Fresh, updated platform revives Freshbooks
New technology had to be simpler and able to handle future upgrades, Rick Spence writes.
For a decade, Freshbooks has been a darling among Canadian startups. It had everything going for it: a global niche as a cloudbased invoicing system for small service businesses; customers in 130 countries; and a 2014 investment of US$30 million from venture capitalists in Canada and the U.S. But in 2104, Michael McDerment, co-founder and CEO, realized there was a deep problem at the heart of Freshbooks.
The technology that has powered Freshbooks since 2003 was no longer good enough. To add more features, speed things up, and simplify the experience, Freshbooks needed a more advanced platform. That meant rebuilding the company’s single product from scratch.
The Post sat down with McDerment in Freshbooks’ west-end Toronto office to discuss how a company bounces back when its product is outdated and its future’s on the line.
Freshbooks began its relaunch two years ago, when its technology constraints were becoming clear. “Making changes to the old platform was hard,” McDerment said. “Those tiny decisions you made 10 years ago can really come back and bite you. It took a lot of time to do even the smallest things, and changing designs incrementally can only take you so far.” He thinks customers would have started noticing problems soon. The US$30-million raise had been intended to build out the team and fund sales and marketing, so McDerment had to ask his board of directors for permission to redirect US$7 million into the new platform. Since these costs mainly related to hiring talent, it wasn’t a hard sell — but that’s also because McDerment carefully chose his investors (and thus his board) in the first place. “Entrepreneurs should be very thoughtful about the capital partners they bring in,” he said. “We wanted people with a long-term mindset.”
Through the second half of 2015, Freshbooks hired 100 people, mostly designers and developers, to build the new platform.
Establishing a five-person, cross-functional team to lead the relaunch, McDerment had two key chores: set the project’s objectives, then determine his own role. The team agreed the new platform had to be simpler and more intuitive, it had to be able to handle a host of future upgrades, and it had to encourage collaboration by better connecting users to each other and complementary platforms, such as project-management software or communications tools.
Eschewing a hands-on role, McDerment was happy to play the visionary and develop standards. “If you’re going to build something truly excellent, almost the first thing you need are constraints,” he said.
His constraints took the form of “design principles” for the team. For instance, McDerment urged them to keep things simple by imagining a screwdriver. It’s a basic tool, easily understood, and perfect for countless uses, such as opening paint cans. “I believe that if you build simple tools, they will get used for things you never intended or expected,” he said. McDerment met with the team once a week. “I provided the voice of the customer,” he said.
By June, Freshbooks had a working version of the new platform, and began a rollout. There were some complaints, but users seemed largely satisfied. Those who upgraded were given the option to return to Freshbooks Classic, the original platform, but 90 per cent chose to stay with the new. “More people are using features we’ve always had, at higher rates,” McDerment said. “We wanted collaboration to be easier, and we’re seeing it’s 250 per cent better.”
Best of all, Freshbooks can open up new revenue opportunities by offering more advanced features.