Making it big overseas
Auckland-based software company XM Developments proves that two guys can still make it big from a garage
Monday, March 08 2010 || Technology || BY Pauline Herbst
Moving boxes around the world is like manipulating a giant Rubik’s cube: everything has to be in the right place, at the right time or it becomes an exercise in frustration. The problem with supply chains is that it’s harder to manage stock when it’s scattered across several continents.
What’s needed is an effective online management system that takes the data from any warehouse and automatically pulls it onto a website. It took two Kiwis, Brooke Anderson and Blair Watkins, to make it happen. Plus a credit card, a strong sense of self-belief and a ridiculous amount of luck.
The former boatbuilder (Anderson) and aspiring film director (Watkins) are the founders of XM Developments, which has just signed an exclusive distribution deal in North America for online third-party logistics software for warehouses.
“We want XM Developments to be the Fonterra of e-commerce software in New Zealand,” says Anderson. The pair began the company four years ago and their first software product, XM Lava, was picked up by logistics company Malcove, which thought it would be a point of difference for Nestlé.
Nestlé was thrilled, reporting an unprecedented 97% decrease in errors in the first 12 months of use, but Watkins knew the software would benefit from more features.
So the duo took a leap of faith and hoped their luck would hold. Using $20,000 of credit card debt and a loan from an uncle, they developed XM Lava, quickly followed by a deal with Nestlé Japan for XM Vapor and, most recently, XM Helium.
But their big break came with XM Oxygen. “Another company liked the look of Lava but asked if we could plug it into Accpac, their accounting system,” says Anderson. “After doing some research, we realised the potential market was so much bigger than just third-party logistics in New Zealand. Accpac has over 35,000 installations worldwide, versus 100 or so third-party logistics companies in New Zealand.”
With the help of a grant from New Zealand Trade & Enterprise (NZTE), the pair jumped on a plane to South Africa, and managed to get 30 minutes to demo Oxygen to Scott Zanbergen, vice-president of Sage Software, a global supplier of accounting and business management software to small and medium sized businesses.
“He asked me over drinks why I had flown all the way from New Zealand,” says Anderson. “I told him we’re making a competitive e-commerce product that plugs into Accpac.”
“I’ve been looking for a company like you,” said Zandbergen.
Sage included the pilot in the company’s evaluation of e-commerce solutions, where it came to the attention of Jim McLean, former vice-president sales of the then-leading e-commerce solution for Accpac, Iciniti Corporation.
“The market has been looking for a solution like XM Oxygen,” says McLean, who bought in and is now based in Vancouver as the new president of XM Developments North America. “The existing e-commerce solutions for Accpac are ancient in terms of internet time. While they work fine, the costs and time to deploy and support them puts them out of reach for the majority of Accpac users.”
Over the next 12 months McLean aims to establish XM Oxygen as the premier e-commerce solution for Sage Accpac ERP in North America. With access to an IP network with more than 20,900km of fibre and the choice of 16 data centres to locate XM Oxygen servers, there’s not much stopping them.
“We couldn’t have imagined we’d be this successful,” says Anderson. “It has been extremely fortuitous but it’s like Blair always says, it’s all about the product, making it as good as you can.
“I expect it to be like the Kiwi band that no one cares about until we went overseas and made it big. We’re hoping people will now finally pay attention locally.”
