The 3 Types of CEOs with Mike McDerment @ Freshbooks - Escape Velocity Show #44

The 3 Types of CEOs with Mike McDerment @ Freshbooks - Escape Velocity Show #44

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Just because you're a founding CEO doesn't mean you keep your job. And so I think the things that you really have to have are a desire to grow and change yourself. Not the business-- yourself. [THEME MUSIC PLAYING] Ignition sequence start. 3, 2, 1. [BLAST-OFF SOUND] Mike, I'm going to come across the table for the shake.

What's up, man? How's it going? It's good. Dude, it's good to see you. It's been a while.

FreshBooks, for those that don't know-- fun fact. I just want to share this, because-- hopefully you remember-- but when I launched Clarity in New Brunswick-- geofenced it for all my 350 entrepreneur friends, it came out live-- you were the demo. You were the person on the other end that I called for business advice. I remember that.

We set the stage. So that was a lot of fun, building that company, and I appreciate the early support in doing that. But FreshBooks today, Mike-- 350 employees.

When did you launch it? Is it 2004? Around there. I mean, for me, 2006 is when we got a little more serious. But yeah, probably founding was more launched 2004. And your background is accounting. No, I wouldn't go that far. But you studied accounting? I did bookkeeping in high school, grade 10.

All right. But then, I went to business school, and you have to do-- I was in Kingston at Queen's, very good business school-- you have to do some-- P&L. Yeah, some basic stuff there. And I was using 5% of my brain at the time to learn that stuff. But it went in. But I also didn't really like it.

It was not the kind of math that was interesting to me. I liked other kinds of math better, so it was always a necessary evil. And that was probably what inspired me to build something simpler and easier to use in the space. That's super cool. And then, since then-- I mean, the journey for a long time-- the way I've always looked at what you've created, Mike, which is incredibly awesome, is like when I think of Basecamp, 37signals. What they've created-- like the bootstrapper mentality, literally teaching everything you've learned over the years-- I mean, you continue to do that.

Where does that part come from? You still show up at events, dude. You don't have to. I know you did the tour at one point, where you're teaching people to build businesses. Yeah. I think you went all over North America.

So where does that come from? It's actually-- you mentioned the folks at 37signals. So Jason Fried-- I've got to get to credit him with this-- is like, you can out-teach or outspend your competition. Pick one. And so it's smart marketing, and the best salespeople have always known that.

If I were to be self-critical, I would say there's been periods where we've done it really well, and there's been periods where we've been quiet on it. And that's probably a focus thing-- you're focused inside the building, you're focused outside the building. But yeah, it's been a pretty good thread throughout. We do try to-- Out-teach or outspend. Yeah. Such a clear way to think about it.

Yeah. Yeah. So if you don't have the capital, if you didn't raise billions of dollars, then it's like-- And for us, that's where we started. So those who don't know, we were in my parents' basement for three and a half years rubbing together nickels. Literally nothing.

Yeah, literally nothing. We found them in the couch, because the basement was also our TV room, my family TV room. So yeah, we were trying to figure out how to do it. And social media was very early then. I don't know if you consider the blogging era pre-social media. I'd say it was the start.

And so we started blogging. And when you start blogging, you realize, what have you got on offer? And it's really, here's what we're learning. Here's what we're going through-- which is helpful to other people who want to learn and follow you. But also, the stuff we were showing back then-- our customers loved it, too.

They really felt like they were part of building the company. And it was early days. This was like Web 2.0, for those who remember that time, and even pre-that getting coined. Sure, yeah. And so the kinds of people who are out there reading blogs and participating in these communities were, in fact, a community.

So we were very much a part of that. And the early adopters of our product were all into that stuff. And so it was good marketing. And it traveled far and wide. Cool. And then, in regards to the lessons learned, I know I saw you give a talk around-- I think it was like, there's three types of CEOs.

Knowing which one you are, and the play to overcome that-- could you unpack that real quick? Because it sounds like you had to discover that in your journey, and-- Yeah, absolutely. So I have never worked in a place that had a CEO. So I have no pattern.

So I read articles, or books, but I still just-- how to operate a company, what a functional company looks like, like departments and stuff-- all a complete mystery to me. And so very, very first principles, growing into my role-- and there were some steps along the way. I really struggled with the title, even. Back in the basement, when you have barely two nickels to rub things together, I would be reading articles about four-person companies like ours. And the leaders were calling themselves CEOs, and it just made me want to throw up. I hate the word "boss."

