Good interview. Going beyond accounting. Still risky yes yes, we know but great to be part of it.
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Good interview. Going beyond accounting. Still risky yes yes, we know but great to be part of it.
No and I won't (at least not at infancy stage of cloud accounting). I just see it as a different proposition now. My earlier understanding was focused on the idea that Xero wants to steal business from Quickbooks Desktop. We were told that if you buy Xero for close to $40, it might be worth over $70 in 5 years, which I think offers a far too small reward for the extreme risk.
What Drury and Thiel seem to have in mind goes beyond that with accounting as beachhead for something greater. I am not really clear on how and where this is headed but for it to work out you have to assume a few things:
1. Winner takes all scenario that see the vast majority of businesses and their books online (without it being a hosted solution).
2. That winner being Xero and not a competitor
3. No margin erosion
4. Cloud accounting/Xero changing the future of small business and hugely improving their chances of growth/survival
5. Small businesses will not outgrow Xero
Time will tell if these guys were great visionaries or simply megalomaniacs.
This is something I am really curious about too because they could also sell that data to others similar to what Facebook does. Intuit has already invested in that area:
http://techcrunch.com/2013/10/23/int...ata-analytics/
Cheers for the offer! I appreciate it and it would be an interesting discussion to follow. The next AGM may be a bit too soon to see what the future will look like and who will come out on top. I think a lot of Xero's success/failure will come down to luck. Something that helped Intuit back in the days was the attention it received from Microsoft trying to defeat it. We may see a similar phenomenon when Intuit runs the superbowl ad and a big part of the US may wake up to Xero. We may see the opposite and QBO will pull away in the race. You just don't know what will happen.
I think the best person in NZ to quiz would be Ben Kepes: http://www.forbes.com/sites/benkepes/
We need to get him on this forum :)
The potential is massive, I think. The data of small businesses must be worth a lot compared to the crap Facebook collects. What I am waiting to see is whether and how they will connect businesses. Imagine tracking of business inventories and purchases to suggest vendors or pool orders with other businesses. There is a lot that can make small business as a whole function like big business and transform the economy.
Interesting personal finance software product
http://www.odt.co.nz/news/business/2...xero-customers
Anybody shorting Xero? I felt really tempted to bet against Xero but I'm not so sure anymore. The reason being that I completely overestimated the competitors. Best to break it up by region:
ANZ
Looks like Rod Drury was right in saying that MYOB is turning out to be an absolute disaster for Bain Capital. Vultures are circling with Xero in a strong lead
http://www.google.com/trends/explore...&geo=AU&cmpt=q
and likely to keep it:
http://cloudaccountingbuzz.wordpress...oud-in-review/
After July we should know whether QBO, Jcurve and Gem Accounts can establish themselves as serious threats to sustained exponential growth. All the other ones seem a bit helpless at this stage.
UK
The fact that Sage came extremely close to buying MYOB is telling. Kashflow, FreeAgent, Wave are stalling and it's still early days for QBO:
http://www.google.com/trends/explore...&geo=GB&cmpt=q
The last paragraph of this article is interesting:
http://diginomica.com/2013/11/26/xer...ing-cylinders/
US
I am shocked by how small the internet footprint of freshbooks, kashoo and wave is compared to Xero:
http://www.google.com/trends/explore...&geo=US&cmpt=q
Note that Freshbooks claims to have 5 million users vs 15000 Xero subscribers!!! Wave claimed 500k users a while ago. Now, they say they track only 200k bank accounts.
Intuit is way ahead and on a good track but there should be enough burnt social capital/accountant partners to maintain Xero's US growth. A lot will depend on how well Xero does in January and February:
http://www.google.com/trends/explore...&geo=US&cmpt=q
It will be harder to play catch-up after March when migration of harmony is complete/ecosphere has swollen. Wave has also a few good things in the making that should make them a more serious option (particularly for home businesses).
ROW
Depends on where you look. QBO does better in Canada. Xero is stronger in Singapore. In India it's tight.
I can't escape the conclusion that Xero isn't just one of many cloud accounting programs. It's one of two main contenders that are in a head-to-head race:
http://www.google.com/trends/explore...0-shoes&cmpt=q
Whatever you make of the shareprice, tulips alone don't cut it as an explanation - I realized at last.
I would never short just out of principle. A month ago, I would have bought a put with a $10 strike that expires two years from now in a heartbeat. I am glad I didn't have the 'option' to because I was only looking at the product from a customer/client perspective without taking a few other factors into account.
Also worth checking out comparison of XRO and Intuit on WolframAlpha.com. A bit of XRO info missing from the calcs but still useful. Expected return v volatility graph is interesting.
Input XRO, Intuit in the search box.
No doubt Rod could even make this wish come true
http://tomfishburne.com/2013/12/holiday-animation.html