Recently, Mike McDerment, CEO and co-founder of cloud accounting software FreshBooks announced something different for his company. FreshBooks has raised $30 million in venture funding — it’s first ever — from major investors Oak Investment Partners, Atlas Venture and Georgian Partners.
Observers, like Alex Conrad of Forbes, have ascribed various motives for FreshBooks finally taking outside funding after 12 years.
In an email to customers and others, McDerment admits he’s always been conflicted about it, fearing investors would change his company’s culture or its ability to serve customers. But in the end, McDerment cautions other startup CEOs like him to focus on three major priorities over all other concerns when it comes to making such tough calls.
Define Your Vision and a Logical Way to Reach Your Goals
Most entrepreneurs have probably heard of this priority before. But, McDerment stresses that knowing where your company is headed and how to get there comes down to both seeing the big picture and also taking a narrow focus.
He explains:
“There are 60 million small businesses in the English speaking world and only about 17% of them use accounting software. The rest mostly use Word and Excel. Consider the implications. We know using FreshBooks helps owners save an average of 16 hours a month. Using back of the envelope math, Word and Excel use is costing the World almost 10 billion hours annually.”
However, looking at this from another perspective, McDerment also observes:
“Now, 60 million businesses is a lot to serve. We don’t believe you can be the best at anything if you try to serve everyone, so FreshBooks is designed exclusively for client service business owners—people who send invoices and get paid for their time and expertise. No retail. No manufacturing. No restaurants. We believe this difference matters, and we are the only accounting software company in the world solely focused on serving this market.”
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