The Dropsolid Diaries Part 2 - 2015-2016 - Becoming the digital business company
My last post on this subject dates back to January 2015. As you can imagine, a lot of things have happened since. Just like two years ago, I would like to share my experiences with the community.
As a newbie CEO, I took on the task of growing the company further. Over a 24-month timespan, we grew from a 25-person team to 65 people at a certain point and then scaled back slightly to 56, with the purpose of creating a steady team and to be able to continue growing.
Building teams has probably been the most important development for us in those two years. On a management level, the initial expansion to 25 members was actually quite easy - everyone was still reporting to Steven (Founder & COO) and myself. At that point, we were just one big team working towards the same goal. When we hit the 30-people mark, things didn’t run that smoothly anymore and started to clog up our efficiency and way of working.
2015 started off really bad
A big deal had gone very wrong on us. I can't tell much about it at this stage, because the whole affair is still under investigation. However, I can tell you now that the client was involved in fraudulent activities. Perhaps next year I might be able to tell you the whole story – it’s not a pretty one. Chasing whales is not a good idea.
Despite the whole thing not being our fault, it still put us in a bad spot. We lost quite a bit of money building a product that never finished and we never got paid for it. On the bright side, it laid the foundations for one of our most successful products. The product that we hand out for free at http://ikonderneemdigitaal.be, is based on a platform that contains reused code of the product that we had built for our client. So eventually, we did manage to turn things around slightly.
Losing a lot of money is very dangerous for young companies, as cash flow is generally very low. Our focus on a growth-oriented business model made things even harder on us. The situation put a lot of stress on us, founders, to attract more business and also be able to deliver. All of this happened whilst we were still looking every day to find the right people to grow and structure the company.
At that point, our biggest investment – installing the teams – was still to come.
We had to fight an uphill battle. Luckily, we had raised some money and we made use of all the financial tools we came across. This is especially difficult in Belgium, where money-raising networks are few and far between.
A thank you to the Belgian and Flemish government
Not everything turned out to be grim that year. In 2015, we managed to get approval for a BA+ loan. This is a government-subsidized loan that allows start-ups to raise money if they get a deal through its partner networks. Since we raised a loan through the BAN (Business Angel Network), we could apply. Our business model was validated and we acquired a loan as one of the last companies benefiting the federal government support measure. This support measure is now part of the Flemish government and exist under the PMV umbrella.
Then, in June of the same year, we received more support from the government, as we secured an IWT grant. This measure has also changed and is now part of VLAIO (also managed on a regional, Flemish level). All of these measures shifted together with the new reforms in the federal Belgian structure. We were awarded €250 000 to fund our products and R&D. This came in at exactly the right time. If this grant hadn’t come through, our R&D efforts would have been halved.
Training new young talent
We were also frequent users of the IBO rule. IBO is a system designed and managed by VDAB (the Flanders employment agency), which allows companies to hire employees on a training contract. This means we don’t pay taxes on their wages during the first six months of employment. After this period, our trainees can apply for so-called Activation cards, which gives the company even more tax discounts. Especially developers who have joined the company via a government training education programme, also hosted by VDAB, are a perfect fit for this. While we cannot employ these developers on the Dropsolid level (because they would need to be more experienced), we do have a solution to onboard a lot of young talent. This assures our company is growth-oriented and doesn’t have to fight the war on talent too much.
Because we operate in the market under two brands - Dropsolid and Cooldrops -, we are able to employ a lot of young people fresh out of higher education or the VDAB training programme straight in our lower-end Cooldrops team. Why? The VDAB programme teaches Drupal, so the young minds entering the company already know its basics. This allows us to place them at Cooldrops, supervised by a technical lead (drupal developer with +9y of experience) and several project managers. Initially, they set up SME websites using the tools we have pre-built.
