Xero: Taking Aim At The Intuit Goliath

Tom Taulli for Forbes writes: When it comes to small business accounting software, Intuit INTU -2.77%’s QuickBooks is the king, at least in the US market. Many have tried to unseat the company but to no avail.

Yet now QuickBooks may finally have a real challenger – Xero. Launched in New Zealand during 2006, the company focused on leveraging next-generation technologies like cloud computing as well as consumer-driven UI approaches.

And yes, this has turned out to be a winning strategy.  In fact, Xero even caught the attention of super investor Peter Thiel, who has participated in four rounds of financing.

So to learn more about the company, I recently talked to the CEO of the US business, Jamie Sutherland.

Here’s what he had to say:

Tom Taulli: How does Xero help with small businesses? What about your mobile apps?

Jamie Sutherland: Xero is beautiful online accounting software, built for the web from the ground up and tailored to meet the financial needs of small businesses in an easy-to-use, intuitive way. Small businesses (SMBs) use Xero to address a variety of business needs from payroll to invoicing, and from bank reconciliation to reporting, all of which are designed to provide full financial visibility to SMBs and their accounting counterparts.

Xero customers are able to access their financials from anywhere and at anytime on any device, which in turn, helps them make more accurate financial decisions about their business. With our native iPhone and Android mobile app, Xero Touch, SMBs can review their accounts, create and send invoices, chase up outstanding invoices, snap a picture of receipts, submit expense claims and more.

Taulli:  You recently put together a survey from your accountant base.  Main takeaways?

Sutherland: Our survey was conducted at our inaugural U.S. accounting event, Xerocon and subsequent cross-country roadshow. The main findings from the survey revealed that today’s accountants are mobile, adventuresome and technologically savvy via the cloud.

Additionally, the recent survey uncovered that the most common mistake small businesses make is not having real-insight into their financials (47%) and the public policy that has most small businesses worried is the Marketplace Fairness Act (77%) – internet sales tax.

Taulli: You are taking on a giant, Intuit’s QuickBooks. What has this been like? What are your advantages?

Sutherland: Intuit’s QuickBooks was not built for the cloud. Therefore it has had a lot of trouble with the transition (in the form of frequent outages and blackout times). Xero on the other hand has had a 99.999% percent uptime rate. This is the big advantage of Xero. Also, given that we were born in the cloud, we are able to iterate on the platform so much faster and implement changes that our community needs and wants at a much higher rate than a legacy player.

We are in an era where web services and contemporary APIs allow for collaboration. From day one Xero has had an open API so we can work with developers to grow an ecosystem of add-on partners that truly meet the needs of all small businesses. Currently we have 300 add-on partners and serve over 211,000 paying customers in more than 100 countries.