Culture: the Secret to This MSP's Success, with Jason Caras

[00:00:00] 211 water's hot, 212 it boils, just one degree. Right. Goes from hot water to boiling water, and boiling water can create steam, and steam can power locomotives. The translation for us was this, that 1% is your area of uncomfortability. It is your push. It is your very, very best. You have to ask yourself, is this your very best? And it became permeated in our culture. So like if you left a coffee cup with a stain on the table, someone would walk by and give you a little chest bump and say, dude, that's not 212.

[00:00:32] Hey guys, Damien Stevens, host of MSP Mindset. And I am blessed to be here in person at Grocon 2024 with Jason Caras. And he is the CEO of IT Authority. So Jason, I wanted to dig right in. Tell me about how many businesses you've started now. The first company I had when I was 14 years old, Jay's Painting. Okay. I grew that to 18.

[00:01:02] And I had two crews working in high school while I was... You grew that to 18? While I was in class, I had two crews painting houses. Years old. And then I went on to a total of 12 companies, three of which have been successful. Okay. What about Jay's Painting? Is that in there? Yeah, it was a nice little exit actually. I was able to sell off all my assets at the end of that little run. Oh, there you go. And the best thing I was looking forward to is not picking paint out of my fingernails. That's what I guess.

[00:01:32] So, how do you go from 12 companies, three, according to you, successes, to building an MSP that's been on the Inc. 500, what is it, seven times or something like that? Yeah. I guess we have been, yeah. Yeah, we're a seven-time recipient of the Inc. 5000, yeah. Yeah, Inc. 5000, thank you for that. Yeah. So, what do you attribute to that kind of growth and also staying power?

[00:02:00] You know, with this particular company, the success comes from so many different things. One of which is my business partner, who is a literal genius. Hmm. If he had this conversation 30 years ago, he would literally describe what your shirt said. He plays every musical instrument. He's amazing at operations and he's our best technical engineering solution engineer. Although he hasn't done that in many years.

[00:02:26] But, you know, I had somebody that did everything I was not good at. Hmm. And I was all the things that he didn't feel comfortable with. Hmm. So, we were such a good match. And it was through him that, you know, I was in the sales side. So, I'm Yosemite Sam, let's go make some sales, boom, boom, boom, boom. And he's like, whoa, whoa, whoa, whoa. We need this to be scalable. Yeah.

[00:02:50] So, we started writing documents when we had three employees for our fourth employee that we knew we wouldn't be able to hire for months. But we were, and that's a painstaking discipline of documenting everything. All the way down to how to shut the air conditioning off when you leave. I'm not kidding. We had documents for every single thing. Wow. And that. At what size or scale? We had three employees. Oh, wow.

[00:03:16] We were writing documents for the third and the fourth and it paid off in spades. Because as we grew, we were able to ingest very large clients without imploding. Hmm. And particularly back in 2014 when we had our first, like, our biggest customer at that time only had like three or 400 users. And then we landed a 3,500 user. Wow. And that would make most people implode. Yeah.

[00:03:41] But we had such a handle on documentation and automation whenever possible. Take the guesswork out, automate it. And, but in the beginning, we literally had pieces of paper that were different colors for an internal process that my business partner, Jason Polner, created. So there were all these little holders for the papers. And if you saw a pink in this one, that, this is where this was in that process and so forth.

[00:04:09] And then he started developing just on top of Microsoft Dynamics CRM. Mm-hmm. And started developing a business process management system that we ended up, that was the core of our, of our operational system. And at one point we had about 20 programmers working on that in India. Developing as we, we would just, we need this process. We need this workflow. Boom, boom, boom. And we just kept catering that to the business and making, I called it an orchestra of precision. Mm-hmm.

[00:04:37] Because if there was a person not doing their job, it wasn't a tree falling in the forest. We had an indicator. We had a key performance indicator that would beep, beep. And in fact, a lot of people complained about it because if you were in the system, you would see something flashing and that would annoy you. And if it would annoy you, you'd do something about it. Yeah. You know, you have a task waiting and three other people are waiting for that task to be completed that won't get it until, and it's going to slip the date and so forth. So, yeah. That's what we did.

