Welcome to our first ever podcast edition Q&A! We have had the absolute pleasure of exclusively interviewing the CEO and Founder of Freelancer.com Matt Barrie! THIS IS HUGE!
Not only is this the first ever podcast Start Smarter have released, but this is the first time we are interviewing a CEO or Founder of a publicly listed trading company! The shares of the company are listed on the Australian Stock Exchange and available for the public to purchase.
Freelancer.com is owned by the company Freelancer Limited which also owns and runs the following subsidiaries;
- Freelancer Technology Pty Limited
- CrowdIT Ltd
- Freelancer International Pty. Ltd
- Warrior Forum
During the podcast, Matt talks about some of these companies that he also runs. We talk about the challenges, company share price, business synergies, integration of businesses, the pitfalls of his career, how he started his first business plus more!
So we can do more free interviews for you to enjoy, please do like and share. It helps us get the word out so we can continue to do more amazing interviews with inspiring people like Matt for you.
You can listen to the free podcast via Sound Cloud
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If you prefer, we have also transcribed the audio interview for you to read.
START SMARTER: Can you hear us? #00:00:07.43#
MATT BARRIE: Yes, I can. #00:00:07.43#
START SMARTER: Fantastic, fantastic. (Comments unclear) #00:00:21.16#
MATT BARRIE: That’s fine. #00:00:18.65#
START SMARTER: Fantastic. So, Freelancer.com is the world’s largest freelancing crowdsourcing marketplace, is that right? #00:00:27.09#
MATT BARRIE: We have about 29,000,000 users on the website and we’ve done 14,000,000 projects. No other marketplace in the world has as many users to date in crowdsourcing as Freelancer. #00:00:44.36#
START SMARTER: Wow! That’s an incredible achievement and we’d love to hear more about how you’ve achieved it, any lessons you’ve learned and any tips you’d give. So, first, let’s talk a bit about you if that’s okay? What drives you to get out of bed in the morning to do this entrepreneurial business and the talk to me about the image you’ve created? #00:01:19.73#
MATT BARRIE: One, Freelancer.com is a global marketplace for jobs for 29,000,000 people and 14,000,000 jobs are posted to our site. Any job you can possibly think of from simple online jobs like building a website, to designing a logo, right through to complicated and sophisticated jobs like aerospace engineering, genetic engineering, biotechnology, local jobs like plumbing, pest control, walk my dog, etc.
Really, any job you can think of and the good part of that is that it really is its own economy. I think Australia’s GDP ranks about 180 out of 193 globally in terms of countries around the world. We have employers. We have workers. Every day people are generating income for their family through the site. We have a rudimentary legal system, which includes dispute resolution and arbitration. If things go wrong, we have to make decisions on a daily basis, we can raise wages in a particular area and so forth. So it’s really like running as a country. And all sorts of interesting and fun things happen, so every day it keeps you on your toes. It’s across every geography in the world. We transact in 45 currencies. We are in 30 or 40 different languages; I’ve forgotten the exact number. It really is a very much a global business.
If you think about it like its own virtual country.
START SMARTER: Okay, so would it be fair to say that what drives you the most is connecting all these people and providing this platform for individuals to generate this income for their families to kind of feed mouths. Almost, to reach out to the 29,000,000 people, provide the 14,000,000 jobs that you do provide and being so diverse in the number of countries you are in and helping all these people are the main driving factors? #00:03:39.23#
MATT BARRIE: Well, it’s really on both parts of the equation. People are posting jobs, they’re entrepreneurs, they’re start-ups, they’re people that have got the spark of ideas and they want to get someone to help them turn it into a reality. And then on the freelancer side, you’ve got people in parts of the world, many in the American markets and developing world economies, who are starting their own businesses to help people in working economies start these businesses and get those dreams and ideas heard. So it’s really fun working with so many entrepreneurs, both on the posting job side as well as the people performing the jobs.
We also have a business called Escrow.com, which is also the largest online escrow provider in the world. It’s done about $4.8 billion in payments volume and it’s been running for 20 years.
