Episode 240: Bootstrapping to Success with Mike McDerment

Aren't you fed up with calling a business only to reach a voicemail, phone tree, automated system, or worse, someone who sounds busy, bored, or actually annoyed you are calling. I can't believe how many businesses we interact with spend money marketing to drive phone calls and then completely fail at handling those calls. A full time assistant costs a lot of money, but at a fraction of the cost. Abby Connect provides businesses with a world class, professional and courteous team of receptionists specifically trained to take their calls. Based in the 247 city of Las Vegas, ABY Connect has been wowing business callers for over 13 years. No wonder they are the highest rated live receptionist service. For our listeners, Abby Connect is offering a no obligation free. That's free trial. And after your trial is over, our listeners will also receive $95 off their first bill, but only when you sign up at our special link Abby connect.com profit first. That's Abby connect.com profit first. Sign up today to experience the difference. In today's episode, we're going to talk about the journey to building a successful company. It can be fraught with a lot of struggles. You're going to learn all about that from the CEO of FreshBooks, Mike McDermott. You're about to hear all that and so much more on today's episode of Entrepreneurship Elevated. Are you queuing music over there? All right, Kalis, are you queuing up music?

Yeah.

Okay, so let's. I'm gonna pause this right away. Just really hard pause. What's the music that you wanted to play that's a little bit better?

That's gonna sound rather similar to what you already played.

It does sound a little similar. See, I like the metal sound. It's very 80s metal.

Yeah.

Y. Yeah, I want. Listen, whatever you pick, I'm gonna go with. Okay, but I. Yeah, but it better be freaking good. I want something that really just brings energy to the show. You know what I'm saying?

Yeah.

All right, well, hey, everyone. I'm Mike Michalowicz. I am on a mission to eradicate entrepreneurial poverty. Oh, hold on a second.

I like that energy.

My God, it feels like Paul and oaks from the 70s.

Oh, it gets better.

Oh, my God.

You feel pumped up now, huh?

No, I'm not. It's hard. Like, it's hard to come back from that. I'm on a mission to eradicate entrepreneurial poverty. Trying to do it through my books. We're trying to do it through the show. There's all different forms of poverty, financial poverty. There is purpose poverty. There Is time poverty. There is the poverty of being able to speak the English language properly. And Kelsey will make fun of me all the time poverty. We're here to fix that. And I'm joined by in studio by my colleague and good friend, Kelsey Ayers.

Hello, everybody. You can find us on itunes, Stitcher, Tunein Radio, Spotify, iHeartRadio, any podcast, or anywhere really. And please leave us a review. If you happen to take a screenshot of it, send it to me and I'll send you a book.

Yeah, it's Kelseykemcallowitz.com so with a K, K, E, L, S, E, Y, you can figure out Mike Michalowitz as a doozy. It's got. Google it. Google it a lot. And we're sending a copy of Clockwork or Profit first or the Pumpkin Plan. And if you use one of our words in your review, like, you know one of the words, we made up a grosius.

Yeah.

What?

Forculous.

Forculous. There may be stored. Stored. There may be some bonus material for you.

Genetically.

Genetically is one of my. That's my favorite.

That is my favorite.

That's my favorite. Kelsey, before we go go to our guests, I want to know what you've been up to. Thanksgiving, in theory, is passed. We're doing four episodes today before Thanksgiving. But what have you been up to there, chief?

Yeah. So what do you do in your family for Christmas gifts? Do you buy everybody gifts or do you do, like, Secret Santa?

Well, you mean what the kids. Yeah, everybody.

Still. Do you guys have, like, a cutoff?

Get a lot of.

Yes or.

Yeah, we have a budget. We have a very specific budget that we. We go with every year. We. We do two Christmases, so we do one in our house, and then we'll go to my parents that same day in the afternoon and then do it over there. It's just. It's really super important for my parents. My father, he's elderly, and so it's super important that we experience it there. And he goes to the same routine that we did since he was kids. He's got to take one picture of everyone. We have to get in front of the tree. The tree almost falls over. Confusion every single time. And the process is the handing off gifts. There's this tradition. One gift gets handed out to each person. Everyone opens it, displays it. Next gift gets handed out. My father used to always do that. He's just too elderly to get out of the chair. So now it's my job. I get it. I give it to him. He then he has to find the tag on it, like, who's it for? He can never find the tag. He never could. Like, that's nothing new. That's not age related. He flips over, who's this for? It's like, dad, it's for Elise. But he can't hear now. He's like, who? Who's this for? Who's this from? And he gets all frustrated. It actually makes Christmas the best because it's traditional.

Funny.

What about you? What do you do?

Yeah, I think it kind of changes every year anymore, depending. Last year we just did it at home. My grandfather lived with my parents, so it was nice because my aunt from Florida came up and staged.

Oh, cool.

Yeah, but it was cozy and I like that. I feel like in the past few years it's been really cozy and sweet. Mostly just my immediate family.

