From Losing 3/4 of Staff and a Major Financial Crisis: How Shawn and Dave Transformed Their MSPs

[00:00:00] And when we learned when we were interviewing somebody to look, does their personality profile

[00:00:05] fit the job and the team? Okay. Do they have, are they hungry, humble, smart? Do they want to get

[00:00:10] ahead? All right. And do they have that ability to take on leadership at their level and start

[00:00:17] bringing it through the entire organization? That was like rocket fuel. We grew, we grew 400%

[00:00:24] in less than two years when we had everything all, everything dialed in. I mean, hold on tight.

[00:00:33] Hey guys, Damien Stevens, host of MSP Mindset. Today I got to interview Dave Cava and Sean Walsh.

[00:00:42] They built their MSPs respectively, one of them to eight figures. The other one

[00:00:48] in eight months built a million dollar revenue. Now you think maybe this is nothing to do with

[00:00:54] you. They're just superstars. Guess what? They lost a million dollar client. Another one of them

[00:01:00] lost 50% of their team in a single month. If you want to know the hard struggles of building MSP

[00:01:06] and what they do to build it back, don't miss this episode and don't miss the authors of

[00:01:13] The Pumpkin Plan for managed service providers. So I wanted to start with the seed of The

[00:01:21] Pumpkin Plan. Pardon the pun there, but before we give you get to the book,

[00:01:27] tell me about how you guys came to know each other. Oh boy. This is your story.

[00:01:34] Okay, I'm happy to tell it. So before I started my MSP, I worked for another company

[00:01:44] that was more project-based. They did cable designs and relocation services for midsize

[00:01:51] financial companies in Manhattan. After 9-11, they decided that they would start what they

[00:01:58] called a VCIO group, basically a small business support group. All their project work had dried

[00:02:03] up due to what was going on in New York City at that time. They hired me and after six months

[00:02:10] they said, we think you're the right guy to run this group. It was really struggling. They

[00:02:18] had four clients that were already to fire them. Long story short, I wound up getting

[00:02:23] it on track. There was about 30 clients when I left there. It was about half the company's

[00:02:28] revenue, but the company was falling apart. It wasn't doing well. So I left there with my boss

[00:02:35] basically said, I'm going to go start a company and I think we work really well together.

[00:02:39] I'd love to keep working with you. I'm going either way. My boss and I left and started this

[00:02:44] MSP and I had decided I want to learn everything I can from other people. I don't

[00:02:51] know a lot about this industry. Whatever I can learn the easy way, I want to learn the easy way.

[00:02:56] About what time frame was this? About what year? 2007. Okay.

[00:03:02] So one of the things I did, I talked to people. We decided we were going to go with Connectwise

[00:03:08] and Kaseya and I started going to the Connectwise user group. The first user group

[00:03:13] Connectwise did was up in New England and Sean was an integral part of it. I said a

[00:03:18] prayer. I said, Oh God, help me to get to know somebody that can help me find my way in this

[00:03:23] industry. And I went up sitting across Sean from dinner and he was quick to share and very

[00:03:29] knowledgeable and he'd been in business a long time by then. And I just said, wow,

[00:03:35] this is really a guy I could latch onto. And so when the next meeting rolled around,

[00:03:42] I called him and said, Hey, Connectwise isn't doing dinner the night before. Would

[00:03:46] you like to get together for dinner? And he said, well, I don't know if I'm available.

[00:03:52] I'm already having dinner with some other MSP owners and by nature, I blush when my wife says

[00:04:00] no cheese on a hamburger. I'm not a pushy guy. I like to accommodate everybody. But

[00:04:07] when it came to business, I learned that you got to set that aside and when it's time to

[00:04:12] work a room, you put your big boy pants on and you'll go work the room. So I just said

[00:04:16] to Sean, it's okay. I'll just tag along. I'm sure it'll be fine. And he's like,

[00:04:24] I don't know. I make a couple of phone calls and see if this is going to be okay.

[00:04:28] So after a little while, I had a sorta kinda invite to this dinner and I went and it was

[00:04:35] a bunch of other guys that have gone on to do really great things in the industry. Brett

[00:04:39] Jaffe was there. MJ Shure was there. A couple other guys that went on to have great MSPs and

[00:04:47] successful exits were there. And I just tried to keep my mouth shut, ask a lot of questions

[00:04:52] and listen. And I caught the server over at the bar towards the end of the night. We had

[00:04:57] steak and lobster. It was a really nice dinner. And I gave him my credit card. I said,

[00:05:01] I don't want these guys to see a bill. And it was almost like I had scripted it.

[00:05:05] Couldn't have gone any better because they started getting annoyed. And eventually they

[00:05:10] called the server over and said, Hey, we've been sitting here for a half hour. Can we get our

[00:05:14] check? And she said, Oh, it's been taken care of. And I said, what do you mean it's been

[00:05:19] taken care of? And pointed right at me and said, that guy, that guy painted right there.

[00:05:25] And MJ said, what the hell did you do that for? And I just said, guys, it's been really

[00:05:31] humbling being around people that have been in this business and been so successful. And

[00:05:36] thank you for having me. And I learned more tonight than I did in the last year of trying

[00:05:41] to figure this business out. And that's how Sean and I met. And eventually we wound up

[00:05:47] facilitating that New England Connectwise user group together. And our friendship grew over the

[00:05:54] years. And we were in a lot of peer groups together, kind of encouraging each other,

[00:06:00] competing against each other, always trying to top each other where what was going on in our

[00:06:05] business. And being there for each other when when things didn't go the way we planned.

[00:06:10] Yeah, that happened too. Yeah, that's interesting. I thought that was just me.

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[00:06:26] Yeah, that's me. Here's what's crazy. 58% of recoveries failed to recover. So if you think

[00:06:31] it's just you, you couldn't be more wrong. What are we going to do about that? Well,

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[00:07:04] learn more if you'd like to take the process that I've spent the last 18 years building

[00:07:08] and steal it and apply it to your MSP so that you can level up your backup game.

[00:07:13] Check out the link below in the description or visit servosity.com learn more.

[00:07:19] I know this is kind of talked about in the book, The Pumpkin Plan. But what was some

[00:07:26] of the struggles that brought that created the environment where you guys said, hey,

[00:07:30] I'm going to go write a book and I want you to be crazy enough to write it with me. And

[00:07:38] how did that happen? Right. That's not the normal MSP path in any shape.

[00:07:43] Now, in my particular case, it was really about a journey of self-development and self-reflection

[00:07:53] and learning how to take those parts of your personality that both have that dark side and

[00:08:02] that good side and figuring out how to leverage the good side without letting the bad side

[00:08:07] come into play. And as I wrote in the book, in the early, well, to back up a second,

[00:08:14] I came out of a law enforcement career. So it was very, very black and white. It was,

[00:08:19] when I tell you to do something, you do it, you don't question it.

[00:08:24] Very authoritarian type of style. And I came into business and that just came with me because

[00:08:32] that's what I had been around my whole life. And for everybody's benefit,

[00:08:37] Sean, what was your role there in law enforcement? I was a detective sergeant. I was the head of

[00:08:43] the Detective Bureau. So I worked undercover narcotics for a couple of years. I was in

[00:08:50] charge of juvenile before that. I did sex crimes against children. So I had a pretty broad

[00:08:59] career, most of it investigative and most of it dealing with some fairly negative things,

[00:09:04] which kind of affects the way you perceive everything down the road. And it takes a

[00:09:09] while before you realize that the experience that I had in law enforcement is not what the

[00:09:15] rest of the world is really all about. But that transition took time and it was painful

[00:09:20] because in business, what was happening is I was coming in with this my way or the highway,

[00:09:27] do it my way. Positive reinforcement was not part of the mix. And I couldn't understand why

[00:09:35] people were having turnover, people were leaving, there was conflict. And one day

[00:09:44] my COO came in and he said, I'm quitting. I said, what do you mean? He's like,

[00:09:49] you're always mad, you're always yelling. He said, I can't take it anymore. I'm like,

[00:09:53] what are you talking about? And the problem was I really had no self-awareness of what I was doing

[00:09:58] and the effect that I was having on other people. And he completely blindsided me with this.