This is a business that was started by Fidelity back in 1999. There are a lot of payment systems out there in the world, but the payment system that you use to buy and sell anything of value, or that’s complex to sell is escrowed because you wouldn’t use something like PayPal to buy and sell a car, boat, an aeroplane. We do. We do that every day. We see industrial equipment, import or export, jewellery, gemstones, fine art and sculptures. In fact, there’s a space station going up in 2021 called Aurora. They are selling tickets for $10,000,000 each to get on this space station and they used Escrow.com to sell the tickets. So right now, if you wanted to reserve your place for $80,000, you could reserve your place on a $10,000,000 trip to space.
People buy and sell animals. If you were in a zoo, and you wanted to sell a zebra to a safari park, it’s a very complicated transaction where you got to look at shipping documentation, regulations of the area and so forth. You would use an escrow to make the payment. If you wanted to ship 20,000 tons of Alpaca’s from the U.S. to China, this is the payment system you’d use. So it’s really used for complex things. We have transactions going regularly up to $10,000,000 or more for one single item going through the payment system.
Then, on top of that, we also run Warrior Forum, which was founded in 1997. This is the world’s largest internet marketing community with 1.3 million internet marketers. This is a place where you’d go to launch your products. This is a platform used before going on somewhere like Kickstarter. Instead of going there to raise money to go into research and development, you go there when you already have a product and want to sell it. You tap into 1.3 million internet marketers who will distribute your products around the world.
We also run a thing called StartCon, which is the largest technology start-up and growth conference really in the Southern Hemisphere, that runs every year around December. That business is transforming into a media company this year where we have people on stage and flying in from around the world to talk about various topics and so forth. We’re running a pitch competition now which is called Pitch For A Million, where we basically have start-ups competing in an X-Factor style or a Britain’s Got Talent style to basically get on stage to win $1,000,000 investment. That’s going to be syndicated across 65 cities. So, there’s a lot of things happening and it’s always exciting. #00:07:27.04#
START SMARTER: So how do you manage your time across all the project? You’re managing a number of companies – the world’s largest escrow internet firm, the world’s largest freelancer’s account etc. So how do you balance your time with these, I assume you have to trust people and empower people to run the businesses for you and you make the executive decisions? #00:07:57.44#
MATT BARRIE: Yeah, I mean, any way you do it, it’s about having great people work for you. And empowering people to use their initiative, who are really keen to grow in the role and build their experience and talent. So I have to act as a coach, head coach and chief psychologist. I work with teams – I think it’s 18 project managers across the entire crew, and each project manager is like a little mini CEO. I’m constantly working with them, coaching them to make sure they’ve got the best players on the bench. #00:08:34.92#
START SMARTER: Well, it sounds like you’re running a great show. We’re going to press ahead with these questions if we may. So going back to yourself…so before you started your business, you studied at Stanford, you did a masters degree in electrical engineering, and then you became a consultant and then from there things progressed. Now, did you always know that wanted to run your own business?
MATT BARRIE: I think that at an early age, fundamentally, I realized that I was unemployable. And then
if I wanted to have a good career, I probably had to create my own job rather to take a job
because I think I challenged things too much. I questioned, I think, “Why things are done like this?”, “Why, too often, I think that I probably frustrate myself over working for someone else?” So I kind of thought I had to go out there and…I didn’t really think that I wanted to be an entrepreneur. I thought, “Well, I just want to go and see if I had a something that worked and see where it goes.”
Freelancer was not my first start-up. There were a couple of them that were not so successful.
You know, I love what I do, I mean, you get to go to work in the morning and get to work with great people. Work with a user base around the world where all these interesting things are happening and I think I wouldn’t do anything else. #00:09:59.98#
START SMARTER: Fantastic! So, you mentioned everyone has failures and now they’re entrepreneurs. For every nine businesses you create, the tenth one will be the success.
How many failures did you come across before you got your current success with the first business?