Does the Tob hand out the gifts or does he have a gift hander outer? Does he go by the Tobe or just Tobe?

Just Tobe.

Oh, does he go by Tobe or Toby or.

I think in our household he goes by Tobe. Toby is the. And his real name is Steve.

That's the best part. That's the best part. Most people go from Toby to Steve. He went from Steve to Toby.

Yeah, yeah. Because he was balding in high school.

Yeah. Well, that. Well, it makes sense, obviously.

Yeah, yeah. But yeah, so usually my nephew was like, you know, 13. He'll be the one to do it. He's our kind of novelty child at the moment.

I like novelty children. Who are you? Yeah's two. What do you call them? The two bits. Christmas boy has two bits. Get me a pheasant as fast as you can, boy. Hurry, hurry. Yes, Miss. Yes, Miss.

Seventh.

Boy, do we have anything else to share before we go to our guest?

Yeah, we do.

Do we have a list?

We have a review.

Oh, what'd they say?

A shout out goes to Biebert.

Biebert.

So Biebert left us a review on itunes. They said. I really like listening to the podcast and the Profit first system is a godsend for me. It has greatly helped me to wrap my head around my business finances. Thanks, Mike.

Oh, you're welcome. B. Bert, is it? His name is B. And last name? Bert. It's confusing.

Yeah.

So it's beat something. So it could be Bert. Bert.

Yeah.

Yeah. Thanks, Bert. Bert. Appreciate it. We appreciate that. Did he get a book?

Yeah, I got a bird.

Nice. Which book did he get?

I think Profit First.

People going for proffers. Yeah, you know, Surprised me. Some people are like, oh, yeah, I never read the book. I've been listening to the show for years.

That's why I love this. I love that we're giving them the book.

Yeah, but like, you know, make the effort and read the book. Like, I think it'll really help you. Like, why you're listening for years. You want to increase your profitability. I'm not. No, that's a good point. I'm not trying to shame anyone.

Like, they're not readers. Maybe they don't grasp things. Things that way.

Okay, well, they grasp free books.

Yeah.

Go to your library. You can get for free. I'm not like, I'm not trying to shame people. I'm like, just take action, my friend. Take action. Okay, Biebert, you're the man. You took action. So let's get to the show. Oh, thanks. I want to thank our corporate partners. Thanks, Steven. Receipt Bank. We'll talk about more about them later. So you can avoid that infamous phone shame and wallet shame. We'll talk about that later. You know what I'm talking about. Our guest today is Mike McDermott. He is the co founder and CEO FreshBooks. You know, I took a trip up to Canada to visit with their offices. Took a tour of the facility. This is a few years back, fascinating location. First of all, it's a massive business.

We're in Canada. Is it?

Oh my gosh, don't.

Toronto.

Dude, I was about to say. I was about to say Quebec City.

Thank you.

I was about to say Quebec City, so not even close.

Montreal.

No, Toronto. My guess is Toronto. Thanks Mike. Thanks, Mike. Back into your hole. Prior to FreshBooks, Mike ran his own design firm where he accidentally saved over an invoice and realized the unmet need in the market for proper invoicing and systems like this. 2003, started FreshBooks from his parents basement in Toronto. See, the answer would have come out if you just hang with me. Toronto. Mike has authored Breaking the Time Barrier. We distribute that book freely and regularly in our welcome kits to our new members and as a guide of using value. It's a guide of using value based pricing to unlock your true earning potential. It's my privilege to invite on our show Mike McDermott. Mike, welcome to our show.

Thank you for having me. Great to be here.

So just give us a little sense. I suspect everyone listens to the show, knows FreshBook and FreshBooks and if they don't like, what rock have they been living under? Give us a sense for what FreshBooks looks like today. As a business.

Yeah. So I guess there's a bunch of ways to look at that. But the way we would classically articulate it is, you know, we're about 300 people, over 20 million people have used our software to send and receive, print and pay invoices since we started. And you know, we started, I think probably like a lot of your audience, pretty humbly with spending about three and a half years in my parents basement getting things going.

Okay, so that's what we're going to jump back to. So you've achieved by the measurement of size, right. 300 employees, 20 million historical users. You've achieved the size of a very significant business, which I would assume less than 1% or maybe even 1% of 1% entrepreneurs ever achieve. But you started exactly where we all started in the basement. What do you attribute that degree of success starting off that humbly? How did you make that arc wise when so many of us don't?

Yeah. So, you know, it's funny, the ingredients, if I really want to be honest about them, and it's a frustrating answer I think in some cases, but also an inspiring one, is a lot of it's perseverance. You know, like we really should have given up. You know, today, in any given month, we help people collect billions of dollars. You know, back then it was a different story. And you know, it took us two years to get to a place where we had 10 customers paying us $9.95 a month each. So we were making $100 a month two years in. So, you know, the point is like, we probably should have quit. You know, by all accounts we were utterly unsuccessful. But we liked what we were doing. Right. So I guess in terms of the poverty of purpose, we didn't suffer from that. We spent a lot of time talking to our customers whenever we did, which was always like a pleasant surprise because somebody had found us and gosh, they were even prepared to speak with us on the phone or by email. We got the sense that we were making a difference for them and, and I think it's that that really got us going.