[00:10:04] And so he wound up leaving. And of course, my initial reaction was, well, okay, the heck

[00:10:11] with you. I'm moving on. You're just being disloyal. And then the cycle continued. And

[00:10:19] then one day I was given a disc profile and I'm reading the disc profile. I'm going,

[00:10:26] oh, holy cow. And I showed it to my wife and she said, you do realize that everybody here

[00:10:33] is scared to death of you, right? I said, me? I'm a teddy bear. What are you talking about?

[00:10:39] And I started looking at that and I just had to start doing some really serious looking

[00:10:45] in the mirror and reflection and deciding what do I want? And what do I want to be?

[00:10:52] And what do I want to be to other people? And so I had to make some serious changes

[00:10:58] in the way I managed it and really worked on bringing up the EQ and just learning how to

[00:11:07] listen to other people and put them first. And that shifted my entire perspective on

[00:11:13] leadership and it changed the style in which I led completely. And finally, after about three

[00:11:19] years, I went back to my former COO and I said, hey, Tom, we need you back.

[00:11:26] Things have changed. I've changed. We're working on this. And he wasn't sure at first. So he

[00:11:33] took my engineer, my wife who did the HR out to lunch away from me and asked them,

[00:11:39] is it really different? They said, yeah, it really is. And he came back and the first thing

[00:11:45] we did was to do a disc and what they call a tri-metrics profile where we do disc driving

[00:11:52] forces EQ. And we do it for the entire management team. And we used it at that point

[00:11:57] throughout the organization on a regular basis. And he came back and we had a consultant who

[00:12:02] debriefed everybody with him in the room so that he could understand everybody else's style,

[00:12:08] mine. And we went through that. And when we walked out of that coaching session,

[00:12:14] he looked at me and he said, if we had had this three years ago, he goes,

[00:12:17] I never would have had to leave. And so I knew right there, even with your team and yourself,

[00:12:24] there has to be a constant attitude of self-improvement and that I want to be better,

[00:12:29] not just technically better, but better as a team member, better as a leader within the team,

[00:12:36] better as a resource and as an example to our clients.

[00:12:43] That was difficult. It was hard, but it's, and helping other people understand those things

[00:12:52] and helping people with those tools to do that self-development is extremely gratifying.

[00:12:59] That's quite the personal development story there, Sean. I love that.

[00:13:06] It's still a struggle every day.

[00:13:09] I was going to say, I can relate to that. I can relate to thinking

[00:13:12] that I'm just the most relatable and I'm the biggest jerk or something all of a sudden.

[00:13:18] How did this tie into you, Dave? How did your

[00:13:22] art group development interact with how the heck you came to write this book?

[00:13:28] Definitely a different road, but it's interesting. Just listening to Sean

[00:13:35] and now having coached a lot of MSPs and had them in our peer groups, both when we were

[00:13:45] peer group members and now facilitating them, you really see that to the degree an MSP succeeds,

[00:13:53] it's usually because the owner is doing good things and has sharp things they bring to the

[00:13:59] table. To the degree they're stuck or failing, it usually points to the owner too. That's

[00:14:06] all well and good until it's your company and you have to face that that's true about you.

[00:14:11] That was certainly the case for me and my MSP. I had a terrific partner who was very

[00:14:22] talented and trustworthy and likable and smart. I brought a couple of things to the table too.

[00:14:29] We got some really neat things done, but to the degree we could have done so much more,

[00:14:34] it definitely is looking at my own flaws and things I've figured out. It's a lot easier

[00:14:40] when you're looking at someone else's company and saying, well, you need to do this, this,

[00:14:43] and this. It's much easier to prescribe than to execute. When it comes to the book,

[00:14:53] I think the biggest thing is I love to write. I've been writing for a long time. I always

[00:15:01] thought sooner or later I'd write a book. Sean basically brought the idea to the table

[00:15:08] and said, we both knew Mike McCallowitz a little. Sean knows him better than I do. We both had read

[00:15:16] a bunch of his books. Pumpkin Plan had really played a role in both of our businesses. He said,

[00:15:22] we have a chance to write this derivative book specifically for MSPs. We looked at it.

[00:15:27] We looked at the licensing fees and the commitment. I just said, well, if we pay the

[00:15:32] money, it'll get done because we're not paying that money and not getting it done.

[00:15:36] It'll force us to do it. We may just talk about it the rest of our lives and not do it if we

[00:15:41] don't do that. I said, it's a funny motivation, but it's basically kicking ourselves in the butt

[00:15:49] to make sure it happens. We're not going to pay a big old licensing fee and not accomplish it.

[00:15:56] That's part of how it came to fruition. As far as what I brought to the table for my MSP,

[00:16:03] there's some ways in which my MSP was almost like a typical MSP sped up and concentrated.

[00:16:11] We were so successful right out of the gate in terms of we hired 12 people our first year,

[00:16:18] we did a million dollars in revenue our first eight months, which is not typical for MSPs.

[00:16:25] I wanted to be really careful on how I told my story in the book because that's not something

[00:16:30] a lot of people are going to be able to relate to. All the problems that MSPs have in terms of

[00:16:38] not having good processes, in terms of growing pains, in terms of personnel pains,

[00:16:43] we had them all. We just had them immediately. Like I said, everything, it was just like if you

[00:16:50] took the first five, six years of a typical MSP and condensed it into one year, that's what

[00:16:57] we experienced. That's not how I put it in the book, but I talk more about the issues that we

[00:17:04] had because people relate to pain. We both had, Sean and I, a lot of pain in our MSPs.

[00:17:16] If you can show people, hey, I relate to you and the problems that you have,

[00:17:21] and we were able to work through them, and here's how, maybe people will listen and learn a few

[00:17:28] things and be able to apply it because their guard's down and they don't feel like this is

[00:17:33] some phony know-it-all coming to them and just saying you should be doing this, this, and that.

[00:17:39] Speaking of that, tell me what that first year did to you and your partner and your health.

[00:17:43] Oh, my gosh. Well, it's still under NDA, so I have to be careful how I talk about it,

[00:17:53] but when we left that other company, we wound up in a lawsuit. There had been a lot of

[00:18:00] disingenuous things going on in negotiations, I'll put it that way,

[00:18:05] and we wound up just leaving with no clients, no money, no anything. We just left.

[00:18:14] There was a lot of legal wrangling. It was the most stressful thing I'd been in my life.

[00:18:30] Off the charts, can't sleep at night, stress while you're trying to start a business.

[00:18:38] Eventually, we wound up settling that, and basically part of the reason we settled it,

[00:18:45] we think we could have just won the whole thing, but it was like you can't start a business and be

[00:18:51] worried about a lawsuit and in court all the time too. That's how we started.

[00:18:56] Then we had a large client that came over to us. Unbeknownst to us was about to break

[00:19:03] off from their corporate parent, which was one of the biggest private equity firms in the

[00:19:07] country, and basically said, we need to split our files, we need to split out email,

[00:19:11] we need to set up physical offices, and it all needs to happen as quickly as possible.

[00:19:15] That's a lot of what drove our growth. We were doing $100,000 a month in consulting fees,

[00:19:21] building out offices and breaking apart exchange servers and stuff.

[00:19:29] It was May we started the company. It was August when my business partner shattered his

[00:19:39] knee and wound up out of work until December. He was out from August to December.

[00:19:47] Then it was February when I was diagnosed with a tumor in my bronchial tube

[00:19:55] and wound up having to go for a surgery where they removed two-thirds of my right lung,

[00:20:00] unbeknownst to me. They said, we might have to take a little of your lung.

[00:20:04] I woke up, they told me what they did and I said, what?

[00:20:07] I mean, that put me out of work for a while. Basically, I tell the story, it's like the MSP

[00:20:14] was trying to kill us. The toll on our health was amazing. We paid the price, for sure.

[00:20:29] Tell me about what happened when the financial crisis hit.

[00:20:32] Yeah. That was 2008 when I had that lung surgery. That was just when things were starting to

[00:20:46] go bad in terms of the mortgage-backed securities and a couple of our clients

[00:20:51] were into that. We went up focused on the hedge fund and private equity space. It really

[00:20:57] affected our clients directly. We were not really on a managed services model yet,

[00:21:03] at least not a mature one. We had little recurring elements but we were still building

[00:21:08] a lot of hours. When the financial crisis hit, our clients started laying people off.

