Seems that a few people thought it was about rugby.

It wasn’t. It was about the downside of living in this amazingly beautiful country full of incredible people.

BUT:

Kiwi’s are hopelessly pessimistic.

In summary, this is what I said:

Here’s what Om Malik says about Silicon Valley:

what really makes Silicon Valley special — to the point that it can’t be replicated anywhere else — is its relentless optimism. And that is the crucial difference between Silicon Valley and London and Bangalore and Shanghai.

What we need are more people like Rod Drury, who say Bugger it, I’m just going to go and make it happen despite all the crap he gets from anonymous small minded losers commenting on the NBR forums.

However let me tell you about two recent experiences with social media (“SM”) which made me change my mind.

The first was with Xero. I’m a power Xero user and have made a lot of money for Xero by sending my clients onto their platform.

A few weeks ago we had a client who we logged a support job for, and a week or so went by with no response.

A quick tweet to OG the @xero mod and a couple of hours later and the ticket was resolved.

After that I had a bad experience at the Broadway branch of ASB. I’m an ASB customer and I’m in the process of getting one of my larger Australian clients to signup with ASB’s merchant team through my mate Grant (who works in CBA corporate).

I pop into the branch to setup a new business account for Pushpay a new business I’m working on, and the lady there is running around like a headless chicken. She tells me to take a seat, and someone will be with me within 10 minutes. I can then only assume she forgot about me, and when I hit her up, she said that no one was available until a couple of hours.

That sucks as I’ve just been waiting for 20 minutes in the branch.

She couldn’t care that I walk out the door with the intention of signing up with another bank, probably one less thing for her to worry about.

So I vent my frustration with a tweet:

http://twitter.com/#!/ChrisHeaslip/status/95311562344120320

@ASBBank branch service is shocking, wait 20m to be told they are too busy to see you, come back later. Think I’ll try @kiwibank instead.

to which I get a prompt tweet back:

@ChrisHeaslip Hi Chris, very sorry to hear about that experience – which branch were you visiting? And can we help at all? ^SM

To cut a long story short, I ended up opening the bank account with ASB as they managed to turn a bad experience into a good one.

Social media and business don’t mix? Yeah Right!

Twitter has changed the game in terms of customer service.

Gary Vaynerchuck says – Just give a damn!

But most businesses don’t. Twitter has lessened the distance between businesses and customers, and it allow customers to contact businesses directly. Those businesses which don’t use twitter (and other SM platforms) are missing out on opportunities to gain customers, and to put things right when things don’t go well for customers.

But it’s not easy. Obviously ASB has empowered their staff who manage their social media to make decisions and to communicate those decisions to customers. There’s a risk to your brand by doing this, which stops other large businesses from embracing this kind of approach. Also, you can’t do SM half hearted, if you have a twitter account no one checks, you’ll be doing more harm to your brand than by not having an account at all.

In the end, ASB has gained a satisfied customer from the experience, and I’ll also tell others about my good experience (by writing blogs like this one).

Good return on investment in social media – you bet!

This post isn’t meant to be arrogant, although I’m sure some will see it that way, but I’d like to talk about why Taxisurfer managed to beat out the competition. I think there are some lessons for all businesses.

1. It’s all about the team

Our team was very lucky to end up with a great mix of people. We had a designer, two iphone developers (including one of the best in NZ), two database guys, two web guys and three business guys. For what we were trying to achieve, this was the perfect balance.

2. You could explain our concept in one sentence

Push one button on your iphone and the taxi will arrive at your location.

That’s all Jordan needed to say and everyone in the group knew what we were building. The idea was specific enough so that the right people could start building it straight away. The core of the idea never changed during the weekend, although all kinds of things around it changed.

Because the idea never changed we started building the tech on Friday night and it all helped us gain momentum during the weekend.

3. Pivot / Being open to change

Apart from the key idea, everything else was up for debate:

The business model – do you white label sell to taxi companies in NZ or overseas? do you work with registered taxi’s only? do you go black market only? Do you include a payment method through the app? or do taxi’s collect the money directly? do you charge a percentage of the fare or flagfall? or have a fixed cost per booking? Do you include other services such as airport transfers? or stick with only taxis? what is the MVP?

