1 00:00:04,019 --> 00:00:06,930 Sean Aylmer: Welcome to the Fear and Greed business interview. I'm Sean Aylmer. 2 00:00:07,170 --> 00:00:09,719 Sean Aylmer: We talk a lot about small business on this podcast, 3 00:00:09,719 --> 00:00:13,110 Sean Aylmer: and with good reason, more than 97% of all Australian 4 00:00:13,110 --> 00:00:16,440 Sean Aylmer: businesses fall into that category. And when you think about 5 00:00:16,440 --> 00:00:18,689 Sean Aylmer: everything they've gone through over the last few years from 6 00:00:18,690 --> 00:00:22,739 Sean Aylmer: a pandemic and supply chain challenges through to soaring inflation 7 00:00:22,920 --> 00:00:25,650 Sean Aylmer: in an extremely tight labour market, it's a little wonder 8 00:00:25,650 --> 00:00:28,920 Sean Aylmer: that the needs of these businesses are evolving. I wanted 9 00:00:28,920 --> 00:00:32,400 Sean Aylmer: to look today at what SMEs need, what they need today, 10 00:00:32,400 --> 00:00:35,879 Sean Aylmer: how that's changed, and where we're heading. Diya Jolly is 11 00:00:35,879 --> 00:00:39,780 Sean Aylmer: the Chief Product Officer of small business platform Xero, usually 12 00:00:39,780 --> 00:00:42,269 Sean Aylmer: based in the US, she's in Australia this week for 13 00:00:42,269 --> 00:00:46,348 Sean Aylmer: Xerocon in Sydney, which is a great supporter of this podcast. Diya, 14 00:00:46,348 --> 00:00:47,400 Sean Aylmer: welcome to Fear and Greed. 15 00:00:47,790 --> 00:00:48,810 Diya Jolly: Thank you for having me. 16 00:00:49,200 --> 00:00:50,430 Sean Aylmer: Are you enjoying Australia? 17 00:00:50,969 --> 00:00:53,369 Diya Jolly: I am loving it. I've been here for six weeks 18 00:00:53,369 --> 00:00:54,840 Diya Jolly: and have really enjoyed myself. 19 00:00:55,410 --> 00:00:57,030 Sean Aylmer: Fantastic. Where are you normally based? 20 00:00:57,750 --> 00:00:59,370 Diya Jolly: Normally I'm based out of San Francisco. 21 00:00:59,910 --> 00:01:04,050 Sean Aylmer: Right, okay. So I really wanted to have a chat 22 00:01:04,050 --> 00:01:06,989 Sean Aylmer: to you today from the perspective of somebody running a 23 00:01:06,990 --> 00:01:10,350 Sean Aylmer: small business. I suppose firstly, what is it that they 24 00:01:10,350 --> 00:01:15,390 Sean Aylmer: need now that perhaps they didn't need five years ago? 25 00:01:15,390 --> 00:01:18,331 Sean Aylmer: How have they evolved over the past five years or so? 26 00:01:18,331 --> 00:01:22,678 Diya Jolly: So if you look at what's happened in the world 27 00:01:22,679 --> 00:01:24,539 Diya Jolly: in the past five years, I mean, I think three 28 00:01:24,539 --> 00:01:29,549 Diya Jolly: things stand out. So one is just how fast digital 29 00:01:29,549 --> 00:01:33,060 Diya Jolly: is taking over the world, whether that is in them 30 00:01:33,060 --> 00:01:36,509 Diya Jolly: offering products and services to their customers or in what 31 00:01:36,510 --> 00:01:39,359 Diya Jolly: they're required to do from a product and service perspective. 32 00:01:39,360 --> 00:01:42,899 Diya Jolly: So if you think about digitisation of tax, if you 33 00:01:42,900 --> 00:01:47,640 Diya Jolly: think about digitisation of payments, things like that. And then 34 00:01:47,730 --> 00:01:50,220 Diya Jolly: the next thing is if you think about how the 35 00:01:50,220 --> 00:01:54,990 Diya Jolly: world has changed post-COVID. So more and more employees are 36 00:01:54,990 --> 00:01:57,929 Diya Jolly: working remotely, more and more customers are looking for the 37 00:01:57,929 --> 00:02:01,140 Diya Jolly: ability to buy things and service things remotely, et cetera. 