Matt Barrie of Freelancer.com: Five Strategies I Used To Grow My Business To Reach Seven Figures In Revenue

An Interview With Doug Brown

The only way to grow a business is to hire the smartest people you can possibly find and delegate to them and take the cognitive overhead off you.

As a part of my series called “Five Strategies I Used To Grow My Business To Reach Seven Figures In Revenue”, I had the pleasure of interviewing Matt Barrie.

Matt Barrie is an award winning technology entrepreneur and Chief Executive of ASX listed Freelancer Limited. Twelve-time Webby award-winning Freelancer.com is the world’s largest freelancing and crowdsourcing marketplace by total number of users and jobs posted.

Matt is also Chief Executive of Escrow.com, a world leader in secure online payments with over US$4.0b in transactions secured.

Matt was Adjunct Associate Professor in Electrical and Information Engineering at the University of Sydney for 15 years. He is the co-author of over 20 US patent applications.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you.

I was born in Adelaide, South Australia, but essentially grew up in Sydney. I went to school there and Sydney University where I got a couple of degrees, and later taught as an adjunct associate professor. I did a post-graduate degree at Stanford. You can find all this on Wikipedia, actually you can find it in my biography on the Freelancer site. If you want to know what I think about the world you should follow me on Twitter.

Can you tell us a story about what brought you to this specific career path?

In 2008 I had just left my last company, which was a network security company.

It wasn’t one of those businesses that really set the world on fire. It was doing about two and half million in revenue at the time, it had about 70 employees around the world, headquartered in Palo Alto and offices in Sydney, Beijing, London. But I got to a point where I decided to leave because the VCs were fighting with each other or they were fighting with me. Ultimately the company sold to Intel, but just before that happened, I decided it was time to do something new.

But that made it very hard to go back to all the smart people I knew, who were working in my previous company, or in the industry and say, “Hey, let’s, let’s do a new venture!” That’s why I went down the entrepreneurial path of starting my own businesses.

I was thinking of all these different ideas for web based companies because I had come out of a hardware product company and I had no desire to build hardware again because of the complexities around it; not only do you have to build the product, but you have to manage the inventory and stock levels — if you don’t have the product, you can’t sell it. If you have too much of the product and depreciates too quickly, and the pricing changes — it’s just a nightmare, so I thought I would do something in software.

I was taking some time to look at what sort of things I could do by myself when my mother, who had a business importing arts, crafts, textiles, glues paints, etc, asked me to build her a website.

I didn’t realize that part of the problem was that she had 10,000 products with no descriptions and poor photos. It became this massive data entry exercise.

I was trying to fill in spreadsheets with information — the name of shops, then the address, the phone number, the URL, and so forth.

I thought this would be a great little job that a brother or sister of a friend of mine would love to do. I needed to start off with a thousand rows filled in the spreadsheet, and offered to pay $2 per row. That’s $2,000. I would have loved to have a job like this in the early days of university.

But it was the most frustrating experience ever. It was not a job I could post on a job board anywhere, it wasn’t a full-time job, it wasn’t a contract job, it didn’t pay a lot of money, and these kids told me the job was too boring to do. Of course it’s boring, that’s why I’m paying you to do the job. If it was exciting, I’d do it myself!

I went to the internet and I searched for “cheap data entry” or “data entry online” and I stumbled across this website called Get A Freelancer. The site looked terrible, like Craigslist only worse. It was all gray colors and could’ve been built by someone who lived in a Soviet-era, utilitarian block, in Ukraine, but it had a hive activity all over it.

I posted the job, put a budget of $2,000 and I went to lunch and completely forgot about it. I came back about three hours later and I had 74 emails saying, “I’ll do it for two thousand…” “…one thousand”, “…five hundred”, “…400”, “…300”, “…200”. It was clear a lot of the bidders were coming from emerging markets. At the time 5 billion people on the planet lived on less than $10 a day. So it wasn’t that much work in terms of what had to be done, just fill in some basic details, and for many parts of the world, they’d be happy to do it for a hundred dollars. I hired a team in Vietnam, the job was done in three days and it was perfect.

And that is when my mind truly exploded.

This is incredible. This is like an eBay for jobs, it’s a marketplace for services. Obviously there’s a marketplace for products and today we have some of the largest companies in the world by market capitalization, Alibaba, eBay, and Amazon. This was potentially a massive category that at the time I hadn’t heard of anyone in the space, so I started my own website called bidded-out.com and I used freelancers on Get A Freelancer to clone Get A Freelancer.

