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Q + A: Rod Drury

Xero boss Rod Drury told TVNZ’s Q+A programme what the political parties are offering at this election is ‘all too small.’

“There's no policy, all it is a bunch of incremental stuff.

“All too small. What we want to do I think you know now that we've proven that we can build world class businesses from New Zealand, the right conversation should be – should we architect New Zealand to take advantage of the biggest technology shift which has happened in our generation, in our lifetimes.”

When asked what he thinks of Kim Dotcom, Rod Drury said, ‘I wish he'd go. So I thought Kim at the beginning it was you know it was really cool to see somebody like that come through, but his manipulation of the media, so he's very media savvy, understands that it's a good story, that journalism's cheap. You know I think it's a big sideshow.’

On the Internet Party, he said ‘Well I saw Laila last night, with respect she's great, and when she's doing her thing you know we all like her and you know she's a great New Zealander, she knows nothing about technology.‘

Rod Drury supports the case for the Wellington flyover.

‘So I think we've just got to get that balance right, and you know getting in and out of Wellington is incredibly frustrating, and I hope in my lifetime we can fix that problem.’

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Repeated Sunday evening at 11:35pm. Streamed live at www.tvnz.co.nz

Thanks to the support from NZ On Air.





Q + A
Episode 21
ROD DRURY
Interviewed by SUSAN WOOD

SUSAN Xero boss Rod Drury announced this week that his Cloud Accounting Software company is on track to list on the US stock market in the future. Xero one of the big success stories of the local industry with more than 300,000 global customers and growing. Rod Drury isn't afraid to think big when it comes to politics too, and so I asked him what he thought of what the political parties were offering at this election.

ROD DRURY – Xero CEO
There's no policy, all it is a bunch of incremental stuff.

SUSAN Too small you say.

ROD All too small. What we want to do I think you know now that we've proven that we can build world class businesses from New Zealand, the right conversation should be – should we architect New Zealand to take advantage of the biggest technology shift which has happened in our generation, in our lifetimes. You know we are the country that’s furthest away from anywhere else, and you know fibre technology connecting directing electronically to large markets, allows us to completely change. So how does that work? Well at the moment you know we're all proud of exporting protein and manufactured goods. What the Internet allows us to do is start exporting services. You know because you can talk to people. You know internet's not about you know downloading movies….

SUSAN …I mean you're behind Pacific Fibre, you wanted that other cable in and out of here, can we do it with what we've got with the band width?

ROD Well no, I know we can't, because we have 17 offices and I can't get everybody. Technology should allow me to get all my 17 offices all on line in real time talking to them all. If that can happen you can dramatically improve culture, you can sell more stuff.

SUSAN Is part of the problem that the politicians are just not of the Internet age generation. They're just too old actually.

ROD Yeah, but I mean they're all nice people and I know all of them across the spectrum, everyone loves New Zealand, we want free healthcare, you know we want better class sizes, we want everything to be clean and green. But to do that you have to grow the pie, and I think you know – and it's hard for politicians to engage, they’ve got so much other stuff going on. You know my idea is to have somebody who's independent that advises government, similar to Peter Gluckman does with Science, and works between government, maybe reports to Cabinet every six weeks or something, but talks to …

SUSAN But the government’s said no to that at this point have they? Labour’s saying yes

ROD Well the government have said no so far.

SUSAN So far, you're thinking they might change their mind on that one?

ROD Well I hope they do, I think this government I think are strategically to roll on that one, it doesn’t cost a whole lot of money. The difference with ICT is we all have a lot of money to spend, you know there's us at Xero, we invest tens of millions of dollars into the New Zealand market. You’ve got Microsoft, SAP, these big global companies. New Zealand could be a test lab, if we can pitch the projects we can get a huge amount of money coming in, and make New Zealand this great lab for the world. So I think this concept of having an independent chief technology officer that works with the private sector, says these are the ten things we need to do as a country. Explains what it is. Then we'd have someone we can engage with, and then you know these multi-nationals and you know significant New Zealand companies, will invest to make it better. And I don’t want our government officials flying to Copenhagen or Estonia to see how things are done. We want the world coming here to see you know the best of business to government, and all those good things.

SUSAN Have you given up on Pacific Cable? I mean you couldn’t get the money together at the time, I know there's another one on the table at the moment.

ROD Yeah, no I've kept working on it pretty strongly. You know Amy's very familiar and so is Stephen Joyce on some of my thoughts. So right now there is a private sector cable and that would be the government's preference for that to get away. My view is that the people of New Zealand would love to own a cable. You know suddenly the mixed ownership model would make sense if we sold a minority of some boring stuff and bought a really cool new one. We have the Superfund with lots of money wanting to do infrastructure investments. Under my model I would say that we put a tender out under UFB, maybe for 5 dollars per connection a month, we get as much band width as we like, you know …

SUSAN What does it mean for people at home, they're sitting there thinking what does that mean for me?

