From MSP Startup to 45 Employees, All In Just 7 Years - Guest: Kevin Barros

[00:00:15] I'm curious what pushed you to say, I need help. I can't do it myself. What we did is we looked at our outside area for our competitors and kind of say, hey, how big are they? We have some in our area that are 100 or 300 employees. And so to us, we said, well, wait a minute, if we're only 12 and there are 100 and there's some that are 300, why can't we do it? Like we can do it too. So we went from 12 to about 45 today. So about another four years, five years from that timeframe.

[00:00:44] Hey guys, Damien Stevens, host of MSP Mindset and I am blessed to be live and in person at Grocon 2024. And I'm very excited to be with Kevin Barros, who is the CEO of The Computer Company. Thank you. So thank you for being here, Kevin. Thank you for having me. Yeah. So I'm curious, what brought you to Grocon? What were you hoping to learn or get out of this?

[00:01:09] Yeah. So we came to Grocon to kind of meet some other MSPs, get some new ideas, get some new direction and vision, just to kind of see what the space is like and what's going on in the space. We just like to be current with what's going on. So we attend a lot of events like Grocon. And so share with everybody, if you don't mind, about where are you in terms of like head count? Yeah. So we're currently about 45 folks. Okay. So I can give you a little history about the company if you like. Yeah. How did you get there?

[00:01:38] Yeah. So I kind of started on my own originally, just the solo, just for fun, making a few extra bucks, nothing, nothing special. I think we can almost all relate to that. Yeah. And then as it kind of developed and kind of grew up a little bit more into a business, we decided let's do a first acquisition. And so we did a first acquisition of another single person MSP. And then how long this was in it? Because you went from like, I did this one person thing for fun. All of a sudden, like I'm doing an acquisition.

[00:02:06] Yeah. So that was about a three year when I did my first acquisition because I was back in 2017. Wow. And then I did a second acquisition in 2020, which probably wasn't the best of times to buy an acquisition. But, you know, it is what it is. Yeah. But 2020, we bought a company and there were about 12 folks at the time. So we went from 12 to about 45 today. So about another four years, five years from that timeframe. So, yeah. Now, is that mostly acquisition or mostly organic? Since that 12, it's been all organic. Oh, wow.

[00:02:35] So it's been a lot of help from Marketopia, from the marketing efforts, a lot of long nights and weekends, which is always there. But it's just doing right by the client and they'll keep on giving you recommendations and a referral. This episode is brought to you by Serbosity. I started Serbosity because I was an MSP that lost data because I thought backup success meant I could recover. And boy, was I wrong.

[00:03:02] If you've ever been there or anywhere close, you know how much your stomach turns over the 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.

[00:03:28] Now, you can do that by either hiring Serbosity or we'll take all the workload of managing backups off of your plate and test your backups daily, weekly, monthly and quarterly. 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 you did it kind of backwards.

[00:03:53] And what I mean by that is I feel like most people grow organically to 12 or so and then think about acquisitions and you acquired a lot of the growth to 12 and then grew organically a ton. Yeah. So the reason why we did that was a little different. So when you go from one to getting your first employee, it's tough because you're giving away a lot of that bottom line to get that second half person. Yeah. And then what you notice is that even if you have a second person, it's still not you still can't do the HR.

[00:04:20] You still can't do the accounting, the payroll, the help desk plus the on road. Like it's just kind of tough. And so we said, you know, it's probably best to focus on a company that has a base. Start with that. And then that way we don't have to go through those hurdles and we can kind of improve from there. So gotcha are all your acquisitions in the same geographic area. Yes. So they've all been in our area, which is in Connecticut. So everybody's kind of stayed in our area for now.

[00:04:47] So maybe one day we'll we'll look for an acquisition just slightly out of state. Yeah. Yeah. Well, I say that because most people operate in one in, you know, geo, but there's only so many acquisition targets. Right. Interesting. So one of the you said you want your takeaways is you could grow faster. I think everybody could. I'm curious. What would that look like? Like what are you hoping to achieve? Yeah. So we want to get more into the compliance side.

