1 00:00:04,110 --> 00:00:07,080 Sean Aylmer: Welcome to the Fear And Greed Daily interview. I'm Sean Aylmer. 2 00:00:07,350 --> 00:00:09,840 Sean Aylmer: I've talked plenty on this podcast about Xero. It's been 3 00:00:09,840 --> 00:00:12,209 Sean Aylmer: one of the biggest tech success stories to come out 4 00:00:12,210 --> 00:00:15,000 Sean Aylmer: of this region in the last 15 years. While positioned 5 00:00:15,000 --> 00:00:17,579 Sean Aylmer: to take advantage of the rise of cloud computing as 6 00:00:17,579 --> 00:00:20,820 Sean Aylmer: business shifts online, it's become a leader in cloud accounting 7 00:00:20,820 --> 00:00:24,120 Sean Aylmer: in Australia, New Zealand, and more recently in the UK. 8 00:00:24,300 --> 00:00:27,300 Sean Aylmer: Steve Vamos is the CEO of Xero and my guest 9 00:00:27,300 --> 00:00:29,100 Sean Aylmer: this morning. Steve, welcome to Fear and Greed. 10 00:00:29,340 --> 00:00:30,810 Steve Vamos: Hey Sean, good to be with you. 11 00:00:31,440 --> 00:00:33,600 Sean Aylmer: Before we get onto Xero, a little bit about yourself. 12 00:00:33,600 --> 00:00:36,089 Sean Aylmer: You have worked with some of the biggest technology brands 13 00:00:36,090 --> 00:00:40,590 Sean Aylmer: around Apple, Microsoft, IBM. How did you end up at Xero? 14 00:00:41,310 --> 00:00:44,640 Steve Vamos: Well, it was interesting. A few years ago, I had 15 00:00:44,640 --> 00:00:48,150 Steve Vamos: moved out of executive life into board work and advisory, 16 00:00:48,840 --> 00:00:51,630 Steve Vamos: and I met the founder of Xero, Rod Drury, who said, " 17 00:00:51,630 --> 00:00:54,270 Steve Vamos: Steve, why don't you work with me to help me 18 00:00:54,270 --> 00:00:57,000 Steve Vamos: scale Xero to be a global technology business?" And so 19 00:00:57,000 --> 00:01:00,390 Steve Vamos: the two of us worked together for 18 months and we 20 00:01:00,690 --> 00:01:03,690 Steve Vamos: really developed a good plan together for the things we 21 00:01:03,690 --> 00:01:07,200 Steve Vamos: would do to really enable Xero to fulfill its amazing 22 00:01:07,200 --> 00:01:12,780 Steve Vamos: potential. And in early 2018, Rod rang me and said, " 23 00:01:12,780 --> 00:01:15,959 Steve Vamos: Hey, I get what I need to do now to 24 00:01:16,140 --> 00:01:19,949 Steve Vamos: drive Xero to the next phase. I don't really think 25 00:01:19,950 --> 00:01:21,720 Steve Vamos: it's me. I'm not sure I want to do it." \ 26 00:01:21,959 --> 00:01:25,860 Steve Vamos: And then we had a conversation about that, and he's 27 00:01:25,860 --> 00:01:29,700 Steve Vamos: a creative guy, a real visionary, and he's less interested 28 00:01:29,700 --> 00:01:35,069 Steve Vamos: in the business of coaching and building better business processes. 29 00:01:35,790 --> 00:01:37,380 Steve Vamos: And so we had a chat about that and then 30 00:01:37,380 --> 00:01:39,480 Steve Vamos: he paused and said, " I think you ought to have a 31 00:01:39,480 --> 00:01:41,580 Steve Vamos: go. You should do it." And that's how it all 32 00:01:41,580 --> 00:01:45,060 Steve Vamos: started. And I went back into executive life, actually said 33 00:01:45,060 --> 00:01:48,960 Steve Vamos: goodbye to everything else I was doing because the job 34 00:01:48,960 --> 00:01:51,840 Steve Vamos: at Xero is so consuming and so much fun by 35 00:01:51,840 --> 00:01:54,990 Steve Vamos: the way. So that's really been happening over the last 36 00:01:55,140 --> 00:01:56,130 Steve Vamos: four and a half years. 