The design of the app: should there be one app or two? what platforms do you design for? How does the app work? should the app show where the driver is and an estimated time of arrival? Do the jobs go out to all taxi drivers or only those within a certain radius? Do you supply the address of the bookee? or supply it only once they want the job?

You can see how this works. The marketing, overall vision, and technology also were areas of debate.

Our team worked together cohesively and made decisions quickly after a robust debate. As I mentioned the team voted 5 – 4 to go for the anyone can be a taxi option, but once the decision was made everyone moved on quickly to what they were supposed to be doing to execute the teams wishes. No one came back and questioned that decision once it was made.

4. We practiced our presentation at least 10 times and overprepared

Andy and Jordan hit it out of the park with the presentation.

But it was no accident that the presentation was that good. We actually did our first presentation practice on Saturday night with a really rough slide deck. Whilst our team was building the tech on Saturday two Andy’s and I (there were three Andrews on our team) were writing slides, debating with mentors and firming up our business model. By 5pm on Saturday our first slide deck was completed with the talking points all mapped out. We had our first presentation practice and used the outcome of this to amend the slides a couple of times. What’s on your slides and what you say don’t have to be the same thing. In the beginning we had exactly what we were saying on the slides, but bit by bit changed the slides to become more polished.

This also allowed us to get the timing right. 5 minutes isn’t a long time, so what you don’t say is as important as what you do. I think the first run through ran about 5 minutes with out the 60 second demo, so we had to decide what to cut from there.

I think my feedback to Andy after each of the 9 practice runs was that he needed to embellish the problem because an iterative improvement to booking a taxi isn’t a 10x improvement on the current system. But the ease of use and the simplicity and added benefits together might be a 10x improvement. You can’t sell someone on how great our new solution is if there aren’t problems with the current solution. In our case the problems were:

To order a taxi you have to leave the bar, call the cab company, wait on hold, order, wait for taxi to arrive, you don’t know when the taxi has arrived, taxi gets grumpy waiting, someone else steals your cab. Repeat process. By having a unique booking number no one else could steal your cab. We also trumpeted the added security of knowing exactly who was picking you up, and being able to contact them should you leave stuff in their cab.

We also massively over prepared for the presentation. We had at least 5 slides which weren’t used in the actual presentation, but were ready for a question. One great example of this was a budget. Should the judges ask how much money we wanted to raise and what we would spend it on, we had prepared a slide showing a $100k budget and how we would spend it.

I suggested this to Andy as this is really important, what’s important is to show that you have thought of it, not necessarily that the budget is 100% accurate. We also had slides on our build architecture and other such boring things.

5. We were first off the bat in terms of marketing

By mid day Saturday we also had setup a twitter account a website and a Facebook account.

We were tweeting out all manner of things to anyone who would listen. We invited VIP’s in the Auckland startup scene such as Andy Hamilton, Justin Flitter and Unlimited magazine.

The thinking goes that if AKLSW does well then everyone at AKLSW benefits from having such people at the pitch part of the event on Sunday night.

We also started tweeting out thanking sponsors for their support of AKLSW.

I hope these lessons help anyone else at future startup weekends, or startups in general.

If you want to see the full video of the presentation, you can see it here.

I started looking around at the various startup weekends run in the US and thought that would it would be great to attend one. The two which seem to have the most traction in the US are:

Startup weekend http://startupweekend.org/ and

Founder labs http://www.founderlabs.org/

Venture capitalist and Blogger Fred Wilson wrote this about them:

Two of my favorite pre-accelerator programs are Startup Weekend and Founder Labs. In these programs you can show up with an idea, without a team, a plan, and much of anything else. They help you put a team together, develop the idea, and get going. Startup Weekend does it in a weekend. Their approach is to “share ideas, form teams, build products, and launch startups in 54 hours.” Founder Labs does it over 5.5 weeks, nights and weekends. Their approach is “keep your job for now, build a team and launch a prototype.” If you have an idea but not much else and need help, these programs are for you.

I couldn’t agree more with Fred. I saw the startup weekend website, and then saw they were running one in Auckland and was keen to head along.

The first obstacle, you have to clear your schedule for the whole weekend, from Friday at 6pm, to Sunday night. That was quite a challenge as I tend to plan my life ahead of time.