Cooldrops delivers websites to SME’s and self-employed people and is a Software-as-a-Service product built on top of JAMES (our Platform-as-a-Service subsidized by IWT). Cooldrops harvests Drupal core capabilities for installing Drupal the way we want it to be for an SME. This makes it very easy for a new developer to build a Drupal website. In a certain way, one might say that we used Drupal to do what Wordpress brings to independent developers. You can make Drupal as easy to install and use as WordPress, but without losing the powerful engine that is inside - the Drupal core, of course. The other way around is not possible. I will tell more about this vision later, but being able to finetune Drupal in such a way that it is nearly as easy to use as WordPress, is a tremendous opportunity.
Industrialising web development
Cooldrops has existed as an installer on top of James since the early days, but it has evolved since. We now host two formulas with Cooldrops. On the one hand, we offer a ‘FIX’ version, which give clients a basic but optimized responsive website that we make available for free on http://ikonderneemdigitaal.be, and FLEX, which is a Drupal installation pre-installed as part of SaaS solution. Customers also get access to marketing packs, which helps them with SEO, e-mail, content and social. On top of that, we deliver traffic packs, which results in quality website traffic. Next to that, we offer a photo & branding pack, so clients can brand them in a cost-efficient way. We even have reseller deal with the popular Teamleader CRM for SMEs, where we onboard customers and connect their CRM with their digital experience. Cooldrops has evolved from a simple product to a complete ecosystem of products and services all tailored to make digital business easier for SMEs.
This offer created an alternative for companies who are looking to spend less than 10k a year and are not ready for a communications agency. SMEs & independents only having a few thousand euros to spend each year on digital experiences. Cooldrops can serve as an 'à la carte' menu where customers can pick what they need and still have the products & services delivered, personalized with personal customer support. With this customer-friendly offer we are trying to steer a lot of customers away from Gouden Gids, Roularta & Proximedia, who deliver a different and less personal customer experience. We also take clients from independent web developers, since we can scale more easily to more customers. In 2017, one of our strategic moves will be to deliver our platform to these independent web developers. Our project is named JIMMY (‘little James’), since the product is based on our JAMES PaaS. It will allow independent web developers to use Drupal in the style of WordPress. With this difference, they will be able to service much more complex projects. More on that later.
In fact, Cooldrops is an implementation of our James and Jenny platform. It proves that industrialising web development is the way to go. With more than 300 customers and multiple daily website launches, we are fast-growing. We like to speed this up to 5000 websites a year in the next 1,5 years. Then we can scale up even faster.
The digital scan that we offer to SME Cooldrops clients, is also government-subsidized. Through the so-called ‘KMO portefeuille’ programme, 40% of the cost will be refunded to SMEs who wish to invest in a strategic digital scan. We build SMEs a tailor-made digital plan, that enables their digital entrepreneurship.
A big thank you to our government in this wouldn’t go amiss. They have been really great to entrepreneurs the last two years and I can only hope they keep up the good work. In return, we as entrepreneurs keep contributing through our taxes. With almost 60 employees (of which more than 70% of the jobs are newly created), we try to give back. I hope we can create many more jobs and develop talent. I believe that next to making money, developing talent, contributing and innovating are the most rewarding. Money accounts only for 25% of the satisfaction that we get every day. Being able to contribute to the Drupal platform & to the community, innovating and developing talent is accounting for 75%. Although I hope we make a lot of money, this is only a part of the motivation. Had money been our only driver, we probably wouldn't have survived.
How to build teams?
Building teams is the single most important task for a management team.
So how did we build the teams? First of all, we already had a team - one large team. The foundation of our teams are the values Steven and I set out in the beginning. Creating value, time & freedom, which is the vision of our company, means different things to employees, clients, investors, the world,…
Our core values - Trust, Help, Challenge, Grow & Enjoy - were formulated in 2015. These values had always been around ,but we managed to put them into words in 2015. We would practice them by having each other's back, by cooperation, by pushing each other forward, by being transparent and having a good time. Then one day we sat down and we found out we could communicate them using these five words. However, at the end of the day they are just words. The most important thing is that we keep practicing them like in the beginning.