That one still hasn't landed for me. That one, too, is-- yeah, I don't really want to be anybody's boss. Right, yeah. Yeah.

Yeah, that's another thing. Anyhow, so yeah. So I was kind of allergic to it-- struggled with it. And then, as you're growing and scaling up, it was just hard to figure out what the heck the rule was, what am I really accountable for, and then-- anyhow.

So this talk that I gave around the role of the CEO and trying to make it less ambiguous is basically laying out, hey, a CEO has three jobs. And everyone should expect the CEO to get these three things done, which is set the vision for the company, build the team-- the team includes executive leaders, but also the board, the employee base, and the partner companies that you're going to need to actually grow and scale. And then, the third thing is to make sure your bank account and its size and scale matches your ambition.

So make sure the bank account is filled up. Those three things everyone can reasonably expect a CEO to do. Where things get more complicated is there are three types of CEOs. There is a visionary, somebody who's probably pretty non-operational and has a great strength for seeing way into the future-- call it 20 or 30 years into it with exacting detail. That is not a common strength. And that can be packaged up into usually one of two formats-- somebody who's hopefully a great spokesperson, wants to go out in the road-- Sell, yeah.

It's going to be selling-- that kind of thing. Or alternatively, somebody who's deeply technical, and wants to stay in a cave and really work on that stuff, but they are a visionary in the product or technology sense. And so that's one kind. And then you've got the builder.

That's probably more where I live, which is, yes, I possess vision for our market and what the product needs to be. But the strength of a builder is to take that understanding of customer, the capabilities of the technologies today, understanding of the team, the market-- all these things-- and take those LEGO blocks, and put them together, and bring something to market that is appealing to that market to win that market, if you will. And then, the third kind of CEO is the operator.

And this is somebody who-- it's funny, I feel like I've personally met fewer of these as founding CEOs. I think professional CEOs-- there's a lot of operators. Yeah. They may have been a COO kind of thing, and they know how to optimize. They're process freaks. They're all into the operations.

Hey-- a great set of strengths. But all three of these you need to balance out with other people. Right? So the operator probably needs to be balanced with a great product leader, right? Because they're probably not a visionary.

And they're not going to do their customer development stuff the same way. They're in the building making the thing go. And then, the builder is probably the most-- I don't want to say ambidextrous-- but probably touches most of the areas required to build a company. Is expert at none of them-- so will be outscaled in each and every one of them-- but can get their hands around all of them, to some extent.

I think the job there to make them successful over time is they need to keep just taking the thing that draws the most energy away from them and hiring behind, repeatedly doing that. And then, the visionary-- again, less operational. This is somebody who, probably really quickly in the company's formation, you want to pair up with an operational CFO who's going to help with the fundraising and the operations of the company, because they're out there selling the thing.

So basically, each of those three CEOs needs-- you can be successful no matter which one of those three you are. Yeah. That's the first thing-- But you're playing all three hats in the beginning.

Well, everybody has some degree-- you could be 99th percentile operational and 1% visionary, right? That's fine. It just means the people you need to surround yourself with-- Are not that. Yeah, exactly-- are different.

And so, yeah, that's right. So you're looking for complement-- which is a classic story. But I think the other thing, then-- just back to this role, and given the nickel tour on the talk-- is you take the three jobs a CEO needs to do.

You take the three types of CEOs. And then, you take the three stages of company, which is startup, and then scaling, and then expansion. And what's needed from, frankly, a CEO, and a team, and the company, when you're zero to 40 employees and $5 million of revenue, from 40 to 150, and 150 plus-- very, very different.

And yeah. And then, part of the talk is around-- yeah, the idea is, hey, there's a bias towards founding CEOs. And the reason for that is, frankly-- They're sexy. It's just-- I would not say that they're sexy, per se. Maybe that's your take on the matter.

But about 10 years ago, the folks in Andreessen-- Horowitz came in. And prior to them entering the market as VCs, a lot of the thought process was, it's really nice that a founder has built and scaled a company to $25 or $30 million in revenue. Now, we fire them, and we put in the professional CEO to scale it. And what they said is, hey, that's really great for this product cycle. But if you want to build an enduring, really big company, you've got to think about the next product cycle.

