. That’s all you could want. So let’s get into fresh books. Because fresh books is one of those big names that you you hear literally everywhere on the online world, especially in the sort of podcasting world. A lot of people sort of advertise your service. Is it something that you look at every day? And you go, Wow, how did this occur? I look back on this. And it was just like a series of dots that have taken me here, or whatever strategic plan.
Freshbooks Mike McDerment [3:09]
First up, I feel like it’d be a better version of myself if I did pinch myself and smell the roses every day. I don’t know not not not how I’m wired. But yeah, it is important. We’ve come a long way. We’ve had great success. There’s there’s much, much further to go. I’m excited about that. And you know, taking stock every now and again is it is a good, good thing to do but seldom done.
David Ralph [3:33]
Why Why do you not say to your guys coming up, we’ve had a good month here, we’ve had a good month, I’m going to bask let let let me carry me around on the throne in the office so that I can feel good about myself?
Freshbooks Mike McDerment [3:46]
Well, it’s interesting, I probably celebrate other people’s successes, encourage them to smell the roses more than I do it myself. So there might be a little more of that coming out of me then then then directed at at myself. I you know, I think that’s a really the important part of building a culture and a team of performance is to celebrate successes to create that positive atmosphere, I think it’s also important to say and maintain, hey, it’s not good enough, we got further to go. And so I’ve always tried to find the balance, I probably slides naturally a little more into the latter category of like, what we can do better. But over the years, I’ve tried to grow as a leader, I’ve you know, seen the importance and the value of creating an encouraging positive environment, that feeling that we’re winning. He’s amazing
David Ralph [4:31]
me because I’ve done 1300 interviews now and literally to a man and a woman, they all struggle to celebrate, they set targets, they set goals, they hit that. And as soon as they hit it, no matter how big is literally they blink and move on. Do you think that is a sort of fundamental character flaw? Or is it actually the strength of what makes an entrepreneur what they are?
Freshbooks Mike McDerment [4:53]
I put it in the strength bucket. I think for most people, like you set that goal, it’s a long way off you you start working towards it, you know, by the time you’re getting close to it, your energy and time is focused on the next one, designing it trying to figure out how to motivate people towards it. So so you know, taking a moment at that milestone to celebrate is, you know, it’s almost at odds with where your focus is that you’re setting up the next thing. So it’s a fine balance. I you know, I think the best do a really good job of making sure you take time to celebrate what we try to find our ways to do that. But it’s, you know, it’s it’s not natural, it’s a learned skill for many of us.
David Ralph [5:29]
So for the listeners out there that aren’t aware of fresh books, what would be the reason that they would sign up for it? Why would they not use, like a ledger and ledger in a pen? Let’s go back to those days. Well, what can you give us extra?
Freshbooks Mike McDerment [5:44]
So, you know, you’re looking for us, if you have clients that you invoice, and creating invoices, tracking down payments, you know, reported like, how much did I make at the end of the year? How much do I need to pay for taxes, if, if any or all of that is a pain, fresh books is for you. And that’s whether you’re self employed, or you have a firm an agency, a consultancy, maybe maybe send a lot of invoices. So what we are is really easy to use invoicing and accounting software, it’s in the cloud. And fundamentally, what I like to say is if you invoice you need graphics,
David Ralph [6:20]
which is good. I don’t have it though. My I don’t have it, I basically whack things out on paper, and I’ve got a Google spreadsheet is very old school the way I do mine.
Freshbooks Mike McDerment [6:30]
Yeah, so so then you’ll feel the pain at you know, at tax time, right? It’d be like where the report they need. Just that overview. I mean, I used to use Word Excel as well, that’s you touched on it, but accidentally saved over an invoice one day was using Word and Excel, there’s a whole bunch of reasons why that’s a terrible idea. It’s time consuming, you know, lost productivity. But, but again, if you fast forward to, you know, figuring out how we’re doing and getting an overview versus just knowing you have five minutes, places that are outstanding, underpaid, there’s just, it’s just not a very productive way to run your business. And what I found was I had all this psychological energy in the back of my mind, just wondering, who owes me money, how much they owe me, you know, and that that, to me, is what you get when you use, you know, the kind of setup that you’re running. And, you know,
we take that away.
David Ralph [7:25]
Yeah, I like what you did in that in the lightest way. You said I was old school, Mike, that’s what you did?
