After the goldrush
Towards a healthy Drupal business ecosystem
Steve Parks
@steveparks @weareconvivio
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
Drupal
Community
Drupal
Hosting
Drupal
Products
Drupal
Agencies
Drupal
Clients
Drupal
Freelancers
Acquia
Drupal
Community
Drupal
Agencies
Hobbyists to elephants
The Ghosts Of Drupal Agencies Past
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
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
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
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
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
CLIENTS
DRUPAL
AGENCIES
CLIENTS
DRUPAL
AGENCIES
UX Agency / Marketing Agency / Specialist
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”
“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.”
Client switches
to proprietary
platform
“Drupal is not an
enterprise platform”
“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.”
Client hires
less “Drupally”
Agency
“Drupal agencies
aren’t professional”
“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.”
“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).”
“Too many fights.”
Inside Drupal
Agencies
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
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
Devshops to Agencies
The Ghosts Of Drupal Agencies Present
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
Until now it’s been easy to run
a Drupal agency
Many founders don’t really
want to have to run a business
Many founders don’t spend
much time or effort wearing
leadership or management hats
Many founders see the
business as a cash machine
rather than an investment
Many founders don’t invest in
professional development
Many agencies aren’t very
well-managed
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
Betamax?
The Ghosts Of Drupal Agencies Future
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)
Healthy Drupal Agencies
An Alternative Future
Values
Drupal Values
• Prioritise impact
• Better together
• Strive for excellence
• Treat each other with dignity and respect
• Enjoy what you do
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
BoF: The Drupal
Business Manifesto
Weds 16:00 in 3.10 Hydrogenium
Motivations
A genuine agency
Sustainable
finances
Real Income
Re-investment
Team
Biz costs
Profit
Turnover
Project costs
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
Real Income Team
50-65%~€100,000 / head / year avg
Business
33%
Staff
33%
Food
33%
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
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
Profit
15-25%
Tax
Cash reserves
Other?
Dividends
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
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
Hurray, new
client!
Hurray new
recruits
Hurray, new
client!
Hurray new
recruits
Focus
Move up the
value chain
Drupal Values
• Prioritise impact
• Better together
• Strive for excellence
• Treat each other with dignity and respect
• Enjoy what you do
Steve Parks
@steveparks @weareconvivio
weareconvivio.com

After the goldrush

  • 1.
    After the goldrush Towardsa healthy Drupal business ecosystem
  • 2.
  • 4.
    In the next45 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
  • 5.
  • 6.
  • 8.
    Hobbyists to elephants TheGhosts Of Drupal Agencies Past
  • 9.
    2001 2002 20032004 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
  • 10.
    2001 2002 20032004 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
  • 11.
    2001 2002 20032004 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
  • 12.
    2001 2002 20032004 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
  • 13.
    Small Orgs ITMarketing 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
  • 14.
  • 15.
    CLIENTS DRUPAL AGENCIES UX Agency /Marketing Agency / Specialist
  • 16.
    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”
  • 17.
    “Drupal agencies arefriendly 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.”
  • 18.
    Client switches to proprietary platform “Drupalis not an enterprise platform”
  • 19.
    “Drupal is aCMS, 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.”
  • 20.
    Client hires less “Drupally” Agency “Drupalagencies aren’t professional”
  • 21.
    “The Drupal communityhas 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.”
  • 22.
    “Drupal’s offer toagencies: 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).”
  • 23.
  • 24.
  • 25.
    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
  • 26.
    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
  • 27.
    Devshops to Agencies TheGhosts Of Drupal Agencies Present
  • 28.
    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
  • 30.
    Until now it’sbeen easy to run a Drupal agency
  • 31.
    Many founders don’treally want to have to run a business
  • 32.
    Many founders don’tspend much time or effort wearing leadership or management hats
  • 33.
    Many founders seethe business as a cash machine rather than an investment
  • 34.
    Many founders don’tinvest in professional development
  • 35.
    Many agencies aren’tvery well-managed
  • 36.
    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
  • 37.
    Betamax? The Ghosts OfDrupal Agencies Future
  • 39.
    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)
  • 40.
    Healthy Drupal Agencies AnAlternative Future
  • 41.
  • 42.
    Drupal Values • Prioritiseimpact • Better together • Strive for excellence • Treat each other with dignity and respect • Enjoy what you do
  • 43.
    Drupal Principles • Impactgives 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
  • 44.
    BoF: The Drupal BusinessManifesto Weds 16:00 in 3.10 Hydrogenium
  • 45.
  • 46.
  • 47.
  • 51.
  • 52.
    Real Income Re-investment Team Biz costs Profit Turnover Projectcosts 50-65% 10-25% 5-15% 15-25% ~€100,000 / head / year avg don’t care % of Real Income
  • 53.
    Real Income Team 50-65%~€100,000/ head / year avg Business 33% Staff 33% Food 33%
  • 54.
    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
  • 55.
    Real Income Re-investment Team Biz costs Profit Turnover Projectcosts 50-65% 10-25% 5-15% 15-25% ~€100,000 / head / year avg don’t care % of Real Income
  • 56.
  • 57.
    Cash reserves Cash inbank Overdue Invoiced Next 30 days bookingsWiP 1 2 3 4 5 6 7 8 9 Investments Months at average monthly burn rate
  • 58.
    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
  • 59.
    Hurray, new client! Hurray new recruits Hurray,new client! Hurray new recruits
  • 60.
  • 61.
  • 62.
    Drupal Values • Prioritiseimpact • Better together • Strive for excellence • Treat each other with dignity and respect • Enjoy what you do
  • 63.