Whenever we faced a challenge, we would always go back to these values. The same went for our partners who were with us. At some point they simply didn’t fit the values anymore.
At the start of the year 2016, we said goodbye to our Cooldrops sales manager. When the core value of Trust gets broken, there is really no way back.
A few month later, in early 2016, we parted ways with our operations manager and also business partner. We are really grateful for his contribution he made to Dropsolid and we still value him a lot. What happened? We came at a crossroads where Steven & I felt we had a different vision on how our operation team should evolve, so we decided that we had to move on.
He was replaced by one of our project managers, who really impressed me. She took over HR, office, administration, project management and operations. She did a job that required three people and at times got more things done in an intelligent way than the people who were dedicated to these positions full time. She is such a team player.
Getting the best people on board is absolutely crucial. I have made many mistakes in hiring the wrong type of people, but lately we are getting better at it. In 2016, we fired people who were not in the right spot faster than ever. Also, some people needed to be in another spot and we transferred them. Deciding how to do this? The answer: our core values. If there is trust, they are helping out, they challenge themselves, grow and enjoy themselves & each other there will always be a place for them at Dropsolid. Our culture has become so clear that whoever doesn’t fit, will feel out of place quickly. This way, it becomes clear very fast if someone does not belong with the company.
Rule number one: build teams. Get the values right. Rule number two: you will need to hire team players. That’s what we did. Another of our key hires was Thomas Simono, who was the sales manager for Coolblue in Belgium at the time. At Coolblue, a strong team culture exists in sales. That is what he brought us too. We found out that in our sales department, we were not acting as a team, but as a bunch of people with targets. Again, we learned the hard way that this didn't fit our values. We transformed the sales team by hiring new people, getting rid of sales targets and working together as a team. Again, hire a team player who can reflect the values and inspire others to do the same.
I can say that our management team, consisting of six people, has been able to fully embody our core values. All the other teams follow their lead. Steven leads as chief of operations. He does this together with Jeanne, the operations manager, who is supported by Laurence, our most senior project manager and the only person I know who cannot be influenced by something other than the truth. Jeanne leads office, administration and HR, reporting finally to Steven & me. Cooldrops operations reports to Steven, as do the Cooldrops marketing team and the strategy team. Dropsolid sales reports to me and Cooldrops sales reports to Thomas Simono, who also reports to me. The Dropsolid marketing team reports to me. The R&D team currently reports to me. We have found our CTO and when he is on board I will reveal his name. Finance is part of my responsibilities and I have trusted advisors on this. In the future we will need a dedicated CFO. If you are interested, please contact me for the future.
Building this management team took us more than three years and it has been one of our biggest challenges. Finding people who are really inspiring our core values is key.
The teams who are up and running are:
- Dropsolid operations: 1 operations manager + 3 teams each, with a project manager and technical lead + 4/5 developers
- Cooldrops operations: 2 teams in Gent and Hasselt. Each with a project manager and 3/4 developers.
- Consulting team: A talent manager who manages all our consultants
- Strategy team: digital strategists, senior designers and functional analysts
- Sales team: 2 closers, the CEO and 5 people in sales assistance (prospecting, coordinating & following up)
- Marketing team: 3 marketeers / 1 coordinator
- Company support: 1 administrative, 1 finance/HR/office manager
- R&D team: 4 developers + CTO
Sales has perhaps been the most ‘hire and fire’-style department in the last two years. I will not go into detail, but dealing with sales people was new to me and since they are good at selling themselves and me believing what they told us, this resulted in failure to deliver. I would like to give one single piece of advice for hiring your first sales people: once they have been through their training and understand what the company is about, they should be able to handle deals on their own. Simply call every client they visited and ask them if they would hire this person as their own sales person, rated on a 1-to-10 scale. Do this again when deals get lost and won too. This feedback will tell you quickly what needs to be done. Do they need more training? Do they say who they were? Are they capable of handling clients and deals and embodying the values? If they aren’t, best to fire them without hesitation. Salespeople are unlike developers and should be handled on direct feedback - they need to deliver.
