He Removed 75% of His Clients in 1 Year - Without Losing Revenue!?

[00:00:00] Let's take our clients and we're going to use a set of objective criteria and rate them as green, yellow or red. And green is, you know, right where we are and we want them to be and all those things that meet those parameters. Yellow is they're maybe not there yet, but they're moving in that direction. And then red is these are just not a good fit. What was interesting about that exercise is we had, I don't know, 75% of our clients were probably red.

[00:00:24] Hey guys, Damien Stevens, host of MSP Mindset. Today I continue my mission to interview 100 of the fastest growing and most interesting MSPs on the planet. Today I'm joined by Wade of Fluid IT Services, and he managed to cut 75% of his clients in a year and still become a top 30 MSP.

[00:00:51] If you want to figure out how he's navigated that and so many other challenges, don't miss out on our conversation today. So Wade, 30 years in industry, something very few people could say. Making it to the top 30 is something even less I think could say. Let's go all the way back to why you started this business. I think you were something involving kind of working with Fortune 50.

[00:01:17] Right. So I had been in IT. I was a systems engineer for a while. And from that standpoint, I was hands on doing everything from network administration to writing software. And that led into kind of more project management and other areas and then eventually led into IT strategy and more specifically IT strategy consulting.

[00:01:45] And I went to work for PwC consulting. Back then it was called PricewaterhouseCoopers, one of the, now I think they call it the big four. And we had, our group was called IT strategy cross industry. And what that meant is instead of being assigned to say healthcare or manufacturing or whatnot, because of our specialty in IT strategy, we would kind of float around and do consulting.

[00:02:14] And it was primarily Fortune 50 companies. One of my first ones was with 3M out of Minnesota. And I was gone five months from November through February. Wow. Being from Texas, I did not have the appropriate clothing. And then again, this will date me. But from there, I went to do some work with Blockbuster, who at the time headquartered in downtown Dallas.

[00:02:46] And it was good work. It was interesting work. The thing I didn't like is we would do all this really good advice and work and, you know, deliverables and hand it off. And then we wouldn't be there to see the results. Like, let's see you guys do this stuff and let's see what happens. We would just kind of be brought in and then we'd leave.

[00:03:13] At the same time, this was around 1999, I guess. And the dot com bubble burst. And so what happened in our group is we had, I don't know, like 40 people on our team and you could pretty much pick your project. And then within, you know, a six month period, 12 months, it was layoffs and all sorts of stuff just because that whole market kind of dried up.

[00:03:44] A lot of my team members ended up having to go get other jobs. I was fortunate because I was still busy and billable. But I didn't really like a couple of things. I did not like that. I couldn't see the results from what we were doing. And I also didn't really having been an enterprise up to that point. We worked for EDS prior to that, which is now they're bought by HP and gone.

[00:04:09] But there is a aspect to enterprise sized businesses that's really good professionally. And then there's a lot for me that didn't really fit my personality type as far as bureaucracy and politics and things like that.

[00:04:25] And so when all those things, the confluence of the dot com bubble bursting and all these other things, I thought it would be really interesting if we could take the methodology, the mindset, the discipline behind what a PwC or back then a century before they went under, what they bring to the enterprise.

[00:04:54] Why can't we bring that to the small to mid market? And at that time, all that I saw were really break fix. It was very reactive break fix. If something's broken, call a guy and a lot of companies. It's literally the brother in law, you know, comes in and tries to do it. And there was no proactive thought behind it. There was no strategic thought behind it.

[00:05:20] And the biggest piece is that I mentioned this in a lot of my articles. The holy grail of it is to align to the business and understand the business objective so well that they not only can help meet those, but then they can actually add additional value, which has changed a lot since we've the Internet and all the other things. And that's become a little bit more profound.

[00:05:45] But what's interesting is when you would ask a business, even large businesses. Well, we're it. We want to help you achieve your objectives. What are your objectives? And a lot of times you get, well, we want to grow. Okay, well, I can't. I can't really tag on to that because that's not a really objective measurable, you know, metric.

[00:06:08] And so taking that mindset to the small to mid market, I thought that could be pretty powerful if we could price it, because the reason small to mid market don't use people like PwC is it's way too expensive. Yeah. So in 2001, let's see, it was a, it would be the fall of 2000 was when I was really, I'd been thinking about my own deal for a long time. I had a company named Fluid.

