Rushed release raises eyebrows.
Trust and love – Xero fans have this in abundance for the hip young software company, not just for its “beautiful” software but for the way it can make competitors look like old men griping about the pace of change.
But that trust was shaken a little on Tuesday with the sudden rollout of online invoicing. (Read details about it here.)
Xero users voiced their surprise and confusion on the company blog which announced the upgrade had instantly taken place on all accounts. Several users expressed anger that the online invoicing was on by default before they had time to evaluate it for themselves and their customers.
Others took issue with the fact that the online invoicing portal carried a small, greyed-out Xero logo at the bottom of the page rather than their own business branding. Some felt Xero was leaping over users to promote itself to their customers – without the courtesy of asking first.
Xero clearly was monitoring the release closely. Within several hours Xero’s head of design (and co-founder) Philip Fierlinger provided badly needed details about the feature in a second blog post with a step-by-step guide to online invoicing.
Within 24 hours Xero CEO Rod Drury had written a third blog post apologising for “scaring” users and showing the overnight addition of the ability to send invoices without links to the online version.
As far as crisis handling goes, it was pretty textbook. Comments in the third post were more conciliatory and forgiveness was in the air.
Yet the whole episode has raised some interesting questions (and at 120+ over three posts, more comments than nearly any other topic).
In its impact on workflow and productivity, it’s probably the biggest release since PayCycle’s payroll app was integrated into Xero. But payroll was featured in a national roadshow, widely discussed with Xero accountants and bookkeepers before it went live, and was available for testing as a standalone product on the PayCycle site before the integration.
Online invoicing was previewed at Xerocon three months ago and there has been no word of it since – until it rolled out, live, on all Xero accounts on Tuesday morning.
Even gold partners were given no warning. One long-term xero accountant said she had no opportunity to discuss the new feature with customers. The firm had to scramble to notify customers what they were now seeing with their invoices – once the firm had first figured out how it worked.
“It definitely created more work for us,” she said.
Until Tuesday Xero has been extremely careful to manage its relationships with customers in general and its accounting and bookkeeping partners in particular. The abrupt release of online invoicing was so out of character that it left people scratching their heads.
Was it really just a fumbled release that was hurried out the door? Or was Xero, now a major player with 110,000 customers, flexing its muscles and making moves on its own terms?
Some feared it was a sign that Xero was no longer the adorable upstart but a determined teenager in a rush to grow up.
“The main reason I switched from Intuit to Xero was that Intuit was like a constant ‘commercial’ and ceaselessly promoting their business. Please don’t follow in their footsteps,” pleaded one user on the Xero blog.
Did Xero launch online invoicing in the form it wanted – on by default and no easy way to disable – with fallback positions to ameliorate any negative reaction? Was that why there was no opportunity given to partners to provide feedback, in case they argued for off by default?
Whatever the motive, people tend to judge the end result. Xero has now added a mechanism to subtly promote its software to the tens or hundreds of clients of each of its own customers. This “network effect” is a real leg-up towards building brand awareness with a massive audience, as cloud commentator Ben Kepes noted on Tuesday.
Drury freely admitted the branded portal for online invoicing was intended to promote Xero. “Do we want them to promote us? Absolutely, that’s how we grow a sustainable business so we can invest further,” Drury told me later on the day of release.
Xero is no doubt hoping that online invoicing will have the same network effect that helped online invoicing program FreshBooks amass over five million customers. Drury has spoken more openly about Xero’s ambition to drive its user base to the magic million mark since reaching six figures in July.
Judged by its track record Xero executes well and leaves little to chance. The fact that it made online invoicing fully optional within 24 hours is incredible. Was it held in reserve, to be deployed in the case of a poor reaction? Maybe their sniper developer team is just that good.
Xero has social capital to burn. Most users have already forgiven it and moved on. But everyone will be watching its next move very closely – and judging whether it puts customers’ interests first, or the company’s. This week’s events showed that these interests may not always be the same.