XU: Can you start by telling us a little bit about yourself and how you came to be the managing director for Xero UK?
AVS: You would have picked up on the fact that my accent is not English? If anything, it’s probably not much of anything, because it’s been influenced by many, many things over the years. I was born and raised in Mexico by two German parents, so I grew up in a very German, and German-speaking, household. I went to a German school in Mexico, but obviously grew up speaking Spanish with a lot of my friends.
I ended up going to the US to study business, then went back to Mexico to start my first job there with Proctor and Gamble. It was in consumer products and a marketing job. And eventually, I decided I did want to get an MBA and I wanted to come to Europe, so I used the MBA in Europe as kind of my springboard into living here. I’ve been in Europe ever since.
Since 1997 I’ve been in Europe and I’ve been lucky enough to work for a whole variety of different types of companies, types of sectors, types of jobs. Rather than going really deep in one particular sector, I ended up doing many different things. I think notably, in 2004 I went to eBay as a marketing director in France. I point to eBay specifically because it was the first digital pure play company, disrupting an industry with a completely new business model. The marketplace model.
I didn’t know it at the time, but it was also my introduction into working with small businesses. eBay as a platform was initially for consumer collector auctions, but very quickly became a platform for small businesses or entrepreneurs to set up new businesses. I spent 11 years at eBay.
After that I did another role at an English company called Electro Components, or better known in the UK under the name of RS Components. It was a digital transformation and I was in charge of driving that digital transformation of the company. Up until that point it had been a very traditional company. It was this whole notion of how you take legacy companies and legacy technologies and completely pivot them in a new direction.
After that, I went to a company called Sum Up, which is a startup in the payments industry. They’re best known for selling physical hardware devices in small white machines, which allow any small business to start accepting credit card payments. It’s that cash to credit acceptance conversion.
It was mostly through my time at Sum Up and working with small businesses that I started coming across Xero more often. Mostly because in the payment sector and the accounting space, they are both new technologies for new digital services, helping small businesses digitise and modernise to stay competitive and be successful. So, when you think of the purpose of those companies, they are quite similar.
Secondly, and this was quite fascinating to me, whenever I was talking to small businesses about “Why don’t you go to payments? Have you thought about it? You’re cash-only, you should do card acceptance” etc, one of the very common answers you get from small businesses is “Hmm, I need to check with my accountant to see what they think of it”. It became quite evident to me that the relationship between a small business and an accountant is critical and one I should be paying attention to.
When I was approached by Xero, there were a few things that struck me. Firstly, I had obviously heard of Xero, as I’ve told you. Secondly, I certainly had a sense that the momentum, opportunity and the business potential for continued growth was pretty phenomenal. And so certainly, as I started having conversations, I found the strength of the brand and the potential of Xero very attractive. I just really enjoyed the conversation.
There’s a lot to be said about “Do you want to work in a company where you’re going to enjoy the people you work with?”. As I went through the process of meeting various employees at Xero as part of the interview process, I really, really liked what I heard and who I met, and the personalities of the people I met.
Those were the many elements of how I ended up here.
XU: What attracted you to Xero specifically, instead of working for another company?
AVS: I would say the main thing for me was during 2020-21. There were a few companies that I thought credibly stepped up to champion the cause of small businesses. I was particularly sensitive and exposed to it, because I had been playing a very similar role at Sum Up. There’s no denying the last two years have been incredibly tough for a lot of people at the individual level, at a collective level, etc. But of all sectors and places you look at, I think small and medium enterprises have been hit the hardest, right?
Partially because their size itself just makes them much more fragile. Secondly, because a lot of the nature of the lockdowns and the way furlough schemes work and the way rent protections work etc., small businesses are just much less able to navigate the complexity of those or just can’t benefit from them.
I think lockdown obviously meant a lot of people naturally converted to consumption through larger companies that were able to do curbside deliveries. It was often your greengrocer in a high street that suffered, or your butcher around the corner that suffered.
It’s something that I’ve developed a lot of passion for over the years; this notion of the grit and the resilience of entrepreneurs and small businesses, and what it takes to keep a small business. I’m very in tune with the importance these small businesses play in maintaining the healthy fabric of a community in a society.
