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Vodafone xone Innovators Series: Xero’s Anna Curzon on the power of ecosystems, jumping curves and Pokémon on The Strand

Ben Fahy: Now Anna, accounting software is not a phrase that would genuinely inspire a huge amount of enthusiasm or excitement. Xero on the other hand, is a company that’s creating a lot of excitement. How did that happen? What was the goal when you set out on this?

Anna Curzon: Yeah. It’s fascinating, isn’t it? I’ve never worked for a company like this. We’re in the business of creating beautiful software. Our purpose is much larger, of course, but people come up to me and say, ‘I love Xero.’ Wow, how powerful is that? Look, I think that’s because we have identified a real problem to be solved. 10 years ago, when Rod Drury, our founder, who owned many small businesses himself, was trying to get up to date accounting data, to be able to run his business and pivot his business, and make better decisions on a real time business, and he’s like, ‘Wow, this isn’t good enough. I’m getting these financial reports, and they’re old. I can’t make decisions on them. They’re rendered useless, so where can I find a software platform that will allow me to see my data in real time?’

And there wasn’t one. I guess the inception of Xero was born right there and right then where he identified the fact that, ‘Gosh, all this data sitting on a PC, not connected to anything, manually entered in, not so interesting,’ but when you can put data into the cloud for small businesses, and start to connect that data and look at it at an aggregate level, that becomes really fascinating. I think, too, what’s happened is, through that process, we’ve connected businesses, over 717,000 globally, and over a 1/3 of the market here in New Zealand, about 182,000, to each other, which has been fantastic.

What we’ve done is really built the pipes into the small business community, and that’s really important because prior to that, the small business community was hidden from sight. It was really underserved, and when you think about it, it’s crazy, because that’s 90 percent of businesses in OECD countries, and we owe a huge debt to small businesses and the people that they employ, and yet, they were seen as, ‘Gosh, how do we reach them all individually if I’m a bank? It’s very costly,’ and there was no way to really talk to them en masse, so what we’ve built with Xero is this amazing business platform for small businesses to run their businesses all through our ecosystem partners, but also for other enterprises, for banks, for government, also be able to plug into the small community and offer them better services.

Not just in New Zealand either. You’re a company now that’s valued at $2.4 billion, there or thereabouts …

Woo hoo.

… and 20 offices. When was the realisation that this was a company that had global potential?

From day one. I mean, when you make a decision to put your business into the cloud, there are no boundaries. Every business is a global business if it’s a cloud business, and so I think that was always Rod’s intention, that we would be able to support small businesses to thrive globally, but from that also look at economies and say, ‘Hey, we could actually rewire those economies for good if we get the small business one humming.’ 

That’s a pretty big goal, rewiring economies.

It’s a pretty audacious goal.

Creating an innovative culture within the business is a very important part of that. Google has its famous 20 percent rule, which is maybe more of an idea than a reality, but how do you create that? Can you force it? Does it come naturally? Does it come from naming rooms? We’re talking in the Lorde room. And there are other [Kiwi] innovators around.

I’m not going to try and sing for you, by the way. Not with the voice the way it is. Look, our innovation comes from our people and we have really clear values here at Xero, and being human is one of the core values. Beautiful is another one, and you see that in our software. It’s elegant, it’s functional, it’s forgiving, but being human is really important so we have a culture of meritocracy here and we have communication platforms setup to support that, and so from an innovation perspective, you could be the newest employee that’s being recruited into the office in Asia that we’ve just opened in Singapore. You might be 21 years old and you’ve got a fantastic idea. You can pop that on Yammer, copy in Rod, copy in whoever you want, create a discussion around it.

People can come and collaborate, and that’s there for everyone to see and build on, and so we understand that great ideas come from everyone and anyone, and there’s not a lot of hierarchy here, either. You’ll find that our C suite team and Rod in particular, our CEO, is constantly on Yammer giving feedback, asking questions, provoking thought, and that encourages us to do it, as well. I think it’s very much about the DNA.

He’s quite prolific on social media, as well.

Absolutely, he is. He is.

Disruption used to be a bad thing. Now, it’s something companies strive for. How important is it to move quickly in this environment? [We live in an era] of the fastest growing companies we’ve ever seen in history. Do you need to change your process of innovation? Do you need to release things into the wild, not fully formed, and test things and bring them back? How’s that changed?