Then I had to come up with an idea to pitch. I asked Sarah (my wife) what she thought was a good idea. She wanted a service which allowed her to see what the locals in Europe do/eat/hang out so that when we visit we can hit these places instead of the touristy places. So I pitched an idea called 9locals.com inspired by Max Levchin’s tweet where he asked:

Question for Kiwis — please suggest a cool, low-key, not (too) touristy dinner spot in Queenstown. Thx!

I thought the idea was great. You could also get recommendations like what does Gordon Ramsay think are the best places to eat in the UK ect. When I did the pitch, I said that I would make it my mission to get Max to write a review of where ever it was he ate as the first one for our new site.

My idea made it into the final 10, but when it came to picking teams to develop the idea further, we only had three people, and we were standing right next to Jordan and his Taxi idea, so once it was clear no one else thought my idea was as amazing as I did, I jumped ship to join up with the taxi team.

Sorry Max, it would have been fun to see if I could have got you to write a 2 minute review for us.

So it turns out that I had attended Jordan’s wedding only a few weeks prior as I knew his wife (only in New Zealand).

The rest of our team seemed cool also, and we had a good mix of all of the skills required to hit it out of the park, although we ended up with a large team of 10 people.

Our initial idea was a white label taxi booking solution which would be sold to a NZ taxi company. The idea was basically that you would program your home address into the GPS, it would know your current address (via GPS) and you would press a big button that ordered you a taxi. It would go to the taxi company’s dispatch system, and they would locate the nearest taxi to you.

Immediately several members of our team had reservations that the idea wasn’t big enough. Yes we could sell it to a taxi company for $100k, but the idea was really quite average. We also did some research which showed that there was already 100 other apps out there which did the exact same thing. More worries within the group. Then the idea was pitched that we could make a service called blackmarkettaxis.com where anyone could be a taxi driver. There was a lot of heated debating backwards and forwards and we left on Friday night without any real idea on where we would go with the idea (even thought the app was started being built, and the back end was also being developed).

When we all met up on Saturday morning there seemed to be two groups within our group. One wanted to stick with the original idea, the other group wanted to go the blackmarket route. More debating and I thought we needed to make a decision one way or the other, or we would end up debating for the whole weekend (as it seems some other teams did) and not actually produce anything. The vote came in 5 – 4 in favour of the black market option and everyone got in behind that idea.

The blackmarket idea was that we would be the airbnb.com of taxis connecting people who wanted a ride, with people who had rides to give.

The team also settled on the name taxisurfer.com even though some members of the team didn’t love the name, we made decisions quickly so we could move on to the real work, making a working prototype and settling on a business plan. After meeting with several members of the team who gave us great ideas and several lawyers who were also mentors we decided to find a middle ground between the blackmarket idea and the white label service.

What we agreed was that there would be a driver app and a customer app. The driver using the service would either register as a metered taxi or an unmetered taxi. If the user requested a metered taxi they could be assured that the taxi was from a legit taxi service because no one would put a meter in their taxi for kicks.

The user interface would allow users to choose whether they wanted a metered or unmetered taxi, and eventually also whether they wanted a van, female driver or taxi from a specific company. Users would also be able to rate taxi drivers and taxi drivers would rate users. Ordering a taxi via taxisurfer would also be very safe because you would know who picked you up and their feedback from other users. You could contact the driver directly if you left your property in their car to get it back.

We reasoned that if you would let a random stranger come and stay in your house, surely you would get a lift from a stranger because it’s less intrusive than having someone in your house.

The business model started to take shape, we settled on a $1 per ride charge to the taxi driver. Work continued through the night on Saturday night. By the time everyone left on Saturday we had: a twitter account setup, a facebook page, a website up, a logo designed, a half finished presentation, a working client app, a half completed driver app, and a half done database. The die was set. It was now too late to make any changes to our business model.

On Sunday morning everyone arrived early and knew exactly what they were supposed to be doing and by lunch time we had our first run through on the presentation with a working app. Several more presentation practices followed and finally it was time to present.

