How tech companies are innovating to help small businesses work smarter

Investing heavily in maintaining an open platform has become one of our key competitive advantages. It’s also become a competitive advantage for many of our partners that have integrated to connect with over 600,000 Xero subscribers, to grow.

For customers, they benefit from Xero as a platform because it drives innovation en masse. Google Maps has been a phenomenal example of just how much value can be drawn from an open API — of all the businesses that have been built using it, great examples include ride-hailing apps, Uber and Lyft.

There are now more than 500 third-party integrations with Xero’s small business platform, and many have the potential to become the biggest in their category. And, with over a quarter of our customers connecting other business tools to Xero, the small business ecosystem is thriving.

Grow, as a team

By innovating and iterating quickly, several startups have leveraged Xero’s rocket-ship growth to help drive their success too. It is humbling to see an increasing number of startups joining us for the ride.

Since 2011, we’ve grown from 25 add-ons to more than 500 partner integrations today. All the companies connecting to Xero APIs can benefit from the Xero marketplace, where small businesses access and search for tailored solutions integrated to Xero.

Crunchboards and Receipt Bank are clear examples of the value of Xero’s network effect. Both are built on Xero, have gone to market with Xero and demonstrate that a world-class integration leveraging Xero APIs can propel your success.

Receipt Bank co-founder Michael Wood told Xero establishing the open API ecosystem in small business accounting has spawned entirely new technology categories.

“As bookkeeping automation software, we couldn’t exist without accounting software having an open API,” Wood said.

“We’re actually an example of a sector, an area, an industry that has effectively been created by an open API.

“We share tens of thousands of clients with Xero, there’s no question, that’s helped our business immensely.”

An open platform also means Xero can offer better solutions and more choice for small businesses from an array of ecosystem partners.

When Receipt Bank launched in the UK in 2011, its focus was its local market, and with just a handful of users, the startup hadn’t yet turned its efforts to global domination. However, after integrating with Xero, it was soon thrusted onto the global stage — whether the team was ready for it or not.

“We focussed on making sure the integration was, and is, the best in our category. We worked really, really hard on it,” Wood said.

“Sitting in London, we were completely unaware of Xerocon, we’d never heard of it. We woke up one morning and Twitter was a flutter with congratulatory messages, we’d been nominated as emerging add-on at Xerocon and we were completely confused.

“But what it absolutely did was turn Receipt Bank from a national business to a global business because suddenly the phones started ringing and on the other end were all these Australian and New Zealand accountants who had been at the awards ceremony.

“At the time we were such a small company, we were so early on, and we had this really odd situation of having to go to our board and say: ‘We might need to open an office in Australia’. We may have had 100 clients in the UK, we definitely didn’t have 1000. We were really small and to suddenly have to go to the board and say the next conversation we need to have is international expansion was incredibly weird.

“The board didn’t laugh, but they were bemused. On one hand it was ridiculous, here we were, this really small business just starting out, but on the other hand, there was no conceptual reason our product couldn’t be consumed by other companies around the world despite the fact that at the time our business plan was UK focused. And there was significant demand.

“So when we talk about the Xero API, it absolutely shaped and was instrumental in Receipt Bank’s exponential growth. It all started with a world-class integration and gaining recognition at Xerocon. Although we connected to the Xero API intending to build a business in the UK, Receipt Bank was actually available to buy and use by Xero’s clients around the world. The API effect has been huge for us.”

Not all platforms are made equal

While we have made open APIs a central plank of our platform, it’s important to note not all APIs are the same. It’s easy for technology companies to announce a set of APIs but not back it up with the resources required to keep them up to date with the user interface.

“Not only has Xero said it would build open APIs, but they have properly resourced it from day one. It’s hugely impressive,” Wood said.

However, it’s not just a set of APIs which are helping these small business technology companies grow, we’ve also managed to grow a community around our platform.

“By investing in events like Xerocon, we have met other add-ons to discuss how we can make stronger solutions together. It gives us the opportunity to meet accountants and small businesses to better understand their needs. Not only has Xero created a set of open APIs, they’ve created a platform for discussion enabling people to take advantage of the API,” Wood said, adding that to be able to tap into a whole group of non-competitive technology companies, at similar stages of development, has been incredibly helpful.

“Xero has done a great job building that community. The community means you’ve got people you can reach out to and speak to. Building a technology company is tough, it’s a difficult thing to do, so to have people to speak to about issues or questions is valuable,” he said.

New standard of business insights

By opening our APIs and promoting an open system, additional services and features have been developed at pace to help both ecosystem partners and their customers.

The open platform has also created new possibilities for startups and mature partners alike. By integrating with mammoth technology companies like Google and Microsoft, Xero customers are able to enter their data once and watch it flow through each of their software solutions. It’s a massive time saver which frees them from the perils of data entry so they can do what they love.

With data flowing between the various tools a small business owner or accountant uses, they’re able to have a more seamless experience which isn’t marked by duplication or out-of-date information. Everything connects seamlessly.

Seizing the ecosystem opportunity

After leveraging Xero’s platform for more than five years now, Wood has started sharing some of his lessons with up-and-coming startups looking to do the same. He explained Receipt Bank was able to seize the ecosystem opportunity because the team had a solid product roadmap and sales skills.

“Xero APIs provide a fertile ground, but [ecosystem partners] still have to farm the opportunities. The ones that struggle are those who think Xero’s large client base and API are equivalent to a full sales strategy,” he said.

“While Xero does facilitate a lot of business for ecosystem partners, as a business owner or entrepreneur, you must look at an API integration as just a starting point to launch your business. Notwithstanding a compelling Xero integration, you have to deliver a compelling value proposition to your customers so they are willing to pay for your solution on a recurring basis. Then, you can enjoy the snowball effect we’ve had at Receipt Bank, and build a strong, growing SaaS subscriber base with Xero — making our mutual customers happy.”