37 00:01:56,580 --> 00:01:59,760 Sean Aylmer: You bring up the idea of management and it's great 38 00:01:59,760 --> 00:02:01,800 Sean Aylmer: to be a visionary and you need people like Rod 39 00:02:01,860 --> 00:02:04,230 Sean Aylmer: around the place to get these things going, but you 40 00:02:04,230 --> 00:02:08,790 Sean Aylmer: have always throughout your career supported managers and young managers. 41 00:02:09,210 --> 00:02:11,610 Sean Aylmer: What is it about management that's so important? What is 42 00:02:11,610 --> 00:02:12,810 Sean Aylmer: it that a manager needs? 43 00:02:13,169 --> 00:02:16,500 Steve Vamos: The way I look at it, a company needs good 44 00:02:16,500 --> 00:02:22,200 Steve Vamos: leadership, and good leadership is essentially about driving change and 45 00:02:22,200 --> 00:02:25,350 Steve Vamos: taking people on a journey, and taking a business to 46 00:02:25,590 --> 00:02:28,770 Steve Vamos: a place you predefine is where you want to go. 47 00:02:28,770 --> 00:02:31,200 Steve Vamos: It's about having a purpose, a vision for the company, 48 00:02:31,770 --> 00:02:35,760 Steve Vamos: and then about executing a great strategy. And that strategy 49 00:02:35,760 --> 00:02:38,250 Steve Vamos: is really about what are we doing today to create 50 00:02:38,250 --> 00:02:41,310 Steve Vamos: that future, to create that vision? Because unless you have 51 00:02:41,310 --> 00:02:45,239 Steve Vamos: both elements in a sense, the aspiration and then very 52 00:02:45,240 --> 00:02:47,910 Steve Vamos: clear views of what you've got to do every day 53 00:02:47,910 --> 00:02:50,910 Steve Vamos: to get there, you don't really have a strategy. So 54 00:02:50,910 --> 00:02:54,690 Steve Vamos: that's where management comes in because management is really important. 55 00:02:54,690 --> 00:02:59,340 Steve Vamos: It's about executing to your intentions, be it daily, weekly, 56 00:02:59,370 --> 00:03:03,450 Steve Vamos: monthly, and annually. So the question of leadership and management 57 00:03:03,450 --> 00:03:05,880 Steve Vamos: is that it's an and, you need both. You need 58 00:03:05,880 --> 00:03:09,540 Steve Vamos: leading change, you need great management, whether it's managing the 59 00:03:09,540 --> 00:03:12,570 Steve Vamos: organization to perform on a regular basis, on a short 60 00:03:12,570 --> 00:03:17,340 Steve Vamos: term basis, whether it's managing people, managing products, management is 61 00:03:17,340 --> 00:03:19,830 Steve Vamos: a very, very important discipline and it comes down to 62 00:03:19,830 --> 00:03:23,490 Steve Vamos: doing the things you intend to do. Leadership is about 63 00:03:23,490 --> 00:03:26,130 Steve Vamos: framing what you intend to do in the context of 64 00:03:26,130 --> 00:03:27,780 Steve Vamos: the long term change you want to create. 65 00:03:28,169 --> 00:03:31,889 Sean Aylmer: Okay. So let's bring that to Xero. For those listeners 66 00:03:31,889 --> 00:03:35,280 Sean Aylmer: who aren't aware, it's an accounting software platform for business 67 00:03:35,280 --> 00:03:40,410 Sean Aylmer: owners, financial advisors, bookkeepers, accountants, all sorts. You operate both 68 00:03:40,410 --> 00:03:43,770 Sean Aylmer: locally in this region, Australian, New Zealand, and overseas as 69 00:03:43,770 --> 00:03:47,760 Sean Aylmer: well. What is the vision and then how do you 70 00:03:47,760 --> 00:03:48,270 Sean Aylmer: get there? 