[00:06:38] I liked that the concept of businesses fluid just made a lot of sense. I also didn't want the company to be about me. So I didn't want it to be the Yeaman company or the way game and something like that. I was like, no, I want this to be its own thing. So I had already kind of mentally gone through and done some modeling and things like that. And so when the dot com bubble burst and all these things were happening, I'm like, you know, this is probably the worst time to go out on my own.

[00:07:05] But my mentality was if I could make it in a downturn, then theoretically, I should be in good shape. Now, again, it's no different than today, but you know, 80% of new businesses fail or they don't make it. So, of course, you're paranoid.

[00:07:26] But one of the main executives I was working with on an account before left and went to work for another Fortune 50 company. And he called me and he said, hey, I'd love to bring you in, but I can't afford PwC. And I said, hey, I've got an idea. Here's what I'm thinking.

[00:07:49] And so that's really what kind of essentially launched it as I was able to run right into no gap or anything right into my first engagement. And what I ended up doing was as I was working there and billing, I was bringing people in underneath me that were providing support to small businesses.

[00:08:16] And then I was dabbling in the parts of the discipline and methodology and IT strategy. And, of course, you know, what enterprise needs a 300 page book, you know, small to mid market, they might need two pages. Right. And so my philosophy on process is really I'm a very process oriented person, very driven by efficiencies, things like that. But I also have a kind of a really broad rule of thumb.

[00:08:45] If it takes you longer to write the process than to do it, you're probably, you know, off base. And the other is it's it's worse to have a policy or process that you don't follow than not having one at all. And so that kind of mindset came into the idea of, well, how much of this do we deploy?

[00:09:09] Because if I said I'm just going to do this methodology that I've been working on that made sense for, you know, 10,000 employees, it's it's not going to work. It's just it's not going to be sticky. But conceptually, it would make a lot of sense. And so from 2001 to probably 2004, it was really building that up. And I think in the first year I came up with my first support plan.

[00:09:40] And today you'd call that a MSP recurring revenue model. Right. But back then it was the one thing I also didn't like about the consulting side is it's a it's a buzzsaw. So you're busy and you make a bunch of money. And then when the project's over, because it's a project, it ends. You have no work. And so you're constantly up and down. And I wanted to have something that was a little more predictable. So recurring revenue was always on the forefront.

[00:10:10] I just didn't know how to structure it and how to sell it. And so when I will never forget, the first one I sold was to a very small real estate company. And I was like, man, this makes sense to me the way I'm doing this. But I don't know if someone's going to make sense to someone else and they're going to want it.

[00:10:27] And when they did, it was a big validation for me because it really meant that the ideas and concepts resonated beyond just someone that was really close to it. And a lot of times in our field, we are too close to it. We can't see the forest. And so that was a big moment.

[00:10:48] And so from there, my kind of, again, I guess philosophically, I really felt like if we did a good job, that was number one. It's kind of like the saying I had that if you do well and you do a good job, the money will come instead of chasing the money. And I've never been one to chase the money. And so it was the same thing. If we do a good job, then we should get referrals.

[00:11:17] And if we get enough clients and enough referrals, at some level, you start to become a little bit viral. And then you're not spending a ton of money on a marketing engine or even sales for that matter. And so that's kind of how we rolled for a long time. And we kept iterating, kept iterating. And then from then on, it was a fight to constantly stay relevant.

[00:11:47] You know, when the cloud came and we built our own private cloud, you know, you get into that and then we got out of that. And then so you can never just sit and rest. But fundamentally, it's still about driving value to the business. And our mission statement is knowing so much about our clients that we become an integral part of their success. Well, it's easy to say that.

[00:12:16] It's harder to do. You can't be integral to their success unless you really know what their business is, what they're trying to achieve. And then now you are offering more than they even thought about. And so that's still the case today. Hey, guys, Damian here. As I continue to interview the top MSPs in the world, one thing has become incredibly clear. It's time that we let go.

[00:12:43] Even more than that, every time I focus on my zone of genius and get out of the way and do the very few things I'm good at and delegate to others, I'm ready for that next level of growth. So if you're ready for that next level of growth, one way that I could help you is with Servocity. We co-manage your backups and disaster recovery so you can focus on what you do best. Let us do the rest.