And that founding CEO-- that's what they do super well. And the operator-- You can't do that. They're the professional CEO. They run this product cycle. So how do we complement? How do we partner? How do we keep that founding CEO around so that we can build really big companies? So would you like say Zuckerberg, and then Sheryl Sandberg, is the ops, as an example? Steve Jobs, Tim Cook? These are examples of how it plays-- that's right. Yeah.

And I think you can find them across all of the CEO types. Yeah. There's always that visionary and the operator-- make sure the trains run on time. Yeah.

And which one are you? I'd say I'm in the middle bucket. So our company got it to scale, did a bunch of things. We got to about 350 employees-- well, 300-ish employees-- earlier this year.

And this has worked out really well. But brought in-- I called it a president-like animal, or a COO animal, because that's what people understand. This was somebody who has been hugely successful in his past. He works with us three days a week.

He does it from another city. But he drives a lot of how the company actually runs, now. And upleveling a bunch of that is very liberating for me, because now-- Is he coaching your exec leadership team and whatnot? Well, interestingly there, we have-- and I credit him with his model of doing this-- but everybody reports to both of us. Perfect. Dual reporting.

So it's not like, report to one or the other-- no. Report to both. Bit of an adjustment for the team, but as long as we're in sync-- and they've given us high marks for us working together as a unified pair. If they get different answers from us, raise it immediately. We'll get an answer inside 24 hours. That's the rule.

OK. But otherwise, it works great. And we attend the same-- we do a 90-minute one-on-one with-- it's one on one on one.

And so we just go through the functional stuff. And I'm even getting-- going to get out of those to a significant degree now. Let him kind of lead them. That's right. Because they're pretty operational.

Yeah. I come in and out when-- And did you do that from a want to love your day more, because you saw a trend where maybe you wouldn't want to do that as much-- Yeah, I-- --and you knew it was important? How did you make that-- It's a good question. The inspiration, frankly, was from our board. They weren't like, go hire somebody.

They didn't tell me to do it. But they're like, hey, you might want to think about this. We'd like to get more time on-- what's the next big thing? And I'll tell you-- it was very clear to me I was living in a world of-- it's actually like textbook. For a founding CEO to get to 300 employees and then bring somebody in. That is straight out of central casting.

And so I was certainly wrestling with-- it is just hard to do both. And as soon as you turn into the day-to-day focus. It just gets harder to get back up to altitude to make the fewer big decisions, which is really where I should be spending my time. And so what this has done is we've carved up the responsibility set, zero to 18 months, 18 months plus. We're both in each other's areas. But the decision making rights live in those two spots.

And it's been a great partnership. But it has been very liberating for me. Because I can get up out of the day-to-day and get into the-- like out of the building, frankly, and doing more of the education on a marketing standpoint. So doing that. But I'm also meeting with way more companies now.

And whether that's to figure out, hey, what's new and novel in the markets. There's partnerships. There's buying companies. There's all kinds of things that, frankly-- More strategic. That's right. And it's a lot easier to do it when you're unencumbered by what's happening operationally today.

So one thing I know that you're really proud of, I think you've said more than anything, is the fact that you've won best place to work. And by true survey, I think it was the best place-- Great places to work, same thing Google and Facebook and everybody else. And you've been always been kind of the top seven last few years. But I also know, I think you wrote a blog post about this, about like learning how to-- not fearing the growth. so like being a little-- was that the concern of like, I don't want to grow too fast and loose that culture? Yeah. When we started out, there was a period where I had a dream of being like the world's greatest 10-person company.

I was very influenced by Small Giants, Bo Burlingham, who I've had a chance to meet subsequently. Read that book. Yeah. It is a great book.

It is a great book. But then I realized, like, hey, if we're successful, we're going to have more than 10 people in customer service. And if we have 10 people in customer service-- You're going to need to, man, with millions of customers-- just, yeah.

Well, if we're going to have 10 people in customer service, then nobody's building the products. So people are going to be unhappy. It's like, oh, maybe this doesn't work. Maybe it just doesn't work. And so then I was like, OK, well, I guess I like a challenge.

I was like, well, isn't it a noble and worthy challenge to try and do what they say can't be done, which is to scale a remarkable culture. And is that not a worthy challenge to take on? And like I'm terrified of losing-- like I think of it as the mojo. Like if you walk into the building and it's lost its mojo, if-- I like to define culture as what happens when no one's looking. And at FreshBooks, I don't need to tell you to do the right thing for the customer or to care about serving them. That's just going to happen.