38 00:02:01,620 --> 00:02:05,609 Diya Jolly: And then finally, if you look at the economy now, cashflow, 39 00:02:05,609 --> 00:02:08,040 Diya Jolly: which has always been a massive concern for businesses, is 40 00:02:08,040 --> 00:02:11,820 Diya Jolly: becoming more and more of a top- of- mind consideration 41 00:02:12,090 --> 00:02:15,389 Diya Jolly: for most small businesses. And things are tight right now. 42 00:02:15,389 --> 00:02:18,629 Diya Jolly: And so cashflow is getting higher and higher priority and 43 00:02:18,630 --> 00:02:19,439 Diya Jolly: being able to manage that. 44 00:02:20,130 --> 00:02:23,429 Sean Aylmer: Okay, so let's take those. When you talk about the digitisation, 45 00:02:23,760 --> 00:02:28,380 Sean Aylmer: and that has accelerated through COVID, what is it that 46 00:02:28,740 --> 00:02:32,280 Sean Aylmer: small business needs? And small business is a very broad category, 47 00:02:32,280 --> 00:02:36,090 Sean Aylmer: I appreciate that, but to actually be part of the 48 00:02:36,090 --> 00:02:38,280 Sean Aylmer: digital economy, what do they need? 49 00:02:38,280 --> 00:02:41,758 Diya Jolly: So what they need as part of the digital economy, 50 00:02:41,760 --> 00:02:45,419 Diya Jolly: think about a whole set of tools and services that 51 00:02:45,419 --> 00:02:49,200 Diya Jolly: they used in-person. Think about their POS (Point Of Sale) systems, think about 52 00:02:49,200 --> 00:02:51,450 Diya Jolly: the systems they make sales from, think about how they 53 00:02:51,450 --> 00:02:55,230 Diya Jolly: invoice customers, think about how they receive their own expenses. 54 00:02:55,590 --> 00:02:58,680 Diya Jolly: All of that gets digitised, so they now need to 55 00:02:58,680 --> 00:03:03,720 Diya Jolly: move to a solution that can actually help them do 56 00:03:03,720 --> 00:03:06,840 Diya Jolly: all of this digitally versus be able to do this 57 00:03:06,840 --> 00:03:08,940 Diya Jolly: as a point of sale when you're in the store, 58 00:03:09,270 --> 00:03:12,508 Diya Jolly: or if somebody hands you a vendor receipt. So I 59 00:03:12,508 --> 00:03:16,409 Diya Jolly: think their entire back office is, of course, their front 60 00:03:16,410 --> 00:03:19,830 Diya Jolly: office is becoming digitised, but few people realise that their 61 00:03:19,830 --> 00:03:21,930 Diya Jolly: back office is completely getting digitised as well. 62 00:03:23,370 --> 00:03:28,139 Sean Aylmer: And then post-COVID, the remote work, purchasing remotely, that kind 63 00:03:28,139 --> 00:03:29,999 Sean Aylmer: of falls in the same category then, does it? 64 00:03:30,750 --> 00:03:33,000 Diya Jolly: Yeah, it does. I mean, if you think about post-COVID, 65 00:03:33,000 --> 00:03:37,230 Diya Jolly: remotely managing employees, is another criteria and dimension. How do 66 00:03:37,230 --> 00:03:39,690 Diya Jolly: you ensure you're paying them correctly? How do you ensure 67 00:03:39,690 --> 00:03:42,300 Diya Jolly: you're compliant? How do you ensure you're getting all their 68 00:03:42,300 --> 00:03:46,050 Diya Jolly: tax information remotely? Et cetera. All of that becomes more complicated. 