[00:21:15] They stopped expanding, they stopped opening offices. A lot of hedge funds start up during

[00:21:25] recessions but it takes a little while for that to happen. The immediate knee-jerk is that

[00:21:30] everything stops. Basically, we lost money six months in a row. We'd had this incredible

[00:21:38] start out at the gate. We'd hired all these people and then we figured out we were losing

[00:21:45] money every month. My partner and I stopped paying ourselves. We had to go to our employees

[00:21:50] who'd been working their butts off for a while and just say, we can't give you raises,

[00:21:55] we can't give you bonuses, we're just trying not to lay people off. It was miserable.

[00:22:04] It did do a couple of good things because it forces you to run lean. That's why great

[00:22:13] businesses are started in recessions because no one's wasting any money. They're careful

[00:22:17] about expenses and smart about how we're going to make a profit from the very beginning.

[00:22:23] The other thing it did was force us to communicate with our staff about the big picture.

[00:22:30] What's going on in the industry, what's going on in the business, which if we hadn't had that

[00:22:35] hard time, it probably would have been years before we got around to really giving our

[00:22:45] employees the inside baseball view of what's going on with the business and the company.

[00:22:53] We wanted them to understand, no, it's not that you're not doing a good job or that we're

[00:22:56] sticking all the money in our pockets or that anybody's done anything horribly wrong. We have

[00:23:01] to stick together here because here's what's going on. That is something that we kept doing

[00:23:09] throughout the life of the MSP for the next 10 or 11 years that really put us on a good

[00:23:15] course in terms of our relationship with our staff.

[00:23:19] Life is not a success only journey if you're listening right.

[00:23:23] There's some struggles there. I want to tie this back into you, Sean. If I understand

[00:23:31] where your MSP is, four states, again we could talk about all these accolades and I don't

[00:23:36] mean to minimize. You guys were both very successful and built MSPs really quickly,

[00:23:43] but tell me about what being slow to hire did to your MSP, Sean?

[00:23:53] As I said, my initial struggle was a lot on the leadership side, but when I started really

[00:23:58] understanding that and I started building the right team, it was really like putting rocket

[00:24:04] fuel on the business and getting the right team in the door and getting the right people

[00:24:12] in the right seats. As Dave just started to go into making sure that you share your vision

[00:24:18] with them and that they understand. It's funny, I often hear people say,

[00:24:24] oh hiring millennials or whatever, Gen Z or whatever. They all want to be CEO on day one

[00:24:33] and I stop people now and I cut them off and I say, you know what? They don't want to be CEO

[00:24:39] on day one. They do want to know what the path to CEO is on day one and they want to know that

[00:24:44] there is a path. That's all. If you share that right up front and go in and say, yes,

[00:24:50] here's where we're hiring you, but here's the opportunities that you'll have in this company.

[00:24:55] Here's where we want to go as a company. Here's all the other doors that we expect to

[00:24:59] open up. Your team will get excited about that and that's what generations today want

[00:25:04] and employees want today. I don't care what generation they're from. They want to know

[00:25:09] that there's a path, there's something to get excited about, that there's a bigger picture

[00:25:13] and when you start putting the right people in the seats and sharing that with them

[00:25:17] and being very much open book and knowing how to communicate with one another in that,

[00:25:26] it's enormous. I tell people there were three transitional moments in my company

[00:25:35] that shifted it and you could see where we were kind of hovering it and all of a sudden

[00:25:40] this came into play and we jumped and we leaped every time one of these three things came up.

[00:25:46] The first was disc personality, profiling, EQ, understanding how to communicate effectively

[00:25:53] with one another. That was enormous. That allowed us to hold on to good people and know how to

[00:25:58] talk to good people and how to get our own points across. So that was a leap. The next

[00:26:05] thing was bringing in EOS or a similar business framework, and I'm not plugging EOS,

[00:26:12] it's just having a framework and understanding the value of that framework

[00:26:17] and we brought that in and that was another leap and then we started to do acquisitions

[00:26:22] and the company started to grow. And then finally, the last piece of the puzzle was

[00:26:30] what's called intent-based leadership and it comes from a book called Turn the Ship Around

[00:26:34] by David Marquet who was a commander of a nuclear submarine in the United States Navy

[00:26:39] and he took the worst performing ship in the Navy and moved it to the best performing ship

[00:26:44] in 18 months. And then his second book I think is even more important for leaders to read which

[00:26:51] is called Leadership as Language and it talks about how even when we have the basis to be

[00:26:58] an effective leader, a lot of times the language we use sabotages our efforts because

[00:27:04] we learned how to manage through a playbook that came up through the factory age and we

[00:27:09] no longer hire factory workers. We're not putting lug nuts on a Chevy, okay? We're hiring smart

[00:27:15] people to solve interesting problems, to steal a line from Seth Godin and when you do that,

[00:27:21] you have to get out of their way. You have to know how to give them the results and get out

[00:27:25] of their way and intent-based leadership is pushing authority down the stack instead of up

[00:27:30] the stack so you're actually pushing authority down to the people who are actually in front

[00:27:35] of the work and doing that. And when we learned how to do that and when we learned when we were

[00:27:41] interviewing somebody to look does their personality profile fit the job in the team?

[00:27:47] Okay, do they have are they hungry, humble, smart? Do they want to get ahead?

[00:27:52] All right and do they have that ability to take on leadership at their level and start

[00:27:57] bringing it through the entire organization? That was like rocket fuel. We grew 400%

[00:28:04] in less than two years when we had everything dialed in. I mean hold on tight because

[00:28:13] growth at that speed will definitely test everything in your processes, your people,

[00:28:18] your team but we did it and it was when you get all those things dialed in correctly,

[00:28:26] it's crazy how fast things can take off. I want to focus on some of the good but I feel

[00:28:32] like we're missing some nuggets of the struggles. Tell me about the, is it true Sean that you had

[00:28:39] some big percentage of your staff walk out? Yeah, yeah that was when I was going through the

[00:28:45] you know I was being the tyrant. I mean you know one of the reasons I basically-

[00:28:49] So tell me about that. How much of your staff walked out at once?

[00:28:53] It was three quarters of the staff. Yeah. Yeah I mean it was and it was technical you

[00:28:59] know so here I am and you know my wife came in the door and she looks at me trying to,

[00:29:04] I'm taking help desk calls. I'm trying to work people through it. She goes you know this is

[00:29:08] like watching an episode of Undercover Boss where you realize the guy who runs the company

[00:29:13] has no idea how to do the work anymore. Thanks you know but you know what I mean I laugh

[00:29:19] about it now but I gotta tell you it took us, it took me and the company probably a good year,

[00:29:27] year and a half to get back on our feet. And you know luckily we really didn't take a financial hit

[00:29:36] but the stress level and I mean it was by the skin of our teeth and every day it was

[00:29:43] are we still going to be here tomorrow? I mean for a year I'm getting up every morning wanting

[00:29:49] to throw up before I go into, before I get in the car to drive to the office and it's all I

[00:29:54] can do to sit there and just. I get stressed out just hearing him talk about it. I mean my wife would

[00:30:01] see me and she'd grab me and say we're going for a walk and she'd walk me you know around

[00:30:06] the neighborhood for two or three miles because she could see that my stress level was about,

[00:30:10] you know my head was about to explode. She's a keeper there Sean wow. You know what I mean

[00:30:18] she was so instrumental in growing this at so many different levels and you know I use her,

[00:30:25] she actually teaches the personality profiling as do I. She has an education background so

[00:30:32] but she does a lot of the assessments but it's funny because we're on opposite ends

[00:30:36] of the chart and you know she's very strong in the areas I'm weak and I'm very weak in

[00:30:43] the areas that she's strong so having her involved in the company again really gave us that balance

[00:30:48] and that yin yang you know. Can I cut in for a second? Absolutely. This is uh Damien this is

[00:30:54] this is great so when Sean and I first started working together in our current business venture

[00:31:01] they came to me and Stacey Sean's wife said Dave you and I have the same exact

[00:31:06] disc profile and it's the dead opposite of Sean so if Sean's ever really frustrating you

[00:31:11] and driving you crazy and you want to kill him or you want to quit she's like you come to me and

[00:31:18] I'll tell you how to deal with it and how to approach him and I looked at Sean and I said

[00:31:25] is this for real? Like you guys are serious you want me to if I have a conflict with my

[00:31:30] business partner I'm supposed to go talk to his wife about it like this is cool

[00:31:34] and they're both like yep that's it's cool like like I can she's like I can help you and