Did you ever want to give up? Like, was there a point where you really were going to call it?

For me in the early days, you know, I don't think, you know, I didn't have the quit of like, I want to stop this so much as I had the entrepreneurial, well, I could do this or I could do that siren call of like a different opportunity. I almost started a business to help, for what it's worth Realtors, because I had a bunch of those in my consulting business we were serving, and I was like, oh, they all could use this other thing that I could build for them. I bet that business would have grown faster at the start, but would have never achieved the kind of scale that this one can.

So you see these customers calling you, they're showing appreciation for what you're doing, but that doesn't pay. I mean, that doesn't pay the bills. Was that really enough to sustain you? And. Yeah. How do you get through that?

Yeah, so I think there's a question of, like, what is sustaining? So I'm a big fan of people when they're starting a company or a project or whatever it is, is like, you need to figure out how to determine your own success. Don't let other people do that for you. And you need to have measures that work for you and not for others. And so there were lots of people signing up for our service every day. Like, I don't know, like 30 people a day. Would you somehow find us on the Internet and sign up for our service? They weren't turning into customers yet, but they were finding us, and they were finding us in pretty much greater and greater numbers every single month. I think if we had evaluated ourselves on revenue and profit and all these things, we probably would have packed it in. If we shared, hey, we're making $100 a month to $1,000 a month or whatever, to somebody else, they would have said, you know, you're what a joke. Like, you're a failure. And so what we ended up doing is, again, sort of saying, hey, we're more interested in these other milestones, customer satisfaction, you know, the challenges like delivering projects and trying to advance. I will say, you know, in fairness, for people who are like, yeah, Mike, but you don't have kids or, you know, you mustn't have had mouths to feed or whatever. I mean, there's some truth to that. I got myself into a place where my personal living expenses were relatively lower, but I had a consulting business that I actually built this business because I accidentally saved over an invoice one day running that business. And so I had a source of income from that firm that was helping serve other small businesses with marketing and website design, things like that. So I had a source of income. I put some of my own money into this thing, though, to keep it going. We had a founder join, and so we cobbled together dollars to kind of fund those early days. But I think the point is, if we had measured ourselves by traditional means, we would have quit a long time ago, but we liked what we were doing, so we found ways to keep going.

Well, let's look at this from another perspective. Maybe you should have quit. I mean, listen, in hindsight, clearly you shouldn't have quit, but maybe the better choice is you're not making money. This isn't sustainable in the long term. This will hurt your future opportunities by continuing to do something that's not working. Do you have any sense of. Of when you really should have quit? I mean, is there any indicators that you maybe even define for yourself? Well, if we don't achieve this, then we're calling it quits.

Oh, well, that's a great question to ask. I mean, you know, I just say, like, clearly, clearly we were right to not have quit.

Yeah, clearly.

I mean, you know, clearly we were, you know, we figured some things out. And I think that, to me, is a little more of the entrepreneurial journey. I will say I'm not every sort of small business owner entrepreneur. The more uncertainty, the more sort of intriguing and challenging and interesting it all is to me. I think some folks, I think of it as the difference between. I feel like the word and just forgive me here for a second. And by the way, I cast no judgment in saying this, so let me just share with you what I've learned over the years. It's funny because I had that consulting business, and my first two clients, who I still have relationships today, are wonderful. One was like a travel. In the travel industry, helping people sort of have great vacations. And the other person was a caterer of all things. Both of them, while I was serving them and helping them build websites and do the things they needed to run their business, in both cases, they. They came to points where they could have. They had to decide they had a fork in the road. I can take a jump and either buy another facility or invest in my own marketing and grow the business in a certain way, or I can sort of hunker down and go a little further and hope that that opportunity will come again. And I saw something happen, whereas I saw both of them choose to not take the step into the unknown. Right. And these are successful business owners, right? They've been doing what they're doing for years. And I will say this, I just. I just didn't understand it. You know, like, for. For me, that jumping off point is, you know, like that uncertainty that comes with the next thing that, you know, you may not figure it out is. Is what I love. Right. So. So which is A long winded way of saying, hey there, those, those people are still in business today. Right? They've built great businesses, different size and scale than the one I'm running now. But I guess there's a bunch of different animals I think of like an entrepreneur is probably a little more what I'd call myself versus the small business owner that I was back when I was working with them and that they still are. But I kind of switched gears and switched sort of lanes and went on a different path. And so what is the point in all this? If I'm being honest, I can barely remember the question. I think it's more. I think it's more a question of, you know, should we have quit? Like, you know, who are you? Right, and what's right for you? Because I am sincere when I say there's no judgment. Like, those are wonderful people. You know, some people don't work for themselves at all. They work for somebody. Like, no judgment in any of this. I just think you need to know kind of who you are, what's interesting to you, and then, hey, do you think it'll be worthwhile to go on the journey of trying to figure this out? Because it's going to be thankless for a long time.

