A New Friend in the Playground

I woke up in the middle of the night to take part in a phone conference (NZ 9am is some ungodly hour in India) only to find my time zones were confused and I was an hour to late.

The conference was initiated by Telecom New Zealand and was to announce their partnership with Xero. It seems Xero will now have a presence on the Telecom Business Hub – Telecom customers can get a free 60 day trial of Xero (as opposed to the standard 30 day one).

It’s a big win for Xero in my opinion, despite their bullishness they need to achieve scale (their released half year report show a burn rate that demands scale). Telecom is already in the mind of most New Zealand business customers so this move just increases that presence.

So from a marketing perspective I understand the benefits to be gained from this deal. From a user perspective there are a few things that would really create a value add that a partnership like this could bring such allowing for a single billing point and tight functional integration between the two companies.

Given the economic climate however it’s a great win for Xero that should see them ramp up their customer numbers, and for Telecom it builds the perception that they’re building a complete business needs marketplace for their customers.

(And maybe, the recent announcement about the new WCDMA network will mean that Telecom customers can have those iPhones that Rod has long been saying will be revolutionary ;-) )

3 Comments
  • Ben,

    Hope all is well in India and you’ve managed to keep the Delhi Belly at bay.

    Just keeping tabs on the Xero marketing plans to date, as seen from an outsider ….

    Rollout 101 – get a few Guinea Pigs on board (myself included), do some tweaking to get a robust user friendly product.

    2 Get the local beanies on board as much as possible, gathering references along the way.

    3 Get the local banks on board (instant credibility plus cross promotion)

    4 Launch into UK (tougher market, banks are crusty)

    5 Launch into Aussie, then Global. All the while winning awards and acceptance from the likes of Deloitte.

    6 Get into some potentially lucrative local partnerships.

    Where to from here? At some point consolidation must come into play; building the existing avenues rather than spread themselves too thinly. Telecom has the potential to be big, as does a one size fits all global offering. My pick is one of either NZ, Aussie or Global will be the goldmine, either through the networking possibilities in NZ/Oz or the sheer size of the global market.

    The whole thing is fascinating to watch.

  • @Paul – yup no Delhi belly yet touch wood

    Let’s put it this way – if the rest of the population is 1% as positive about Xero as you are they’ll have a firecracker on their hands!

    You’re right – it’s fascinating to watch and be part of.

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  • I do not understand what they are doing at Xero… they have spent way to much cash over the last 6 months. At this rate they only have enough cash to last 1 more year.

    This means that they need to obtain another 11000 or so customers in 12 months, realistically they could do half that.

    Better cash management would have seen them have 18 months of cash – this would have given them two change over periods to acquire the needed customer base to break even.

    Looks like another capital raising is on the cards, unless Xero pull a rabbit out of the hat with a new product or revenue stream.

    Don’t get me wrong, I love the product, I think there is a huge market for it, I just think they have given themselves a runway which is 6 months too short…

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