[00:31:41] and I'm like Sean you good with things like I'm good with it you know like the

[00:31:44] was like okay you know it hasn't happened yet it's come close a couple times but I think it's

[00:31:51] a few times she jumped in and volunteered some information. I haven't broken the glass yet

[00:31:56] sooner or later I'm sure it'll happen you know that we haven't made enough money or

[00:32:00] lost enough money to you know. And you know what and the good thing is because sometimes you know

[00:32:06] I'll hang up from a call with him I'm going I don't understand how he's getting there she

[00:32:10] goes well let me explain to you why he's thinking that I'm like oh all right. That's

[00:32:16] awesome that is a different level of EQ you can go to my wife and get things sorted out

[00:32:21] with me that's a that's a different that's a next level there. Well you know the great

[00:32:25] thing the wonderful thing about EQ is it's even if it's bad even if your EQ is low it's very

[00:32:32] coachable and it's all about intent it's all about self-awareness and and if you have the

[00:32:37] self-awareness and you have the desire to be better at it it's an easy thing to coach up

[00:32:43] when the when the person you're coaching has realizes that they need the assistance

[00:32:49] and that they want the assistance. Yeah the desire is an important part there. It is I mean

[00:32:54] you can lead the horse to water I can I can tell you all day and but you have to want to do it

[00:33:02] but it it can be done it's not something you know there's people out there who think well this

[00:33:08] is just the way it is and it's got to be that way and no it's not. You know your your destiny

[00:33:13] is never cast in stone you always have the ability we've we've coached people who've been

[00:33:19] in business you know 20 years and and barely getting by and all of a sudden we've been able

[00:33:24] to help them turn things around it's really just about lining up the resources with the

[00:33:31] person who has the desire and and and if you're willing to have that mindset of a lifelong

[00:33:37] learner you can be successful at things. Well said so I've pulled out several things that

[00:33:44] I found interesting in in the pumpkin plan for managed service providers and one of the ones

[00:33:51] that I think everybody can relate to but I'd love for you guys to talk about is the hamster

[00:33:55] wheel who can't relate to being on the hamster wheel if you're if you're watching a video the

[00:34:00] book you got to pick up a copy tell me about the hamster wheel and how we all get caught on

[00:34:05] that. Well I'll start with this you know Sean likes to use a there's a book called built to sell

[00:34:16] right and terrific book not made for MSPs made for general entrepreneurs and businesses

[00:34:25] and they talk about you know seven things that to look at when you're looking at

[00:34:30] the value of a company and basically trying to view a company through the lenses of a buyer

[00:34:35] and one of the things they talk about is the hub and spoke problem right and the hub and spoke

[00:34:39] problem is when everything revolves around the owner in a business and I think you know for a

[00:34:45] sub say 15 person MSP and sometimes even bigger this is the most natural problem in the world

[00:34:52] you know probably half to three quarters of them have it where you know the owner is an

[00:34:57] engineer and you know not thinking in terms of business and basically they learn the bookkeeping

[00:35:05] they learn the sales or force themselves to do it they're already as strong on the engineering

[00:35:10] side and they're not wired to delegate they're not wired to build a business frankly they're

[00:35:16] they're wired to what needs to be done okay I'm going to do it and and then they hire

[00:35:21] people to help them do it when they get too overwhelmed and everything winds up revolving

[00:35:25] around the owner so that's really at the core of the hamster wheel the guy on the hamster

[00:35:31] wheel or girl on the hamster wheel is usually the owner right and it is is well how do we get more

[00:35:40] successful we have to work harder and at the core of that is is definitely the owner and that's

[00:35:46] why they get burned out and it's why their companies get stuck because when the answer is

[00:35:53] I have to do more sales I have to do more work I have to sell more hours I have to get

[00:35:57] to more invoices you know it's usually the owner getting to those things so we we put together a

[00:36:04] bunch of qualities of the hamster wheel and how we identify it you know in terms of your trading

[00:36:09] time for money you are over reliant on rock star employees it basically it the billing is always

[00:36:21] a mess because it's dependent on the time sheets you know there's there's a lot of qualities that

[00:36:28] we identify but ultimately it's the small chaotic msp that's just more more more more

[00:36:36] and you're you know I like to say that mature msp's rely on rock star processes

[00:36:45] and immature msp's rely on rock stars and and rock stars eventually burn out or they hold the

[00:36:54] company over a barrel you know saying I need I need more money and the owner's going oh if this

[00:37:01] guy leaves I'm totally totally screwed you know because everything runs through them

[00:37:07] and basically we we see this over and over again where usually that person in the middle

[00:37:13] of everything is the owner and if they're lucky they find someone else to put in the middle of

[00:37:18] everything and they just transfer the problem over to someone that isn't them so one of the

[00:37:24] things we advocate for is thinking strategically in terms of your team from day one you know

[00:37:32] something that we've started working on in our consulting process is basically helping small msp's

[00:37:37] say what should your company look like when it's 10 people and I say at the heart of it is this you

[00:37:46] should have a fully functioning service organization that the owner isn't involved in you know you

[00:37:52] should have a service manager you should have a dispatcher you should have somebody doing

[00:37:56] account management you should have high level techs you should have low level techs and

[00:38:02] all that's possible with 10 people if you plan it out if you if all you have is an owner and 10

[00:38:12] people working under the owner you're gonna get stuck because at that point when you try to

[00:38:17] mature things it's like doing an organ transplant saying I know everything runs through me

[00:38:22] you know meet your new boss now everything's gonna run through him or her you know like

[00:38:26] that it usually doesn't work there's a strong chance that that organ transplant will fail

[00:38:33] so you want to think scalability from the very beginning if you want to get off the hamster wheel

[00:38:38] yeah I refer to it as the double-edged steward of entrepreneurship right we we get to a certain

[00:38:45] point where we can make a living because we are capable of doing every job of the business

[00:38:50] okay we can it's pretty much required when absolutely one or two or three people right

[00:38:55] you don't make it past startup you don't make it past being an idea unless you can do everything

[00:39:00] and that's what makes entrepreneurs different but we get to about you know 800 000 in revenue

[00:39:10] and all of a sudden we still insist on doing everything and now what got us here isn't going

[00:39:17] to get us there so now we've got to start delegating but that goes that goes so much

[00:39:24] against who we are because we can do everything and we can do it great and nobody can do it as

[00:39:28] good as us and you've you've got to now flip the script you've got to flip the mindset

[00:39:34] and you know with you know and I have a I have a very dominant personality I like to

[00:39:39] have my hands in everything I'm a squirrel chaser you know I multitask and so I would

[00:39:45] get involved in so many things I drive my staff crazy and you know finally we grew to that point

[00:39:52] and we started growing through acquisition and the acquisitions were geographically different

[00:39:57] areas which in kind of a way was the best thing that could have ever happened because it

[00:40:02] made me have to go someplace else and I and I came to a conclusion finally I said

[00:40:08] if I want these acquisitions to succeed I can either I can either have it succeed or I can

[00:40:15] spend my time micromanaging my team but I got to pick one and because it wasn't going to I was

[00:40:21] never going to succeed growing the company with multiple locations of that if I wanted

[00:40:26] everything to go through me so I finally had to let go and when I realized that they could

[00:40:32] do it it was the most liberating feeling in the world and now I was able to start handing off

[00:40:39] the hats and and letting other people run stuff and now I just now I shifted from working in the

[00:40:45] business to working on the business and I was able to get it to a point where I was

[00:40:50] basically 100% on the business the only the only thing I did was I was still doing the

[00:40:56] sales management I had sales people but I but I was managing the sales team that was the

[00:41:01] only hat that I had left and you know what what owners need to understand is someday

[00:41:09] hopefully they're going to exit their company on positive terms and one of the things that's

[00:41:15] going to impact that the term on which they leave is how dependent is the business on them

[00:41:22] and you know when when I sold my company the buyers asked me they said well how long

[00:41:26] are you willing to hang around you know after after the sale of the company and I said until

[00:41:31] the check clears wait a second you know we've bought MSPs we need you I said no you really

[00:41:39] don't I said I am the business isn't dependent on me anymore I said but you need to keep Tom

[00:41:45] happy you need to keep Kevin happy you need to keep Diana happy so those are the people

[00:41:50] who run this company day to day and they said well we'll need we'll need to check that

[00:41:55] out during due diligence so and they did and they came back to me about a month later and they