I know you from that one meeting we had face to face, watching what you've done from afar. And this is my assessment is you will step into uncertainty, but at the same time you're very calculated, which almost seems paradoxical. Here's a guy. I see you as a guy that says no to many opportunities because it's a distraction from your core opportunity. Yet at the same time you're stepping into the uncertainty. It almost sounds like those we conflicting. And maybe it's not a fair judgment of who you are. Is that a fair judgment or not? And how's it work?

Let me, you know, try and speak about myself without getting too.

Without me speaking about you.

Yeah. So I have heard it said, you know, that, you know, entrepreneurs are risk takers. And I guess I never really see it that way. Maybe when I talk about jumping into the unknown, there's obviously risk there, but I think of entrepreneurs as risk mitigators. The question is, is the reward enough for the risk? So do I want to go in there and then do I believe I can squish the risk down into component pieces that I think I can influence and control enough of it, even though it's hugely uncertain and terrifying for maybe others? But I see some path where to me, the risk is manage constantly calculating that so it's not like a, you know, I'd say, yeah, it's not a blind thing, but it's, you know, I'm standing in the situation, you know, And I think this is true of a lot of entrepreneurs and a lot of small business owners. Like, we see and feel the risk differently, and that's, you know, that's good. And that's part of, you know, the DNA of the animal. Right. Yeah. So I think there's risk in all these cases, you know. Yeah. And the job is to, you know, have confidence that you can take some of it out and maybe you can't, and then just be okay with the notion that, you know, maybe it won't work out.

Are you on a mission through your business or personally? Something greater than just the transaction? More than. Let's, you know, let's make more money, let's sell more. I mean, do. Are you genuinely trying to deliver something to the customer that betters their lives or has an impact in a way that they wouldn't realize without you?

Levy? You know, I've never been really motivated by money. I just. I'm sort of an intrinsic motivation kind of person. And, you know, I think, you know, and philosophically in life, I believe if you do the right things, like other good things come out of that. Right. And so I think apply that philosophy to business. And so we've always had a real interest in serving our customers. So even in the basement there, when we were making no money, like, we were intensely customer focused. And I built up my agency with those clients I mentioned and others, you know, before we were running freshbooks again by kind of serving people well and kind of exceeding their expectations and helping them succeed, and myself finding a purpose in that. Today with FreshBooks, it continues to be all about the customer. Yes, the scorecard is kind of revenues and growth and all those things, but those are byproducts of doing a million small things. Right. For many, many people, whether it's our dedication to customer service or building excellent products, I think those are the ways. Those are interesting problems. Like, hey, how can we do a really good job serving our customers? Whether it be they phone us and they have a good experience there, or they're using our products and we're not even with them. But it's so intuitive that it's easy. That's fun. I figure if we do all that right, it's going to work out for people. And then when you do speak with customers, which everyone at FreshBook spends their first month in customer service, I Spent years talking with customers way back when. I still go out and have dinners with them and all that kind of thing. When you get connected to the real life struggles of a small business owner, of somebody out there working for themselves, trying to get a business off the ground and find clients and serve clients and frankly, whose mental health is influenced day to day by their clients, Was it a good day because my client's happy or was it a terrible day because I really feel like they felt like we underdelivered for them or something along those lines. You know how important the work you do is. Everybody at FreshBooks has a sense of purpose, I believe, and it's because they get to speak with their customers and see them using it. And the product. What's the point if you don't have that is kind of my orientation.

I don't know if it's a chicken before the egg type thing. Is it just related to you? Is it all businesses? But my question is, when it comes to making money versus catering to something greater than making money, what's the driving factor? I mean, does a business really need to make money first to realize that there's a greater purpose, or do you need to have a greater purpose, clearly defined first to make money that supports that purpose? I don't even know that question is clear. Does that land with you?

Well, maybe I'll try and take a stab at how I might think about it. Is, you know, I don't think I'd have fun and enjoyment running a business that just made money. Right? Like I want to know that I'm. I'm serving somebody with my efforts and we're making a difference for people. And then I think the question is back to the making money part is like, hey, are you taking on something that if you do a good job of it, there's enough impact, influence and ability to earn at the end of it that it actually makes sense for you. And I think that's kind of the calculus, right? If we didn't need to feed ourselves and what have you, I wonder how much different the things people would do would be. And in my case, I love serving. I'm not sure how much different it would be. Right. But someone else might spend their time differently.

