The Dropsolid Diaries part 1
This blogpost will tell you why you haven't heard much of me in the past 2 years.
I was involved in founding a startup called Dropsolid. In those 2 years I changed from a freelance drupal architect/teamleader into a general manager of a company with 25 employees.
On 31-12 Dropsolid will have officially existed for one year and 9 months. While my partner Steven Pepermans and I committed to Dropsolid in november 2012 it took us a few additional months to get the company founded.
In this post I want to share my personal experience on how we founded Dropsolid and made it through our first years and grew the company from 2 to 25 people and triplicated the turnover the second year.
Learn how a developer is becoming an entrepreneur and general manager.
Initially we started talking in februari 2012. We were talking about building a company around a product to provide Drupal as a service however after some business planning and calculations we quickly realised we had some serious competition and that we were lacking the funding to give this project a proper chance. Early on, we early on decided that if we wanted to build a product, that it would need a proper vision and that it would need a company that is capable of embodying this vision. This way it could generate the resources necessary to build such a product. We also realised that the opportunity might pass but that from within a company with the proper vision, generating ideas for new products would certainly be possible. So we decided to aim high and founded a company instead of a product or a feature.
While both of us already had founded two small companies we were fairly inexperienced in what was about to unfold. The business planning and financial planning had however started something else: The development of a vision that would later become the heart of the Dropsolid Mission. We were both running a freelance business renting out our services to other Drupal companies. Steven as project/account manager and I as Drupal developer/team leader. With Drupal in high demand we were doing pretty well. We were starting to see the huge opportunity lying ahead and we could see that with a proper vision we could build a company that could benefit from this opportunity. We also thought that we could shape that vision and that we would be able to build a company to carry it out resulting in the a service company with the ultimate offer for the client, the employees, the partners and the founders.
We started to look at what was already working for us. What was it we thought we were already good at? We came up with Dropsolid's initial vision: "Creating flexible and easily manageable web content management platforms based on Drupal technology with a focus on maximum automation and standardisation. We will provide our clients with comprehensive web solutions and services that will reduce maintenance costs and will create added value to their business. Our company will be driven by passionate people carrying out our mission to deliver high-level solutions and services."
Three services were conceived: Training, Consulting and Solutions. On top of that we built the foundation of a set of automations that would make it possible to start building products once the service company becomes profitable. Early on we decided to outsource our development work so we could focus on building the business. With only 20% of our time going to team leading/project management we were able to deliver projects early on and work on the business. Steven spend most of his time doing business development on his network and on leads generated by this very site. A lot of my efforts went into building the early automations in building Drupal sites that would later make us super efficient and allow us to decrease the learning curve for Junior Developers (more on that later). I was responsible for building the services, this required building the teams, automations and knowledge bases for developing solutions. It also included building infrastructure and processes to track projects, register time, customer data and accounting information.
On top of that we were developing our Drupal training material so we could go create a revenue stream from our knowledge base, which was basically the only thing we owned. This became the academy which will further grow and will teach more Drupal connected technologies.
The business model in the beginning was pretty simple: build a service company and then use that money to fund products that could deliver us more predictable revenue streams. We built the company around the initial idea "we can make drupal CMS development easier". Which was great and attracted a lot of customers but, as we will see later on, much more potential was there as we made the business model evolve.
What were the things we focussed on?
So how did we grow from 2 to 25 in less than 2 years of official existence?
Let me share some of the things that worked well and worked out worse.
We have invested in online marketing early on. I knew that sharing was the key. This blog had about 10000 unique visitors a month at its peak and it generated around 3-10 leads a month. While not all leads were always qualified, we knew that sharing content is the way to show expertise and generate leads. When I started this blog as a junior developer posting n00b articles, it was never my goal to start attracting leads. It just happened because of the sharing of knowledge. The articles got better and better and people started to congratulate me instead of laughing how n00b my articles were. I really didn't care back then. For me, my blog was a learning tool, in same the way contributing Drupal modules was. You share code and you have very Senior devs patching your code. The experience is invaluable. Even now writing this article I know I'm a young entrepreneur who is just starting out and maybe I m writing stuff that no one is interested in, but once again, I'm learning. Every comment will allow me to learn. In the end I know the articles will get better.
