Dangerous, page-26

I think the whole "will they succeed in the US" thing is a bit of a furphy.

If you look at their position in the UK and Aust. markets - they are well on the way to become a dominant player there. These are BIG markets. If nothing happens in the US, this is still a massive market opportunity.

If you just look at their marketing strategy in Australia (but worldwide also) they are positioning themselves as the choice of start-ups, entrepreneurs, getting stuck in involved with the crowd...They are integrated with 300+ cloud apps from improving productivity, managing job costs, CRM's, everything a business needs to function. People will naturally use Xero because it integrates with irreplaceable tools they love.

MYOB has just put "Online" in front of "accounting software". They are going to keep losing market share to Xero. Interestingly, MYOB is supposed to float next year valued at $2.5bn. A company with no global ambitions or no hope of global success. Xero is currently valued at $1.9bn - if you had to buy something right now - what would you buy?

Another furphy is the idea that 4/5 small businesses fail and that Xero's customer base is going out of business within 3 years. Yes this is true, but people forget that those who fail are replaced by others who open shop. Everyone needs accounting software. Net result is what matters.

But accounting software is not all it is anymore. In future, those signing up to a Xero subscription will not be just sold a "cloud accounting software". They will be sold a whole business cloud solution.

Small business cloud is BIG business.

This is why many here can't understand why this "dog" is so overvalued or ever got so overvalued. It got that overvalued because many people realized the market potential. There are NO start-ups on the ASX I know of with this revenue potential.