[00:05:16] So we're trying to get our CMMC level two certification today. We've been had a SOC certification, SOC two type two for a while. So we're trying to get a little bit more kind of get those clients and kind of say, hey, we can kind of help you. If we did it, we can do it for you as well. And we also do a lot of hosting ourselves. So we're a data center out in Connecticut. Okay. So we've now expanded out to Vegas to do some co-location for now. But we'd love to expand that Vegas side and kind of target people a little bit and say, hey, we can we can do your hosting.

[00:05:45] We could do your backups. We could do your DR. Let's talk about it. So. Hmm. So kind of create some new opportunities. Interesting. I imagine this is probably a big question, but what's been your biggest challenge on your journey from one to 40 or 45? Yeah. So it's I guess it's all the meetings and appointments that you just don't get told how many times you have to talk to a client or how many times you have to talk to a prospect before locking them in

[00:06:15] or how many follow ups for a project that you got to do or reminders. And there's a lot of meetings we do that we're trying to kind of cut down a little bit and say, hey, let's come up with a more plan, a better plan, a little bit more efficient. So what surprised you about that? I guess we kind of I guess it's kind of a dreamers mindset. You kind of think you'll talk to one person. They're just going to say, yeah, we understand. Let's do it. And in reality, it's it's not. It's about when's their budget? When do they have funds to do something like that? What's their timeline? Are they busy?

[00:06:46] You know, CPA is really busy from January to April, you know, but not so busy the other time. So it's kind of finding when they're busy season is and what's not. And also kind of explaining it a non-technical way for folks to say, how does this add value to your organization? Does it give you a better bottom line? Does it improve efficiencies for employees? Like what's what's the key takeaway from it? Not just an extra cost. So, yeah. What was what was your expectation? Like number of meetings versus what you found to be reality?

[00:07:16] Can you help me understand that? You're saying it's a lot more meetings and more follow ups than you expected. Yes. You mean in terms of like with prospects? I think if I understand you, you're saying it's a lot more. So prospects are a little bit different. So prospects are kind of unique situations now because they they've been through an MSP or two before. They they've kind of gone through it. And so now they're a little bit scared and hesitant to say, hey, are you just another person? It's another quick date.

[00:07:44] Or can we go somewhere a little bit more serious? Can you help me kind of grow? And so they're a little bit more cautious. And so they want to kind of prove yourself a little bit more. So that takes a few extra meetings to kind of prove it. Hey, we'll visit your site. Why don't you come visit us? You can check out the data center. Yeah, we could be a little bit more flexible on the pricing or the packages, how we can kind of do things. But that kind of took us a little bit by surprise initially. But what kind of like difference did you notice? Like did you expect it would just be one or two and then it's 10? I'm just kind of curious.

[00:08:14] So we kind of expected originally to be like two or three meetings in reality. I mean, some of these could take like a year or longer to actually close a new deal or to even get a big project to prove it could take like a year. And so we never would have thought like it could be that that long. Yeah. And so what ends up happening is they finally approve it. You're super excited to do this project or this onboarding. In reality, you got 20 others already scheduled at that moment in time. So now you're trying to say, well, I don't want to say no to them. So because we took a year to get here.

[00:08:43] So how do we do this workload a little bit? Yeah. So has that become mostly a service scheduling and resource balancing contention issue? It does. It does. So now we're starting to get a little bit better for scheduling to kind of say, hey, listen, November is really bad for us. You know, do you want to do December or hey, let's pull it in a little bit. Maybe we can do it in October and knock this out for you while things are a little bit quiet. And we can kind of focus on your project a little bit more uniquely. So clients really appreciate that one now.

[00:09:09] So we're trying to get more automated to kind of show schedules for clients. But we haven't quite automated everything yet. So I asked you about like what's your biggest challenge. Let me ask you about the biggest opportunity. What do you think the biggest opportunity in the market for you is right now? Yeah. So for us, it's compliance by far. Compliance like HIPAA has been around for quite a bit. That CMMC is something that's new coming out starting really in 2025. Yeah.

[00:09:36] And I don't think a lot of MSPs are taking that as serious as they really should. You know, they kind of see that, hey, we don't have to comply to CMMC now to certify these guys. So we're just not going to do it. When in reality, if you actually lean into it and you eat that cost and you invest that time and money, it could actually be a huge opportunity for them to kind of grow and expand. Because it's easy to say to a client, hey, you know, we have the certification that you need. I think I can help you out and do this.