[00:42:00] said okay when once the deal's done we want you to meet with these four big clients but other

[00:42:06] than that you're free to go and and so you know that's the difference between having an

[00:42:11] earn out where you might be in a position where you're responsible for the company to

[00:42:16] perform at a certain level but you no longer have the authority to run things the way you

[00:42:20] want to run them which is a tough position to be in you know and the ability to get walk away money

[00:42:27] and and I knew my personality enough to know I would not do well staying in a company that

[00:42:34] I founded and watching other people make decisions on it so I knew for me that was

[00:42:40] the best way to exit and because I had handed off those hats and we had processes

[00:42:46] you know we had documented repeatable processes the key to this and then we gave those processes

[00:42:52] to the right people in the right seats that made all the difference in the world in just

[00:42:57] being able to decide how I got to choose how I exited they didn't tell me how I was going to

[00:43:03] live yeah yeah and if you're if you're listening to Sean I would and you're not ready

[00:43:08] if you're thinking if you're not thinking exit yet you're thinking that's down the road

[00:43:11] quite a ways or you know I do run into people think they're just gonna run it forever

[00:43:17] but the thing is you need to do this for your team you need to do this for your clients

[00:43:24] because you're not perfect you're not invincible things happen or health happens family needs us

[00:43:32] they're a thing that are going to you know even if you haven't exited the business they're

[00:43:36] going to take you away from the business and if you've set it up to with you as a

[00:43:42] single-pony failure then that's going to be a brutal thing for your team and for your clients

[00:43:48] absolutely and Damian one of the things that you know when I when I'm working with somebody

[00:43:53] and I start bringing up exit planning and they go whoa I'm not planning on exiting for at

[00:43:58] least 10 years I'm like perfect this is the time that we should be working on it then and

[00:44:04] you know there's a saying that I brought from law enforcement which is you know the day

[00:44:08] chooses you we all think that someday in the future we're going to pick a day that we're

[00:44:13] going to retire and then we're going to drive that that timeline and one of the things being

[00:44:21] an entrepreneur is more often than not you don't pick the day the day picks you now in my case

[00:44:28] that was a positive event because we got an offer that we didn't expect it was above the

[00:44:32] number that we had planned on it was good timing for us and we're like wow this is a great

[00:44:38] opportunity we get to take advantage of it because the business was in a great we were

[00:44:43] working a 10-year plan we were only on year six but the company was in a great position to sell

[00:44:49] because we had it that way ahead of time but you know other times we have people who come

[00:44:55] to us and say I want to sell my business and it's because there's a health crisis there's

[00:44:59] a family crisis and they think it's worth a certain amount and we have to tell them that

[00:45:03] it's not and I hate having that conversation and my goal is to never have that conversation

[00:45:09] again with somebody so yes if you should still be exit planning even if you have no intention

[00:45:16] to exit you should always be keeping your msp in the best possible condition to sell

[00:45:22] so that when that day chooses you you can still maximize the investment that you've made

[00:45:28] in this company regardless if it's on your terms or somebody else's yeah why wouldn't you keep your

[00:45:34] options open absolutely amazing company with amazing team that you've built yeah always keep

[00:45:40] it in the best possible condition that it can be at a given time just backing up to the hamster

[00:45:46] wheel for a minute I told you like everything in our msp was sort of like standard msp

[00:45:51] experience you know concentrated you know at when we were three or four years into our msp

[00:45:59] I had gone to breakout sessions at conferences on msp plateaus and you know kind of the

[00:46:08] there's a few major plateaus and one guy one plato is what I call 10 guys and an owner

[00:46:14] you know kind of the owner that's gotten assistant or bookkeeper and eight techs and

[00:46:19] basically basically that's how the msp functions but there's no middle management there's no

[00:46:26] processes you know and and it's a common place to get stuck or to build a great lifestyle

[00:46:31] business where um there's nothing there's nothing wrong with that but at one point

[00:46:36] I thought we had long broken through that plateau and it dawned on me when I went to

[00:46:44] another one of those sessions that man all they are is that 10 guys in an owner company with two

[00:46:49] owners you know I had I had 21 people that were directly reporting to me wow when it came time

[00:46:56] to do reviews um you know I had to ask other people you think this person's doing a good

[00:47:02] job because they report to me but I can barely remember their name much less I don't know

[00:47:06] what they're doing all day you know like these people were not really being managed at

[00:47:11] all you know to say they were under managed would be an exaggeration they really weren't

[00:47:16] being managed at all because I was also functioning as the COO and doing the invoicing

[00:47:22] and everything else and I was commuting an hour and 45 minutes each way into New York City

[00:47:27] and and you know I was just you know 14 16-hour days when it came to hamster wheel

[00:47:34] man I was I was rocking that thing harder than anyone has ever rocked it so when it

[00:47:39] it comes to you know speaking from experience and and and living the burnout you know those

[00:47:46] those chapters were that that chapter was not hard to write because

[00:47:51] it was not based on years of research and and in interviews you know it was what

[00:47:58] what I lived so that's what that's what I love about that is if you running your own MSPs

[00:48:04] screwing it up yourself just like me I was an MSP you don't have to go out to pull the

[00:48:10] ground better when we stay out there when someone else says it okay I guess we did

[00:48:15] maybe it was just me maybe it was just me screwing up my MSP but you know it's it's

[00:48:20] think about it and this is a talk that Dave and I do we start out with you know that we

[00:48:25] all get into this business the same way you know we go to Harvard Business School we get

[00:48:29] a degree we analyze businesses to get into we choose an MSP no we we get into being an MSP

[00:48:37] because we got fired we got laid off we had a boss who was a jerk who we decided I can do

[00:48:42] this better and start my own company but we go into it with typically very little business

[00:48:47] experience if any at all we go in there because there's something we can do to offer

[00:48:52] somebody else that we know has value but all that stuff around it I mean thank God we

[00:48:58] don't know about it because if we did we'd probably run away and never try but we don't

[00:49:03] know any better so we jump into this with both feet and all of a sudden we're looking around

[00:49:07] and going wow there's all this other stuff I got to learn you know I got to learn accounting

[00:49:11] I got to learn business I got to learn HR I got to learn you know how to hire people

[00:49:15] learning how to swim in 20 feet of water yeah I mean and then we just we just figure it out

[00:49:21] yeah you know and and of course everybody else thinks it's easy you know and what's

[00:49:26] you know it only takes 20 years to be an overnight success but you know but it's like

[00:49:30] the duck in the water man everybody sees us floating there but nobody sees the feet going

[00:49:34] like this that's right I remember when my ideal client profile was anybody's check cleared

[00:49:40] AFAB you know I can install your server would you like me to paint your office for you while

[00:49:45] I'm at it that's right I can sweep the floor too right exactly I wanted to talk about what I

[00:49:51] think is important too in the book you talk about differentiation versus building a commodity

[00:49:57] and I think that's another trap that I fell into and a lot of us fall into so what does that

[00:50:05] mean to you

[00:50:08] Sean's got his can liquid yeah all right tell me about this what is this

[00:50:16] this is this is a can it's a can it is a can of water okay not fortified water it's not

[00:50:23] vitamin water it's water all right okay this company started in 2017 they decided we're

[00:50:30] gonna put water in a can we're gonna give it a fancy label they charged three times

[00:50:36] the price of regular water the company two months ago was valued at 2.4 billion dollars

[00:50:43] and yet I have MSPs who have all this stuff they do and they sit there and they tell me

[00:50:48] I can't differentiate I do the same thing as everybody else I'm like if these guys can put

[00:50:52] water in a can and sell it for three times as much you can differentiate water is still

[00:50:59] water at the end of the day right but what did they do what did they do by putting in

[00:51:05] a can okay they changed the customer experience but it's so simple and you know people will tell

[00:51:13] you okay they put in a can because it's more recyclable it's going to help the environment

[00:51:17] that attracts a certain buyer absolutely the bigger differentiator is actually been they've

[00:51:23] they've found that the it's that when you're at the neighborhood barbecue and you don't want

[00:51:30] to drink when you're holding a bottle of Poland Springs everybody goes oh you're not drinking oh

[00:51:34] have a beer and once this looked like a craft beer can so they changed like a cult 45 yeah

[00:51:40] but it's but it's still water okay so yes they're delivering the same thing that Poland

