Tuesday, April 13, 2010

Rod Drury on Xero and Growing Business

A really interesting interview today on Radio New Zealand given by Rod Drury, the founder of Xero Ltd [XRO.NZ]

Apart from the fact that he is clearly a smart cookie, entrepreneurial and is fully aware of technology and its application in the real world and a very positive person (and don't we just need that in our little negative backwater of New Zealand - such a negative thing to say Darren!) I found what he said about business in general and his own Xero to be quite revealing.

I got the impression from what he said is that Xero could be one of those companies that one builds up with the intention of flogging off to a willing buyer sometime in the future.

Rod cited a number of cases that this has happened, Trademe was one but two that really interested me were 42 Below and the upcoming listed player Ecoya.

42 Below was built up to sell and the intention is that Ecoya will probably go along the same lines.

42 Below is yet to make money but did of course for those that sold the company and Rod hinted that this is a business model that he liked. He also mentioned that Xero could break even in 2011.

I haven't heard it indicated before although I have wondered to myself as to whether Xero is a company along the same lines as the aforementioned and the founders are just waiting for some kind of large sugar-daddy like Reckon Ltd [RKN.AU] or MYOB to snap them up to remove the losses from their balance sheet.

I like businesses that grow and make money but hey that's just me, unconventional and completely off the wall.

*Please see Rod's response to this blog here - seems my impression was wrong.

**Rod is going to do a Share Investor Q & A. Please submit reader questions here.

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