[00:13:08] And then what we do is we test the backups every single day so you never have to worry. If you'd like to learn more, click the link below. Well, it's one of the biggest. You have a different perspective, right? You came from consulting at one of the big four and often consulting for Fortune 50. Obviously, that's an entirely different world. Like you mentioned, 300-page report to a two-page report. Right. I doubt they even read the whole two pages.

[00:13:39] And so what was one of the biggest lessons learned when you were just getting your business started and kind of making that transition? A lot of it has to do with spending your time on the right things. I was saying, you know, if you have one hour left in the day, what are you going to do? You know, how are you going to use that time? And when you start out, as I did, I'm doing everything. I mean, I'm doing the accounting. I'm doing the selling.

[00:14:08] I'm doing the marketing. I'm doing the website. I'm doing the timesheets and all that stuff. And so you have to be really careful of how you allocate your time. And the other aspect is, I think, finding where you as a company offer the most value.

[00:14:31] And you do that by talking to your clients and getting feedback from them. You make a lot of mistakes, but you also have to get to the point where you're willing to diagnose what really makes a good client versus one that's not a fit. And we went through a period where we had a lot of companies, a lot of clients, a lot of business.

[00:15:00] We had a lot of products. And it's not one of those things that happens overnight. Just like our clients typically don't end up having, you know, 20 different types of laptops. It's because that's what's happened over a five or 10-year period. Same thing with your clients. And we kind of woke up and we're like, you know, ironically, the bigger clients are actually easier and they're less noisy and squeaky than the smaller ones. And there's some reasons behind that.

[00:15:30] But we had to go through a very formal process of identifying that. And what we did is we said, let's take our clients and we're going to use a set of pretty much objective criteria and rate them as green, yellow, or red. And green is they're either, you know, right where we are and we want them to be and all those things that meet those parameters. Yellow is they're maybe not there yet, but they're moving in that direction.

[00:15:57] Or they've been good, but maybe they're starting to go south a little bit because they've had a change in leadership. And then red is these are just not a good fit. What was interesting about that exercise is we had, I don't know, 75% of our clients were probably red. And so then that tells you where are you spending your time and resources and all that. So we actually went through a period there where we terminated all those red clients. And that was a pretty scary time.

[00:16:28] But the result was it was much better for our existing clients that remained. They got better service, better time allocations. We became more efficient. We were able to lock in more related to our overall objective of focusing on IT strategy because the red clients, they didn't really care about that anyway. Right. They just I want an email account and I want it to work. And I don't want to ever call you. I mean, no one really wants to call us.

[00:16:58] I mean, we don't get people that call us and say, hey, you guys are doing awesome. I just wanted you to know. And by the way, our Internet is so fast and that just doesn't happen. And so we already are viewed as a stress, a source of stress. And so if you know that and you take a more proactive approach to how do we deal with that? And part of that was we really had to do some soul searching and go through and kind of clean out how we were going to approach the business.

[00:17:28] So how did you I mean, if you had 75 percent of your clients are red and you needed to fire them, I imagine it wasn't done at once. Help me understand that because it is it's very scary when you are first aware of it. And then it's, I think, much scarier to take action. Yeah. So I have this whole again, I overthink everything. But so I have this whole presentation on the concept of you don't know what you don't know.

[00:17:57] So call it a blind spot. But in our space and I.T., when we deal with businesses, there is an awful lot of I don't know what I don't know. And that scares people. So the first step is making someone aware. And once you're aware, then you have to decide, are you going to ignore it? Are you going to do something about it? Or you're going to educate yourself.

[00:18:26] And based on the education, even if you decide to do nothing about it, you know what the risk is that you're undertaking. Right. And so that was kind of the first step here is we need to get a really good awareness of this situation, educate ourselves, and then decide what we want to do about it and what time frame, how we're going to do it. And so how are we going to communicate this to those parties over what time frame?

[00:18:56] And, you know, so it became a pretty formalized process by doing that. And then as far as the time frame as well, we also knew that because these red clients were taking so much time, the other side of it is our staff were frustrated.

[00:19:22] So, you know, the happy quotient was not good because it's like I don't want to come to work and get yelled at all day. And when you look at, you know, five of your eight hours is based on that. The other big part of this, though, was it was robbing our really good clients of time we should be spending with them.

[00:19:45] Because if you're spending time just doing break, fix and reactive, then you're not spending time doing proactive things like, hey, help me understand where the business wants to be in six months or a year. Are you going to be growing? Are you moving? Are you opening offices? You know, software you're using now. Are you happy with it? Not happy. You never even get to those questions. Right.