I think there’s a number of components to that, and technology has helped us to move at pace. The cadence really is blistering, but it’s good, because it doesn’t feel like work. With a strong sense of purpose, it feels like we’re adding value every day, so I think for us, it’s really important that our product teams, who are really focused on agile practices, understand what the minimum viable product is. Really important that we constantly listen to our customers, as well. Whether that’s on social, whether that’s out visiting our partners, or our direct customers, getting their feedback on board, and then constantly feeding that into our development plans.

So nothing’s ever finished?

No. If you think about it, it’s like there’s no full stop. It’s just a series of commas. It’s a conversation, rather than a speech, to quote a Facebook-ism. You have this ongoing dialogue with your customers, and you’ve got to feed the metabolism of your online community and your social community, and so for us, being on Google Hangouts, for example, using Google, it means that if there’s an idea, I can jump on a Hangout with Trent Innes who’s the country manager in Australia, or Gary in the UK, anyone I need to, to make things happen. We’ve got a real culture of own it and deliver it, and make the decision and be empowered just to do it. If you own it, get it done, celebrate it, and collaborate, as well. Technology is a huge part of that.Innes who’s the country manager in Australia, or Gary in the UK, anyone I need to, to make things happen. We’ve got a real culture of own it and deliver it, and make the decision and be empowered just to do it. If you own it, get it done, celebrate it, and collaborate, as well. Technology is a huge part of that.

It has allowed a huge amount of collaboration, but increasingly companies are collaborating with each other, and even sometimes with their own competitors. Is that something you’ve had to adapt to, as well?

I think this is just the naturalization, I guess, and the broadest term of capitalism, and how we create value now. Gone are the days when you could own a vertical end to end, and have all the black box of secrets tucked way, and never share those with partners. Now, so much of success is about being part of an ecosystem, so you’ve got to understand what role you’re going to play in the ecosystem, what problem you’re going to solve, what friction you’re going to eliminate, who are your customers, and yes, partner with others. We can see that through the Xero ecosystem, with over 500 add-ons and we create these great experiences, but we know that our business was never going to be about the best eCommerce platform or point of sale platform, or farming solution. It’s about us being the business platform, if you like, and then having these amazing suite of experiences and service that integrate seamlessly into Xero.

We’ve got a reputation for invention in New Zealand, and in some ways, that might be romanticised, and in other ways, it’s well founded, but do you feel like Number 8 Wire is enough these days? What do we have to do to commercialise some of those ideas that we have?

Yeah. I think it’s good. In some ways, it’s still good for us to have a sense of naivety, that bloody-mindedness that Kiwis have, that, “Of course we can do this.”

No one would get into it if they knew what they were they getting into.

Exactly, exactly. Again, think about Rod ten years ago saying, ‘Yes, I’m going to create this global business, and we will rewire economies.’ What an audacious and amazing vision to have. I think yes, the Number 8 Wire mentality is still really important. Innovation is about creating, and invention, if you like. It’s about creating something completely new. Innovation is building off systems and ideas, and when I look at where innovation is coming from now and new sources of value in business, it really is within those ecosystems, so it really is tying together different points, and a system and creating experiences for customers with a core sense that you’re solving a problem. In isolation, I think it’s really hard to come up with a completely new idea.

If not impossible.

I don’t know. Are there any new ideas anymore?

Even if you look at Pokemon Go, which is a bit of a trend at the moment …

Oh, my lord. Are you playing that?

… No. No, I haven’t. I’m suspicious of things that take the world by storm.

They’re everywhere. They’re around this building, just quietly. Watch out. Apparently they’re over at The Strand.

If you look at the things that have been required for that to exist, it goes back a long way. Further than GPS, but the satellites that they need to track, to then, can the satellites track things on the Earth, to then, let’s put [GPS] on the phone, to now let’s collect monsters with augmented reality. It’s hard to find where those things came from, where they end and where they began.

Yeah, look, gaming will never be the same again. After Pokemon, it’s going to be fascinating to see how people do ideate off that concept from here on in, but look, I really agree. I think Apple spearheaded this when they created the idea of an app, because again, they knew that they weren’t ever going to be the best taxi company like Uber, or the best accommodation company like Airbnb, but they wanted to create a platform to allow those ideas to emerge and succeed, so I think it just goes back really, you’ve got an entrepreneurial mindset, rather than going, “What’s the next big idea? What’s the next big thing?,” look for friction, and look for problems to solve, and then look at connecting the dots, all the things that you’ve got at your disposal, to be able to solve that problem. For me, new value is becoming really about designing great experiences moving forward, and less about creating new tangible things.

