Dan Martell - The 3 Types of CEOs with Mike McDerment @ Freshbooks

00:00:00.000 Just because you're a founding CEO doesn't mean you keep your job.

00:00:02.300 And so I think the things that you really have to have are a desire to grow and change yourself, not the business, yourself.

00:00:12.860 Ignition sequence start.

00:00:14.940 Three, two, one.

00:00:26.080 Mike, I'm going to come across for the shake.

00:00:29.500 What's up, man?

00:00:30.000 How's it going?

00:00:30.960 It's good.

00:00:31.800 It's good to see you.

00:00:32.560 It's been a while.

00:00:34.660 FreshBooks for those that don't know.

00:00:36.320 Fun fact, I just want to share this

00:00:37.880 because you would remember, hopefully you remember,

00:00:39.900 but when I launched Clarity in New Brunswick,

00:00:42.940 geo-fenced it for all my 350 entrepreneurial friends

00:00:45.900 that came out live, you were the demo.

00:00:48.600 You were the person on the other end

00:00:50.020 that I called for business advice.

00:00:51.600 I remember that.

00:00:52.440 We set the stage.

00:00:54.080 So that was a lot of fun building that company

00:00:55.720 and I appreciate the early support in doing that.

00:00:58.480 But FreshBooks today, Mike, 350 employees.

00:01:02.940 When did you launch it?

00:01:03.940 Is it 2004?

00:01:06.360 Kind of around there.

00:01:07.180 I mean, for me, 2006 is when we got a little more serious.

00:01:11.580 But yeah, probably founding was sort of more launched 2004.

00:01:15.520 And your background is accounting.

00:01:17.460 No, I wouldn't go that far.

00:01:19.300 But you studied accounting?

00:01:20.860 I did bookkeeping in high school, grade 10.

00:01:24.200 But then I went to business school.

00:01:25.360 And you have to do, I was in Kingston at Queens,

00:01:27.860 very good business school.

00:01:28.620 And you have to do some basic stuff there.

00:01:32.460 And I was using 5% of my brain at the time

00:01:35.860 to learn that stuff.

00:01:36.520 But it went in.

00:01:38.060 But I also didn't really like it.

00:01:40.580 It was not the kind of math that was interesting to me.

00:01:42.640 I liked other kinds of math better.

00:01:44.820 So it was always a necessary evil.

00:01:47.480 And that was probably what inspired

00:01:49.780 me to build something simpler and easier to use in the space.

00:01:53.060 That's super cool.

00:01:53.860 And then since then, I mean, the journey for a long time,

00:01:58.580 the way I look at, I've always looked

00:02:00.080 at what you've created, Mike, which is incredibly awesome,

00:02:03.020 is kind of like the Canadian, like when

00:02:05.680 I think of like Basecamp 37 Signals, what they've created,

00:02:08.800 kind of like the bootstrapper mentality, you know,

00:02:13.260 literally teaching everything you've learned over the years.

00:02:16.300 I mean, you continue to do that.

00:02:18.220 Where does that part come from?

00:02:19.740 Like where does that, you know, you still show up at events,

00:02:23.080 Dude, you don't have to.

00:02:25.700 I know you did the tour at one point

00:02:27.240 where you're teaching people to build businesses.

00:02:29.560 I think you went all over North America.

00:02:32.060 Where does that come from?

00:02:33.080 It's actually, you mentioned the folks at 37signals.

00:02:37.080 So Jason Freed, I got to credit him with this.

00:02:38.880 It's like, you can out-teach or out-spend your competition.

00:02:42.320 Pick one.

00:02:43.360 And so it's smart marketing.

00:02:45.020 And the best salespeople have always known that.

00:02:47.880 If I were to be self-critical, I would

00:02:49.200 say there's been periods where we've done it really well,

00:02:51.040 and there's periods where we've been quiet on it.

00:02:52.920 And you know, that's probably like a focus thing.

00:02:55.960 You're focused inside the building.

00:02:57.120 You're focused outside the building.

00:02:58.340 But yeah, it's been a pretty good thread throughout.

00:03:01.240 We do try to out-teacher, out-spend.

00:03:04.120 Yeah.

00:03:04.420 Such a clear way to think about it.

00:03:07.200 Yeah.

00:03:07.540 Yeah, so if you don't have the capital,

00:03:08.800 if you don't raise billions of dollars, then it's like.

00:03:11.080 And for us, that's where we started.

00:03:12.400 So those who don't know, I mean, we

00:03:14.240 were in my parents' basement for three and a half years,

00:03:17.180 you know, rubbing together nickels.

00:03:22.140 Literally nothing.

00:03:23.140 Literally that we found in the couch

00:03:26.040 because the basement was also our TV room.

00:03:28.800 So my family TV room.

00:03:29.880 So yeah, we were trying to figure out how to do it.

00:03:33.720 And social media was very early then.

00:03:36.240 It was, I don't know if you consider the blogging era

00:03:38.760 pre-social media.

00:03:39.620 I'd say it was the start.

00:03:40.840 And so we started blogging.

00:03:43.000 And when you start blogging, you realize,

00:03:45.360 what have you got on offer?

00:03:46.460 And it's really like, here's what we're learning.

00:03:47.960 Here's what we're going through, which

00:03:49.740 is helpful to other people who want to learn and follow you.

00:03:53.700 But also, the stuff we were sharing back then,

00:03:56.100 our customers loved it, too.

00:03:57.280 They really felt like they were part of building the company.

00:04:00.000 It was early days.

00:04:01.980 This was like Web 2.0, for those who remember that time,

00:04:04.720 and even pre that getting coined.

00:04:07.360 And so the kinds of people who are out there reading blogs

00:04:10.440 and participating in these communities

00:04:13.140 were, in fact, a community.

00:04:14.520 So we were very much a part of that.

00:04:16.120 And the early adopters of our product,

00:04:18.220 we're all into that stuff.

00:04:19.720 It was good marketing, and it traveled far and wide.

00:04:22.960 Cool.

00:04:23.380 And then in regards to the lessons learned,

00:04:28.660 I know I saw you give a talk around,

00:04:30.580 I think it was like there's three types of CEOs,

00:04:32.900 knowing which one you are, and the play to overcome that.

00:04:37.340 Could you unpack that real quick?

00:04:38.540 Because I mean, it sounds like you

00:04:40.100 had to discover that in your journey and kind of.

00:04:42.720 Yeah, absolutely.

00:04:43.600 So I have never worked in a place that had a CEO.

00:04:50.400 So I have no pattern.

00:04:51.960 So I read articles or books.

00:04:54.420 But I still just how to operate a company,

00:04:57.000 what a functional company looks like,

00:04:58.760 like departments and stuff, all a complete mystery to me.

00:05:02.480 And so very, very first principles growing into my role.

00:05:06.280 And there were some steps along the way.

00:05:08.840 I really struggled with the title even.

00:05:13.300 Back in the basement, when you have barely two nickels

00:05:16.240 to rub things together, I would be reading articles

00:05:19.080 about four-person companies like ours,

00:05:20.780 and the leaders were calling themselves CEOs,

00:05:23.020 and it just made me want to throw up.

00:05:25.100 I hate the word boss.

00:05:26.560 I've never, that one still hasn't landed for me.

00:05:28.540 That one too is, yeah, I don't really

00:05:30.060 want to be anybody's boss.

00:05:31.540 Yeah, that's another thing.

00:05:34.460 Anyhow, so I was kind of allergic to it,

00:05:37.700 struggled with it.