The one part of the presentation which I was most worried about was that we would have to describe a problem. Is there a problem with how you currently book a taxi? We were a little worried because there isn’t a real problem with ordering a taxi, but one of our team members came up with this great line:

When I was young, there wasn’t really a problem with black and white television. But then colour TV came along…

This was a genius way to phrase our problem. To order a taxi now, you have to leave the bar call the company, go back into the bar, wait for the taxi to arrive, argue with someone else as to whose taxi it was, the get a ride home.

Our solution was, pull out your smart phone, press the big button, a minute or so later it would tell you how long until the taxi arrived, put your phone away, the app would alert you when the taxi driver was there. No arguing over whose taxi it was because you have an order confirmation number to match against the drivers number.

During the presentation everyone loved the app demo and the presentation was 4.58 long, perfect timing, 2 seconds to spare.

There were some good questions from the judges about the legality, the scalability and the ability to get traction. We answered them all very well.

When the awards were announced, our idea came out on top, and we won first place.

My thoughts about the overall weekend:

I initially went to meet like minded people and this went WAY better than I expected. The quality of the people at AKLSW was top notch, the mentors were excellent and accessible and the organiser Jason did a great job. I met so many great people that I decided to setup a linked in Group to connect with them, and I’m looking forwards to developing relationships with them over the next few months. New Zealand is a small place, and having a group of like minded people together for an event like this is a great achievement.

All in all, the weekend was great, and highly recommended to all.

Chris

To do two things at once is to do neither. – Publilius Syrus

Because Jack is running Square and Twitter at the same time. Read all about it here: http://read.bi/gFxF6f

This reminds me of when I was younger. I wanted to run 10 companies. One that made cars, one that made airplanes, one that made fire engines, and one that printed money for the government (amongst others).

I couldn’t understand why all these boring adults would choose to only have one company. Why doesn’t Bill Gates buy Ferrari? He could probably afford it, doesn’t everyone want to own Ferrari? He could also build the worlds tallest building too, and do all kinds of other things.

But he couldn’t even run Microsoft and a charity at the same time, the richest man in the world, and he chose to step down from Microsoft to focus on the Gates foundation. I would have thought that if anyone could have run two big organisations simultaneously Bill Gates could.

But what I have come to learn is that focus is a sign of maturity. Focusing on one business, one idea, one job is part of growing up.

You learn that time is limited, everyone is given the same amount of time, and what sets you apart from other people is how you choose to spend and invest your time. Ultimately what people think of you at the end of your life will be a judgment of how you spent your time. Contrary to popular belief, money isn’t an important criterion. Great people have accomplished much with little funding especially in the religious world, Jesus, Mother Theresa and Ghandi all had little money, but spent their time in pursuit of causes they considered great. They are considered “GREAT”. So money isn’t what people will remember you by. Time is.

What I’ve also learned recently is that focus isn’t what you say yes to, it’s what you say no to. This reminds me of a great story I heard of recently involving probably the greatest CEO of the last decade, Steve Jobs. Steve was on the phone to Mike Parker (the CEO and president of Nike) just after he had become CEO:

“Well, he didn’t call to offer me advice, but we had worked together on a Nike Apple collaboration called Nike Plus,” Parker explained. “Long story short, he said, ‘Hey, congratulations, you’re going to do a great job.’ I said, ‘Well, do you have any advice?’ And he said, ‘No, no, you’re great.’

Parker continued, “And then there was a pause and he said, ‘Well, I do have some advice. Nike makes some of the best product in the world. I mean, product you lust after, absolutely beautiful, stunning product. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff.‘”

“And then I expected a little pause and a laugh,” said Nike’s CEO. “But there was a pause and no laugh at the end. And he was absolutely right. In fact … one of my major focal points in terms of my priorities as a CEO–and even as a designer when I was growing up with the company–is to edit.

Apple is the largest technology company in the world, and nearly all of their sales come from 6 products (Laptops, Computers, iPhones, iPods. iPads and iTunes). That’s Focus. Cant you imagine how many products Steve canned? probably in the thousands?…

And while we’re on the topic of what you say no to, this article hit headlines this week when Richie McCaw decline to attend prince Williams royal wedding. Richie McCaw says:

“I did get an invitation, it was a heck of an honour and I felt a bit lucky,”

He said he needed to concentrate on his recovery from foot surgery and get back to playing for the Crusaders in the Super 15.

