Nathan: Hello and welcome to the Founder Podcast. My name is Nathan Chan and I am your host coming to you from Melbourne, Australia. So thank you so much for taking the time and sharing your earbuds with me. I’m really, really excited to have you here and I’m really excited about today’s guest, Rod Drury. He is the founder of Zero Accounting and Zero is an online accounting software that also helps manage your bookkeeping as well, and it’s seriously next-level accounting software.

Like it allows you to automate so much stuff and we actually use it here at Founder and I was really, really excited to speak with Rod because the guys at Zero are there, they are disrupting the accounting and financial space and Rod is such an extremely switched-on, super smart entrepreneur and I took so much away from this interview, especially how Rod just operates every single day and he talks about, you know, the speed of implementation and doing things extremely fast and leadership and, you name it. Like, the success that this company is having.

It’s a billion dollar company. They’ve got over 475,000 paid customers. They’re a listed company. I could go on but there’s a lot here. I’m really, really excited to share this interview with you because Rod is a really, really interesting founder. So, that’s it from me guys. I hope you are enjoying these interviews. If you are, please do take the time to leave us a review. I’d love to hear from you. Please do shoot me an email. nathan@foundermag.com. I’m here to help. We’re here to serve, however we can, and I’ve got so much more coming your way. Now, let’s jump into the show. First of all, yeah, just thank you for taking the time out to speak with me today Rod.

Rod: Good.

Nathan: Can you first tell us about how you got your job?

Rod: Well I haven’t had a job for, you know, 15 plus years. I’ve been doing my own start-ups. I mean, all the business I’ve done for the last little while have been one’s that I’ve started. So, it’s never really felt like a job, but my first kinda, I guess, real work job was I started it after Young, which become Ernst and Young, the accounting firm, and I guess to the internal entrepreneurship there.

I kinda worked out what I wanted to do, I mean, without building our own software teams inside Ernst and Young, or EY as it’s called now, and then I ended up realizing I really wanted to work, like, you know, I really wanted to work for a software company and there weren’t any software companies around so we went and started our one back in mid ’90s.

Nathan: I see. And what was that software company?

Rod: That was called Glazier Systems. We kinda really exploited what was happening in Microsoft Windows back in those days and built a first of all little consulting company around that, and then ended up selling that in the early ’90’s and then that’s when I started sort of doing my own businesses and investing and that sort of led to Zero.

Nathan: I see. And how did Zero come about? Can you give us a little bit of an insight?

Rod: Yeah. So, you know, you kind of…as you get more kind of experience and you’ll see these big opportunities and we just saw this huge one coming with that. You know, the cloud was really compelling in that small businesses was a very vast, fragmented market, and we saw it all coming together on the Internet, which is a…in small business computing is a real hybrid of traditional enterprise computing. Like, more consumer-like sales models and so we just saw this massive opportunity.

We realized that accounting was the killer app for small businesses. Kind of the beach-hit application and that looked pretty sort of obvious to us and then it was about raising enough capital to build a significant business. So we ended up in New Zealand. We didn’t have a very venture capital market at that time, and we needed 50 people from day one. That’s half a million a month and so we thought we needed about $15 million of funding, which was kind of outside what a normal BC round would be, so we ended up having to tell a big story and we floated pretty much as a start-up.

So we had virtually no revenue and, you know, we listed from day one so we have kind of…you know, with most start-ups are kind of private and no one sees what’s happened. We’ve been doing the start-up in the public eye for last eight years.

Nathan: Yeah, I know it…that…now that’s something I really want unpack and touch on because it’s fascinating. I understand that when you went IPO you only had a hundred paying customers. Is that correct?

Rod: Yeah. That’s right.

Nathan: First of all, I’d like to unpack, how did you guys get your first hundred paying customers?

Rod: I think they were all blood relatives.

Nathan: So, they were just friends and family pretty much?

