Xero Founder Rod Drury On Accounting And Artificial Intelligence

xero founder

After eight years at Capital One, working to make small business banking better, I realized there was more I could do from outside the bank. The switch to a technology company like Xero felt natural because I’m continuing to support entrepreneurs and business owners — from a different perspective. Xero is a launch sponsor of our new publication, Get Shift Done, which provides tips and management advice for the modern workforce. “If you are building a cannabis smuggling operation you are probably not going to record all your transactions in cloud accounting software. Drury sees an opportunity to bring the good reputation of chartered accountants into the “lending equation” for small businesses through certifying real time financial data.

After all, Xero started in New Zealand, rocked Australia and the UK’s accounting industry, and is slowly, but surely breaking into the U.S. market. Other companies, like Fathom, Receipt Bank, and Stitch Labs, have seen the potential within Xero and fortuitously seized their opportunities. TCV GP David Yuan recently had a chance to chat with Rod Drury, Founder of Xero, about his take on building a business from the region.

Key Resources From Our Interview With Rod Drury

He has worked in roles across a range of sectors in Australia, the UK, the US and Canada. Before joining Xero, he was the chief commercial officer at REA Group. Joseph is a member of the Institute of Company of Directors in Australia, and has a Bachelor of Management focused on marketing from University of South Australia. Chaman leads Xero’s legal, government relations and governance functions globally and has more than 20 years’ experience in legal operations, strategy, compliance, governance and risk management. She has previously worked as group general counsel and company secretary for Envato and Lonely Planet Publications. Chaman is dual-qualified in Australia and the US, and is a graduate of the Australian Institute of Company Directors.

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Toro Taxes, LMS Tax & Insurance Solutions and JPG Select Xero.

Posted: Mon, 25 Oct 2021 07:00:00 GMT [source]

“Some would say [he’s] an authoritarian, but he had a really clear vision and took people along on a journey that really drove an outcome,” he says. Credit Suisse once called it the “Apple of accounting” and Drury was introduced to the crowd at XeroCon in Brisbane last year as a person who was “doing for accounting what Steve Jobs did for the phone”. Drury says Xero has given new confidence to New Zealand startups and investors that it’s okay to “play the long game”. This post-Xero crop of startups are different from previous generations, Clare says, because they have tangible sales backing up their business. “What it has done is help support a strong technology investment story in Wellington, and to a lesser extent Auckland.” “And that was a real, ‘a-ha’ moment for us. We realised that we had a pathway to do something that was really good… Working with those customers, we could educate them.” There was a collective acknowledgement that small businesses also needed to create jobs to make a real impact on youth unemployment.

The Xero Ecosystem

Xero is a New Zealand-based software company that develops cloud-based accounting software for small and medium-sized businesses. Prior to his time at Microsoft, he served as managing director of Apple Computer Australia and New Zealand, and in various executive and professional roles at IBM between 1974 and 1994. Between 1998 and 2002, Vamos also led the growth and development of an online media business in his role as CEO of Ninemsn, a joint venture between Microsoft and former xero founder Australian media company Publishing and Broadcasting Limited. Speaking with ZDNet in September, Drury said his company was evolving from an online accounting software firm into a global small business platform. Gary is responsible for leading Xero’s operations across the UK, Europe, the Middle East and Africa. He has more than 20 years’ experience in the UK’s accounting software industry, and before joining Xero, he was the product group director for Microsoft Dynamics.

Can Xero be used in Germany?

The problem: XERO is not certified for the German market

Xero data and evaluations do not meet the German standards for generally accepted accounting principles. Xero data can not be transferred over an ELSTER interface (Elektronische Steuererklärung = electronic tax return) to the German tax authorities the data.

Xero brought in experts to create an education pack for its client base. The company was armed with ready information to teach small businesses how to find young workers, how to manage them, what the rules are on wages and probation periods — all to help them take on more young people. Thiel is recognised for his business acumen and has some deep and fascinating philosophical views on society and history, but he has lately become a divisive figure in Silicon Valley, mainly for his political views. He has financially supported Republican candidates at various elections, and wrote a book in the 1990s that railed against political correctness. “We’re really proud that they are enthusiastic about our business, understand what we’re doing and that they want to help us,” Drury said at the time. Winkler had indeed made more than six times his initial investment by the time he sold off $NZ15 million of shares in November 2012.