I’m giving you a long answer, but even before I started talking to people at Xero, I really felt they were one of the companies who were credibly stepping up there, defending and investing in helping small businesses. It was quite striking to me, how much of Xero’s attention was genuine defence of small businesses. That was certainly one of the biggest triggers for me to want to speak to Xero when they approached me.
As I met them and had conversations, I obviously tried to poke holes into it, as you would. Whether they were doing their due diligence, to make sure they were for real and not just a poster child type company. And it wasn’t. I confirmed that fact and I can confirm it more so now I’ve been here for four months. Monday through Friday, from the early morning, there is a genuine care for the success of small businesses in the UK.
XU: How does it feel taking over from Gary Turner who was in the role for such a sustained period of time and an icon within the UK accounting industry?
AVS: I’m no Gary Turner, nor do I pretend to be. I agree with you, I think he is a legend. What Gary has done in this space and what he has built over the last 13 years is just phenomenal. He deserves all the credit in the world. He’s been an incredibly gracious host in terms of welcoming me into the building and eventually handing over the keys, so I owe a lot to Gary.
Gary obviously has a personal and very intimate connection with the early years of Xero that I will not and cannot emulate. I wasn’t there for the early years. I’m also not a chartered accountant, so there’s an intimacy in terms of how he knows that space. With a lot of grit and passion, he’s taken this company up to a certain size and a certain level. Obviously, we want to continue growing the company to the next level of maturity and the next level of scalability.
That’s probably where I come in, because of my involvement with companies in the technology space of a certain size and maturity, like eBay. What will it take to operationalize a company of that size? What does it take to do that? Not only in the UK, but increasingly across a wider region in EMEA and South Africa.
And then in terms of understanding the ecosystem, of how we can help small businesses, either directly or via their partner accountants and bookkeepers, I certainly feel quite comfortable having done that before. I think Gary would agree with this, right? It’s not trying to replace one with a kind of copycat, but rather where the complementarities are in terms of what Xero will need going forward and to what extent we do that.
XU: Xero has the following core values - #human #ownership #beautiful #team #challenge. How do you envisage these continuing going forward and what will your role be in continuing these going forward, especially with recent changes within the world?
AVS: It’ll be in stages. I think there’s a desperate need for us to put the pandemic behind us and reignite some stability, but also reinject health into the relationships we have with all of our stakeholders.
I don’t mean to imply that it’s unhealthy, but it’s been done over Zoom in teams and meets over the last two years. Our preferred modus operandi has always been to do it over handshakes and cups of coffee, or a meal. So there’s a massive drive in the next few months and during this year to make sure we build on, reconnect and rekindle the relationships we have with partners, old as well as new.
I guess the most emblematic example of that will be Xerocon in July, because it’s a particularly visible event. And we’ve started already this year… we did quite a few education events in February, we’re reaching out with lunches and what we call Xero conversations, which are basically reach-outs to many of our partners across the country. We’ll continue that throughout the year. So that’s the first part.
The second one is, there’s been a lot going on in the industry regardless of pandemic or not, right? Some of it may have shifted a bit and some of the deadlines have shifted. Obviously MTD and MTD for income tax self-assessment etc. is coming. We need to make sure that we are readyor all of that, as well as in our relationship with HMRC. We need to make sure that we have all the internal capabilities and the product to make sure we can help our partners, our bookkeepers, our accountants and small businesses through that. So, there’s quite a lot of investment in work and just making sure we are absolutely ready for that and help our entire client base through that transition.
And then third is probably a bit more longer term. Trying to see what’s on the horizon, in terms of where, regardless of regulatory or not, the industry is going in the next two, three or four years. Are we well-equipped to continue partnering with our clients in terms of offering the right services and the right value proposition? What sort of investments do we need to think of now already from a product investment perspective? New features, new functionalities or new services that we can attach to Xero to make sure that as the industry continues developing and growing, we’re ready for that.
So there’s a shorter-term, mid-term and longer-term vision.
XU: Over the last 12 years Xero has seen significant revenue growth year-on-year. What do you have planned to do the same but also differently to see this snowball continue?
AVS: A lot of that growth, especially in a market such as the UK, will continue coming from growing our relationships with existing partners or bringing new businesses and partners into the fray. There’s still a significant amount of growth to be had, so a big focus certainly will be around that.
