Behind The App: Freshbooks – Painless Billing

An interview with Mike McDerment, CEO of FreshBooks

“Billing should be simple.” Is one of the underlying principles to FreshBooks, what personal experience drove you to creation of this app? At what point did you say: “I have had enough…. I need to make my own version of this” ?

In January 2003 I was using Word to invoice the clients of my design agency. When you use Word, the best way to invoice an existing client is to open an old invoice that has the client address info in it already, then enter the new invoices details. So that’s what I did – I opened an old invoice, entered the new info and saved it. Then I said, “F$#%^$%^%$!!!” because I forgot to rename the old file so I lost the old info. That was it, I literally said, “there’s got go be a better way” and I spent the next two weeks of my spare time and built an online invoicing service to bill my clients.

Tell us a bit about SoftwareasaNetwork.com

Software as a Network (SaaN) is an approach to the design of web apps. Traditionally business apps have been designed as silos. You have your account, and you invite me into it to do work. I have my account, and I invite you in. Trouble is our accounts are distinct entities in this paradigm and I have to log into your account, you have to log into mine and managing all those URLs, usernames and passwords is a massive headache. Enter SaaN.

When you build a web app, you want to start with the network you want to build in mind. Then you want to build experiences around the individuals in that network. Silos aren’t necessary –and they never were – they’re the result of short sightedness on the part of designers and developers. Accounts should talk to each other and each user should be able to stay within their own account to get their work done.

I have an analogy I like to explain this. Lots of people use collaborate remotely using web apps. Many times they do it from within their own homes wearing pajamas. If two people choose to work together, neither is forced to relocate themselves to the location of the other. Why does software insist that you do? With FreshBooks’ online time tracking and invoicing network, our users stay inside their own accounts to get work done – they don’t need to relocate – even if they are working for someone else.

How did you come to the decision to launch and expand on a new model?

The inspiration for our networked model came from my own pains, and those of our customers. I used to run a design agency, and I worked with contractors who did software development. In the early days I used to bring in all the work and dole it out to my contractors, but as their businesses grew, they started inviting me to do their design and project management. The consequence of this was – at any given time – I might owe someone $7000 for their work, and they might owe me $12,000 for mine, but since we were using Word and Excel and/or QuickBooks to do our invoicing, it was incredibly hard to figure out who owed who what without actually doing forensic accounting and sorting through a million emails. This whole process stunk, and it ate up time and energy. At FreshBooks customer dinners across North America we heard about these pains time and time again from our customers. FreshBooks’ online invoicing network is the solution to this problem.

Since FreshBooks accounts now talk to each other, it’s easy to tell who owes you money and, what you owe them. When another FreshBooks account holder invoices you, you can choose to receive their invoices inside your FreshBooks account. If you have 10 contractors who are all invoicing you, you now have a standardized platform to receive all your invoices instead of getting 3 different Excel templates, 2 QuickBooks invoices and 5 faxes. The time savings working on a platform like this is enormous. That is just the invoicing part of the equation, what about time tracking? FreshBooks covers that too.

If you have contractors who bill time on your projects, now you can manage them easily in FreshBooks. Simply add a contractor to a project and they will get an invitation to join your project (if they don’t already have a FreshBooks account they can get their own account for free and at no cost to you). When they log hours to your project from within their account, you can see those hours and stay abreast of their contributions. Also, as I’ve outlined above, it’s dead easy for them to invoice you when their work is done.

Got privacy concerns? FreshBooks manages all the sensitive data, and only shows it to the right people at the right times. Your contractors never see your client’s name or address, and your clients don’t see your contractors. Your contractors can set a rate to bill you at, and you can rebill your contractors to higher rates without your clients or your contractors ever knowing. This is how it’s done in the real world, so we built FreshBooks to manage these pieces of your billing process.

Your UI is simple and clean. Why is it important for the UI to blend into the background so the user can concentrate on the point of the app?

I played a bit of hockey growing up (bear with me here), and I played defence. You know the mark of a great defencemen? You don’t notice them. I’d say the same is true of your application when someone uses it – you want them to get into an unconscious flow where they don’t even notice they are using your application. If they do notice it, you want them to be experiencing surprise or delight (“that was…fast, helpful, easy, hilarious…”) – kind of like when a defenceman scores. J

So with that in mind, I like to distinguish UX (User eXperience) rather than UI (User Interface) – it drives the point home that you are designing experiences, not interfaces. We have a concept at FreshBooks called “4E”, which stands for “Execute on Extraordinary Experiences Everyday”. We’re in the experience business and using our app is part of that process, and so is calling us on the phone or sending us an email. It all matters, and while the app is the core, we think in terms of a holistic experience and every step in your app is part of that.

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