00:05:38.400 And then as you're growing and scaling up,

00:05:40.360 it was just hard to figure out what the heck the role was,

00:05:43.140 What am I really accountable for?

00:05:44.480 And then anyhow, so this talk that I

00:05:48.600 give around the role of the CEO and trying

00:05:50.380 to make it less ambiguous is basically laying out,

00:05:53.760 hey, a CEO has three jobs, and everyone

00:05:56.360 should expect the CEO to get these three things done, which

00:05:58.560 is set the vision for the company, build the team.

00:06:01.380 The team includes executive leaders, but also the board,

00:06:05.520 the employee base, and the partner companies

00:06:07.920 that you're going to need to actually grow and scale.

00:06:10.500 And then the third thing is to make sure your bank account

00:06:13.140 And its size and scale matches your ambition.

00:06:15.220 So make sure the bank account is filled up.

00:06:17.220 Those three things, everyone can reasonably expect a CEO to do.

00:06:21.780 Where things get more complicated is there are three types of CEOs.

00:06:27.220 There is a visionary, somebody who's probably pretty non-operational,

00:06:30.500 and has a great strength for seeing way into the future,

00:06:32.980 call it 20 or 30 years into it with exacting detail.

00:06:37.220 That is not a common strength.

00:06:39.060 And that can be packaged up in usually one of two formats.

00:06:43.560 Somebody who's a great, hopefully a great spokesperson,

00:06:45.560 want to go out in the road.

00:06:47.060 Sell.

00:06:48.060 Kind of be selling, that kind of thing.

00:06:50.560 Or alternatively, somebody who's deeply technical

00:06:52.560 and wants to stay in a cave and really work on that stuff.

00:06:55.060 Build the future.

00:06:56.060 But they are a visionary in the product or technology sense.

00:06:59.560 And so that's one kind.

00:07:01.560 And then you've got the builder.

00:07:02.560 This is probably more where I live, which is, yes,

00:07:04.560 I possess vision for our market and what the product needs

00:07:07.560 product needs to be.

00:07:08.700 But the strength of a builder is to take

00:07:12.300 that understanding of customer, the capabilities

00:07:14.840 of the technologies today, understanding of the team,

00:07:17.940 the market, all these things, and take those LEGO blocks

00:07:21.420 and put them together and bring something

00:07:23.320 to market that is appealing to that market to kind of win

00:07:26.840 that market, if you will.

00:07:28.260 And then the third kind of CEO is the operator.

00:07:32.100 And this is somebody who it's funny.

00:07:35.220 I feel like I've personally met fewer of these

00:07:37.420 as founding CEOs.

00:07:38.780 I think professional CEOs, there's a lot of operators.

00:07:41.340 They may have been a COO kind of thing,

00:07:43.180 and they know how to optimize.

00:07:45.160 They're process freaks.

00:07:46.280 They're all into the operations.

00:07:47.880 Hey, a great set of strengths.

00:07:50.140 But all three of these, you need to balance out

00:07:52.320 with other people.

00:07:53.360 So the operator probably needs to be balanced

00:07:55.120 with a great product leader, because they're probably

00:07:57.460 not a visionary, and they're not going

00:07:58.840 to do their customer development stuff the same way.

00:08:00.940 They're in the building making the thing go.

00:08:03.260 And then the builder, you know, the builder is probably

00:08:05.500 the most, I don't want to say like ambidextrous,

00:08:08.480 but probably touches most of the areas required

00:08:11.420 to build a company, is expert at none of them,

00:08:13.640 so will be outscaled in each and every one of them,

00:08:16.140 but can kind of get their hands around all of them

00:08:19.040 to some extent.

00:08:19.740 I think the job there to make them successful over time

00:08:22.580 is they need to keep just taking the thing that draws

00:08:24.740 the most energy away from them and hiring behind,

00:08:27.500 repeatedly doing that.

00:08:28.460 And then the visionary, again, kind of less operational.

00:08:33.080 This is somebody who probably really quickly in the company's

00:08:36.740 formation want to pair up with an operational CFO

00:08:40.700 who's going to help with the fundraising

00:08:42.700 and the operations of the company,

00:08:44.600 because they're out there kind of selling the thing.

00:08:46.840 So basically, each of those three CEOs needs,

00:08:49.760 you can be successful no matter which one of those three you

00:08:51.900 are.

00:08:52.400 That's the first thing.

00:08:53.060 But you're playing all three hats in the beginning.

00:08:55.520 Well, everybody has some degree.

00:08:58.460 You could be 99th percentile operational and 1%

00:09:01.460 sort of visionary.

00:09:02.900 That's fine.

00:09:04.100 It just means the people you need to surround yourself with

00:09:06.560 are not that.

00:09:07.340 Yeah, exactly, are different.

00:09:08.720 And so, yeah, that's right.

00:09:09.900 So you're looking for compliments, which is a classic story.

00:09:12.260 But I think the other thing then, just back to this rule

00:09:15.660 and kind of giving the sort of a nickel tour on the talk,

00:09:19.240 is you take the three jobs a CEO needs to do.

00:09:22.480 You take the three types of CEOs,

00:09:24.360 and then you take the three stages of company,

00:09:26.720 which is a startup, and then scaling, and then expansion.

00:09:30.620 And what's needed from, frankly, a CEO and a team

00:09:34.220 and the company when you're like zero to, I don't know,

00:09:37.000 40 employees and $5 million of revenue from 40 to,

00:09:39.940 I don't know, like 150 and 150 plus.

00:09:42.920 Very, very different.

00:09:44.220 And yeah, so that's the, and then part of the talk

00:09:48.600 is around, yeah, the idea is, hey, there's

00:09:51.140 a bias towards founding CEOs.

00:09:53.120 And the reason for that is, frankly, the.

00:09:56.300 They're sexy, it's just, yeah.

00:09:58.220 I would not say that they're sexy, per se.

00:10:00.500 Maybe that's your take on the matter.

00:10:02.240 But about 10 years ago, folks at Endresa Horowitz

00:10:07.220 came in, and prior to them entering the market as VCs,

00:10:10.940 a lot of the thought process was,

00:10:13.640 it's really nice that a founder has

00:10:15.100 built and scaled a company to $25 or $30 million in revenue.

00:10:18.360 Now we fire them, and we put in the professional CEO

00:10:20.640 to scale it.

00:10:21.620 And what they said is, hey, that's really great

00:10:23.240 for this product cycle.

00:10:24.360 But if you want to build an enduring, really big company,

00:10:26.400 you've got to think about the next product cycle.

00:10:27.740 And that founding CEO, that's what they do super well.

00:10:30.500 And the operator, you know, like they're

00:10:32.360 the professional CEO, they run this product cycle.

00:10:34.840 So how do we complement?

00:10:36.180 How do we partner?

00:10:36.840 How do we keep that founding CEO around so that we can build

00:10:39.600 really big companies?

00:10:40.420 So would you say like Zuckerberg

00:10:42.200 and then Sheryl Sandberg is the ops as an example?

00:10:45.280 Steve Jobs, Tim Cook.

00:10:47.280 These are examples of how it sort of plays out.

00:10:50.240 That's right.

00:10:50.820 Yeah, and I think you can find them across all of the CEO

00:10:54.800 types.

00:10:55.300 Yeah, there's always that visionary and the operator.

00:10:57.680 Make sure the trains run on time.

00:10:59.420 And which one are you?

00:11:00.660 I'd say I'm in the middle bucket.

00:11:02.220 So our company sort of got it to scale,

00:11:07.000 did a bunch of things.

00:11:08.040 We got to about 300, 350 employees,

00:11:11.540 sort of like earlier this year, well, 300-ish employees.