The second aspect is making sure the health of that growth is good. In other words, the depth of the relationships and the number of Xero products/offerings that each one of our relationships is using and consuming. Especially in a relationship with practices, the number of clients that those practices have been able to deploy Xero to, that we can continue investing in and improving.
It’s not just about pure growth in numbers and levels, but rather growth that can deepen relationships that we already have and then offer more value to them.
XU: We’re currently sitting in the new Xero London office. How have you seen the impact of Covid-19 on office/home working within Xero and what does the future of this look like?
AVS: The first thing I’d probably say is that it’s still a moving target, right? I don’t know that anyone has truly written the book yet on how to successfully handle the pandemic and come back into the office. Many companies are at different stages of their journey as to what should be done or not be done.
In true Xero fashion we are extremely sensitive and sensible towards the needs of our employees. Even though we have a preference towards bringing people back, because we have a strong belief in togetherness and collaboration, we’re also very cognizant of the fact that not everybody is there yet. We need to make sure we take that into account.
We’re encouraging, not forcing, people to come back. As an encouragement guideline, we’ve said to think of it as a 50/50 thing, but with a lot of flexibility in terms of how that gets interpreted and ultimately with huge empowerment to individual teams to discuss amongst themselves what that means for their team dynamic.
We suspect we will likely then start slowly moving the dial towards increasing that kind of office presence. That said, I think we all recognize that we are not going to turn the clock back to February 2020 yet with Monday through Friday, nine to five. Not that that was really ever reality. But I don’t think that’s where the world is going to move back to.
I think it’s probably one of the current topics of conversation everybody’s struggling with and I hear a very large spectrum of interpretations. Other than the forced lockdowns, we’ve never really left. We always stayed in the office and in other practices that are really struggling to find ways to bring some of their colleagues back into the office. It’ll be interesting to continue comparing notes on it.
XU: Xerocon has had a recess for a period of time and is now back with a new location for the UK. Do you think Xerocon is going to look a little different to previously? What is the vision for it and why should people attend?
AVS: You might say he’s a bit cheesy, but frankly, the objective is that we just want to see partners again. Full stop. End of story. There is no other objective.
Will we make it a great show? Yes, of course. Will we make sure it’s worth every single penny? Yes, absolutely. Is there a lot of effort, investment and thinking going into what it will look like and who will speak? Of course.
So we’d like to think that the recess has given us more energy, more time and more passion to make sure it’s a great event. The main theme is that we’re just desperate to do one again, to see our partners and re-engage. That really is the agenda.
XU: Have you ever seen so many accountants and bookkeepers on a dancefloor before having a party?
AVS: I have to admit, my wife had a good chuckle when I showed her some of them on YouTube, so I’m sure she will make a bit of fun of me as I practice my dancing.
XU: How do you see Xero supporting new businesses over the next 12/24 months?
AVS: One of the ways that is often less visible to others, is our insight into what businesses are most worried about and what their immediate pain points are. We regularly run the Xero Small Business Index, which gives us insight into trends and data from different markets.
One of the things we’ve picked up on in the UK over the last few months already is cash flow management. Small businesses suffer from cash flow management more so than large businesses, and one of the culprits for that is late payments. To be frank, they get mistreated by some of the larger companies in terms of being offered very penalising payment terms, or are being offered payment terms that are then not respected.
So we do quite a bit of work with the government, submitting our recommendations to a late payment initiation and hoping that the government will introduce other policies around late payments to help small businesses.
We recently launched our new App Store, so we’re busy continuing to build that and transfer additional partners in. We’re creating an ecosystem of all sorts of apps that are different in nature, to help small businesses with the myriad of things they may need. Just this morning I was talking to a business that was struggling with being competitive in the sustainability space. One of the challenges in sustainability is that large companies can figure out carbon footprint offsetting and all that, but for small businesses it’s hard to do. So in our App Store, we have third parties that offer services to that extent. That’s just one example. But whether it’s on the payables side, the receivables side, the loan side… we’re quite busy making sure that we continue offering that up.
I also think that magic triangle I mentioned earlier between Xero, a small business and their accounting and bookkeeper is really powerful. So, just as we work with accountants and bookkeepers to deploy Xero into small businesses, we can do a lot more to help small businesses find their accounting and bookkeeper if they don’t have one yet. So there’s quite a bit of work going on there in terms of how we become a matchmaker between them all.
