Speaker by Various Artists

39

Re-Entry III: The Eagle has Landed

by Daniel K 3

We arrived at Auckland airport, via a few days spent wolfing Malaysian food in Kuala Lumpur, on Sunday. We had been conscious of a pronounced antipodean flavour in the dress of many of the other tourists in KL – who sported stubble and beachwear rather than parted hair and polo shirts – and so were somewhat prepared for the atmosphere of our arrival.

I am always struck by the politeness and warmth of New Zealand’s customs officials. I don’t want to overstate this; customs officials in all countries are designed to make life difficult, but in New Zealand they do it with a smile. I was genuinely grateful to the passport officer who, once she saw we had ticked the “permanent return” box on the customs form, smilingly welcomed my wife and I back to the country.

Having negotiated our way through the MAF fruit police, we picked up a rental car and drove through Epsom to a central Auckland hotel for a night to shake off our jet lag. Our families are based in Wellington and we will see them next week, as we head down the island visiting some grandparents. As I drove, visions of Christchurch suburbia appeared before me. I saw well-marked roads, sensible saloon cars being driven carefully, well-tended gardens, well-trimmed grass and functional, practical, squat houses. An image of life as Good Clean Fun. This was disconcerting. I also know it is not representative. Other parts of South Auckland look very different and in a strange way I was pleased to recall this and to remind myself that behind the suburban weatherboards probably lay one or two P factories, tinny houses and aspirational garage bands.

The hotel was a mistake. I figure there are two types of hotels in the world: those that figure you are paying them enough money and so treat you like a valued guest; and those that see your dependence upon their amenities as an opportunity to fleece you at every opportunity. This fell firmly in the second camp. Internet access – even the wifi in the lobby – was expensive, breakfast was extortionate and came complete with “upgrade options”, and the privilege of parking anywhere near the hotel (ie a five minute walk to a nearby parking building) was, predictably, an added extra. Which wouldn’t have been so bad had the place not both resembled a tired 1970s grand dame and yet been insufferably smug, as if – for reasons known to the staff but not to you – it was a great honour to be allowed to walk down its faded brown hallways.

That day my wife and I met some good friends for a few drinks and a bite in a bar in central Auckland, which we walked to along quiet, leafy streets. This was the same day as Billy Connolly’s show, in which he described New Zealanders as beige and challenged his audience to step outside the comfort zone of discussing interest rates over salad and sausages eaten off paper plates. If I had read this ten years ago, living in Wellington, I am sure I would have been somewhat indignant. Now, I thought I could see what he meant, with a clarity I had not carried in my memory of New Zealand.

I had a privileged position as the bar we were in had filled up with the middle-aged punters about to head to Connolly’s show. I was struck by how familiar, yet quite unfamiliar, they looked. The men resembled Gavin Larsen – short cut, salt and pepper hair, chinos and short-sleeved shirts, inoffensive smiles and matey gestures. The women looked somewhat more confident, yet somehow uncomfortable; brightly dressed up with more effort than style, as if to impress a distinguished guest. Everyone ate quickly and efficiently, refuelling on kumara chips with aioli with the minimum of fuss and conversation.

We then headed up to Russell, with my old and good friend Mike, for a few days before starting work in a fortnight. It has been great to catch up in such a relaxed setting; eating, drinking and losing at board games.

But, while I have tried, with all my might, to appreciate the simple joys of a beach holiday in a traditional Kiwi bach, I confess to being slightly ill at ease. The drive from Auckland to Russell provided even more evidence of Good Clean Fun. The scenery seemed too pristine, too innocent, too unspoilt. I was relieved when, after the first day, the sun disappeared, lending a rather menacing wildness to the scenery and positively pleased when the inclement weather turned into a full-blown storm.

Prior to this, I was haunted by flashbacks of the adverts I remember for Kiwiburgers; snatches of beach holidays, Jonah Lomu and slices of beetroot. Yes, Sizzlers, Twisties, Tip-Top ice-cream, the Black Caps collapsing again – all of the signs of summer – are great for a break, but I am not truly on a break (all external signs notwithstanding). I am finding my country again. I know that New Zealand is not a 3-D Kiwiburger commercial. But I am anxious to confirm this with some first-hand experience.

