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Drury lashes out at Dotcom

Entrepreneur Rod Drury has lashed out at Kim Dotcom.

Asked what he thought of the Internet Party founder on TVNZ's Q+A, the CEO replied, "I wish he'd go".

"I thought Kim at the beginning was you know, it was really cool to see somebody like that come through, but his manipulation of the media, he's very media savvy, understands that it's a good story, that journalism's cheap," Mr Drury said.

"Kim doesn’t represent the Internet generation. I represent the Internet generation. We've created 800 new jobs, we're paying lots of PAYE.  We're investing, we're burning, we're creating export revenue.  So I just think it's a sideshow and wish it would just go away."

Mr Dotcom's music streaming startup Baboom has created around 30 software development jobs. The only problem is he's offshored them to Portugal.

The Xero CEO said he has met Internet Party leader Laila Harre this week "With respect, she's great [but] she knows nothing about technology."

The Internet Party's ICT policy includes 50% cheaper broadband for everybody, which it says it will achieve through a second international cable increasing competition. However, even if the maths added up, neither policy is an MMP bottom line, or supported by potential coalition partners Labour and the Greens.

Mr Drury reiterated his theme from an ICT industry debate mid-week that all of the political parties are thinking too small.

"There's no policy, all it is is a bunch of incremental stuff."

Earlier, Mr Drury told Internet NZ's Nethui conference in Auckland that he was politically on the right, and believed that a creating a business-friendly environment was the best way to create wealth for better hospitals, schools and other public services. But he was exasperated that the headline policy launch at National's election-year conference was a roading project.

"We're not talking about the big issues," the Xero boss said on Q+A.

Mr Drury used the interview to address one of the ICT issues he's been focussed on: applying a mixed ownership model to fund a second submarine fibre optic cable out of NZ.

While the incumbent, 50% Telecom-owned Southern Cross Cable repeatedly says it has bandwidth to burn, and is selling it at a price pegged to the more competitive Australian market, Mr Drury says two players would be more competitive than one. He has often noted he has trouble using Google Hangouts and other video conferencing and calling technology when contacting his company's offshore offices.

Why do we need better international bandwidth?

"You know it's great to get Netflix, once you’ve seen that, that completely changes your life," Mr Drury said on Q+A.

"But really it's the businesses and people that are exporting services that will create the new jobs and get more export revenue coming into our country."

Mr Drury also spoke on national and regional development, telling Q+A, "We're seeing this labour arbitrage where New Zealand workers who are exactly the same skills and these are cool jobs, are under 60% of the cost ... So what we did actually in Hawkes Bay and in Nelson was work with Council and start to bundle up the offering of getting these high value contact centre jobs, and they're going – you know CIO who's sitting in Melbourne isn't gonna say I'm gonna open up a call centre in Hastings.  They're not going to knock on the door, you’ve got to go and sell the stuff.  In the same way we have to sell our product.

"So we have done that, and when KiwiBank said that they were going to move, Hastings was very well dressed, and we got 200 new jobs.  200 new jobs going into a regional CBD is a game changer."

The Xero CEO has also been a critic of the government's plan to spend around $1.5 billion upgrading IRD's computer systems, and has even gone so far as putting forward a cheaper alternative plan.

It's almost like he's putting policy out there. Has Mr Drury ever thought about running for office himself?

He was asked that question on Twitter today and replied "I can promise you I have zero aspiration for politics but always happy to help them make NZ more awesome."

Mr Dotcom and Mr Drury went on to have a brief Sunday afternoon barney on Twitter.

 

 


RAW DATA: TVNZ Q+A transcript: Rod Drury interviewed by Susan Wood

Watch the full interview here.

SUSAN         Xero boss Rod Drury announced this week that his Cloud Accounting Software company is on track to list on the US stock market in the future.   Xero one of the big success stories of the local industry with more than 300,000 global customers and growing.  Rod Drury isn't afraid to think big when it comes to politics too, and so I asked him what he thought of what the political parties were offering at this election.

ROD DRURY – Xero CEO  There's no policy, all it is a bunch of incremental stuff.

SUSAN         Too small you say.