[00:10:03] It's very difficult when you're not having anything and saying, I could do it for you, but I chose not to do it myself. Like, so what's the value in that? So we kind of see as a huge opportunity for those that do want to make that jump, do that jump. And then you're going to be head and shoulders above everyone else. I'm curious. Is that because you think this will open up new markets or because your existing clients are faced with this or need this? So we're in the Northeast.

[00:10:30] So we have a lot of defense workers for CMMC, for example, that they have to comply to it. And so a lot of them are nervous about it. And so for us to be able to explain to them, hey, we're certified in this. We know what we're doing. We can help you. It kind of makes their day to day a little bit lighter and a little bit less stressful by doing that. Whereas opposed to if we don't, they're kind of worried about that auditor coming, you know, every year, every three years in the beginning. But they're worried about that auditor. Are we going to pass? Yes or no. What does it look like?

[00:10:59] Whereas if you do do it, they kind of have. So we kind of see it as a little bit more of an opportunity to kind of gain those clients over time. So I want to go back to the part where you talked about you grew. You've grown again from 12 to like 45 over about what time period? That took about four years. So first of all, most people never get to 45. Second, that kind of growth in four years is really impressive. Right. So what the heck are you doing?

[00:11:31] So again, we're a little bit unique. So we have a data center out, which makes us a little bit unique to attract customers to do some hosting. And we can kind of brag to clients that we're truly an all-in-one type of MSP. We have developers on site to do development. So we can kind of create reporting or processes to kind of streamline client day-to-day tasks. So that's been a huge striving help. Marketing has been a humongous help.

[00:11:58] I cannot even express how important that is to us, which is really, really nice. And then we've also been developing a portal for our clients to kind of understand their IT a little bit. So it's a page we develop that ties into all our vendors. Hey, when do you need to replace that PC? You know, what subscriptions do you have that are coming up due? What do your tickets look like? And so they kind of feel like they have control of that system, even though we're really supporting them behind the scenes, which has been helpful.

[00:12:27] So all of that really kind of, I think, conveyed to that success so far. So and hopefully into the future. Yeah. There's got to be a little more to that, right? All in one. I mean, you mentioned marketing, too. How much of a role has that played? Marketing is huge. And so it was a shift to us. A lot of MSPs either think they could do marketing on their own. Yeah, they're wrong. They're 100% wrong.

[00:12:53] And it's funny because we're telling our clients, hey, don't do IT yourself. You need to trust an outsider like us who really know. But then internally, we're going to go and say, oh, yeah, we could do marketing, too, which is kind of funny. Yeah. So we acknowledge that we are not marketing people. It's a different mindset. It's a different skill set. And so when we partner with Marketopia, you know, we just have to trust their system. Of course, we give our opinions and our thoughts and, you know, all that matters. But we just have to trust the pros to do it at that point in time.

[00:13:23] So for it. But, yeah, marketing has been number one by far for how awful. You can't grow if nobody knows who you are. That's right. But a lot of us MSPs, we never get past that. So I'm curious what pushed you to say, I need help. I can't do it myself. Yeah. So what we did is we looked at our outside area for our competitors and kind of say, hey, how big are they?

[00:13:49] You know, when you see your surrounding people and they're all five people, five, five employees or 10 employees, that's what you kind of expect. That's what you think the limit is at that point in time. But grateful or not grateful, depending how you want to look at it. We have some in our area that are 100 or 300 employees. And so to us, we said, well, wait a minute. If we're only 12 and there are 100 and, you know, there's some that are 300. Why can't we do it? Like we can do it, too.

[00:14:16] So so we kind of made that push and we weren't afraid to increase the prices or set those pricings that we needed to kind of cover the marketing at that point in time. So which has been a huge success. So and so for the future now, we're going to be doing more and more events ourselves to kind of get some sort of engagement with folks a little bit, get them a little bit more knowledge, a little bit more experience. So we're kind of excited for that. So now there's one thing saying, OK, I need to help.

[00:14:44] And there's in my experience, another saying I'm willing to put in the time, money and effort to actually do it. Yeah. So what how did you cross that chasm? Yeah. So I actually talked to a lot of I know a lot of business owners outside of the MSP space. And so I sat down with them and I kind of said, hey, they're saying that I need to spend X on this marketing thing. They're not guaranteeing me a return on this. Right. I don't even know if I'll ever make the money if it's like a seven year break even, like when's the break even on this?

