I like working with Mark Weldon at the NZX because he is also super smart and thinks strategically. The re-focus on implementation is working. In the UK we had a number of larger firms committing to orders but not following through with implementation. There were a number of similar releases plus the annual report and audited accounts that clearly states that the customer numbers are "paying customers". MARKET RELEASE Xero exceeds 10,000 customer milestone 23 July 2009 In advance of the Xero Annual Meeting this afternoon Xero wishes to provide the market with a short update of the Company’s progress. Doing quick release cycles reinforces a culture of innovation and execution but it is something we think about a lot. SI - You are a small company now, how will you keep your strong company culture and customer service when you hopefully get allot bigger? SI - Was the intention of yourself and the Xero board to build the company up as a brand with the express purpose of selling, along the lines of say 42 Below?

RD - Xero is fairly distributed as our sales teams operate out of several areas on many time zones so we build culture online. He is a leader that gets marketing and has built a great culture of innovation. Yammer is a great way for everyone to know what’s going on and feel part of the discussion. It’s really hard to find great product testers in New Zealand. I am still a Xero investor as well as customer, and I find a number of the features of the product extremely innovative. I have been concerned with the amount of time being spent on building Xero Personal which is a completely different target market. I understand that for many SMEs there is a fine line between personal accounting and their business accounting, but I think that providing a solution to solve this for small business owners doesn’t require all the Xero Personal features. E.g. maybe it just requires an add-on to the Expense Claim module to allow expenses to be pulled out of a personal credit-card statement, etc… Did you know that you can personalize your Spectrum TV cable lineup? Depending on the transmission system, power cables can be AC or DC.

LT Copper Power Cable Excellence: Power cables are the backbone of any electrical distribution system, what is control cable tasked with transmitting and distributing high power safely and efficiently. SI - What are the biggest commercial threats to your businesses in terms of competition and is your reaction to this competition likely to be aggressive or reactive in nature? SI - What are your biggest challenges as the company expands? Our biggest risk is losing customers data so we ensure that we cover that risk with the appropriate risk management strategies. Rod clarifies and confirms that the previous numbers were not paying customers on the Xero website. On paying customers: How do Rod and the board of Xero reconcile the following? Rod is a director on the board of the New Zealand Stock Exchange and also sits on the New Zealand Trade & Enterprise Beachhead Advisory Board. For example, reporting is still very rudimentary, there is no stock control, the functionality in a number of the modules is quite basic, etc… I believe there is a significant opportunity here, but that there is still a lot to do to maintain Xero’s position as a leading SME accounting solution.

I am concerned about maintaining focus on building the best online accounting system for the SME market. My only concern is that they do not divide their focus between two very different markets. Reader Question - I have a concern about focus at Xero at the moment. SI - You contribute to a blog on the Xero website and of course your business is web based, how important is the internet to the business to spread the Xero brand and business and will you start to use more traditional forms of media and or advertising as you grow? An assertion that was made repeatedly in various interviews and blog posts that the customers were paying customers. The delay in implementation delayed revenue so we now count customers as they implemented which more closely aligns revenue. Xero has now exceeded 10,000 paying customers, which amounts to ten-fold growth since March 2008. Crossing this threshold two years after the IPO (read the 2007 Xero Prospectus for detail) is a significant milestone and positions Xero as one of the leading online accounting software providers in the world. Hopefully you will have an easier time understanding them now! Our Headlight systems have a unique, replaceable control cable.