ROD             All too small.  What we want to do I think you know now that we've proven that we can build world class businesses from New Zealand, the right conversation should be – should we architect New Zealand to take advantage of the biggest technology shift which has happened in our generation, in our lifetimes.  You know we are the country that’s furthest away from anywhere else, and you know fibre technology connecting directing electronically to large markets, allows us to completely change.  So how does that work?  Well at the moment you know we're all proud of exporting protein and manufactured goods.  What the Internet allows us to do is start exporting services.  You know because you can talk to people.  You know internet's not about you know downloading movies….

SUSAN         …I mean you're behind Pacific Fibre, you wanted that other cable in and out of here, can we do it with what we've got with the band width?

ROD             Well no, I know we can't, because we have 17 offices [worldwide] and I can't get everybody.  Technology should allow me to get all my 17 offices all on line in real time talking to them all.  If that can happen you can dramatically improve culture, you can sell more stuff.

SUSAN         Is part of the problem that the politicians are just not of the Internet age generation.  They're just too old actually.

ROD             Yeah, but I mean they're all nice people and I know all of them across the spectrum, everyone loves New Zealand, we want free healthcare, you know we want better class sizes, we want everything to be clean and green.  But to do that you have to grow the pie, and I think you know – and it's hard for politicians to engage, they’ve got so much other stuff going on.  You know my idea is to have somebody who's independent that advises government, similar to Peter Gluckman does with Science, and works between government, maybe reports to Cabinet every six weeks or something, but talks to …

SUSAN         But the government’s said no to that at this point have they? Labour’s saying yes

ROD             Well the government have said no so far.

SUSAN         So far, you're thinking they might change their mind on that one?

ROD             Well I hope they do, I think this government I think are strategically to roll on that one, it doesn’t cost a whole lot of money.  The difference with ICT is we all have a lot of money to spend, you know there's us at Xero, we invest tens of millions of dollars into the New Zealand market.  You’ve got Microsoft, SAP, these big global companies.  New Zealand could be a test lab, if we can pitch the projects we can get a huge amount of money coming in, and make New Zealand this great lab for the world.  So I think this concept of having an independent chief technology officer that works with the private sector, says these are the ten things we need to do as a country.  Explains what it is.  Then we'd have someone we can engage with, and then you know these multi-nationals and you know significant New Zealand companies, will invest to make it better.  And I don’t want our government officials flying to Copenhagen or Estonia to see how things are done.  We want the world coming here to see you know the best of business to government, and all those good things.

SUSAN         Have you given up on [a new] pacific cable?  I mean you couldn’t get the money together at the time, I know there's another one on the table at the moment.

ROD             Yeah, no I've kept working on it pretty strongly.  You know Amy's very familiar and so is Stephen Joyce on some of my thoughts.  So right now there is a private sector cable and that would be the government's preference for that to get away.  My view is that the people of New Zealand would love to own a cable.  You know suddenly the mixed ownership model would make sense if we sold a minority of some boring stuff and bought a really cool new one.  We have the Superfund with lots of money wanting to do infrastructure investments.  Under my model I would say that we put a tender out under UFB, maybe for 5 dollars per connection a month, we get as much band width as we like, you know …

SUSAN         What does it mean for people at home, they're sitting there thinking what does that mean for me?

ROD             Well I don’t think we need fibre to the home for all people.  If people want it for the home they should pay for it.  You know it's great to get Netflix, once you’ve seen that, that completely changes your life.  But really it's the businesses and people that are exporting services that will create the new jobs and get more export revenue coming into our country.

SUSAN         What do you think of Kim Dotcom?

ROD             I wish he'd go.  So I thought Kim at the beginning it was you know it was really cool to see somebody like that come through, but his manipulation of the media, so he's very media savvy, understands that it's a good story, that journalism's cheap.  You know I think it's a big sideshow.

SUSAN         I should probably defend journalism here, but carry on.

ROD             Yeah but you know we're not talking about the big issues right.  You know do we want to make New Zealand you know this country that can exploit technology.  Kim doesn’t represent the Internet generation.  I represent the Internet generation.  We've created 800 new jobs, you know we're paying lots of PAYE.  We're investing, we're burning, we're creating export revenue.  So I just think it's a sideshow wish it would just go away.