[00:15:14] And they all kind of said the same thing. Like you don't know. And that's just part of the business. And you just have to accept that you're going to have to just do it. Hope on faith. Don't get discouraged after a month or two months. It might take three or four months or six months, but just stick with it. And eventually you'll see those results. So we just put our head down, didn't ask any questions and then hoped it worked out. So so far, so good. So it's kind of exciting. You said you didn't about how long? How long? The marketing.

[00:15:44] The marketing we've been doing now since 21. So we've been doing three years. OK. So I will say, you know, hindsight 2020. If I knew what I knew today, I would have made much more changes back then. I would have pushed a little bit harder, gotten the full time caller sooner. I would have done the socials a little bit easier. But we're here. We learned our lesson. So we're trying to move on and try to do better here. So that's awesome.

[00:16:09] What advice would you give to yourself from five years ago or seven years ago? Yeah. So before I took over, when I first purchased my in 2020, the 12 employee MSP, I was really nervous about acquisitions because I said, you know, I'm purchasing someone else's problems and successes at the same time. Yeah. And I should have just done it and just, you know, gotten the courage to just do it and pull the trigger.

[00:16:39] And sure, there would have been bumps on the road. Absolutely. Like anything. But you'll ride them out eventually. You'll figure it out eventually. Yeah. And you would have gotten through it. So I probably could have been bigger if I had just pulled the trigger a little bit sooner. So. Yeah. I think there's a lot to say to that courage because it's, it looks like a mountain when you're standing next to it, even if it's really not that big. It's a small hill. Yeah. Yeah. And it's, it's tough, especially with acquisitions because you're trying to assess something that somebody else builds.

[00:17:07] They have a very big emotional attachment to it. So you don't want to disrespect that too. There's a financial aspect to it and then funding and lawyers involved. And there's just a ton of fun with it. So, um, but if you go through it all, it's, it's worth it. So. So what's your take on the M&A space? Do you think that you'll do most of your growth in the next, let's say five years organically or acquisitions or. Yeah, we're, we're hoping for it to be mostly organic. Um, we're always looking for acquisitions.

[00:17:37] Um, we, we don't want to overpay of course. We don't want to, we don't want to take a stumble just because we're trying to run so fast. So, um, but we do think in the beginning, in the short term, it'll still be organic. And then if you're talking about maybe 10 years out, we'll do a couple more acquisitions then at that point and jump it. We want to hold off our acquisitions until we know for certain that we could absorb them with, it's not just the financial, it's, it's the talent, it's the, um, skillset.

[00:18:04] It's the tools that they use versus us, the cultures that are different. The billing is completely different than that other company. So we got to kind of have a good plan for how do we merge all those things together, um, before just pulling the trigger on it. Otherwise it's disaster for both companies at the end of it. So, um, so we're trying to be cautious. Yeah. You speak like somebody that's done that, done acquisitions before and learned as easy as it sounds. Right. Yeah. But it's, it's exciting though. Um, it's always exciting. So yeah. Yeah.

[00:18:33] Well, when you're, when you're, when your money's on the line, when you're taking the risk, it's going to be exciting, I suppose. Yeah. If it's somebody else's money, it's much easier to pull the trigger on. So. Right. But, um, but when it's yours, you want to do right a little bit by it. So. Right. Right. What are you most excited about right now in, in your business or in the industry? Yeah. I, so I, I really like tech in general. So I love the AI stuff. I know that's still very early on.

[00:19:00] I know it's a little bit, um, overplayed and outspoken a little bit too much, but, um, I'm kind of excited to see where that tech kind of goes, what impact that has to our clients and doesn't have. Um, and I'm also kind of interested in seeing, um, just how the vendors do, which ones kind of stick around, which ones don't, which ones get acquired. Um, cause say in connect wise, I've been acquiring quite a bit of recent. So, um, it kind of seems like they're trying to do their own platform and getting everything in house as much as possible. So, yeah.