Anyway, we created two websites early on to write the content and to develop. We aimed with http://dropsolid.com to attract customers who already know Drupal and are looking for Training, Consulting and Solution building. We have build http://cooldrops.be to target the Belgian SME market. The offer there is a small Drupal website with SEO and marketing services tailored to very small companies. On these websites we created content and landing pages to attract the correct customer segments.
It was a serious effort to set all this up but it paid off. We were visible, blogging, attracting customers and positioning ourselves as experts.
A mistake we made here was probably to start the site in too many languages. This effort was too big as we were only active on the Flemish market. I would start out with the language that engages the maximum potential customers.
Also I would recommend starting out with less services and limit the content. Although we could all deliver them. It is better to focus than to be complete. Focus on the service that yield the most value and then build on that. This is what we are doing now.
Automations are for the long run
Thanks to lots of automations we can build websites very easily and they serve as an important tool to reduce the learning curve for junior developers.
We have built a platform that allows you to deploy drupal automatically. We even went one step further: we can roll out these deployment pipelines automatically. Everytime we have a new project we save the team about a full day of work setting up and installing all the tools. When having more that 400 environments up and running this adds up. We plan on having 1500 enviromnments running by the end of next year.
While the investments were pretty big for our small startup we managed to get it done and we productised it so our clients who want to develop themselves can hire the environment from us. Using install profiles we were capable of building SME sites very early on with great speed and quality. This was beneficial to our customers because their initial investment was more manageable and they received the same quality.
Using a standardised way of working from the beginning and investing in a project management & documentation tool we were able to transfer knowledge more easily to our junior developers. This turned out to be a huge win. On our first 3 devs we were investing heavily but since the number has gone up to 20 developers the benefits are massive. All the knowledge in our organisation is captured in this system. Sharing is everything at Dropsolid. Everybody is working hard on making this knowledge base grow. Automating knowledge sharing is key.
Sales & marketing automation was from the beginning implemented but we didn't think it through. This caused us later to switch CRM. With a proper CRM tied to our invoicing and accounting, scale was no issue anymore. If we had done a little more research we could have selected the correct tools the first time.
Learning how to sell is vital
We probably underestimated this one the most. Working for established companies had blinded us from the fact that for them acquiring and keeping a customer is a lot easier. With no brand and nothing more than our resumés we figured out that getting customers was not so easy.
We rented ourselves out and meanwhile did projects with our initial team. This worked because demand for Drupal talent was huge in the market. But getting directly to commercial clients not using Drupal proved difficult.
Our initial strategy was to subcontract work from other agencies looking for Drupal development. This worked great. We were training and hiring new guys constantly. My focused switched in december 2013 from leading a team of 6 developers to start working on the business development. At the end of our first year we were with a team of 12 people total.
Attracting projects of our own was not so easy. We were not capable of participating in pitches. We lacked the cashflow. Cashflow is another thing we learned the hard way. Our inital investment eventually ran out, so attracting business was essential. We needed commercial clients to decide fast so we could complete projects and get the cash in. This was the only way to keep hiring and keep growing the team. Growth was needed because we wanted the revenue to fund our product development.
I cannot stress enough how important a focus on sales & marketing is. We could have grown even faster, if we would have focussed on this more from the beginning. We were so naive that we thought all the customers we needed would just come to us through our website, word of mouth and our reputation. Although some business came to us this way, it was not enough to make us grow the way we wanted. It would never give us the revenue streams we needed to build our products and execute our vision. We would never be the company we felt our customers needed. If we wanted to be capable of making our customers super happy with great products and great service, we needed to grow.
So we decided to grab the telephone and started cold calling commercial organisations. We only started doing this in 2014. We should have done this from day 1. I turned from a developer to a sales person. I had to cold call businesses and explain them what Drupal could mean to them. Go out there and tell people and businesses about your company and products. In the beginning it was so confronting. Changing into a sales person perhaps gave me more insight into what customers want although I had been building them solutions for years.
It required me to change my mindset about sales totally. For a developer sales almost is something evil. While some sales guys may be evil most of them are not. The good sales people are in fact capable of understanding the customers business in a fundamental way that is essential in how to deliver the solution to them. A deep "seek to understand" of the client's business is at the basis of a good commercial relationship.
