created on Mon, 2007-08-06 16:54

A question that has been growing in popularity since we started in early 2004. I recall Boris Mann and I debating this some time ago, before Raincity and Bryght even had offices...

Drupal product development vs product service provider. What is the best route to take for an entrepreneur?

For myself the answer was pretty easy: To create a reputable open source service provider firm! It is my calling. Why? Simple! I am a business developer, a marketeer and somewhat of a visionary (and arrogant apparently). I'm not a very talented coder or designer, I know my basics but I am passionate about the business development and enabling clients and talent to work together.

Plus it's easier to build other people's products than coming up with your own. At the end of the day, I am unsure how I would cope with having to report to an investor(s)?

If you ask me, creating a service company is easier as you don't have to go through months of development to create a product that will hopefully provide you a decent return on investment to justify the initial expenses and the hardship that the team had to face to get the product off the ground. Not counting the time you need to spend to maintain, support, upgrade and fund this new monster you've just created!

So should Raincity be worried about the growing popularity of hosted solutions and Drupal-based products? What does it mean to us service providers? Will the upcoming market crash affect our little studio? Will making Drupal easier to install and use take away from our market?

My take is NO! Yes, we will see a dip if the market crash, but clients; people, companies, firms, organizations, government, associations etc. will always need professionals to help them setup, configure and develop, or theme websites for their markets.

Raincity Studios, world's premier Drupal themers and service firm since 2004

Truth be told, I started Raincity Studios in December 2003 with a $26k personal investment, together with the help of Will Pate, and the folks at Bryght, we negotiated a few clients and had Mark and Erik do the production. That was late 2004, early 2005.

Mark had been playing with Drupal for a few months and he found it easy to configure and theme sites. We also created a series of templates for our friends such as Darren Barefoot, Just a Gwai Lo and The World is Not Flat.

We participated at conferences, helping with open source events and barcamps, and in no time we had more clients than we could take on.

Our first year, we made $160,000.00. In 2005-2006, we ramped up our production team and played with other technologies such as Ruby on Rails and AJAX. We made $540,000.00 providing service to an impressively growing portfolio of clients.

My target, for the 2006-2007 fiscal year, which is coming to an end September 30th, was to make a million dollars in service revenue. As it stands, we are at 84% of my goal with sales in the excess of $840,000.00

We are currently working on our 2007-2008 budget and action plan. Our projected sales for the year are $1.6 million (aggressive), $1 million (conservative). Moving forward with an operation budget of $1 million for the next 15 months (August 2007 to October 2008).

We have a few great projects and clients which will carry through 2008 and 2009.

Thanks to the great efforts of some awesome peeps such as Kris Krug, Bryght, the Lullabots and the ongoing referrals from our other friends and clients. Our production team is often booked a few months ahead, allowing the sales and support team some time to improve internal process and service systems.

Our firm currently employs 9 full-time employees, 2 part-time, a few consultants and Drupal coders assisting us with module creation and document support. Our ongoing partnerships with other Drupal service providers and product developers has helped us get to where we are today. The open source community, our friends and family have given us the strength to work together in good and less good times, overcoming the many obstacles of life and business.

Our goal for 2008 is to continue to grow our team, our 3 year plan calls for revenues of 3.5 millions by 2010 with a team of 25. Offering bilingual services; English and Francais.

We hoped to open an office in the California this summer, but due to the declining US market and various other factors including current client locations. We opted against the idea and concentrated our finance and resources to growing the Vancouver office.

We are, however, looking at options to open an office, possibly in Montreal. But That is just talk for now and we have a few more things on our to-do list that need to be tackled before we can consider the expense. I am also continuing to work on our Asian initiative in partnership with China Access.

Zak, from Foo Associates asked me how my experience in open source business development was doing at Northern Voice earlier in February! At the time, I have to admit, I was just about to quit and go back to teaching scuba diving or sail around the world. Business development is not always easy, but now, I would have to say things are going really well.

2006-2007 was a good year for me/RCS despite all the hardship!
I learned a lot both personally and in business; employees are not just resources, clients are not just a way to pay the bills and it's not just all about taking care of business. First and foremost, it's about taking care of the peeps in your network.

Drupal service providers are here to stay, the economy will go up and down which will affect our growth as a company, but such is life. A solid service firm should survive the test of time if led by a passionate, talented team with a solid portfolio of progressive work, dedicated to learning and improving

I raise my hat to all those product developers out there and I will gladly attend your party when you make it big or at your next round of funding! Perhaps one of these days, I will grow the courage to go into product development, but from what I understand, service companies rarely make good product developers. Except for the mighty folks of 37 signals!