Freshbooks Mike McDerment [7:32]
Well, I just to underscore the point, you know, I was before using Facebook as well. But but i think i think what people don’t realize is, you know, whether it’s starting up your, you know, your podcast here, or maybe you start a little consulting business on the side, or all of the above, what often happens is, you’re so focused on getting a client and serving a client or setting up your first show and running it. And then one day, maybe it’s an advertiser in your case, you know, maybe it’s a client says, Can you send me an invoice? And you’re like, Oh, my God, you know, it’s such an afterthought. And what often happens then is you go and you create one in Google Docs, and you say, Okay, I just got to get something out of the door really quickly. And then that becomes your process, that that’s the way you do it. And that it’s too much mental energy to think about changing it up. But ultimately, you are on a very bad
so so wasteful, unproductive that
David Ralph [8:30]
so so this sort of newbie entrepreneur, they would be better suited to get into something like this straight off, you know, a dependent on how much they need to use it. If I’ve got this one to clients, is it cheaper than having 100? clients?
Freshbooks Mike McDerment [8:46]
Absolutely, yeah, you can get started for free. And, you know, things will scale up with you, if you have real success, we’re going to keep growing with you till you know, I don’t know until you have 100 employees or so so. So it’s what we’ve really focused on is making things easy to use. Because the other thing about when you’re just getting started out, again, your focus is not creating an invoice. So we actually a couple years ago rebuilt our whole thing to make it even easier based on 10 years of learning lessons on how we could make it easier. Yeah, I mean, I think just the fundamental thing that people don’t often do is they don’t value their time, the way you should. And I promise you, you can create an invoice faster using fresh books. Then you can your Google Doc, by the way will take care of automated follow ups. If your clients are late to pay help you with your reporting at the end of the year helping collect online payment. I didn’t mean to turn this into it like a product advertorial. But But yeah, so all kinds of reasons, right? Yeah. All kinds of reasons why you’re doing it wrong, David, I’m gonna, I’m gonna
David Ralph [9:46]
have 10 of them, Mike, and I’m gonna have one, one for each client. Right? Let’s play some words. And then let’s delve back into your story. He’s Oprah.
Oprah Winfrey [9:55]
The way through the challenge is to get still ask yourself, what is the next right move? not think about, Oh, I got all of this stuff. What is the next right move. And then from that space, make the next right move, and the next right move, and not to be overwhelmed by it. Because you know, your life is bigger than that one moment, you know, you’re not defined by what somebody says, is a failure for you. Because failure is just there to point you in a different direction.
David Ralph [10:26]
Right? So let’s take you back in time, okay. So it is 2000. And maybe a little bit later than that. And you’re sitting in your parents basement on the bed, wearing your Power Rangers and defense. And you’re thinking to yourself, I’ve got to create this thing. I know, it’s what’s needed? How the hell do you start? I’m always interested in that, because it’s too big for the normal brain to compute what you really need to do.
Freshbooks Mike McDerment [10:51]
Yeah, I think the best counsel I can give and I think, was certainly the case, in our case was like, Don’t overthink it. I don’t think just start. I think I think that’s a place where, you know, the smartest people I know, get stuck, because they start, you know, looking down the road, and you know, they start anticipating obstacles and and like, every, everything looks like a dead end, if you have enough foresight. The question is, does the destination you know, call to you enough that you want to push through all those those challenges. And so what I again, what I like I encourage entrepreneurs, and would be entrepreneurs to just start, find the smallest next step that will first point towards, you know, a further out destination. And I guess the one thing I’d add to her thing, it’s the next move the next year, she’s up directed somewhere. So having some could be an instinctual sense of where you want to get to, it could be a picture in your mind. But then taking the next step towards that however small, you know, it can be like, tidying up your office this week, and getting a mind space to do the next thing. I mean, that might be brought procrastination and in one thing, but that’s once you’re done that it’s like, okay, now I can get down to work, I gotta clear space, I can focus, like, the steps can be very small that the point is that you are actually taking deliberate steps towards the destination, you want to find yourself. But so
David Ralph [12:17]
many people see that destination is just too big. It might be appealing. You know, people would love that. But they look at it and go, I can’t do this. It’s not going to be for me. Did you have those doubts? Or were you just blinkered? At the beginning?
Freshbooks Mike McDerment [12:31]
Well, I think, you know, sort of both and similar, but differently. I think I was gapped on like, how big canopy, right? I was just like, it could be bigger than I can imagine right now. But I didn’t have a clear picture. But I just you know, and I had this advisor, this guy who founded a, you know, what became a $6 billion technology company. And he kept asking me, how big do you think this thing can be? And I was always like, I don’t know, my wife
David Ralph [12:55]
says the same thing to me, Mike. I,
Freshbooks Mike McDerment [12:59]
and I just kept going, he was he was like, that’s fine. Just keep going. Like he knew it could be bigger than I did. And that’s why, you know, it’s great to surround yourself with people who are going to, you know, encourage you and give you the confidence to keep going.
