Freshbooks is an internet startup that wants to make your invoicing suck less. The company was founded in 2004 and like typical startups, it hasn’t raised much in terms of Venture Capital. This approach has both advantages and disadvantages.

The unavailability of Venture finance avoided them from trying to get too many users too quickly and trying to generate buzz early and often. There are people who might advocate in favor of trying whatever trick there is in the book to generate buzz about your service, but we have seen it from the example of CUIL that it might not be the best move specially in entrenched markets.

So naturally FreshBooks was left with the only other viable option of growing slowly and organically, where each new user is a result of positive word of mouth generated by the existing users. This was good in many ways, firstly they didn’t have had to hire support and PR personals well in advance in anticipation of users coming in hordes. Secondly it allowed them to listen to the feedback of each and every user and there by tweaking FreshBooks tiny bit at a time to become as user friendly as possible.

Mike McDerment, the CEO  of FreshBooks has now shared with us the lessons of these early and painful days of building and growing the company. His style is interesting as he has mentioned the 7 mistakes which almost killed FreshBooks. If you are a startup founder out there you must read his blog post to find out about the mistakes that needs to be avoided.

Five of my favorite lessons are:

• Thinking we had to move faster than we did
• Thinking we had to spend more than we did
• Placing my faith in consultants
• Underestimating word of mouth
• Doubting ourselves too much

Disclosure: FreshBooks is a Startup Meme sponsor.