[00:20:04] And so once we decided, we took, you know, probably a full year to actually go through that because, yeah, the concern of, well, I can't just dump all this revenue. Right.

[00:20:20] But if you do it over time and you now you have a better idea of what the proper persona is for a good client, then on the other side where you have new business coming in, you're also being a lot more careful about what you're pulling in and you're able to say no. And so over that same course of time, one good green client could really compensate for probably 10 reds. I mean, easy.

[00:20:47] And so by doing it that way over a time frame, we were able to do that. And then we've carried that methodology and that mindset forward. So if I understand what you're saying, Wade, you kind of just once you knew the red clients, but 75%, right? I don't know if the exact revenue was 75%, but I imagine it was considerable. So you didn't fire them all at once. And as you brought in new clients, you had some period where you were firing them or however you want to word that.

[00:21:15] And then that allowed you to grow. Did that basically allow you to be neutral for a while, like that year on revenue because you kind of replaced with the right fit? Actually, we grew. We've grown almost every year. Now, there have been years where it's been, I would say, flat, but we've pretty much always grown.

[00:21:38] The other aspect of this is, you know, at the same time you're doing that, you're also looking at your own product mix and trying to tweak and, you know, make those products more relevant, better, price them accordingly. And the other thing is, you know, and the other thing is, you know, share a wallet is really important.

[00:22:00] So when you look at farming versus hunting, so farming, I want to get more revenue from my existing client base. And then the hunting is getting the new logos in. And so we also became very good at farming. And we added complimentary things to where, because I was very sensitive to a couple of things. One, I don't like myself to get nickeled and dimed.

[00:22:27] So I really didn't want to, you know, have a situation where clients felt like we brought them in. And then once they got in the door, now all of a sudden the fees tripled. It's like, well, no, one of my, from the get-go, I'm not going to discount. I do not discount. I'm also a stickler for scalability.

[00:22:48] So even though we were very small, mentally what we did for 10 clients needed to work for 1,000 clients. And so when you look at the back of the house operationally, it was all built that way. Contracts, we had single contracts. You know, we didn't customize agreements. We didn't have customized pricing because it won't scale.

[00:23:13] And then we also, you know, made difficult decisions as far as minimum terms that everyone has to accept. And it's really scary when you're building something and you're on the sales side of feeling tempted like, boy, if I discounted this 10 bucks, I could get this deal. Or if I didn't hold them to a one-year agreement or a 36-month or whatever it is, and I'm going to let them go month to month.

[00:23:40] And you just have to really hold firm on that knowing you're not going to win everything. But then that goes back to, are they really a good fit anyway? And so all those things are happening at the same time that you're doing these other factors. And so when you are able to really focus on those good clients and you're able to increase share of wallet, everyone's happier. Your employees are happier. Your clients are happier.

[00:24:08] And that's why, you know, we have clients that we've had over 20 years, you know, that we don't know any different, you know, both parties. And we've had them where they had six employees when we started and they have over a thousand now and they still use us. You know, so that ability to be scalable internally also translates externally to your, you know, your ability to service that customer base. Hmm.

[00:24:39] Now you rated them red, yellow, green, but you mentioned you want to do it objectively because I think like it's really easy, especially if you're on the sales side or if you're on the upside to look at it and go, that's not the right fit. But often that's just, that's not an objective way. So is there some rationale you brought to make this objective instead of, you know, I don't like this particular way they do this or they. Yeah, so there's some easy ones. You know, how much revenue.

[00:25:10] We don't really look at revenue as far as what a client makes, the money they make. The bigger metric for us is number of employees or users. And so we would look at that. And then we would look at what industry are you in? Because some industries are just notoriously difficult. Then are you planning any growth?

[00:25:33] And so we tried to be as objective as possible, but you do have an element of, you know, another one would be how many tickets do they put in a month? What type of tickets are they? And then you have, are they easy to work with, which is a little bit more subjective. But when you're talking to the people doing the work, it's not. It's like, no, every time they call, it's awful. I hate it. Well, okay, tell me more about that.

[00:25:59] Is that because it's a personality clash or is it the way they're actually treating you? So you can, sorry, my light went off there. You can get into as much and as deep as you want. And I think the other thing that was going on at the same time is that we got to a point where it had too many products.