[00:51:46] Springs is but they're just changing it and I think it's because so many of us come from

[00:51:50] an engineering background is we overthink this we miss the target because differentiation

[00:51:57] can be such a simple thing it can be put it it'll change the package when Dave and I give our talk

[00:52:05] I wear a suit and a tie and those people there I've known for years that have never seen me in

[00:52:09] a suit and tie but I explained to the to the to the audience that when I was when I had my

[00:52:16] MSP my target audience my target clients were law firms and one day I had a lawyer look at

[00:52:22] me and he said you sell to lawyers right I'm like yeah he said well why do you look like one of

[00:52:27] your techs I said what do you mean he goes you come in here and I can't tell the difference from

[00:52:32] you from one of your techs because you come in here and a logo shirt and dockers and that he

[00:52:37] goes that's not who your audience is and after that I started wearing a suit and tie because

[00:52:43] I went in there looking like the lawyer I was the only MSP that they interviewed they came

[00:52:48] in looking like them so there was an immediate emotional connection they perceived me at a higher

[00:52:55] level than the other people who were coming in because they felt that I was more on their level

[00:52:59] I was also I also knew to have have boardroom conversations with them not server room

[00:53:06] conversations we talked about business results not speeds and feeds but that caused our per seat

[00:53:11] price to go up dramatically and our deal size went up dramatically and it was just as simple

[00:53:19] as that you know yesterday I ordered some bars for the back of my truck for putting

[00:53:28] bicycles on and I found this company and it's a US based small company that makes these racks

[00:53:35] really liked I opened up the box and as I opened the lid there was a handwritten note it said

[00:53:42] thanks Sean for ordering from us we really appreciate it let us know if there's anything

[00:53:45] we can do somebody took the time to write that with a sharpie on the inside of the box

[00:53:50] you know I was like wow that's awesome customer service I really like these guys I can't wait

[00:53:56] to buy from them again that's a simple thing of just taking the time to write that personal

[00:54:02] note on the inside of a box lid it's a differentiator I've never seen anybody else do it

[00:54:10] did it change their product no it was just about mindset engaging with the customer making a

[00:54:16] connection there's so many ways to differentiate that are simple and they don't even cost

[00:54:22] anything you know we use citizen m hotel chain as a if you look on on youtube citizen m blue

[00:54:31] ocean strategy there's a video there it explains why they are a blue ocean strategy but they just

[00:54:36] they took all the things in the hotel industry the people wanted from three star hotels four

[00:54:41] star hotels five put them together at a decent price it just changed the experience they're

[00:54:46] just they still give you a bed to sleep in so people need to stop overthinking their

[00:54:53] their differentiation and they need to stop confusing different with better because oftentimes

[00:55:00] when I ask what's your differentiator well we do this better than our competitor you know we have

[00:55:05] better technology our people speak english yada yada yada there was actually a study that showed

[00:55:12] when you go into a prospect and this is not unique to it but if you go into a prospect

[00:55:19] and you and you present to them saying I'm better than this I'm better than my competitor

[00:55:25] that the more you compare yourself to your competitor the more you look like them you're

[00:55:30] not differentiating you're actually making it worse so you need to go in and create a different

[00:55:36] experience and what I tell people is when you're when you're presenting to a prospect

[00:55:41] if they're agreeing with you if you're if you're saying yeah you need this firewall you

[00:55:44] need monitoring but they're going yeah yeah absolutely I do need that you think you're

[00:55:50] you think you're closing the deal the reality is is what you're doing is you're confirming that

[00:55:56] you're not telling the prospect anything that they don't already know and you're walking out

[00:56:01] the door going yeah I closed the deal and they're going oh well they said the same

[00:56:05] thing the other four people did so therefore I can I can safely pick the low bidder they're

[00:56:11] all the same you're not different you're not winning the deal when they're agreeing with you

[00:56:15] you're winning the deal when they cock their head and they go huh nobody's ever said that to

[00:56:19] me before nobody's ever presented this to me this way before nobody's created this experience

[00:56:25] before that's when you're winning the deal so you've got to figure those things out and

[00:56:31] that's you know that's one of the things that we work through with folks and it's a it's an

[00:56:35] interesting process so you may have already covered it but what Shawn what was what is

[00:56:41] your differentiator because I feel like this is one I struggle with struggled with struggle

[00:56:44] with depending on tense yeah and as an MSP I struggled with and I feel like it's the norm

[00:56:51] it's not the exception so yeah what was your words that one I want to allow you to share

[00:56:55] yours too put you guys both in the hot seat ours was really understanding law firms and because

[00:57:00] of my police background and I came in I used to teach computer forensics at the police academy

[00:57:07] even the clients that weren't lawyers that we had were usually medical and financial services so

[00:57:13] we focused on those people who needed security compliance and and we could walk in the door

[00:57:20] and start that conversation knowing what their biggest concern and liability was

[00:57:26] so we understood the client we understood what their fear was and the big mistake that a lot

[00:57:31] of people make when they sell is they talk about they talk about what they know and what

[00:57:36] they can offer because that's what we're comfortable with naturally but instead you

[00:57:41] want to walk in the door talking about what your client wants or what's the what's their fear what

[00:57:45] keeps them up at night and and again walking in a suit and tie because that's who our client base

[00:57:52] was being able to talk their language and talk about it from where we could bring it

[00:57:57] in from their direction so it was a different experience in the conversation when they worked

[00:58:01] with us Dave tell me about you let me put you on the hot seat what was your differentiation

[00:58:07] you know when I think about turning points for for my MSP there's you know three that come to

[00:58:15] mind one was the transition to managed services and I think a lot of MSPs from my era can

[00:58:23] probably say the same thing the second one was when we had a consultant come in and basically

[00:58:31] confront my partner and I and basically say if you guys don't define your lanes

[00:58:36] and your roles well I'm going to wind up mediating a divorce between you two

[00:58:41] you know and basically one of you needs to have operations and one of you needs to have

[00:58:47] sales and we both like doing both and it was same thing you know owner can do everything

[00:58:52] and that was at the time we were like ah he's crazy blah blah and he turned out to be 100%

[00:58:58] right but the third thing was when we began to self-identify as an MSP that

[00:59:08] focused on hedge funds and private equities and basically that vertical definition

[00:59:16] put us in a situation where instead of competing against 150 MSPs in New York City all of a

[00:59:22] sudden we're competing against five and then we went to the power brokers in that world who

[00:59:29] are the prime brokerages at the large investment banks Goldman Sachs Morgan Stanley companies

[00:59:34] like that they're the ones that launch the hedge funds and and we went to them wound up

[00:59:41] getting meetings with them and we said you know all of our competitors in this space are

[00:59:47] going after bigger fish right we are a small service intensive MSP at least comparatively

[00:59:56] small versus the 100 million dollar MSP you know and we are the perfect fit for that five

[01:00:02] person MSP that's launching with 200 million dollars under management which sounds like a

[01:00:09] lot to us normal human beings but it's not a lot in the hedge fund world and basically we

[01:00:15] defined a niche within a niche and then the business just started coming to us instead of

[01:00:21] us having to chase it you know people are throwing us clients where we're not even in

[01:00:26] competitive situations sometimes and these guys all talk to each other and that's what really

[01:00:31] led to viral sales for us so for us definitely the basically identifying a lane for ourselves

[01:00:40] identifying a lane for the world and then going for that niche within a niche we just found

[01:00:46] a place where it was cleared out it was blue ocean you know in terms of we could go into

[01:00:53] these situations and say sure you could sign with the big name you'll be their 200th most

[01:00:59] important client you know you'll be our third you know which situation do you want to be

[01:01:04] in because we're going to do everything we can to make you happy and then you get to a

[01:01:08] point where you've achieved a certain amount of success and you don't have to go to market saying

[01:01:13] we're the scrappy little guy that's going to treat you like the king you know we can go to

[01:01:17] market and say we've got all the experience we've got all the compliance things lined up you

[01:01:21] know we do this in our sleep and it's a different kind of sell but basically finding

[01:01:28] that blue ocean where not everybody's chasing the same thing and you've committed to

[01:01:33] something there was a major turning point in our business because we already had those kinds of

[01:01:38] clients and we were terrified to go to market like that because we felt like we'd lose

[01:01:43] opportunities in other places it turned out that we didn't lose any of those other

[01:01:48] opportunities we just gained a lot more opportunity within the vertical that that

