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Please note - On Interview Questions: Because of the nature of this Q & A, what is control cable it means the subject cannot be probed further on each question asked. Reader Question - Hi Rod, are Asian versions(non-English) of your products in the pipeline? Reader Question - Will the American version of Xero be launched this year? Reader Question -Does Xero have any future plans of going into any other fields of cloud computing beyond accounting or personal finance? Plasma is a state of matter where atoms have been stripped of their electrons, resulting in a cloud of positively charged ions and free electrons. Traditional media can be very expensive so we tend to piggyback on our partners spend for that which is why we have built marketing partnerships with banks and telecommunications carriers. RD - Accounting software is a referral model, so the social media can be used to accelerate that. SI - You seem to have a small band of loyal and devoted users within the software industry, why do you think that is and do you think that will translate into mainstream customers? RD - I think Rob Fyfe is classy. The market is really just starting and with accelerators like iPads, Google's up comingChrome operating system we think that things are only just getting exciting.
Our initial market research showed that 60% of small businesses used Excel. So the small business market we believe is the largest monetizable opportunity out there. I certainly don't understand the business and growing income and customers without making a profit is foreign to most investors. RD - Actually I think at 17,000 customers and many more users we have much more than a small band or loyal users. Having tripled revenues and reached over 17,000 customers is fantastic. Reading this over just 5 years latter its surprising to read how much of it is relevant today. As the plan progresses over the next few years we will focus more on margin. SI - With the question above in mind, do you see Xero coming back to the market and or its shareholders for more capital to grow your business? The large companies we are targeting on on completely different business models. This follows commitments from a number of sizeable UK accounting firms for large up-front orders without actual implementation.
I am still a Xero investor as well as customer, and I find a number of the features of the product extremely innovative. RD - I would certainly like Xero to pay dividends eventually but we are still in an investment phase. RD - I would still like to be running Xero, the global leader in small business software and one of the most admired software companies in the world. RD -The challenge with doing our type of business is that we can control costs and product but its very hard in the early days to predict what adoption will be like and therefore what the revenue will be. RD - As we are still in investment phase we are focusing on executing our plan within our cost budgets, recruiting and growing partners (which builds a scalable way to attract customers), customers, revenue. We wanted to do Xero because we saw the consumer Internet was taking off with lots of innovation yet small businesses were still locked into pretty poor desktop software.
Xero has now exceeded 10,000 paying customers, which amounts to ten-fold growth since March 2008. Crossing this threshold two years after the IPO (read the 2007 Xero Prospectus for detail) is a significant milestone and positions Xero as one of the leading online accounting software providers in the world. SI - Are there any particular books or periodicals that you have read that you would recommend to Share Investor readers in your business sector or business/investing in general? I enjoyed Richard Branson's latest book, Business Stripped Bare: Adventures of A Global Entrepreneur, that explained what the Virgin Brand promise is. SI -You seem to have strong brand recognition in New Zealand, how is Xero going in foreign territories? Yammer is a great way for everyone to know what’s going on and feel part of the discussion. Figure out what tools it is going to take. How do you take a factory radio out of 1995 ford escort sedan? Where is the starter on a 1992 Ford Escort LX?
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