[00:26:22] So if you went to our website, we had all these really what I would call now bundled products that are just, they come with what we do. You know, we hosted email. We had email defense, which is like Mimecast or, you know, whatever. Antivirus and all these things. And they were add on because we were obtaining those as we went because the market was shifting to where, you know, small to mid market.

[00:26:51] Generally, my experience is lags enterprise by about 18 to 24 months minimum. So while you read everything about, you know, back then antivirus this and all this. Well, getting our clients to even look at it, they're not, they don't care. Like it's not, there's not enough value or there's not a pain point. And so you have to have a mindset where, for me, I want to be, I don't need to be up front and be the first mover.

[00:27:22] But I also don't want to be chasing it and trying to catch it. So I want to be there if I can to time it where I can catch the business and we're ready. So, for example, let's say email defense is something like where you have, you know, anti-phishing and all that. And that was, let's say that was not a solution.

[00:27:44] If we don't want to be the first ones to have it because we're going to be sitting on that and probably paying for it for however many years before it finally catches on. But if we can be there and the key is we have to have the staff with the technology skill sets to support it. So if we can be there and then as that warms up with our customers, we're already ready to do that.

[00:28:09] And that's, that also converses to you have to be ready to decommission services, even though you're making money on them, because you're looking strategically and you're saying, okay, this is not going to last. So that was also going on as well, where we were right-sizing our product mix because it was actually too complicated. I mean, for the market and for internally. And so we, at the same time, we were really flushing down those, that client mix. We were doing the same on our product mix.

[00:28:39] That makes a lot of sense. But it's really easy to have that creep, product creep, right? Yeah. All of a sudden you look up, you've got 26 different line items or things in your tech stack. Yeah. And that's where it gets back to the, if you're guiding principle from the get-go is being scalable and being efficient. And another metric that we use a lot is, you know, how many clients can one tech service?

[00:29:08] Mm-hmm. And so there are things you can do to kind of test yourself to see how efficient you are. And, again, having that process mindset from the get-go is really important because what you realize is a lot of IT companies start by a really talented IT person.

[00:29:31] So someone that really is a stellar engineer or a cyber security expert or a developer and they start the company, well, it just so happens they have no mindset for financials and operations, right? Well, you can't have one without the other. And if you just wake up one day and you say, oh, I've got a company, that doesn't mean it's running well. It doesn't mean you're making money. It doesn't mean you're efficient.

[00:29:57] And so having those things kind of laid out in the beginning is really crucial to ensuring that you have the ability to check yourself, look in the mirror, and the leadership team collectively look in the mirror and go, you know what? This is really good right now, but it's not going to last. And we have to be okay with changing course.

[00:30:22] And, again, a lot of these things are guiding principles that are much better if you can start that way. It's harder to make that adjustment in flight because when you look at your people and your culture, you really want people that are like-minded. But you want the strength of having diversity and the mindset and what their ideas are.

[00:30:47] And that's harder to do if you try to, you know, just wake up one day and say, I'm going to do it this way. And you look at your staff, you're like, okay, they're not, it's not going to work. But it is constant, continual improvement. I mean, that's one of our big ones, you know. So there's a lot there to unpack.

[00:31:04] But it goes fundamentally back to, you know, I think having a disciplined approach, having a process-oriented approach that's scalable, standardized, not doing a bunch of custom work. You know, in my world before starting, there was a big difference in build versus buy.

[00:31:26] And so all those came into play as far as how things were structured and even today how we approach things. So you're deep on the client. You want to understand, you want to be integrated with the business. You want your team and IT to be supporting the business. How do you hold that tension with standardization, efficiency, cost-effectiveness?

[00:31:51] Because the reality is, right, as an MSP, when I get a new client, they don't have the same stack. They don't have the same switch. They don't have the same firewall. Whatever the things are. And so, you know, we're trying to drive efficiencies and some level of being, if not the same, similar. How do you balance that, like, desire for the client, but also it seems like on the other edge, you could say, well, I'm trying to be scalable and do things the exact same way.

[00:32:19] It's changed because, you know, five, eight years ago, we had our own private cloud and we were migrating physical servers into our cloud. We were hosting them. We didn't really trust AWS or Azure at that point. And so, you have an environment where you have a lot of infrastructure you're maintaining. And on that infrastructure, you have a lot of applications and software. And so, you do have quite a bit of variance.

