Keeping the startup spirit alive: Xero

Xero Australia's managing director, Chris Ridd, says the software company still has a startup culture

Financial software-as-a-service (SaaS) provider Xero (ASX: XRO) might have plans to take on the world but it doesn’t want to adopt the culture of a large corporate, according to Xero Australia managing director Chris Ridd.

Xero began as a startup in Wellington, New Zealand by CEO Rod Drury in 2006. The company has offices in New Zealand, Australia, the United Kingdom and the United States

Speaking at a Deloitte briefing in Sydney this week, Ridd said he started in the MD role at Xero Australia in February 2011 after working at Microsoft since 1996 in various roles. Ridd joked that he could use any form of software at Microsoft “as long as it started with an M".

“Coming into a startup like Xero where we were using a lot of different applications from many vendors was a big shock to the system,” he said.

For example, Ridd recalled when the company acquired Australian online payroll provider Paycycle in 2011 and he had to help create a heads of agreement document. This was done on a mix of applications including Google Docs and Office 365.

“There were four of us working on this document together. I was sitting in my car in Melbourne and using Skype while waiting for my kids to come out of a basketball game. CEO Rod Drury was in the Hawkes Bay [in New Zealand], our COO was in the United States while our CFO was in Wellington [NZ].

“We were watching each other as we frantically tried to put together this three page heads of agreement which was due in the morning. Watching how we were able to work on that document opened my eyes to the way that we should be working,” said Ridd.

In 2013, Xero migrated from Outlook and Office 365 to Google Apps offerings including Gmail and Google Docs.

“There were a number of people who really struggled with the move to Gmail. But again, the notion of us working anywhere on any device, meant we needed something in the cloud,” he said.

Read more: Warehouse Stationery integrates with Xero platform

“That concept of publishing documents and sharing them [in Google Docs] reflects the way that we work. It’s fast paced and we are asking people to collaborate from anywhere.”

According to Ridd, Xero’s collaborative culture is driven from the “top down” by CEO Rod Drury who is all about sharing ideas and information.

“We’ll do fortnightly global catchups and Rod will talk about a range of things. We don’t want those corporate situations where you end up with politics and islands of information,” he said.

The former startup also employs many young people who are open to new ideas and technologies but also about “challenging the hierarchy", Ridd said.

Read more: NZ firm launches video app to integrate with CRM systems

“It’s often the discussions you will have outside of formal meetings that are a wakeup call or idea you can pursue. That’s pretty much how we work.

“We constantly talk internally about the need to stay nimble and keep that entrepreneurial spirit. Myself and a lot of the executive team come out of big corporates. As we hopefully become a global leader in the space that we’re in, we want to break some rules along the way," he said.

Despite announcements in the Federal Government’s 2014-15 Budget in May 2014 that Commercialisation Australia, a $213 million grants program for startups, would be cut, Ridd is still positive about the future of technology startups in Australia.

“Outside of the [Australian] government’s role, I think we are getting on with things. I was part of a think tank in Canberra in June with the Minister for Small Business, Bruce Billson. There are efforts in the small business space to try and reduce red tape,” he said.

In June, Billson announced that the Federal Government wants to “remove $1 billion worth of red-tape out of the economy".

As part of the Economic Action Strategy, it has removed 10,000 acts and regulations which affect small businesses.

According to Billson, 372,500 small businesses will benefit from the administrative changes to PAYG instalment thresholds.

“Around 32,500 small businesses that have no GST reporting requirements will no longer have to lodge a business activity statement [BAS],” Billson said in a statement.

The remaining 340,000 small businesses with modest or negative income that are still required to lodge a BAS will no longer have to interact with the PAYG instalment system, he added.

Follow Hamish Barwick on Twitter: @HamishBarwick

Follow Techworld Australia on Twitter: @Techworld_AU

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