69 00:03:46,050 --> 00:03:49,110 Diya Jolly: If you look at me, when I joined Xero, I 70 00:03:49,110 --> 00:03:51,870 Diya Jolly: didn't submit my tax form like I did in my 71 00:03:51,870 --> 00:03:54,480 Diya Jolly: last job the last four years, or four years ago, 72 00:03:54,480 --> 00:03:58,020 Diya Jolly: which is I walked in and I handed my credentials. Here, 73 00:03:58,020 --> 00:04:00,150 Diya Jolly: we had a whole digital process of how to do that. 74 00:04:01,950 --> 00:04:04,320 Sean Aylmer: Amazing. What about cashflow? I mean, cashflow is always top 75 00:04:04,320 --> 00:04:06,210 Sean Aylmer: of mind, but you're saying more and more now. Is 76 00:04:06,210 --> 00:04:08,459 Sean Aylmer: that a cost of living, higher interest rates issue? 77 00:04:08,910 --> 00:04:12,359 Diya Jolly: Yeah, I think it's where the economy is. Cashflow for small businesses is 78 00:04:12,359 --> 00:04:15,510 Diya Jolly: always, I mean, it's always a big deal. But I 79 00:04:15,510 --> 00:04:17,940 Diya Jolly: think with the economy, some of the things we're seeing 80 00:04:17,940 --> 00:04:21,089 Diya Jolly: is 38% of businesses are not able to even pay 81 00:04:21,089 --> 00:04:25,380 Diya Jolly: themselves, business owners. And cashflow, given where the economy is 82 00:04:25,380 --> 00:04:29,670 Diya Jolly: with high inflation, with lower and lower purchases from consumers, 83 00:04:29,940 --> 00:04:34,200 Diya Jolly: is becoming bigger criteria for smaller businesses right now. 84 00:04:35,910 --> 00:04:39,389 Sean Aylmer: So this is an area obviously where Xero plays. Do 85 00:04:39,389 --> 00:04:46,770 Sean Aylmer: you think most businesses are accepting of the technology, are 86 00:04:46,770 --> 00:04:50,279 Sean Aylmer: able to use the technology, just to make things easier? 87 00:04:50,490 --> 00:04:52,620 Sean Aylmer: Or is there an education piece here that we need 88 00:04:52,620 --> 00:04:53,220 Sean Aylmer: to work on? 89 00:04:54,360 --> 00:04:59,520 Diya Jolly: So I think most small businesses have limited time. As 90 00:04:59,520 --> 00:05:02,250 Diya Jolly: a small business owner, you are always trapped for time. 91 00:05:02,759 --> 00:05:06,419 Diya Jolly: I think the key here is you have to, any 92 00:05:06,420 --> 00:05:08,969 Diya Jolly: software solution that you want a small business owner to 93 00:05:08,970 --> 00:05:12,450 Diya Jolly: use, has to actually provide a tremendous amount of value. 94 00:05:12,930 --> 00:05:15,059 Diya Jolly: And if it does that, and when I say value, 95 00:05:15,059 --> 00:05:16,919 Diya Jolly: a lot of it is time savings or cost savings, 96 00:05:16,920 --> 00:05:19,469 Diya Jolly: honestly, for them. So increase in productivity so that they 97 00:05:19,469 --> 00:05:22,440 Diya Jolly: can go get more business. And when you actually do 98 00:05:22,440 --> 00:05:25,020 Diya Jolly: that, you are able to attract their attention because it 99 00:05:25,020 --> 00:05:28,380 Diya Jolly: has such a high return for them. Right now, given 100 00:05:28,380 --> 00:05:31,440 Diya Jolly: the phase we're in, small businesses are actually looking for 101 00:05:31,440 --> 00:05:33,570 Diya Jolly: ways to become more productive, cut their costs, et cetera. 102 00:05:34,080 --> 00:05:37,859 Diya Jolly: So it's actually a phase of the economy where they 103 00:05:37,860 --> 00:05:40,019 Diya Jolly: are having to work harder to be able to do 104 00:05:40,020 --> 00:05:42,570 Diya Jolly: this. And so they are actively looking for tools that can 105 00:05:42,600 --> 00:05:46,289 Diya Jolly: help them. And while yes, of course there's education, I 106 00:05:46,290 --> 00:05:49,740 Diya Jolly: don't think you have to educate them to the benefits necessarily. 