Rod: Yeah, probably. And a few really early adopter accountants who were just interested in what we were doing, and it’s amazing with such little functionality back in the early days, and looking back it’s amazing we managed to get it off the ground, but we did and we learnt a lot, and we tried to give those early customers a really good experience and they felt like they were part of the journey. Many of them became shareholders and have done really well.

Nathan: I’m sure you must have had a lot of doubters and people telling you that it would be a bad idea to go IPO so early on in the piece. How did you handle your…other people doubting you? Did you have any self-doubts yourself?

Rod: So, yeah. There were lots of people who didn’t really get it and it seemed really such a big pain. There’s lots of bits of accounting software but because I’d done three or four start-ups before, you just had confidence and that you understand the industry and, you know, so I think you sort of build confidence and inner courage to do things, and that’s entrepreneurship, right, and I think as you sorta, you know, get through and do a few different things, that confidence grows.

So, I’ve never had any doubts about Zero. So, you know, it’s not…I don’t think it’s a surprise where we’re at. It’s more of a relief that we’re where at, but it’s not a big surprise. So, this is the logical…if we had have got it right, this is what should be happening. So now we’re, you know, past US a hundred million annualized revenue, over a thousand staff and, you know, we’re, you know, a multi-billion dollar business. It’s pretty exciting.

Nathan: I’m curious, when it came to raising capital for the business in the early days, you also attracted investors like Craig Winkler, Peter Thiel. How did you go about convincing them and what advice would you give to our audience around pitching investors and seeking capital?

Rod: I think I’ve always been really good telling the story and letting people understand the scale of the story. So, I think being a clear thinker, being able to communicate and show passion and the experience as being key. And it seems to be pretty binary. You either can do that or you can’t. So, I think the key thing is to have people in the team that can really explain to investors now why it’s such a good idea.

You’ve thought about the risk, and I think also, you know, I had a pretty strong track record. You know, I’d done a few really good things before and had been seen to be successful before. So, I think that was definitely a big part of it. So, for early entrepreneurs, I think you treat entrepreneurship as a series of baby steps. With each one you get a bit more capital, a bit more experience, you know, your network builds and you always find better ideas later anyway, so it’s more about getting in the game, giving your investors a good, good experience and that allows you to just get bigger and bigger and bigger. So, I think this is my forth one.

Nathan: With early stage entrepreneurs, do you recommend seeking capital or bootstrapping from the ground up and I guess validating your concept first?

Rod. So, it’s not a choice. It’s what you can get. So, if you can raise capital, then you should raise capital. Often you can’t, so you have to bootstrap. And maybe just some, you know, there’s a…the odd once in a blue moon business that doesn’t require capital and you can bootstrap, but it’s more about, you know, the probably the first one’s you’ll have to, you know, bootstrap or do friends and family, or take a loan, or have parents pay…put the money in, and as and you get more and more success, it gets easier to raise external money.

Nathan: Now with your growth, is…has there been any key factors that has allowed you to rapidly grow and scale the business that you’d like to mention that may be useful to our audience?

Rod: Well, I think the key thing is building an awesome team. Often the entrepreneur is not a very good operator because they’ve acquired different skills and because we’ve been publicly funded early on, I’ve always been out in front evangelizing the business and basically selling the business. So that means, really right from the beginning  had good operators inside the business.

So, I think making sure you build that diverse team with people that actually know how to operate businesses to scale, smart people who are working inside the business every day, while you’re out, kind of driving things forward and, you know, creating opportunities is really key. So, it’s about, you know, building a really good, diverse team.

Nathan: When you talk about building a good team, what do you look for in hiring?

Rod: You know, it’s making…it’s not hiring people just like yourself. It’s trying to build this diversity and different styles and personalities and different skills. I mean a high performing teams need a whole range of skills, whether it be in sport or in business. So, it’s building that collection of unique people that together can be awesome and deliver outstanding performance and that’s about having, you know, thinking hard about what’s skills you need in that team and having, you know, good diversity of thought, of people, of ages, of experience. All that good stuff.