I want to talk a little bit about the hard knocks. You know, I went to your office, I was walking around with one of your salespeople. You and I sat down, we had a lunch together, toured around, met your team. They had the tennis tables down there. You know, it's a. It's A beautiful office, beautiful space, like an industrial complex, but really just modernized and so that, you know, I look at him like, wow, this, this guy's had an easy rise. And look at this tremendous success he's had. Envy kicks in and I start painting my own story of a business like yours or yours itself, saying it was easy for him, but that's not the reality. But I don't think it was easy for you. What's the reality of achieving a business like that? Was it smooth riding after you got the parents basement?

Well, I mean, first of all, we spent three and a half years there, so, you know, to get some points for that period. Just asking, hey, mom, where's the peanut butter jelly sandwich? Yeah, yeah, right, yeah, no, did not go down like that. So, yeah, I mean, listen, I like challenge and personal growth. So I think the question is, if it was easy, would I still be doing it is maybe another way to frame things. I don't think it's ever been easy. Right. I think the question is, do you get energy and do you enjoy the challenge? Right. For me, I don't do well if I'm not challenged in some way. And so building a company and learning how to do that and then learning how to run it and building the team and sort of keep customers and people like there's, there's a whole bunch of problems in there. You know, learning how to build product, learning how to marketing product. Like, I love all that, you know, I like trying to solve those problems. And so I don't know that we've had an easy. Like, I don't know that there's such thing as an easy day since we started. I think there's fulfilling days, you know, when you make a difference for people. Maybe they're inside the building. Maybe it's, you know, you're delivering some new features that customers have been asking for for a long time. Those are still my favorite. But yeah, it's never easy. Right. And I don't think if you do anything that's worthwhile in this world, it's ever easy.

Well, what's your relevance to the business now? I mean, day one, you might have been the guy coding and developing, doing customer service. Now you got 300 colleagues working there. Does the business even need you or. I'm sure it does, but what's the capacity? Are you needed on a day to day basis? Are you needed as a visionary? And. And what does that even mean?

Yeah, truthfully, I'm on a bit of a journey with that myself. I would say every Three to six months since we started the business, or maybe less in the early days, I've had to redo my role. I think the phase I'm at right now, it's probably a bit of a bigger redo, but I'm looking at a world where I used to be more operationally evolved and thought I had to be. Last little while, I've sort of, I built a team. They're, they're very strong and, you know, I'm not as necessary. And on the one hand that's an ego bruise. On the other hand, it's like, wait a second, you know, I kind of want to go back to, you know, resolving or better solving some of the early problems, you know, some of the squishy problems. You know, hey, you know, our brand, you know, it's been a thing that I've been looking at for a long time. I just haven't been able to get to. So, you know, and what does that mean? It's like, you know, it's not like a logo update. It's a more thoughtful exercise to go back and get in touch with some pieces there. So, you know, I think right now, I think the next phase is the question I ask for myself is what am I uniquely positioned to contribute? What are the things that no one else is going to care about and get to in a way that I believe really matters and stacking those projects up and chewing through them. So, yeah, my role is turning into a little bit more of that than like, hey, I'm at the weekly meeting. What are the numbers and why? Yeah, I'm trying to free myself up from that operating stuff and focus more on the, you know, the further out pieces.

Do you ever see yourself maybe in hindsight that you've become an impedance at certain points that you've insert yourself in a role for too long and you're actually impeding the progress of other colleagues in the business itself.

Well, the interesting one I'm having with myself right now is I've been an impedance on myself.

Yeah. Yeah.

Is that a new word? I don't know.

Yeah, I think it is. It will be. It'll be in our dictionary.

Yeah, There we go. So self and Peter, where I, you know, I think I held on to this, the last permutation of my role, longer than I needed to. And I think, you know, the downside of that is, you know, I like, listen, I've enjoyed what I've been doing, but I'm actually pretty excited about letting go of that stuff and kind of going to some other things now, which I think is, which is how you stay engaged over a long period of time. Right? Yeah. So I think it's important to make sure that I sort of serve myself in a way to stay engaged and to take on those things that as a founder you sort of uniquely positioned to understand and do and help lead other people through. Right. Other people can run the operations and is another way to look at it. So that's not to say I'm not showing up to the office every day and things like that. It's just my focus and is different. So yeah, that's the answer today.

What about the development of your team? Meaning when I experienced your office, you had some people that clearly are very more than loyal. They're excited to be there that you could see in their eyes and their actions. They're committed to the success of the business. How did you develop such a loyal team and how did you do it from the early stages in particular when you were, you know, work out of the basement?