[00:05:05] I mean, really intricate business process designed. And that made us scalable. You know. Yeah. Yeah. That's really cool. This episode is brought to you by Cervosity. I started Cervosity because I was an MSP that lost data because I thought backup success meant I could recover. And boy, was I wrong. If you've ever been there or anywhere close, you know how much your stomach turns over the

[00:05:32] thought of not being able to recover any version of the data for your client. Now, naively, I set off to build a better mousetrap and build a better backup product. Until finally, I realized it's all about the people and the process. So, you have a choice to make. Do nothing and bury your head in the sand or level up your processes. Now, you can do that by either hiring Cervosity, where we'll take all the workload of managing backups off of your plate and test your backups daily, weekly, monthly, and quarterly.

[00:06:02] Or, you can keep the tech stack you have in place, your existing backup into your provider, and steal my 18 years of knowledge and download that process and add that to your operational maturity today. So, surely there's more than writing docs to make my MSP grow. What else do you attribute to that?

[00:06:25] You know, culture was, I think, the most important part of it all because, you know, I'm not Superman. My business partner isn't either. We can't carry a company. We can't do it all. You need people. Right. Lots of people too. And, but everybody needs to be rowing in the same direction. Mm-hmm. And also, as much as you want to have 100% of your employees activated and, you know, involved, it's just not real.

[00:06:55] Mm-hmm. But my goal was to get as many as possible to drink the Kool-Aid. Mm-hmm. And the Kool-Aid was personal development. Mm-hmm. And if you went into our office, we had a huge wall and across the wall it says, we work harder on ourselves than we do our job. Mm-hmm. I love that. And people thought, what? What? From an employer saying that? Yeah. And the philosophy was, if you're working harder on your job than you are on yourself, you got the cart before the horse. Mm-hmm.

[00:07:25] But if you're working harder on yourself, the job improves. Mm-hmm. Because you're working harder on yourself and you're growing and you're learning and so forth. But you also, you're taking care of your life, your health, your family, your loves, your goals. So we were really, really big in culture. And the culture was personal development and everybody rising together. Mm-hmm. You know, everyone rising together. The 360 degree leader, we called it, where if someone was beneath you in a position,

[00:07:52] you would bring your hand down and bring them up and say, here, this is what you need to do to get up to this level. If someone was above you, you would push them to make them look even better. And if someone was with you, you grabbed them by the shoulders and you went up. And that was a different philosophy that a lot of them weren't used to. Mm-hmm. You know, everyone's like, it's my job and, you know, antithetical to my career. But that's not the case. And what happened was people fell in love with that. Mm-hmm. And you know what?

[00:08:20] We got way more out of those people than they would have, you know, if they weren't inspired and motivated. So that was a big part of it. And then obviously you need customers. Right. That's, they'll be twiddling their thumbs if we don't have customers. So, and frankly, I don't know that I was, we were great at it. We competed well. Like Terry said, we competed a lot together and he was a tough competitor. Yeah. Rumor is you and Terry, we're at Grocon, right?

[00:08:50] We were head to head competitors. Oh yeah. We were, it was, it was great. Um, but, um, you know, we had a sales system. It was pretty cool looking back. I mean, now it's, it's antiquated, but back then before the, all the automation, we would come out and do a, uh, an exhaustive study. And then we would come back with a, um, a living binder and we would just wow them.

[00:09:16] I had these beautiful three ring binders made up with our logos all over them. And it just looked so beautiful and professional that, you know, we, our goal is to outclass our competitors. You know, if they gave you a one page proposal, we were giving you a 17 proposal with tabs on it. And it was a reiteration of everything we uncovered during the sales cycle, all the, all the concerns and how it's impacting your business and what some potential solutions might look like and what the benefits would be in the end of that.

