From idea to $800 million dollar company
Date: February 3, 2016
Name: From idea to $800 million dollar company
Presenter: Matt Barrie
All entrepreneurs have amazing journey they want to share. Moreover, future entrepreneurs model them as their foundation for their businesses. Vancouver Entrepreneurs Group and Vancouver Business Network invite Matt Barrie, the CEO of Freelancer.com, to discuss his journey of building successful online business. In this presentation, Matt Barrie will provide valuable business advice for entrepreneurs; in addition, he will deliver many actionable insights to inspire entrepreneurs. The presentation will include an interview panel with Matt Barrie and Chris Koch, the CFO of Freelancer.com. The interview will be moderated by Dan Lok, the Founder of Vancouver Entrepreneurs Group, and Roger Killen, the Co-Organizer of Vancouver Business Network.
Matt Barrie is the CEO of Freelancer.com and also the President of Escrow.com. He was named the inaugural BRW entrepreneur of the year 2011. Aside from his business, Barrie is also the Adjunct Associate Professor for Cryptography at the University of Sydney. For over many years, Barrie has appeared on many Summit Series, the New York Times, the Wall Street Journey and the Economist. He is considered as the serial entrepreneur in Australia and has inspired many future entrepreneurs.
World domination on a shoe string budget
Matt Barrie started his first business in Stanford. With the background of computer science major, he discovered many problems, such as the selling strategy, with the current business model. Because of a lack of experience, the business was facing problem with venture capitals. After 6 years, Barrie decided to walk out.
It was tough to raise money. Barrie decided to change his strategy by concentrating on small projects. When he was trying to build a website for his mother’s wholesale business, he realized marketing strategy did not excite his interest. He outsourced the task to other inexperience consultants. However, there was no job site website existed in the market for him to outsource. Eventually, he found the “Get a Freelancer” website. The design was not appealing, but it did the job Barrie wanted. Barrie was fascinated with the business model and decided to build a similar website.
“If Amazon is the marketplace for books, how come there is no marketplace for tasks?”
He purchased Biditout.com and set his 1 million dollar revenue for his business. He needed to have traffic for A/B testing, understand the prospect, and construct the operating structure. Barrie later realized there were over 100 or more competitors, so he changed his business strategy to “buy, instead of build”. Barrie acquired Getafreelancer.com. However, Barrie was experiencing difficulty to focus because he was going in solo. He hired a team to delegate his tasks and able to figure out the core problem.
“As team of one, it is tough; as team of 2 or 3, you get someone to push you forward”
The website had some basic graphic. He decided to get some support. Barrie integrated dashboard to measure the visitor of the site, revenue, and the membership. The dashboard gave Barrie the sense of the business direction. Barrie needed to work on cash flow, so he hired someone smarter than him to address the issue. Barrie gave them the permission to hire their friends. Suddenly, Barrie gathered a group of talent people in his company.
“Hire A, and they will attract A. Hire B or C, they will be cockroach and you cannot get rid of them”
Barrie needed to change the logo, so he auctioned the task in a competition method. He managed to purchase the domain of Freelancer.com for over $324,000. It was Barrie’s best decision he ever made. The SEO took off because of keyword. With the new logo of the humming bird, the company is sustaining in the industry. The team eventually moved into a bigger office. The team began to test new feature for better conversion rate. By breaking down the tasks into many simple steps, Barrie was able to see some light in the business.
Barrie suggests entrepreneurs to only have one call to action on the website. People prefer the color orange button. While in business, Barrie was teaching lectures to seek new potential team members. To increase brand recognition, Barrie spend money on bus and taxi banners for business exposure. Journalists and writers were promoting Barrie. Barrie received the award for entrepreneur of the year and many others. Barrie emphasizes when entrepreneurs win the first award, they will be on the roll to receive more. Barrie suggests entrepreneurs to apply for small awards, build up the momentum, and people will put them on the short list for future awards. When Barrie needed a speech, he posted the job on Freelancer.
The company was now full of teams. Barrie consolidated the industry by buy out many small competitors. He purposely selected small competitors because they are easy to tear and repair.
The company was now operating in many different currencies. Barrie hired international PR to help the company promote. He then launched a regional office in Vancouver. Barrie was inspired with the company because the value of company is changing people’s lives. Barrie managed to get Freelancer on IPO and the company is now worth 1 billion dollar.
Barrie acquired Warrior Forum. The website has a 60 second guarantee. The company is now working with NASA and currently it has 18 million users today.
Questions and Answers
As an entrepreneur, work excites Barrie. An advice for future entrepreneurs from Barrie is to work on the communication skill. The more define of what people want, the easier it gets. Maintaining communication comes from proper follow up. Barrie suggests entrepreneurs to build recruiter team.
Chris Koch mentions the finance team in Freelancer.com is the core support in the company. Finance team requires transparency and needs to be articular.
Barrie shares he makes mistakes all the time, but he will not make the same mistake twice. The biggest mistake he made is acquiring business in bad match. When business starts with the wrong people and the wrong culture, stress will appear. Entrepreneurs should always start business with interest. Barrie regrets he should of start business at earlier age.
Koch is proud of the core matrix in the company. He shares he is excited when he sees the change from people’s expression during the explanation of the company’s business model.
Barrie mentions the true reason for starting the company is because he was unemployed and he needed to create a job for himself. When a problem occurs, Barrie suggests entrepreneurs to learn the skills first and hire others who understand more to solve the problem. When the company is using A/B testing, entrepreneurs need to ensure the split is random and independent. Timing can change the result.
Barrie indicates US government does not like bitcoin concept. In business, Barrie does not like users to go through too much currency exchange. The company uses mix signals to analyze their rating system. The team will look at the history to measure performance. To mitigate fees from complex transactions, Koch opens over 100 different bank accounts. He will pay attention to different countries’ currency change and look for the lowest cost in the local country. The strategy is to build up the fund and transfer in one batch.
Barrie suggests young entrepreneurs to take as much risks as possible. Young entrepreneurs should work for a startup company for at least 2 years to understand the business policy and procedure before starting their own company. Young entrepreneurs should start talking to prospects to understand what they think and what they want. Barrie mentions 3D printing is the newest and fastest growing market.
Elon Musk is Barrie’s role model. He fascinates his vision and his work. When he is looking for partner, Barrie will look for people who have technology background and good at their industries. Barrie will hire people who are poor, hungry and highly driven. The candidates should take charge, have ambition and believe they can make a difference.
The revenue model for Freelancer.com is 10% commission. Users will get additional features when they upgrade their subscription. Barrie believes instead of monthly subscription, the conversion rate is better if users are in annually subscription. The profit margin is 88%, which is close to the average benchmark of the industry standard.
5 years from now, Freelancer.com will be considered the early stage of the new workforce for business. As a CEO, Barrie will delegate his tasks to the team. The final advice from Barrie for entrepreneurs is to find a way to measure everything because statistic will tell.
“CEO without technology background is good; but CEO with technology background will be better”
“You cannot improve if you cannot measure”