Yeah. And so I'm, you know, forgive me for like wanting to say something glib like, you know, like how do you cross the street? Right. Like you put one, you did say something front of the other. Right. And you don't even know, you don't necessarily think about it. The flip of that is, if I'm being honest, I spent a hell of a lot of time thinking about it and you know, back to being calculated because you know, to my mind it's like you want to hire the people best folks and then you want them to stay. And you know, people have choices these days, especially in the industry I work in. So it's incumbent on you to ensure that people actually do love being here. And by the way, don't you want to work around and be with people who are passionate, what they're doing and glad to be there every day versus somebody who's not. Right. So there's a whole bunch of reasons why, you know, I think me spending time thinking about like, hey, how do we create a great experience for people so they want to be here is very much in line with their interests and the long term success of the business. And you know, just, you know, we, you know, I've, I've gone to great lengths on this. Like I'm a big culture person. Yeah. You know, I've kind of tried to, you know, I didn't understand what it was or how it worked or what it even, you know, like really meant or why it mattered when I started out so I've been back to like calculating and deliberate. Like I've had to go on like a deliberate learning journey to tease it apart. You know, the upshot of that is, you know, we have built the kind of workplace you describe. We, we actually participate in some of the, you know, the Fortune 500 companies do this great places to work and Google and Facebook, you know, sort of try to be the top company to work for and usually are in the top, you know, sort of five or 10. And you know, we compete in the same survey just for less than 1,000 employee companies. And we were number one in 2015 and number four in 2016 and number seven in 2017. So yeah, you know, it's all that thought has sort of paid off in a way. But, you know, it doesn't. This is one of those things where it's like you're as good as, you know, your last day on the job, right?

Yeah, yeah, of course.

Like you gotta, you gotta keep doing it.

But that culture, I assume, you know, when I see the awards, the ones you kind of rattled off, the Googles and stuff, I think large corporations have culture. Doesn't it start though, even with just yourself, when you're a solo practitioner?

Well, I think the thing you don't appreciate at the time, if I can speak in generalities, is yeah, you are making and creating a culture whether you know it or not. Like day one yourself.

Right.

And a lot of our culture today, you know, the die was cast when we were 1, 2, 4, 10 people. Right. Like you can still see that in many of the things that we kind of do today. And I think that that is, you know, that is something. Right. It's fascinating and it can't be under appreciated. You can change things and you know, often there's times to edit and tune, but the die is cast pretty early.

Yeah. What's the future for FreshBooks? What do you see as your 10 year vision?

Well, we're a values driven organization. We have nine values and an invisible tenth one called stealth. And what that's about is no forward looking statements, no strategy, no financials. We keep all those things kind of close to our vest, so to speak. But I think the simplest way to think about it is, hey, we've helped and millions of people over the years, if you don't know what we do, it's, you know, ridiculously easy to use invoicing and accounting software. You can get on your desktop, your mobile phone, if you invoice, you should check us out. But you know, I just you know, our mission as a company is to reshape the world to suit the needs of self employed professionals and their teams. And I just think there's all kinds of. We started off in sort of the accounting, invoicing, accounting software. We help people, clients collect payments now and we kind of actually, I would say sort of completely redesigned how accepting payments works. So you can sign up with our service in one click, accept Visa and MasterCard. Nobody's ever done that before. And so I think, you know, when we think about, you know, our. We have a philosophy and a credo of execute extraordinary experiences every day. I think that is fundamentally how we reshape the world for our customers. I think there are other problems. It's collecting payments over here. It could be something else over there. For us to go out and take on that problem and rend it from a world of complexity and pain and nuisance into something remarkably simple. That's the direction we want to be going in. And I just see lots of problems that aren't solved for, you know, a very important and growing number of people who are out there working for themselves. Right. And really don't have the level of support that, you know, they do as consumers. As business people and self employed folks. We just don't have the same level of support that we do as consumers.

So I have one more question for you because we got to start wrapping things up. But you've had a perspective. You've had 20 million customers mostly, if not all business owners. Now I know you don't have a relationship or can even see their data. I mean it's their own private data. But have you been able to surmise the differentiator between a successful entrepreneur and one that struggles? Is there anything that comes to mind, at least for you as the differentiator?

So one of the things that makes us different. So there's lots of, you know, there's actually, there's really not lots of accounting software choices out but there. But you know, one of the most popular ones, they serve every kind of business, right? Retail, restaurants. We don't. Okay. And so I say this, we only serve people who serve others. They send invoices. That's kind of the common denominator for our customers. So no retail, no point of sale, no restaurants. But if you invoice, you should really be using FreshBooks. I say that again to speak to like, hey, when I think about our customers and the things that makes them different and more successful, you know, if you look at the data, it generally always comes back and says the same thing. It's like people with, like, cash flow or whatever. It's like, oh, you know, thanks a lot. That's really insightful.

Right.

But, but if I think about it personally and you go out and you have dinner with people, I just, you know, I think it's people who really are able to, you know, put themselves in their customer's shoes. Right. You know, kind of put their customer in front of them, get into their shoes and help that customer solve problems and then deliver in a way that is beyond the expectations of that client. Because those clients will then take you to other people. And then you'll have so many clients, you'll have to start letting some go and choosing the best ones. And then you'll be down to a short list of the best customers who only get to work with you because you're the best at what you do. I think that's the progression. And that customer orientation is, you know, not something that's in a huge amount of supply and it's squishy, but it's important.