[00:09:45] And just articulating that whole story and the customers bought in and we had a very high closing ratio, probably higher than we should have because we took on more than we should have. You know, we weren't selective, um, when we're selective now because we can be, you know, when you're growing and you're trying to make payroll, you're taking anything and everything. That's right. You know, which it is also, that is antithetical to growth because you can't grow a business if you're going in eight different directions. Right. You gotta be, you gotta pick one.

[00:10:14] And we did, we didn't go outside, but we stuck to our knitting and not let the shiny objects distract us. And there's a lot of those, um, you can offer those services through partners and be transparent with the customer and say, look, we don't do this, but we work with a partner. They're pretty good. We like them. We've recommended them to our clients, but I don't want it on my paper. Right. We don't do this stuff. You're going to call my help desk and ask for a sip trunk. No. Right. We don't even know what to do with that. Yeah. Right.

[00:10:43] So it seems like you've put a lot of work into culture. I love the personal development part. It seems like that turned out in a number of accolades, best place to work, that sort of thing. Yeah. We got best places to work for about 10 years. We were voted the number one company to work for in Florida. Wow. By Florida trend magazine. We even beat Microsoft. It was big. Yeah. Yeah. Because, yeah. And people, we had a big Kool-Aid stuffed animal inside the office, right? Because everyone felt like they were drinking Kool-Aid.

[00:11:12] It was inspiring. Everyone was helping each other. The career paths were there. And I would do a monthly work session with everybody where I'd walk them through this program. I eventually wrote a book on it. And that's the book I was telling you about earlier. And it's just fundamentals of building your life. It's fundamentals. And I taught those. But the end of the course ended up with a dream board, a vision board. But that was actually the last step.

[00:11:42] You would actually do things like write letters to yourself. You would assemble your values. You would contemplate. You would go through this process. And then you would end up with a dream board that symbolizes all of the preceding exercises so that you could look at it and say, that's why that's there. And I got to tell you, I still have employees, ex-former employees that come back to me and they said, you know, I brought that concept to my company and everyone loves it here. We had one concept.

[00:12:10] It was called a 212 degree principle. And we didn't invent it. We just adopted it. And back in 2007, I came across it. It was just a company that did posters and mugs, 212 degrees. I'll explain it. 211, water's hot. 212, it boils. Just one degree goes from hot water to boiling water. And boiling water can create steam and steam can power locomotives. So, but the translation for us was this. That 1% is your area of uncomfortability.

[00:12:40] It is your push. It is your very, very best. You have to ask yourself, is this your very best? I mean, it became permeated in our culture. So like if you left a coffee cup with a stain on the table, someone would walk by and give you a little chest bump and say, dude, that's not 212. That's how crazy it was. My license plate still says 212. I believe in the concept because it's such a simple one. Give your very best. Ask yourself, have that internal conversation and ask yourself, is this my very best?

[00:13:09] My very best. Because if it isn't and you're doing 211, don't expect anything great. Yeah. You know, you're going to have nothing but mediocrity. You're not going to reach your goals. It's the push. It's like working out. If you're going to work out and every time your chest doing bench press starts to burn, you stop and rest, you're defeating the purpose. You need to go through the pain. Yeah. You need to tear the muscle. It's uncomfortable. So the longer you're able to stay in an uncomfortable place, the more successful you will be, the more you grow.

[00:13:40] It's easy to relate to in working out. That's what I love it. 212 is easy. It's just, yeah, 212, you're very best. So what are some of the other examples? I mean, this is, I find it really interesting that you directly correlate a good culture to personal development, which sounds obvious because you, I want my people to grow. I want them to be the best version of themselves, but I don't feel like most people put it that way. They think it's a pool table. They think it's a ping pong table. Right. And free lunches. Yeah. Which we did.

[00:14:10] We did stuff like that, but we didn't, we did lunches, free lunches for people. And we had a masseuse in during the week so they could just put their name down and get, get a 15 minute massage. You know, um, we did those things. But at the end of the day, culture is defined by the way, the way you feel when you grab the front door to open it up, to walk into your office, because that is how you feel. Now, how you feel is how you're going to behave. Yeah.