XU: What new apps in the ecosystem have you seen released that are really making an impact?
AVS: I think we’re fairly in tune with what practices need the most help on and to what extent. Whether that’s on the practice management side or the tax side, or whether we need to increase the focus on other items such as payroll. We’re also very aware of the fact we’re not the only solution on the market, so it’s very important for us to make sure that we have an open dialog with our partners to know where we can help them.
Longer term we want to identify and rank in order of priority the areas where we should be investing more aggressively, so that we can come back to the market with more and better solutions. Let’s make sure we identify the right partners or other companies we can work with closely to offer that.
XU: What do you do in your spare time?
AVS: Currently, to my wife’s desperation, my most recent hobby is wine. Not just drinking wine… I’ve become quite a student of wine. Last year, just before I joined Xero, I studied and passed my WSET level 2 and 3 exams. I then went for my French Wine Scholar exam and now I’m studying for the Spanish Wine Scholar exam. So I’m accumulating wine diploma. I’m not quite sure what I’m going to do it though!
XU: So we’re going to have quite a line up at Xerocon!
AVS: Well, you should do, if I get to choose the wine! That’s become my latest hobby. My wife’s a bit concerned because sometimes the parcels show up at home and she’s like, ‘Oh Alex, you had another deliver”, and it ends up being a box of something.
So, that’s one… and another one? I still have a young son living with me at home. My daughter is off to college already, so I only see her every few months whenever she graces us with a visit. Whereas my son is still very much full time. So I spend my time with my son and my wife. I’m a family man.
XU: Have you had a trip across to New Zealand yet?
AVS: No, not yet. I think now that the borders are opening the more likely scenario is that we willhave a wave of the global teams coming out to the regions. Now that they’re allowed to travel again I think they’re itching to get back out, which is great. We’ll be welcoming quite a few of them and obviously for Xerocon you’ll have quite a large contingent coming.
Later on I think there will be an occasion for me to go and visit headquarters. I was out in South Africa two weeks ago, which is part of my remit. I’m in charge of the UK and EMEA, so I was with the team in Cape Town. I spent a week there visiting some of our partners and banks and stakeholders, and then obviously spending time with the team. So that was lovely.
XU: How do you see the Xero expansion across Europe going over the next few years? There’s been talk of Xero in different languages and a whole ream of other things that go along with that.
AVS: In the shorter term our expansion will continue being around our existing Xero product, which is our international product. We have many people that use it across EMEA and discovered it quite organically. So we do account for them and offer them support, but I don’t think we have been purposeful in proactively commercialising it. We want to ramp that up and there is quite a lot of opportunity to do that in the first instance.
XU: Is there one bit of advice or an inspiring quote that’s helped you in your career?
AVS: I was just reminded of it last week. You probably would have seen the headline. They found the original Endurance ship under the ice in Antarctica, which was the ship of Ernest Shackleton. I’ve always been a bit of a sucker for grit and survival stories, and probably none more so than the Arctic or Antarctic exploration.
Shackleton is a very well known one, but I actually look to a more obscure one. There is an Antarctic polar explorer who was Australian - Douglas Mawson. There’s a very good book written about him called Mawson’s Will. The reason his story is not as well known is because he had an adventure… Well, if you can call it that… He had a near-death experience in the Antarctic that he eventually survived, pretty much at the same time as you had Roald Amundsen race to the South Pole, which of course was when Captain Scott died.
So I think history tends to forget Mawson because everybody was paying attention to the South Pole. But the story is quite incredible. It comes down to just a single man who has lost his entire team, sleds and dogs - everything - crawling his way back to his team and surviving! It’s an incredible story.
The reason I like those kinds of stories, not only for that grit and survival in adversity, is because it’s important for us to stay grounded. The pandemic is a good reminder of that. Stay grounded in the fact that, yes, life will throw a whole bunch of stuff at us, but sometimes you just need to power through. And they often build or show their character and leadership during those difficult moments. I’ve always found that quite inspiring.
Whenever you work with global teams, there’s a huge value to bonding through shared experiences and travel. It almost doesn’t matter what that shared experience is, it’s just something to create memories and stories. I have a former boss from many, many years ago, and she always said corporate culture is about the stories you tell, the language you speak and the heroes you hold high. You need to create these stories, that then becomes your corporate culture.