107 00:05:50,520 --> 00:05:52,769 Sean Aylmer: Stay with me Diya, we'll be back in a minute. 108 00:05:58,589 --> 00:06:01,740 Sean Aylmer: My guest this morning is Diya Jolly, Chief Product Officer 109 00:06:02,040 --> 00:06:07,229 Sean Aylmer: at Xero. Okay, so let's go forward five years. Do 110 00:06:07,230 --> 00:06:10,380 Sean Aylmer: you think these will be the same top-of-mind issues? I mean, 111 00:06:10,380 --> 00:06:13,830 Sean Aylmer: I'm sure cashflow will be top of mind, but what 112 00:06:13,830 --> 00:06:17,850 Sean Aylmer: about the flexible working idea? What about digitisation? Are they 113 00:06:17,850 --> 00:06:21,360 Sean Aylmer: concepts that will be embedded in the economy within small businesses? 114 00:06:21,570 --> 00:06:24,480 Sean Aylmer: And so just kind of table stakes in a sense, 115 00:06:24,750 --> 00:06:27,389 Sean Aylmer: what will small businesses be worried about in five years, 116 00:06:27,389 --> 00:06:27,810 Sean Aylmer: do you think? 117 00:06:30,779 --> 00:06:33,209 Diya Jolly: That's a great question because look, if we do our 118 00:06:33,210 --> 00:06:37,440 Diya Jolly: jobs and our ecosystem does their jobs right, these should 119 00:06:37,440 --> 00:06:40,050 Diya Jolly: be things that become second nature to small businesses. So 120 00:06:40,620 --> 00:06:44,339 Diya Jolly: online payments was something that was a novelty before. Now 121 00:06:44,339 --> 00:06:46,889 Diya Jolly: you look everywhere and online payments is just par for 122 00:06:46,889 --> 00:06:49,500 Diya Jolly: the course for any big company. It should become the 123 00:06:49,500 --> 00:06:52,860 Diya Jolly: same for small businesses. I talk today about how online payments, 124 00:06:52,889 --> 00:06:55,440 Diya Jolly: people that use Xero's online payment solution, actually get paid 2X (two times) as fast, 125 00:06:56,279 --> 00:06:59,789 Diya Jolly: small businesses. So these things should just become more and 126 00:06:59,790 --> 00:07:04,740 Diya Jolly: more embedded within their experience. Remote work and compliance remote work, like, yeah, 127 00:07:04,830 --> 00:07:07,020 Diya Jolly: if there's somebody joining remotely, even if you're showing up for 128 00:07:07,020 --> 00:07:09,419 Diya Jolly: work the first day, you should be able to submit 129 00:07:09,420 --> 00:07:12,150 Diya Jolly: your tax information and verify yourself remotely the day before. 130 00:07:12,150 --> 00:07:14,730 Diya Jolly: Why waste the time when you're at work? So I 131 00:07:14,730 --> 00:07:19,470 Diya Jolly: think more and more these solutions will become the norm 132 00:07:19,470 --> 00:07:24,030 Diya Jolly: and accepted and will increase productivity for small businesses and will 133 00:07:24,030 --> 00:07:25,710 Diya Jolly: become mainstream over the next five years. 134 00:07:26,160 --> 00:07:29,489 Sean Aylmer: Okay. So I want to ask about AI. Where does that fit into it? I know this has 135 00:07:29,490 --> 00:07:32,340 Sean Aylmer: been a discussion at the Xerocon conference this week. 136 00:07:33,060 --> 00:07:35,400 Diya Jolly: "Everybody talks about AI as if it's a new technology, 137 00:07:35,760 --> 00:07:38,820 Diya Jolly: but AI has been around for a long time. I 138 00:07:38,820 --> 00:07:41,969 Diya Jolly: used to work at Google, and AI was everywhere. We 139 00:07:41,969 --> 00:07:45,330 Diya Jolly: were using AI in everything. And Xero has been using AI, 140 00:07:45,420 --> 00:07:48,209 Diya Jolly: to be honest, across a range of our products already. 