One of New Zealand’s biggest startup success stories, Xero reached the million-subscriber milestone after seeing subscriber numbers double in under two years.
Naturally, that has Drury pretty excited. “Five-and-a-half years ago, at 50,000 subscribers, we asked shareholders to imagine our business at a million subscribers,” he says. “We invested for the long term to build a business and ecosystem to achieve those numbers. It’s very satisfying to deliver on that promise.”
The company added about 300,000 subscribers just last year, he says. “Starting around ten years ago with our first lines of code, it’s amazing to see the global community who have built businesses on our platform. We thank our accounting and bookkeeping partners, small businesses customers, our Xero people and investors who have been cloud pioneers, reinventing how small businesses work in a digitally connected world.”
But the company certainly doesn’t intend to rest on its laurels, says Drury – not with the fact it’s processed more than $1.2 trillion in the past year and is on track for $1 billion in revenue, and subscribers in more than 180 countries. “Only a global platform – on a single global code base like Xero – can offer the opportunity for small businesses and their advisors to expand their businesses offshore, connect to banks in multiple countries and use Xero’s technology and payment partnerships with Google, Apple, Square, Paypal, Stripe and others to do business seamlessly all over the world,” he says. “It sets in motion a global network effect as small businesses expand their trade between countries. Many of the 100,000 business advisors who work with their clients on Xero have small businesses that import or export. The increasingly global nature of small business means that, like Airbnb, Amazon, and Facebook, accounting platforms must also be global.”
Increasing diversity and fighting for equality
Aside from surpassing the one million subscriber mark (all the more impressive considering Drury says he believes there’s only about three million businesses worldwide at the moment that use cloud accounting software), the Wellington-based company is also touting another achievement: the increased gender diversity of its workforce and growing female representation.
On Wednesday (29 March), Drury tweeted that 42 percent of Xero grads in 2017 are female. It’s a stat he’s particularly proud of. “We think about diversity in all things,” he says. “We’re putting our money where our mouth is.”
It’s also something echoed by Xero managing director Anna Curzon. Speaking to Idealog for International Women’s Day earlier in March, she praised the company’s efforts at changing the dialogue and working towards greater representation and equality not just internally, but in the wider community as well. “What I love is that there is a big audacious purpose and intent behind what we do at Xero. There aren’t many organisations that have the audacity and passion to go out there and attempt to change not just an industry, but rewire entire economies for the greater good. I love working with amazing people every day who share this intent.”
Check out an earlier interview with Anna Curzon:
But more can be done, she said.
"It’s shocking to think that, until just a few weeks ago, there wasn’t a single female CEO in the NZX50 (Kate McKenzie started as CEO of Chorus took up her role on February 20).
“It is an indictment and it isn’t good enough. We need to address why this happening and rather than just talk about it, make change. There is more than enough evidence and research available to show that diversity in leadership teams and boards drive better outcomes and performance of the business. In fact, it is negligent if the boards and management of NZX-listed companies do not have a plan to address diversity on their teams.
"In my experience, change is CEO-led. They set examples in the decisions they make every day. Diversity can’t just be a policy written on a document stowed away in a folder somewhere, and dusted off when the next Diversity Awards come around. A focus on diversity needs to filter down through the business from the top down, so that it’s palpable within the culture of the company.
"The most important thing, yet possibly the hardest to address, is everyday unconscious bias in those making decisions within a business. Often people don’t even realise it’s happening, but those that do need to keep on noticing it and confront it. It’s important to remember though, that in most cases there isn’t a direct intent to discriminate. Sometimes being called out on it is enough to wake someone from their unconscious bias; other times, it’s not. But keep on pointing out when diverse thinking is not being respected, because people and businesses cannot continue operating in this way. It’s bad business!
"Another way to promote greater equality is for people in the business to focus on building a pipeline of talent within their team. Once you’ve identified someone with talent, ambition, and promise, build them and train with opportunities to grow beyond their role and into something more senior. The statistics for the number of women in senior executive roles is terrible. We need to build up, support, and encourage people with potential in business to build out that pipeline. Of course, we also need to fight against some of the natural and unconscious biases that occur when recruiters go into the selection process.
"In the end, diversity within a business allows for different perspectives and vigorous decision-making, effective risk management, and higher achievements by, and within, the company."
Emphasis on AI and machine learning
With artificial intelligence (AI) and machine learning set to become ever-more-important, there’s an increasing focus at Xero on embracing these technologies and their potential. The company recently completed its migration to Amazon Web Services, consolidating the platform on a powerful set of technologies that help unlock the power of its vast network of connections and data. Xero’s machine learning system can now code invoices for small businesses, categorise expenses and recommend accounting practices to a potential client, automating the busy work of accounting, freeing advisors up to focus on providing clients with expert advice.
“Machine learning and automation will open up the next phase of innovation in accounting, driving a transition in the industry bigger than the move to the cloud did ten years ago,” says Drury. “With technology doing more of the time-consuming, data entry work, we will see more accountants take on advisory and virtual CFO roles within the small businesses they support. Rather than just keying in data, they’re interpreting the output – and with the power of machine learning, they’ll provide higher level advisory services that help clients feel in control of their finances which is a key human function that cannot be replaced.”
And although the cloud accounting industry is very “new,” Drury says it’s vital to embrace new technologies in order to stay ahead and not lose an edge. “Xero has evolved from the market challenger into one of the leading global cloud accounting platforms,” he says. “The first challenger to surpass one million subscribers is a significant milestone for cloud accounting and validation for an industry which didn’t exist a decade ago. Together with our accounting partners and small business owners, we’re so excited to lead the industry innovation charge.”