Another thing that we threw out of the window, are commissions. No one has a bonus plan anymore. Everyone is working for the company. We are working as one. Closing what the company needs. This in comparison of created deals that tend to drift from our core business. Long shot deals that will probably never land and will disappoint customers. None of that anymore. People work as one large team and guess what? With 20% fewer people, we crossed the 1M sales mark in Q4. Who could have guessed that firing sales would boost sales?
Our marketing team is a brand new team and it was formed over a 1,5 year timespan. We started with a marketing manager, but eventually we had to let him go because our vision on marketing did not align. While branding is important, I think it is more important that we work in a structured way, working on a system that measures and learns from outcomes. Lesson learned? Although marketeers tend to be very creative people, never get fooled that measuring and learning is nothing for them. Especially in online marketing, where everything is measurable.
What I am really proud of, is the way we matured our operations team. We scaled up from a very literal ‘bunch’ of people to three highly structured, self-sufficient teams, led by only one operations manager. We function with minimal overhead and deliver quality code to clients. These teams, supported by R&D, marketing and strategy teams, deliver the services and products that makes Dropsolid different from any other Drupal company or digital agency.
We help clients infuse digital into the DNA of their company. Because we believe companies should become digital in their core, we deliver them the platforms and services to do so. Our R&D team develop the platforms like James, Jenny as our multisite solution, Jimmy & Cooldrops. This helps our clients to build their digital experience and integrate them deep into their core. Our platforms are open so the dependency is virtually non-existent. Our strategy teams help clients make the right choice and our marketing team helps to increase the performance of the experiences. In this process, we truly work with C-level management to digitally transform these companies.
On a larger-sized Dropsolid level, we stay away from the tasks of larger communications and marketing agencies. Although we can deliver marketing services on an SME level through Cooldrops and deliver the whole package. We do not deliver 360 marketing on an enterprise level such as content, social, mail, SEA, SEO, nor do we deliver campaigns on large scale projects. We work together with these digital marketing agencies to build the experience on top of our platforms and make sure our solutions perform. The key difference between us and digital agency or a software integrator is that we infuse the digital DNA into our clients genome. We work so tightly together that these companies learn to adopt our digital DNA. As a start-up/scale-up digital company building our own products and services, this comes with a fresh mindset. We don’t solve a problem with a solution, we build the problem-solving solution into our clients core. Because we change companies in a way they can truly change the way they go to the market, the results are transformative. Companies become able to use our platforms and digital experiences to build new customer journeys, to deliver better offers to clients through new channels. Drupal is so perfect to do this because the product can really be owned by the companies we work for. They can install Drupal in their cores without having to worry about continuity or a total cost of ownership that gets out of control. They only need Dropsolid to deliver them the tools and the expertise to embed these powerful strategic digital experiences into their core.
Cooldrops has the same structure as Dropsolid, but works much more standardised. We deliver solutions from start to finish using a playbook. This allows us to minimize the needed custom work and deliver experiences to SMEs at great prices with great service. Because we assemble, a lot of clients have more money to spend on marketing and traffic packs which have more impact on their business. I see a lot of potential growth for Cooldrops, for the simple reason that I see a lot of clients wanting a more personalized service who are not ready to go and spend +10k/y with communications agencies. The Cooldrops buffet model will be perfect for them to bring their companies digital experience and digital presence to the next level.