MATT BARRIE: Lots and lots of a series of bad decisions. You’ve got to make mistakes to figure out how to do things right. I mean, anyone can hope they’re on a sea of calm, but when the storms hit that’s when you really learn how to sail a boat. Certainly, there were many businesses beforehand which were not quite successful, but that’s where I really figured out how to actually run a business, grow revenue through sales, run engineering and build a business. It’s over time and it’s only through making mistakes that you will actually learn how to do things proper. It’s kind of funny, many years ago, I would see a lot of CVs that would come through from people in Silicon Valley that worked in the first Dotcom boom. When I worked at this company, it went from $0 to $100 million in revenue. When things are going great for everything, how much of that is you actually learning? It’s only through failures that we can become better and through adversity that we can challenge ourselves. #00:11:46.99#
START SMARTER: Okay, so one of the questions that we actually had down here was “Are you scared of failure?,” and I guess you kind of answered that by saying that you only learn through failure. So, it’s a matter of attacking it head on and learning through those, is that fair to say?#00:12:00.23#
MATT BARRIE: Well, let me tell you, when you are running a business of this size, with around 500 something people around the world, seven offices, and so forth, every single day,
if you come into the office and you’re not smelling smoke, then you’re not sniffing hard enough.
That’s a quote that comes from another friend that’s an entrepreneur, and I think it’s absolutely true. Which is, every day something is going wrong. The trick is to try and figure out where the smoke is burning and then try to address it if possible and move on. Every day, you’ll have adversities. Things aren’t all rainbows and unicorns on a daily basis. Constantly, things are going wrong and things are going right, as well. But, I like to really figure out…the stuff that’s going right, let’s double down on it. The stuff that’s going wrong, let’s try not to do that again. Try to change things. #00:12:59.11#
START SMARTER: Wow! Okay, fair enough. So, now specifically Freelancer.com. How did you come about this idea? #00:13:11.25#
MATT BARRIE: In a way, it was kind of serendipity mixed with 50 other inventions. I left my last company, which was a semiconductor business that I started in 2001. It was a company called Sensory Networks. It was building high performing chips. The network traffic, like a graphics chip that goes on a graphics card. It was like a chip that went on a card that would scan for things like viruses, content, spam, or attacks, intruders, whatever it may be. Then we’d supply that to network equipment manufacturers around the world to speed up their firewalls and their security and so forth. I ran that business for six years and it set the world on fire when I left it. I left for a variety of different reasons. But I was a bit of a broken man at that time because it didn’t set the world on fire. Ultimately, it would sell to Intel. I was the founding CEO.
At this point, I’m still looking for something to do. I was working on some side projects and I was building a website. I was trying to figure out how I could get some data entry done for that website to fill in a spreadsheet with a list of shops, the addresses, phone numbers and the URLs and so forth. I thought it would be a little job that a little brother, sister or friend would love to do and I would give them $2 per entry in the spreadsheet. I wanted 1,000 entries and I’d give them $2,000. I thought some people would love to do it at home. Get on the computer on their own time. It was just really frustrating. You know, they’d work on it a little bit and tell me it was boring. I said, “I know it’s boring because if it’s not boring I’d be doing it. That’s why I’m paying you.” It was stop-start, stop-start for months. In frustration, I think I went to the internet and I think I typed in data entry online or cheap data entry or something like that. I found this website called “Get A Freelancer.” It was run by a guy in Sweden living in a fish farm. The site looked terrible. It looked like Craig’s List. I used it and I posted a job. I didn’t really know what was going on because it had a lot of hippies on it. It had a half million users back then. I posted the job and I went away and then I came back two hours later after going for lunch, forgetting that I had posted my job. I had several people wanting to do it. I thought, first of all, there’s no way that many would want to do the job because I can’t find anyone. The second thing was I was paying $2,000 for the job and there were people bidding $100 for the job. I thought, ‘Well, wow! Is this real? Does this work, etc.?” I hired a team and the job was done in three days. It was perfect. I didn’t have to pay until the job was done. I thought, “This just changes everything.” I thought, “This is just phenomenal!” I just tried so hard to find someone to do this job. I was willing to pay a fair bit of money for it, and it was done for about 5% off what I was going to pay. It was done in three days. It was perfect. I originally couldn’t find anyone to do it for four months, and now I had people wanting to do it.