00:11:13.620 And earlier this year, and this has worked out really well,

00:11:17.380 but brought in, I call it like a president-like animal

00:11:20.300 or a COO animal because that's what people understand.

00:11:22.720 This was somebody who has been hugely successful in his past.

00:11:26.740 He works with us three days a week.

00:11:28.080 He does it from another city.

00:11:29.500 But he drives a lot of how the company actually runs now,

00:11:32.740 and up-leveling a bunch of that.

00:11:34.100 It's very liberating for me, because now we

00:11:35.700 Is he coaching your exec leadership team and whatnot?

00:11:38.160 Well, interestingly there, we have,

00:11:40.080 and I credit him with his model of doing this,

00:11:42.240 but everybody reports to both of us.

00:11:44.880 Perfect.

00:11:45.720 Dual reporting.

00:11:46.480 So it's not like report to one or the other.

00:11:49.040 No, report to both.

00:11:50.580 And a bit of an adjustment for the team,

00:11:52.560 but as long as we're in sync, and they've given us high marks

00:11:54.900 for us working together as sort of a unified pair.

00:11:59.900 If they get different answers from us,

00:12:02.080 raise it immediately.

00:12:02.940 We'll get you an answer inside 24 hours.

00:12:04.660 That's kind of the rule.

00:12:06.240 But otherwise, it works great.

00:12:07.300 And we attend the same.

00:12:08.460 We do a 90-minute sort of one-on-one.

00:12:10.780 It's one-on-one-on-one.

00:12:12.540 And so we just go through the functional stuff.

00:12:14.220 And I'm even getting to get out of those

00:12:16.080 to a significant degree now.

00:12:18.060 That's right, because they're pretty operational.

00:12:20.160 I come in and out when.

00:12:21.380 Did you do that from a want to love your day more?

00:12:26.120 Because you saw a trend where maybe you

00:12:28.140 wouldn't want to do that as much.

00:12:30.080 You knew it was important.

00:12:31.340 How did you make that decision?

00:12:32.220 It's a good question.

00:12:34.460 The inspiration, frankly, was from our board.

00:12:36.720 They weren't like, go hire somebody.

00:12:37.980 They didn't tell me to do it.

00:12:38.940 But they're like, hey, you might want to think about this.

00:12:40.780 We'd like to get more time on what's the next big thing.

00:12:43.880 And I'll tell you, it was very clear to me

00:12:46.660 I was living in a world of at a certain,

00:12:50.180 It's actually kind of like textbook.

00:12:51.920 For a founding CEO to get to like 300 employees

00:12:53.640 and then bring somebody in, that is like straight out

00:12:56.240 essential casting.

00:12:57.680 And so I was certainly wrestling with,

00:13:01.420 it is just hard to do both.

00:13:03.300 And as soon as you turn into the day-to-day focus,

00:13:08.480 it just gets harder to get back up to the altitude

00:13:10.460 to make the fewer big decisions, which is really

00:13:12.900 where I should be spending my time.

00:13:14.240 And so what this has done is we've

00:13:16.420 carved up the responsibility set zero to 18 months, 18 months

00:13:19.660 Plus, we're both in each other's areas.

00:13:21.680 But the decision-making rights kind of live in those two spots.

00:13:26.380 And it's been a great partnership.

00:13:28.180 But it has been very liberating for me

00:13:30.520 because I can get up out of the day-to-day

00:13:33.160 and get out of the building, frankly,

00:13:37.960 and doing more of the education on a marketing standpoint.

00:13:41.020 So doing that.

00:13:41.520 But I'm also meeting with way more companies now.

00:13:44.080 And whether that's to figure out, hey, what's

00:13:46.000 new and novel in the market.

00:13:47.660 There's partnerships.

00:13:48.760 There's buying companies.

00:13:50.560 There's all kinds of things that, frankly, that's right.

00:13:53.440 And it's a lot easier to do it when you're unencumbered

00:13:56.300 by what's happening operationally today.

00:13:59.440 So one thing I know that you're really proud of,

00:14:01.600 I think you've said more than anything,

00:14:03.220 is the fact that you've won Best Place to Work.

00:14:05.740 And by a true survey, I think it's the best place to work.

00:14:08.520 Great place to work.

00:14:09.100 Same thing Google and Facebook.

00:14:10.340 Yeah.

00:14:10.840 And you've always been kind of the top seven last few years.

00:14:15.360 But I also know, I think you wrote a blog post about this,

00:14:17.600 about like learning how to not fearing the growth, right?

00:14:22.060 So like being a little, it was that the concern of like,

00:14:25.280 I don't want to grow too fast and lose that culture.

00:14:29.100 Yeah, when we started out, you know,

00:14:31.880 I had a, there was a period where I had a dream of being

00:14:34.820 like the world's greatest 10 person company.

00:14:37.660 Yeah, Small Giants.

00:14:38.240 I was very influenced by Small Giants,

00:14:39.860 Bo Burlingham, who I've had a chance to meet subsequently.

00:14:42.360 Yeah, it is a great book, right?

00:14:44.240 It is a great book.

00:14:45.860 And then, but then I realized like, hey, if we're successful,

00:14:48.620 we're going to have more than 10 people in customer service.

00:14:51.500 And we have 10 people in customer service.

00:14:53.000 Millions of customers.

00:14:53.840 Well, if we're going to have 10 people in customer service,

00:14:55.580 then nobody's building the products,

00:14:56.660 and people are going to be unhappy.

00:14:57.920 It's like, uh-oh, maybe this doesn't work, right?

00:15:00.680 Maybe it just doesn't work.

00:15:01.900 And so then I was like, OK, well, I guess I like a challenge.

00:15:06.500 I was like, well, isn't it a noble and worthy challenge

00:15:11.600 to try and do what they say can't be done, right?

00:15:15.300 Which is to scale a remarkable culture.

00:15:19.180 And is that not a worthy challenge to take on?

00:15:22.560 And I'm terrified of losing.

00:15:24.640 I think of it as the mojo.

00:15:25.800 If you walk into the building and it's lost its mojo.

00:15:30.060 I like to define culture as what happens

00:15:32.940 when no one's looking.

00:15:34.340 And at FreshBooks, I don't need to tell you

00:15:36.980 to do the right thing for the customer

00:15:38.480 or to care about serving them.

00:15:40.300 That's just going to happen.

00:15:41.700 And when a customer calls and they have a problem,

00:15:45.000 People just respond and get things right

00:15:48.300 to the best of the organization's ability.

00:15:50.040 And they'll pull in the organization, not just

00:15:51.920 themselves, because it is the culture of the place.

00:15:56.580 And I'm very proud of that.

00:15:57.680 And it's very much alive to this day.

00:16:00.600 And I want to keep that going.

00:16:03.300 And but I want to see now it's like, well, how far can we go?

00:16:06.100 And what are the decisions we're going to make to keep it alive?

00:16:08.520 Yeah, I'm not going to lie to you.

00:16:09.600 We have had times along the way where I really

00:16:12.500 feel like we're lost, right?

00:16:15.320 We're lost.

00:16:15.940 And maybe it's not evident, but doubts

00:16:18.080 creeping into people's mind.

00:16:19.220 Hey, have we lost our way?

00:16:20.460 What did you see that made you feel

00:16:22.080 like that might have been happening?

00:16:23.420 Was it conversations?

00:16:24.600 Was it people leaving at 5 o'clock?

00:16:26.280 Was it customers screaming on public forums?

00:16:31.080 In these cases, it was almost entirely inside the building.