SUSAN         Is the Internet Party putting anything up that is of any use?

ROD             Well I saw Laila last night, with respect she's great, and when she's doing her thing you know we all like her and you know she's a great New Zealander, she knows nothing about technology.

SUSAN         Are you having trouble getting skilled people?

ROD             We were having trouble getting skilled people but you know our brand is now getting so good that we are getting through.

SUSAN         So everyone wants to work with you?

ROD             What I do worry about though is you don’t want to suck all the people out of New Zealand.  We want to see you know out of the 300 add-on providers, we want to make sure that there are still lots of people coming through, and we're doing lots of work around getting school kids into tech.  We're seeing lots of females coming into our industry as well.  So we always you know have lots of school kids going through.  Andrew Patterson just took a couple of schools up out of Silicon Valley and I think suddenly we're starting to see you know people are like hey technology's actually a pretty cool industry.

SUSAN         So what are the chances that we will get – as you talked to me really in this interview about this intergenerational shift, it's a once in a lifetime opportunity.  Do you think that the politicians will get on board?  Do you think we're going to blow this opportunity?  Will business do it despite the politics?

ROD             Well we're not being passive about it, you know we're going to make it happen.  So you know that’s why you know I'm talking about this stuff.  I think it's really important.  I would hate that in 20 years we all wake up and think we missed the biggest opportunity that New Zealand has had to step change.  So I think there is some urgency.  When it comes to times when elections happen you can bring these issues, but we just see this every day.  We have smart people in New Zealand, we can absolutely redefine our place in the world.

SUSAN         Now you’ve got a plan for the regions, because there is really quite patchy growth across New Zealand.  Auckland flying away, Canterbury for its own reasons.  What do you think should be happening in the regions?

ROD             So it's great that Auckland is doing its thing, that’s awesome, it's great to have a really huge city.  Do I care about house prices in Auckland?  Absolutely not.  People can't afford a house in Auckland move to Hawkes Bay.  It's awesome .  And you can go surfing in the weekends.  What I do think though is if we do want to have the regions to work we've got to have an active plan.  So we have you know very high value contact centre staff  that work across Auckland and Wellington, Sydney and Melbourne.  We're seeing this labour arbitrage where New Zealand workers who are exactly the same skills and these are cool jobs, are under 60% of the cost. 

So what we did actually in Hawkes Bay and in Nelson was work with Council and start to bundle up the offering of getting these high value contact centre jobs, and they're going – you know CIO who's sitting in Melbourne isn't gonna say I'm gonna open up a call centre in Hastings.  They're not going to knock on the door, you’ve got to go and sell the stuff.  In the same way we have to sell our product. 

So we have done that, and when KiwiBank said that they were going to move, Hastings was very well dressed, and we got 200 new jobs.  200 new jobs going into a regional CBD is a game changer, and I think what we hear  is I a lot of people want to move to Hawkes Bay or move to Nelson, or Queenstown. 

You know we've got to manufacture these jobs, and we have a natural labour arbitrage, and these are fun jobs. 

So getting you know UFB to the regions is great.  International connectivity makes all that happen, and you know the cool thing about having a lifestyle where you earn globally and live locally, and have all the benefits of living in New Zealand is magic.

SUSAN         Do you want the Wellington flyover?

ROD             Of course I want the Wellington flyover, I used to live in Maupuhia and I know the frustration of driving there every morning.  I mean we've got to get the balance right.  It seems a little bit like in New Zealand you can't do anything at the moment.  You know we can't get a dam in Hawkes Bay, we can't even just get a flyover.  I mean I've looked at it, it looks pretty exciting.  Whenever these projects happen there's new opportunities that come from it.  So I think we've just got to get that balance right, and you know getting in and out of Wellington is incredibly frustrating, and I hope in my lifetime we can fix that problem.

SUSAN         Rod Drury from Xero there. 