I thought this was just such a game changer for anyone that wants to do things in the world
whether it’s work on their business, start a new business, get some work done, whatever it may be. I thought, “I just need to use this so I can build a business. What kind of business should I build?” And then I thought, “I really like this business. Maybe I should build a business that’s very similar to it.” So, I built a site using freelancers from Get A Freelancer. I could do the programming, but I couldn’t do design and I couldn’t do other things. So after a few weeks, I kind of figured out, “Okay, this is how the business works. How much money do I need to get raised?”, and so on. Then, I just thought, “Maybe I can find some way to buy this business rather than try to build it from scratch.” A very long story short, I ended up buying it and had little problems with it. I fixed the problems one by one by one and every time I fixed a problem that people told me about or that I discovered, the revenue went up, it became easier to use. Eventually, it got to a point where I could start hiring people. So I started hiring people and I basically bootstrapped it. I raised a little bit of money from someone to buy it, but after I bought it, I didn’t raise a single bit of capital until we went public. So
we went from about a $2.5 million valuation to a $1.1 billion raising not a single cent of capital.
Every time I fixed an issue, I can just hire another person. I couldn’t hire the best people, unfortunately, back then because I couldn’t afford it. I just hired more people to fix more problems, revenue kept on going up and it went on and on and on and on and on until we went public in 2013. So that was in 2009 to 2013, so it was four years. #00:18:18.03#
START SMARTER: That is an awesome story! I think our listeners would be very inspired by that. I think the key takeaway from what you said there for me would be how I made this better was by listening to my customers. They told me what the problems were. I fixed it one by one. Each time I fixed it, I saw my revenue increase. Now, I think that’s a great takeaway there. #00:18:46.78#
MATT BARRIE: You have to talk to customers. You have to get the feedback from them. Customers don’t always know what they really want and I think it’s the same as where Henry Ford asked customers what they really wanted, they would say faster horses. If you would jump to our modern counterparts, there was just so many problems with the site and I just loved it when people called me to hear the problems are fixed. Every time I fixed them and things would improve, the revenue went up so it really seemed like it worked for the business. #00:19:26.51#
START SMARTER: Moving on to our next question. So, how do you keep Freelancer.com as the most attractive freelance site because now, as you’re probably aware, there are various freelance sites that’s out there like, Fiverr, Upwork, and several other businesses? So how would you say Freelancer.com is any different, what is the best thing about it and how does it separate it from all the others? #00:19:54.04#
MATT BARRIE: Yeah, so that’s a good question. First thing was, we bought pretty much most of the competitors that were out there and consolidated them into Freelancer. We bought 19 businesses. About 15 of them were direct competitors of Freelancer at the time. But as we went along, we made a bit more money, we would go and pick up the smallest in the field – so we’d buy the eighth smallest in the field, then number seven, and number six and so forth. The marketplace that was out there that was generally full of jobs, any jobs you can think of, we’ve consolidated most of them. So, vWorker, Rent A Coder, Scriptlance, Get A Freelancer, EUFreelancer.com, Freelancer.co.UK. A few weeks ago, in the UK, we acquired Freelancer.net. This is a relatively small business that’s been running the UK for 20 years…one of the earliest pioneering websites for UK freelancing. So we consolidated all of that over time, and so today, really, for the most part, it’s a very, very small niche. So they’re either in a geographical area like there might be a Polish freelancing site, which we acquired straight out of Poland, which was the number one there. Or it might within an industry niche. It might be a graphic design or something. Or a legal services site. So that’s what we’ve done, and as a result, we’ve consolidated a lot of liquidity in the site.
We have the largest number of users and online marketplaces trend towards the winner takes all.