00:16:34.100 It was kind of a leading indicator.

00:16:35.900 It was like, I don't know, it's like an instinct gut thing.

00:16:39.000 Or sometimes somebody would plunk themselves down

00:16:41.000 and say I just think what we're doing here or about to do is wrong and here's

00:16:44.900 why and you know hopefully as a leader you get lots of people coming and having

00:16:48.800 those conversations with you I think it's a really healthy sign but and

00:16:53.300 sometimes you're like okay I understand but you know that doesn't concern me

00:16:56.600 here's maybe what you know I would suggest you might be missing you know

00:17:00.060 now that you know that do you feel better about it but then there's times

00:17:02.660 when it's like oh my god you know you're right you're absolutely right and so

00:17:08.720 In those moments, what was the correction?

00:17:13.720 Well, I think those are sort of case specific.

00:17:16.720 And so some of them, I mean, the classic one I talk about is like 80 people.

00:17:23.720 It was more operational.

00:17:25.720 I didn't know how to operate an 80-person company.

00:17:27.720 Got it.

00:17:28.720 And so that's a place where all the ways I had scaled my communication before just broke.

00:17:32.720 Yeah.

00:17:33.720 And we needed to move to having quarterly all-hands meetings where we talk about the vision,

00:17:36.720 about the vision, we talk about the customers,

00:17:38.260 we talk about the plan, and then after a quarter,

00:17:40.720 that would deteriorate, but we'd have the next one.

00:17:42.420 And so that was a really important thing,

00:17:44.380 and we weren't doing that.

00:17:45.460 A lot of companies now start out that way.

00:17:46.960 And you did that for a long time.

00:17:47.560 You didn't have that for?

00:17:49.260 For years.

00:17:50.220 So we got to 80 people.

00:17:51.320 So yeah.

00:17:52.120 So it's kind of like, that wasn't going to scale.

00:17:55.620 You add that.

00:17:56.380 Was it because you felt like if you had that,

00:17:58.540 it would be too corporate-y?

00:17:59.620 Because I feel like a lot of founders hate meetings.

00:18:01.220 I just did not know any better.

00:18:02.860 OK, you just never been exposed to it.

00:18:03.780 I literally just didn't know any better.

00:18:05.160 And then if we had the meeting, what would the contents be?

00:18:08.160 We used to do one at the end of the year

00:18:09.780 where we'd tell people the plan.

00:18:12.440 And I remember 25, 30 people.

00:18:14.760 And the plan was like Levi and I, my co-founder,

00:18:17.820 spent a weekend or two working in Excel.

00:18:20.520 And we had a great track record of predicting

00:18:22.280 the future of the business.

00:18:23.520 We're very good at it.

00:18:24.480 And we came back.

00:18:25.020 We presented the plan.

00:18:25.680 And it was all numbers, right?

00:18:27.000 And so people were falling asleep in the meeting.

00:18:32.320 You're so into serving the customers

00:18:33.680 and building the product.

00:18:34.440 I know we don't have a problem, but when we present this stuff,

00:18:36.820 it's just not doing it for you.

00:18:39.000 So I knew on some level that, hey,

00:18:41.400 hadn't figured out how to do this mass communication stuff.

00:18:43.940 So that's very much an internal operational thing

00:18:46.460 and the importance of mission, vision,

00:18:49.000 bringing the customer into the building,

00:18:50.640 showing people that stuff, running OKRs,

00:18:53.160 all those kinds of things that I think

00:18:55.360 are becoming better understood to those of us who've never

00:18:58.680 worked inside companies because we can just go to YouTube

00:19:00.860 or what have you and learn about them.

00:19:03.120 In other instances, it was like, hey,

00:19:05.360 we made a series of decisions, two or three decisions,

00:19:08.700 where any one of them on their own probably would not

00:19:11.440 have created the concern.

00:19:14.160 But you put them together.

00:19:16.300 And we did our first price increase

00:19:18.880 in the history of the company.

00:19:21.400 And people were like, OK, we've always grandfathered people.

00:19:24.720 Why are we doing a price increase?

00:19:26.180 And so I was like, well, we have 1,400 packages.

00:19:29.980 We need to make it sane.

00:19:31.240 And some people are paying a lot more than other people.

00:19:37.480 And so to be fair, we need to do this kind of stuff.

00:19:39.920 But then there were a couple other just operational

00:19:42.460 decisions we made in the business in and around that time.

00:19:44.600 And you put them together.

00:19:45.640 And people are like, hey, are we the same company anymore?

00:19:48.760 And it's like, oh, jeez, you know, maybe.

00:19:52.060 And if you don't look at them, yeah,

00:19:53.720 if you look at them as a whole, it's like, oh,

00:19:55.180 I can see how they got to this point.

00:19:56.920 Yeah, and it's like, jeez, that's a good question.

00:19:59.640 You know?

00:20:00.700 Huh.

00:20:01.920 Yeah.

00:20:02.880 All right.

00:20:03.420 And so it's like, OK.

00:20:05.040 You know, let's, yeah, maybe, like,

00:20:08.220 I believe we're still the same company,

00:20:09.880 but we're at risk of not.

00:20:10.620 There's a communication.

00:20:11.820 Well, I don't, listen, you can't behave a certain way

00:20:15.200 and just communicate your way out of it.

00:20:16.600 Yeah.

00:20:17.140 OK?

00:20:18.060 I don't think, I think people were,

00:20:19.620 it was like the beginnings of doubt.

00:20:22.040 It wasn't like a full on, you know, what have you.

00:20:24.360 But people were asking this question of like,

00:20:25.880 you know, what's in on this?

00:20:27.480 And to some extent, like, hey, it

00:20:29.080 turned out we did a poor job of communicating the rationale for you know

00:20:32.620 the increase inside the building and so people kind of weren't bought in and then

00:20:36.640 they had to talk to people on the phone or what like these kinds of things so we

00:20:39.820 learned a bunch of lessons but I think more to the point is you are going to

00:20:43.960 have periods of time where no one incident says something with three

00:20:48.040 things say something and I think the most important thing at that time was to

00:20:52.060 step back and you know frankly I can see what you're saying yeah I'd like I take

00:20:57.520 these three data points, I might draw the same conclusion

00:20:59.680 you are.

00:21:00.460 So let's first start by acknowledging

00:21:03.040 that what you say makes sense.

00:21:04.280 And that tends to be like a huge healing

00:21:06.780 bomb on the whole company, because I

00:21:08.240 think mostly people are just concerned

00:21:09.940 that their fears are unheard and not understood.

00:21:13.520 And if you can kind of show, this is where all hands comes in.

00:21:16.400 And you'll be able to stand up and say, everybody,

00:21:18.820 like, you know what?

00:21:19.760 I see what you're saying, and I think our customers would agree.

00:21:22.180 And so that's on us.

00:21:24.040 And so what are we going to do about it?

00:21:26.020 And here are the things we're going to do.

00:21:27.020 And then you make a couple decisions that sort of go in the other direction and are like way more either balanced or balancing.

00:21:34.900 And I think things sort out.

00:21:37.400 So the way I like to think about it is you're always trying to make durable decisions.

00:21:41.700 I like that word, durable.

00:21:42.860 And a durable, you've been hearing a bunch?

00:21:45.120 Yeah, yeah.

00:21:45.760 I have a company in San Diego, and they raise a bunch, I think, $30 million in funding.

00:21:51.020 And 200 salespeople wasted it all.

00:21:53.960 And literally, they just said, enough's enough.

00:21:55.940 We want to build a durable company.

00:21:57.780 And I just feel like it's just such a good way to explain.