David Ralph [13:12]
And then do you have to surround yourself with people could could you have done it being just on your own in the basement? Or did you have to find a sort of a business Yoda to help you along?
Freshbooks Mike McDerment [13:23]
I needed 10 business years, I think I absolutely could not have done it on my own in the basement, you know, not only from the like, I had a great co founder, who are wonderful to work with, you know, I was probably the entrepreneur in the group, and so had to figure out the forward looking things. And I had never done this before. Like, I’ve never worked inside a large business. So So scaling and growing a thing and understanding potential scale. And all these things are, you know, like are some of the growth obstacles is like, you just gotta imagine it’s bigger than anything you’ve ever actually seen before. Okay, good. And then and then, you know, keep just keep moving forward. Because what I yeah, I was just gonna say, but I think the, you know, the, the advisors help you with that. Right, they don’t only give you the confidence and unblock the thinking for where you are today, but can help you. You know, bring some some definition to how big it could be and challenge challenge your thinking, right? Because that’ll be the thing that’s that’s holding you back.
David Ralph [14:23]
Yeah, I found growing base, I’ve got sort of several businesses behind the scenes as well, this is just one of them. And I would say every single one of them has taken me by surprise how much money I’ve had to put into it at certain stages, and you get to a certain point, you realize it needs more investment, and you haven’t got the money. So where do you get the money? And you take it from somewhere else? And you put it in with yourself? Was this a one route track? Did you have other businesses like I did, where I could dip in, move money around? Was it just you know, fresh books or die?
Freshbooks Mike McDerment [14:55]
Yeah, so that point of it, like the opportunities almost always bigger than you? Well, I guess it depends, at least in my case, it’s almost always bigger than I started thinking about it being, but it’s always, you know, that 500 times harder to make it happen than you think. So, you know, with regards to, you know, capital and these kinds of things, I started out where I had this consulting firm, and I could move dollars over. And that’s what we did. And our co founders, you know, first couple of years, we we put in some dollars and use credit cards, and you know, you’re talking like 100 $200,000, to get all that together. But then we kept going and we were having success. And you know, some other people took an interest and, you know, collectively they put $100,000. And so we so we were able to raise a little bit of money to fund things ourselves, for me to use the agency to to support the business. And so we were cobbling it together from a few sources for for some time.
David Ralph [15:51]
And both sources still part of the business.
Freshbooks Mike McDerment [15:55]
Well certainly make my co founders are the, you know, the folks who, you know, sort of put some of that early money in, the two of them are still on our board. And then by choice on my part there, you know, so they’re great operators, and I’ve had a big influence on me and the direction of the business, thankfully, over the years. Yeah, so So the short answer is yes. I mean, that’s not always the case. And you know, there were people who were completely necessary and transformative at one stage of the business, that are no longer part of the mix of either outgrown them or their, you know, their role and helping us grow as has passed. But so, you know, so to mix, some some, yes, some still with us some some less necessary for these legs of the race.
David Ralph [16:50]
And I’ll some of the ones that are still with me, my ones that you wish would you can share, you can share, Mike, that no, I would
Freshbooks Mike McDerment [16:58]
I would not characterize it that way at all. You know, one of them was somebody who, you know, he now who now runs an 80,000 person company, right? So I think he was waiting for us to catch up, right, like waiting to be more useful. So he’s a CEO of that organization. And you know, very helpful to me a very seasoned operator and somebody who I turned to when I don’t know how to unstick something.