71 00:03:49,800 --> 00:03:52,530 Steve Vamos: So when we talk about our strategy, we start with 72 00:03:52,530 --> 00:03:55,410 Steve Vamos: our purpose, which is to make life better for people 73 00:03:55,410 --> 00:03:58,680 Steve Vamos: in small business, their advisors and their communities around the 74 00:03:58,680 --> 00:04:02,190 Steve Vamos: world. Now, you say, well, that's a really nice lofty 75 00:04:02,280 --> 00:04:07,410 Steve Vamos: statement and every organization nowadays has read the textbook that 76 00:04:07,410 --> 00:04:10,620 Steve Vamos: says you need a purpose. The difference for us, what's 77 00:04:10,620 --> 00:04:13,920 Steve Vamos: exciting about our purpose, it's what our customers and partners 78 00:04:14,190 --> 00:04:16,980 Steve Vamos: say about us. And I'm going to linger a little 79 00:04:16,980 --> 00:04:18,810 Steve Vamos: bit on this but I was at a function in 80 00:04:18,810 --> 00:04:21,240 Steve Vamos: Wellington, New Zealand. I met a married couple in small 81 00:04:21,240 --> 00:04:23,940 Steve Vamos: business together. They asked me what I did and I 82 00:04:23,940 --> 00:04:26,790 Steve Vamos: said I worked for Xero. And the woman I was 83 00:04:26,790 --> 00:04:30,330 Steve Vamos: talking to said, " Xero, save down marriage." And I started 84 00:04:30,330 --> 00:04:33,660 Steve Vamos: to laugh and her husband chimed in and said, " She's 85 00:04:33,660 --> 00:04:37,169 Steve Vamos: serious, Steve. This is not a joke." And so we 86 00:04:37,170 --> 00:04:39,810 Steve Vamos: have a very clear connection to purpose. Many of the 87 00:04:39,810 --> 00:04:42,960 Steve Vamos: people at Xero have experienced what it's like to either 88 00:04:42,960 --> 00:04:45,480 Steve Vamos: run or be in a family of small business operators 89 00:04:45,870 --> 00:04:49,770 Steve Vamos: who often work seven days a week doing front office 90 00:04:49,770 --> 00:04:51,960 Steve Vamos: work when they're doing what they're really there to do, 91 00:04:51,960 --> 00:04:54,839 Steve Vamos: which is to look after customers, and then the back office over 92 00:04:54,839 --> 00:04:58,200 Steve Vamos: a dining table at night or on a weekend. So 93 00:04:58,200 --> 00:05:01,469 Steve Vamos: Xero can take a lot of that pain away, particularly 94 00:05:01,470 --> 00:05:03,990 Steve Vamos: when you have a great accountant or a bookkeeper advising 95 00:05:03,990 --> 00:05:07,770 Steve Vamos: you. Our vision for the future is to really extend 96 00:05:07,770 --> 00:05:11,099 Steve Vamos: from where we started, which was about making the whole 97 00:05:11,100 --> 00:05:15,419 Steve Vamos: accounting process and compliance process more efficient, through to getting 98 00:05:15,420 --> 00:05:19,260 Steve Vamos: small businesses to now use over a thousand applications that 99 00:05:19,260 --> 00:05:23,670 Steve Vamos: connect to Xero and really suit small businesses that operate 100 00:05:23,670 --> 00:05:27,210 Steve Vamos: in a whole range of different industry sectors, and have 101 00:05:27,210 --> 00:05:30,360 Steve Vamos: all different shapes and sizes of course. And then beyond 102 00:05:30,360 --> 00:05:34,710 Steve Vamos: that, with the customer's data in the Xero platform, we can 103 00:05:34,710 --> 00:05:37,800 Steve Vamos: do some pretty amazing things in the future, and we 104 00:05:37,800 --> 00:05:40,860 Steve Vamos: are today in some of our products really taking advantage 105 00:05:41,070 --> 00:05:45,089 Steve Vamos: of the customer data to create insights and new applications 106 00:05:45,089 --> 00:05:48,690 Steve Vamos: and services that help even more with advice that can 107 00:05:48,690 --> 00:05:51,089 Steve Vamos: be ahead of the game rather than looking back in 108 00:05:51,089 --> 00:05:54,779 Steve Vamos: the rear view mirror. So how we execute that day 109 00:05:54,779 --> 00:05:58,169 Steve Vamos: to day is really about the strategy that we have 110 00:05:58,170 --> 00:06:01,589 Steve Vamos: to really pursue those three areas of potential opportunity. 