00:22:00.620 Yeah.

00:22:01.620 Well, durable comes in a bunch of forms.

00:22:03.320 So decisions specifically, I'll just

00:22:05.360 lay out my little piece here, which

00:22:07.600 is a durable decision works across the three stakeholder

00:22:12.580 groups any company has primarily, which

00:22:15.680 I would define as customers, employees, and shareholders.

00:22:21.180 And so I think any durable decision

00:22:24.020 works for all three of those groups.

00:22:26.240 Full stop.

00:22:27.140 And I think you can go ahead and say, hey,

00:22:28.940 and I think you can go ahead and say to somebody, hey,

00:22:31.880 we're going to make a decision that skews shareholders

00:22:35.200 at this time.

00:22:35.700 And our customers are not going to love it.

00:22:36.940 And we'd like you to understand.

00:22:38.440 But by the way, it's a revenue positive thing.

00:22:41.120 And we can use that to fund development.

00:22:42.640 And we'll put that back into serving our customers.

00:22:44.400 So taking a long view, not so bad.

00:22:46.400 Now, if you go ahead and make three or four or five

00:22:48.180 of those in a row, and you don't balance them out,

00:22:51.020 like, hey, wait a second.

00:22:52.680 you can't keep making that non-durable decision

00:22:54.980 ad nauseum repeatedly.

00:22:56.060 So anyhow, and ideally, any decision you make,

00:23:00.180 there is a good rationale across all groups.

00:23:02.660 And your organization understands that.

00:23:04.520 So even the price increase, like there

00:23:05.800 are parts of our organization, like our billing,

00:23:08.460 our operations team, going from 1,400 different packages

00:23:12.760 available to customers.

00:23:14.040 That's not a good place to be for a whole bunch of reasons.

00:23:16.640 It actually slows us down for serving our customers.

00:23:18.800 So let's talk about this may seem

00:23:21.360 like a purely shareholder decision.

00:23:23.660 But underneath that could, it's actually

00:23:25.920 ticking all the boxes in some ways.

00:23:27.300 So please understand that.

00:23:29.160 We know it'll be a little choppy for a little bit.

00:23:31.160 And that is not to be taken lightly.

00:23:34.860 But anyhow, so examples of decisions.

00:23:40.220 And I found the durable across those three stakeholders

00:23:45.760 to be very helpful.

00:23:46.460 I mean, it's a good pattern to teach leaders

00:23:48.860 to say like, when you're making decisions,

00:23:50.560 show me how this is good for all three.

00:23:52.360 We wrote it into our values.

00:23:53.680 I mean, it's just such a.

00:23:54.280 We have one called ownership.

00:23:55.320 And it's all right.

00:23:55.800 We make durable decisions across these three groups.

00:23:58.060 All three.

00:23:58.720 And then you mentioned, so lol, like you

00:24:01.180 see something in the culture, take a potential dip,

00:24:03.760 you get these data points, and then you fix it.

00:24:06.320 But back to the head count, because I know some people

00:24:08.240 are like, hey man, I like it when it feels like this size.

00:24:11.600 And I remember reading that post saying

00:24:14.140 like how you got over the fear of growing head count.

00:24:17.140 Yeah.

00:24:18.460 What was it that made you realize like,

00:24:20.860 because there's a difference between 10 people and 150.

00:24:23.580 I think there's a couple of things around that.

00:24:25.080 And I think what gets challenging, too,

00:24:26.820 is you will have some people who love a certain stage

00:24:28.860 of the company.

00:24:29.360 And they'll leave.

00:24:29.900 And they'll be like, oh, this place has completely changed.

00:24:33.020 What I have found is, and I don't want to be judgmental,

00:24:36.400 but my data set would say, I feel like people have,

00:24:41.140 if they're leaving, they have their reasons.

00:24:42.860 And almost at all times, they're going to, yeah.

00:24:46.160 But it's also often indicative of not

00:24:48.340 having a growth mindset.

00:24:49.800 And I don't mean business growth, necessarily.

00:24:51.740 I mean personal growth.

00:24:53.060 Because one of the reasons to stay and grow is like, hey,

00:24:55.240 you're going to grow and develop in your role.

00:24:56.900 And you could stay and do that exact same thing forever

00:24:59.880 in a day.

00:25:00.380 Chances are you would become unhappy with that at some point.

00:25:02.680 So it's this sort of dynamic.

00:25:05.620 So for me, people, so long as I feel

00:25:10.940 like we are living our values, we are making durable decisions,

00:25:15.880 the mojo in the business is there.

00:25:17.800 people are responding to customer needs, you know,

00:25:20.640 expediently and kind of doing the right thing.

00:25:23.140 Those are like my health checks, right?

00:25:25.680 If we have those, and somebody leaves saying,

00:25:27.680 we've completely lost our way, I respect your opinion.

00:25:31.400 Yeah.

00:25:31.900 That is your, you know, sort of perspective.

00:25:33.040 But you're going to sleep great at night.

00:25:34.460 But I'm not going to lose.

00:25:35.740 I'm not going to lose sleep on that one.

00:25:37.780 And other times, yeah, they might leave,

00:25:39.080 and I might lose sleep.

00:25:40.320 Yeah.

00:25:40.900 And what, like, is it, as you looked at building your board,

00:25:46.440 And I know bringing on capital was a big decision for you

00:25:49.260 very late.

00:25:50.320 And I didn't even know if you were going to ever do it.

00:25:53.120 How did you think of like, was that a competitive market

00:25:56.780 thing, an opportunity thing?

00:25:58.200 How did you guys decide to mature the operations or whatever?

00:26:02.320 I don't even know if that's the right word.

00:26:03.280 So we went more than a decade without bringing

00:26:05.320 on external capital.

00:26:07.200 We had people banging down our doors.

00:26:09.360 Hey, we're SaaS in this new market,

00:26:12.200 competing with Intuit.

00:26:14.280 We're now number two in America.

00:26:15.520 So we had people banging down our doors.

00:26:17.940 And I was just like, hey, I will take the call.

00:26:23.760 I will see what I can learn from this.

00:26:25.220 And initially, it started out as like,

00:26:27.040 and know that I'm terrified, because I have no understanding

00:26:29.900 of what you do for a living.

00:26:31.180 And so do I want you owning a part of my company

00:26:33.720 when I have no concept of what you do?

00:26:36.380 And growing up in Toronto and back in those days,

00:26:40.220 not just in Toronto, there were just some egregious behaviors,

00:26:43.120 Just terrible, I mean, there's real bad actors,

00:26:48.160 giving people a bad name.

00:26:49.220 So big fish, small pond, here's ridiculous.

00:26:53.080 It's like the wolves coming in.

00:26:54.440 Absolutely.

00:26:55.280 And there was such an information arbitrage.

00:26:57.560 One of the great things that's happened, I think,

00:26:59.300 for business and everybody is the internet's come along.

00:27:02.020 Transparency.

00:27:02.640 Yeah, and the information arbitrage is pretty much zero

00:27:05.400 now if you do your reading.

00:27:06.360 You cannot be a bad actor and get away with that.

00:27:08.360 Yeah, well, and then there's that,

00:27:09.980 is if you are a bad actor, you won't be in business for long.

00:27:12.360 I think of venture capital and private equity investing

00:27:15.660 as like it's some of the longest sales cycles in the world.

00:27:18.200 Yeah.

00:27:18.700 Right?

00:27:19.200 And so the people we end up taking capital from were

00:27:23.360 inviting to be, I guess, our partners,

00:27:25.620 were people who had multi-year relationships with.