David Ralph [17:20]
He’s interesting when I talk to people like yourself, who obviously have created something, and then it’s become a company, more often than not, you’ve got to walk through that company, I would imagine, because the companies I’ve always worked in have generally the directors and the sort of senior management looked like I knew all the answers. But more often than not, I didn’t, it was just been looking like they had it until you actually got into a board meeting with them. And you think these guys haven’t got a clue they’re making up as I go along? How do you do that? In your own business? How do you give your staff that great competence that every decision is going to be a winner for fresh books, or I lay with you? Well,
Freshbooks Mike McDerment [18:01]
I think it’s both. I think there’s some things that are, you know, bedrock and you know, your firm on and there’s some areas that it’s like, Hey, we don’t know, we’re going to do this. And, and that’s what makes it exciting. Like being part of a technology company that’s growing like you’re experimenting, you’re running programs that you know, do not work. And by the way, like, we’re deciding to, you know, flight the program, or invest in the project or whatever, it’s actually then it’s like, it’s not even me doing it, like, we think it’s the right thing to do. Now, it’s done to you to execute it and make it happen. And so either we could have the wrong thing, the execution could have been poor, any way you slice it, we’re learning, which is, which is the front of it. And by the way, when you succeed, that’s a huge win. And we had, you know, you have a portfolio of things like people go and take something and, you know, just exceed your expectations, delivering it in some cases, you know, it probably wasn’t the people, that’s probably what we chose to apply ourselves to, or, or sometimes it just takes three times as long to get to what we thought would take, you know, one third the time. So there’s all these vectors to assess it. But yeah, I think there’s something where it’s like some things where it’s like, Hey, you know, you want to set a baseline of confidence that we know where we’re going, and then say, you know, here are the uncertain things and help us solve them. And that’s, that’s how you really engage hearts and minds.
David Ralph [19:16]
Now that that obviously works, but when you achieve, but when you fail, and you’re sitting down in Hooters with all the directors, and not one of you can afford the buffalo wings. How do you do that? How do you overcome the disasters that you’ve had?
Freshbooks Mike McDerment [19:31]
Yeah, I think, you know, I think that’s where you think you like? So first of all, I think there’s a cultural piece to that, right, where you’re always trying to build a culture that is sort of failure tolerant. So people, one of the things I’m constantly struck by is how people will apply, you know, a judgments and pressure to themselves and ascribe it to me, and I’m like, Wait a second. I am not, you know, I’m not a completely new age, you know, I, I saw you work so hard, and I say, do everything like, hey, this thing didn’t work out, let’s figure out either how to, I’m happy to chip in and if you want new ideas, if we’re going to keep pursuing it, or, or let’s work on something else, but it is a human beings are interesting that way, some folks will just persevere and figure out a way to make something go, if it hasn’t worked out on their timeline, other people start, you know, turning inwardly and, and judging themselves harshly. And, you know, it’s that second one that I it’s, I will say I’m in like, it’s just like, the layers and layers of understanding that are still, you know, I’m still learning lessons on like, I just can’t believe the psychology and what people do to like, literally do to themselves, you know, that I’m still grappling with it, as I see it again. And again, and I don’t know, I don’t know, if it’s like, you know, we hire people who want to succeed. And if they don’t, then you know, I just don’t know. It’s, it’s, it’s, it’s very, very interesting and deeply psychological. One of
David Ralph [21:02]
the very first episodes I ever did, it must have been episode eight, or something many years ago, I always remember the guy saying, but one of the best business advice he got was a guy just saying to him, Look, if you want to beat yourself up, put down the bat and pick up a favor, it’s gonna be much easier for you, you know, he’s taking it away. And he’s basically that’s, he’s, he’s metaphor for life, really, things are going to go wrong. But I can either really hurt myself or just sort of move on with it. And he’s become a big success from that point.
Freshbooks Mike McDerment [21:33]
Yeah, no, no, I used to. I mean, I remember playing sports as a kid growing up, and, you know, I would hang on to the air, like, by the way, we’d win, you know, I might be one of the stronger players in the game, I would hang on to the mistakes I made for like, you know, a week or more, I’d be reliving them in my head. And, you know, just beating myself up. And then eventually, one day just in a sort of started to realize that the marriage of letting, letting go, right, and not judging yourself too hard. Like, you know, there’s a part of you when you do that, at least in my experience, like obsessing about those things, where you, you get trapped into this, this thinking that like that is, I mean, strangely, it’s a source of motivation. But but it just, it comes with a great tax, right. And I think it’s an ultimately limiting tax and liberating yourself and saying, Hey, I made a mistake, I can do it better next time. Moving on, you know, instantaneously. And letting and being like, be easy on yourself. I’d be easy on yourself that I will say for myself was not a lesson that
David Ralph [22:36]
came easily. It’s interesting, we’re talking about this, because this week, my daughter who’s 13 had to stand up and do a speech. And it had to be funny, we had to have jokes in it. So we kind of wrote it together. And she stood up and she did it. And afterwards, I said to her, you know, how did it go? And she said, Well, the other teacher laughed, I said, well ask good if the teacher laughs That’s the one scoring you you don’t care about anybody else, you know, that’s, that’s the main one pocket have done it better. And I said, Well, how could you have done it better? I don’t know. I just could have done it better. And I realized that I had the same trait. Even if I do something that goes well, but I’ve got no reason to want to make it go even better. It’s still not good enough for me is strange, why we are looking for the the failures even when they’re not there?