So, the buyers want to go where all the sellers are. The sellers want to go where all of the buyers are. So, that’s given us a tremendous network effect. Then, we’ve just consolidated and now we are we are innovating. We’re constantly launching new ventures, new functionalities and making it easier to work together. More collaborative tools. Communication tools. Really just post a job and get people to very quickly bid on their job and engage. I don’t know if you’ve tried posting a job on Freelancer…if you post a job, on average, over 80% of the job get bid on within 60 seconds. So it’s extremely liquid and you get to start speaking to people straight away. #00:22:16.16#
START SMARTER: We can definitely be the first to agree with that! We have used the site and we love it. We return to it to get all sorts of menial things completed such as data entry, for example. We’ve seen that we literally post a job and within an actual minute, you have various kinds of people to choose from. Our favourite is the Start A Contest option because you can see people’s work before you choose that person’s work. So, we definitely agree with you there.
Moving on to start-up advice for our readers at Start Smarter and also the listeners of this podcast. What would you say to someone who is thinking to go and start a business but who are currently employees of another business although they’re not quite sure they want to take that leap of faith because they’re not that quite courageous enough. Essentially they are not comfortable enough to take that leap of faith for whatever reason. What would you say to that person? #00:23:28.18#
MATT BARRIE: Well, the great thing now is that
it’s really a lot easier, a lot cheaper to start a business than it’s ever been.
So before you even leave your full-time job, you can be on the side using Freelancers, for example, to very quickly, cost-effectively, prototype your site, kind of get your business altogether, do your market research and so forth. Years ago, back when I started Sensory Networks, for example, to start a company, like a software company, you would have to raise $5 million to a typical Series A financing. It was extremely time-consuming for us to raise money and it was very complicated. Hiring people was slow and so forth. Using Freelancers, you can do things off the back of a credit card. You can get a website built for 100 GBP. You can get logos built for 10 GBP. Very quick and cost-effective to get things done. Very rapid responses from freelancers.
You can actually go and test the waters, and actually get a lot done without actually having to make the full-time leap.
The other thing is though that if you do make the leap, the ability for you to scale your business now is unprecedented in history. With the internet connection, you have 4 billion people online now. If you have an internet connection, you can grow very rapidly. You can reach lots of customers very quickly and you can sell very quickly and immediately. So, the trick today is just kind of get out there and do it. Get a basic product out there first, and rapidly see what the customers think. If they like it, it can take off very, very quickly. #00:25:15.80#
START SMARTER: Fantastic! Now, I think you hit the nail on the head there. I completely agree and starting a business is easy nowadays. It’s cheap and most definitely to get the first thing off the ground like logos, websites, and depending on your idea, I guess it is that much easier than it used to be. And so, what’s the first bit advice you’d give to someone who takes this leap of faith on their logo, their website, what is the best bit of advice you’d give them from your experience of running all these successful businesses? #00:25:47.69#
MATT BARRIE: Well, you just have to keep getting ready and you just have to keep persevering at it. To be an entrepreneur, you’ve got to quickly put your blinkers on to a certain extent because people will feed you all sorts of advice. Your mother will be there saying, “When are you going to get a real job?” Sometimes, you just have to ignore everyone and just keep doing what you’re doing.
I think the faster you can get a dashboard up, with kind of instruments that gives you analytics you can do better.
It gives you insight into what’s going on. For example, the first thing we did at Freelancer has put up a very simple dashboard. If you’re not technical, you can get a freelancer to do it extremely cheaply, probably under 100 GBP, you can get the basic thing up and running. It just tells you the key metrics around your business. So for Freelancer, it would be how many jobs are being posted per hour, per day, per week, how many people are signing up, what revenue is being generated, what the revenue lines are, etc. So, the more you can actually measure what you do and have that little dashboard for your business, and grow that dashboard over time, the more you can get an understanding of what’s working and what’s not working. Even without getting into rigorous testing of something like AB testing and so forth, which is kind of how it starts today, we’ll push new features of functionality, you can eyeball the charts and see if something has impact, if something’s great, and if your launch is doing well, you could do more of that and if things are going down, you can reserve it and you try something else. Rapidly innovating. Rapidly getting a part of the market. Don’t go into a long period of development for a year or two and get too afraid to talk to customers. In fact, in today’s world, what you can do is you can even talk to customers before you launch.
You can put together a little presentation or a little flyer and you can seek the customer and say, “If you had this at this price, would you buy it?”