It is probably apparent by now that I am not returning to New Zealand for “lifestyle” reasons. Indeed, I have never known quite how to respond to people who assume this must be the case. I loved my lifestyle in New York and London. I like books, music, restaurants and interesting discussions; all of which were easy to find. I walked to work daily from my New York apartment and from both of my London flats. In New York I diligently explored, and grew very fond of, Manhattan streets and nightlife. In the UK I happily spent most of my free time in pubs, bookshops and wandering around the countryside (where I could find more pubs and bookshops). In both places, I grew to like the solid, stone buildings and the centuries of history scattered all around. And I liked working in fascinating jobs amidst it all.

In this connection, I should mention this week’s Listener article on returning Kiwis. I bought a copy on my third day back, hoping to find a bit of solidarity.

Its starting point was a Massey University survey of New Zealand expatriates, which suggested that those who stay overseas had “higher levels of achievement and influence motivation than those who chose to come home”, who were motivated by social and family reasons. The article then postulated that even those ambitious expats might be forced to return due to the global recession, as reduced opportunities overseas make them more receptive to lower New Zealand salaries. In other words, those who come back either want to own a lifestyle block or have had their hand forced.

I found this line of reasoning rather depressing, perhaps because it doesn’t describe me very well: I have chosen to return, but neither because I lack ambition nor due to the global recession. It is true that I am partly motivated by social and family reasons – as are we all – but I am driven significantly by my work. I just think that my work will be more meaningful and fulfilling if done in the context of my own country.

My main objection to the article’s argument is its implicit identification of “ambition” with “the single-minded pursuit of wealth”. The premise seems to be that anyone who is primarily motivated by their career will naturally want to obtain the highest-paying job they can. As overseas jobs pay more, ambitious expats will stay overseas unless forced to return.

This seems unduly narrow to me. In truth, I think that the most driven people are sustained more by the satisfaction of what they do than the salary they draw. And there is, I hope, a lot of satisfaction to be found beneath the hoary old cliché of “making a difference” to a community, or country, you feel you belong to.

I can well understand Kiwis who cannot find the same opportunities in New Zealand as out of it: a friend who does disaster aid work for the Red Cross, and has recently been in Ethiopia, Chad, the Congo and Sri Lanka, is a good example. But if you are lucky enough to find (or be able to create) ways to pursue your vocation in your own country, then I have no doubt that there is interesting work to be done with a ton of drive needed to do it well.

But perhaps not in a bach in Russell during a storm. Which is probably a good thing. I have time to lose a few more board games yet….

21

Surviving Small III: Creating a Profile

by Xero 2

A few readers asked me to talk about how to create a PR profile. So here goes. I had to do it with Xero because I had to get my name and face out there and become known by the business community, so that we could raise the money we’d need to be able do Xero properly.

You need to make a choice to build profile. Having a profile is a double-edged sword, especially in New Zealand. I can report the tall poppy syndrome is alive and well and with any profile you will get plenty of flak. I don’t know why that is, but it just is. That’s why I think you need to start slowly and build experience like I mentioned in my article last year Setting media goals. There are skills to be learnt and you need to grow a thick skin.

I’ve always argued that serial entrepreneurship is repeatable. Stories like TradeMe get the press but they really are the exception. For most people stepping through a number of successful businesses is a more realistic way to do something finally great. Each business provides more experience, capital and networks.

But you need to be seen to be successful through each of these steps. I was thinking about doing online accounting well before the ink was dry on AfterMail so I made a point of ensuring that I got recognition for its success. There were a number of other great people at AfterMail who were welcome to take the limelight, but I saw AfterMail as a building block for what I wanted to do next, so pushed it.

Planning Xero, we quickly worked out that being a public company was key to our business strategy. I was probably well known in tech circles but not so much in the main stream business media. Having some business profile was essential to what we wanted to do. I didn’t formally come up with a plan to build profile but there were some natural things that it made sense to do.

Doing a blog was obvious, and I was already doing that, and there were a few other key things I worked on.