[01:01:52] we identified and focused on yes there's a very much relate to that though right and we

[01:01:57] feel like if we if we say to the world this is what we do this is our niche is what we're

[01:02:02] for that we're just going to miss out on the rest of the world and it's i don't i don't know

[01:02:09] where we get that from but i know i have that fear and i go why you know what damien

[01:02:13] there's you know we're msp mindset right i think a lot of it is psychology

[01:02:18] that when someone projects that i know who i am i'm comfortable with who i am you know

[01:02:26] if you want to get with me you're gonna get with me i'm not gonna i'm not gonna try and

[01:02:30] become what you want me to be there's something that's very attractive about that people are

[01:02:36] drawn to that so that even if if you're a law firm or a pr firm and we say we're a financial

[01:02:43] services msp firm they'll go it's not a turnoff to them you know like that we can go oh you

[01:02:50] have you have demanding users with three houses and spend the summer in the hamptons and

[01:02:55] need all your technology to work from everywhere and you're and you have important people that

[01:02:59] are paying the butt well we deal with hedge fund managers yeah and they go oh i tried all the

[01:03:04] firms that specialize in law firms and pr but it seems like you're what we need and we go

[01:03:10] well here's here's how we do things and here's how we price them and we're not changing for

[01:03:14] you you want to jump on board you know it's a totally different mindset than when you know

[01:03:21] when someone when someone feels like you're begging them for the sale you know they they

[01:03:26] go well why should i use you it's kind of the plan hard to get confidence draws people

[01:03:35] you don't have a strategy until you can say no i love that and that comes from michael

[01:03:40] porter from harvard business school who i am a big fan of and i i teach a lot of his

[01:03:46] methodologies but you know he is very key on strategy and you have to know what you don't

[01:03:51] do and what you're what you're going to say no to you know if you if you don't know what that is

[01:03:57] or there isn't anything then you really don't have a strategy it's just hit and hope

[01:04:02] yeah yeah i love that well this kind of is a perfect segue to a part i love to talk about

[01:04:07] which is you guys talk about your unique offering or your giant pumpkin seed and i

[01:04:14] love to talk about people and understanding you know what makes you unique so tell me

[01:04:22] tell me more about that from your perspective what is this giant pumpkin seed and why is it

[01:04:25] so important i'll i'll start the the because i think it's a continuation of what we were just

[01:04:33] talking about you know you have to know who you are right what is it that you bring to

[01:04:39] the world what is it that you bring to the marketplace if you start out by trying to figure

[01:04:46] out what people want and turning into that thing it doesn't work as well you know it has to there

[01:04:54] has to be some self-awareness some self-reflection of of of where do we fit in this business

[01:05:01] landscape what do we have to offer you know what is it that is inherent to us our core

[01:05:06] values our our corporate personality that we can we can leverage and take to the world i think

[01:05:13] that's where it i think that's where it starts and maybe i'll pass the batonda

[01:05:18] to sean there because the sweet spot is his sweet spot so yeah um you know one of the

[01:05:26] things that that i think that you really need everybody needs to bring to the table and i think

[01:05:31] Dave and i do is that you really need to come at things from a place of of curiosity you know

[01:05:40] if you ever watch ted lasso um i love the the the dart scene i've just googled if you google

[01:05:46] ted lasso dart scene it's on youtube but where he goes into this battle with this guy but he

[01:05:52] gives a speech and it's about you know be curious not judgmental and and there's a lot

[01:05:58] of judgmental business owners out there i was one of them i think that that's one thing that

[01:06:02] that if you want to have that seed that grows you better be coming at things from a place

[01:06:08] standpoint of curiosity and lifelong learning and i think that's universal for everybody's

[01:06:13] pumpkin seed you know we talk about the sweet spot in the in the book and it's really

[01:06:19] the combination of three things it's the combination of knowing who uh knowing who your

[01:06:26] target audience is so having your client your customer uh avatar dialed in you know um you know

[01:06:34] another example i use in the talk is stanley cups company has been around 30 years 75 million

[01:06:42] sales very very solid company was selling to construction workers and sold coolers and and

[01:06:50] thermoses things like that to the construction industry and then one day a mommy blogger got

[01:06:56] a hold of one of the bugs did her little video said oh my god this thing's the greatest thing

[01:07:00] ever it went on to a peloton page and they realized that their audience their target audience

[01:07:06] wasn't mom it wasn't uh construction workers it was stay at home moms um and mom mom pernors

[01:07:15] they're saying they've been around 30 years 75 million in three years they've gone from 75

[01:07:21] million in sales to 750 765 million actually um 10x knowing who your client base is so that's

[01:07:29] one part of the that's one part of one circle of the uh of the sweet spot the other is having

[01:07:35] your processes okay the owner not doing everything having documented repeatable process that

[01:07:42] everybody follows so the client experience is the same no matter who gets that person

[01:07:47] you got to have that dialed in and finally your unique offering what is the thing that you do

[01:07:52] uniquely well and i already touched on that but what are the things you're going to say no to

[01:07:56] because you know they're things you're not they're not what you're best at they are not

[01:08:01] your core competency and one of the things you're going to say yes to when you find

[01:08:05] the intersection of all those things that is your sweet spot that is where you're going to

[01:08:10] how do um let me go back to your example so shawn you you know from what i gathered your your msp

[01:08:17] was focused on attorneys day of yours was head funds there was more to it than that obviously

[01:08:21] but you know size and psychographics and in demographics but um just for a high level how

[01:08:29] how did you know when to say no because like dave's example was like well they really wanted

[01:08:34] somebody that was used to dealing with high demanding people so there were some people

[01:08:37] outside of that that you know maybe it made sense to say yes to and that's one thing it's like

[01:08:42] where is that line you know do they have to be an attorney in your world shawn or do they align

[01:08:47] in some other way no and i i explain this to people you have an a list client avatar that's

[01:08:53] who you're going to spend money to pursue that's who you're going to spend your time

[01:08:56] and energy pursuing now if somebody comes up on the fringe here and they still meet the

[01:09:02] qualities of an a-list client but maybe they're not in your vertical but they want to do

[01:09:05] business with you that's fine you don't have to walk away there it's more do they it's not about

[01:09:11] the vertical that they're in it was about are they going to follow our processes or are we

[01:09:16] there one of the things i follow the msp forum and reddit and i see people posting almost every

[01:09:22] week well the clients asking me to do this how do i do that how do i do this or they want me

[01:09:27] to one of them a couple weeks ago was well the client doesn't want to use my software for

[01:09:32] this in my stack so i got to get this other piece of software so i can get this client

[01:09:36] i'm screaming at my phone going no stop the madness the client takes your stack so many msp's

[01:09:44] let the tail wag the dog you are the expert you go in there and you say this is how we manage

[01:09:52] if as dave said if you want to get on board with us that's great we'd love to have you

[01:09:56] if you want to micromanage the process or you want to interject with other things

[01:10:00] no you know you go away yeah one of the best ways somebody said it to me was they get to

[01:10:07] choose if they hire me as a mechanic they don't get to tell me what brand of tools i have in

[01:10:10] my toolbox exactly that's that's a great analogy i mean but you know you go in go in confident

[01:10:18] know know what you're best at you know one of the things when we changed this mindset in

[01:10:24] our company was um we i had a law firm their server crashed the engineer came back told me

[01:10:32] there's a data loss and we don't have a backup i said oh my god what's going on he said the

[01:10:37] tape he said the tape was in the drive and it was broken it was spinning and nobody's

[01:10:40] changed it in six months so i got called in you're the first person that's ever happened

[01:10:45] to you nobody's ever had that right absolutely so of course you know being a law firm i got

[01:10:50] called into a partner's meeting and they're all at the table and you know the one who hired me is

[01:10:54] leaning over the table going why did we have a data loss we pay you so much money and i knew

[01:11:00] what was coming i deal with lawyers so i pulled out a copy of the contract i said well because

[01:11:04] right here where it says backup services you crossed it out and said that cost too much money

[01:11:09] and that you would do it yourself and he looks at the table and pauses and looks at me looks

[01:11:15] at the table looks up again he goes you should have insisted and i wanted to punch him in the

[01:11:21] nose but he was absolutely right i was the expert in it he was not he was not qualified to

[01:11:27] make that decision i should have said no you have to have our backup services along with all