[00:19:30] Um, uh, so one of the things you're excited about is AI. Yeah. What's your take on AI? Should we be waiting? Cause it's not quite there. Should, are we on the other side? Maybe we're, if you're not already doing it, you're late. Yeah. I don't think anybody's, I always, so all of our clients were a big Microsoft copilot shop. And so we always tell our clients purchase one or two licenses, even if it's for the key

[00:19:56] CEO or VP or CFO or whoever it is, just purchase one or two just for them. Play with it. See what it's like. At least get involved. Dip your toes into it. Right. Um, I wouldn't give it to all the employees yet cause you don't have those safeguards in a place. Um, and of course everybody searches what does such and such make or what's their bonus like. So you don't want AI to kind of tell you that, um, information to the employees. Um, but at least you should dip into it from a high end side, know what it does, know what

[00:20:23] it's capable of doing and, um, just try to see how it can kind of work out with your business and stuff. So, but I think it's still a little early on, um, for it, but I'd like to see, you know, early worm gets the bird sometimes. So, yeah, yeah, yeah. I mean, it sounds like you're, it sounds like you're interested in AI and perhaps investing in CMMC. So it sounds like you got quite a few big, big initiatives. Yeah, definitely.

[00:20:49] Um, what's, uh, you've accomplished more than most, unfortunately more than most people will as an MSP, at least statistically speaking and far faster for anybody that's listening. Is there a gift that you would give? And what I mean by that is like, is there something where you're like, Hey, if you're going through this or if you're experiencing this or if you're struggling with this, I'll be happy to help. Yeah.

[00:21:16] So we're always happy to help anybody we talk to. The biggest thing I could tell you is, is listen to your clients. Um, your clients will tell you what they want. Um, don't force something down their throat. Just listen to them. They're going to tell you what their struggles are. If, if you can get that, um, partnership, that trust, uh, by saying, Hey, you know, that struggle that you're always having, um, I can help out with that. And maybe it's the solution. Maybe it's not. Maybe you just do it for them. But that really sets you apart at that point in time.

[00:21:45] Um, if you're just looking at your clients as a money-making opportunity, then I think you kind of fail that mark and you're going to kind of see that you have to show that value to them. Um, so one of our clients that we always talk to, for example, they're manufacturing and they wanted to do manufacturing, um, overnight, but they were afraid of their machines catching on fire, which is a reasonable expectation. And so I said, you know what? It's, it's not an IT thing at all, but we have some other manufacturers. Clearly one of them must be doing this.

[00:22:15] Let me get you in contact with them. Yeah. Two of you guys can connect. You guys could see maybe there's something that you can help each other out with. And just by putting that other company in front of them, they were so grateful for it. So of course now when I make a recommendation or a suggestion, they're just going to take that. So yeah, listen to your customers, understand what their struggles are. Even if it's not IT specific, maybe one of your other customers can kind of help them out and you still look like the hero at the end of that. So, which is great. So I love that.

[00:22:46] Let me flip that question around. Yeah. There's, there are people watching this. Is there an ask you have that I'm struggling with this or I'd love to learn more of this or I'd like more of this and what we're doing? An ask. Oh boy, that's a good one. Um, I don't know on this one. Um, I don't know. Uh, I mean, the only thing I would ask is more from our vendors. I think our vendors, you know, they do cost increases.

[00:23:15] They give all the bad news to us and they're like, all right, you guys tell the clients that at the end of the day, cause we only have to tell our MSP friends. We don't have to tell the end users that. And I wish our vendors would kind of pick it up a little bit more and understand that you can't just tell an MSP it's 10% more. You can say it to one MSP, but we have to tell it to 200 people or 300 people. Um, and it's not that easy to kind of do it, you know, to kind of do those things. Um, same thing with policy changes.

[00:23:41] Some of them, um, the, the NCE program, for example, for Microsoft was so popular when that came out, but you know, telling a client that was flexible before, Hey, you can't be flexible anymore. Otherwise you get to pay a penalty and you're kind of stuck with like, it just looks bad. Um, and they're kind of putting their partners a little bit more at line. So if I could ask for anything, it'd be for our vendors to kind of do a little bit of a wake up call and understand the MSP struggle a little bit because the MSPs want to grow with them.

[00:24:08] But if you don't give them that tools and you're setting them down, then that kind of beats them up a little bit. But well, I know, I feel like I could ask you questions for so much more, but I know we don't have that much time. I just want to thank you for taking your valuable time out of the event here at GROWCON and for being on MSP Mindset. Thank you. I appreciate it. So it was nice talking to you. Thank you.