The challenges for 2017: Install Drupal as easy as Wordpress
What we have developed is a Drupal installation that is as easy to install and use as WordPress, but still consists of 100% Drupal. In its core, the platform being Drupal means that everyone who uses our digital service platform can easily set up sites themselves and have them evolve. Selecting Drupal at the core also provides a lot of advantages for young developers. First of all they will be able to build a long term career. Choosing Drupal means you will get always a job. Just google drupal developer on most talent platforms and you'll know what I mean. And this is exactly how Cooldrops and Dropsolid work. Once a developer has gained a couple of year of experience he can evolve to Dropsolid projects. These are enterprise class projects where we build digital experiences for companies like Securitas, TVH & ERA. It involves a lot of custom development integrating Drupal as Web CMS in these enterprises backend systems like Salesforce, Microsoft Dynamics, SAP and others. Building digital experience involve as well front as back end developers using Drupal to deliver these complex experiences. We often work together with marketing & communication agencies like for example Thesedays, Prophets and BBC. They trust on our knowledge of Drupal
Making Drupal as easy as Wordpress is a great opportunity both commercially as well as for the community. The service platform we will be delivering in 2017 will allow independents to use Drupal for their clients. Drupal has been losing ground to WordPress for many years when it comes to independent web developers. Drupal has become a developers’ tool. The main goal of these developers, however, was to eliminate the website builder. Since they are developers, they only completed half of the task – they built the engine, but never got round to building the actual car. What we have done with JAMES, Cooldrops and JIMMY is build that car. You can now turn the key and start driving - just like WordPress. Our goal is to leverage the community to help independent web developers to deliver to their clients. Their added value is that they are close to their clients and know them best. They can easily use JIMMY & Cooldrops to start up an experience. JIMMY will allow them to host, maintain, support and build easier. This enables them to spend more time to focus on their clients. Market research shows that lots of independent developers spend too much time on activities that do not contribute to their revenue and client satisfaction. But why Drupal? Why not host Wordpress?
Drupal will give them the ability to deliver more to their clients. They will be able to develop more advanced features that these business demand. As SMEs need to adopt digital more and more into their core business, the demand for more complex development increases. Using this platform independents will be able to outsource all the work to Drupal developers who can help them do this. Using this combination, these SMEs can benefit from all the marketing, traffic and branding products that Cooldrops has to offer. Marketeers, copywriters, designers, etc. can use the platform to deliver digital experiences using the Cooldrops platform.
How will this impact the community? If all these independents start using Drupal instead of Wordpress, our community will grow x-fold. Drupal used to be big for independents, but market research show it has lost this position to WordPress. We will take it back because we believe Drupal is for professionals and WordPress is a great product for individuals. Having all these independents use Drupal will make sure we have a new inflow of talent. Market research shows that after doing the one man business a lot of indies become consultants. If these guys would be Drupal developers, then Dropsolid would like to hire them. As would our competition.
For independents, it’s like being a one man band freak versus being a director of an orchestra. Instead of doing anything yourself and earning little money the director has an entire platform (orchestra) that can deliver experiences to its clients. With this platform, Dropsolid wants to support independent web developers in becoming more customer oriented, more reliable, more scalable and ultimately become more profitable businesses. In the end, when they like to retire they can sell their portfolio to Dropsolid at a predetermined exit fee.
Our challenge in our R&D team is to make Drupal as easy to use and easy to install as WordPress. Drupal 8 has meant such an enormous leap forward. We can stand on strong shoulders to keep up. We already made it work in D7, having D8 will make our product even better.
Challenge 2: Pushing Drupal as the go to platform for companies to build their digital experiences
Next to innovation and talent development one of the goals of Dropsolid is to make companies bet on Drupal as a go to platform. We are one of the more commercial players in the market which I believe positions us best to do this. Although we have focussed on freeing billable time for contribution and organizing several Drupal events to spread the Drupal message I think we are the best placed company to convince people Drupal is the way to go.
Four years ago Steven and I left successful Drupal companies to start our own company. The companies we left also do other technologies than Drupal. They ‘re part of larger structures and Drupal is just one of their offerings. We took a huge bet on Drupal to only do Drupal and nothing else. We’ve put ourselves in the market as a Drupal only shop. To survive and grow we had to attract enough work. Instead of sitting around and waiting for someone to come to us with a Drupal project, we went out and really showed potential customers what Drupal is about. By doing this we’ve build a strong sales force convincing clients Drupal is the way.