“Had I still been injured and it had not been a World Cup year, then I’m sure things would have been different.”

Isn’t that amazing, Richie McCaw decided his focus was on winning the world cup, and declining an invitation to the wedding of the decade mortified his female friends, but he knows winning the world cup is his focus.

So why doesn’t Bill Gates continue to run Microsoft and amass an even greater fortune? This is what Bill said when announcing is resignation from Microsoft in 2006:

“I’ve decided that two years from today, I will reorganize my personal priorities,”

“I believe with great wealth comes great responsibility – the responsibility to give back to society and make sure those resources are given back in the best possible way, to those in need,” he said. Gates added, “It’s not a retirement, it’s a reordering of my priorities.”

Bill realised that at the end of the day he had achieved everything he wanted to in business, and now he wanted to use his wealth through philanthropy to benefit others. He could probably have done this while still working at Microsoft, but now he is free to give that great cause all of his undivided attention.

At the end of the day, as I say above, money isn’t all that important. Follow Bill’s example and spend your time in pursuit of a cause you consider to be great and worthwhile, and say NO to everything else!

Chris

A thought occurred to me the other day that when I was younger, you were cool if you wore Nike or Reebok clothes. There may have been a couple of other brands too like Starter, Mossimo and Stussy, but that was about it.

These days though, it seems that there are many more ‘cool brands’, you simply wear the brand which is closest to your self image.

If you’re into boxing you wear everlast, rugby – Adidas, surfing – Rip Curl/Billabong, skating – Vans, edgy – Abercrombie and Fitch – You get the picture.

None of these are wrong. 20 years ago you could tell the warehouse/Wal-Mart T-shirt and you would be mocked for wearing it. But these days it seems that you won’t get mocked for wearing Everlast if you’re a boxer to school. Sure none of your friends wear Everlast, but that doesn’t matter, they respect it as a brand.

This is clearly bad for business for the bigger companies, mainstream is no longer cool. It’s not uncool, it’s just not as cool as it used to be. Nike sensing this change moved their brand from meaning ‘cool’ to ‘successful’. Cool started to become too hard to define, but success was easy. You either won or you didn’t. They moved from supporting cool players like Dennis Rodman to Michael Jordan. This was an amazing pivot, but that’s another topic.

The same shift happened to music. Once upon a time the top 40 songs were what mattered. Now that chart has expanded to be the top 200, and there are sub charts for R & B, Latin, Dance and Christian amongst others.

And also to books. In 2000 there were only 3 categories, fiction, non-fiction and self-help. This from ehow.com about the New York Times best seller list:

Throughout the 21st century, the New York Times Bestseller List has been greatly expanded to include hundreds of books in over a dozen categories… In 2007, Paperback Fiction was divided yet again into separate lists for Trade volumes versus Mass Market paperbacks. By early 2009, the Times had added another category for graphic novels.

I count 20 categories on their website, at 20 books per list means that 300 books are listed on the New York times best seller list. An increase of almost 7 times over the last 10 years.

So mainstream has become fractured. So what? What does this mean?

To be honest, I have no idea. What I’ve said above are observations. Discussing the implications of these is a lot harder. But I’ll give it a crack anyway.

1. There are a lot of opportunities for targeting specific niches, and targeting these niches will become easier.

Targeting specific niches has become easier. How do you find those who fit my niche – easy, look at the clothes they wear, the music they listen to, and where they spend their time. It seems to me that people also self select themselves into groups online. For example they join Facebook groups, LinkedIn Groups, use the same apps, ect. If you have a product to target a specific niche, gaining access to these people should be easy. Find the gate keepers, and you’re in.

2. Mainstream is dead.

Given that people are inclined to identify themselves with one of the many thousands of brands out there, it’s unlikely that one or two companies will be the definition of cool. Why? It just costs too much to advertise to the point where everyone thinks you’re cool. Furthermore once you’ve run those ads cool has moved on.