How Rod Drury Built Xero From A ‘small Set Of Rocks In The South Pacific’ Into A Global Player

He currently leads the team at Foundr as their Chief Executive Officer. You know, so we’ve had, even at the border level, we’ve had on our third chairman, because, you know, going from a start-up to New Zealand scaling company to a global company are all three quite distinct phases. So, even at the board level, we’ve been active around keeping refreshing the board so it’s always got the appropriate talent for the stage of life of the business, and I think doing that around out leadership team as well. You’ve thought about the risk, and I think also, you know, I had a pretty strong track record. You know, I’d done a few really good things before and had been seen to be successful before. So, for early entrepreneurs, I think you treat entrepreneurship as a series of baby steps.

THE UNTOLD STORY: How Xero took a band name and changed accounting for a million companies – Business Insider

THE UNTOLD STORY: How Xero took a band name and changed accounting for a million companies.

Posted: Tue, 12 Sep 2017 07:00:00 GMT [source]

People aren’t overly familiar with public companies making losses over the longterm as they chase growth, especially in Australia and New Zealand. “We’re really on that tightrope between using cash to grow and being a loss-making public company,” he said.

Interview With Xero Founder Rod Drury

Drury got started leading software teams for the accounting firm Ernst & Young, doing “internal entrepreneurship,” meaning he carved out what he wanted to do in his job. When he left the firm in the mid-1990s, it was a key moment in the rise of tech companies. The cloud accounting firm cum small business platform has made four major product announcements at Xerocon, including a program to help individuals actively re-skill for a tech-savvy future.

xero founder

This week it is hosting 3000 customers at its annual event, XeroCon, in Melbourne. When Xero was planning to list on New Zealand’s stock exchange through its initial public offering ten years ago, there was a gag in Kiwi financial circles about the company which said it aimed to upend the accounting industry. Damien leads Xero’s global strategy, corporate development teams, partnerships and ecosystem teams.

From Xero To Hero

And with its ambition, it scales up its team, the other key component. Drury is a huge believer in the importance of building a solid team, not just one that is skilled, but also highly diverse. From the very beginning, the company has had a strong vision, led by Drury. He’s always had a knack for telling his company’s story—a key entrepreneurial skill that he sees as something you either have or you don’t. That ability has helped him fundraise and grow the company, but also to lead by example. For Drury, the key to success at Xero has been largely about two main factors—a strong, enthusiastic vision, and a skilled, diverse team.

Small business is something that is close to my heart, and being a part of a company that shares my personal mission is both compelling and inspiring to me every day. Xero’s mission is to rewire the global economy, connecting millions of businesses to their banks, advisors and each other. In a nutshell, Xero wants to connect a small business’s financial world, on their terms, to empower and fuel entrepreneurialism around the country and the globe. “We’re proud to support these organizations that align with our purpose – to improve the lives of people in small businesses, their advisors and communities all around the world. Xero’s lead investors includes Accel Partners, Matrix Capital Management, MYOB, TCV, Valar Ventures and others. The company has raised a total of $681.4M in funding.Xero went public on Jun 15, 2007. Xero was founded in a Wellington studio apartment in 2006 by Rod Drury and Hamish Edwards.

They were in enough contact that Drury invited him along to his lavish 40th birthday party, where he was celebrating not just the life milestone but a recent business success. In 1999, straight out of university, he had worked at Glazier Systems, a software development and consulting company founded by Drury. At first, Walker didn’t have much to do with the boss, but that all changed in his second year. The company started in an apartment with a ramshackle solution for accessing wifi from a nearby café.

But he also understood that starting up an accounting software company required a huge investment—something he didn’t have. So he put the idea on hold and started an e-mail archiving company called AfterMail. After two years, he sold it to Quest Software, giving Drury and Edwards the war chest to do Xero properly. We had a great person, Wayne, who was our sort of startup, sort of founder in the Australian market, and I think once we got to 5,000 customers, we were able to attract a guy called Chris Ridd, who was a senior Microsoft exec.

Rod and his team have created and scaled a massive SaaS platform for small businesses around the world that’s made Xero the largest tech company coming out of New Zealand. You wanna sort of think big and then like, keep it to a horizon that people can actually, can feasibly see, and then celebrate the steps of success and that starts to build the sort of confidence that hey, we can actually do anything we wanna do. “We’re moving away from the software to actually being a business platform that accountants and bookkeepers can run their practices on to make small business customers more productive.” The evolution of accounting software to the cloud has been a seismic shift in the industry. Xero has stayed ahead of the curve and their competitors because of its culture of continuous innovation, building incremental value to the whole ecosystem, and always being centred around the needs of the Xero community.