Competitive research revealed that there were actually dozens of little companies out there trying to do this. If there’s a dozen or so companies out there, no one wants to fund me to be number 13. It was also clear I could buy a couple of these websites for a smaller amount than the money I was going to need to start from zero. So I decided I need to buy rather than build. I figured out which website I wanted to buy and I ended up on Get A Freelancer because it had more traffic than the others and had the best SEO strategy.

Can you share the most interesting story that happened to you since you began at your company?

I started experimenting with the site. I asked the users where they thought the issues were, what needs to be fixed, and every time I fixed the bugs it improved.

One of the very, very first things I did was change the graphics. It looked terrible. If you go with a way back machine you can see how bad it looked. I got a friend of mine to provide a skin for the site and I implemented it. It looks pretty primitive in hindsight, but the day I turned on the new skin, the revenue doubled instantly — forever.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Anyone can hold a rudder when the sea is calm, but when the storm hits is when you learn how to sail.

After walking out of the semiconductor business people said it’s a great learning experience, and certainly it is. I realized I was fundamentally unemployable because of my track record and I needed to do my own thing. Then I stumbled across this incredible resource, which allowed me to solve a problem I had, which was being too embarrassed to ask the investors I knew to back me.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. We’d love to learn a bit about your company. What is the pain point that your company is helping to address?

It’s about enabling people to change their life through access to an online jobs marketplace.

There are billions of people in the world all struggling to get ahead and most have a skill that offers value to someone else. But those people may be on the opposite sides of the globe, how do you bring them together for mutual benefit? You put them on this services marketplace called Freelancer.

What do you think makes your company stand out? Can you share a story?

Freelancer is similar to a country. There are 50 million people there. In terms of GDP we would rank about 181 out of 197 countries of the world. We have a labor force that works, an economy, we make decisions on a daily basis such as “Do we lift a minimum wage here?”. There’s a financial system. There’s a dispute resolution system of arbitration by a community. It’s basically a highly intelligent marketplace of 50 million active people and you’ve got to be very, very careful about changes you make. Things can adapt very quickly to changes you make. Just think about every time the government of any country makes a law trying to implement something, and then they get unintended consequences. So we have to be very, very careful. It’s not like you’re selling books or CDs. You can optimize on one side of the funnel, the books don’t optimize on the other. That’s why it’s good to get a lot of people aware of how it works, get a feeling for it, because it’s effectively trying to manage the economy of a country.

When you first started the business, what drove you, what was your primary motivation?

So when you walk out of a business that didn’t really set the world on fire. You get asked constantly by friends, family, and in business settings “By the way, what happened to the last business?” and it just grates on you mentally. People might not realize they ask you that question, but after a while, it’s like, ask me any other question, please!

And the other thing was when you do look at a business like that, you’ve been trying so hard to make it work, there’s a bit of reality distortion going on. In hindsight, I know, I know exactly what I should’ve done to be successful.

What drives you now? Is it the same? Did it change? Can you explain what you mean?

It’s been 12 years, but we’ve only just started. I have this feeling, this belief, that our time is coming. The changes to the nature of work, the way Fortune 500 companies are more willing to accommodate remote work and embrace freelancing, and the desire in people around the world to trust themselves, to back themselves and strike out on their own, means the services marketplace is about to explode.

Are you working on any exciting new projects now? How do you think that will help people?

We’re always striving to improve the platform, to improve the experience for the users, so we have multiple projects running. Many of them are technical, but it goes back to my original strategy — ask the user what needs fixing and work out what needs to be fixed next. It’s a never ending process.

The topic of this series is ‘Five Strategies I Used To Grow My Business To Reach Seven Figures In Revenue’. Congratulations! Seven figures is really a huge milestone. In your experience what was the most difficult part of being able to hit your first million-dollars in sales revenue?

It was already doing a million in revenue when I bought it, it was doing 1.1 million in revenue. That was incredible. It was about the 5,000th best website in the world at the time, had a half a million users I was doing about a million dollars in revenue and it was slightly profitable. But how do you make the next million?

I had a pathological focus on asking the customers what to fix — and fixing those bugs. If you do this month on month on month on month, and if you have 8% growth in the revenue each month for 12 months, you’ll double your revenue each year.

If you have six things in a core funnel, and you improve each by 15%, you double your revenue. So it’s a matter of constantly fixing, fixing, fixing, fixing, fixing the most important things and, and having focus.