141 00:07:48,209 --> 00:07:53,280 Diya Jolly: We can scan your bills, which is AI. We use 142 00:07:53,280 --> 00:07:57,360 Diya Jolly: AI to help you with your bank reconciliation. Now, what's 143 00:07:57,360 --> 00:08:01,139 Diya Jolly: happened with AI is that with generative AI, it has 144 00:08:01,139 --> 00:08:04,230 Diya Jolly: become much more conversational as opposed to producing a bunch 145 00:08:04,230 --> 00:08:06,720 Diya Jolly: of outputs. So you can ask questions and you can 146 00:08:06,720 --> 00:08:09,990 Diya Jolly: get answers to questions. We are experimenting with a bunch 147 00:08:09,990 --> 00:08:13,890 Diya Jolly: of those techniques and we're experimenting with like, hey, how 148 00:08:13,890 --> 00:08:17,160 Diya Jolly: about we use AI to help answer our customer's questions 149 00:08:17,250 --> 00:08:19,920 Diya Jolly: versus having to have them look through a bunch of articles. 150 00:08:19,920 --> 00:08:22,320 Diya Jolly: We're trying to figure out, hey, can we use AI, 151 00:08:22,320 --> 00:08:24,089 Diya Jolly: like if somebody's trying to use Xero for the first 152 00:08:24,090 --> 00:08:26,130 Diya Jolly: time or a new feature within Xero for the first time, 153 00:08:27,870 --> 00:08:30,030 Diya Jolly: can they just ask a question and say, "Hey, I want 154 00:08:30,240 --> 00:08:32,429 Diya Jolly: to use invoices in Xero. Here's what I'm trying to do. 155 00:08:32,429 --> 00:08:35,610 Diya Jolly: What should I do first?"? Versus having to go again, 156 00:08:35,849 --> 00:08:38,069 Diya Jolly: try to figure it out on their own. So AI 157 00:08:38,490 --> 00:08:43,740 Diya Jolly: has a large potential, if harnessed correctly, to truly drive 158 00:08:43,950 --> 00:08:46,110 Diya Jolly: two things for small businesses. One is to reduce the 159 00:08:46,110 --> 00:08:49,200 Diya Jolly: amount of effort and increase their productivity. And then the 160 00:08:49,200 --> 00:08:53,520 Diya Jolly: second is actually to help tools that help them give 161 00:08:53,520 --> 00:08:57,540 Diya Jolly: them much deeper insights into things that make them more money, 162 00:08:57,540 --> 00:08:59,309 Diya Jolly: make them more productive, et cetera. 163 00:08:59,789 --> 00:09:02,130 Sean Aylmer: Just wrapping that up, in a sense, it is probably 164 00:09:02,190 --> 00:09:05,819 Sean Aylmer: oversimplifying it, but it's kind of making life easier for small businesses? 165 00:09:06,600 --> 00:09:09,929 Diya Jolly: Absolutely. Making life easier and helping them make more money. 166 00:09:10,469 --> 00:09:12,659 Sean Aylmer: Now, one thing I want to just talk to, Diya 167 00:09:12,660 --> 00:09:16,139 Sean Aylmer: Jolly from Xero, before we go, is an issue in 168 00:09:16,139 --> 00:09:20,280 Sean Aylmer: Australia has often been around workforce management, and something Xero 169 00:09:20,280 --> 00:09:24,240 Sean Aylmer: does focus on. We've had a bunch of situations where 170 00:09:24,240 --> 00:09:28,949 Sean Aylmer: things like businesses haven't paid staff the right amount, not deliberately, 171 00:09:29,280 --> 00:09:31,530 Sean Aylmer: but just simply because the award system can often be 172 00:09:31,530 --> 00:09:36,750 Sean Aylmer: quite confusing. Those sort of everyday problems, and I have run small businesses, 173 00:09:36,750 --> 00:09:39,630 Sean Aylmer: and actually how much to pay an employee, is sometimes 174 00:09:39,630 --> 00:09:44,340 Sean Aylmer: really hard to work out. Can AI technology solve those 175 00:09:44,340 --> 00:09:45,179 Sean Aylmer: sorts of problems? 