Thanks Lightning 70! Further to your post from NBR yesterday:

Xero launches app store for third-party solutions

Company wants to showcase development partners and onboard small businesses.

By Hadyn Green

Wed, 04 Aug 2021

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The Xero App Store.

Xero is launching a new app store for software to work with its cloud-based accounting system. The store works like other app stores, where users can browse different third-party solutions that either 'plug into' or work alongside the Xero system. New Zealand, Australian and UK users will get the first access to the store.

Xero executive general manager of ecosystem Nick Houldsworth told NBR during a demonstration of the store, that it would be introducing a host of new features that will make it much easier for small businesses to find and connect with software. Houldsworth – who joined Xero four years ago from one of its partners, Vend – said the store was also an opportunity for developers to create software that can grow alongside Xero.

"The Xero ecosystem is really built around our public API," Houldsworth said. The company launched its API in 2009 and started working with a handful of partners to build effective integrations and extensions of Xero.

"Some of those are filling gaps that our product may not have, especially in the early days when you're growing business. And then some of them are standalone businesses as well, that needed a ledger to power their back end."

Xero executive general manager of ecosystem Nick Houldsworth.

The company ticked over 1000 integrated apps this year, however, as Houldsworth noted, it never had an effective way for small businesses to find those apps and solutions and add them to their systems.

"Last year, we saw data that showed the businesses on Xero who were using integrated apps were actually growing their revenue, whereas businesses that were not using integrations and not using apps were losing revenue.

"The big announcement for [Xero] is to play a much more active role and help small businesses become digitally savvy."

Developers now also get a chance to be seen by more potential users.

"A lot of our developers have been saying for a long time they want this capability. We've had really positive feedback so far. They also tell us that it's really hard to find customers; paying for Google ads and Facebook ads, it gets really expensive."

How the app store works.

Like other app stores, such as Google and Microsoft, once you're logged into Xero, your credentials are shared with the apps you sign up for. Xero will also use your information to help you find apps. For example, if your business has a payroll, the store may suggest payroll apps to help you.

What the developer’s dashboard looks like in the Xero app store.

The shared credentials also allow for billing, so users can manage subscriptions and payments via their Xero accounts. The store will also allow users to trial the apps for free, similar to other subscription services. Xero takes a 15% cut of new sales through the store.

"We've introduced a subscription revenue share for where we generate new sales for our app developers," Houldsworth said. "I think [15%] is a really fair value exchange for what we're providing here to our partners, which is a market of nearly three million small businesses who are desperately looking for solutions."

"Also, it's only for new sales that we generate from the app store; we're not requiring them to switch up the whole billing systems to send all of their volumes through us."

From the developers' side, they have access to a dashboard showing information on how the app is performing, options to change pricing tiers, and the ability to reply to reviews. Only Xero users who have signed up for a product can leave reviews.

By Hadyn Green