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Comments and questions
19

Earlier, Mr Drury told Internet NZ's Nethui conference in Auckland that he was politically on the right

Just about sums it up really. Cheers

Ummmmm Rod doesnt get to decide

KDC done a lot more in business than Roddie the Tulip

The debate around KDC is varied but he has the media + young (normally non voting) peoples ear

Yeah right. Drury never pumped and dumped, committed embezzlement or securities fraud, nor ripped off investors. So much for "experience"...

Still, it must be nice to be able to take flights to the USA that won't involve handcuffs...

Kim Dotcon could take a flight to the USA that doesn't involve handcuffs but why bother when New Zealand is a safe haven for people who buy their way to residency and where you can run an allegedly criminal enterprise.

True wealth is created by manufacturing widgets the world wants.

Neither Rod or, KDC do that.

Profound wisdom of the challenged kind!

Get rid of all services industry then - entertainment would be a good start.

...or services the world wants. They are a lot cheaper to ship than widgets, and hey presto, no obsolescence or inventory issues...

And your experience in the field is, what?

Rod has built an accounting software program that close to half a million companies use (possibly 2 users per company) and are likely to use for the next decade at least. I would say that amounts to a widget that many in the world want, now that may not be as valuable as the current Xero share price indicates but at least he doesn't have the entire US film industry gunning for him, or the FBI and the bulk of US law enforcement. Why is that, because he has a vision to build a company within the law, and isn't using the NZ generosity to protect him from those he has p....d off as KDC is doing.

Roll on KDC's extradition, let him fight his battle in the US where he can use all his wealth to fund a defense and build his next widget making venture.

the www'w represent themselves

KDC closest to them on age + attitude

Seems a desperate statement

Just wait until Xero customers demand Drury to incorporate Bitcoins into its packages .... now which generation are you in ?

Rod has done more for nz than KDC ever will.

How selfish of Rod. If it weren't for Kim, the NZ Police wouldn't have been able to play dress-up Teenage Mutant Ninja Turtles and Black Hawk Down.

If KDC was really committed to a better NZ he should leave our shores.

Rod continues to do more for NZ than KDC has ever talked about.

Good on you Rod for saying it like it is. Far too many intelligent kiwis are keeping our true opinions of Dotcom to ourselves because it's not the 'cool' thing to do. Dotcom has built a fun and relevant media persona for himself on the back of stealing intellectual property and embezzlement.

The really cynical part about this character is the way he is manipulating our legal and political processes in order to escape responsibility for his crimes.

Rod calls for a guru like Gluckman as Govt Science adviser to to help the govt see the wood amongst the trees. The govt already has such an adviser. Its called the Productivity Commission. Set up as part of the Supply and Confidence agreement with ACT in 2008.

Mostly used as a door stop by the cabinet since then but now back in more prominence and hopefully will now get listened to a bit more respectfully. Their reports are a great way for govt to prepare the groundwork for the hard decisions ahead if Rod Drury's call for a more business friendly environment and associated improved social outcomes is to yield some fruit.

And imagine the additional clarity that would come to the economic and social debate from a renewed ACT presence complete with Leader Jamie Whyte's Alternative Budget

The real shame of all this is that the core stuff that Rod talked about in the interview - ie "The Big Issues" - NZ's ICT export opportunities as a first world market have been completely outshone by the Dotcom discussion. Rod was right to call Dotcom a "sideshow". The problem is, this sideshow is distracting us all from the important issues. There's a limited window on this ICT stuff folks. Let's get in while we can.

Rod talks about skype stuttering. Skype works fine for me. Maybe he should switch ISPs instead of moaning about international bandwidth.

Good point ... maybe he could put some of this millions towards a new underseas cable to NZ ... if truly understood the Internet he would know that, like KDC does.

And property rights and the role of the State and the good ole boyz NZ network ... and dragenet electronic surveillance, the list is endless, RD is so out of touch its laughable he thinks he is one of us.

Check out the Xero Add-on page www.xero.com/au/add-ons most of these companies would not exist without Xero, Geoop, Unleashed, Vend. They are all NZ success stories and between all of them they employee hundreds of kiwis. Because of Xero NZ companies are able to get funding from overseas investors, they are able to scale into new markets and employee more staff.