Freshbooks Mike McDerment [23:21]
Well, I mean, I think there’s something very good about this, right? And this is this is this is the challenge and the tension. And the thing to navigate, like, the drive to continuously improve is wonderful. The question is, you know, how, like, what question is, what is the cost? Like, can you do an exercise no matter what you do, where you just, you finish the exercise, like your daughter gives a talk, and you say, no matter what, we’re just going to sit down and say, What, well, what could be better? Right? And you write it down on a piece of paper? And then you move on, like it’s done. Right? And I think it’s the one of the things I’ve learned over the years is, you know, unless I get deliberate about shutting off that tab, like, how do we do better tap? It keeps running, right? And it’ll drain the well, you know, depending on the scenario, so I, you know, a pen and paper is my best friend. And the scenario, that’s fine. If I write something down, then it just stays on the page, and it leaves my head, and I can move on. And so that’s, that’s my little act.
David Ralph [24:22]
So so taking it back to fresh books, how do you know that fresh books is doing well? Is it just simply more customers? Or is it customers feedback being more positive? The bottom line? What’s your metrics? Well, we’ve had a really good month, we’ve had a really good year.
Freshbooks Mike McDerment [24:39]
Yeah, I think I so first of all, there’s so many vectors now, you know, across like, different functions, like our world class customer service team, or our product development organization, or just literally how much revenue we earn in a given period. You know, that’s, that is kind of the scorecard revenues, kind of scorecard. But I feel like it’s important to assess people and teams and everything in, you know, in situational context, right. So you can have a great month, that should have been better, or you can have a bad month, this better than you thought, right. And so it’s like, you’ve got the scorecard. But evaluating it in context is very important. And so, you know, great days for me, or when we’re shipping lots of new stuff to customers, when we’re solving sort of heart heart problems in a way that they love, like, those are leading indicators to me of sort of long term value for our customers, and therefore the business. And that’s what I really care about. But you know, you have you have other measures in these different disciplines. And, you know, I find, part of my role is to say, Hey, what’s the measure? It’s a similar exercise is going through your daughter’s like, whatever the measure, Okay, great, you know, you know, what did we think was going to happen? You know, what did we learn? You know, how can we do better next time like that, that’s just a you’re always learning and trying to improve stuff.
David Ralph [26:04]
But you can only do that once you get the ball going, can’t you get get the ball rolling at the beginning, you don’t know whether you’re improving or whatever, you’re just doing stuff?
Freshbooks Mike McDerment [26:15]
You’re not wrong. But that goes back to the just starting, like, at the beginning, it’s just did I get x done? Like, did I cross it off a list, you know, on a time frame, right? That’s it, like, you’re just doing delivery, and that’s what needs to be celebrated? And that’s how you should hold yourself, you know, accountable. Like Don’t worry about, you know, metrics or what have you. It’s like, you know, you need these, these leading indicators, like it’s probably project delivery, or maybe it’s I’m trying to get my first clients, it’s like, I met for new prospects. Okay, good. I believe stuff will come out of that, at least I’m f4. Right. And then I’ll wait for one of them to turn into somebody who actually, you know, pays, right. So I think I think at the beginning, it’s really, really important to hold yourself accountable for just getting like the activities and the projects complete. And not worrying about too many layers. On top of that, you do that all with your conviction, that in the long run, you take enough of these actions, the other stuff, the results, the revenue, whatever your measure is, what will come later.
David Ralph [27:19]
But But you say this sort of layers on top, Mike, there’s a truth again, for all the interviews that I’ve done, where there’s a kind of three year path, the first year is to do try to get things done, ticket off. The second year is a kind of spaghetti that is made, where one being over crosses, and it’s not quite right. The third year is when simplicity starts to come in. And looking at fresh books as I have, it is something that seems to thrive on simplicity, did that come later on in the process, and was the layers just a part of that you had to go through.
Freshbooks Mike McDerment [27:55]
But I think that, you know, on the whole day we focus on, these are supposed to be for our customers, that’s what we want your experience to be. But But underneath the cover, right, like, maybe we’re building a new, you know, capability into our product, like we were actually for years, we really just helped folks with cc invoicing and doing things like time tracking some simple expense creation, we’ve recently added, you know, the ability for you to scale your accounting needs, with us, you know, for, you know, up to like 100 employees or what have you. So, things like a GL and bank record, what have you, those were new things for us to add to our platform. And in the earliest days, like, I mean, I think that initiative inside a hair overall platform sees us, we’re not exposing this stuff to customers until it’s kind of ready. But underneath the hood, we had teams who who live those three phases, right? So it’s, again, back to like, we have a portfolio of projects. And each one of them is that, you know, one of those phases, and the question is, how many of you have a phase one, phase two and phase three?