3. The rise of the gatekeeper.

Because mainstream has splintered into many fragments, each niche needs someone to tell others what cool is. This means that there will be more and more people who take on this gatekeeper role. In some instances the gatekeeper will be a corporation, in other cases it will be a person. One example which comes to mind is Red Bull. Red Bull has come to represent energy, speed and risk taking. To my knowledge they haven’t done this via ads, but by sponsoring activities which they think will suit their brand. This has worked very well for them.

Robert Scoble is another example. His is considered a thought leader by many. As we have less and less time available, we rely on these ‘gatekeepers’ to help us make quick decisions. Robert Scoble thinks color sucks, therefore I won’t try it because he is mostly right.

Each niche and segment will look to one or several thought leaders who tell them what to think. Do you think Fox news was an accident? Someone very smart decided basing a television channel around right wing conservative ideas was a good idea, and it turned out to be. This segment looks to O’Reilly and Beck to be their gatekeepers.

I admit there are some counter examples of this behavior such as Apple. Apple is cool. But Apple never set out to capture the mainstream, their advertising is aimed squarely at young hip kids, not at old folks, and yet old folks buy iPads. Apple is cool because it is the anti-Microsoft.

Chris

Take a look at these amazing pictures:

http://bit.ly/eAUaSR

Chris, Why don’t you use Facebook, Facebook is awesome, you can play games, message people, publish pictures and do all kinds of cool stuff. You can also find people you want to keep in contact with. Facebook is cool.

To which I usually respond:

Facebook is rubbish. The primary purpose of Facebook is to spend time with people you don’t want to spend time with in life, and therefore it’s a great big waste of time.

Let’s start at the start. I used to have a Facebook account. But from day 1 I put a message up saying something to this effect:

Please don’t send me a message via Facebook. I don’t check my Facebook messages. My phone number and email are below. I’d love to hear from you.

Do you think people took notice of this? No. They still wrote on my ‘wall’ and sent me private messages expecting a response, taking offence when one was not forth coming.

However I could deal with this. What pushed me over the edge was the ‘friend’ management. In no time I managed to accumulate about 200 friends. People who I used to know, people who I didn’t know, and people who I didn’t want to know. Where do you draw the line with accepting friends? Do you only keep good friends? People you want to contact? People who might be useful in a business field?

So I decided that I would only accept requests from people who I considered associates to friends, people who I wanted to be in contact with in the future. If I didn’t want to talk to someone, I declined their request.

However some people thought I must have clicked the wrong button by accident, and asked to be a friend again, and again and again. One person up to 10 times.

Some people were quite perturbed that I declined them and sent me a nasty emails.

The next task was to remove from my friend list all of the people who I didn’t want to keep in contact with. I decided I should have about 50 friends, cull the rest.

I settled on a plan. Axe 10 per week so the list slowly declined.

Ranking people in this manner certinaly feels a little wrong. But never the less, swing the no axe, swing swing and some people were cut.

After a while I looked at the list that I had left. They were all people who I regularly contacted via other means anyway. Email and phone calls seems so old fashioned, but are more personal. So if the only people I want to ‘connect’ with via Facebook are the people I keep in contact with anyway, what is the point. I contemplated cancelling my account, but this made me think, why do we use Facebook? Won’t I miss out on all the latest information? Won’t people call me a luddite?

When you think about what you would miss out on (i.e. the latest information) that wasn’t a really good reason to remain on facebook.

So I cancelled my account.

Have I regretted it once since then? Nope. Not once.

There is one thing that I find annoying, and that is that people assume you are on Facebook. This has happened a few times, it goes like this:

Them: Hey why didn’t you come to my birthday?

Me: What? You had a party and didn’t invite me?

Them: Yeah, I sent out an invitation on Facebook!

Me: Dude, I’m not on Facebook!

Them: What, why not, who’s not on Facebook?

Me: Facebook is rubbish. The primary purpose of Facebook is to spend time with people you don’t want to spend time with in life, and therefore it’s a great big waste of time.

Them: <Stunned> trots out some kind of innoculous argument about why I should be on Facebook.

Them: See, you missed out on my party because you’re not on Facebook.

Me: If you really wanted me there, you would have emailed, texted, phoned or posted me an invite!

Them: mutter mutter. That requires work. Sending a Facebook invitation is so much easier.

And that’s my point. Real relationships require hard work. I’ve never missed an important event because it was sent on Facebook.