111 00:06:01,950 --> 00:06:04,110 Sean Aylmer: Stay with me, Steve. We'll be back in a minute. 112 00:06:10,529 --> 00:06:13,950 Sean Aylmer: My guest this morning is Steve Vamos, Chief Executive of Xero. 113 00:06:14,520 --> 00:06:18,119 Sean Aylmer: Small business is a very disparate sector, and that's a 114 00:06:18,120 --> 00:06:21,089 Sean Aylmer: great anecdote about saving the marriage but it really does 115 00:06:21,089 --> 00:06:22,979 Sean Aylmer: tell the story of actually taking some of the pressure 116 00:06:22,980 --> 00:06:25,289 Sean Aylmer: off small business at their back end and letting them 117 00:06:25,290 --> 00:06:28,440 Sean Aylmer: do what they actually want to do. How big an opportunity, 118 00:06:28,440 --> 00:06:30,990 Sean Aylmer: and this isn't just a Xero question, it is for 119 00:06:31,650 --> 00:06:35,099 Sean Aylmer: that back end, using technology to improve the back end, 120 00:06:35,100 --> 00:06:37,920 Sean Aylmer: how big an opportunity is that for small business generally? 121 00:06:38,850 --> 00:06:42,270 Steve Vamos: What our data has shown us, particularly going through challenging 122 00:06:42,270 --> 00:06:45,300 Steve Vamos: and uncertain times over the course of the last few 123 00:06:45,300 --> 00:06:48,870 Steve Vamos: years, is that the more cloud software a small business 124 00:06:48,870 --> 00:06:53,219 Steve Vamos: has connected to the Xero platform, the better they have fared 125 00:06:53,610 --> 00:06:56,610 Steve Vamos: when it comes to the revenue they're producing and also 126 00:06:56,610 --> 00:07:00,330 Steve Vamos: the general state of their business from a profitability viewpoint. 127 00:07:00,990 --> 00:07:06,450 Steve Vamos: So the more technology that small businesses adopt, there is 128 00:07:06,450 --> 00:07:08,969 Steve Vamos: very strong reason to believe they'll be more effective, more 129 00:07:08,970 --> 00:07:11,910 Steve Vamos: efficient, and their business health will be greater. When we 130 00:07:11,910 --> 00:07:15,180 Steve Vamos: execute on our vision of trusted insights, ultimately, we're talking 131 00:07:15,180 --> 00:07:18,960 Steve Vamos: about more good advice and support being available to more 132 00:07:18,960 --> 00:07:23,130 Steve Vamos: small businesses because the truth is today, without small business 133 00:07:23,130 --> 00:07:28,290 Steve Vamos: data all being available in the cloud, small business advisory 134 00:07:28,290 --> 00:07:32,490 Steve Vamos: is not really that available. So kids on a Saturday 135 00:07:32,490 --> 00:07:35,190 Steve Vamos: sport day get more coaching than most small businesses, and 136 00:07:35,190 --> 00:07:38,430 Steve Vamos: our aim is by getting the small business to do more 137 00:07:38,430 --> 00:07:42,450 Steve Vamos: in the cloud with software, they can get access to 138 00:07:42,480 --> 00:07:45,060 Steve Vamos: that support and advice that looks at what's going on 139 00:07:45,390 --> 00:07:47,610 Steve Vamos: and says, " Hey, how come you're doing the things the 140 00:07:47,610 --> 00:07:50,460 Steve Vamos: way you're doing them? Is there a better way?" And 141 00:07:50,460 --> 00:07:51,840 Steve Vamos: better coaching, better support. 