ROD Well I don’t think we need fibre to the home for all people. If people want it for the home they should pay for it. You know it's great to get net flicks, once you’ve seen that, that completely changes your life. But really it's the businesses and people that are exporting services that will create the new jobs and get more export revenue coming into our country.

SUSAN What do you think of Kim Dotcom?

ROD I wish he'd go. So I thought Kim at the beginning it was you know it was really cool to see somebody like that come through, but his manipulation of the media, so he's very media savvy, understands that it's a good story, that journalism's cheap. You know I think it's a big sideshow.

SUSAN I should probably defend journalism here, but carry on.

ROD Yeah but you know we're not talking about the big issues right. You know do we want to make New Zealand you know this country that can exploit technology. Kim doesn’t represent the Internet generation. I represent the Internet generation. We've created 800 new jobs, you know we're paying lots of PAYE. We're investing, we're burning, we're creating export revenue. So I just think it's a sideshow wish it would just go away.

SUSAN Is the Internet Party putting anything up that is of any use?

ROD Well I saw Laila last night, with respect she's great, and when she's doing her thing you know we all like her and you know she's a great New Zealander, she knows nothing about technology.

SUSAN Are you having trouble getting skilled people?

ROD We were having trouble getting skilled people but you know our brand is now getting so good that we are getting through.

SUSAN So everyone wants to work with you?

ROD What I do worry about though is you don’t want to suck all the people out of New Zealand. We want to see you know out of the 300 add-on providers, we want to make sure that there are still lots of people coming through, and we're doing lots of work around getting school kids into tech. We're seeing lots of females coming into our industry as well. So we always you know have lots of school kids going through. Andrew Patterson just took a couple of schools up out of Silicon Valley and I think suddenly we're starting to see you know people are like hey technology's actually a pretty cool industry.

SUSAN So what are the chances that we will get – as you talked to me really in this interview about this intergenerational shift, it's a once in a lifetime opportunity. Do you think that the politicians will get on board? Do you think we're going to blow this opportunity? Will business do it despite the politics?

ROD Well we're not being passive about it, you know we're going to make it happen. So you know that’s why you know I'm talking about this stuff. I think it's really important. I would hate that in 20 years we all wake up and think we missed the biggest opportunity that New Zealand has had to step change. So I think there is some urgency. When it comes to times when elections happen you can bring these issues, but we just see this every day. We have smart people in New Zealand, we can absolutely redefine our place in the world.

SUSAN Now you’ve got a plan for the regions, because there is really quite patchy growth across New Zealand. Auckland flying away, Canterbury for its own reasons. What do you think should be happening in the regions?

ROD So it's great that Auckland is doing its thing, that’s awesome, it's great to have a really huge city. Do I care about house prices in Auckland? Absolutely not. People can't afford a house in Auckland move to Hawkes Bay. It's awesome . And you can go surfing in the weekends. What I do think though is if we do want to have the regions to work we've got to have an active plan. So we have you know very high value contact centre staff that work across Auckland and Wellington, Sydney and Melbourne. We're seeing this labour arbitrage where New Zealand workers who are exactly the same skills and these are cool jobs, are under 60% of the cost. So what we did actually in Hawkes Bay and in Nelson was work with Council and start to bundle up the offering of getting these high value contact centre jobs, and they're going – you know CIO who's sitting in Melbourne isn't gonna say I'm gonna open up a call centre in Hastings. They're not going to knock on the door, you’ve got to go and sell the stuff. In the same way we have to sell our product. So we have done that, and when KiwiBank said that they were going to move, Hastings was very well dressed, and we got 200 new jobs. 200 new jobs going into a regional CBD is a game changer, and I think what we hear is I a lot of people want to move to Hawkes Bay or move to Nelson, or Queenstown. You know we've got to manufacture these jobs, and we have a natural labour arbitrage, and these a fun fun jobs. So getting you know UFB to the regions is great. International connectivity makes all that happen, and you know the cool thing about having a lifestyle where you earn globally and live locally, and have all the benefits of living in New Zealand is magic.

SUSAN Do you want the Wellington flyover?

ROD Of course I want the Wellington flyover, I used to live in Maupuhia and I know the frustration of driving there every morning. I mean we've got to get the balance right. It seems a little bit like in New Zealand you can't do anything at the moment. You know we can't get a dam in Hawkes Bay, we can't even just get a flyover. I mean I've looked at it, it looks pretty exciting. Whenever these projects happen there's new opportunities that come from it. So I think we've just got to get that balance right, and you know getting in and out of Wellington is incredibly frustrating, and I hope in my lifetime we can fix that problem.

SUSAN Rod Drury from Xero there.


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