[00:32:50] In that timeframe over the last eight years, though, you know, everything's changed. You now have SaaS models and things like that. And during that, we went from, you know, hourly to a per device to a per user. Because back when it was heavy infrastructure, if you supported a server or a virtual server or both versus a laptop, completely different skill set, different amount of time. So, per device made sense.

[00:33:20] Well, then, flash forward, per user makes sense. And so, what we've been able to do is now that we're focused on the user, we also said, well, these ancillary pieces we want you to have to your point of how do you make sure everyone kind of standardizes and efficient, let's just include it. And we'll also require it contractually that you have to have these things in order for us to be able to do our job.

[00:33:49] Now, can you – so, let's say, for example, we include email defense, let's say. And we include backup for 365. And we have a new client and they say, well, we already have that and we want to use that. Well, we're not just going to go, okay, we're going to go, why? And a lot of times it's, well, because we just bought it, we feel like we need to get use out of it. That doesn't happen as much anymore because everything is subscription-based.

[00:34:20] Yeah. In the old days, you have issue where, oh, we just bought this server in our office two months ago. We feel like we need to run that out even though your cloud makes sense. That's not really the case anymore. Now, what you may have is, okay, well, our agreement isn't up for renewal until February. Okay, well, let's run with that. We don't want you to throw money away.

[00:34:41] But most times when you look at our bumbled approach, once you allow them to, in this example, get rid of their email offense in favor of ours, they save money. You know, so it's become easier and we are now doing what we call a modern workplace, which, again, enterprise would look at this and go, this isn't modern. This has been around.

[00:35:08] Like, I know, but for our market, it is a big switch and it's a lot of it's serverless. There is no server. And so it's counterintuitive for us because we have a substantial amount of revenue tied to server architecture and hosting those or in Azure, because we are now in Azure, or supporting those. So it's counterintuitive to say, you know what?

[00:35:36] From an IT strategy standpoint for your business, we're going to move you away from, let's say, an RDS farm for remote desktop services. We're going to move you away from that and get you to a completely serverless environment. You're going to save a ton of money. Well, where are they saving that money? From us, right? Yes. But it goes back to it's the right thing to do.

[00:36:01] And everyone that works here knows my number one thing is, look, when I started this business, I have one thing I cannot compromise because I can't get it back, and that's my character. And so there's been a lot of ways to make a lot more money I have not said yes to because there's a lot of sketchy stuff out there. And unfortunately, in our space, it's easy to do because I don't know what I don't know.

[00:36:30] And so there's a lot of just trust me going on. And clients have kind of no choice to just trust them. And it's not too different than, you know, if you're in your house and, you know, you have, let's say, a major plumbing issue. And you call a plumber and they say, here's what it is. At that moment, do you say, you know what? I'm going to get two other plumbers. Or do you say, I can't. I got to get it done. I trust you.

[00:37:00] Just do it. Same thing with a physician, right? How many times do you go to a doctor and say, ah, I'm going to get a second opinion? It's usually only if it's pretty big and catastrophic. So a lot of that mentality kind of comes in our space. And I think you have to be very mindful and respectful of that, that that is a big privilege you're given that once you lose it, I don't know if you'll ever get it back. Mm-hmm.

[00:37:28] How do you, how have you navigated and how do you recommend maybe others navigate? Do you got to, your business name, you got to stay fluid, right? You had a hosted cloud in your data center. Now maybe you hosted in Azure. Maybe you're going to something that's, that is not based on servers. Antivirus was the thing. Now it's probably some XDR or manage something like the one constant change.

[00:37:54] But even the infrastructure and how, like you said, you have a lot of revenue tied to managing servers. But now maybe there's less of those. So how do you manage those transitions so that you have the character to still advise what's best, but not be too early, too late? And also, right, we have the whole inconvenient thing is the bigger we get, the more we could shoot ourselves in the foot from the revenue. Yeah, exactly.

[00:38:19] And it's not one quick, easy answer, but I will say, you know, you got to be willing to make mistakes. But you also have to have, I'll say, foundational structure in place, meaning you need to have the ability, even though you're small, to kind of have a innovative R&D aspect to what you do.

[00:38:40] And so you have to, you have to be deliberate about that, because if you don't, typically the person or people that you really need to do that, they're high up on the food chain. They're like a senior level person, and they're also the one getting pulled eight different ways on all the projects because they're the expert.

