This blog post is on purpose, Open Source, profit and pie. This week I had an opportunity to meet Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. I was inspired by the following comment he made (not his exact words):
"Because companies strive to have a positive balance sheet, they take more in, than they give out. However, as individuals, we define success as giving more than you take. Given that many of us are leaders as individuals *and* also leaders in our businesses, we often wrestle with these opposing forces. Therein lies the leadership challenge."
I’ve seen many Open Source developers struggle with this as they are inherently wired to give back more than they take. Open Source developers often distrust businesses, sometimes including their own employer, because they take more than they give back. They believe businesses just act out of greed and self-interest.
This kind of corporate distrust comes from the “fixed-pie concept"; that there is only so much work or resources to go around, and as pieces of the pie are taken by some, there is less left for everyone else. The reality is that businesses are often focused on expanding the pie. As the pie grows, there is more for everyone. It is those who believe in the "expanding-pie concept" who can balance the opposing forces. It is those who believe in the "fixed-pie concept" who worry about their own self-interests and distrust businesses.
Imagine a business that is born out of a desire to improve the world, that delivers real value to everyone it touches. A business that makes employees proud and where team members are passionate and committed. A business that aspires to do more than just turn a profit. A business that wants to help fuel a force of good. That is Acquia for me. That should be your employer for you (whoever your employer is).
The myth that profit maximization is the sole purpose of business is outdated, yet so many people seem to hold on to it. I started Acquia because I believed in the potential and transformative nature of Drupal and Open Source. The purpose of business is to improve our lives and create value for all stakeholders.
Acquia's growth and capital position has given me power and responsibility. Power and responsibility that has enabled me to give back more and grow the pie. I have seen the power that businesses have to improve the world by accelerating the power of good, even if they have to take more than they give. It's a story worth telling because business is not a zero-sum game with one winner. I believe Open Source companies are in a prime position to balance the opposing forces. We can do well and do good.
Happy 13th birthday Drupal! It’s hard to believe so much has happened with Drupal when it really just started as a little hobby project. I'm super proud of what we accomplished. After all these years, it continues to be a passion and labor of love to grow, maintain and sustain the larger community.
A birthday presents us with a great time to look back and reflect. Though there are many things we could reflect on, I'd like to use this post to look at the bigger picture and share my perspective on the market. This means this blog post mainly offers a business perspective rather than a technical perspective.
From web to digital
Drupal was grown out of my own interest in the web. Today, it is a critical component of many organizations’ operations. For most organizations, having an online presence -- like a website or mobile application -- is an essential part of running their business, and it only continues to grow in importance. The rise of mobile and social media means we no longer talk about having a “website” or having a “web application;” instead we talk about the totality of the “digital experience.” Providing visitors or customers with a great digital experience is no longer a nice-to-have; it is a make-or-break point.
From content to experiences
For Acquia, creating high quality content and driving traffic to our site was the #1 way to generate new leads in 2013. This is true for the vast majority of organizations; high-quality, valuable content remains important. Five years ago, this meant if you had a business, and you didn't have a blog, it was time to start one. Today, it involves so much more than creating pages or cranking out new sites; you create and manage your content, and find ways to promote and reuse it across multiple channels to generate awareness and reach more people. You track and measure all of your efforts and try to optimize the content for different users. Content is gold, but delivering the right content to the right user at the right moment in the right format is platinum. It's no longer just about publishing content; it’s about managing the entire experience of a site visitor or user over time.
From mobile to context
Just like in the last half decade or so, "mobile" has completely redefined the internet, in the next half decade or so, "contextualization" will redefine it once again. The next big challenge, and opportunity, for Drupal, is figuring out how to make it a platform not just for content creators to deliver essentially the same content to users in their preferred language on their preferred device, but a platform for content creators to deliver the most appropriate content to each individual user.
Digital experience platform
As the Drupal community, we need to stop thinking of Drupal as a "content management platform" and start looking at it as a "digital experience platform" used to create ideal visitor experiences. This means publishing content that is easily accessible on multiple devices, and ensuring the site can be easily integrated with other tools, such as social media sites and customer relationship, e-mail and campaign management systems. We've been doing this for many years but it doesn't hurt to recognize the trend, double down on it and evolve our vocabulary.
You may have heard me talk about Web Experience Management (WEM) in the past, but we should move away from that term. The fact is that “web” doesn’t capture all the possible touch-points for Drupal, be it a website, mobile device, game console, wearable device, or something else.
