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I gave my traditional State of Drupal presentation this week at DrupalCon Austin. You can watch the recording of my keynote if you are interested in learning about my vision for the future of the web, the challenges and opportunities ahead of us, how Drupal fits into that. In good tradition, you can also download a copy of my slides (PDF, 120 MB).
If we want to encourage more organizations to contribute to Drupal and hire core developers, we should start to give them credit for their contributions. I'd love to see us maintain a page on Drupal.org that shows which companies contribute to Drupal and in what capacity. This credit provides these organizations a tangible benefit in recruiting developers, demonstrating their expertise, and more. Credit is a powerful motivator for individuals, but also for businesses. It is a form of trust currency.
It is great that we give individual contributors credit for their contributions, and we should continue to do so. However, I'd like to extend that to organizations, both to the Drupal agencies as well as their customers. Mapping out how contributions get funded can be great for individuals, customers and digital agencies.
A great way to start doing this, is to adopt a new format for Git commit messages. I'd like to propose the following format:
$ git commit -am "Issue #n by INDIVIDUAL@AGENCY*CUSTOMER: message."
We prefix agencies with @ and customers with *. I believe this provides us the necessary flexibility. We could choose to store this in Git Notes, if we prefer, but that is not the main point.
Contributed a feature as an individual consultant directly for a customer or end-user:
$ git commit -am "Issue #n by INDIVIDUAL*CUSTOMER: message."
Contributed something in your spare time and don't want to give credit to your employer:
$ git commit -am "Issue #n by INDIVIDUAL: message."
Let's put it all together with a real example. Imagine Sam, Megan and Tim collaborated on fixing a performance bug. Sam helped in the "20% time" provided by her employer Acquia, Megan helped in her spare time after work, and Tim worked on this on behalf of his employer, Pfizer, who is affected by this bug. Ideally, the commit message would look like this:
$ git commit -am "Issue #42 by Sam@Acquia, Megan, Tim*Pfizer: fixed performance bug."
The great thing about this approach is that we can adopt it today and worry about analyzing the data later. It also works regardless of where your Drupal code is hosted (Drupal.org, GitHub, etc) or what your source code management system of choice is (Git, SVN, etc). In fact, I believe all Open Source projects would benefit from this level of transparency and that giving credit directly into the commit message makes it very transferable.
If adopted, we'll want to build tools to help us create these commit messages (i.e. have contributors provide proper attribution in a new project issue field so the maintainers/committers don't have to manually create it).
With this level of transparency, we can start to study how our ecosystem actually works; we can see which companies contribute back code and how much, we can see how much of the Drupal project is volunteer driven, we can better identify potential conflicts of interest, and more. But most of all, we can provide credit where credit is due and provide meaningful incentives for organizations to contribute back to Drupal. I believe this could provide a really important step in making Drupal core development more scalable.
I'd love to hear your thoughts about us giving organizations credit.
We’re excited to announce that Acquia acquired TruCentric, a software-as-a-service company that is focused on providing personalization for websites. Earlier this year we launched Acquia Lift, which brings testing and personalization capabilities to Drupal sites. With TruCentric, we acquired not only a great complementary product that we will integrate with Acquia Lift, we also gained a great team with a long history and strong leadership in marketing automation technologies.
TruCentric uses real-time and historical data to build a deep understanding of both anonymous and authenticated visitors. Every action that a visitor takes and every piece content that they look at continuously updates this profile. TruCentric can infer a visitor's persona, interests, preferred content, and level of engagement as well as site-specific characteristics such as favorite team (for example on a sports destination), favorite products (such as on an e-commerce site), or favorite activities (for example on a travel site). This data can be married with existing customer and audience data, and tied together across multiple online destinations. Profiles can also be connected together across the different devices that a visitor uses.