The first one was get to know some business journalists, so that they would call and ask for comments on stories. I always make a point of looking out at conferences and events to introduce myself. I also asked a few out for lunch to get to know them and understand how their industry works and how I could help them and engage. I think in general you should work out how you can provide value to other people.

One of the big things I did, which came out of Foo Camp two years ago, was to champion an issue. Broadband, especially international connections, is something I’m passionate about so I wrote a discussion paper, seeded it around which started a discussion on state involvement in networks. I had no idea how successful that would be but I think it worked because it was topical, I was passionate about it, it had conflicting people and companies on each side of the issue, and it had some controversy – a free market person arguing for state involvement.

Within a few weeks the ‘Drury Report’ was mentioned on TV and journalists were calling up asking what I thought interest rates would do. Suddenly I was a business commentator. I thought that was pretty funny!

Looking back you can see several stages. 1. Joining a conversation, which might just be commenting on blogs. 2. Starting a conversation - which I did with the broadband issue. 3. Hosting a conversation, which was starting to happen on my blog. Public Address is one of New Zealand’s great examples of hosting a conversation, which is exactly what we’re doing here today.

A recent example of another person building profile successfully is Ben Kepes based in Waipara just out of Christchurch. Starting initially by commenting on Xero he has set himself up as a SaaS industry commentator and is one of the main contributors of CloudAve which is becoming a key industry blog. It seems like he now gets flown around the world to speak at conferences on SaaS. In a very short time Ben has built a personal brand which is providing him with many exciting opportunities.

Networking is another important aspect. I’ve been told I am a prolific (if not veracious) networker. You do have to get out there and get known but there are a lot of people out there. Power networking comes from connecting. Understanding what people are doing and thinking how you can help them by connecting them to someone else.

As you get bigger and have resources your ability to connect gets stronger. You will find that spending money with key people will up your value and opportunities. That’s why it’s often worth paying a little more to be working with top quality people that can connect you. A good example is how we work with our legal advisors. We use Bell Gully and Quigg partners. Probably not the cheapest people in town, but we get invited to top-quality events where we can meet with incredibly high calibre and important people. So thinking about how you use your expenditure to advance yourself and your business is another of the tools an entrepreneur will make the most of.

A good example of starting a conversation, and an interesting experiment, was something that we put up on the Xero blog last week. We announced 1000 customers in 50 days. Seemed to impress oversees websites but wasn’t picked up by the mainstream media here. I wanted to do a cartoon rocket and we quickly found a well-recognised Tin Tin rocket that we put a Xero logo on.

This was happening while the section 92a debate was going so we had an internal discussion as to whether we could use it or not. I argued that I didn’t want to live in a world where you can’t have fun with images that weren’t doing any damage to anyone, and possibly quite the opposite. I did go and buy a Tin Tin book though to assuage any residual guilt.

Supersmarty Lance Wiggs picked it up along with a few others and that became the story in Computerworld. I was hoping to be taken to task because we wanted to have the public argument which would have generated even more exposure but it didn’t gain traction.

One of my all time favourite quotes is from Oscar Wilde and I think is most relevant to would-be entrepreneurs, especially when things don’t go your way:

“There is only one thing in life worse than being talked about, and that is not being talked about”

I invite your comments and questions.

32

Surviving Small II: Changing Process

by Xero 2

When we set out to do Xero a couple of years ago, it came out of the frustration I had as a small business owner that the way to do small business bookkeeping was inefficient and frustrating.

The software was dated, it took ages to get up and running, it was hard to use, hard to get data out and my accountant has to keep on applying band-aids to what was fundamentally poor data.

Instead of trying to replicate what old accounting systems did, but be online, we started with a blank sheet of paper and looked at what small businesses actually did everyday. That became the foundation of Xero and over the past year or so we’ve raced ahead building the accounting features small businesses need but with this ‘what do you actually do’ approach.

That sounds kind of technical and we just put our heads down and worked hard, but now with over 4000 customers we can look back and see what we have actually achieved.

Rather than just building software, we are finding we are asking small business owners to change their businesses processes.