Creating better interfaces to develop structured content, and delivering that content to a variety of devices and channels, is an important part of creating ideal customer experiences. Another important part is the ability to personalize what content to present to a user. Though it will be interesting to see how CMSs facilitate this direction, it seems imperative that CMSs deliver tools to empower content creators to not only create great content, but to also help them make decisions about what content to deliver to whom, when and in what format. Over time, these content decisions will become more data-driven and automated, and less opinion-based and manual.
Few CMSs are actually growing in market share; our industry will continue to consolidate further in 2014. The fact most CMSs become less and less relevant isn’t a surprise since CMSs are becoming more complicated. The CMSs that will survive are those that (1) are able to keep up with the speed of the Internet and (2) offer the least amount of friction to adopt. Open source CMSs that foster a healthy community are well positioned to win in the long run. Drupal's biggest challenge going forward is to create a user experience that gets out of a user's way and lets them do their business regardless of how simple or complex their task is. This is why I'm so passionate about in-place editing, and usability in general, but also creating a great developer experience. It's important that we continue to focus on those goals in 2014 and beyond.
For a long time, there has been somewhat of a misconception about Drupal’s viability for the largest, most complex deployments. Analysts, technology decision makers and proprietary competitors such as Sitecore and Adobe will claim that Drupal is great for simple sites but lacks the scale and depth of features needed for enterprise deployments. They're wrong! They only have to look at how GE, White House, MSNBC and many others are using Drupal. Drupal 8 is in a great position to take this "digital experience management" to the next level and to further cement Drupal's reputation; from the mobile improvements, to the authoring experience improvements, to APIs, to getting even better at structured content, Drupal 8 is set up for growth.
We've come a long way in the past 13 years. I'm immensely proud of our community for making this awesome contribution to the betterment of the internet for everyone. But we also have a lot of work ahead as the internet, just like the drop, is always moving. Drupal 8 will continue to help democratize web publishing and digital experience management. This is exciting since we can bring these tools to the masses (including individuals, small and large organizations) rather than only being available to those that can afford the million dollar license fees sold by proprietary software vendors. Happy birthday, Drupal!
As is now a tradition, here is my annual Acquia retrospective. Time to look back at 2013. In your life, you only get an opportunity to do so many things, so you have to focus on doing things that matter. I'm fortunate that Drupal and Acquia are remarkable stories. I take time to write these retrospectives for you and for me. I write them for you, because you might benefit from my experiences or from analyzing the information provided. But I also write them for myself so I don't forget this incredible journey. If you want, you can read previous retrospectives: 2009, 2010, 2011 and 2012.
For Acquia, 2013 was another excellent year. It was our fifth full year in business (i.e. revenue-generating year), and we finished the year with 19 consecutive quarters of revenue growth. In short, 2013 was a year of continued momentum, record bookings and great customer success. With five-year sales growth of more than 84,100 percent, Acquia was identified as the second fastest-growing company on Deloitte's Technology Fast 500 in North America. Acquia was also listed among North America's fastest growing software companies in 2013's Inc. 500. We're all very proud of that.
We hired 208 people this year and ended the year with 412 employees, up from 280 employees at the end of last year. 337 employees are based in the US, with 197 in Burlington, 27 in Portland, and 113 remote employees. We employ 75 people outside of the US, 53 of which are based in our office in Reading, UK. In 2013, we almost doubled our headcount in the Reading and Portland offices. Additionally, we hired 31 interns in 2013.
Acquia grew its customer base to more than 4,000 organizations. Some of the brands we've added as customers include Intel Corporation, Polycom, News Corp Australia, Timex, the National Association of Realtors, the X PRIZE Foundation, Columbia University, McGraw Hill Financial, Bart.gov and the Red Cross.
In 2013, Acquia continued to be focused on providing Drupal support to our customers. We reached the milestone of 100,000 support requests received and resolved during our company lifespan. In 2013 alone, we resolved almost 32,000 customer service requests, up 30 percent from 2012. We invested a lot in scaling our support team and on improving overall customer satisfaction and responsiveness. For example, we created a dedicated customer onboarding team. The result is that we spent more time with our customers to better understand their needs and help solve their Drupal questions. In 2014, we'll continue to keep customer success front and center. It's something we are very passionate about.
With regards to Acquia's software products, it was certainly our busiest year. Not only did we continue to invest heavily in Acquia Cloud and Acquia Network, we also launched some new products. Acquia Commerce Cloud was unveiled last quarter, providing a platform for creating content-rich, socially enabled shopping experiences. Acquia Cloud Site Factory was also released, providing a platform for launching and managing hundreds of websites. We unveiled Drupal Commons 3.0, our Drupal-based community platform, that was identified a Social Platform leader by Forrester Research. And we delivered the general availability release of the Mollom Content Moderation Platform, a content moderation platform built for the enterprise.