[00:39:01] You have to force that to be able to, you know, have the time to spend on that. You also have to have a culture where you constantly facilitate discussions that are allowed to be new ideas, that are allowed to say this is going away and have healthy debate.

[00:39:27] It doesn't necessarily mean that it's all a democracy, but you have to be able to collaborate. And then lastly, I would say is being very deliberate about scheduling it. Time management is huge. And so everyone will say they don't have time for it. Again, I go back to that, what, you know, one hour left in the day, what are you going to do? And you might get a different answer from everyone, depending on who you talk to.

[00:39:53] And so with that said, you say, okay, I'm going to get my, you know, five key people together and we're going to spend this one hour on, you know, strategic things. Right. And we might do that, you know, every other week or once a quarter or whatever we decide. But we also have a very defined process for strategic planning every year. And we follow the same process. And it's not just looking at fluid.

[00:40:22] It's also looking at, we look at the macro economic situation. We look at the micro economic situation. We look at benchmarking within IT, benchmarking within MSPs. And so we've been doing that the same every year. And so when you do that, it just becomes how you think.

[00:40:44] And so you also feel a little safer about saying, hey, we need to turn this thing off. And a good example is being fluid is we were going to decommission our hosting environment because we had a lot invested in that. And we had said a year in advance.

[00:41:07] And in 2019, we said, okay, during that strategy planning, we're going to have this fully decommissioned by the December of 2020. Well, what happened in 2020? We had COVID. And so we said, okay, we got to step back from that. But we still have to do it. So we just pushed it out a year and we say we'll decommission it. And that was huge because we had to notify every client. We had to say we're moving you off this environment and we want to move you to Azure. You can say no. But if we do our job right, we should be able to do that.

[00:41:37] And so, you know, again, even though COVID hit and it was not fun, it didn't really impact us. Because we already could work from anywhere. We already had all of our clients set up to be able to work remotely. They had to scramble themselves to get people into their little home offices and whatnot. But for us, the biggest thing was, okay, we're not decommissioning our cloud. You know, we're going to have to hold on to that.

[00:42:06] And we're going to have to really go into retention mode rather than all these other changes. So it's just it should be kind of something that you build into your DNA. I have this saying, you know, because I see it all the time where MSPs will offer virtual CIO services. You don't wake up one day and know how to do IT strategy and just go, you know, I know how to do it. And we're going to put it on our website. But yet a lot of them do.

[00:42:36] And they may think they are doing that. But from what I see, it's like that's not really what you're doing. It's a different level of service. It's a different approach. It's a different discipline. And it's the same when it comes to looking inward at your own products and also not being afraid to try new things. We created security as a service probably.

[00:43:06] Oh, 10 years ago with the idea of providing networking hardware, firewall switch, APs, all that stuff, because, again, that stuff's in a closet. No one knows what make model if it's under support and we're having to support it. If we could control that, it would make it a lot easier, more secure, all these benefits. We had that about a year ahead of when it caught on. And initially I thought, man, we missed it.

[00:43:36] And then it was again, it was just a lag. And then all of a sudden it just kind of took off. So the other side of it is creating new product lines or services that ideally are complementary. And that's becoming more difficult because there are so many MSPs out there now and they all say the same thing. They all say they do the same thing.

[00:44:02] And it's really watered down the value proposition for, unfortunately, the buyer. How do you remain relevant and competitive in the market? Exactly. And I think the big question there is what's your differentiator? How are you different? Going back to some of the questions about when we started, I could just talk to a business owner and talk to them and say, here's what Fluid's about. Here's how we think. Here's how we do things.

[00:44:31] And they would be hooked and I want it. Here's the only other alternative was I got to call my brother-in-law or I'm going to call this guy in a truck and that's not going to work for me. I've outgrown it. My business needs to grow. And you just can't do that anymore because everyone's saying the same thing. I think part of it is we focus on two primary metrics. One is end user satisfaction and the other is client retention.

[00:44:57] Because if you're not doing things well, your users are going to be unhappy. And when your end user is unhappy, they're going to complain up to management. And then eventually I'm going to hear about it. And your client retention, you can't be bringing in one new client and lose one out the back door. You're not going to grow. And then fundamentally something's wrong with that. Why is that happening?

