NZ Herald Pulls A Fast One With Xero Article

By Shawn Smith,

Published on Oct 27, 2011   —   2 min read

If you only read through the first part of Nick Smith's article on Xero, you'd swear the company is headed for financial disaster. There's talk that it continues to lose money, burns through cash, and that the CEO, Rod Drury, gossips on his blog like a 13 year old girl. None of those quotes are from Nick the writer, by the way. They're the ones he picked out of what appears to be a desire to ramp up the hype surrounding Xero and it's presumably shaky future.

Some of you might be aware that Xero and my company have a rather close business relationship. They did a case a study on us, and we rely on their software to make our business work. Their service has simplified our accounting practices and allowed us to spend more time doing what we love – taking pictures.

So you can see I have a bit of a soft spot for Xero, and it's funny. The article itself was fairly non-biased. Obviously Nick Smith has a duty as a journalist to extract himself from the equation (which is more than I can hope to do right now). Still, I can't help but feel as if the whole article was overhyped. After you read the first few paragraphs, there's this looming sense of disaster for Xero. What if it fails? What if they really are burning through cash and the concept never catches on?

There is an early mention of Peter Thiel, the legendary Paypal founder and Facebook investor, but it's more of a footnote than anything. Please Mr. Smith, I beg of you, provide some more context earlier on. These famous investors that you refer to in the negative as no slouches, are defined by so much more than what they are not. Even you acknowledge their accomplishments. The problem is you do it at the end of the article. By then, most people have either moved onto Facebook, clicked on whichever ad they're supposed to click, or tuned out altogether.

It's the same old tired story with the news. Emphasise the negative before pointing out the positive. Xero might not be profitable yet, but it's customer base is growing substantially. With Peter Thiel's backing, Xero has an entryway into the global economy too. If it's doing well here, and it's got a lot of money behind it overseas, chances are it will grow to become a huge force in the following years.

There's a difference between investing and burning cash. These things have a tipping point. Nobody is quite sure where it lies, but it's much better to get everyone to adopt the service right away than to give the competition any time to catch up. Some say it's throwing money at the issue, but the same technique has worked with similar startups in the same space.

Of course, I don't have to say any of this stuff. If you read the NZ Herald article, you'll see it's all there. Just keep going past the hyperbolic rhetoric and carefully selected quotes. Somewhere, about a paragraph after you lose interest, you'll find what you're looking for.

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