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In a matter of a mere eight years, Xero has managed to create and foster an “ecosystem” of numerous groups of successful software developers, over 200,000 small business owners, and thousands of advisors – all over the world. Xero not only offers a revolutionary accounting software, but also encourages an active global community of developers, customers, and business advisors to create this ecosystem of software solutions.

Drury will remain with the company as a non-executive chair and will continue his focus on innovation and strategy when Vamos takes the chief role officially next month. Xero CEO Rod Drury has announced he will be stepping down from the chief executive position at the company he founded 11 years ago. This stock story shows the value of studying, understanding and trusting the visionaries behind the innovative companies with big ideas. This has been so effective that most accounting firms are ‘Xero only’ accounting firms.

Xero is a suite of online accounting software for small businesses, accountants, and bookkeepers. Xero’s innovation extended beyond accounting software—it was also funded in a unique way. In New Zealand at the time, the biggest VC deal was about two million dollars. Perhaps not surprising given the size of the country (which Drury calls “a small set of rocks in the South Pacific”) but Drury needed more than that. Having started life supported by a thousand retail investors, the company would later take money from some surprising backers, including the founder of a competing company. Rod Drury was a board member of TradeMe at the time, but he was also busy doing the sums to try to get Xero off the ground. He figured he would need $NZ17 million to sustain a business with close to 50 staff – for three years to develop the accounting software into a commercially viable product.

Who owns QuickBooks?

QuickBooks and Quicken are financial management tools owned by Intuit and H.I.G. Capital, respectively. QuickBooks is a full-featured business and management suite with all the tools that a small business would need, but it’s also costlier.

“So every morning… the first thing was to hang the rod out over Willis Street, otherwise, we wouldn’t have any internet for that day.” With not much funds, renting a residential flat wasn’t the only penny-pinching measure in the early days. Catherine Walker, when she first started working at apartment 404, was alarmed by the ferocity of the debates between her husband and Drury. “I think we were legally working there. I’m not entirely sure whether you were allowed to start a business out of an apartment.”

  • “Over more recent years, the whole concept of equality’s become a big deal here. Politically, it’s a different time, it doesn’t play out as well, but my view is these people add a huge amount of value to New Zealand,” he says.
  • Steve led the growth of online media business Ninemsn from start-up to industry leader as the company’s CEO.
  • The company started in an apartment with a ramshackle solution for accessing wifi from a nearby café.
  • In November 2017, he sold $95 million worth of shares in Xero, leaving him with a 13 per cent holding in the company.
  • For Walker, having an understanding of diversity at Xero is essential to walking in the shoes of their customers – small businesses.
  • “I’d been watching him a while closely, and I saw MYOB was moving down the private equity route. When it had all those private equity people come into it , Craig got moved to chief innovation officer, then left.”

It acquired its domain name by flying a fan of a US metal rap band out to New Zealand. Along the way it secured backing from the co-founder of an arch-rival company, as well as from one of Silicon Valley’s most controversial entrepreneurs. Joseph was appointed managing director in July 2021, after joining Xero as executive general manager of sales in 2019. Joseph is responsible for driving Xero’s next phase of growth in Australia and Asia.

xero founder

In our qualitative assessment, Rod Drury has built Xero to be a global business with an enormous moat via network effect. Drury knew this and went about listing Xero in New Zealand very early so that he could access public funding.

  • Walker had long moved on from Glazier and VIATX, and he had a good portfolio of small business customers that kept him busy.
  • When he left the firm in the mid-1990s, it was a key moment in the rise of tech companies.
  • Professional business software had not caught up with the growing opportunities consumers were experiencing with cloud-based software.
  • It certainly helped the company win extra press, however, and promote its brand.
  • That’s a prospect that might terrify a lot of notoriously closed-book startups.
  • While Mary Taylor returned to England in 1859 or 1860 to live out her remaining years, she had set a precedent of risk-taking, independence and entrepreneurship on Cuba St that remains to this day.

But there have been a very small number of occasions where the legal framework means they can get our customers’ data without informing them. And when your online books are accurate you can review your financial data and react in real time.