You get that feedback from them. And in some circumstances, the customer will even pay you to do this upfront, as long as you say you’ll do it by a certain time or certain day and if you don’t do it, you’ll give the money back. So, you can rapidly get to the market. You rapidly can innovate. You rapidly can listen to customers and rapidly measure everything you do. #00:28:00.55#
START SMARTER: Fantastic! Some take-away points there is understand what your key metrics are and what the revenue drivers are. Then, therefore, you can tell what is working, what is not working. Fantastic points there. So you mentioned perseverance as a key characteristic for an entrepreneur or an acquired attribute. What other characteristics do you feel that an entrepreneur would require to succeed, as far as, perseverance? #00:28:32.25#
MATT BARRIE: You can have a lot of them. Initiative. You got to up in the morning and go, “What am I going to do today?”
Not every day goes well, so you’ve got to be able to handle it. You’ve got to roll with the punches.
When things go really well, don’t get too excited. When things go really badly, don’t get too upset. You’ve got to be a talent scout. You’ve got to find the best people you can afford, and when you start, you’ve got to tell them you can’t really afford that much. You’ve got to be quite scrappy. You’ve got to think like the owner of a business. Be very careful where you spend every dollar.
Make sure that every dollar you spend or every pound you spend, you earn more of a pound in return.
There’s an infinite amount of things you can do in a day to work on a business. You just really need to focus on the ones that are going to really move the needle and really get the impact. Really focus on revenue, revenue, revenue because every unit of revenue you get in will help you hire more people, do more things, give you more revenue. This will make you attractive to investors and so forth. You’ve got to be somewhat of an extrovert. You got to talk to customers. I mean, some of these people are afraid to talk to customers. If you put off speaking to customers, you run the risk of building a product that no one wants.
Don’t be afraid to tell people what you’re doing.
Some people want you to sign confidentiality agreements to keep it secret. End of the day, ideas are a dime a dozen. A number of entrepreneurs pitch me the same ideas literally within days of each other. It’s just huge.
It boils down to execution.
It’s down to who’s the person that’s going to get out in the morning and do it every day until it works. #00:30:40.46#
START SMARTER: So there are people who want to start this fantastic idea but it all boils down to execution. We hear this from various people, including yourself. Don’t be afraid about telling people the idea, it’s all about execution and the person may not even have the drive to do so, you have the drive, so just put it out there and go for it. The other key takeaway, I think, a mental takeaway is what you just said to focus on revenue, revenue, revenue. Every time you spend needs to generate more than a pound for your business. People can get sidetracked with spending too much money on finer details when they don’t haven’t got the fundamentals right. Fantastic takeaway there for us. So, thank you for that.
On to the last few questions. One of the biggest things our end right now is having the right online presence. How crucial is it to have a well-designed website and its accompanying online presence? Is it a make or break or is it less important? #00:32:15.26#
MATT BARRIE: It absolutely matters. We’re living in a hyper-competitive, hyper-connected world where you’ve got a great idea, you’re going to have competitors, right? If you don’t have competitors, you don’t have to worry about whether you’re in a market or not that’s actually the same size. When you have competitors, you have to make sure that you look better than the competitors. The difference between a website like Airbnb, which really have taken over the vacation rental online. I mean, fundamentally, what Airbnb did that was different from the other vacation rental websites was that they just executed better in the marketing, the design, the user experience, and so forth.