One of the interesting things that Airbnb’s design director talked about was friction, where he wanted to create more friction, so you want people to meet each other, and they will then have a better experience.

Oh, that’s interesting.

If they don’t meet them, they don’t have as much appreciation for the house they’re staying in, or the stories involved in it, which I found quite interesting.

Yeah, that engagement.

There are a lot of people who came up with that idea to create a network where they would share their house. YouTube was another example where apparently 27 different video sharing platforms existed at the same time, but YouTube was the one that came on strong. Airbnb is the one that won. Uber, same deal. Is that a case of execution outweighing an idea?

I agree. 100 percent. Again, it is really about the experience you’re designing, and how can you make that so fit for purpose for the problem that you’re solving, that customers are going to buy your product, if you like, your virtual product, and your shelves are bare? I think if we look at Uber, like gosh, I saw it was a few months ago, it was valued at like $50 billion. Airbnb, $26 billion dollars. Really, the only assets they have are their apps and 10 years ago, trying to explain that to someone would have been really difficult. Sometimes it’s about timing, and it’s also the race to mass. You know, how many buyers and sellers, if you like, can you get on your platform the fastest?

How do you do that? Because one of the things around selling an idea is trying to spread that idea. How have you done that? I love the story of sliced bread, actually. People say it’s the best thing since sliced bread. But it took around 20 years for it to start becoming popular after a big company came on board and started seeing some potential. So what’s your secret?

I think if you’ve got a great idea, and a great product, you’ve really got to understand who your customer is, and where they are. I think from a marketing perspective, gone are the days where you go to your creative agency first and they come up with a fabulous idea, and then you go to your media agency and say, ‘Can you implement this TV commercial that we’ve just built?’ They go, ‘Oh, your customers aren’t there.’ You’ve really got to map out experiences, I think, and if you look at Xero, and again, people say, ‘We love Xero,’ that’s about a beautiful product but also a beautiful experience, and that’s got to permeate every touch point, so whether I’m on social, whether I meet a Xero – what we call a “person” from Xero – whether I see a bit of paid material, it’s got to be really consistent and just ooze the Xero culture.

I think the other thing, too, is our small business market is quite different to a lot of other markets, and so if you’re thinking about targeting the segment, it is always on. We don’t have lots of seasonal activity, so we rely heavily on the Google stack, the Adobe stack, Marketo, and we’re just learning ourselves, and I think understanding the impact of things like branded search. If you’re in the marketing gig, really got to get more articulate about understanding how these things interact.

Speaking of the impacts, automation is something that people are excited about, and in some cases, worried about, and Xero is part of that. It’s making things easier for a lot of people, but it’s also causing some concern that jobs may be at risk. Is that something that you are concerned about? Presumably not given you’re working for Xero, but do you see the worry there?

Quite the opposite. You know, it’s a great quote that I use frequently and often, by Marc Andreessen, who in 2011 said, “Software is eating the world.” What he meant was, technology is solving everyday problems now. It’s hard to identify, even the most traditional industry or business that isn’t using technology to solve a problem for their customer. If you think about that explosion and we’re seeing it here locally in New Zealand, I mean, ICT and SAAS, exports have doubled over the last few years. They contribute 9% of total exports, $6.3 billion, and yet, we’ve got jobs here and we can’t fill them. The technology sector is exploding, but we need to make sure that we’ve got a pipeline of talent to be able to fulfill these roles.

This isn’t a Xero thing. This is actually core to the economy because again, doesn’t matter if you’re in a bank or you’re starting up your own business from scratch, technology is going to play a core part in that. It’s not so much about the pie shrinking. It’s about the types of roles changing.

Many of which we won’t really know. We don’t know what the top 10 jobs will be 10 years.

No. Isn’t that exciting, though?

I think it’s quite an interesting exercise to figure it out. Even with the previous industrial revolutions, jobs were cut, but new jobs were found, because time was opened up. I guess that’s the lure of technology: it will create those opportunities, but it can also be used the other way, too, to ‘create efficiencies’, as the press release euphemism sometimes goes when there are job cuts. But I find it amazing that dairy exports will be overtaken by tech exports in around 3 years, judging from current estimates. Do you feel as though that’s something that New Zealanders in general don’t know? Do they know how big the sector is, and how quickly it’s growing?

