Lessons in Scale.
Who better to learn about the challenges of scaling a company from than Rod Drury, founder and CEO of Xero. We caught up with Drury on our Kiwi Founder Stories webinar and discussed his lessons in scale.
Drury described the chart in Xero’s earning reports, showing the up-and-to the right growth to a million subscribers. He said “what’s interesting about this is we’ve added 300,000 in the last year, and half a million subscribers in the last two years. Five years ago at our annual meeting with 50,000 customers standing on the stage and saying to investors ‘imagine our business with 1 million customers’. People thought that was pretty ambitious. But we had to put it out there because we knew to be successful we had to really front load the infrastructure build.”
Drury is proud of hitting one million customers, but he says he’s more proud of onboarding half a million in the last two years. It’s a tribute to the investment they put into scale. “Once we had a vision of one million customers it was very clear the investment we had to make to reach this.” Make the upfront investment to scale sustainably. It’s difficult and requires more capital, but ultimately will set you up to onboard a greater number of customers, give each one of them a better experience, and improve your customer retention.
“Raising a huge amount of money allowed us three or four years of building a team up to 1700. We could then seamlessly and happily onboard all of those customers. That was a really big lesson. People didn’t understand it five years ago. But now looking back they can see why we talked about a million customers. If we hadn’t, maybe we were really successful and got to a million customers. But they’d have a shitty onboarding experience and we’d end up burning customers straight away.”
Watch the webinar here:
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