And when a customer calls and they have a problem, people just respond and get things right to the best of the organization's ability. They'll pull in the organization, not just themselves. Because it is the culture of the place. And I'm very proud of that.

And it's very much alive to this day. And I want to keep that going. But now, it's like, how far can we go. And what are the decisions we're going to make to keep it alive? And I'm not going to lie to you.

We have had times along the way where I really feel like we're lost. We're lost. And maybe it's not evident, but doubts creeping into people's mind. Hey, have we lost our way? What did you see that made you feel like that might have been happening? Was it conversations? Was it people leaving at 5 o'clock? Was it customers screaming on public forums? In these cases, it was almost entirely inside the building. It was [INAUDIBLE] I don't know. It's like an instinct, gut thing.

Or sometimes somebody would plunk themselves down and say, I just think what we're doing here or we're about to do is wrong and here's why. And hopefully as a leader, you get lots of people coming and having those conversations with you. I think it's a really healthy sign. And sometimes you're like, I understand. But that doesn't concern me. Here's maybe what I would suggest you might be missing.

Now that you know that, do you feel better about it? But then there's times when it's like, oh, my god. You're right. You're absolutely right. And so those are the moments where-- In those moments, that was the correction? Well, I think those are sort of case specific.

The classic one I talk about is 80 people, it was more operational. I didn't know how to operate an 80-person company. And so that's a place where all the ways I had scaled my communication before just broke. And we needed to move to having like quarterly all-hands meetings where we talk about the vision and we talk about the customers, we talk about the plan. And then after a quarter, that would deteriorate. But we'd have the next one.

So that was a really important thing. And we weren't doing that. A lot of companies now start it that way. And you did that for a long time. You didn't have that for-- For years.

Like until we got to 80 people. So it's kind of like that wasn't going to scale. You add that. Was it because you felt like if you had that, it would be too corporate-y? Because I feel like a lot of founders hate meetings. I did just not know any better. And I literally just didn't know any better.

And then if we had the meeting, what would the contents be? We used to do one at the end of the year where we'd tell people the plan. And I remember 25, 30 people. And the plan was Levi and I-- my co-founder-- had spent like a weekend or two working Excel. And we had a great track record of predicting the future of the business, very good at it. And we came back, we presented the plan, and it was like all numbers. And people were like falling asleep in the meeting.

You're so into serving the customers and building the product, I know we don't have a problem. But when we present this stuff, it's just not doing it for you. So I knew, on some level, that hey, hadn't figured out how to do this mass communication stuff. So that's very much an internal operational thing and the importance of mission, vision, bringing the customer into the building, showing people that stuff, running OKRs, all those kinds of things that I think are becoming better understood to those of us who've never worked inside companies because we can just go to YouTube or what have you and learn about them.

In other instances, it was we made a series of decisions, two or three decisions, where any one of them on their own probably would not have created the concern. But you put them together. We did our first price increase in the history of the company.

And people were like, we've always grandfathered people. Why are we doing a price increase? And it's like, we have 1,400 packages. We need to make it sane. And some people are paying a lot more than other people.

And so to be fair, we need to do this kind of stuff. But then there were a couple other just operational decisions we made in the business in and around that time. And you put them together, and people are like, hey, are we the same company anymore.

It's like, oh, geez. Maybe you're onto something. If you look at any one as isolation, but the package.

And it's like, jeez, it's a good question. And so it's like, OK. I believe we're still the same company. But we're at risk of not-- [INAUDIBLE] communication. Well, I don't-- listen, you can't behave a certain way and just communicate your way out of it. I think people were, it was like the beginnings of doubt.

It wasn't like a full on what have you. But people were asking this question of what's in on this. And to some extent, like, hey, it turned out we did a poor job of communicating the rationale for the increase inside the building.

And so people kind of weren't bought in. And then they had to talk to people on the phone, these kinds of things. So we learned a bunch of lessons. But I think more to the point is you are going to have periods of time where no one incident says something, but three things say something. And I think the most important thing at that time was to step back and frankly, I can see what you're saying.

I take these three data points, and I might draw the same conclusion you are. So let's first start by acknowledging that what you say makes sense. And that tends to be like a huge healing balm on the whole company. Because I think mostly people are just concerned that their fears are unheard and not understood.