Nathan: I’m curious. One thing that Tony Hsieh says is that he doesn’t hire anybody unless he’d have a beer with them. What’s your thoughts on that statement?

Rod: I don’t have time to drink beer.

Nathan: That’s fair enough.

Rod: Yeah. No. But I… So for me, I just aren’t a big drinker but we have a lot of fun at work. So, I don’t hire everybody who I enjoy but I definitely…you wanna enjoy the people that you work with. So, you also need to make sure you’ve got a very diverse team. Right. So, it’s about balancing those things. So, you know, you certainly don’t employ assholes is what he’s saying, but I think it’s much more about what I said earlier getting a good diverse team that together can do the job and works out how to work together well.

Nathan: In terms of management lessons and leadership, what do you think it means to be a great leader and somebody that is leading the ship? You know, you’ve got a thousand people team. What advice can you give from that standpoint?

Rod: Well, I think you have to lead by example and, you know, we have…you have to set the values of how you’re gonna play and, you know, take the kind of framework or charter that the business operates on because there’s so many decisions, so if you have a framework for doing that. In terms of the way I work, I mean, I don’t know how other people work, I’m very much…I kinda have the vision and the I can imagine what we need to do and, you know, what the thing looks like, and I think what works really well at Zero why there’s so many evangelas at Zero and people truly love Zero, is we had a really clear vision,  and then we incrementally delivered to that vision, so people get used to this flywheel of success as we keep seeing things, having the courage to move in direction and execute on that.

So, I think the way I sorta work is very much setting a vision, bringing, you know, making it the teams vision and, you know, really listening and having a very open organization. So, we the biggest poster on the internal yammer network as an example. So ,always sharing and reinforcing where we’re getting to, and just showing them that someone really owns the success of the business and then, you know, you build the great team and try to foster that winning culture.

Nathan: And I’m curious, with you vision, had it always been the same from the start has it changed over time?

Rod: I think the general direction is very similar. You know, because you had values and you had things that you really want to achieve, but as you achieve more success, it just grows, and I think with anything the vision expands. In fact, if you had have said what were doing now, you’d go back to eight years ago and say, “That’s crazy talk.” So, you don’t wanna scare the horses too much by being too big.

You wanna sort of think big and then like, keep it to a horizon that people can actually, can feasibly see, and then celebrate the steps of success and that starts to build the sort of confidence that hey, we can actually do anything we wanna do. So we, you know, at 50 thousand customers, we put out a vision of a million customers, but if we had have said a million customers on our prospectus people were going to go, “It’s crazy” and now were at sort of, you know, over 400 thousand and you can kind of see it quite comfortably getting there and, you know, that’s again, seemed like a massive number a few years ago, but very quickly and technology you can, you can get there.

Nathan: I’m also curious around how you structure your day and set goals for yourself. Are you able to give us an insight around that?

Rod: I’m kinda walk around manager. So, I kinda do what you do when you get to work I just go to my meetings and, you know, making sure I’m  division. You know, I’ve got people to catch up with and see what they’re doing and checking in. I’m pretty unstructured and…but I’m 24/7, so I’m always watching what’s going on and I’m just sort of jumping in if I think someone needs a bit of a hand or make sure people are working on things that get us in the right direction and I spend a lot of time… said, “It’s my job to say yes because as you get big, corporate’s wanna say no.”

So, I’m much more of the view of how do you say yes to things? How do you encourage people to try something different and take ownership and just run as fast as they can? So I’m very much trying to unlock things and just keep the urgency going as much as I can . So, I tend to dart around the business because I’ve got great people running each part of it, that frees me up to not be too prescriptive about my day.

Nathan: I see. And do you have any tricks or hacks around productivity that you would recommend that has helped you to get, you know, move really fast?

Rod: Yeah, do exercise. Get out on your bike or go for a swim. As you get older it’s more important and your brain actually needs time to uni-simulate things and you can’t do that with a conscious thought. So, I always find if I, you know, if I have a problem, by the time I’m riding back down the hill I’ve go tit solved. So, I think keeping fit and doing a bit of exercise every day is really important.