Because of the experience of being an entrepreneur, I started to understand how a business works and grows. By seeking to understand how my customers' businesses worked, I could now consult clients on the business problems. Having a serious business of my own now had taught me some lessons that were essential for understanding business owners. Having to manage a budget for 25 people as a general manager teaches you how prioritise. Having experienced a cashflow incident in our first year (see later) I knew business owners are very cautious on what they will spend their money on. I was talking to business owners about their problems and opportunities in a totally different way. I learned to understand the business first and then to architect the correct solution for them, so their business would actually become more profitable and more valuable. Being an entrepreneur with a background in product development and development, I could give clients a unique insight in how software solutions could make their business more successful.
I learned about Drupal from a totally different point of view. I learned how to position Drupal as the best solution for business owners and their business. I had to convince them that Drupal is the best tool to engage customers and other stakeholders. I had to convince people who knew nothing about technology that spending ten of thousand and sometimes hundreds of thousands of euro's on a piece of software was going to give them a strategic advantage in some way and make their business more profitable in the long run. It made me question Drupal as well. Is Drupal really the best answer? Am I honest to my clients who trust me with their money that the solution that I will build for them using Drupal will return on their investment? Sometimes the answer on the question "Is drupal the best of all solutions", was no and I told them so. I did not want to end up with clients having solutions that were not returning on investment. This proved to be a good move because being true about these things earns you trust. It also meant customers started to repeat more because their solutions were returning on investment, which meant that they were ready to invest more in the good stuff.
I learned how to calculate ROI streams from software solutions rather than trusting only on gut feeling. Although gut feeling was confirmed by the numbers it was mostly the numbers that convinced the business owners who mostly did not have the same gut feeling on how technology could help their business. Instead of following fads & trends we could go into real numbers and estimates and define real targets before we even started to build something. Being able to do this gave us access to clients that are not familiar with Drupal or technology.
I must admit that I did not got all these insights about sales on my own. I have had some great mentors who guided me. I would definitely recommend that anyone who starts a business finds himself a mentor on the strategic side and on the sales side. The mentors I had were also much older than I am. They didn't know anything about technology or the business we are in. Nevertheless their input was invaluable.
From a small team to a big team
This one was probably the most challenging aspect of what we had to do. Our first moves were to start an offshore team. Being a drupal architect I was perfectly capable of leading that team. I prepared issue queues, reviewed code, and sometimes did some coding myself. This worked out fine for our first projects. See how.
Then we started to train our team on site. We hired 5 people in a couple of months. We trained them to become developers. As we were making our first steps on the market our projects were relatively small. As we standardised and automated a lot of things we got them up productive in a matter of weeks. They were delivering small websites that were generating vital cash for our organisation. Then once in a while we landed a bigger project. We formed a team where I was the architect and just like working with the offshore guys we completed these projects by closely following the progress. Our automations made it so easy for the novice developers that they could focus on Drupal only. They did not need to care about anything concerning infrastructure. All was automated. They could launch a script and the project was installed on their local machine. They commited, pushed a button and the code was live. Being able to focus on Drupal itself, it was mind-blowing what these guys were doing after six months. They could do things I only figured out after 2 years.
When I made the switch to the business side I knew I needed someone to take over from me. So we convinced Hannes Tack (7y of drupal architect) to join our team. He continued where I left off. He now manages our operations with our senior project manager. Our focus however was alway to put the team first. When we faced rapid growth we stretched this to the limit realising we needed more leaders. We figured that to manage a team properly you need around 1 leader for every 5 devs and the leader puts the team ahead of his own code. We have now 14 developers, 3 leaders, 1 analyst/support engineer, 1 infrastructure engineer and 2 project managers. We do not babysit our developers. We still make them work hard so the learn how to do things themselves so we prefer coaching, reviewing and pointing out stuff. But sometimes when they get stuck the leader has to be there for them to get them out of trouble.
Now the team is a machine. We pull in new guys every month and they get drupalised by being around so many talented individuals that learn even faster than our first team. Our recruiting has become better, our processes have become better. We get projects done easier, with less bugs and faster. Project management is now fully integrated with development. Operations is running like a machine. On top of our platform we are focusing only on Drupal. This allows us to free up time to give time back to the employees to work on contributions and personal projects. Although we have only half a day/month we plan to win more time and freedom so we can do this every week. If we grow, I'm confident that we will make it. Our clients will benefit too as our contributions and gained knowledge will also be used to make them more successful.
The ultimate goal is to create product developers who are capable of building really creative things. We have now 2 people working part time on those kinds of projects so we are getting there. In 2015 we want to create a dedicated product development unit. An R&D unit will be created, led by a person who is excellent in building products, thinking in terms of business, is very tech minded and dev friendly. Growing is the only way we can build products that supports our vision. The ultimate goal is to be able to bring better products to the client that make his business even more successful. We need to keep evolving so we can stay relevant to our clients.
