When Incumbents Raise the Bridges, Builders Rewrite the Map

Last week, Xero updated its developer policy. It now prohibits developers from using customer data to train or contribute to AI models. They also implemented API fees for third parties building on their platform. There was no grand announcement. It simply appeared. Quietly. Finally.

In reality it was much louder than that. It was the sound of a door slamming shut.

The update bans the use of customer data for AI model training, introduces new API fees for partners and tightens how third-party apps can store or reuse platform data. These are not small policy tweaks. They redefine how much innovation can happen on top of Xero and signal a shift from open ecosystem to controlled perimeter.

For nearly twenty years, ERP 2.0 has been defined by a simple promise. Put accounting in the cloud and give businesses access to their numbers from anywhere. It mattered. But time has moved on. AI changed how companies operate and how fast decisions must be made. Founders now build with speed, precision and small teams. They expect their systems to keep up.

Xero’s new policy makes something clear. Legacy platforms have chosen to raise the bridges and close the gates. This is not about capability. It is a strategic decision to protect the old world at the exact moment the next generation of companies is reaching for something new. The agents are already placing the incumbents under siege and the incumbents know it.

History offers a useful parallel. During the Vicksburg campaign, Grant broke every assumption the defenders believed would protect them. He crossed the Mississippi at night, maneuvered through terrain considered impassable and moved so quickly that the fortifications built to stop him no longer mattered. What made it even more remarkable was how he led. Grant set a clear vision, delegated authority with confidence and trusted his commanders to act on intent rather than wait for orders. His staff operated with speed and initiative while the defenders clung to rigid structures and slow communication. By the time they realized the rules had changed, the outcome was already decided.

That lesson holds today. Small teams with agents win when they move with clarity, when every person and every system is aligned around intent and when they are empowered to act in real time. AI native companies operate this way by default. ERP 2.0 does not.

Founders should understand the implications.

When a platform restricts learning, it restricts progress. Month end remains slow. Reconciliation remains manual. Financial visibility stays trapped inside static systems that cannot adapt to the pace of a modern business. The data you produce every day cannot make your system smarter the next day. For an early stage team this is not a minor inconvenience. It is drag. It is lost time. It is missed decisions. It is the difference between reacting and leading.

Service providers feel this even more. Bookkeepers and accountants want to deliver real time clarity and higher quality work. They want leverage. They want tools that improve with use. If the ledger cannot learn, neither can the service. The implication is simple. Bookkeepers, accountants and their customers are beholden to the product decisions of the platform. Xero may roll out its own solutions, but they will be slow, lack specialization and prevent service providers from differentiating. This is how capable operators become constrained by systems that should be elevating them. Furthermore, the tools and apps service providers recommend to their customers could increase in cost, stagnate or cease to exist all together.

Developers feel it too. Building on a platform that can change the rules overnight is a risk few can justify. Innovation depends on freedom and stable ground. A modern API should be a foundation for what is possible, not a ceiling on what is allowed. When a platform suddenly restricts how data can be used, it torpedoes the ecosystem, the innovation and entire business models in an instant. The most ambitious builders will choose platforms aligned with their ambition.

All of this matters because we are entering the era of AI native companies. Small, exceptional teams now operate with the leverage that once required entire departments. Intelligent systems sit at the center of these companies. Systems that learn. Systems that adapt. Systems that anticipate. Systems that act.

ERP 3.0 is built for this world. It is an agentic system of action that reflects how modern companies actually run. Intelligence sits at the foundation, not the surface. Data flows continuously. The ledger reconciles itself. Insights arrive when they are needed, not at month end. Founders focus on decisions, not the work required to reach them.

We build Lucius for these founders. For the teams who want to spend their energy building products, not stitching together disconnected tools. For the bookkeepers and accountants who want systems that elevate their work rather than cap it. For the AI native companies that refuse to operate from the past.

Legacy platforms are waiting behind their walls, protecting what was. Builders are out in the field rewriting the map, defining new ground and moving with the speed and alignment that win every era. The systems that support them must do the same.

The past is defending its borders.

The future is expanding the frontier.

ERP 3.0 begins now.