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After the goldrush

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A session at Drupal Europe 2018, exploring the state of the Drupal agency ecosystem, how ready agencies are for a more competitive age, and how they can get in shape.

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After the goldrush

  1. 1. After the goldrush Towards a healthy Drupal business ecosystem
  2. 2. Steve Parks @steveparks @weareconvivio
  3. 3. In the next 45 mins… • The ghosts of Drupal agencies past • The ghosts of Drupal agencies present • The ghosts of Drupal agencies future • An alternative future: Healthy Drupal agencies
  4. 4. Drupal Community Drupal Hosting Drupal Products Drupal Agencies Drupal Clients Drupal Freelancers Acquia
  5. 5. Drupal Community Drupal Agencies
  6. 6. Hobbyists to elephants The Ghosts Of Drupal Agencies Past
  7. 7. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4.6 4.7 5.0 6.0 7.0 8.0 The Drupal Agencies Journey
  8. 8. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4.6 4.7 5.0 6.0 7.0 8.0 Hobby Freelance Devshop Web Agency ? The Drupal Agencies Journey
  9. 9. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4.6 4.7 5.0 6.0 7.0 8.0 Small Orgs IT Marketing Digital Evolution of Clients
  10. 10. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4.6 4.7 5.0 6.0 7.0 8.0 Small Orgs IT Marketing Digital Evolution of Client Demands Cheap! Cheap and secure Look great, be easy to use! Serve user needs, deliver value
  11. 11. Small Orgs IT Marketing Digital Cheap! Look great, be easy to use! Serve user needs, deliver value Freelance Devshop Web Agency ? Drupal is open source Drupal is open source, and we know a designer Drupal is open source, and we have a designer Drupal is open source CLIENTS DRUPAL AGENCIES Cheap and secure
  12. 12. CLIENTS DRUPAL AGENCIES
  13. 13. CLIENTS DRUPAL AGENCIES UX Agency / Marketing Agency / Specialist
  14. 14. Client hires Drupal agency Agency delivers, but… Client frustrated with… Client builds internal team Client switches to proprietary platform “Drupal is not an enterprise platform” “Drupal agencies aren’t professional” Client hires less “Drupally” Agency “Drupal agencies aren’t professional”
  15. 15. “Drupal agencies are friendly but often amateur and a bit arrogant.” “There’s too much talk of Drupal and modules, and not enough about what users or stakeholders need.” “Great at the tech, terrible at account and project management.”
  16. 16. Client switches to proprietary platform “Drupal is not an enterprise platform”
  17. 17. “Drupal is a CMS, good for blogs and simple sites. We needed an enterprise digital platform, with a good ecosystem of agencies.” “We don’t really care about the technology, we care about results. We want agencies that bring us ideas and advice.”
  18. 18. Client hires less “Drupally” Agency “Drupal agencies aren’t professional”
  19. 19. “The Drupal community has quite a steep on-ramp.” “The Drupal community is mainly geeks, whereas [other platform] feels more diverse and full of people who just want to get things done.”
  20. 20. “Drupal’s offer to agencies: do you want to pay for sponsorship so you can be on a list to be spammed by hosting and offshoring companies, and… er, that’s it.” “Drupal seems to think you can either be ‘of the community’ or run a successful business, but not both (until it’s time to pay for pizza).”
  21. 21. “Too many fights.”
  22. 22. Inside Drupal Agencies
  23. 23. Hurray, new client! So busy, so stressed! Whew, done at last! Shit! Get selling!! Oh F**k Hurray, new client! So busy, so stressed! Whew, done at last! Shit! Get selling!! Oh F**k
  24. 24. Drupal Agencies Past • Growing disconnect between client needs and agency offer • Proprietary software and agencies regaining ground • Drupal agencies losing ground to outside agencies and internal teams • Outside agencies not being tempted into Drupal community • Drupal still stuck in the ‘CMS’ category • Drupal gaining reputation as ‘not enterprise-ready’ because of agency ecosystem • Broadly, Drupal agencies haven’t evolved and professionalised
  25. 25. Devshops to Agencies The Ghosts Of Drupal Agencies Present