Our community has always been focused on getting people to code as a contribution and of course this is core and we will still keep doing this to evolve the product. We have been focused on spreading and commercialising Drupal. We told people how they could use Drupal as a platform to build all their digital experiences on it. We explained them why investing in a more complex CMS was going to benefit them. Why spend the extra money when you don’t need all this power right now.
In business people only look at what a product can do from a business perspective. It just needs to do what I need it to do they say. I don’t care if it's Drupal or Wordpress or something custom or whatever. Well this is very short sighted and it can be a very dangerous vision to have non digital people at the head of companies who think like this. It could eliminate the company's ability to deliver what clients expect them to deliver. These non digital people will be then the first to complain how their selected product is not able to deliver what their clients are demanding. It is so dangerous that companies that do not invest now and think further will be out-evolved by learner newer players and competition that did invest.
We see all sorts of companies becoming aware of how important it is to select the right platform. Even SME’s care about what platform they are building on. They need to be sure Drupal is the right platform, because it can deliver their services, products and support to all stakeholder across all channels. An API-first, decoupled, symphony based web CMS that allows you to model data easy is perfect for this. Drupal unites users and content and give marketeers tools to pull data from the companies backbone and transform it in a great experience for the customers.
Our challenge is to bring Drupal to every company big and small.
Betting on Drupal and digital transformation was the right bet and the reason why Dropsolid has gained so much momentum. By trusting that our vision was correct, we have developed a Drupal centric brand. By industrialising how we will deliver Drupal we are able to deliver Drupal to smaller organisations and convince one-man shops to use Drupal. By doing so we beat every shop that didn’t focus so much on Drupal because they do not have the ability to support companies with tools like James, Jimmy and Jenny. Nor have they the expertise to deliver the strategies needed to transform a company with Drupal. They only know how to build websites with Drupal. We have become much more than a Drupal shop. We have become a Digital business company that has Drupal at its core because Drupal is the only opensource platform that will allow our customers to deliver the experience they need to satisfy their customers. We have built our own products we know how to innovate and to survive. Our culture is completely different from the companies we left 4 years ago. Apart from building Drupal websites we are building our customers future business with Drupal.
We will make sure that everyone large and small knows Drupal is the engine they need to deliver the digital experiences their clients need. That will be Dropsolids contribution to Drupal next to hosting events, allow people to contribute company time and training new Drupal talent.
Why bad things can turn out really great
2015 and 2016 were really tough. Trust our core value was really our guiding star on deciding who we wanted in our teams and in our lives. I’m so grateful of having the right kind of people around me. I lost some of my naivety and I got a little more careful, although I feel there is still enough left to go out and trust people. Building trust by selecting and growing the right people & clients has been our biggest investment and now trust has become our biggest asset. I realised that trust is a really scarce resource, but if you can mobilize clients and employees who are amazing, things start to happen. This is what I already see now in Dropsolid. We are doing amazing things. We are building new products and we are changing our clients businesses so they get this really valuable piece of Digital Dropsolid DNA injected into their cores. With Dropsolid they will have a strong business partner who not only builds them digital experiences but transforms how they do business in the future.
Dropsolid has weathered quite a few storms. Just like a tree, strong winds make the roots grow even deeper and the branches grow stronger. The Dropsolid gene that we inject in our customers’ DNA is the strong DNA they need to withstand the test digital disruption is putting their business through. Doing so together with Dropsolid our clients will be safe for many storms to come and the deeper roots will yield sweeter fruits, because in every difficulty there is an opportunity. The Dropsolid DNA will help not only protect them from the storms, it will also help them benefit from that opportunity.
2017 has only just begun, and we are looking forward to a great year. We will be innovating by launching new products, developing our talent, contributing to Drupal and we will be growing at steady rate guaranteeing quality delivery to our clients.