00:27:28.600 Actually, we had one that kind of came in sort of towards the end,

00:27:31.720 but we just kind of liked them.

00:27:32.900 And I had enough pattern recognition

00:27:34.600 to know I knew why we liked them.

00:27:36.420 And I'd spoken with a lot of firms,

00:27:38.120 and we only invited a smaller group into our process.

00:27:42.200 And we worked with that group.

00:27:43.200 Was there a unique aspect to that capital?

00:27:45.200 Was it more patient?

00:27:46.280 Were they not, did you look at how much capital to the fund

00:27:49.480 size?

00:27:50.480 Yeah, so I looked for a couple of things

00:27:52.760 that were a little more empirical,

00:27:54.700 but the most important parts were intangible.

00:27:57.620 So on the empirical side, here's what I like,

00:27:59.500 and I would steer founders to be mindful of.

00:28:01.820 Like, you want a fund that's basically in year one,

00:28:04.680 so you have as much time as possible.

00:28:06.040 Yeah, they're going to force you into some kind of decision.

00:28:08.500 Yeah, and you want the investment partner

00:28:10.300 to basically be a founder or managing director,

00:28:13.720 somebody with a significant track record.

00:28:15.760 So there's no politics.

00:28:17.380 Because there can be a great deal of politics

00:28:20.080 inside these firms.

00:28:20.920 And you've got the up and comer VC

00:28:22.780 who wants to make a name for themselves and get liquid

00:28:25.060 so they can demonstrate a capability to do that.

00:28:28.340 It is an unfortunate thing for those folks.

00:28:30.940 And it's really bad for the companies,

00:28:32.340 because now it's like you're not really

00:28:34.700 practicing your fiduciary responsibility

00:28:36.920 to do what's in the best interest of the company.

00:28:38.860 You're trying to get the best interest for your fund.

00:28:40.860 And unfortunately, if you, say, have a board seat,

00:28:44.200 that's not appropriate.

00:28:45.120 It could be disruptive.

00:28:45.700 Yeah, highly disruptive, right?

00:28:47.280 And bad things have happened.

00:28:48.520 And now you're influencing the dynamic of a board meeting,

00:28:52.020 potentially, and what have you.

00:28:53.200 So we solved for people who could make their own decisions,

00:28:57.540 who had long-term capital.

00:28:59.000 And then just the people.

00:29:00.520 And was there a rapport there?

00:29:02.360 Did we believe in the person and the platform?

00:29:05.700 I think, VCs, sometimes you think you're buying a platform.

00:29:07.980 like, hey, I'm Sequoia.

00:29:08.980 But not every partner at Sequoia is the same partner.

00:29:11.640 And so you need to, both from political capital

00:29:14.280 to just how they behave.

00:29:15.800 And so understanding that, no matter what venture capital

00:29:19.260 firm it is, that it's not just a Sequoia thing,

00:29:21.320 it's an everybody thing, is very important.

00:29:23.080 And so I spent a bunch of years talking to people

00:29:24.800 and trying to get pattern recognition

00:29:26.360 for what would work for me.

00:29:27.600 And that has proven to be a very good thing, right?

00:29:30.920 And so we've had a very constructive, very,

00:29:34.900 it's been a very positive experience for me,

00:29:36.360 having professional investors.

00:29:37.520 They've been very helpful in helping us grow the business,

00:29:39.960 having good conversations.

00:29:41.160 We had sort of diversity and even philosophy

00:29:44.660 around how to invest and stage and scale

00:29:48.120 and a variety of things.

00:29:49.260 And so it's been good.

00:29:50.760 And we've got a well-rounded board with independence

00:29:52.740 and all kinds of things as well.

00:29:54.080 But anyways, it took me a while to get there.

00:29:57.380 Yeah.

00:29:57.880 And I think the question you asked off the thing

00:29:59.560 was, what is the thing that made you tick over?

00:30:02.560 For me, I can tell you it was kind of learning

00:30:05.900 at the industry enough to not feel like I was completely

00:30:08.480 disadvantaged from an information standpoint.

00:30:10.700 But in parallel, looking at our business,

00:30:12.800 de-risking the product and the market,

00:30:17.420 and the final thing for me was the team.

00:30:19.420 And once we kind of hired our first exec,

00:30:21.020 like I had always struggled to find somebody who I really

00:30:23.060 thought could scale and be a really great peer to us.

00:30:25.360 When I hired the first one, inside of the next year,

00:30:27.860 we basically, I basically just hired.

00:30:29.660 Yeah, I kind of rebuilt again the whole exec team.

00:30:32.360 And what did you feel for those that have never felt that?

00:30:35.440 When that person came into your organization, like.

00:30:38.740 I was like, why is this so easy?

00:30:40.220 It's crazy, right?

00:30:40.960 It's been so hard.

00:30:42.000 You know, like, by the way, I worked with some great people.

00:30:44.800 And they are, like, off running, like,

00:30:46.600 big parts of other companies now.

00:30:48.520 Entrepreneurs are like huge parts of management teams

00:30:50.580 for, like, really successful Canadian companies.

00:30:52.820 And so I have a lot of gratitude for those folks

00:30:56.320 and their contributions.

00:30:57.320 And I learned from every one of them.

00:30:59.320 You know, at the stage and scale where we were,

00:31:02.420 you know, what I realized is there's

00:31:03.640 a whole other level or two, or maybe three or four or five.

00:31:07.400 And that is once you get a taste of that, it's addictive.

00:31:10.540 And you just want to be surrounded by those folks.

00:31:13.100 Because ultimately, at various times in my career,

00:31:17.400 I'll say I've been accused of being a control freak.

00:31:21.400 What people did not understand and would not

00:31:24.100 have probably believed is, I don't

00:31:25.400 want to have anything to do with your function.

00:31:27.020 Put me out of business, please.

00:31:29.080 But you have to be able to do it.

00:31:30.620 Show me.

00:31:31.480 Yeah, well, like, well, I'll let you in and you go.

00:31:34.060 But then I'm going to start contributing in a way

00:31:36.340 if it's not getting there.

00:31:37.540 And my way of grooming people up was sort of challenging.

00:31:41.560 But then once you get somebody in who really knows it,

00:31:43.780 they're like, hey, I got this.

00:31:45.640 And I'm like, yes, you do.

00:31:47.100 I'm going to go, whether it's on vacation or just tune out

00:31:49.480 or go focus on some other part of the business.

00:31:51.680 Yeah, it's a great place to be.

00:31:53.320 What have you learned?

00:31:53.980 I know there was big replatforming

00:31:57.200 you had to go through in regards

00:31:58.660 to looking at the years of building FreshBooks.

00:32:03.580 What's some of the things, if you could go back, that maybe

00:32:08.780 sometimes it's like, I needed to go through it

00:32:11.020 in that cadence.

00:32:12.520 But what are some of those things

00:32:14.500 that came up that you wish you would have done sooner,

00:32:17.240 or you would have changed the way you operated back then,

00:32:19.780 just for new founders coming in that have aspirations

00:32:22.280 to build these endearing, an internet brand like yourselves?

00:32:25.900 Yeah.

00:32:26.520 Yeah.

00:32:28.100 So it's hard to say.

00:32:28.940 People often ask, what are your biggest mistakes?

00:32:30.800 I just simply do not have a lot of regrets.

00:32:33.280 I can give you answers to that question.

00:32:34.800 We started off with the wrong brand name.

00:32:36.380 I can tell you all about that, stuff like that.

00:32:39.880 I've made, it doesn't mean I've made a bajillion mistakes,

00:32:43.340 but regrets is another whole category of stuff.

