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Last week I spent a few hours at Xero HQ in Wellington. Partly I was in need of some connectivity and the Xero guys kindly let me use their WiFi (thanks team) and partly to sit down and have a heart to heart about both the Xero business model, and the Xero product offering.

I met with both Stuart Bale (former product man with MYOB, now product delivery manager for Xero, and just getting over being called “defective on-demand head after one of my recent posts) and Andrew Butel, product manager.

Obviously most of our discussion was in confidence but I can report about perceptions post meeting. In terms of business model, Xero are fully aware of the difficult job ahead of them. Their aim is to become known as the easiest accounting system in the world, this entails both creating a premium product, and ensuring people know about it.

I came away from the meeting impressed by some of the concepts floating around the Xero world, there are some really interesting ideas, both in terms of marketing initiatives but also ways to help “raise the tide” for all SaaS players - much of this tide raising revolves around playing nicely, encouraging and facilitating connections between applications and being open-minded about how a SaaS ecosystem will look in the months and years ahead.

It’s not all plain sailing though, along with the benefits of being a publicly listed company, shareholder observation also massively increases the pressures and Xero is clearly under significant pressure to perform. This pressure sees them having to work at many levels at once - via marketing, technology, business partnerships and careful fiscal responsibility.

All in all the early investors in Xero can rest comfortable in the knowledge that there is a highly capable team being built that understands the issues and is thinking and working hard about how to overcome them