It’s human nature to dislike change. If it ain’t broke, don’t fix it – right? Why disrupt a process, or do things differently?

Usually the answer is that the process is, in fact, broken – or could be massively improved – but we’ve become too complacent to notice.

This is particularly apparent to start-ups providing a service to enterprise customers. Unlike the nimble, adaptable start-up themselves – or SMEs that can react with agility – large enterprises with multiple decision-makers are typically more change-averse simply because of their size and scale. Despite the fact that technological evolution is inevitable, and new technologies are becoming quicker and easier to implement, the process of integrating new solutions is still a risk for large organisations.

So as an enterprise start-up, how do you break through?

In answering that question, I have an unusual advantage. I have been heavily involved with two successful enterprise start-ups that are at different stages of their growth journey. As Head of Accounting at world-beater Xero, and CFO at newly-listed Xref, I have learned that there are some common challenges that B2B start-ups face, as well as strengths that they must build to grow with enterprise customers.

Acceptance of automation

So, beyond their names, what is the “x-factor” that Xero and Xref have in common?

Xero’s initial problem was that accountants didn’t like change. When Xero launched in Australia in 2009, we weren’t accustomed to using cloud technology as a part of our everyday work, and we weren’t ready to trust it. And there is always an element of apathy – it’s easier to simply maintain status quo.

When Xero came to the market, it was clearly a boom for SMEs as it allowed them to streamline their bookkeeping. It was less clear how accountants could use it to add value without losing some of their key revenue drivers.

Despite the obvious benefits of data storage, security and integrity, the process also changed the manual, time-consuming elements of accounting. But Xero met resistance – why would people abandon what they knew?

Our first job was to remove the stigma of automation. It’s a common misconception that automated technology results in job loss. Wrong.  Automation is, at its core, about adding value. In knowledge work, automation rarely deletes an entire role – rather, it removes laborious and manual elements of many different roles and processes, to makes them more efficient and accurate. We had to make it clear that, through automation, Xero would provide businesses with the data they needed to make more educated financial decisions, while freeing up accounting teams to offer greater strategic value.

Those who first adopted Xero saw the value immediately; it allowed them to offer their clients a better service by leaving simple processes to technology. The growth of Xero was paralleled by the industry’s understanding of automation and the value it could bring. This was a turning point for Xero.

Automation now streamlines accounting for small business, accountants and business analysts across the world. It’s an elegant solution to an archaic problem.

Like for Like: How Xero and Xref revolutionised different industries with a similar approach

Xref was also addressing a process desperate for innovation. That’s why I knew it would work.

HR Managers and recruiters had, for decades, been conducting reference checks over the phone, which was time-consuming and produced few insights from which good hiring decisions could be made.

Xref’s automated solution solves these problems. A reference check through Xref can be delivered within 24 hours, and it gives clients the power to make hiring decisions based on data, as opposed to a ‘gut feeling’ from a conversation.

One of the most critical elements of any successful start-up is its scalability. It must be a flexible solution that can easily adapt and integrate with other systems, to rapidly scale and meet the demands of clients.

And the provider of any good solution will discover that, once adopted, the market will find ways to adapt it to suit their needs. Xero launched as a small business accounting solution, now it’s used by both businesses and accountants across the world. Likewise, Xref launched as a reference checking platform, but because it was scalable and easy to integrate it became the perfect solution for large enterprises, which are now beginning to use Xref in new ways, or coming to the company to ask about solutions to other, similar entrenched problems.

Xref, like Xero, also isn’t replacing a slow process with a faster one, or an expensive human with a cheap robot. It is replacing an outdated approach with a more effective solution – improving a necessary but low-value process with technology to make it more efficient, more effective and ultimately, into a high-value process to the business.

In the end, that is the Holy Grail for any B2B start-up. A solution that makes a process a driver of both efficiencies and value, rather than just making a cost centre less costly.

The logical power shift

Eleven years ago the accounting industry had a problem. While business owners held all the power, it was accountants who were driving financial processes. In recruiting this is usually still the case – albeit these are people-based decisions rather than financial ones.

But with the rise of Silicon Valley, we’re now seeing a shift. The power in the process is moving to those who have the most control and incentive to drive the process. In reference checking, this is the candidate.

The Xref system gives the candidate, the person most invested in the process, responsibility. Each candidate provides referee details and reference requests are then issued via the Xref platform for the referee to complete when it suits them. Candidates are notified once their references are completed and if there is a delay in referees’ responses, the candidate is made aware and is able to follow up.

The power of the relationship and subsequent success of the process is put in the hands of the candidate (and the referee), massively reducing time wasted by HR managers and recruiters. Because the vast majority of referees prefer to provide feedback via laptop or mobile, Xref references – full of useful, benchmarked, unbiased data – are returned within 36 hours, on average, compared with two weeks for phone-based reference checks.

While Xref and Xero operate in different industries, their success is proof that, in an industry ripe for disruption, automation can not only increase efficiency but also add value through improved productivity, better access to data and a shift in the control of the process.

While you don’t necessary need to have a name beginning with ‘X’, I’m eagerly looking out for the next start-up that can transform an industry in a similar way.