00:32:46.100 Yeah, it's not a right word, yeah.

00:32:47.040 Yeah, that's, and so I feel like we, by and large,

00:32:50.660 have made very good decisions.

00:32:52.820 We've been very deliberate about it.

00:32:54.200 I think that is sometimes, like I'll

00:32:57.200 say even ultimately, you know, I think some of the leaps of faith you take at various times

00:33:04.360 from one bridge to another are the biggest and best decisions you can make. You can get them

00:33:09.200 horribly wrong, but trust your gut and make some of those. And so even like, hey, I interviewed

00:33:13.680 people and bringing this president character. At the end of the day, it was still like a leap of

00:33:17.600 faith, right? And we had like a six-month timeline. It's going to work or it's not, right? Here we go.

00:33:22.020 And it's been great. But, you know, that at the end of the day is a big, that's a big leap of

00:33:26.380 And you don't know.

00:33:27.340 And it's down to so many bloody variables.

00:33:30.220 You don't know.

00:33:31.840 But now I feel like, OK, I'll have pattern matching

00:33:34.000 for that next time.

00:33:35.620 That's going to help a bunch.

00:33:36.880 So I think some of the really big decisions

00:33:38.800 where you just have no pattern recognition,

00:33:40.340 you've got to take a leap, those are,

00:33:42.940 and they come in a variety of forms.

00:33:44.340 And they're going to differ depending on who you are

00:33:46.300 and what kind of CEO you are.

00:33:47.720 And so those are all things.

00:33:51.280 And so the question was kind of in like,

00:33:55.200 What would you do over again, or?

00:33:56.920 Yeah, more of do over, or would it

00:33:58.700 got you there faster, make the decision sooner.

00:34:02.160 I think if I could have found a way

00:34:04.080 to experience what an executive really was sooner,

00:34:08.160 that would have been nice.

00:34:09.180 And how do you think founders could do that today?

00:34:11.340 Is it part of the mentoring group, or like EO?

00:34:16.260 I mean, hey, that's a good idea.

00:34:18.000 So I think, yeah, peer mentoring.

00:34:19.640 I had a collection of advisors around me who were great.

00:34:22.060 It just seemed like the people I could hire were not that.

00:34:25.020 And so I think I don't know if it's like really working with having advisors and what have you close enough to be quite opinionated around, you know, whether that hire is good.

00:34:37.200 I'm not sure I had people like I brought I had some board members and stuff at the time.

00:34:40.260 I brought candidates for even like our first, you know, like dev manager role to them.

00:34:45.640 And they were like, well, let me introduce you to some other people.

00:34:48.020 We got answers.

00:34:49.280 I feel like along the way we probably could have got faster to excellence there.

00:34:53.260 And I don't know how to unstick that.

00:34:55.020 But I would encourage you to do it.

00:34:57.020 And I think that would have sped everything up.

00:34:59.520 Because it really is about the team

00:35:01.200 you surround yourself with.

00:35:02.340 Yeah, and really just exposing yourself to excellence

00:35:06.520 at scale so you can then use that as a pattern recognition.

00:35:09.480 Well, listen, I think it's challenging.

00:35:11.540 Because excellence at my scale and excellence

00:35:14.400 at someone else's scale might be very different.

00:35:18.220 You're looking for a different kind of leader

00:35:20.220 at startup, scaling, expansion where we live today.

00:35:24.480 And so I think that is a, so it's complicated, right?

00:35:30.060 So this is where I think VCs can be helpful,

00:35:33.600 and other people who are really close to stuff.

00:35:35.980 And they can interview.

00:35:36.900 I still have one of my board members

00:35:40.140 who I always put candidates through in certain roles.

00:35:43.140 Because it's just like, hey, here's what I think.

00:35:45.000 And we always come to the same place.

00:35:46.920 But it's good validation.

00:35:47.940 It's also good buy-in for whenever the person comes.

00:35:49.740 They get a relationship with a board member or two.

00:35:52.020 I think that's important.

00:35:52.860 But yeah.

00:35:54.160 What do you think makes your approach

00:35:56.560 to building companies, when you see these entrepreneurs

00:35:59.800 today, build, exit, raise money, exit,

00:36:03.920 and it seems like you've always had this,

00:36:07.400 I just want to build.

00:36:09.200 Do you think this is going to be the only company?

00:36:12.400 Well, it's an interesting question on a bunch of levels.

00:36:17.540 So yeah, I do get frustrated with the mindset that there's

00:36:21.280 like capital and everything.

00:36:22.820 No, no, listen, here's what I believe.

00:36:25.480 I just believe, like I am, funnily enough, like this far in,

00:36:30.000 I am more bullish on the scale and scope of our opportunity

00:36:33.520 than I've ever been, which is insane.

00:36:35.780 So it's like, I don't want to take my eye off this prize.

00:36:39.320 Yeah.

00:36:39.820 Do I think of myself as a single company founder?

00:36:43.480 You know, I haven't ever been, because I've

00:36:45.620 done some other little things along the way.

00:36:47.960 A couple of years ago, I co-founded another company,

00:36:50.340 you know, sort of told the board, hey,

00:36:51.760 going to help these folks get this going.

00:36:53.180 And I'm kind of chair of it now.

00:36:54.380 And it's operating.

00:36:55.560 It's a team of seven people and starting

00:36:57.100 to grow really quickly.

00:36:57.940 But so I like that.

00:37:00.540 That's like a pastime, a way for me to recharge my batteries.

00:37:03.700 Yeah, yeah, yeah.

00:37:04.520 That's like a hobby for me.

00:37:05.620 Starting companies is like a hobby.

00:37:08.120 And I get to take all this knowledge and what have you

00:37:10.180 I'm getting from my day job and apply it over here,

00:37:14.240 which is kind of like an unfair advantage, which

00:37:17.020 I like having unfair advantage.

00:37:18.160 That's nice to have.

00:37:20.260 And everyone's parlaying their career experience

00:37:22.500 into making them more effective in their role.

00:37:24.840 So this is my opportunity to do that.

00:37:26.460 But I think FreshBooks just has so much runway.

00:37:29.800 It's not like that's the issue.

00:37:32.020 Oh, it's still beginning, which is remarkable.

00:37:37.320 And I think it's getting clearer to me

00:37:39.180 now that we're kind of in that expansion stage of the plays

00:37:41.500 to run to go really, really, really, really far.

00:37:44.480 So I'm excited about that.

00:37:46.680 How do you reset?

00:37:47.380 I mean, you mentioned do these side things to kind of like,

00:37:50.500 I don't know, it sounds like a creative outlet for yourself,

00:37:52.340 but how have you reset over the years as a CEO

00:37:57.520 when you felt like maybe you went through a tough sprint

00:38:00.520 at work?

00:38:01.120 Or where have you landed today in regards

00:38:04.600 to some level of an integrated life with work?

00:38:09.820 Yeah, so there's certainly been periods where I call it

00:38:12.700 like a very narrow path, where it can be like four months,

00:38:16.300 where it's like, I don't feel like I have any choice.

00:38:18.340 I am just completely heads down.

00:38:20.020 And it can be very taxing.

00:38:23.000 It's very taxing.

00:38:24.400 And it can be hard on people around you.

00:38:27.740 It's like, hey, I sort of don't have a choice in any of these

00:38:31.120 things.

00:38:31.380 This is exactly the path I have to walk.

00:38:33.660 I don't have any time in my day.

00:38:35.580 This stuff just needs to get done.

00:38:37.000 And by the way, can I tell you exactly when it's done?