[01:11:32] this other stuff for us to manage this properly and protect you and and but we didn't and

[01:11:38] that would be like the lawyer saying to me which one of these contracts would you like

[01:11:42] without explaining the differences and what's happening it would be malpractice

[01:11:47] so me letting the client make those decisions is malpractice on my part so after that i went back

[01:11:54] to my team i said you know what he's absolutely right at that point we we began offering one

[01:11:59] level of service this is what you get if you don't want that then we're not your company

[01:12:05] we'll find somebody else there's plenty of other people out there you know what but but

[01:12:09] we can take care of you really well as long as you let us do what we do well

[01:12:14] they're going to blame you if you don't have backups they're going to blame you if you don't

[01:12:19] have a reasonable commercially reasonable cyber security stack why would you let them

[01:12:24] know cross off the essential elements you know you when you build a house you don't cross off

[01:12:31] which of the utilities you'd like right pay for you know i don't tell the contractor i want

[01:12:37] you to use this brand of you know two by six not not yours no you don't get to do that but

[01:12:44] yeah so you know after that it was very clear and at that point it was you you get our whole

[01:12:50] stack i don't care what i don't care that you paid for two years of this crappy antivirus

[01:12:55] that you have there and you know what i'd so if it really came down to it i'd give him a

[01:12:59] credit for it and just say here i'll pay you back we work it into the price it's fine you

[01:13:05] know what they feel better we feel better whatever it takes to you know always protect

[01:13:09] the recurring revenue so you know we would get them on board but after that it was you know

[01:13:15] what we're the experts here and you got to come in like the expert i love that yeah i would just

[01:13:23] echo everything that that shawn said you know talk about knowing yourself right when

[01:13:29] you have a really well-defined approach to service you have a well-defined stack and

[01:13:36] and a well-defined service offering it you don't have to say no to a whole lot of things because

[01:13:42] when you're not going to compromise from that people will say no to you it sorts itself out

[01:13:48] there's not a whole lot of people you need to turn away when you go to when you go

[01:13:53] to market and say this is who we are this is what we do this is what it costs you know

[01:13:58] we're not going to learn your proprietary software we're not going to discount our prices

[01:14:04] we're not going to we're not going to support your weird back end technology if you hire us

[01:14:11] this is what you you get and we know it'll work great do you want it you know the that's

[01:14:18] the but i think the reason so many msp's don't do that is they're they're going well we'll

[01:14:25] lose sales that way and our response is always absolutely you will and you'll lose the ones you

[01:14:30] should lose you'll lose the ones that are going to be difficult relationships that will probably

[01:14:35] eventually go away anyway that it's going to be hard to make money on you have to have

[01:14:41] confidence that you don't need to sell every opportunity you need to sell the right

[01:14:46] opportunities to build a great a great business so if i'm listening to you and i realize

[01:14:53] you're talking about me you're talking about my business what it sounds like i need to get out of

[01:14:58] them only sounds like the the the space between my ears is what's holding me back so dave what

[01:15:05] do you what would you say that i need to be asking myself there's there's two things right

[01:15:11] there's knowing knowing who you are both personally and corporately right the the

[01:15:17] shona and i did a paid marketing study of our company of encore you know basically and i think

[01:15:24] the most valuable thing it provided this was maybe six months ago the most valuable thing

[01:15:29] it provided was us learning who we are as a company you know like we are educators

[01:15:35] we both kind of no bs personalities we have very different personalities but we have that

[01:15:40] in common very down to earth no bs what you see is what you get we're going to tell you

[01:15:44] how it is and and and that's going to be appealing to some people and not others and that's that's

[01:15:50] okay we're not going to try and change change who we are you know i think one of the

[01:15:56] as far as asking yourself a question what am i doing to get better what am i doing to validate

[01:16:02] what i'm doing who do i have to bounce things off of you know am i asking the right

[01:16:07] am i am i subjecting myself to to the critics they are am i just surrounded am i just asking

[01:16:14] the people that i know will agree with me and and to that point you know the thing that we

[01:16:19] tell every msp we talk to who comes and asks us for help whether they choose to go with us or

[01:16:24] not is i don't care if you join our peer group but join a peer group and i don't care

[01:16:32] if you hire me as a coach but get a freaking coach coaching and being in a peer group are the two

[01:16:39] single best investments i ever made in myself and my company and it helped me way beyond my

[01:16:45] business it's helped me in every aspect of my life and and that's where you know that's how

[01:16:52] i built a relationship with dave the people who were in my peer group 15 years ago i still

[01:16:58] talk to almost on a daily basis even though i'm not an msp anymore you know having a group of

[01:17:05] people that you trust to be candid with you ask you hard questions and tell you hard truths is

[01:17:11] invaluable you know tell you when you're full of crap absolutely less people can't tell the

[01:17:16] owner and as dave said you know we you know we would love to help anybody listening to this

[01:17:23] as their coach or have them join one of our peer groups but they don't have to join ours you

[01:17:28] know having a coach is a very personal experience you've got to find that you've got the right

[01:17:33] person in front of you and there's some fantastic coaches out there in our industry

[01:17:37] we have some great peers there are some bad ones too i mean you should do your research

[01:17:41] on people and you know make sure you know who you're getting advice from but you do your

[01:17:46] research do your due diligence on the person or the peer group company you know at interview

[01:17:52] people don't just take things of face value and find the person that you can connect with

[01:17:58] and find the person that that you're going to be comfortable with but get in that group

[01:18:03] and get that feedback because it's going to help you grow and you're going to grow faster

[01:18:08] not just your business growth but your personal growth which they're going to go hand in hand

[01:18:13] because one doesn't go without the other so at least it leads not well all right all right

[01:18:20] damian it came back i'm ready for take two if you want the uh what's the genius answer dave

[01:18:26] oh tell us all right well what i was saying is the you have to know who you are both personally

[01:18:33] and and corporately right you've got to figure out what you're offering to the world

[01:18:37] is and what your approach is what that unique thing that you're bringing is but the second

[01:18:43] part of it is just confidence right everything is about a leap of faith all right i think a

[01:18:50] lot of people continue to tell people what they want to hear and just sell anything to anyone

[01:18:55] because they're scared that if they if what they really bring to the market is what they're really

[01:19:01] good at and it reflects their corporate identity like there'll be some people that don't want

[01:19:04] that you know you think about trying to make a new friend or trying to get a girlfriend or

[01:19:09] boyfriend or a spouse you know it's the whole do i just be myself or do i try and be cool

[01:19:14] and try and be the kind of person that that they're going to want to uh be attracted to

[01:19:20] it's like if if you get into a relationship based on something that isn't really you

[01:19:27] it's going to break down sooner or later it's only going to work for a little while and it

[01:19:32] the same thing is true in business you have to know your core values you have to know what

[01:19:35] you bring to the world and then you have to bring that and it's not going to be everybody's

[01:19:41] cup of tea but for the people that where there's a match it should be a wonderful long-term

[01:19:45] relationship that isn't transactional and has real value for everybody involved i love that

[01:19:52] dave um thank you for sharing that i'm reading a book by gay hindrix called the big leap

[01:19:57] so you almost use those words and it's it's been very insightful as somebody that has

[01:20:01] multiple um more than one coach in an impure group don't wait you know if you're wondering

[01:20:08] don't wait um guys i could spend all afternoon but i know you don't have that kind of time

[01:20:13] talking to you so thank you for this um would you tell folks that are interested

[01:20:17] shawn and dave how to get connected with your company connected with you if they'd like to

[01:20:22] learn more absolutely uh shawn or dave at encore strategic dot i o okay and they can

[01:20:29] reach out to us directly we're also we're both on we're pretty active on linkedin

[01:20:34] um and other social media so they can get all of us there as well

[01:20:38] but we are always open to talking and and you know giving people direction you know we talk

[01:20:43] about core values a lot and one of our top core values is is we help first so um you know so

[01:20:51] please feel free to reach out at any time yeah i tell people sure we'd like to make money

[01:20:56] but the reason we want to do it doing this is because we love doing it and we'd be doing

[01:20:59] it for free even if uh even if it wasn't our business so that's awesome yeah and we all need

[01:21:07] this help so if you're listening and you don't take action on the offer dave and shawn just

[01:21:12] made you that's your fault so guys thank you for uh this gift today um and it's been

[01:21:20] just a blessing to to get to learn from both of you