Having an R&D department is a magnet to developers. Projects are great to develop your skills and gain experience but when doing projects for 5-10 years some developers want to go next level. They want to work on a product where they can put their heart in. An R&D is a key driver to produce excellent developers. Once again being able to balance the company, the clients and the employees will result in massive benefits for our clients in the long run.
The meaning of the academy
Creating the atmosphere of everyone being there for one another has been crucial. We have a dedicated internal academy. One developer's job is to gather knowledge and package it into sessions. We then organise these sessions and when they are good enough we make the course available for customers too.
Every incoming developer gets trained the full Drupal training cycle we have. You'll see our academy develop quite a few courses in 2015 for the general public.
Investing in knowledge is appreciated by your developers because they become more valuable. Figure this, if Dropsolid were ever to fail, they are safe because they would possess multiple skills and would be hired by competition. Promoting a second skill is vital. I only could have known this because I have been a developer myself for so long. As a developer your value depends on how much knowledge you master. If you can master a framework like Drupal you are safe, but if your master a second technology like frontend frameworks (angular, backbone, ...), infrastructure, symfony, ... in combination with Drupal you are a super star.
Training is "win-win", if the devs get better, your company gets better. If you worry about your guys leaving for another company and by doing so you do not invest in them, you can be sure they will come to a company like ours where management does invest. If they want a raise when they master a technology because they figure they are more valuable, I will be glad to give it to them because if their value increase I will be able to prove that to our clients and our clients will also benefit from that. And if the client is benefitting more, he will be happy to pay more.Training is alway win-win.
The academy, although she is not a cashcow, is a cornerstone of our organisation. It embodies our vision of creating value, time and freedom. Training creates value for the developer, the company and the client. It produces the freedom for the developer to make clear career choices. By being able to choose which technology to learn next, he is able to shape his future and make sure he never becomes obsolete. And the time we invest in learning is won back times 3 because we are so much faster in making more intelligent choices. This will ultimately benefit the client as well, as he will receive very motivated and smart individuals to work on his projects.
We started looking for funding from day 1. In our calculation we saw that some degree of funding was needed. We were pretty naive on how to value our company and how to negotiate deals. We learned this the hard way when an investor failed to meet agreements and we pulled out the plug. The good news is we survived the incident due to good sales, some additional loans and working day and night. This event woke us up and made the company leaner and meaner than before.
We also made some assumptions that were simple not correct. For example being freelance consultants meant we were pretty spoiled on the money side. This resulted in overpaying ourselves and our initial partners. Due to missed funding, we were forced to cut costs. Although no one working at the company as an employee noticed any change the founders and partners made serious sacrifices to make the company survive. Missing out on an investment was the best thing that could happen to us. It quickly made clear who was entrepreneurial enough to go on and to risk both their valuable time and money. Some key people did leave. While in the short term this was painful, in the long run it proved that who was still around was also prepared to go the extra mile when needed. When one potential partner left, another presented himself. Wouter Leroy who is a passioned digital consultant was prepared to invest his own money at a time the company (which of course had huge potential) was not doing so great at a cashflow level. For me and Steven it was clear that this was the kind of people we wanted on board.
After this experience we were still there with a company who was doing good sales, was delivering good projects, training devs with great potential, running a development platform, building a strong vision, running profitable (as of october 2013), and was lean and mean, ready to take on bigger challenges. We managed to break even around june 2014. This was the time we also had been talking to several other investors. With new knowledge about negotiations and a far better valuation we completed a small round with two business angels. This gave us the freedom to hire more people and to invest more time into business development.
We are well funded and well capitalised. A valuable lesson was learned.
In 2015 we will go out and find more investors as we are building new products, planning on taking more markets and deepen our impact in the markets we already service. More on that next year.
Building the culture
Perhaps the most challenging but also the most rewarding thing we did was creating the culture we have. This is ongoing work and requires us to look into the mirror every day. We created a culture of accountability. Which does not mean looking for someone to blame. Accountability is taking responsibility for everything you are involved in. As a general manager and the one responsible for each and every decision, I have to do this every day. Every time something goes wrong the first question is: "What should I have done to make the outcome better". By thinking from that perspective instead of blaming people, which I sometimes do as a first reaction which gets you nowhere, I notice other people who are also responsible step forward and also take responsibility. A situation might arrive where a developer deploys a bug, does not see it, client sees it, client is not pleased, ... This would easily result in: "you stupid developer why did you do that, don't do that again, the quality must be better, jada jada, ...". I cannot count the times I have been in that situation.