00:38:39.760 Like, my head's just down.

00:38:42.700 I'm just going.

00:38:43.520 And I'm going to march until I get to the other side,

00:38:45.480 And then we'll talk about it, but like, yeah.

00:38:47.840 And so that's how I'm built.

00:38:51.300 That's maybe not everybody's thing.

00:38:52.600 I will say, even during that path,

00:38:54.160 I'm pretty good about taking the weekends.

00:38:56.900 But by and large, that weekend is

00:38:59.540 like you're just trying to get some quiet time to reconfigure

00:39:02.120 yourself to get ready for Monday again.

00:39:05.080 And so that pattern, high level, is not that much different

00:39:08.020 in good times and bad.

00:39:08.960 It's just the sense of I have no choice.

00:39:12.820 I am on a narrow, narrow path.

00:39:15.020 and I just got to get to the other end.

00:39:16.980 It's like just tunnel vision.

00:39:18.200 You're just going, walking with the belief

00:39:20.600 that you'll get there.

00:39:23.180 But how do you recharge?

00:39:24.680 So once you're on the other side of one of those,

00:39:26.360 or you're not in one of those periods.

00:39:28.360 For me, I learned early on I'm really

00:39:30.560 good at running myself into the ground in a company

00:39:32.980 that I started before, FreshBooks, my design agency

00:39:35.260 that I built FreshBooks for.

00:39:36.720 And I would start working on weekends

00:39:38.480 because there was just stuff to do.

00:39:40.140 And then I realized I can't do this, right?

00:39:41.900 I just burned myself out.

00:39:43.040 And so I turn my phone off on Friday night.

00:39:46.260 That's right, it doesn't work for me.

00:39:48.380 So I like to get outdoors.

00:39:50.840 I passed a couple of years practicing

00:39:52.660 a lot more mindfulness.

00:39:54.620 I do, I'm like a complete amateur with surfing,

00:39:57.900 and so I get to do that maybe a day or two a year on vacations.

00:40:02.380 That's not really my thing.

00:40:03.880 But whether it's running or taking up some sports like that,

00:40:07.400 literally like walking in the morning

00:40:09.620 and practicing dangerously close to pure meditation

00:40:13.520 to just clear the head and get going has been a thing.

00:40:17.300 Trying to learn how to be a, trying

00:40:21.360 to learn something new in a physical dimension.

00:40:23.500 So swimming is something I've always known how to swim.

00:40:26.120 I just wasn't very good at it.

00:40:27.300 I learned in July.

00:40:29.280 I did three sprint triathlons in August

00:40:32.540 that I started swimming in July because I had to obviously

00:40:34.680 swim.

00:40:35.640 It's cool.

00:40:36.680 Yeah, I mean, it's a whole thing that people do.

00:40:39.400 Like, I was always into distance running.

00:40:41.280 But you know, that's another whole set of stuff.

00:40:45.140 And you know, I'm like skinny and bony,

00:40:48.100 less than I used to be, but you know.

00:40:49.760 You look good, man.

00:40:50.560 Like, I remember there was periods of maybe,

00:40:52.880 I think it was when your head's down and.

00:40:54.940 Oh yeah, I think, you know, you don't eat right,

00:40:57.320 you don't sleep right, all that good stuff.

00:40:59.120 Simple focus.

00:41:00.640 But yeah, anyhow, that's the nature of the beast.

00:41:04.880 When you look back, Mike, at like this journey,

00:41:08.320 You know, personally, if I asked you,

00:41:10.320 who did you need to become to be the CEO leading 350 people?

00:41:15.120 Like, what's the answer to that in regards

00:41:17.320 to just your personal character?

00:41:19.720 Yeah, the answer is I'm still becoming.

00:41:22.820 You know, it is, I think, you know, part of this talk

00:41:25.840 I talked about here, the, you know, like, hey,

00:41:27.500 there's the sort of three by three by three things

00:41:30.400 to think about with the CEO.

00:41:31.940 And yeah, expose this so CEOs can be clear for themselves.

00:41:34.380 And so other people can support, right?

00:41:35.960 If we need these founder CEOs because we

00:41:37.600 want to have the big outcomes to get there, then we have to support.

00:41:40.960 But it's also not a license to be a jerk, right?

00:41:44.800 Just because you're a founding CEO doesn't mean you keep your job.

00:41:47.020 And so I think the things that you really have to have

00:41:50.600 are a desire to grow and change yourself, not the business,

00:41:56.360 yourself.

00:41:57.580 That is top.

00:41:59.260 And then I think supporting that, but critically important,

00:42:03.220 is a measure of self-awareness that is always expanding.

00:42:08.500 And so encouraging the feedback that is critical

00:42:12.220 and making sure you understand where people are coming from

00:42:15.100 and really just seeking out others' perspectives

00:42:17.980 and not just dining out on your own.

00:42:20.320 And also just being wide open and listening all the time.

00:42:23.260 And this is where mindfulness can also just help

00:42:26.380 is because you're just open.

00:42:28.240 And I just think those two things

00:42:30.700 are critical to staying in the role.

00:42:33.040 And they unlock the evolution in yourself

00:42:36.040 that will come over time.

00:42:38.180 It's not easy.

00:42:39.160 Like there are parts in our history

00:42:41.460 where the business was probably ahead of my development.

00:42:43.680 And there's parts of the business

00:42:45.300 where my development's ahead of the business.

00:42:48.080 Catch up waiting.

00:42:48.980 Yeah, it's an ever-moving, ever-fructuating kind of thing.

00:42:52.480 But it has been a journey for you

00:42:53.800 in regards to the mic that we need.

00:42:55.100 Oh, yeah, absolutely.

00:42:56.980 And I'm a better person for it.

00:42:58.260 I'm a way better parent because FreshBooks, right?

00:43:02.160 I had to learn how to, like I have like 350 kids,

00:43:05.400 if you want to think about it that way now.

00:43:07.080 And the things you need to learn in terms of communication

00:43:12.540 and all these kinds of things are very applicable to home life.

00:43:15.600 So I'm incredibly grateful for the broader FreshBooks platform

00:43:21.420 for helping to develop me and having the patience

00:43:26.100 and the understanding and the support to help me get there.

00:43:28.940 And I'll always be working on it.

00:43:30.960 I mean, I think that is the, and that's the gift, too.

00:43:33.780 Challenge and personal growth are what make it interesting.

00:43:36.220 And so there's more than enough of both.

00:43:38.420 But don't kid yourself into thinking

00:43:40.140 you're not on the hook for going there.

00:43:42.340 Yeah, it's your job.

00:43:43.320 You mentioned kids as we wrap up.

00:43:44.580 Mike, I just want to let you know,

00:43:46.340 I share this story often.

00:43:47.320 You may never even knew this, but Halifax,

00:43:51.540 forget the conference.

00:43:52.620 We're walking between things.

00:43:54.120 We connect briefly.

00:43:55.320 you invite me to speak at mesh and coming down the escalator at the Mars

00:43:59.260 center, I meet my wife.

00:44:00.980 So I become a better human because of my kids and indirectly because of you.

00:44:06.180 Thank you so much for coming on the show, man. Really appreciate you.

00:44:08.560 Great to catch up.

00:44:09.440 Thanks for watching this episode of escape velocity.

00:44:12.540 Be sure to like,

00:44:13.700 and subscribe and leave a comment with your biggest insight from our

00:44:17.120 conversation. Be sure to check out the next episode.

Dan Martell - December 31, 2020

The 3 Types of CEOs with Mike McDerment @ Freshbooks - Escape Velocity Show #44

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