Herman Man, the global VP of product at Xero, was a recent guest on our podcast, B2B Nation. Herman spoke with us about the current virtual reality (VR) landscape and the future of small business accounting.
In this episode, we discuss:
- Virtual reality (VR) vs augmented reality (AR)
- How businesses can use AR and VR
- The future of small business accounting
Below are some highlights from our conversation.*
The Origin of Virtual Reality
“I think it’s a combination of VR and AR that’s going to take the industry by storm. With VR, the user experiences a virtual world and is immersed within that world. In augmented reality, the user experiences the real world with images enhanced on top of it. A good example of that would be Pokemon Go. There are big growth opportunities here. I think Goldman Sachs said it’s an 80 billion-dollar market by 2025.
“With respect to VR, I think it came to prominence in the early-mid 90s with a focus on gaming. Nintendo and Sega were really claiming the space, and I think we’ve all been enamoured with VR. If you think back to the 90s and the era of science fiction movies depicting an alternate universe, that really piqued our imaginations. The Matrix was one really popular movie of that era that featured VR. Many people have heard about it, but up until now, it’s largely been in our imaginations. I think we’re at this unique point in time where technology, costs, and social norms have intersected to make this acceptable, which is why we’re seeing such a growth now in popularity.
In the 80s and 90s, no one would have ever dreamed of the computing power of mobile phones, right? What we have today with the iPhone 7 and Androids out there. We take the power, graphics, and casual games for granted. If you take a step back and imagine 2016 from the 90s, and take into account the graphics and frame rates of this device, no one would have thought it possibile. We’ve made a lot of software advancements in the last 20 years. Algorithms, big data, and machine learning are prevalent in almost everything we touch. Think of Siri or Google Maps, that you can talk to your phone and it responds intelligently, and it learns over time. In Google Maps, when you punch in your destination, it can take you there, but it also estimates your arrival down to the minute. That’s pretty astounding.
“It’s become the expectation of our customers, and it’s really changed our lives. These forces . . . are compelling AR and VR into the future.”
How VR Could Impact Small Businesses
“I think there are two ways VR could impact small businesses.
- Using AR and VR for customer experience — to see/hear/touch a product. A roofing company might use AR to show the customer how the product will actually look on the their home.
- Using AR and VR as a platform and marketing channel. This requires us to be aware of AR and VR trends to leverage them at a marketing level. Pokemon Go in the US came out of nowhere, and some small businesses got strategic by placing lures to attract foot traffic into their stores, which is super smart and very inexpensive. A coffee shop in CA put a lure in front of the shop, and players came by and then actually entered the store to buy coffee, which is a really intelligent way to market your small business.
“I think we’re going to see more of an explosion with advertising and marketing in VR. Companies are starting to do what Google and Facebook did with the digital space in the VR world.”
How Can Businesses Prepare for the Future of Accounting
“Accounting will be more automated in the future. Systems are getting smarter, and more of the workflow is being handled through machine learning (ML) algorithms. Our CEO, Rod Drury, discussed invoice categorization and ML at XeroCon recently. Because our computers have so much data, we can actively categorize invoices based on this data. This will save everyone time, but it helps the small business owner most, who can then spend more time serving customers.
“Accounting will also become more human. It’ll be more accessible and more familiar through tools like Facebook Messenger, Slack, or even Siri one day. We recently announced Hey Xero at XeroCon, which is really exciting. There are 50 million small businesses that use Facebook Messenger each month, so why not let them do accounting there? It’s a more natural way to work, since they can use natural language, ask questions, discover new apps, and query for financial data, bringing the customer into the data flow and letting them access their own data easier.”
Cash is No Longer King
“Businesses need to accept payment in any form to reduce friction for the customer. You want to make the transaction funnel easy for them. So you want to accept regular debit/credit cards and also mobile payments. These businesses like ApplePay and PayPal are forecasted to grow tenfold in the US from 30 billion in 2016 to 266 billion by 2020. Point of sale solutions like Square also make this simple because it feeds directly into your accounting system.
“From a secondary perspective, if you’re online, not supporting digital payments really hurts small businesses because cash flow is tight, and you need to get paid quickly. The traditional invoice process can take up to 2 weeks, but if you can do this electronically, the payment transfers right away.
“At Xero, we’ve worked hard to make a seamless integration with PayPal in particular, so payments can be made immediately and small businesses can get their money faster. Xero reconciles all the payments quietly in the backend of our accounting software, which makes for a cashless environment.”
B2B Nation is a podcast for B2B sales and marketing professionals, featuring expert opinions and advice on the most important topics in the industry. Check out our other episodes on SoundCloud or follow us on Twitter: @Technology_Adv.