Instead lets take this approach. Ask questions: "Have I given you not enough time?". Developer: "Well, we needed to complete this project fast and this came in between and I though I fixed it". "Have we not structured or process in such a way that testing is vital". "Yes but the client was waiting already for quite some time and the project manager asked me a favor, ...". Then the project manager might tell me I have given her too many projects to manage and she wanted to please all the customers at once, ... Looking deeper, almost anyone is involved. Most of the time issues are a combination of, the organisation being not well structured, a developer who tries to do good by being a super hero, a project manager that doesn't communicate correctly to the client, ...
There is no simple solution for this. The only way to solve this, is to take responsibility as CEO. You need to rethink the processes with the operation manager, rethink how we communicate with clients, rethink how to manage priorities and train the developers in not being solo superheroes. No one should have to "superhero" alone to save the day. Instead they should depend on the team and the process to get things done correctly every single time. When everybody takes his bit of responsibility we can save the day and be superheroes as a team anytime. We will even go as far to make the clients employees take responsibility as well. This will result in our client's organisation working correctly.
Career opportunities are an additional benefit of working for a growth company. Because the company grows, new positions open all the time. This means you can advance your career within the same company. There is nothing worse than having to leave a great team because there is no growth path for you. For now we do a good job. Some people might even be forced to grow a bit too fast, but in my experience this is better than too slow. While it may be more painful, the benefits to peoples' careers are massive. They get pushed out of the comfort zone so fast that they become rockstars so fast. Sometimes it is unbelievable what people can do when allowed to evolve.
We used a lot from an idea called tribal leadership. Basically it comes down to helping each other to the next level. By doing this for yourself individually you'll pull yourself to the next level. By doing so you 'll be able to pull other people to the next level. This is very rewarding. Although it will not generate any euros or fame or other stuff, it will make you feel good about yourself. It is a way to transition to rockstar and finally to someone who empowers others to become rockstars. The more people who are focussed on shining together instead of alone, the higher your tribe is valued. Creating value, time and freedom forces us to go up that ladder as far as we can. We've got your back. We never stop creating the feeling that the team has your back. And by the team I mean your colleagues but also management. Management should ultimately have everybody's back. No matter what.
Another valuable book we took to practice was the lean startup. In the lean startup the idea is to build fast, fail fast, improve fast and eternally. If we would have tried to do everything first try we would have run out of money before we sold anything. While in the eyes of the client this might not be immediately beneficial to them. In the long run it is. Because you are iterating on all levels to adapt to your client needs and to excellence, they will eventually benefit the most. If they choose you as a company, they know you will not become obsolete, serving them obsolete products and services. You will be the company they want to stick with because being lean is about thinking ahead. By doing this you 'll sell them products and services that will generate value, time and freedom not only now but also in the future.
The most practical advice I could give anyone who has to manage anything is getting things done. Right in line with our values, it creates time & freedom by freeing your mind from loose pieces of unprocessed information by putting it into an airtight system.
The future: Evolving the business model
What is next for Dropsolid? Our lean philosophy makes us evolve at high speed. We reinvented ourselves every six month. Management changed positions every six months. Everybody is growing personally and evolving to a state where he feel he has to most impact to deliver our values. This will make us a company that is adaptable to what ever lies ahead. We are capable of evolving our business model so fast that it makes us valuable allies for our customers to have in the digital age where everything changes so fast.
This why we went from: "We are good at Drupal & CMS" to "We make digital engagement easier and therefore we make it easier for companies to undertake digitally". This had a huge impact on how we are selling and delivering our services.
This insight has been key and did not come over night. Why is that? Why does it need to evolve? This you can read in this blog post (which is in Dutch).
The conclusion is that we need to be able to talk to business owners about how Drupal and digital engagement can transform their businesses. To do that we need to go in at the business level and explain in financial consequences why they need to invest in digital engagement using the Drupal platform. By doing so we are not just any tech integrator but a supplier that has understood their missions and values. A partner that will work with their managers & employees by offering a unique business insight through digital glasses.