It seems obvious now looking back; but small businesses don’t really have a standard set of processes. The way that traditional accounting systems work hasn’t changed for many years. The last big technology change was Windows based accounting software in the late ‘90s, but that was just the same old DOS based models with colour and a mouse.

Those old processes assumed that you did your bookkeeping activities in batch, often only at the end of a reporting period. This forces bookkeeping to be a grind you begin to dread, but more importantly it means the business owner cannot have a daily view of where they are at – so important in these more challenging days.

Where did these processes come from? Did a staff member who is no longer there pass them down? Have your processes ever been reviewed? Were email and the internet around when those processes were designed? Do you still fax things? Do you still have big paper files?

One of the apparent insights we had was that most small business owners log onto their online banking system in the morning to see who has paid them. We then noticed they didn’t process those bank transactions into their accounting system at that time, creating the need for catch up processing later.

We were able to connect Xero to all the major trading banks so that you can go into your accounting systems each morning and your bank transactions are already there, ready to be processed. Some are already classified for you as the software learns about your business.

A better business process is therefore for business owners to jump into Xero each morning to check receipts and also quickly process their cash transactions. This has numerous benefits:

• It eliminates the dreaded catch-up time

• The small business owner knows exactly where they are each day

• The business owner can better manage their cash allowing them to maximise their working capital and enhance their survivability

This is just one example where changing a business process will improve business. We’ve come up with a set of common practices, organized around when you do them to help small businesses relook at their processes. Different industries will do slightly different things but this collection of processes should be a useful start to help you get going.

For example: do simple daily tasks so that inputting of data never becomes your core work activity:

• Check your bank accounts to see what transactions were processed overnight

• Enter those transactions into your accounting system

• Open your mail and enter any cheques received and any invoices you need to pay

• Check your debtors and call any customers with outstanding balances

• Completed any jobs? Invoice straight away and send out

• Record any incidental expenses

Then there are weekly activities – mainly around invoicing and basic tracking reports:

• Bank account reconciliation, if you’re not doing it daily make it at least weekly so you always know where you are and can avoid the dreaded catch up.

• Plan your bill payments (Accounts Payables) – set up the amounts and dates you want to pay on your Awaiting Payment payable invoices.

• Send out your invoices (Accounts Receivables) - check your draft and Awaiting Payment tabs for any unsent invoices.

• Phone any customers who have exceeded your terms of trade

• Keep on top of expense claims

• Payroll – make sure you do this on time

• Review your top customers and consider calling ones you haven’t spoken too recently for new opportunities

And monthly – take the temperature of your business:

• Statement Run – send out statements to all customers with balances outstanding

• Pay your bills

• Clean out your wallet and expense claim any personal business expenditure

• Take any necessary drawings

• Complete your management reports and send them to your bank manager.

GST time – do the compliance work (Your accountant may help you with these):

• Check all expenses and transactions have been entered

• Look for any abnormal transactions

• Review the tax return

• Enter the tax transactions that you’ll either pay or receive

• Lock your accounts for the end of the tax period.

This is just our take on the changes we’ve seen in small business processes in the past year after talking to and hearing from a diverse group of varied customers and accountants.

But we’re keen to hear from you, so if there’s anything you think we’ve missed or if you have some insightful small business tips please join the conversation.

Rod Drury

CEO Xero

6

Re-Entry II: Wending Our Way Home

by Daniel K 2

I am writing this from the town of Minori, on Italy's Amalfi coast, watching the sun set as Serge Gainsbourg purrs enigmatically from the stereo in the corner. I don't expect any sympathy, at least not until I've worked my way through the whole Gainsbourg box set, purchased for 13 euros from Casablanca airport's sole duty free store: perhaps illustrating the regard in which the Moroccans hold the French.

There is a true art to travel writing, which I most certainly do not possess. While we are usually too polite to say so, most stories of other people's travels are either rather dull or else come across as an implicit boast, as if those telling the story were showing off their holiday like a shiny new possession. It takes a remarkably acute eye and, I think, a highly developed sense of humanity, to really bring alive the experience of a foreign place through words alone. My only defence in writing this short post is that the journey home is a time-honoured part of the re-entry process. Almost all Kiwis take, as we are doing, a circuitous and interesting route back. Ours has been via Morocco (Fez, down to the desert, along the Southern oasis roads to Marrakech and finally to Casablanca), ending with a few days in an apartment on the said Amalfi coast.

