Dorm room to boardroom [April 17, 2012]
Describing himself as an academic at heart, Dries Buytaert never thought of charging people for the system that now sits behind one in 50 websites. GrowthBusiness finds out how he’s monetising Drupal while staying true to its open source principles.
It’s a scene familiar from movie screens: a Red Bull-guzzling university student programming away into the small hours on a venture destined to change the world.
However, for Dries Buytaert the hours spent burning the midnight oil during his final year of a Masters degree have turned his hobby into a business that is now powering 2 per cent of global websites.
Drupal, an open source content management system, was devised by the Belgian national to allow users to build websites with functions such as blogging and RSS feeds. Like Facebook’s Mark Zuckerberg, Buytaert began with modest ideas about the potential of the tool he was creating.
‘I initially wanted to build a message board to exchange messages with my friends,’ Buytaert says. ‘I set out to work on it for a couple of nights, but ended up developing it for a number of years.’
Having started Drupal in 2001, Buytaert spent the next six years honing his platform, in between dipping back into academia to complete a PhD in computer science, and a quick stint at a software start-up in Belgium.
It was then that all the work began to pay off. ‘I remember one day, I think it was 2006 or 2007, when all of a sudden MTV UK started using Drupal, and then NASA started to as well. That was a personal moment, it felt like additional responsibility,’ he adds.
However, Drupal still hadn’t made Buytaert a penny. Its widespread adoption was driven by the fact that it was, and is, open source, and Buytaert refers to the ‘community’ of developers who use and add to the system. Drupal users have doubled in number each year, and it now has 1.5 million unique users per month.
‘I think open source is changing the way websites are being built, and it’s having a massive impact on the web. It’s a way of democratising the internet,’ Buytaert claims.
This was all very well, but Buytaert still didn’t have a way of turning his ‘passion’ into a full-time job. Together with Jay Batson, who founded successful unified communications company Pingtel (later acquired by Nortel), he founded Acquia in 2007.
Acquia was established to monetise the open source system that Buytaert had produced back in his university dorm, by providing products, services and technical support for Drupal.
‘For Drupal to get to the next level it needed to be successful in the enterprise, to help larger organisations use it: so that’s why we started Acquia,’ he explains.
Acquia’s UK base is in Oxford. ‘I guess I’m an academic inside,’ says Buytaert. ‘We want to attract young, ambitious people, and university towns are the place to do that. It also keeps costs down not being in the big cities.’
Buytaert won’t disclose Acquia’s turnover or profit, but he says that fundraising for the company was on the agenda from day one for a couple of reasons. ‘Firstly, we wanted to take advantage of the fact that Drupal was already established globally in order to monetise it on a worldwide scale.
‘Secondly, the kind of company that we are building is relatively human-intensive. We are in the business of providing commercial-grade support 24/7, and it takes more than just a handful of people to do that well.’
Buytaert and Batson started with a trip to Boston, Massachusetts, pitching to a group of carefully selected VCs who matched what Acquia was looking for.
For Buytaert, the difference between American and European venture capitalists is one of scale. VCs in the US have deeper pockets, as well as a desire to stay with an investee company for longer.
‘Also, the VCs we have worked with have much more operational experience than those we have met elsewhere,’ he adds. ‘All of them have been CEOs of several companies and experienced several exits.’
Following on from Acquia’s $7 million (£4.4 million) Series A funding round, which included the likes of North Bridge Venture Partners and Sigma Partners, the business has gone on to raise a further $31.5 million in growth capital. Its Series D round in July 2011 netted the company $15 million.
The process of raising funds is one that Buytaert says ‘took a lot of work’. To prepare for the Series A round, he surrounded himself with people who brought business experience to the company.
‘Building a company is all about building the right team,’ he says. ‘The best thing I’ve done is recruited a talented team of people with the right attitude, passion, integrity, knowledge and aptitude – and who are smarter than myself.
‘By surrounding myself with them I have learned a lot about building an enterprise business, and continue to learn to this day.’
Another benefit of investing early in manpower is that Buytaert can afford to take the occasional few weeks off while the business continues to hum along.
‘It also allows me to change my focus on a weekly or monthly basis. Sometimes I find myself working on different projects, while other times I am doing a lot of sales and marketing,’ he says.
Building a successful technology business takes a careful balance of resources between product development and marketing. Drupal continues to host its DrupalCon community events, where numbers have now swelled from an initial gathering of 40 people in Antwerp back in 2005 to its last get-together of more than 3,000 people in Denver during March. ‘On any given weekend there will be maybe up to five different DrupalCamps around the world,’ says Buytaert.
In Buytaert’s view, there’s a key difference between US and European start-ups when it comes to growth strategy. ‘I feel there is a belief in Europe that it is better to own all of the company, whereas in the US they want to go fast and are willing to give up more equity in order to grow fast.’
He points out, ‘In the US, people are ok with owning a smaller piece of something bigger rather than a bigger piece of something smaller.’
This strategic rationale ultimately has an impact on success rates, he says. The reluctance to seek outside funding leads to start-ups being ‘underinvested’ and missing out on opportunities.
However, being a web entrepreneur with global ambitions is much easier than it was ten years ago, he says. The world is ‘flatter’ than it used to be, meaning that it’s easier to reach a global audience; as a result, there is room for smaller start-ups that are still profitable and healthy.
Passing it on
Buytaert’s ability to see such opportunities is one of the reasons that he works with various start-ups as an adviser, giving them the benefit of the experience he has gained through building Drupal and going through four rounds of fundraising for Acquia. ‘I try to help them out with all aspects of their business, and it’s a very interesting process for me,’ he says, adding that he would like to try his hand at angel investing in future.
Another motivation for working with start-ups is that Buytaert wishes he’d had more help himself when building Drupal.
‘When I was younger, I underestimated the value of people in your life that you can go to with hard questions. It’s important for entrepreneurs to build up their networks so that they can call upon them when they need to.’ It’s another example of the ‘community’ ethos that is central to Drupal and which Buytaert clearly relishes.
Away from his work with Drupal, Acquia, and other people’s ventures, Buytaert is having a go at bootstrapping a business himself. His start-up, Mollom, is a tool that aims to filter out spam from website comments, forum posts and contact form messages.
With a much smaller team of five, Mollom is already a ‘profitable, healthy business’ that currently filters out spam on 50,000 websites around the world.
Help at hand
It sounds like Buytaert is a busy man, but he says his days (and nights) are less frenetic than they used to be, and he’s now in a position to enjoy family life.
All-night programming sessions and back-to-back conference calls are behind him now, and he is quick to acknowledge the role of the VC capital that Acquia has secured in restoring a modicum of free time to his existence.
The beauty of Buytaert’s dorm room discovery is that the community he has built will continue to contribute towards the evolution of the platform. Its members come from different countries and cultures, but they share the passion for open source that he possesses. That’s why he isn’t overly worried about competitors.
‘We have thousands of people all around the world working 24/7 and being extremely passionate about it, often working for free. It will just blow the others away.’