And all of a sudden it was doing 2 million in revenue. So I could use that to start hiring special people in the real world and to do customer support and to help me do programming and it grew and grew from there.

Here is the main question of our interview. What are your “Five Strategies I Used To Grow My Business To Reach Seven Figures In Revenue”. Please share a story or an example for each.

Listen to your customers.

The strategy I used in the early days was to ask the customers what to fix and then figure out what to fix next based on what you think will have the biggest impact on revenue and be simple to implement.

Originally I didn’t have a formalized method for doing that. I simply got up some analytics of all the key metrics on the site — there was no AB testing done. No one was really talking about AB testing back in 2009. — It was just simply eye-balling changes on graphs as I fixed bugs. I could tell if I stuffed something up pretty quickly, because I got a feeling for the shape of these graphs, and this is not rigorous analysis, but simply I would push code, usually editing the code live in production, eyeball some graphs in the next 24 hours trying to determine if I’d stuffed something up, or if it was better. If it was better, I just kept going.

Nowadays we formalize that at Freelancer. We use a methodology that Sean Ellis has pioneered from growth hackers.com. He’s the godfather of growth hacking. It’s called an ICE score. You get your backlog. You rank it all in terms of I, C and E.

I is impact out of 10 that you think it will have in terms of revenue. C is the confidence you have out of 10 that that’s successful and E is the engineering effort where 10 is easiest and one is hardest. You add all the numbers up and you get a way of ranking what you should work on. So that’s the second thing; have a plan for getting better.

Third thing — Back when we started the traditional model for a software based business was to go raise $5 million in “series A” investment and hire a lot of people and a lot of infrastructure. I didn’t raise a single cent for operating capital. I raised $USD2.5 million and it was just purely to buy the website and fix it up, fix it up, fix it up and IPO it four years later.

It opened at $USD1.1 billion market capitalization, which I think is one of the better uses of capital in the technology industry, as opposed to the Uber model of raise, raise, raise, and just pump that revenue line forever and dilute the equity holders. I managed to do it with one single fundraising.

Be transparent with staff about the business. In terms of reporting, we’ve built a dashboard where we’ve got well over 40,000 graphs being updated in real time. Anything you need to know about the business is there. Everyone has access to that. So you can be a low level engineer or you could be a product manager or in the communications team and you want to look something up, it’s all there.

A lot of businesses staff don’t even know what the revenue is like or whether things are going downhill, no clue, no idea how the business is going, and sometimes they get blindsided. If you’re transparent it gives them some power to actually get things done and implement their own strategies and look at the data to build assumptions.

The only way to grow a business is to hire the smartest people you can possibly find and delegate to them and take the cognitive overhead off you.

You know when someone’s doing a really good job, because you can just leave them alone. I just let them do whatever they do and once in a while they tell me what they’re doing and that’s great. I never really never interfere with anything they say, I always trust what they do because they get results, a consistent track record of results.

Wonderful. We are nearly done. Here are the final “meaty” questions of our discussion. You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

It’s what we do every day at Freelancer. Freelancer changes lives. By enabling people to get work they wouldn’t otherwise have been to access, by helping someone turn their passion into their profession, by helping someone add income so they can get to spend more time with their kids, we are changing lives.

We’re heading to having posted 20 million jobs on the platform. Our goal is one billion jobs.

We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them :-)

Right now and it has nothing to do with running the business, it’s probably Eric Sprott to talk about the silver market. I think it’s interesting to see what’s happening in the world with all central banks going crazy with money printing.

I think a lot of the things you’re seeing right now with social unrest, the world really tracks back to 1971 when they removed the us dollar from the gold standard. Now I’ve got a general feeling that central banks have, and particularly in the US, have realized that the debt situation in the US is mathematically unsolvable, so we might as well just print money, like crazy because it wins the politicians quite a few favors with the general populace.

At some point there’s gonna have to be a reset of some sort to try and bring sound money back. They’re gonna have to do it with precious metals. It’s not going to be with crypto. I can tell you that much. I was an adjunct professor of cryptography for 14 years at University of Sydney. I know the technology very, very, very well. There’s no way that central banks will let go of the money supply, so it’s going to come back to sound money, and right now there’s a whole question around what actually is happening in the precious metals markets, in particular silver there’s discussion about price suppression.

Eric’s probably been in the business longer than anyone else and I just think he’d be great to have a conversation with at the moment.

Thank you so much for this. This was very inspirational, and we wish you only continued success!