And if you can say, this is where all-hands comes in and be able to stand up and say, everybody, you know what, I see what you're saying. And I think our customers would agree. And so that's on us. And so what are we going to do about it? And here are the things we're going to do. And then you make a couple decisions that go in the other direction and are way more balanced or balancing.

And I think things sort out. So the way I like to think about it is you're always trying to make durable decisions. I like that word durable. Have you hearing it a bunch? Yeah.

I have a company in San Diego and they raise a bunch-- I think $30 million in funding. And 200 salespeople wasted it all. And literally they just said, enough's enough. We want to build a durable company. And I just feel like it's just such a good way to explain.

Well, durable comes in a bunch of forms. So decisions, specifically-- I'll just lay out my little piece here, which is a durable decision works across the three stakeholder groups any company has primarily, which I would define as customers, employees, and shareholders. And so I think any durable decision works for all three of those groups, full stop. And I think you can go ahead and say to somebody, hey, we're going to make a decision you know that skews shareholders at this time and our customers are not going to love it. And we'd like you to understand. But by the way, it's a revenue positive thing.

And we can use that to fund development. And we'll put that back into serving customers. So taking a long view, not so bad. Now if you go ahead and make three or four or five of those in a row and you don't balance them out, like, wait a second.

You can't keep making that non-durable decision ad nauseum repeatedly. And ideally, any decision you make there is a good rationale across all groups. And your organization understands that. So even the price increase, there are parts of organization like our billing, our operations team, going from 1,400 different packages available to customers, that's not a good place to be for a whole bunch of reasons. It actually slows us down for serving our customers. So let's talk about, this may seem like a purely shareholder decision.

But underneath [INAUDIBLE],, it's actually ticking all the boxes in some ways. So please understand that. We know it'll be a little choppy for a little bit. And that is not to be taken lightly. So examples of decisions and I've found the durable across those three stakeholders to be very helpful.

It's a good pattern to teach leaders to say, when you're making decisions, show me how this is good for all three. We wrote it into our values. We have one called ownership.

And [INAUDIBLE] we make durable decisions across these three groups. And then you mentioned you see something in the culture take a potential dip. You get these data points. And then you fix it. But back to the headcount, because I know some people are like, I like it when it feels like this size.

And I remember reading that post saying, how you got over the fear of growing headcount. What was it that made you realize-- because there's a difference between 10 people and 150. I think there's a couple of things around that. And I think what gets challenging, too, is you will have some people who love a certain stage of the company.

And they'll leave. And they'll be like, oh, this place is completely changed. What I have found is, and I don't want to be judgmental, but my data set would say, I feel like people, if they're leaving they have their reasons. They can point at things. At all times they're going to-- yeah.

But it's also often indicative of not having a growth mindset. And I don't mean business growth necessarily. I mean personal growth. Because one of the reasons to stay and grow is you're going to grow and develop in your role. And you could stay and do that exact same thing forever and a day.

Chances are you'd become unhappy with that at some point. So it's this sort of dynamic. So for me, as long as I feel like we are living our values, we are making durable decisions, the mojo in the business is there, people are responding to customer needs expediently and doing the right thing, those are my health checks. If we have those and somebody leaves saying we completely lost our way, I respect your opinion.

That is your perspective. But I'm not going to lose sleep on that one. And other times, yeah, they might leave. And I might lose sleep. As you looked at building your board, and I know bringing on capital was a big decision for you, I didn't even know if you were going to ever do it. How did you think of, was that a competitive market thing, an opportunity thing? How did you guys decide to mature operations or whatever? I don't even know if that's the right word.

So we went more than a decade without bringing on external capital. We had people banging down our doors. Hey, we're SaaS in this new market competing with Intuit. We're now number two in America.

So we had people banging down our doors. And I was just like, I will take the call. I will see what I can learn from this.

And initially, it started out as, know that I'm terrified. Because I have no understanding of what you do for a living. And so do I want you owning a part of my company when I have no concept of what you do? And growing up in Toronto and back in those days-- not just in Toronto.

There were just some egregious behaviors, like just terrible-- Bad actors. Real bad actors, giving people a bad name. So big fish, small pond.

Here's like ridiculous-- It's like the wolf's coming in and you're-- Absolutely. And there was such an information arbitrage. One of the great things that's happened, I think, for business and everybody is the internet's come along. And the information arbitrage is pretty much zero now if you do your reading. You cannot be a bad actor and get away with that.

