We provided a positive update to the market last week announcing we have in excess of 30,000 paying customers of our business product. We will provide full numbers in May.

We’re making great progress in NZ, Australia and the UK in our short time but still at a modest market share and haven’t even scratched the surface of the small business demand globally.

Is that it? have you finally picked all the low hanging fruit?

they have the potential to kill off quite a few small accounting houses around town which i see no reason for them to exist…[only to over charge customer]

hey rod ,i think borrowing some of peter jones business builder’s approach may help.

This kind of system is relatively simply to create and manage as well as a promotional tool for helping people to get into business…or hook up with xero.

https://www.peterjones.tv/bb/

everything peter does is almost win-win.
I wonder why NZer’s don’t seems to like TV appearances…largely due to the culture

I’m planning to start similar site in asia, there may be where it could take off.

Plenty of small online businesses there…

We’re building a long term business with lots of big things to do this year so it’s better to have regular periodic updates.

Rod

On ARPU – we’ll cover that in detail at annual report time (in a month or so) when we can take the time to discuss that properly. But yes we would need more customers at our current ARPU level, but our growth rates and resources give us some more flexibility there to take a mid term view.

What is worth noticing is that this sector has high monetization rates compared to consumer offerings, and has a myriad of ways to generate revenue, while still being great value to customers. So we are very comfortable with our approach to build the foundations, then customers (with good monetization) then build revenue.

I spend an inordinate amount of time talking about SaaS accounting (see cloudave.com/tag/accy for lots of reviews and analysis) – the fact is there are literally dozens of SaaS accounting products out there. Many existed before Xero came on track and many more have launched since Xero’s release – Rod would be the last person to suggest that Xero “invented” SaaS accounting – and to be honest this isn’t a zero-sum game – there’s room out there for many players.

To specifically answer your question – the traditional accouting software players are vaguely trying to go SaaS but a number of technical and business issues mean that they’re unlikely to do so successfully. A number of new businesses are also doing SaaS accounting to greater or lesser success. Bottom line is that if the Xero feature set and pricing fits within your use case – it’s the pick of the bunch – as always it’s important to assess your requirements to ensure that any solution will fulfil your requirements.

And now over to Rod for question two (although I’d have to say that yes, a lower average revenue per user does mean that the number of users needed to break even is higher – that said lower ARPU should result in higher customer levels anyway)

Many thx

We’ll provide some more analysis in our full year report during May but our churn rate seems very low so far.

I think this is because:

1. Accounting is a sticky application
2. We take a conservative approach to counting customers and we have a no obligation trial so once customers are in they seem to stay
3. We haven’t seen as much business failure amongst our customer as the media would have you expect. That may mean that people interested in Xero are more likely to be interested in managing their numbers so are less likely to fail.

Churn rates would be a useful thing for us to benchmark with other SaaS providers so freely share that information once we have done some more analysis.

Small Business SaaS churn rates do seem to be well below consumer SaaS churn rates.

Thanks for the great question,

Rod