Mergers & Acquisitions in Drupal: A Conversation Ignited

I'll admit it: I think conference sessions, in general, can be a little dull. Okay, what I mean is that they're usually snoozefests. Unless I'm watching P2's own Samantha Warren speak passionately about typography (and if you've never heard her speak, you should go do that), I've got a bit of an attention-span problem.

I'll admit it: I think conference sessions, in general, can be a little dull. Okay, what I mean is that they're usually snoozefests. Unless I'm watching P2's own Samantha Warren speak passionately about typography (and if you've never heard her speak, you should go do that), I've got a bit of an attention-span problem.

That said, I figured a session at DrupalCon London about mergers and acquisitions in the Drupal space -- that might be a different story. And thanks to a catalytic question from the gentleman in the 10th row, it was indeed.

I had the pleasure of sitting on a panel with Ivo Radulovski of ProPeople and Frédéric Plais of Commerce Guys, in a session led by Acquia's Robert Douglass, on the subject of Mergers & Acquisitions in the Drupal space. Everyone here had really interesting experiences of either being acquired, merging with someone else, or making a strategic alliance of some kind. And because this concept is pretty new in Drupal (and just a teensy bit controversial), I was pretty excited to hear the discussion.

The early audience questions were pretty standard -- what were the challenges in merging two company cultures? And how do you know if it's been a successful merger or acquisition? And to be honest, all of our answers to these questions were pretty standard too. They mostly included putting the words "collaboration," "communication," "thoughtful strategy," and (cringe) "synergy" in various configurations. I think right around that time, people started tweeting around, looking for their happy hour buddies. Nevermind that it was 2 pm.

But, here's where Guy In Row 10 comes in. A few minutes later, this brave audience member at last shot his hand up in a bit of frustration and said "Ok, listen, all that's great. But for all of the small, 5-10 guy shops around here, we want to know: how do you GET your company acquired?" The question obviously struck a nerve, judging by the number of people nodding, mumbling agreement, and looking at the panel as if to say "yeah, hotshots. HOW?" And then the question got even more challenging.

Guy in Row 10 followed up -- gutsy -- and said "and if you DON'T want to get acquired but some of these firms are growing so much larger, is there any way to grow…organically? How do firms break the 12-20 person ceiling that seems so common in Drupal?" And that tipped us all into the realm of REAL discussion.

At that point, people put down their phones and tablets and started talking about how to build great Drupal shops - either by organic growth or by acquisition and merger - who bring in excellent work, time and time again; and who retain the best talent, time and time again. The conversation was way less about "who's buying who" and way more about "how does growth in Drupal REALLY happen?" And in all of that discussion, I think the group really learned some things -- I definitely did.

What did I learn, you ask? Why, I just so happened to write up a few lessons learned. Here they are:

  • Drupal M&A is Trending on Leverage: Acquisitions in Drupal are often happening around "product" concepts -- distributions, packaged service offerings, or third party products. Why? Because then, the acquisition isn't just about combining teams or adding talent -- it's about leveraging a product for a greater market.
  • Define and Seek Specific Value: The "acquisition equation" is really all about finding or adding needed value. Firms looking to be acquired need to do the soul-searching necessary to finding out where they can add unique value to another firm, and then specifically seek out that firm. And those looking to acquire another company need to decide exactly what value they're missing (talent? products? geographical reach?) and seek out the firm that can best provide that value.
  • Organic Growth is About Maintaining the Ecosystem: Growth is not about selling a bunch of Drupal work and making a big margin. It's about growing the overall ecosystem of people who need Drupal and people who provide Drupal and provide it well. The firms that are able to grow organically past that "20 person ceiling" are the ones who not only build a great portfolio of clients; but also those who keep their developers developing, contributing back code, and building cool stuff in Drupal. Because cool stuff in Drupal makes Drupal better, and a better platform attracts more developers, and more developers help firms grow. Circle of life and all that.
  • Mergers and Acquistions are not about being "rich": Value exists in every size of Drupal firm, be it single-person-consultancy or 100-person firm. And "acquiring" or "merging" can be as simple as making a hire, exchanging equity, or joining forces in a strategic partnership. It's not a concept exclusive to the super-big firms -- it's about finding existing value in the Drupal ecosystem, and leveraging it for the benefit of both parties.

For me, this session was a perfect example of what I think is unique about DrupalCon and this community in general -- in a short period of time, a very polite conversation about business ideas turned into a very real discussion about business decisions.

Thanks, Guy in Row 10, who asked the questions that it turns out everyone was wondering about. And especially, thanks to moderator Robert Douglass for stoking such an honest and provocative discussion.

Karen Borchert