Why FreshBooks Launched a Competitor to Itself
After realizing his accounting and invoicing company FreshBooks wasn't innovating fast enough, Mike McDerment had to take extreme measures.
This is an episode of our podcast Problem Solvers. Each week, an entrepreneur reveals how they overcame an unexpected problem in their business -- and were happier and more successful as a result. The show is hosted by Entrepreneur’s editor in chief, Jason Feifer. Listen below, or subscribe on iTunes, Google Play, Stitcher, or wherever you get your podcasts.
Mike McDerment saw the future, and it wasn’t bright. His accounting and invoicing company, FreshBooks, was doing well with customers, but behind the scenes, its software code was a mess, and it wasn’t able to innovate as quickly as it needed. But fixing this problem was tricky. If he ordered his team to hit pause and fix the code, years could go by and Freshbooks would lose ground to its competitors. And if his team did manage to create a better Freshbooks in the process, customers might be annoyed by the sudden change. So his solution was radical: He launched a competitor to his own company.
Listen to this week's Problem Solvers to see how McDerment did it and what he learned along the way.
Jason Feifer is the editor in chief of Entrepreneur magazine, and host of two podcasts: Build For Tomorrow, a show about the changes that got us here, and how to thrive in a changing world; and Problem Solvers, about entrepreneurs solving unexpected problems in their business. He writes a newsletter about how to find opportunity in change.
Prior to Entrepreneur, Jason has worked as an editor at Men's Health, Fast Company, Maxim, and Boston magazine, and has written about business and technology for the Washington Post, Slate, New York, and others.