And then there's that. If you are a bad actor, you won't be in business for long. And I think of venture capital and private equity investing as it's some of the longest sales cycles in the world. And so the people we end up taking capital from, we're inviting to be our partners, were people who had multi-year relationships with.

Actually, we had one that kind of came in sort of towards the end. But we just kind of liked them. And I had enough pattern recognition to know I knew why we liked them.

And I'd spoken with a lot of firms. And we only invited a smaller group into our process. And we worked with that group. Was there a unique aspect to that capital? Was it more patient? Di you look at how much capital to the fund size? So I looked for a couple things that were a little more empirical. But the most important parts were intangible. So on the empirical side, here's what I like and I would steer founders to be mindful of.

You want to fund that's basically in year one. So you have as much time as possible. They're not going to force into some kind of decision. And you want the investment partner to basically be a founder or managing director, somebody with a significant track record.

There can be a great deal of politics inside these firms. And you got the up and comer VC who wants to make a name for himself and get liquid so they can demonstrate a capability to do that, it is an unfortunate thing for those folks. And it's really bad for the companies. Because now it's like you're not really practicing your fiduciary responsibility to do what's in the best interest of the company.

You're trying to do the best interests for your fund. And unfortunately if you say, have a board seat, that's not appropriate. It'd be disruptive. Highly disruptive. And bad things are happening.

And now you're influencing the dynamic of a board meeting, potentially, and what have you. So we solved for people who could make their own decisions, who had long term capital. And then just the people and was there a rapport there? Did we believe in the person and the platform? I think VC, as soon as you think you're buying a platform, like I'm Sequoia, but not every partner at Sequoia is the same partner.

And so you need both from political capital to just how they behave, understanding that, no matter what venture capital firm it is-- it's not just a Sequoia thing, it's an everybody thing-- is very important. And so I spent a bunch of years talking to people and trying to get pattern recognition for what would work for me. And that has proven to be a very good thing.

And so we've had a very constructive, it's been a very positive experience for me having professional investors. They've been very helpful in helping us grow the business, having good conversations. We had diversity and even philosophy around how to invest and stage and scale and a variety of things.

And so it's been good. And we've got a well-rounded board with independence and all kinds of things as well. But it took me a while to get there. I think the question you asked off the thing was, what was the thing that made you tick over.

For me, I can tell you, it was learning about the industry enough to not feel like I was completely disadvantaged from an information standpoint. But in parallel, looking at our business de-risking the product in the market. And the final thing for me was the team. And once we kind of hired our first-- I'd always struggled to find somebody who I really thought could scale and be a really great peer to us. When I hired the first one, inside of the next year, I basically just hired-- [INAUDIBLE] exec team.

Yeah. I kind of of rebuilt again the whole exec team. What did that feel for those that have never felt that? When that person came in your organization? I was like, why is this so easy. It's been so hard.

And by the way, I worked with some great people. And they are like off running like big [INAUDIBLE] companies now. Entrepreneurs are like huge parts of management teams for like really successful Canadian companies. And so I have a lot of gratitude for those folks and their contributions. And I learned from every one of them.

At this stage and scale where we were, what I realized is there's a whole other level or two or maybe three or four or five. And that is once you get a taste of that, it's addictive. And you just want to be surrounded by those folks because ultimately, at various times in my career, I'll say I've been accused of being a control freak. What people did not understand and would not have probably believed is I don't want to have anything to do with your function.

Put me out of business, please. But you have to be able to do it. Show me. Well, I'll let you in.

You go. But then I'm going to start contributing in a way if it's not getting there. And my way of grooming people up was sort of challenging. But then once you get somebody in who really knows it, they're like, hey, I got this. And I'm like, yes you do. I'm going to go, whether it's on vacation or just tune out or go focus on some other part of the business.

It's a great place to be. What have you learned-- I know there was big re-platforming you had to go through. In regards to like looking at the years of building FreshBooks, what are some of the things, if you could go back, that-- maybe sometimes it's like, I needed to go through it in that cadence.

But what are some of those things that came up that you wish you would have done sooner or you would have changed the way you operated back then? Just for new founders coming in that have aspirations to build these enduring, an internet brand like yourselves. Yeah. So it's hard to say. People often ask, what are your biggest mistakes. I just simply do not have a lot of regrets.

