By Damien Tampling, Xero’s Chief Strategy Officer
Few cross-organisational projects in human history have been as successful as the Human Genome Project. Many years, hundreds of scientists and researchers across 20+ global institutions devoted their time, effort, funding and ingenuity to create the first-ever complete map of human DNA. It was a feat not just of science, but of human collaboration and what is possible when organisations collaborate on a goal bigger than what they can achieve alone.
The same could be said of what’s happening in platforms today. The totality of business data is a little like the double-helix structure of DNA: each strand of information in the accounting ledger, CRM, inventory database or marketing funnel is a nucleotide (the base elements of DNA) that tells an isolated story. Tied together, through an API or another means, each piece of data enriches another, telling a fuller story than the sum of its parts.
Platforms as genomes
The best software platforms today are those that treat both their own and their ecosystem’s data as crucial to the overall story. They are bringing together partners across apps from various niches to create a tapestry of information that is far richer and more cohesive. In effect, they are building their own Genome Project for businesses.
Access to that tapestry of information is seemingly one reason Salesforce acquired Slack last month. Its plan to integrate a powerful collaboration platform like Slack into its Customer 360 platform — along with data from thousands of other third-party apps already available on the Slack platform — means each piece of data is richer than it was before, and its customers can do more with their data as a whole piece.
Yet that opportunity doesn’t just have to come through acquisition — partnerships are just as crucial, done well, also bringing together complementary and critical workflows that give customers a more holistic picture or greater insight.
The Xero ecosystem couldn’t be a better example — today more than 70,000 users connect to the Xero API and more than 1000 certified apps are integrated that read and write to the single accounting ledger, adding more colour around how businesses deal with their customers, inventory, manage their compliance and payments.
Creating those connections doesn’t just reduce the time it takes to share information; our own data has shown that connecting Xero with third-party apps has made for more resilient, healthier and faster-growing businesses, particularly during the COVID-19 pandemic.
Partnering for a complete picture
If those involved in the Human Genome Project had failed to agree on their end goal, where they wanted to focus their efforts on filling gaps and challenging themselves to seize opportunities with partners vs alone, it’s unlikely we would have a blueprint that is critical to so much medical research and therapeutic development today.
That’s why the most successful partnerships are built on a common goal first — the why — before looking at the how of connecting data sources or creating contracts. Agreeing on a shared sense of purpose first ensures any conflict that arises in future is less likely to jeopardise the partnership itself.
Stripe’s recent partnership with Shopify to create Shopify Balance has powerful potential because of that alignment. By agreeing on the end goal and working tightly together, these two companies have enabled potentially billions of dollars in additional economic value by helping small businesses more easily access capital, using the combination of complementary data. Neither of these major platforms would likely have accomplished this by themselves.
With our acquisition of Waddle, and other investments we are making, we are able to do the same with financial and fintech partners around the world; helping them provide smarter, more timely lending options to small businesses to manage their cash flow and support their growth.
That doesn’t just happen on Xero — that lending capability enables other platforms to leverage accounting data to offer better, more competitive products to customers in need.
That’s why whenever we begin talking to a potential partner about working deeply together, we ensure we’re aligned on why — anchored in understanding each other’s vision and a common passion for solving a customer’s most important problems. For us, the why is simple: just one in five small businesses today use the cloud to manage their finances, with even fewer tapping into the potential of connecting apps together to help run their business.
By bringing the single accounting ledger into the cloud so it’s accessible anywhere, and integrating additional data through a suite of apps like those available on the Xero App Store, small businesses can access real-time business insights. Those insights lead to businesses that are more profitable and ultimately grow faster, providing the potential to radically transform global economies through greater small business productivity and growth.
This kind of live view of your business and the tools that sit around it were previously only available to big business and typically expensive software — by democratising access to these tools and the data on which small businesses sit, we give that access to the world’s largest class of business: small business.
As my friend and the late Clayton Christensen did a good job explaining in his research and many acclaimed books, disruption tends to be linked to making something more affordable or more accessible to a segment. In my mind, the fundamentals of the journey we are on — supporting small businesses around the world to grow and thrive — is much bigger than you might think at first glance.
Finding partners that are aligned with this opportunity and the impact it can have on communities around the world, and enabling this potential together, is the first step in a long, prosperous and healthy partnership. Agreeing on that ‘why’ upfront is critical and ensures partners can collaborate on a unified purpose; like delivering a view of the whole DNA sequence of the human genome, for the benefit of their shared customer.
The Human Genome Project was only possible because of deep collaboration between disparate parties, unified by a common goal to transform the way we look at what makes us human. Truly empowering small businesses to innovate faster, make better decisions, realise their full potential but also find better life-balance, is no different — it will continue to require the same level of collaboration and symbiotic relationships. Never more so than in a world moving faster than many can keep up with.
Today’s platforms, and the partners they work with, have the opportunity to create a symbiotic ecosystem for businesses and enable greater economic value for decades to come.
Damien Tampling — Xero’s Chief Strategy Officer
Damien leads Xero’s global strategy, corporate development, partnerships and ecosystem teams. Prior to joining Xero, Damien spent 20 years at Deloitte in a number of senior strategy, M&A and other executive roles and was a founding Partner of Deloitte’s global online and mobile technology practice, Deloitte Digital. He holds a Bachelor of Business from RMIT University, Melbourne and is a member of the Australian Institute of Company Directors.