Why Gary Turner left a cushy job at Microsoft to found Xero UK

As a lifetime technology enthusiast and champion of SMEs, Gary Turner was the perfect pick to spearhead the growth of Xero UK. Having become the market leader, he’s now applying a healthy dose of paranoia to avoid being overtaken by new startups

Why Gary Turner left a cushy job at Microsoft to found Xero UK

People thought Gary Turner was crazy. They kind of had a point. After all, not many people would’ve swapped a high-paying job at Microsoft for an uncertain future with a small accountancy tech startup from New Zealand few had heard of. But that wasn’t how Turner reacted when Xero reached out to him on LinkedIn in 2008, asking for help bringing the company to the UK and Europe. “I was like holy shit,” he remembers. “This was an opportunity to be a part of the next generation of software businesses.” That’s how he became the co-founder and managing director of Xero UK.

While his decision to join the startup shocked friends and colleagues, a quick glance at his CV would’ve liberated them of any illusions the choice to opt out of the cushy pay cheque came out of the blue. Having spent two decades spearheading tech firms supporting SMEs in his professional life and blogging about the future of innovation at night, Turner couldn’t let this chance slip through his fingers. “It was so obvious that not only was that the right opportunity for me but I was the right guy for it,” he says. In the ten years since, he’s been proved right by scaling Xero UK into becoming the market leader in Britain and has helped thousands of small firms control their budget. And there’s no doubt in his mind that he made the right choice to join the startup. “I have the best job in the world,” he says.

But his dedication to alleviate SMEs of their daily woes wasn’t just something picked up throughout his career. No, it started much earlier than that. “I grew up in the outskirts of Glasgow,” he says. “And I only recently realised the importance my teenage years had on my career choice.” At the time,Turner’s father ran his own small business and his mother did the bookkeeping. If the nightly dinner conversations about cashflow would’ve been the only influences at the time, Turner might’ve ended up as an accountant. However, that combined with his “utter passion for technology” set him upon his professional path from an early age. “I don’t think I could ever be in any other industry than the one I’m in because of that original experience,” he says.

And growing up, Turner had plenty of opportunities to explore his interest in computers. From the ZX Spectrum to the Commodore 64, developers were increasingly flooding the market with hardware. And Turner still remembers when his parents bought him a BBC Micro computer. “It was on the 24th of January 1984,” he says. “That’s how impactful it was. It was like a huge, huge thing for me.”

Armed with this technological marvel of the time and the BBC’s televised tutorials, he quickly developed a flair for making zeros and ones dance to his tune. “I was the kind of kid who the computing class teacher would come to for advice,” Turner laughs. He even admits to having indulged in some low-level recreational hacking. Together with a friend, Turner wrote a programme they put on a disc. If it was put into a computer it would secretly copy every programme from the machine. They then took the disc to computer stores and asked if they could check it for corruption. Then, when the disc was checked on the store’s computers, the routine was activated without the owner being any wiser. While they didn’t make a profit from it and really had no use for the mostly office-based applications they downloaded, they were happy with proving their chops. “So I might have invented digital shoplifting,” he laughs.

Given his aptitude for programming, it seemed only logical that he’d sign up to get a degree in computer science. “But after five months I concluded that it wasn’t the right path for me, so I dropped out,” Turner says. While kids in computer science classes today may have a host of options available to them – from interface design to product marketing – those options didn’t exist when Turner was young. Instead, the teenage dropout convinced a computer retail store to hire him while he figured out what to do. “I didn’t enjoy it but I was at least earning some money,” Turner says.

Eventually he managed to get a job as a junior IT consultant at a firm servicing SMEs, a position he held until the mid-1990s. By then he’d started hearing about Pegasus Software, a PC-based accounting company, and how the firm was breaking new grounds in tech. And the news couldn’t have reached his ears at a better time. “I’d been swimming around in the world of small business technology for five years and I was ready for the next challenge,” Turner says. So when a vacancy came up to become a regional account manager at the firm, he pounced on the opportunity.

From this moment on, Turner had a front row seat to how tech changed the world around the turn of the millennium. Suddenly every business required an internet connection, an email address and a webpage. As the masterminds in Silicon Valley churned out innovations transforming the world of business, the leadership of Pegasus Software realised the firm needed to evolve too. And Turner, with his combination of tech and management skills, was just the person to do it. So in 2003 he found himself spearheading the evolution of Pegasus Software as its managing director and he loved it. “I think that I had finally found my calling at the age of 33,” Turner says.

At the time he’d also been running his own tech blog for two years. “I was probably one of the first 50 people to have a blog in the UK where I would muse in the evenings about what the internet was and how the world of business could harness the web,” he says. The inspiration to do so came from having read the book The Cluetrain Manifesto where the four authors outlined how digital innovations would transform businesses. Through the blog, increasingly Turner found himself engaging in conversations with other tech aficionados that he describes as “quite avant-garde”. All their talks pointed in the same direction. “The game was up for traditional software businesses,” he says. Sadly, he became convinced this also applied to his current employer.

