The plot thickens – seems an article in the Independent Financial which was apparently critical of Xero’s performance was pulled after complaints from CEO Rod Drury. Hopefully it was pulled for the right reasons (ie factual incorrectness) rather than for any “not wishing to ruffle feathers” reason.

Either way it doesn’t seem to have hurt the share price any.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • The article claimed that Xero was reporting non-paying customers in it’s subscriber numbers. However, Rod is on the record that “We do have some non-paying customers who are ‘influencers’, but these figures only record paid up Xero subscribers.”

  • I do have my concerns on the numbers published and some of the spin that has been put on these numbers.

    the offering document stated the goal as 1300 NZ customers at $75 each.

    Press releases state they have exceeded this goal..

    A) Price has been reduced from $75 to $50/$25
    B) The goal was 1300 NZ customers and I would estimate that of the 1406 less than 1200 are NZ customers (sure it is great to see UK subscribers but reality is the uptake in Xero’s easiest market to succeed is less than forecast even with 33% lower prices
    C) There is truth in the ‘free deals’ article. Xero had to discount its product to achieve its customer goal, and I am pretty sure that the “free until april 1st customers” HAVE been included in the customer numbers since they were paying as of April 1.

    I still believe Xero can be a huge success (massive) – it will all come down to sales over the next two years, unfortunately sales growth will be tough over the next 11 months until the next change over period.

    4000+ customers in a years time, my fingers are crossed

  • Cary – cheers – so the article was in fact false but it does lead us to Carl’s comments which are valid

  • Ben,

    Shot down to the local bookstore and picked up a copy of the IFR. I have no problems in getting a few non – paying users on board to kick things off, and did so myself with SmartFreight in its early stages here in NZ. Happy customers who don’t have to pay write the best references, and good references are gold.

    Fact is that Xero reported 1400 “paying” customers as at May 11, which I’m happy to take as gospel. If there are any more freebies thrown out I’d be concerned, given that the initial “Will they fly or won’t they” stage is now well and truly over.

  • Mark Austin |

    Two issues here:

    – There is suspicion that the way in which customer numbers is reported HAS changed from the way in which they were counted originally. If someone purchases a Xero account for their main business, then uses Xero for three additional businesses (which is a lower rate), do they count as one sale or four sales? Originally, I thought this would have been counted as “one sale.” Would be good to get confirmation of this, as if it counted as four sales, this isn’t entirely accurate – four instances yes, but four separate “customers” – maybe not.

    – What right does Rod Drury – or any other CEO – have to order an article pulled? Yes, they have the right of reply, but there should be no opportunity to remove an article unless it was dramatically wrong – the press must have the opportunity for free speech. Conspiracy theorists could speculate that it’s because the CEO of Fairfax, David Kirk, has 500,000 shares and that may open up communication channels somewhat…


  • Mark – your first point is fair and deserves a response. As to your second – my belief is that we have editorial independence in New Zealand – I for one would be surprised (and seriously angry) if any other influence came into play here

  • Guys. The article claimed that we had counted non-paying customers in our numbers.

    Completely incorrect and very damaging, so it was right to be pulled. Annoying because we pride ourselves on being open and honest. We have to lead by example and we take responsibility seriously.

    But hey, of course people are going to take shots at us. That’s the downside of doing things publicly. We’re big boys so we have to take the kicks with the good times.

  • Rod, is this retraction material or not worth the hassle do you think?

  • I think there’s a lot of bored people sitting around taking a knock at poor old Rod and the team. Whether it was the correct number of users or give or take a few percent, does it matter? For lack of a better phrase, quite a few of the people taking a shot at XERO are are just wage earners who wouldn’t have the balls to get off their bums and take a chance on something in business like Rod has.

    Regardless of results I think we should start encouraging the dreamers of this country, otherwise we’ll all be doomed to 40k salaries in dead boring IT service firms.

    That’s my kick up the arse to the poppy choppers – get in the game or stand on the sidelines, but don’t give negative commentary to those playing the game.

  • Falafulu Fisi |

    Julian said…
    For lack of a better phrase, quite a few of the people taking a shot at XERO are are just wage earners who wouldn’t have the balls to get off their bums and take a chance on something in business like Rod has.

    I completely agree here. Investing is a risky business. There is nothing wrong with the media scrutinizing Rod & Xero since they went publicly in 2007, however I get the feeling that some of those critiques have somehow gone overboard by just critiquing for the sake of it, perhaps comments about Xero will always generate a headline.

    Any investor who had bought shares in Xero know fully well about the risks that involve in investing in the financial market. Doubters of Xero, somehow feel they have an obligation to scrutinize Xero in public forums (blogs, internet news, newsprint , TVs, etc…) as a mean to educate investors or at least made them aware of things the perhaps Xero are not forthcoming with the detail of how they progress. Investors don’t need to be educated in public forums, since it was their choices to invest here or there. Any investor who claims that he needs public forum to educate him/her is daft. Obviously the investor is in the wrong business. Investors are well informed consenting adults that don’t need to be educated about Xero’s performances via negative commentaries in public forums. They can make up their own minds.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.