142 00:07:52,170 --> 00:07:56,610 Sean Aylmer: Is that Xero's competitive advantage, the coaching and support and 143 00:07:56,610 --> 00:07:59,520 Sean Aylmer: data? Because you are in a competitive industry, you have 144 00:07:59,940 --> 00:08:03,180 Sean Aylmer: competitors being almost taken over by big banks and things 145 00:08:03,180 --> 00:08:05,790 Sean Aylmer: like that. Not quite, but there's obviously lots of interest 146 00:08:05,790 --> 00:08:09,360 Sean Aylmer: in your sector. What is the competitive advantage of Xero? 147 00:08:10,380 --> 00:08:14,280 Steve Vamos: The competitive advantage Xero has originates from being first in 148 00:08:14,280 --> 00:08:17,970 Steve Vamos: the cloud. So we're not a desktop company that went 149 00:08:17,970 --> 00:08:21,960 Steve Vamos: through a conversion process of their organization product to get 150 00:08:21,960 --> 00:08:25,260 Steve Vamos: to the cloud, so we are born in the cloud. We're born 151 00:08:25,260 --> 00:08:27,840 Steve Vamos: with the view of collaboration of an advisor with a 152 00:08:27,840 --> 00:08:30,989 Steve Vamos: small business in the heart of our product. We've got 153 00:08:30,990 --> 00:08:34,530 Steve Vamos: a product that our customers and our partners, or our 154 00:08:34,530 --> 00:08:39,390 Steve Vamos: accountants and bookkeepers love like no other in any technology 155 00:08:39,390 --> 00:08:43,440 Steve Vamos: business that I've been involved with. We've got an amazing 156 00:08:43,500 --> 00:08:47,370 Steve Vamos: partnership with accountants and bookkeepers, which is really on show, 157 00:08:47,370 --> 00:08:50,400 Steve Vamos: for example, at our Xerocon conferences where you get thousands of 158 00:08:50,400 --> 00:08:54,150 Steve Vamos: them coming along to learn and to share and be 159 00:08:54,150 --> 00:08:57,480 Steve Vamos: part of the Xero journey. I think also we have 160 00:08:57,480 --> 00:09:00,209 Steve Vamos: a company that has a very special culture, and that 161 00:09:00,270 --> 00:09:04,860 Steve Vamos: culture is very human centric and has caring about each 162 00:09:04,860 --> 00:09:09,090 Steve Vamos: other and our customers, partners and people we work with 163 00:09:09,090 --> 00:09:12,150 Steve Vamos: very much front and center. And so we've been able 164 00:09:12,150 --> 00:09:15,000 Steve Vamos: to attract great talent and continue to grow at a 165 00:09:15,000 --> 00:09:15,600 Steve Vamos: rapid rate. 166 00:09:16,170 --> 00:09:18,179 Sean Aylmer: So then that leads me onto, I've got to ask 167 00:09:18,179 --> 00:09:22,200 Sean Aylmer: you about Xerocon, the two day conference you've just held in 168 00:09:22,230 --> 00:09:25,920 Sean Aylmer: Sydney. It was once described as Coachella for bookkeepers and 169 00:09:25,920 --> 00:09:29,040 Sean Aylmer: accountants. That is a cracking description. How did the conference 170 00:09:29,040 --> 00:09:30,090 Sean Aylmer: go? What aim out of it? 171 00:09:30,420 --> 00:09:34,770 Steve Vamos: It's been fantastic. We had close to 4, 000 people for 172 00:09:34,770 --> 00:09:39,090 Steve Vamos: the first time in three years together and the atmosphere 173 00:09:39,090 --> 00:09:44,250 Steve Vamos: was amazing, and at the heart of it, it is 174 00:09:44,250 --> 00:09:47,939 Steve Vamos: about our culture. It's about recognizing the humanity that is 175 00:09:48,929 --> 00:09:51,600 Steve Vamos: in all of us, every one of us. And in 176 00:09:51,600 --> 00:09:55,170 Steve Vamos: the accounting and bookkeeping profession, you think about the course 177 00:09:55,170 --> 00:09:58,679 Steve Vamos: of the last three years, the conversations that advisors have 178 00:09:58,679 --> 00:10:03,179 Steve Vamos: had to have with business