Yeah. Great insights, Mike. Before we let you go, where can our listeners Sign up for FreshBooks and start using your system?

Yeah, first of all, you can get started for free. Check us out@freshbooks.com and I'll just say it one more time, but I think it's super important. If you invoice, you should be using FreshBooks.

There you go. It's that simple. The CEO of FreshBooks, Mike McDermott. Thanks for joining us today.

Thank you, Mike.

Thanks for having me.

All right, hang tight, though, while we upload your file and Kelsey and I talk behind your back. All right, so, Kalus, before we do talk about what we learned from Mike, I do want to thank our corporate partners who make the show a reality. And a big shout out to receipt bank. Kal, I've never seen so many receipts as the ones that covered your desk the day you came on board. And I said, kal, so you're a brand new employee. I don't want to embarrass you, but for God's sake, that's embarrassing. I'm surprised anyone even wants to be your friend.

Yeah.

And I know that's, you know, culturally, maybe you don't want to approach a colleague like that, but that's how I approached you. And you said, I think I need something better. I said, you need your seat bank. And from that day forward, no problems, right? I mean, yeah.

And I appreciate you humbling yourself to be my friend. Yeah, well, I set that culture Right from the start.

Yeah, I did. I really did. That was a very humble thing of me. Then I looked at your phone, and first of all, I was disgusted, to be honest. I said, kelsey, what kind of phone is this? And you said, it's the phone I use. And I said, that's not what professionals use.

There you go being judgy again.

I wasn't being judgey. I was being helpful. I was being a friend. And I said, why don't you use the nextiva phone? You're like, what is that? I said, see? See? You have so much to learn, my child. Anyway, when I called you my child, I thought that was a little bit over the top, but really.

And I got you then I'm not patronizing at all.

And I got you the next diva phone. And you're like, this has been life changing. You have no receipt problems with and thanks to the receipt bank. And you've no phone problems. Thanks, Next diva.

It's beautiful.

I mean, your life is basically fixed.

Yeah.

Yeah.

All to you.

I know.

I bow to you.

I know.

Master. Hey. And you, my dear friends, why aren't you using an Xtiva phone? Because your life could change just like Kelsey's. And why aren't you using receipt bank? Because your life can change like Kelsey's if you. If you don't do. All right, cows, I want to know what you learned today. If I can hit the button. There we go.

Come on, man.

Yeah. A little bonus.

Oh, I love this so much. I.

He's amazing, right?

I'm super appreciative of Mike.

Yeah.

I think it's so important that you determine your own success because. And I think that's in all aspects of your life. Like, determine what is meaningful and important to you for your life's purpose and don't be swayed by any of the things you think that you should be swayed by. And I think that that's integral to, you know, thinking about money, because obviously money is the lifeblood of your business, but it shouldn't be the determinant of whether you keep doing it or whether you give up. It really has to be something bigger than that, right? Like, you know, keep your side consulting job for as long as it takes to get this thing that you're super passionate and that's serving a community that you feel you need to serve. Like, do whatever you have to do, but make sure you are in tune with what matters.

I like the poverty of purpose. I didn't like, like, the fact that there's a poverty of Purpose. But I liked the clarity of the negative impact.

Yeah, yeah, yeah.

So I thought that was powerful. I like that they referenced the siren call, which I believe is some mythology, right? The sirens, how they. Paul, you. The siren call to do different things, which is the. It's the Achilles heel to make another biblical, another mythological reference. It's the Achilles heel of entrepreneurs is to be constantly distracted by different things. And to me that offset this, this, this desire to step into uncertainty because it invokes curiosity and intrigue balanced with the. The intentional disregard for distraction.

Right.

I thought that was super powerful.

Yeah. And I also love that he's like sort of company mission was to rent things that are complex for small business owners and break it down into something that they can use that's easy for them to access. I love that and I think it's so true because it is super complex. Especially when in terms of like cash flow. Like I think setting up merchant accounts is stupid, stupid complicated. Just to be able to take credit card payments.

Oh yeah. Well, because we've done it here. Oh yeah. Nightmare.

And it's like, why are there so many different people kind of in the process for getting money and getting into your bank? Right.

We got it. We gotta get that fixed.

It's crazy.

And here's the last thing is I asked him about the kind of his own growth. I mean, he started out as himself. He was the business. He started adding colleagues. He's got 300 plus colleagues, if I heard that correctly. And he keeps asking himself, what am I unique for now? And I thought that's a real powerful way.

Yeah.

As a business, we're tiny. There's 10 of us here. We're about to hire someone maybe, you know, so 11, like we're tiny. Right. I mean, but even our role, your role, my role has shifted every time we brought someone on board. I mean, think about the day you started to. What you're doing today.

Yeah, it's crazy.