I can give you answers to that question. We started off with the wrong brand name. I can tell you all about that, stuff like that. I've made a bajillion mistakes. But regrets is another whole category of stuff. And I feel like we, by and large, have made very good decisions.

We've been very deliberate about it. I think that is sometimes-- I'll say even ultimately, I think some of the leaps of faith you take at various times from one bridge to another are the biggest and best decisions you can make. You can get them horribly wrong. But trust your gut and make some of those. And so even like, I interviewed people and bring in this president character, at the end of the day it was still like a leap of faith.

We had like a six month timeline. It's going to work or it's not. Here we go. And it's been great.

But that, at the end of the day, that's a big leap of faith. And you don't know. And it's down to so many bloody variables. You don't know.

But now I feel like I'll have pattern matching for that next time. So it's going to help a bunch. So I think some of the really big decisions where you just have no pattern recognition, you've got to take a leap, and they come in a variety of forms. And they're going to differ depending on who you are and what kind of CEO you are. Those are all things.

So the question was kind of in like what would you do over again? Yeah. More do over or would have got you there faster, make the decision sooner? I think if I could have found a way to experience what an executive really was sooner, that would have been nice. And how do you think founders could do that today? Is it be part of a mentoring group? Like EO? That's a good idea.

So I think peer mentoring. I had a collection of advisors around me who were great. It just seemed like the people I could hire were not that. And so I don't know if it's like really working with-- having advisors and what have you close enough to be quite opinionated around whether that hire is good.

I'm not sure I had people-- I had board members and stuff at the time. I brought candidates for even like our first dev manager role to them. And they were like, well, let me introduce you to some other people. We got answers. I feel like along the way we probably could've got faster to excellence there. I don't know how to unstick that.

But I would encourage you to do it. And I think that would've sped everything up. Because it really is about the team you surround yourself with. And really, just like exposing yourself to excellence at scale so you can then use that as a pattern recognition. Listen. I think it's challenging because excellence at my scale and excellence at someone else's scale might be very different.

You're looking for a different kind of leader at startup, scaling, expansion where we live today. And so I think it's complicated. And this is where I think VCs can be helpful and other people who are really close to stuff. And they can interview. I still have one of my board members who I always put candidates through in certain roles. Because it's just like, hey, here's what I think.

And we always come to the same place. But it's good validation. It's also good buy in for whenever the person comes. They got a relationship with a board member or two.

I think that's important. What do you think makes your approach to building companies, when you see these entrepreneurs today build, exit, raise money, exit. And it seems like you've always had this like, I just want to build. Like do you think this is going to be the only company? Well, it's an interesting question on a bunch of levels. Yeah, I did get frustrated with the mindset that there's capital and everything. I don't think I've ever asked you that.

And I've always thought it. No. No. Listen. Here's what I believe. I just believe like I am, funnily enough, this far in I am more bullish on the scale and scope of our opportunity than I've ever been, which is insane.

So it's like I don't want to take my eye off this prize. Do I think of myself as a single company founder? I haven't ever been. Because I've done some other little things along the way.

A couple of years ago I co-founded another company. I sort of told the board, I'm going to help these folks get this going. And I'm kind of chair of it now. And it's operating. It's a team of seven people and starting to grow really quickly.

So I like that. That's like a pastime, a way for me to recharge my batteries. That's like a hobby for me. Starting companies is a hobby.

And I get to take all this knowledge and what have you I'm getting from my day job and apply it over here, which you is like an unfair advantage, which I like having unfair advantage. That's nice to have. Everyone's parlaying their career experience into making them more effective in their role. So this is my opportunity to do that.

But I think FreshBooks has so much runway. It's not like that's the issue. It's like it's still beginning, which is remarkable.

And I think it's getting clearer to me now that we're kind of in that expansion stage of the place to run to go really, really, really, really far. I'm excited about that. You mentioned, do these side things that kind of like, it sounds like a creative outlet for yourself.

But how have you reset over the years as a CEO when you felt like you maybe you went through a tough sprint at work? Where have you landed today in regards to some level of an integrated life with work and family? So there's certainly been periods where I call it like a very narrow path, where it can be like four months where it's like, I don't feel like I have any choice. I am just completely heads down. And it can be very taxing. It's very taxing. And it can be hard on people around you.