owners about survival, about dealing 179 00:10:03,179 --> 00:10:07,920 Steve Vamos: with having to go to fully remote and doing business 180 00:10:07,920 --> 00:10:11,309 Steve Vamos: in radically different ways. They have done an amazing job 181 00:10:11,309 --> 00:10:15,089 Steve Vamos: to support such an important sector of our community, and 182 00:10:15,090 --> 00:10:18,270 Steve Vamos: so it really is about that appreciation for the importance 183 00:10:18,270 --> 00:10:21,540 Steve Vamos: of the work they do, and the agenda for Xerocon 184 00:10:21,570 --> 00:10:25,890 Steve Vamos: isn't all about software. It's about professional life, being human, 185 00:10:25,890 --> 00:10:29,100 Steve Vamos: the things that we all as human beings need to 186 00:10:29,100 --> 00:10:32,310 Steve Vamos: deal with, so it really is a wonderful forum. 187 00:10:32,790 --> 00:10:36,630 Sean Aylmer: Steve, one final question. You had a life which wasn't 188 00:10:36,630 --> 00:10:39,480 Sean Aylmer: as full on up until 2018. You then took on 189 00:10:39,480 --> 00:10:43,500 Sean Aylmer: the Xero job. That share price, do you watch it? 190 00:10:43,590 --> 00:10:48,360 Sean Aylmer: Because tech stocks generally, and Xero, probably particularly more recently, 191 00:10:48,750 --> 00:10:52,319 Sean Aylmer: incredibly volatile without necessarily having a lot of reason for 192 00:10:52,320 --> 00:10:54,120 Sean Aylmer: it at times, or from the outside, it doesn't look 193 00:10:54,120 --> 00:10:56,100 Sean Aylmer: like there's a lot of reason for it. Do you 194 00:10:56,100 --> 00:10:56,490 Sean Aylmer: watch it? 195 00:10:57,120 --> 00:10:59,700 Steve Vamos: It's one of those things where, of course I check 196 00:10:59,700 --> 00:11:01,380 Steve Vamos: in on it every now and then, but the truth 197 00:11:01,380 --> 00:11:05,460 Steve Vamos: is that in 40 years of working in this industry, 198 00:11:06,150 --> 00:11:09,960 Steve Vamos: you never ever get consumed in it because you've got 199 00:11:09,960 --> 00:11:12,270 Steve Vamos: to look long term. And at the end of the 200 00:11:12,270 --> 00:11:15,239 Steve Vamos: day, it's the fundamentals that matter most. All that other 201 00:11:15,240 --> 00:11:18,150 Steve Vamos: stuff takes care of itself one way or the other. 202 00:11:18,450 --> 00:11:21,570 Steve Vamos: The fundamentals that we have to be concerned about really 203 00:11:21,570 --> 00:11:24,960 Steve Vamos: come down to having the right strategy, executing it well, 204 00:11:24,990 --> 00:11:27,300 Steve Vamos: and at the heart of that, is looking after our 205 00:11:27,300 --> 00:11:30,750 Steve Vamos: customers, partners and our people, and that in itself keeps 206 00:11:30,750 --> 00:11:33,209 Steve Vamos: me very, very consumed. 207 00:11:33,480 --> 00:11:35,250 Sean Aylmer: Steve, thank you for talking to Fear and Greed. 208 00:11:35,460 --> 00:11:36,780 Steve Vamos: Thank you for having me, Sean. 209 00:11:37,470 --> 00:11:40,470 Sean Aylmer: That was Steve Vamos, Chief Executive of Xero. This is the 210 00:11:40,470 --> 00:11:43,380 Sean Aylmer: Fear and Greed daily interview. Remember, this information is general 211 00:11:43,380 --> 00:11:46,320 Sean Aylmer: in nature and you should seek professional advice before making 212 00:11:46,320 --> 00:11:48,989 Sean Aylmer: any investment decisions. Join us every morning for the full 213 00:11:48,990 --> 00:11:51,930 Sean Aylmer: episode of Fear and Greed, Australia's most popular business podcast. 214 00:11:51,990 --> 00:11:53,730 Sean Aylmer: I'm Sean Aylmer, enjoy your day.