Nathan: That’s a great one, and also, who do you learn from? Who influences and helps you make some of your decisions?

Rod: No, no one person. I read lots…you know, have my RSS feed so I read a lot of information every day. I’ve got, you know, my standard tech news feeds, and so you’ll continually refining your internal models and reinforcing them, depending on external news that happens. So, I think it’s actually the amount of news and business snippets I read that is probably what I learn the most from. I think in New Zealand we haven’t had a lot of other technology leaders to follow so you take a chocolate out of every box, but there’s certainly no, no one person, and, you know, Big Friday, I was talking to my other team leaders and bouncing ideas around is probably the most value I get from talking to other people.

Nathan: Are there any books that you would recommend that have had a big impact on your life, out of curiosity?

Rod: No I’m not kind of, you know, not really get into those business books. I usually give them a bit of a skim to get to points and they normally just reinforce what you know are kind of natural rules anyway so, I’m not a huge …there’s no one or two books that I kinda take out, kinda work out, but when I do read those they seem like pretty obvious business things to try, right. You know, having a clear vision, you know, having a clear strategy, learning, you know, that you can’t hide from the numbers, and I think I’m 48 now I have done quite a lot of stuff in tech you just end up, you know, having a good set of internal models and how things work, and that gives you quite a lot of confidence to be able to make things happen.

And the biggest thing I’ve learned in business actually making things happen. So, picking up the phone, asking, “Why? Why aren’t we doing it now? Why is it gonna take a week? Why can’t I do it today?” Just driving urgency and actually getting things done puts you so far ahead of most other businesses, that you can win in a really significant way.

Nathan: I’m getting this sense of feeling that you have a massive sense of urgency and do you believe that the most successful entrepreneurs are really fast at implementing things? That’s something that I’ve some across from everyone that I’ve spoken to. The speed of implementation.

Rod: Yeah, no, urgent. Like, I’m like, “Why aren’t we doing it now? Today?” If I have a meeting in the morning, have you done it? You know, I’m checking a few days later, “Why haven’t you done it?” and it frustrates the hell out of me so I… if things haven’t been done. So I’m incredibly urgent. I think velocity and cadence is an absolute competitive advantage because if you can make decisions fast, get your vision implemented, and that’s why software’s so great because you can move so fast, you can really change the game and you just have…just operating you on a different, kind of level of physics than most organisations.

Nathan: I’m curious on your thoughts on the lean start-up methodology.

Rod: Well, we are the Oxford of that, right. We had massively funded start-ups and that’s our competitive advantage. So, it’s horses for courses and if you don’t need money then of course you have to be lean, but then there’s other businesses like ours where raising, you know, $300 million dollars allows us to build a business that very few people can’t.

So, we don’t have any real direct competitors. We’re just competing against incumbents with no other business software…small business software company that’s had anything like the funding we’ve had, and if they did get it we’d see them coming now for three to five years. So, I don’t think it’s the… I think lean is one model that’s interesting and of the start-up often have to do that. But as you gain more experience, you find there’s a whole lot of other models as well.

Nathan: Out of all your success, what do you value the most?

Rod: Being able to go surfing.

Nathan: How often do you go surfing?

Rod: As much as I can. So I decided to live pretty close to a beach and try to make that an active part of my week. So, most weekends and, you know, I work from home a day or two a week and, you know, the best day is when you’re doing sorta phone calls overseas and then go out for a wave. You know, nothing better than that.

Nathan: Yeah. No. That’s great that you actually take a break. How many hours do you say you work a day? You said 24/7. Like, how often do you sleep?

Rod: Probably sleep six or seven hours, but I’m emailing from as soon as I wake up till as soon as I go to bed. But I also make sure I go for a swim, you know, spend time with the family and I just, you know, work and life is just completely blurred and it always has been.