David Ralph [28:59]
And but but can you put too much on it? Can you had too many bells and whistles that stuff. But you know, might make it sexier, but actually detracts from the user experience?
Freshbooks Mike McDerment [29:10]
Absolutely. So we talked about, you know, we have a product vision that’s broken into three parts. And, you know, one of the parts is kind of focused around this concept of like, hey, what, what jobs do we do for people. And, you know, what I mean is, you know, for example, a job that we would do is automating follow up for a client paid you on the determined timeline. So that’s, that’s a job because you’d be doing it if our software didn’t do it for you. When you dig into various businesses, like there’s there could be like a reporting need that you have, that’s like a job. And if we don’t offer it to, you’re doing it in Excel going is there’s the jobs. And, you know, we have two parts, three parts, the product vision, two of them have discrete numbers of, you know, steps in the process, that jobs. I lyst, as you know, we’re working on performance and number of jobs for customers. But I also point out that, but we’re not going to deliver infinity. Right. And the reason for that is, you know, you can add too much to something where the offering becomes complicated, right? You start to alienate, you know, your customers there, there is a, I guess, a diminishing returns, you know, for a product that’s, you know, becomes so feature rich, it’s impregnable. Like you can’t figure out how to make it work, or, frankly, I think you have to appoint with, you can’t figure out what it is, right. So you need to keep it simple enough that it’s, you know, comprehensible. And it sort of works in an intuitive way. That’s, that’s what we’re always striving to do.
David Ralph [30:45]
I went into McDonald’s yesterday with my kids, I hate McDonald’s, I have to emphasize. And so this was a real goal. And then we’re going there. And it was so complicated. I went up to the counter, and they said, Oh, no, you got to order it over there. Why? Why can I order it here. And there was no sort of board behind that showed you the prices or whatever. It was like advertising slogans moving around, it was almost like, I had to come up what I wanted by magic. And I couldn’t understand why they were doing it. And I said, Oh, yeah, the customer experience is much better. You can get served. I said, Yeah, but you don’t know what you’re buying. You don’t know what you’re buying, Mr. McDonald’s? What? Have you been in it? Have you seen that kind of thing? Mike, does that annoy you in the same way with your simplistic head on but it’s the customer experience?
Freshbooks Mike McDerment [31:29]
Sounds like they’re running some experiments in either phase one or phase two.
That’s just, that’s just doesn’t sound like it’s going to turn into, you know, more sales for them if that’s if that’s their objective. And if that’s your experience, right, and maybe, you know, this, like whoever came up with this new approach to stuff is, is biased by thinking everyone knows our menu already. Right? So we don’t even need to show it, which is a, you know, just a great feat of hubris when you think about it. So yeah, I don’t know what to say that just doesn’t sound good.
David Ralph [32:03]
Well, I’m gonna give you another one. What about these computer programs where you’ve got going to corners to find out how to do things, and it’s not in front of you, and you have to go into this corner in that corner? What is that all about? Mike?
Unknown Speaker [32:15]
Freshbooks Mike McDerment [32:17]
depending on how you define corners, and we think about this in terms of like, settings, right, and so I have to go into settings, and then sub settings and settings. And this is like Microsoft software, right? Like, it does everything, like you can conceive of the question is, can you find your way to it? Yeah. And and how much of it? Do you actually want? Like, probably less than 10%? Right. So yeah, that is that, you know, that is, to me is is where software goes wrong, I know, what we try to do is, is just, you know, actually our goal is to not have a setting section to speak of, and to have, you know, the things that you want to adjust, be adjustable in and where you want to use that, which is like a design philosophy, every, you know, every every product and every company has a different approach to these kinds of things. And, you know, sometimes it’s like, you know, actually, here’s a fun way to talk about it, we, we built our new, like reimagined and redesigned version of our software, we had a series of design principles, and one of them I like to call screwdriver. And what it means is, it’s got to be simple, like a screwdriver, so simple that people would choose to use it for things It was not intended. And so let’s just go back to it like what why a screwdriver? Well, screwdrivers, they’re obviously built to turn a screw, but they also get used to open pans cans of paint, they also get used as like a chisel, right, and maybe remove some quarter round or something like this. And so screwdrivers are so simple that they actually become you know, more powerful and make you feel more powerful that you can do more things with this tool. And so that is actually one of the central design principles for us. So we don’t have people running into corners, trying to figure out things that sounds like overkill.