  26. 26. STRENGTHS • Drupal experts • Open source • Friendly WEAKNESSES • Marketing & Sales • Account management • Project management • People management • Finance management • Leadership • Strategy • User experience • Design OPPORTUNITIES • Best version of Drupal ever, particularly for enterprise • Drupal now a fully-fledged platform for digital services • To grow agencies into fully fledged agencies rather than just Drupal shops • To move further up the value chain • Build positively on the peak we’ve reached THREATS • Global IT consultancies entered market • Experienced, external agencies entering market • Being relegated to build-only as backdoor work • Buyers less interested in tech than in outcomes • Resurgence of proprietary, with slick agencies • Clients want multi-disciplinary teams • Other tech stacks ascending
  27. 27. Until now it’s been easy to run a Drupal agency
  28. 28. Many founders don’t really want to have to run a business
  29. 29. Many founders don’t spend much time or effort wearing leadership or management hats
  30. 30. Many founders see the business as a cash machine rather than an investment
  31. 31. Many founders don’t invest in professional development
  32. 32. Many agencies aren’t very well-managed
  33. 33. Drupal Agencies Present • It’s been easy to make money during the Drupal goldrush • The money hasn’t been reinvested in building sustainable businesses • Most founders don’t really want to be business owners, leaders or managers • Drupal agencies are, broadly, poorly prepared for competition • Some will sell, many will be acqui-hired, some will fail • An unhealthy agency ecosystem will be damaging to the Drupal community
  34. 34. Betamax? The Ghosts Of Drupal Agencies Future
  35. 35. Drupal Agencies Future? • Ah yeah, it was amazing technology • Just didn’t have the sales and marketing to support it • Wasn’t easy for other businesses to get involved (community has steep on ramp) • Kept breaking (poor quality control and project management at agencies) • Clunky (poor UX and design at agencies)
  36. 36. Healthy Drupal Agencies An Alternative Future
  37. 37. Values
  38. 38. Drupal Values • Prioritise impact • Better together • Strive for excellence • Treat each other with dignity and respect • Enjoy what you do
  39. 39. Drupal Principles • Impact gives purpose • Build software that everyone can use • Foster a learning environment • Decisions should be collaborative • Everyone has something to contribute • Choose to lead • Embrace change • Every person is welcome, every behaviour is not • Be constructively honest, and relentlessly optimistic • Seek first to understand, then to be understood • Be sure to have fun
  40. 40. BoF: The Drupal Business Manifesto Weds 16:00 in 3.10 Hydrogenium
  41. 41. Motivations
  42. 42. A genuine agency
  43. 43. Sustainable finances
  44. 44. Real Income Re-investment Team Biz costs Profit Turnover Project costs
  45. 45. Real Income Re-investment Team Biz costs Profit Turnover Project costs 50-65% 10-25% 5-15% 15-25% ~€100,000 / head / year avg don’t care % of Real Income
  46. 46. Real Income Team 50-65%~€100,000 / head / year avg Business 33% Staff 33% Food 33%
  47. 47. Real Income Team 50-65%~€100,000 / head / year avg Day-rate is approx 3x the daily cost of the staff member Daily cost is annual salary + benefits / number of likely billable days per year
  48. 48. Real Income Re-investment Team Biz costs Profit Turnover Project costs 50-65% 10-25% 5-15% 15-25% ~€100,000 / head / year avg don’t care % of Real Income
  49. 49. Profit 15-25% Tax Cash reserves Other? Dividends
  50. 50. Cash reserves Cash in bank Overdue Invoiced Next 30 days bookingsWiP 1 2 3 4 5 6 7 8 9 Investments Months at average monthly burn rate
  51. 51. Hurray, new client! So busy, so stressed! Whew, done at last! Shit! Get selling!! Oh F**k Hurray, new client! So busy, so stressed! Whew, done at last! Shit! Get selling!! Oh F**k
  52. 52. Hurray, new client! Hurray new recruits Hurray, new client! Hurray new recruits
  53. 53. Focus
  54. 54. Move up the value chain
  55. 55. Drupal Values • Prioritise impact • Better together • Strive for excellence • Treat each other with dignity and respect • Enjoy what you do
  56. 56. Steve Parks @steveparks @weareconvivio weareconvivio.com

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