Paired together with Acquia Lift, the joint solution will provide a powerful level of understanding about a website's visitors resulting in much more effective testing and targeting. Additionally, the solution will incorporate TruCentric's content recommendation and marketing offer capabilities. Content recommendations suggest and promote links to content that are most likely to interest a user, increasing engagement and time on site. Marketing offers enable the most relevant promotions, sign-ups and other types of calls-to-action to be selectively shown to site visitors, increasing conversions. Both offers and recommendations can be easily configured by site builders or marketers by selecting from a variety of rules, algorithms and filtering criteria.
Longer term, I'm particularly excited about the impact of Acquia Lift (with TruCentric) on e-commerce. Many brands and corporations today offer fragmented and poorly integrated shopping experiences that confuse the customer, are difficult to manage, and ultimately, leave money on the table. Top e-commerce brands have proven that content-rich product stories with the deep personalization and seamless e-commerce integration increase conversion rates significantly. We believe that building a software platform that uses the world’s best personalization practices in combination with the best possible content management capabilities presents us with a really big opportunity.
We've got great news to share today; we are announcing that Acquia raised $50 million, the largest round of financing we’ve ever completed.
The round is led by New Enterprise Associates (NEA), one of the world's top investors in our space. They have made various great investments in Open Source (MongoDB, Mulesoft, etc.) as well as SaaS companies (SalesForce, Workday, Box, etc.).
With the new funding, we can continue to go after our vision to help many more organizations with their digital platform and digital business transformation. In addition, Acquia is charting new territory in the world of software with a very unique business model, one that is rooted in Open Source and that helps us build a web that supports openness, innovation and freedom.
We have such a big and exciting opportunity ahead of us. This vision will not come to life on its own and the proprietary competitors are not resting on their laurels. We'll use the funding to double down on all aspects of our company; from increasing our investment in products to deeper investments in sales and marketing.
In addition to lead investor NEA, other investors include Split Rock Partners, and existing investors North Bridge Venture Partners, Sigma Partners, Investor Growth Capital, Tenaya Capital, and Accolade Partners. The new funding will bring Acquia’s total fund-raising to $118.6 million.
Of course, none of this success would be possible without the support of our customers, the Acquia team, our partners, the Drupal community and our many friends. Thanks so much for supporting Acquia!
Do you have questions about the upcoming Drupal 8 release (or Drupal 9 and beyond)? On Thursday, June 5 at DrupalCon Austin, I'll be moderating a question-and-answer core conversation with a panel of key Drupal 8 contributors. Questions are submitted in advance online, and anyone can submit a question. I will curate the submissions to ask the panel the most interesting and relevant questions.
This is a rare opportunity for the community to communicate directly with the trailblazers who are shaping Drupal 8 into the best release of Drupal yet. Help us make the most of of it -- submit your questions now!
I've long been convinced that every well-run Drupal agency of 30 people or more can afford to hire a Drupal core contributor and let him/her work on Drupal core pretty much full-time. A healthy Drupal agency with 30 people should be able to do $5MM in revenue at a 15% net profit margin #1. This means they have $750k in profits that can be invested in growth, saved as reserves, or distributed among the owners.
There are many ways you can invest in growth. I'm here to argue that hiring a Drupal core contributor can be a great investment, that many Drupal agencies can afford it, and that employing a Drupal core contributor shouldn't just be looked at as a cost.
In fact, Chapter Three just announced that they hired Alex Pott, a Drupal 8 core maintainer, to work full-time on Drupal core. I couldn't be more thrilled. Great for Alex, great for Drupal, and great for Chapter Three! And a good reason to actually write down some of my thoughts.
The value of having a Drupal core contributor on staff
When Drupal 8 launches it will bring with it many big changes. Having someone within your company with first-hand knowledge of these changes is invaluable on a number of fronts. He or she can help train or support your technical staff on the changes coming down the pipe, can help your sales team answer customer questions, and can help your marketing team with blog posts and presentations to establish you as a thought-leader on Drupal. I believe these things take less than 20% of a Drupal core contributor's time, which leaves more than 80% of time to contribute to Drupal.