David Ralph [34:04]
Now mine we need you is ruled with the world we do, I’m going to try and vote you into power. You can control McDonald’s, and Microsoft and everything can can we get you to just move Freshbooks to the side and go off in pastures new.
Unknown Speaker [34:20]
That wouldn’t be easy. But we’re happy to have a chat.
David Ralph [34:25]
But let’s play some more words for him. And this is a guy who created the whole theme of the show back in 2005. He was in it land as well. And he’s left quite a legacy here, Steve Jobs.
Steve Jobs [34:36]
Of course, it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards. 10 years later. Again, you can’t connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something, your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leaves you off the well worn path. And that will make all the difference.
David Ralph [35:11]
So can you look back in those words and sort of really join up? dots, Mike?
Freshbooks Mike McDerment [35:16]
Oh, absolutely. And it is kind of stunning. Right? And there are periods where you know, you’re definitely making a hard left. There’s no, there’s no clear path. And I think that part about really trying to be true to yourself and follow your heart that That to me is really the only thing through it all?
David Ralph [35:41]
And is it something that you look back on? And you kind of with rose tinted glasses? You almost go, it was actually quite easy, really? Or do you look back on it and go, Oh, my God, I I look like Brad Pitt when I started and now look at me.
Freshbooks Mike McDerment [35:56]
So I, the way I think about it is, you know, I made a hard left, right, I think there were parts of this that I really struggled with. I mean, personally, and I don’t know how often you heard this on the show, if ever but you know, I struggled with I guess you know, I there were clear expectations set and the family I grew up in, which is wonderful. And you know, I wish for everybody that you know, sort of high expectations. You know, I think high expectations for people is a good thing. But what I found at times, and I don’t think these things have to go together. But for me they did, I felt I was doing things or directing myself, for others and not for myself. And I know people feel this way at various points of their lives. And you know, I’m not going to put kids in this bucket, it can feel that way. But I think that’s a different like having children, I think it’s a different kind of thing. So I was growing up and I was I was making choices and kind of you know, I wasn’t really following my heart, I was doing what I thought I was supposed to do. And I had to break that cycle of thinking. And it was hard. And it led me into a wilderness in my let’s say, my early 20s, where it was unclear that I was going to be you know, it was unclear what I was going to wind up doing, right? Yeah, I was kind of doing some work or what have you and I wasn’t gonna sort of I was going to be some kind of contributing member of society, if you will, but it wasn’t clear, it really wasn’t clear where I was going. And what I was doing was i was i was reprogramming myself to make sure that I was working for me and not for somebody else. And if I hadn’t have done that, I would not have got on the path to building a thing. And, and frankly, having the energy and the drive to persevere. Because when we started out, like there was not a lot of traditional economic rationale for success for business, but but we love doing it. And I knew that much. And I was okay with that, as opposed to trying to hold myself to some bar that other people have. And, you know, if we hadn’t done that we would have killed this business off. Like for years, it really was not making much money, or were very successful by traditional measures. But but but I was at that point, I was like, forget it, I love it. Like, let’s just keep going.
David Ralph [38:24]
The things that never was successful internally as they look externally are they you know, that that’s the smoke and mirrors that you see online more often than not,
Freshbooks Mike McDerment [38:34]
I often felt like the the moments when we have been most publicly successful. And, you know, are the moments I’ve felt the least successful. And, you know, alternatively, the moments where I felt like, you know, whether it’s inside the building or something we felt, and we you know, I thought some people may feel like we’re losing or what have your often times I get great energy and feel, you know, so I’m like, I’m a off cycle. This is a personal thing. And this is where I don’t know who said it, but it’s like, you know, success and failure or you know, just both imposters, right? They’re both imposters and I think getting comfortable with that, which creates a great deal of discomfort, but knowing that, you know, success is a lie. And failure is too and that life happens kind of in between and you just keep going. That’s that’s where it that?
David Ralph [39:29]
Well, the bit that jumped out of me in that whole thing was when you said we love it, we love I could see your face, even though we’re not looking Hmm, light up with the full of actually, what you’re doing is a big thing, isn’t it? I love what you’re doing.
Freshbooks Mike McDerment [39:43]
I listen, I think it makes all the difference. And that’s the path I was on the wrong path for the first you know, I call it 20 years in my life.