Nathan: That probably…good segway. What has been some of the biggest challenges with Zero that you’ve faced and how have you overcome them?

Rod: I think the biggest one was, you know, doing our IPO in the very beginning. That was…that gave us the capital to move forwards and raise our first es-teen and as I said I think we’ve raised over 300 so far. I think it’s always, you know, it’s always gonna be people and making sure you’re getting great people. Dealing with…you know, because you’re growing so fast, you actually outgrow people quite quickly.

So, what I’ve learnt is to be very active. You know, so we’ve had, even at the border level, we’ve had on our third chairman, because, you know, going from a start-up to New Zealand scaling company to a global company are all three quite distinct phases. So, even at the board level, we’ve been active around keeping refreshing the board so it’s always got the appropriate talent for the stage of life of the business, and I think doing that around out leadership team as well.

So we tend to put people in early and then let them build their teams underneath them, rather than build a team and put a manager on top. So, you know, I think the…it’s always people are always gonna be the biggest challenge, but it’s been pretty good.

Nathan: And what sacrifices have you had to make to get where you are today? What have you had to give up?

Rod: Well, you know, I haven’t had, I haven’t had massive holidays. I don’t sort of take big breaks and, you know, go around the world and sort of flop around and lie on a beach. I tend to be…work most of the time but, you know, still that I have plenty of time with the family and all of those sort of things, so, you know, work for me and I basically have work and family. Those are the two things and I do that 24/7.

So, I don’t usually travel for pleasure. No interest in it because I’m on an airplane so much anyway. So, I think, you know, when you’re doing an International business from New Zealand you do have, you know, quite a bit of time away from the family. That’s probably the hardest thing and not having that regular weekly…like I’m in the same town every week. Week on week and you join the local sorts clubs and all that sort of stuff.

That’s kinda…you know, I sleep in one city or sleep in one town and work in a whole lot of other ones. So, I think that kind of stability of just having a, you know, one place that you live and work in is what you give up when you’re doing these global jobs. You’re just traveling constantly and, you know, you get a few nights a week away from home, you know, which isn’t fun. You spend a lot of the time in a cool room.

Nathan: Yeah, look we have to work towards wrapping up. A couple of last questions. One, what are three action items you would give to early stage start-up founders and novice entrepreneurs?

Rod: Well, I think they have to build your own personal gain. So, you have to, you know, stand for something and get active in your community and do something that is good that inspires or shows that you take a real interest in moving things forward, and I think that’s important if you want to be an entrepreneur. You can’t sort of be a shrinking violet. You’ve gotta get out there and make a difference.

Third thing is, you really gotta build your networks, and I always think about that as more paying it forward. Its not about the number of people you know. I try to think about when I meet people, who do I know that can help this person and always making introductions and trying to create opportunities around people I meet, so you’re actually providing value to people in your network. I think that’s really important.

And then the third thing is just making sure you balance things out and enjoy the journey, because that’s your…you know the prize isn’t the reward at the very end. The prize is actually doing it and the enjoyment of being part of a team that’s, you know, kicking ass globally. That’s awesome.

Nathan: Yeah. No. That’s great. Those are some great one’s. Last question is, how do you guys differentiate yourself from your competitors?

Rod: Well, it’s really us verse the incumbent. So, you know, we’re just a mixed generation company that our customers enjoy and love. So, you know, we get word of mouth effects because of the way we deal with our customers and the beautiful experiences we’ve created for those customers.

Nathan: Awesome. Thank you so much for speaking with me, Rod. It’s been an absolute pleasure.

Man: The Founder Podcast has come to a close, but it’s not time to sleep. It’s time to hustle. Download the Richard Branson issue of Founder Magazine for free right now by visiting foundermag.com/branson. Again, that’s an absolutely free download of the Richard Branson issue of Founder Magazine, containing an exclusive interview with the man himself. It’s only available at foundermag.com/branson. So, download it now and we’ll see you next time on The Founder Podcast.