So, a lot of products you see today out there in the real world is just online versions of traditional offline businesses. So, it’s really just how you apply the technology and marketing. Very smart use of technology with a really great marketing and so forth. You need to stand out. There are 4 billion people on the internet, and you need to stand out from the pack. #00:33:23.83#
START SMARTER: Agreed! Moving on, what is your number one tip on how to grow your customer base in the most unexpected way? #00:33:36.36#
MATT BARRIE: Well, the first one that pops up in my head, this is in no particular order, you’ve got to have a great name for your business. I mean from a domain name perspective. You know, when I bought this business, it was originally called GetAFreelancer.com. I thought that was a great name. I thought you could have really any name. I thought Get A Freelancer was quite descriptive of what the business did. Then, somebody in the business said, “Well, why don’t buy the domain name Freelancer.com?” I thought, “Okay.” I looked into it. The guy that had it had it from a computer magazine that he ran that was. He wanted an astronomical amount of money for it. I thought, “Well, Freelancer is a bit abstract and it doesn’t really tell you what the business does. Get A Freelancer says you get a freelancer. It’s quite obvious what it does. So I thought, “Do I really want to get that name? It hasn’t really impacted the business so forth.” Then, Simon says to me, “What happens if someone else gets the name?” I thought, “We’ll be subordinated forever.” So it’s an interesting story…I didn’t have a lot of money so I thought, “Well, I’ll just chip away at it.” The second we changed the name to Freelancer, I didn’t understand how much of an impact it had in terms of customer recall, journalist recall, and natural organic traffic. If someone was to meet someone on the street and say, “Have you heard of this website?”, and I might mention a competitor that might have a really funny name like Google-sort of a name, and some of them may say, “What’s the name of that site again, I can’t remember?” I’ll doubt they’d forget Freelancer.com? And we’ll be on the front page of Google. And then,
the competitor couldn’t mention the word, ‘freelancer,’ because every time they mentioned the word, ‘freelancer,’ we got traffic.
So, they started calling their service providers, contractors. My mind thinks that contractors build bridges. And so every time they mention the word, contractors, whatever, and then so forth. So, it just gave us a natural organic uplift from both customers, media, SEO and so forth. And that’s why now my escrow business is called Escrow.com. Escrow.com is definitive marquee of standard globally for online escrow. The first place you go for escrow. It gives you the credibility and so forth. If you get the opportunity to have organic keywords in your company domain name, do it. We paid a few hundred thousand dollars for that name but it bought us the best house on the best street. #00:36:33.86#
START SMARTER: Gotcha! The next question will be interesting of hear. What is the biggest lesson you’ve learned on your way to creating the successful, world’s biggest freelancer website to date? #00:36:57.74#
MATT BARRIE: Well, focus. There’s just so many things you can do in a day. But you just need to make sure that every single person in your organization gets focused on revenue generation or their key metrics. Some teams might not have immediate revenue goals, but they feed into other teams’ revenue goals. You’ve just got to make sure that everybody is focused on the right things at all times. Because, particularly as you get larger, there are so many things you can do in a given day, but if you’re not working on things that move the needle, then you stagnate. It gets really tough when you’ve get hundreds of people working for you to make sure everyone is working on the right thing. It’s so easy to get distracted. It’s so easy say, “Oh, I’ll do this today. I’ll do that tomorrow.”
You just need to ask yourself everyday, “am I working on the number one thing I should be working on that would move the needle?”
When you move the needle, you move revenue. You make a little more in revenue, you going to hire another person. That extra help you’ve hired can work on fixing all the things you’ve wanted to fix up in the past. But you just want to have everyday income or revenue growth. Focus, focus, focus. So many start-ups get distracted and just don’t work on the right things. #00:38:13.73#
START SMARTER: For sure. Increments, revenue growth is the key takeaways here, guys. That is what we need to focus on. Focus on revenue goals and hire another person and keep pushing.
So Matt, now this is the most interesting part of the interview for me. Going forward with Freelancer and looking at Freelancer’s future, it’s clear that Freelancer.com is a massive, fantastic company.
looking at the financials and the share price of Freelancer.com, it had highs of $1.80, but in recent months it’s come down to an all-time low, what are the main reasons for this and what is your current action plan to bring it back to its glorious $1.80 days?
MATT BARRIE: Good question. I mean, again, it comes down to focus. What happened was we grew very, very rapidly. We had revenue growth growing at 60.0% compound for about six years. Then, about two years ago, we just had so many new people coming into the company, we acquired a business called Escrow.com, which is a completely new business. I was determined to make sure that was well-resourced and had the right management in it. So, I went from acquiring that business to putting in half my management team into the new business and keeping half my team in the (unclear phrase) business and really stocking up.
We just had too many new people coming to the company that we just didn’t have working on the right things.