[00:14:39] And if everybody's feeling like they can't get ahead in the job, that they're competing with their fellow people, that it's vicious, that it's cutthroat, it's not going to be good. But if you have the opposite of that and it's everyone's growth oriented and everyone's really in it together and people are selfless, um, it just changes the dynamic. So to me, culture is how you feel and how you feel is how you're being treated. So for instance, are you missing employee reviews?

[00:15:07] Are you, uh, you know, what we would do is we'd sit down with them and design dream boards with them. You know, when are you going to buy that house? Well, how are you going to do that? Well, you're going to need to make more money. All right. So how do you do that? You need to improve your value. You have this much value and it's great. We love it. But you need to get to this stage. That needs more value. You have to add more value because the company needs more value to be able to give this to you. It's how it all works. And, uh, so that to me, culture is not the ping pong tables.

[00:15:35] It's how you treat people and whether they know you have their back. You know, if I, and I have, I've showed up at a kid in a coma who was an employee, you know, if we didn't care, we would have been there. You know, we've paid people well longer than we should have, uh, you know, given them, uh, severances that were beyond, you know, anything reasonable because they would in a bad situation in their life. It's really just doing the right thing. Treat people the way you want to be treated. Truly the way you want to be, like a family, you know, like a family you love.

[00:16:07] Not the ones you're forced to hang out with. There's some people that don't like their family. I say that, but I love my family. Uh, what, what do you, um, what do you wish you could say to yourself 10 or 15 or 20 years ago, uh, about this journey? Oh, it would be, uh, don't spend as much money. That's just a personal thing.

[00:16:32] Uh, I just have grown up liking, that's what motivated me having things. And as my, as I grew older and I became a family man and I didn't want the condo in, uh, Las Vegas anymore. You know, now I wanted the, uh, trip with the RV and the kids out in the mountains. It's a whole different, same money, right? Same money, just better. Um, but I would have saved a lot more money. I would have been more frugal.

[00:16:59] I would have built the business, um, more frugal. You know, we got a little drunk with the money, you know, we were like just, you know, spending money like crazy and kind of get out of hand, you know? So I would have, I would advise all around that. I think everything else, I think we did everything right. We treated people well. We grew, we, we had a meteoric rise, you know, we ended up selling all that stuff worked out for us. Is there one thing you would ask? Is there something you're challenged with, would love help with?

[00:17:26] Is there an ask you have for over the season you're in right now? No, you know, I mean, I get a lot going on right now. I like, uh, in the panel discussion, I just shared that, you know, I'm moving into a new category. You know, uh, the typical MSP will have customers that are, you know, 25, 50 users and a big one might be five, 600 users. Right. Our largest one, uh, 3,500 right now, but our parent company is bringing opportunities that

[00:17:56] one of which is 200,000. Another one is 350,000 users. That's a whole new universe for me. Yeah. Right. So we, we're, we're having a mature in, in a line. So, I mean, that's, that's where I'm at. I'm growing and learning and, and learning the enterprise space. Okay. You know, we, we grew up in the SMB and I would say on the small side of the mid market.

[00:18:24] And I say small size, it's all eyes at the beholder for us. A midsize company is, you know, up to about three or 4,000. Yeah. And then you start getting into small enterprises, what we consider a small enterprise, three, four, 5,000 and above. And then they get bigger into the hundreds of thousands. Right. Yeah. Um, so yeah, that's my ask is, uh, I guess from God almighty to guide me in my ways. I love that. Yeah.

[00:18:54] That's a, that's a couple of orders of magnitude difference. So maybe, uh, somebody that's listening has experience with that. Uh, if you are reach out to Jason, if you want to like his help, reach out to Jason. Uh, I just want to thank you for this. Uh, there's so many more questions I want to ask, but in interest of your time, I won't today. Thank you for taking your time. And, uh, especially at grow con, there's so much going on to speak with me and to be on MSP mindset. I really appreciate you having me. Nice to meet you too. Thank you.