The cloud continues to prove to be a great way for organizations to save money, manage websites more efficiently and bring them to market faster. And Drupal is no exception to this trend -- in 2013, many organizations decided to standardize on Drupal in a big way, moving away from the variety of different systems -- exactly the vision we laid out in 2010.
And the proof is in the numbers: Acquia Cloud grew from 4,300 AWS instances at the end of 2012 to 7,300 AWS instances at the end of 2013. In aggregate, we're now serving more than 22 billion hits a month or 319 TB of bandwidth. I believe that makes Acquia the largest Drupal infrastructure provider in the world. Some of the Acquia Cloud achievements I'm most proud of include hosting the Grammy Awards (462 million visits) and hosting Red Nose Day during their largest fundraising event ever (£75 million/$113 million raised in one night).
Drupal community and Acquia
In 2013, we continued our long track record of giving back to the larger Drupal community.
- We sponsored 77 Drupal events in 2013, helping thousands of Drupal developers connect and collaborate together.
- Our product teams sponsored work on numerous important community modules, such as Media, Organic Groups, and more …
- The authoring experience work for Drupal 8 that we started last year landed in core this year, including WYSIWYG and in-place editing. We also sponsored work on redesigned content creation page and an improved blocks UI for Drupal 8.
- Also on Drupal 8, we sponsored work on the Web Services and Migrate in Core initiatives, donating the Migrate module authors' time.
- We helped set up numerous process improvements to help streamline Drupal 8 core development, including various "hard problems" discussions at DrupalCons to work through complex issues, releasing monthly alpha releases for user and developer feedback, and laying out the criteria for beta 1. We've also helped establish communication channels to help promote what is happening in Drupal 8: the This Week In Core series, and the Drupal 8.0 landing page.
- We helped the Drupal Association to establish Drupal.org Working Groups to provide better leadership and transparency to the Drupal website. Some of our team also helped assist on Drupal.org upgrade and security issues.
I'm particularly proud of Acquia's contributions to Drupal. It's part of our philosophy to give back, and we work hard to do our part by contributing to the Drupal community -- the reason why we exist. I'm proud of this because it is not trivial to give back as much as we do.
What I'm most proud of is that we have accomplished all of this "the open source way". Since Acquia's interests are so aligned with Drupal's, we try to raise the tide for the Drupal community at large.
At the end of the day, we're not selling Drupal or cloud hosting. We're selling what can be done with Drupal. The belief in the limitless. No matter what you dream, you can do it, and Drupal will get you there -- and Acquia is here to help you succeed. Thank you for 2013, and we're looking forward to working with more customers that are changing the world.
If Steve Jobs was adopted by a Belgian family rather than an American family, it's extremely possible he may have ended up working in a bank instead of co-founding Apple. Why? Because starting a company and growing it is hard no matter where you are, but the difficulty is magnified in Europe, where people are divided by geography, regulation, language and cultural prejudice.
While entrepreneurship and startups have spread tremendously in Europe, a lot of aspiring young entrepreneurs leave Europe for the United States. Very little will stop a true entrepreneur from trying to reach his or her goals, including uprooting their entire life and moving it across the ocean to optimize their chances of success. From my interactions with them, the United States' gravitational pull is only getting stronger.
So, what can Europe do about it? Here are my three recommendations.
Focus on creating large companies
Europe produces plenty of small businesses: restaurants, small technology firms, clothing stores, hair salons, and so on. What it doesn't produce enough of are innovative companies that grow quickly and end up big. It's a problem.
Look at the 500 largest companies in the world (Fortune Global 500). According to Bruegel, a European think tank devoted to international economics, Europe created three new, large companies between 1975 and today. The U.S. created 26.
That number is even more incredible when you take into account the fact that Europe has about twice the population of the U.S. The reality is if Europe were to be competitive, it has to produce 25 times more large companies than it does today.
Access to capital continues to be a challenge in Europe. Getting seed capital (1M EUR or less) has become easier, but raising significant money (25M EUR and more) to turn your company in a global business continues to be difficult. Large companies also provide an important 'exit strategy' for startups. Without a vibrant exit market, it's harder to attract both entrepreneurs and investors.
Large companies also play an important role in creating successful innovation centers. They are catalysts for creating angel investors, for providing distribution, and serve as a breeding ground for talent and practiced management.
If you look at Silicon Valley, Hewlett Packard, among others, served that purpose in the early days, and more recently, a number of successful entrepreneurs have emerged from Google.