But perhaps most importantly, it is a crucial contribution that helps ensure the future of the Drupal project itself and help us all avoid falling into the tragedy of the commons. While some core contributors have some amount of funding — ranging from 10% time from their employers to full-time employment (for example, most of Acquia's Office of the CTO are full-time core contributors) — most core contribution happens thanks to great personal sacrifice of the individuals involved. As the complexity and adoption of Drupal grows, there is a growing need for full-time Drupal contributors. Additionally, distributing employment of core contributors across multiple Drupal organizations can be healthy for Drupal; it ensures institutional independence, diversified innovation and resilience.
Measuring the impact of a Drupal core contributor on your business
While that sounds nice, the proof is in the numbers. So when I heard about Chapter Three hiring Alex Pott, I immediately called Chapter Three to congratulate them, but I also asked them to track Alex's impact on Chapter Three in terms of sales. If we can actually prove that hiring a Drupal core contributor is a great business investment, it could provide a really important breakthrough in making Drupal core development scalable.
I asked my team at Acquia to start tracking the impact of the Drupal core contributors on sales. Below, I'll share some data of how Acquia tracked this and why I'm bullish on there being a business case.
For Acquia, high quality content is the number one way to generate new sales leads. Marketers know that the key to doing online business is to become publishers. It is something that Acquia's Drupal developers all help with; developers putting out great content can turn your website into a magnet. And with the help of a well-oiled sales and marketing organization, you can turn visitors into customers.
Back in December, Angie "webchick" Byron did a Drupal 8 preview webinar for Acquia. The webinar attracted over 1,000+ attendees. We were able to track that this single piece of content generated $4.5MM in influenced pipeline #2, of which we've managed to close $1.5MM in business so far.
Even more impressive, Kevin O'Leary has done four webinars on Drupal's newest authoring experience improvements. In total, Kevin's webinars helped generate $9MM in influenced pipeline of which almost $4MM closed. And importantly, Kevin had not worked on Drupal prior to joining Acquia! It goes to show that you don't necessarily have to hire from the community; existing employees can be made core contributors and add value to the company.
Gábor Hojtsy regularly spends some of his time on sales calls and helped close several $500k+ deals. Moshe Weitzman occasionally travels to customers and helped renew several large deals. Moshe also wrote a blog post around Drupal 8's improved upgrade process using Migrate module. We aren't able to track all the details yet (working on it), but I'm sure some of the more than 3,200 unique viewers translated in to sales for us.
Conclusion: investment returned, and then some
Obviously, your results may vary. Acquia has an amazing sales and marketing engine behind these core contributor, driving the results. I hope Chapter Three tracks the impact of hiring Alex Pott and that they share the results publicly so we can continue to build the business case for employing full-time Drupal contributors. If we can show that is not just good for Drupal, but also good for business, we can scale Drupal development to new highs. I hope more Drupal companies will start to think this way.
#1 I assumed that of the 30 people, 25 are billable and 5 are non-billable. I also assumed an average fully-loaded cost per employee of $125k per head and gross revenue per head of around $180k. The basic math works out as follows: (25 employees x $180k) - (30 employees x $125k) = $750k in profit.
There are 365 days per year and about 104 weekend days. This means there are 260 business days. If you subtract 10 legal bank holidays you have 250 days remaining. If you subtract another 15 business days for vacations, conferences, medical leave and others, you have 230 business days left. With a blended hourly rate of $130 per hour and 75% utilization, you arrive at ~$180k gross revenue per billable head.
I confirmed these numbers with several Drupal companies in the US. Best in class digital agencies actually do better; they assume there are 2,000 billable hours in a year per head and maintain at least a 85% chargeability rate (i.e. 1,700 billable hours per head). Many companies do less because the maturity of their business, the market they are in, their geographic location, their ambitions, etc. It's not about what is "good" or "bad", but about what is possible.
#2 "Influenced pipeline" means that the content in question was one factor or touch point in what ultimately lead potential customers to become qualified sales leads and contacted by Acquia. On average, Acquia has 6 touch points for every qualified sales lead.
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.