It's like, I sort of don't have a choice in any of these things. This is exactly the path I have to walk. I don't have any time in my day. This stuff just needs to get done. And by the way, can I tell you exactly when it's done? Like, my head's just down. I'm just going.

And I'm going to march until I get to the other side. And then we'll talk about it. And so that's how I'm built. That's maybe not everybody's thing.

I will say, even during that path, I'm pretty good about taking the weekends. But by and large, that weekend is you're just trying to get some quiet time to reconfigure yourself to get ready for Monday again. And that pattern, high level, is not that much different in good times and bad. It's just the sense of I have no choice. I am on a narrow, narrow path. And I just got to get to the other end.

It's like tunnel vision. You're just going, walking with the belief that you'll get there. But how do you recharge? So once you're on the other side of one of those or you're not in one of those periods, for me I learned early on I'm really good at running myself into the ground in a company that I started before FreshBooks, my design agency that I built FreshBooks for. I would start working on weekends because there was just stuff to do.

And then I realized, I can't do this. I just burn myself out. And so I turn my phone off on Friday night.

It's not sustainable for you. That's right. Doesn't work for me. So I like to get outdoors.

The passed a couple of years, practicing a lot more mindfulness. I'm like a complete amateur with surfing and so I get to do that maybe a day or two a year when on vacations. That's not really my thing.

But whether it's running or taking up some sports like that, literally walking in the morning and practicing dangerously close to pure meditation to just clear the head and kind of get going has been a thing. Trying to learn something new in a physical dimensions. So swimming is something-- I've always known how to swim. I just wasn't very good at it. I learned in July. I did three sprint triathlons in August that I started swimming in July because I had to obviously swim.

It's cool. Yeah. It's a whole thing that people do. I was always into distance running. But that's another whole set of stuff. And I'm like skinny and bony, less than I used to be.

You look good, man. Like I remember there was periods of maybe, I think it was when your head's down, and-- Oh, yeah. I think you don't eat right, you don't sleep right, all that good stuff. That's the nature of the beast. When you look back, Mike, at like this journey, personally, if I asked you who did you need to become to be the CEO leading 350 people, like what's the answer to that in regards to just your personal character? The answer is I'm still becoming. I think part of this talk I talked about here, there's the three by three way three things to think about with a CEO.

And I expose this so CEOs can be clear for themselves and so other people can support. If we need these founder CEOs because we want have the big outcomes to get there, then we have to support. But it's also not a license to be a jerk. Just cause you're founding CEO doesn't mean you keep your job. And so I think the things that you really have to have are a desire to grow and change yourself, not the business.

Yourself. That is top. And then I think supporting that, but critically important is a measure of self-awareness that is always expanding. And so encouraging, feedback that is critical and making sure you understand where people are coming from, and really just seeking out others' perspectives and not just dining out on your own. And also, just being wide open and listening all the time.

And this is where mindfulness can also just help, because you're just open. And I just think those two things are critical to staying in the role. And they unlock the evolution in yourself that will come over time. It's not easy. Like there are parts in our history where the business was probably ahead of my development. And there's parts of the business where my development's ahead of the business.

Just catch up, wait, either or. It's an ever moving, ever fluctuating kind of thing. But it has been a journey for you in regards to the Mike that-- Oh, yeah. Absolutely.

And I'm a better person for it. I'm a way better parent because FreshBooks. I had to learn how to-- like I have 350 kids, if you want to think about that way now. And the things you need to learn and in terms of communication and all these kinds of things are very applicable to home life. So I'm incredibly grateful for the broader FreshBooks platform for helping to develop me and having the patience and the understanding and the support to help me get there. And I'll always be working on it.

I think that is the-- and that's the gift, too. Challenge and personal growth are what make it interesting. And so there's more than enough of both. But don't kid yourself into thinking you're not on the hook for growing up. Yeah. It's your job.

You mentioned kids as we wrap up. Mike, I just want to let you know, I share this story often. You may never even knew this.

But Halifax, forget the conference, we're walking between things. We connect briefly. You invite me to speak at mesh.

And coming down the escalator at the MaRS Centre, I meet my wife. So I've become a better human because of my kids. And indirectly, because of you. Thank you so much for coming on the show, man. Really appreciate you.

Great to catch up. Thanks for watching this episode of Escape Velocity. Be sure to like and subscribe and leave a comment with your biggest insight from our conversation. Be sure and check out the next episode.

2021-01-02 20:08

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