Your role shifted. My role shifted.

But there's aspects that haven't. There's aspects that I probably should have let go.

Yeah, yeah. But we got to keep asking ourselves, what are we unique for? To find irrelevance. Otherwise it builds redundancy and you start becoming this almost clones of each other and the business stop. The progress stops moving.

And I think. Sorry, go ahead.

I'm on a roll here. I think the leader of the business really has to live into their uniqueness.

Exactly. And I think like you said too, that is what's ultimately going to keep feeding you. To be engaged within the business. Otherwise, I mean, like anything, you get bored with your role or it becomes monotonous to the point where you resent it. Like you need to kind of. Kind of shift as your own needs shift.

Right, right. Fascinating interview. Probably my favorite interview I've loved. I always enjoy our interviews, but this one was really kind of insightful. To talk about a guy that I think in some regards, many of our listeners, myself also aspire to have some of the elements of what he's experienced in his business. In our own business.

Yeah. And I think as a human, just to have that kind of integrity with all aspects of life.

Yeah. Super Real guy.

Yeah.

Okay, Kelsey, do we have anything else to talk about? Oh, oh. Do we have a male?

We do.

Pattern baldness.

Hilarious. So this comes from.

Sorry, that was Ruby's hand.

So this comes from Jay Murray.

Hey, Jay.

What's up?

He says, my wife and I started a home healthcare business. If we are both getting W2 checks, why would we still have a bank account for owner's pay?

So, JJ, because W2, I'm presuming you're saying you're receiving a check from other work you do. Right. You're getting a paycheck from another employment. It's unclear from your question, but when you start a business, we have to prove that the business can support you in its entirety. So if you have a job on the side, you're moonlighting this new business. We have to make sure the business can support you. And by doing this, we have to bifurcate, meaning allocate the money to the different accounts for each pre intended purpose. If we pay you out of owner's pay, we know the business can support you. If we're not paying your owner's pay and you're living off your W2, you're artificially growing your business. Your business is actually leaching off the other work you need to do. So you have to allocate the money to know that's really available for you.

I'm wondering if he's saying that he pays himself through a payroll company.

Oh, well, that changes everything. No, if you pay yourself through a payroll company, so that's an S corp or C corp, you actually have to do that. We have a payroll company here, but we're an llc, so I don't get a paycheck. But if you get what's called distribution, if you are getting a paycheck from your business, you still have to have an owner's pay account because we need to make sure that the pay is being secured for the owner themselves in addition to their employees. It's a reward mechanism. It's a behavioral mechanism. As an owner that's transferring money around, we need to know that you're being paid. Sadly, most owners don't pay themselves. They start to resent their business and hate it. But if you see that money is being reserved for you, it starts building that confidence. It's a simple reward mechanism. So you still need to do it. We do it.

Yeah.

Yeah, we do it. Really didn't go anywhere from there, but we do it. All right, Kels, take us out of here.

Thanks, everybody. And please leave us a review on itunes to check. Tuning, radio, Whatever you listen to, just take a screenshot and send it to me. Kelseykemcallowitz.com and we'll send you a book, book, book.

A book of your choice, as long as it's limited to profit first or clockwork or the pumpkin plant. Like, we'll give you a choice of three. It's not like we're sending you Mike mcdermott's book for free.

Yeah.

Because we have to buy it and send it to you. And it's really awkward. And we're like, hey, Mike, can you give us a deal? And he's like, no. And then, you know, but we'll send you my book for free.

Yeah.

So any book you want, as long as it's one of those three and you leave a review and it's a hardcover. We only send the hardcovers. We don't send you audibles. And you do a review and you use one of our invented words.

Yeah.

There is a bonus going on right now. We don't know what the bonus gift is. If there's anything, it quite frankly, may be nothing. So count on nothing. And then be surprised if there is something.

Yeah, yeah. But be lured in by something.

Yeah, yeah.

But, hey, you can get surge anytime, though. Just go to mikeypilots.com that's unbelievable. Yeah.

Like, this is like, what author does this? Hey, just take my books for free. Like, this is how I make my living, and it's giving it all away for free.

Yeah.

Because it's. Because it's a manipulative marketing tactic. Here's what you do. Go to mikemcalowitz.com I know you can't spell that. Go to mikemotorbike.com that's the backup. Some people are calling me Mike motorbike now, by the way. I've been at events. Hey, it's Mike motorbike. Like, that's me.

Yeah.

How's Kelsey Ayers?

She's good.

She's good. So go to mikemotorbike.com, click on @ the top of any of the pages. It'll say, get your free copy of Surge. And sure enough, you'll get my book free. No shipping cost, no nothing. The entire book, the same one you can buy on Amazon, sent to you immediately for free. Okay, I think we're good. All right, we'll see you guys.

Thanks, guys.

Have a good day. Oh, Ruby has something to say.

Daddy.

Fetbag. That's right.

Sam.