I recommend that European government stimulus focuses on companies that could become titans, not on small companies that won't move the needle. Too often, there are investments made in companies that have limited or no growth potential.
Level the playing field
Anyone who has built a global organization likely understands that European work regulations can shackle the growth of startups. Taxes are high, it's hard to acquire a European company, severance packages can be outrageous and it's extremely difficult to fire someone.
It only gets worse when you attempt to operate in multiple European countries, as anyone with the ambition to build a large company has to. Each country is different enough that it requires setting up a local legal entity, and having local accountants and local attorneys. Setting up and running these legal entities costs valuable time and money, a huge distraction that gets in the way of actually running and growing your business.
Europe needs to roll out unified labor laws that are competitive globally and unified across Europe. My biggest worry is the branches of government that try to promote entrepreneurship are not powerful enough to address Europe's labour rules.
Change our culture
A small business can be started anywhere in the world, but it takes a different level of ambition to aspire to become the next Apple. The biggest thing entrepreneurs need is the belief that it can be done, that it's worth taking the risk and putting in the hard work. Having the right culture unlocks the passion and dedication necessary to succeed.
Silicon Valley is a state of mind. To recreate Silicon Valley in Europe, Europe must first adopt Silicon Valley's culture. I believe Europe's culture would benefit from adopting part of the American Dream: the egalitarian belief that everyone is able to succeed through hard work, and that it is acceptable and encouraged to better oneself economically through hard work.
It doesn't mean Europe needs to give up its strong communal beliefs and its desire to look out for the greater good. I'm a firm believer that many modern businesses can "do well and do good". Businesses that generate value for their shareholders and that also have a positive impact on the world go beyond generating profits.
Our world does not lack business opportunities; there are plenty of people with needs that aren't met. Enabling entrepreneurship enables innovation, and innovation helps change the world. The entrepreneurs that succeed in building large businesses, especially those that are aligned with fixing the world's problems, will transform the lives of others for the better and introduce more opportunity on a global level.
Entrepreneurs, not the government, will change the world. It's time for Europe to help their companies grow.
Every week, I get asked the "Silicon Valley question". This week alone, it came up at least three times. I had a phone call with a Belgian start-up asking me for my thoughts on whether to start their company in Belgium or in Silicon Valley. This afternoon, iMinds, a Belgian research institute that promotes entrepreneurship, visited me at Acquia to talk about similar topics.
There are advantages and disadvantages to being in Silicon Valley, and we could argue them to death. Not every great technology company is based in Silicon Valley, and there are many successful entrepreneurs who aren't in the valley. However, I bet you that deep inside every one of those entrepreneurs wonders whether it wouldn't be better to be in Silicon Valley. More often than not, it actually would be better.
This morning I got a message from Bart Becks, a well-known Belgian entrepreneur and angel investor. He asked for my thoughts on an article he is writing about whether Europe could replicate the Silicon Valley phenomenon. To me, this is the more interesting "Silicon Valley" question.
Europe has no choice but to reinvent itself to become more like Silicon Valley. Entrepreneurs, not the government, will actually change the world. While the government's role is to foster entrepreneurship, clearly the government on its own isn't capable of changing Europe fast enough.
Silicon Valley is a state of mind. To recreate Silicon Valley in Europe, Europe has to adopt Silicon Valley's culture first. That culture has developed around the desire to continuously reinvent everything, including oneself. That is what keeps Silicon Valley relevant, and what Europe needs to emulate most. Once Europe has established a Silicon Valley-like culture, it can slowly mix in the other ingredients that make Silicon Valley successful: money, smart venture capitalists, better engineering talent, better creative talent, and more. But let's start with the culture.
There are other aspects of the Silicon Valley culture that all of Europe should adopt. The Silicon Valley culture encourages people from all over the world with different cultural backgrounds and diverse skills to physically come together, inspire each other, and try to accomplish something unique and game-changing.
I also believe that Europe should adopt part of the American Dream: the egalitarian belief that everyone is able to succeed through hard work, and that it is acceptable and encouraged to better oneself economically through hard work. It doesn't mean Europe needs to give up its strong communal beliefs and its desire to look out for the greater good. I hope the European financial crisis represent a watershed moment that causes Europe to rethink some of its current models.
America's social history wasn't necessarily pretty, but it has created a culture where multiculturalism, ethnic diversity and thoughtful capitalism are part of the national character. I'm worried it may take Europe a couple generations to truly embrace such a culture. Until that happens, we'll see some regional and national successes, but not the European-wide "Silicon Valley" culture that Europe needs to successfully reinvent itself.