This realisation that Pegasus Software wasn’t the right place for him to fulfil his ambition lead to Turner deciding to take a sabbatical from his role in 2007. Hearing that he was “slobbing around”, it didn’t take long before Microsoft came knocking, asking for help launching its business software Microsoft Dynamics. “It had always been on my bucket list to work for Microsoft,” he says. But having been flattered into signing the dotted line, a year later he again found himself wondering if the next level of innovation would come from the tech titan. And that’s when Xero reached out to him. “I quit my job at Microsoft and everybody thought I was insane but it felt like I’d won the first prize in a job competition,” he says.

It didn’t hurt that he found a kindred spirit in Rodney Drury, founder of Xero. “We share the same fluency and passion about technology,” he says. Not only did this mean the founder was happy to sign off on Turner joining the business but the pair also ended up running the podcast The Rod & Gary Show together. “It was basically Rod and I trying to see who was the smartest when it came to blockchain or some other emerging new technology,” he smiles.

Backed by the founder, Turner set out to grow Xero UK into the powerhouse that it is today. “I wouldn’t have left Microsoft if I didn’t think there would be a successful business at the end of it,” he says. But at the time few would’ve thought the venture would become a triumph with its handful of employees and no office. “I remember feeling quite frustrated that people couldn’t see we were going to be an incredibly successful business,” he says.

Fuelled by this frustration and his belief in Xero UK, Turner set out to prove the sceptics wrong by tackling the challenge of growing the company’s client base. “We had to be very focused because we didn’t have a lot of money,” he says. So instead of wasting cash on lavish marketing campaigns, the team tried to find early adopters among accountants who could bring their message to SMEs. In order to find them, Turner’s team made a point of attending as many conferences as possible, or “pick-up joints for accountants” as he calls them, to “find the five freaks and weirdos that understood what we were talking about.”
By following this approach, Xero UK rapidly grew the number of customers and by 2012 the company set up its first office in Milton Keynes. “I literally got out Google Maps and dropped a pin where the eight of us all lived,” he laughs. This office was later joined by one in London as the number of employees ballooned to 260. And it won’t be the last one. “We are always looking for more space and every year we have to rent more office space, buy more desks,” he says.

Surprisingly, this rapid expansion hasn’t prevented Xero UK from maintaining its culture, although the formula has required some tweaking. “We’ve certainly had to bring in a lot more maturity and structure to how we run the business,” he says. “It’s no longer the case that I’m the only manager. We have a whole bunch of managers in the business now.” Still, he maintains the team is still energised by Xero UK’s upwards trajectory and by the prospect of helping Britain’s 5.7 million SMEs to avoid failure. He points out that small businesses “deliver about 50% of our GDP” and that if Xero UK can boost their productivity, the whole country wins. “And we are incredibly motivated by that,” he says.

Another huge difference from the early days is that he’s increasingly hearing how the scaleup’s software has helped SMEs. “I didn’t have that in the beginning,” he says. “So we begin to see some of the echoes of our existence getting played back to us now.”

On a personal level, Turner feels that he’s fitting more into the role as the company has scaled. “Running a startup business was the anomaly for me,” he says. Having led Pegasus Software and worked with Microsoft in the past, he was accustomed to having thousands of customers and not running a small startup team. “So the bigger and more successful we’ve become, the more it feels like home to me,” Turner reflects.

But just as Xero UK seemingly pounced out of nowhere to take on the market incumbents, he’s very aware that other startups may attempt to do the same to him. “The founder of Intel had a famous saying that only the paranoid survive,” he says. “Knowing what  kind of disruptive impact Xero has had globally to established businesses such as Sage, we’ve always been looking over the shoulder for our Xero.” This watchfulness means the scaleup is kept on its toes against any startups looking to claim the crown. “If there’s a Xero out there that is coming for our marketplace then we’ll see them from far away,” he says. “And we know that it’s taken us a decade to build us a company of this scale. We don’t think there is going to be an overnight entrant that is going to completely transform the marketplace.”

But despite this paranoia, he’s still eager to spare some time advising entrepreneurs at the beginning of their journey. For instance, he’s been a mentor to early stage fintech startups at the accelerator TechStars London. “I just love technology and I love solving problems,” Turner says. Whatever their problems, he’s happy to share his notes about how Xero UK has solved similar issues. “If I can help, I’ll help,” he says.

Given Turner’s passion for tech and his own track record, it’s unsurprising that his ultimate goal for the business is simply stated “global domination.” And for some reason, we’re unsure if he’s kidding or not.

Eric Johansson
Eric Johansson

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