I am often amused by, but at the same time innately distrustful of, holiday accounts presented as a series of anecdotes. Most life, even on holiday, does not unfold as a series of entertaining episodes. Indeed, it seems to me that holiday travel is interspersed with more than its fair share of minor difficulties and privations as well as prosaic periods of waiting, sitting, reading and just thinking. Perhaps I am merely getting used to the change of gear which always occurs when one swaps a working life for a few weeks off. With no actual work to do, I find it is all too easy to see the free time stretched out ahead as a challenge to be met rather than a rare gift to be enjoyed. I generally find that by the time I have successfully changed gear, it is time to return to work.

Perhaps as part and parcel of this winding down process, I tend to experience the process of travelling just as vividly on an internal level as on an external one. Save for special moments, I don't ascend to a hyper-awareness of new cultures and ancient history, but I certainly do relish the extra time available to read books, listen to music, have lengthy dinners and rambling conversations and also just to sit and stare blankly.

This means that, unlike a skilled travel writer, I have surprisingly little of interest to relate. Thus, instead of relating a lurid description of the sun setting in hues of pink behind the craggy rocks of Amalfi, I shall briefly describe our trip according to the five criteria by which it has been most truly experienced:

1. Signature food: tagines. No competition here. A tagine is a Moroccan clay pot with a conical lid in which, it would seem all theoretically possible combinations of lamb, beef, chicken, zucchini, olives, dates, prunes and lemons can be cooked. Arresting enough for us to buy one to take home in our already bulging luggage; ubiquitous enough to make me pleased to be in Italy.

2. Bouts of food poisoning: one. Ironically encountered on our first day in Italy as a result of food eaten on our last day in Morocco, possibly on the plane.

3. Signature experience: hair-raising driving. Navigating the technically-closed snowy roads of the Atlas mountains, seemingly alone, in an elderly Toyota Corolla was fun, but led to a lengthy skid. Returning over an even higher mountain pass, the hypnotic music on the stereo induced me to drive slightly too fast over a huge pothole (more like a ditch), but the car thankfully remained on the road. Now, every day negotiating the Amalfi drive is one to be remembered.

4. Signature music: Cat Stevens. Possibly sad, but undoubtedly true. It all started with a rotisserie chicken restaurant just off the square in Marrakech which aided the digestion by piping soft-toned melodic 1970s pop through its stereo. At the time, this seemed not at all incongruous, but merely calming. When "Father and Son" inevitably came on I was reminded, as I often am, of my childhood and of seeing my own father again. It made the chicken taste better. This moment must have influenced my purchase of a Cat Stevens box set from the same Casablanca duty-free store, also for 13 euros. The liner notes record that Stevens - now Yusuf Islam, but born Steven Georgiou - was, like me, of Greek immigrant extraction. They also record that he grew up opposite the Shaftesbury Theatre in Soho, which was 50 metres from my first, much loved, London flat. I've always enjoyed reading liner notes, and these show Stevens as an emotional, kind and reflective man, constantly searching for meaning and substance in his life. All of his best music has a bittersweet, searching edge to it - a reflection of the questions which ultimately led him to Islam and contentment. I must say, though, that I can understand better why he gave up pop music after listening to the casio-tone inflected songs on the final disc.

5. Signature book: Leo the African, by Amin Maalouf. I was lent a copy of this book by one colleague and strongly encouraged to read it by another. It is a fictionalised account of a man born in Islamic Granada at the end of the 15th century. The Spanish conquest of Granada and the ensuing Inquisition forced his family to Fez in Morocco, from where he travelled the great caravan route to Timbuktu in Mali. He also lived for periods in Cairo, Italy (somewhat bizarrely serving the pope in Rome) and Tunis, collecting wives and abandoning children along the way. It is a swashbuckling and sobering tale which puts the routines of a pre-booked holiday firmly into perspective. His travels encompassed many of the places we have passed through in the last few weeks and enriched our process of doing so.