If you want to be friends with someone (as in the offline sense) a phone call every now and then to see how they are doing is a lot more meaningful that a message on a Facebook wall.

Facebook messages, like Facebook relationships are easy, disposeable, and meaningless.

Everything I don’t want my REAL relationships to be.

Chris

PS I do use Linkedin, and I recommend you should too. This serves a purpose – to keep in contact with all your business associates. Perhaps another post.

24/02/2011

I remember reading a book many years ago with that same title.

Xero are cranking out innovations and updates to their product at a rate of knots. Xero’s recent post discusses the technology behind their recent groundbreaking release called Xero touch. In a nutshell it allows you to take a photo of your receipts and upload them into xero, attached to a transaction. The idea is brilliant.

But what struck me reading their blog is the amount of detail they are putting out to the public.

Here’s some quotes from that blog:

To enable us to work with the best WebKit can offer we chose Sencha Touch as our app framework….
Sencha Touch also works beautifully with PhoneGap, an open source project that allows us to…

The post goes on to give the reasons behind some of their software decisions. They’ve also spelled out in the past details of their servers to explain to users why there may be a small lag time.

I couldn’t help thinking to myself that this kind of post comes off a bit arrogant.It’s like saying the competition, here’s what we’re doing, we’re so not concerned about what you might do that we’ll pass on a whole lot of info to help you, and we still don’t think you can replicate what we have.

Perhaps I’m reading way to much into it, but going back a few years, that’s exactly how Xero’s post would have been interpreted.

Twenty years ago we lived in a different time. Competition would mean down in the dirt tactics, do anything to win. Spy on other companies, steal their ideas, steal their IP, try to change your product if the competition is gaining (new Coke), bigger is better, scale is everything.

But times have changed.

Let me explain:

After reading Xero’s post, I cant  help thinking that Xero’s competition could read this and possibly implement the same technology, given that they don’t have to go in search of the technology to implement it. But who are Xero’s competition?

Xero don’t see themselves competing against tradtional accounting software, This from the share investor website:

Question: Are you worried about your competition such as MYOB? (paraphrase)

Rod Drury: We’re more scared of a well funded new SaaS competitor like us than the incumbants

To date there has been no well funded competitor. Just MYOB trying to play catch up.

Also in that same interview Rod talks about how the challenge for a competitor like MYOB is that they are firmly entrenched in desktop software. For them to develop an online offering it is difficult.

Why? Well for several reasons but one is that they already have developers who are working full time on rolling out upgrades to their desktop software. MYOB can’t simply drop supporting this, as that’s where their bread and butter (money) comes from. For example MYOB had to develop a new release when the GST rate changed to 15%. This means those resources are unavailable to work on an online offering.

I would have thought they also needed to hire new developers with different skill sets. Further again moving them outside of their core competence.

But it goes deeper than that. My gut tells me that the culture in an organisation has a lot to do with the development of the software also. MYOB has just stopped being innovative. I can’t remember the last time they released a remarkable product. I can remember the last time they axed a lot of services though. We had some clients using their Commac Bureau service, and soon after being taken over by a private equity firm, they cut a lot of services. This payroll service wasn’t the only one, their accountants outsourcing (which had some hope of being innovative) was cut also.

Now this blog post isn’t meant to be a slag on MYOB, some of their products in their day were very innovative. My question is, do they have the culture to compete with Xero? Rod Drury does not think so. The changes they would need to make are just too big and too hard for an organisation like them. In short, they are just too big.

Which get’s you to the point that there’s no one (in NZ anyway) who are in the same orbit as Xero (I hear Acclipse have a product, but haven’t used it).

So why not tell the world what technology your platform is built on, why not explain to those interested how the product works. What have you got to lose. By the time they get around to implementing the technology, Xero will be on its 3rd iteration. I can’t help but think that roll outs like Xero touch have been in Xero’s pipe line for months.

Which brings me back full circle to the title of this post, which is a valuable lesson for every business owner:

It’s not the big that eat the small, its the fast that eat the slow.

Chris

Full Disclosure: I’m an accountant who uses Xero, recommends it as the only accounting software to my clients, and recommends it to other accountants. By the time you read this, I’ll probably be a shareholder too.