Hard to believe Drury won’t re-emerge

Xero founder stepping back but his passion likely to find fresh focus

In 2007 Rod Drury took me to lunch. He told me about his idea for a cloud computing company and how he planned to turn into a global tech player.

That kind of enthusiasm and passion for an idea isn’t unusual in entrepreneurs — but the clarity of Drury’s vision was disarming. His success in executing it is extremely rare.

Having sold his first start-up (AfterMail) for US$45 million ($62.28m), Drury had enough local support in 2007 to raise $15m and list Xero on the NZX with a market cap of $18m.

When it, controversially, delisted to join the ASX this year it was worth nearly $5 billion.

It now has 1.2 million customers in 180 countries and is breaking even at a cash earnings level.

Drury has systematically done what he said he would do.

As the company grows away from his particular skill set, he is taking a back seat.

At his core he is a tech entrepreneur. He thrives on fast-paced decision-making and has run a hands-on strategy for rapid growth.

The company is too big for that now. It requires the structure and systems of a major corporation.

There will inevitably be speculation about Drury’s motives and timing — as there was with the ASX move.

Was he pushed, or even gently nudged, by shareholders keener than he was to see Xero start returning dividends?

Putting aside the fact that his 12.8 per cent shareholding still gives him substantial clout on the board, his vision for Xero has been executed with such precision that stepping down as CEO seems like just another step in the plan.

Drury says he has no business plans outside of his Xero directorship.

He’ll stay on the board and focus on the innovative end of the business — yesterday he talked up plans for developing AI tech to further enhance the Xero’s accounting products.

The travel involved in running a global business from Havelock North must be wearying.

He has three children — and a passion for sports like surfing and mountain biking that you could hardly blame him for wanting to indulge while he is still young enough.

But in business terms he is still very young, turning 52 this year.

It’s hard to believe he won’t eventually become involved in investing in and championing new local startups, particularly if this next phase of the Xero story sees it bedding down to become a steady, profitable — but ultimately more boring — incumbent player.