The role provided some invaluable insights into how entrepreneurs went about securing the funds they needed.
“You got to see what went through an entrepreneur’s and investor’s mind,” he says. “I realised that the fastest way to raise the valuation of a business was to ask for more money.
“VCs have a large amount of money to put to work. If you ask for $2 million or $4 million it’s not really worth their time. Ask for $10 million and they are more interested.
“You need to be very optimistic as an entrepreneur but you can’t get too carried away. You need a healthy dose of realism and you need to know how to work with your resources – never write code unless you need it and make sure you get more than $100 in value for $100 of your time.
“Investors will poke holes in your business. You can’t be naive about it.”
Searching for the right idea
In 2007 Barrie started scanning the market for inspiration for his own start-up.
“I was looking for businesses that were credible,” he says. “The first $1 million is the hardest to make. Once you get a business that is doing that you’ve jumped four years ahead of yourself.”
While doing some very boring”data entry work worth $2000, Barrie, in his frustration, posted the job on a little-known website that enabled it to be outsourced. It was completed within three days, inadvertently giving Barrie the business model he was seeking.
But he had to hurry. A rival had just raised $60 million in funding and had a considerable head start.
Barrie bought the website from a Swedish man who was overwhelmed by running 200 sites, renamed it Freelancer.com and started running the fledgling business from his garage with one employee.
With a few tweaks the site was pulling in so much traffic that it was crashing almost every day.
Barrie had to re-write the code after six months and the website was able to grow globally, with 40% of outsourced jobs now coming from the US compared to 5% from Australia.
Going global
“I realised that the online world was going to be teeming with this kind of activity – only one billion people in the world were online and a lot more people were connecting, more cheaply than in the West,” he says.
“The global labour markets are disrupting. If you make $10 a day you can make far more than that with outsourced work. We haven’t created this market, it’s the internet.
“We’ve just solved the problem for the entrepreneur in the west who needs a web designer and can get it for $1000, rather than pay $30,000. It’s very powerful for small businesses.”
Barrie dismisses the suggestion, occasionally aired by disgruntled designers, that Freelancer has commoditised good online work and driven down its value.
“We’ve actually created work so it’s a win-win on both sides,” he says.
“If you punch out a logo for $500 a time, well, those days are over. There are more than five billion people who can do the same as you. You can’t sell ice in the age of refrigerators. This is disrupting everything, from books to music. Everything.
“The global labour market has only just started to change. Seven years ago the cloud was in the sky and a tweet was something a bird did. We are all minnows in the space still.”
Be credible – “If you can’t get revenue, get customers. If you can’t get customers, speak to them and find out what they need.”
Be a pain killer and not a vitamin – “People won’t take a vitamin every day, but they will take a pain killer for their pain. Find something that solves a real problem for people.”
Practice your pitch – “Go to an investor that you don’t want anything from and ask them lots of questions. Refine your pitch and then, when you finally speak to the right investor, you’ll know what to say.”
Get connected – “Read industry websites. Go to networking events. Talk to other entrepreneurs. Know what’s going on.”