176 00:09:45,690 --> 00:09:48,420 Diya Jolly: Look, so let's start from what Xero offers today, and 177 00:09:48,420 --> 00:09:49,949 Diya Jolly: then I can talk to you about what AI can 178 00:09:49,950 --> 00:09:53,309 Diya Jolly: do there. So we have our offering Planday, which actually 179 00:09:53,309 --> 00:09:56,670 Diya Jolly: allows small businesses to have their employees enter their time, 180 00:09:57,150 --> 00:10:00,328 Diya Jolly: its time sheets, and it then calculates awards based on 181 00:10:00,330 --> 00:10:03,270 Diya Jolly: that time, and then enters it into Xero payroll, and 182 00:10:03,270 --> 00:10:06,179 Diya Jolly: you can execute the payroll run from there. What AI 183 00:10:06,179 --> 00:10:09,150 Diya Jolly: can do is, yes, it can find anomalies. If you 184 00:10:09,150 --> 00:10:12,059 Diya Jolly: have a regular pattern, it can also sort of make 185 00:10:12,059 --> 00:10:15,358 Diya Jolly: the inputting of your time easier so that you don't 186 00:10:15,360 --> 00:10:16,920 Diya Jolly: have to enter everything. You can just look at it 187 00:10:16,920 --> 00:10:20,010 Diya Jolly: and say, "Yes, this is correct." It can help increase security. 188 00:10:20,010 --> 00:10:22,078 Diya Jolly: So who's running the pay runs? Et cetera. So there 189 00:10:22,080 --> 00:10:24,391 Diya Jolly: are lots of places AI can help in here. 190 00:10:24,391 --> 00:10:28,109 Sean Aylmer: Okay. So I suppose there's still going to be an 191 00:10:28,109 --> 00:10:31,110 Sean Aylmer: element of small business, I mean, I suppose a small 192 00:10:31,110 --> 00:10:33,480 Sean Aylmer: business needs to understand what they're doing with staff and 193 00:10:33,480 --> 00:10:37,980 Sean Aylmer: that anyway, but certainly AI as we go forward, should 194 00:10:37,980 --> 00:10:39,600 Sean Aylmer: or less be able to help that process? 195 00:10:40,050 --> 00:10:43,799 Diya Jolly: Yes, absolutely. I mean, there's so much from communicating with 196 00:10:43,799 --> 00:10:48,179 Diya Jolly: the employees, their time and expenses, their education and training, 197 00:10:48,479 --> 00:10:51,840 Diya Jolly: their pay run, the security, the compliance, and all of 198 00:10:51,840 --> 00:10:53,578 Diya Jolly: it, AI can make easier. We've talked about all of 199 00:10:53,580 --> 00:10:55,380 Diya Jolly: this in some form or fashion in this talk. 200 00:10:56,010 --> 00:10:57,809 Sean Aylmer: Diya, thank you for talking to Fear and Greed. 201 00:10:58,260 --> 00:10:59,099 Diya Jolly: Thank you for having me. 202 00:10:59,610 --> 00:11:02,639 Sean Aylmer: That was Diya Jolly, Chief Product Officer at Xero, in 203 00:11:02,639 --> 00:11:05,579 Sean Aylmer: Sydney this week for Xerocon, which is a supporter of this 204 00:11:05,580 --> 00:11:08,640 Sean Aylmer: podcast. This is the Fear and Greed Daily Interview. Join 205 00:11:08,640 --> 00:11:10,530 Sean Aylmer: us every morning for the full episode of Fear and 206 00:11:10,530 --> 00:11:14,249 Sean Aylmer: Greed, Australia's most popular business podcast. I'm Sean Aylmer, have 207 00:11:14,250 --> 00:11:14,819 Sean Aylmer: a great day.