The mistake took one click.
In 2003, Mike McDerment was running a small design firm in Toronto and billing clients with Word. A client came back for more work, so he did what any busy person would do: he opened last time's invoice, changed the details and saved it. He saved it over the original. A record of what he had billed, and what he was owed, was gone.
The company paid its way through subscriptions and kept its team small while larger accounting products dominated the category.
That was the itch. McDerment decided there had to be a better way to bill, and since no one had built it, he started to build it himself. He worked out of his parents' basement in Toronto, and by his own later account the effort went on for about three and a half years. FreshBooks launched in 2004, with Levi Cooperman and Joe Sawada alongside him, first as an online invoicing tool aimed at technical freelancers and small shops.
It was a slow climb. For a decade there was no outside money. The company paid its way through subscriptions and kept its team small while larger accounting products dominated the category. McDerment ran it as chief executive from 2003 to 2021.
What almost nobody outside the company saw was how much it had to rebuild. In January 2015, McDerment incorporated a second company, BillSpring, to build new products without being held back by the old code. In 2016 it was folded back in and became the new FreshBooks. The original version lived on as FreshBooks Classic until 2022, when the last users were moved across.
Money arrived after the product had proved itself. Oak Investment Partners led a US$30m Series A in 2014, with Georgian Partners and Atlas Venture. A further US$43m came in 2017. In August 2021, the company announced an US$80.75m Series E and US$50m in debt, reportedly putting its value above US$1bn. That year, McDerment handed the chief executive role to Don Epperson and stayed on as executive chair.
FreshBooks says more than ten million people have used the product. Revenue is not published.
What they do show is a founder who turned his own embarrassing error into a company, then had the discipline to throw away a working product and start again. The best ideas often begin as a small personal injury, and the founder who takes it seriously can turn it into a business.