It’s hard isn’t it? Because technology has permeated our lives, and there hasn’t been this massive tipping point that’s gone past us. ‘Oh, technology has arrived.’ The tide has got higher and higher and higher, and we’re now at a point where we need to start socializing this data so we can make rational decisions, pragmatic decisions for the country. If you look at how important technology is and the fact it’s going to overtake dairy in the next few years, surely – and our founder, Rod Drury, has talked about this many times – we need a technology plan. We need public and private sector working together to say, ‘Hey, where do we want to be? What are the unique things about this country that we could really home in on to help our kids have the best careers’?

Could we possibly be a smaller, less brash, Silicon Valley? A little hub of technology and innovation in New Zealand. Is that on the cards?

Absolutely. Absolutely. Why couldn’t we? I mean, again, with some of the unique things we’ve got about living in this really precious country is that it’s small enough that we can trial things, and give things a nudge, experiment, and I think, again, if we put some markers in the sand to prepare for the 3 years and the 5 years ahead and said, ‘Gosh, we want to have the most digitally literate kids as a percentage of population in the world’, what would that look like? That would be amazing, because we know that the demand is going to be insatiable for these jobs, and so again, if we’re doing that, we’re setting our kids up for the best chance of success, if we’re building the small businesses within the economy, that means better hospitals, better schools, a healthier, wealthier, happier New Zealand.

We can’t leave it to chance, because it’s more important than that, and as a business, we would never do that, so as a government, you’ve got to ask the question, ‘Why wouldn’t we have a vision and a plan for New Zealand?’

Is that what keeps you going?


As a company perhaps, but personally, as a woman who’s been involved with a lot of innovative companies like Spark and ASB, what’s your driving purpose?

Well, it’s interesting. I did a bit of work on personal purpose a few years ago, and it frustrated me. I was at a café one day, and it just popped into my head, in terms of what really keeps me awake at night, gives me energy, what do I want to pour gas on? What came out was, for me it’s about using technology to democratise success, and what I mean by that is, technology takes away all those silly boundaries that used to exist before in terms of geography, or ethnicity, or gender. You can have access to the tools, the information, the advice that only the biggest enterprises had once upon a time.

Personally, if you’re a kid that lives in a rural part of New Zealand, you can have the same level of access to information, to learn how to code online, whatever it is that you’re really passionate about. If we can give kids access to that, we’re setting them up for the best chance of success. It’s about that old Kiwi-ism, giving people a fair suck of the sav. Technology allows that to happen, and that’s what I’m really passionate about.

So what’s next, Anna?

What’s next? This is really the end of the beginning, if you like. I heard Rod say that the other day, and it’s so true, because we started out to create this beautiful accounting platform, and we’ve achieved that, and we’ve got 450 million transactions going through our platform globally now, and it’s a trillion dollars worth of transactions. It’s huge. For us now, it’s about jumping curves again. It’s about 10x-ing, and what that tangibly means is, thinking about cloud 2.0, and that’s really getting our platform onto the AWS platform, so I’m going to get a bit geeky here for a minute.

What that means is, and we’ve been working on this for the last three years, we’ll be able to introduce things in an affordable, and accessible way for our small business customers, like machine learning, and artificial intelligence. While you’re asleep, we’re doing all the work for you. You wake up, and your Apple Watch tells you, ‘Hey, I’ve paid Ben. I’ve sent a reminder to Sarah because she hasn’t paid her invoice yet and it’s 10 days overdue. I’ve put some time in your diary to call her, and Jimmy’s 90 day trial period is nearly up. Make sure you go and review his performance.’ Starting to think again about rewiring the economy, making things more simple and easy for our customers, also working with the likes of government, with the banks, to better ways for more affordable lending, capital and cash flow, and also the big enterprises, helping them with their supply chains, so they can access the small business market. Why would you send out a paper-based bill anymore? Why wouldn’t you send it directly through the Xero platform? Really, the next wave is super, super exciting. We’ve invested heavily into the next wave of innovation, and we can’t wait to see the impact that it’s going to make on the small business economy.

Thank you, Anna.

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