Lullabot Case Study at DrupalCon SF 2010


This talk was given by Liza Kindred of Lullabot. You can find her on twitter as LizaK.

About Liza

Liza comes from fashion, worked in the fashion industry for ten years and owned a retail boutique, and produced a lot of fashion shows. She's also done art events and sat on boards in the art world. Now she's Lullabot employee number 3! She's obsessed with open business models, which is how she got into Lullabot.

About Lullabot

Lullabot does Drupal podcasts, high-level consulting and site architecture, as well as development and training. We also write books and produce training DVDs. We hire smart people who are good communicators and good teachers, and we just have a lot of fun with it.

Liza showed a video that philosophically compared open source software to common knowledge.

Making Mistakes

First I want to talk about making mistakes. When we talk to our employees about what makes us Lullabot, they mention that Lullabot is an awesome place to make mistakes.

[Liza told a story about Angie making a mistake, which I am going to redact for this online summary. -dn]

My own "big mistake" was a $17,000 mistake in reserving hotel rooms for a group of people.

"Pixar is a community in the true sense of the word. We think that lasting relationships matter, and we share some basic beliefs: Talent is rare. Management's job is not to prevent risk but to build the capability to recover when fatalities occur."

Room for Stupid

We have people that are really smart, but even smart people can ask stupid questions or make stupid mistakes. A lot of the content that we create is based on stupid mistakes that we make, that we want to educate other people NOT to make!

Give it Away

Jason of 37 Signals says "Do what the chefs do." They out-share and out-contribute to each other. They say "Here are my secrets!" In the business world, people say "Why give your ideas away? Won't your competitors use it?" A company is valuable if it has people hanging on its every word.

Create then Capture

A business model creates value, and then captures a portion of that value. We feel that Drupal is a wave that's rising, and we see ourselves as the little Lullabots on our little surfboard, riding the wave. We try to take all the information we get and put it back into the Drupal Pie, so that we can grow the pie.

At some point, we have to figure out what to give away and what to keep. We have to determine what to charge for. So how do we do that?

What to Charge For

We keep it pretty much aribtrary, but we spend a lot of time talking about it. Figuring out what to charge is the hard part.

Liza sent a survey to some local Drupal shops to get their standard hourly rates. To summarize, these companies have 5-20 employees and have been in business 2-6 years.

For consulting rates, the spread is $100-$300/hr for consulting, with a cluster around $175. Development, design and themeing both land between $100-225. Training is all over the map, from $100-300+. Performance and scalability sees a similarly wide spread.

Choose your clients. Say no.

Make sure you're only working with clients that you want to work with. No mean clients! It's important to tell people no sometimes. My nickname, given to me by a client, is "the velvet hammer."

Rule of Threes

Each project should have:

  • A nice client
  • A big budget
  • And the project is fun to work on!

Thanks for the talk, Liza. More detailed information on these same topics is available on Liza's site.

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