As a final thought, it is interesting to consider - as I have been doing over the past few days - the world view which permits such a peripatetic life. I think it is most clearly expressed in the following exchange between Leo and his second wife, a Circassian who is encouraging him to oppose the Egyptian ambitions of the Grand Turk in Constantinople, whilst Leo's instinct is, as usual, to move on:

"What substance are you made of that you accept the loss of one town after another, one homeland after another, one woman after another, without ever fighting, without ever regretting, without ever looking back?"

"Between the Andalus which I left and the Paradise which is promied to me life is only a crossing. I go nowhere, I desire nothing, I cling to nothing, I have faith in my passion for living, in my instinct to search for happiness, as well as in Providence."

I think I lack the courage for this type of unmoored life. But I also lack the inclination. By temperament I am in Cat Stevens' camp: I prefer the reflective and proactive search for a significance and shape to my life, rather than leaving all to be decided by the great wheel of Fortune. This means, alas, that as well as being a poor travel writer, I am probably also an indifferent traveller. Perhaps the two are connected.

While in Morocco, I found out that one of my grandfathers had taken ill and is in hospital. Although our trip has been a welcome break, I am glad to be coming home. For me, that was always likely to be the biggest adventure of all.

PS: In Amalfi, we have been firmly instructed to sort our rubbish into two categories: moist and dry. This is more perplexing in practice than it appears. I have a question which occurred to my wife and I last night - do olive stones count as moist or dry?

Daniel Kalderimis

80

Surviving Small

by Xero 1

For business owners and managers the past few months have been a very steep learning experience. After a decade of relative prosperity in New Zealand things have changed dramatically, and the changed economic environment has called for a change of pace to the way we do business.

For those of us in positions of responsibility the last few months has meant difficult choices around staffing and resourcing.

And for those of us who are still trading, the fact we are doing so indicates we have been making - at least sometimes - the right decisions.

Starting today - with the objective of empowering NZ small business owners and managers to learn from each other's experiences - Wellington online accounting software providers Xero are sponsoring an online discussion at Public Address System about business survival strategies.

The discussion will be led by myself (Scoop Media General Manager) and Xero founder and serial entrepreneur Rod Drury.

Our intention in holding this discussion is very much to seek to provide practical advice to business managers and owners. Hopefully an element of collegiality may also emerge and it is possible that useful new connections may be made.

And so if you either have questions or experience to share you are very welcome to participate.

As a starter for 10 I will briefly outline some of the strategies we have adopted here at Scoop Media since the credit crunch started to bite

By way of background Scoop is a pretty classic small business - albeit an online one. We employ around 10 people, some part time, and have the usual overheads, phones, rent, office supplies etc. We do not carry any trading stock and most of our overheads are fixed. Most of our costs, 75%, are wages. We are 10 years old in June and determined to get to the other side of this recession.

And when the balloon went up - i.e. when Lehman Brothers went bust - in September we got very serious about business survival.

Fortunately it was not too much of a shock to the system. By September last year we had already experienced nearly nine months of no-growth in the NZ economy, and in our sector, a fairly hostile market for our main product - online advertising. Advertising is often something of a leading indicator of economic conditions and we had noticed things deteriorating as early as November 2007.

And so for most of 2008 we had already been in a cost reduction phase. With the prospect of a deeper recession ahead this aspect of management became the focus of board activity.

Through 2008 the steps we had taken were the usual:
we developed closer relationships with the accounts staff at our major clients;
we instituted close management of overdue accounts and follow up procedures;
we opened discussions with our major suppliers informing them that we were cutting our costs and seeking favourable payment terms;
we cut all non essential expenditure.

One of the first things we did after the Lehman's collapse was negotiate an end to the lease of our Auckland office. It was a bitter pill to swallow but one we had already identified as being the next in line in our cost cutting programme.

While we did not exit at no cost, the settlement did enable us to significantly cut our monthly outgoings and reduced our overall liability.

With costs trimmed to the bone we moved to the second key focus of survival activity - sales.

And so if you want to hear more about how we did this - and also share the experience of other business owners and managers - please join me and Rod at Public Address System over the coming fortnight.