We went into a long development time with Escrow, just really overhauling the whole technology stack and a couple of systems within it. I think the market expected us to do that a lot quicker. It looks to us about two years and the market expected us to do it in three months. We’ve done that now and we’ve come on the other side. The business is going gangbusters. For the first quarter of this year, we are up 30%. In fact, we had the second biggest quarter ever in the history of the company. We made a few mistakes in terms of some decisions.
We’ve fixed those mistakes and, in fact in the first quarter, it’s growing again in terms of the growth of payment volume of 9.5% year on year.
I think that’s quarter. It’s looking like we returning strong now. But it’s really, the fundamental issue was we just lost a bit of focus. We moved some of the management around in internal businesses. Buying Escrow was a big thing to digest. One thing you realise is when you acquire a business you need to make sure that you really resource it properly and it’s really tough when you take half the management off of one and fill the other. But, you know, business is continuing to grow. Growing very, very strongly in terms of where it is now. I really just spent the last 18 months just making sure it runs on the right thing at the right time.
It’s a very complicated business to understand. It’s just a growing pain in many respects. When you start off in a small business, and you have a bunch of different revenue lines coming in, you sometimes get into a situation where some of the revenue is a little bit soft. For example, we had a membership plan that’s primarily designed for freelancers that give you more bids on projects and more things to help you win jobs and earn income. There were some benefits for employers as well, but we had some employers, for example, that would not like subscribing to membership plans. We actually just went in there and said, “No, we’re just going to clean this up. We wanted to ensure you’re getting value from this and we’re going to actually cut this plan and put you back to a free plan.” That’s a big decision to make because obviously, you were generating revenue from that. But we made a conscious decision to do that and now the net promoter’s score and customer satisfaction is up.
I think, really the crux of the situation is the focus and what happens is that revenue increases. We had two years in a row of about $50 million net revenue. The market shifts, stock prices react to momentum. The faster your revenue grows year on year the more of a premium the market is going to pay for your equity. When you take the heat out of the revenue growth, it takes the heat out of the stock price. So,
I’m pretty sure that the stock is going to shoot back up in a very short period of time.
Stock prices go up and go down. I’m not too worried about that on a daily basis. What I’m more focused on is making sure the business is powering ahead. #00:43:22.13#
START SMARTER: Well, thank you, Matt. I guess the penultimate question here is;
it was reported in 2013 that you rejected a takeover bid of about $400 million (USD). Is this right, and if so, would you ever be open to a takeover bid in the future?
MATT BARRIE: Look, we had a formal approach and I made a decision not to take the approach and to instead go public, which at the time, I think was the right decision. You know, I’ll never say never to things in terms of decision making. But we’re on a rocket ship, and I thought to myself at the time, “Why would I get off the rocket ship?” There’s a big opportunity ahead. Even today, we have 29,000,000 people in the marketplace. 4 billion on the internet. So it’s a very, very, very early days. I really love what we do. I think there is a whole lot of work to do still and we’re not even close to getting.
You think about the lives of companies in the world that are publicly listed with a global marketplace. You’ve got Amazon, eBay, Ali Baba and a lot companies in global market capitalisation. The same thing is going to happen in services and in services, so, it’s an early day and you look at Amazon’s stock price over the years. I can’t remember the exact numbers but Amazon’s stock price was up and then it goes way down and back up on to where it is today. So, you think, “Can I go up or can I go down?” So I’m not too worried about that. #00:45:12.45#
START SMARTER: Fair enough. Well, thank you very much, Matt. Last question we have for you. Do you have a mantra or a quote that you live by day in and day out? #00:45:28.42#
No one’s going to hand to you your future on a silver platter. You’ve got to go and create your future.
So, it’s really up to you to make what you will out of life. No one else is going to do it for you. So, get out there and just do it. #00:45:50.93#
START SMARTER: Love it! Very strongly ended. Matt Barrie, CEO and Chairman of Freelancer Ltd. Thank you very much for your time, Matt, and really appreciate it. We’ll be in touch with you again when that share price is at $18. #00:46:16.99#
MATT BARRIE: Thanks a lot !#00:47:10.73#
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