Unknown Speaker [39:52]
I think it’s, you know,
Freshbooks Mike McDerment [39:54]
I think you do everything you can to pursue to have a passion, passion and to pursue it. And if you find one, it’ll probably lead you to another or maybe you’ll Nisha, just stay in that thing. And that’s fine. But passion is going to give you energy, it’s going to draw you to you know, interesting people, it’s you’re going to be compelled to grow yourself to keep you know, investing in that passion and furthering yourself within it. Like there’s just so much goodness in there that comes out and complete you as a human being, and sets you up to do the next thing, whatever that may be.
David Ralph [40:27]
Right stop? Well, this is the bit of the show that we’ve been leading up to that we call the Sermon on the mic, when we’re going to send you back in time to have a one on one with your younger self. And if you could go back in time and speak to the young MC, what age would you choose? And what advice would you like to give him? Well, we’re gonna find out because I’m going to play the theme. And when it fades, you’re up. This is the Sermon on the mic.
Unknown Speaker [40:55]
Unknown Speaker [40:57]
with the best beer of the show.
Freshbooks Mike McDerment [41:10]
So where to go back to? It’s a it’s a tough question. Because I think there’s a few points. But you know, I would say for me, we’ve touched on this so far in the show, you know, it took to in my 20s to kind of knock myself on to the right path with me. And it was a pretty messy thing. So I guess the question is, you know, can I go back sooner? Right? And I don’t know if it’s like elementary school, and just, you know, sort of have a different conversation going in, in my head around why to do things and and what should the outlook be and his success doing something for someone else? Or is it like listening to myself and knowing how I feel about that thing and continuing to pursue it? come hell or high water and having the internal fortitude to say that and self awareness to know that’s important and communicate it to others? I think he married that orientation with one other thing that I would say, in reflection, as I was thinking about this is you’re going to be a byproduct of the people you surround yourself with. So choose your friends carefully. So do what you love. And then surround yourself pursue that thing. It’ll probably lead you to surround yourself with good folks. But that that is also an important part of all this.
David Ralph [42:32]
Right advice. Mike? What is the number one best way that our audience can connect with you, sir? You know,
Freshbooks Mike McDerment [42:39]
probably Twitter, if you’re trying to reach me directly, which is Mike McDermott at at Mike McDermott on Twitter, or you can email me at Mike at Freshbooks, or come check us out at freshbooks.com.
David Ralph [42:52]
We have all the links in the show nose. Mike, thank you so much for spending time with us today, joining up those dots. And please come back again when you got more dots to join up. Because I do believe that by joining up the dots and connecting our past is the best way to build our futures. Mike McDermott, thank you so much.
Freshbooks Mike McDerment [43:08]
Thanks for having to do this.
David Ralph [43:14]
Mike McDermott from Freshbooks. Yeah, it was really interesting wasn’t a because Ace is a big, big success. But you imagine you you just start with that position of pain is your own personal pain and how can we sofa. And through most of my coaching any of my coaching clients who come through, they will realize I paying on about knowing somebody’s pain, because that’s a great point to start a business. And you can see that with blockbusters ended up you know, Netflix killed blockbusters, because of the pain that the Netflix owner was feeling. And it you can just run through literally every business, there’s always some kind of pain point that gives them their their steer, to go and do their own things, which is Mike has done. Okay. So if any of you out there is annoyed with a company and think that you can do your own thing when men look at it closely and think to yourself, yeah, what can I do? Can I change it to make a better customer experience? There’s businesses everywhere, you just need to see that opportunity here that opportunity. And start. Until next time, thank you so much. As always, that was David Ralph. And that was Mike McDermott from fresh books. We speak again. Cheers, fear. Oh, so you’ve now listen to the podcast? And are you interested in creating your own business because creating an online business isn’t too hard. As long as you do the research and you get the foundations in place, and you have a strategy? Well, over the last five or 10 years, I’ve created multiple online businesses, and cemented that information by interviewing so many people through join up dots. And now I have a four stage strategy that can teach you how to do the same. Create a business that will bring income into your life, create freedom, and say goodbye to the alarm clock and the boss forever. Now, this is a 30 day program. But I personally take you through giving you all the steps that you need to do before you get to the stage of actually creating your business, you’re pretty much guaranteed that the business is going to work as long as you put the effort into it afterwards. If that’s of interest to you, then just go over to the join up dots homepage and click on the 30 day course there’s a video of me and you can just send a message through to me saying that you’re interested you want to register on the next course and I will personally connect with you and talk you through it to make sure that you are fit for what I’m about to teach you. If that’s of interest, as I say go over to join up dots, the 30 day business course and I hope to speak to you soon