[00:45:25] What are we doing so well to bring them in, but we're not doing to keep them happy? So if you can keep your users and your clients happy, then theoretically every one of my clients should be able to be called as a reference or do a testimonial. That is more powerful today than anything else is being able to say, because I get it all the time now.

[00:45:52] It used to be maybe 20% of new prospects would say, hey, I want a referral. Now they all say it. And I'll be honest, when we had all those red clients, I'd be like, oh, gosh, who's happy today? You know, I've got to be careful who I send out there. Now I can just say, tell me how many you want. And they always say, I want someone exactly like me in my industry because we're unique and we're different.

[00:46:19] I go, OK, well, you're not that unique and not that different, but I appreciate the sentiment and I will get you what you need. But also, if you need more, let me know. And so that is kind of fundamental as far as just how you operate to where you have a confidence level that and you have metrics in place. So, for example, our customer user satisfaction that comes in real time and it posts to our front page of our website in real time.

[00:46:47] If we get anything but, you know, let's just use stars, five stars, we have a process in place where that person gets immediately contacted to say why. What happened? What could we do better? Ironically, most of the time they click the wrong thing. It's a mistake. But there are times when there's, you know, legitimate feedback and they're frustrated.

[00:47:09] And so having a process in place to deal with that very quickly, I think a lot of times, especially in the small to mid market response time is critical. If you sit on something, it's not even a day, it's half a day, it's hours. They don't have time for that. You know, it's not like enterprise where I throw this out and we'll get back to it in two weeks. It's now that we've missed it by then. So those are the things we're focusing on.

[00:47:38] But on the other side of that is back to your big question, which is more difficult, is how do you stay relevant? Well, unfortunately, the MSP market is, as the way we say it here, is kind of becoming a McDonald's. You know, there's just so many on every corner. And, you know, no one here wants to flip burgers.

[00:48:07] You know, we want to make a bigger difference. And when you also have all the M&A going up and all the roll ups of these MSPs, that relevance becomes a lot more difficult. And so then you have to challenge yourself. And we had this discussion yesterday. Wherever there's complexity, there's opportunity.

[00:48:31] And so that's why, even though we don't do it, working with the government can be a complete nightmare. But if you figure out how to do it, you can make a lot of money. Same with health care and all the billing codes and all those things, because it's just hugely complex. So when you're looking at relevance, you also have to look at. Are there things that we can do to differentiate and how do we stand out from the crowd?

[00:49:03] Because no amount of marketing or website, you know, page is that's not going to do it. It has to be from within, within your service offering and how you do things. And so that's something we're dealing with literally right now. We're this week doing strategic sessions on that. And, you know, we have a couple, you know, big objectives and goals coming out of that to deal with that. Because it's just been it's become a lot more difficult because everyone wants the recurring revenue.

[00:49:34] And then the VC firms and the PE firms, they all want to buy MSPs and put it in their portfolio. So you have this institutional money. And that's not necessarily what we're after. We don't want that, you know, because that breaks the mold of from the very beginning of I want to do the right things for the right reasons to help people.

[00:49:57] And a lot of times when you see those others come in, the first thing they do is they get rid of leadership and they just run it as a financial vehicle, not as, you know, a company that wants to do the right thing. I wanted to kind of switch gears and ask what's all these years in business, what's been the biggest lesson that you've learned?

[00:50:22] Oh, it's going to sound cliche, but I think there's certain things you want to hold on to as fundamental aspects that you're not willing to really compromise on. But then there's a lot of other things that you have to be willing to let go. Can you give me an example?

[00:50:47] Well, I mentioned some on the products, but even the staffing, the staffing type and model that we had back when you had a lot more hardware, you know, having someone that knows Dell servers and VMware and all that stuff. Well, none of our staff knows that. I mean, if I were to go out there and say, hey, we're going to do an N plus one environment with full redundancy, VMware, blah, blah, blah, blah, blah. Back then it was Horizon, whatever it is now.

[00:51:16] They would gloss over our technical people other than our senior guys who've been with me forever. And so you have to be willing to. And that's harder because it's a family. You got to be willing to adjust the family as necessary. And that can be a lot more difficult because you have people that come in that want to be in IT and they are here and they realize, I don't want to do that. I want to be a teacher. OK.

[00:51:44] Then you have some that come in and they realize, well, I want to focus on cybersecurity. You have to be honest. Are you going to be able to get that here or not? Even as much as I like you, I owe it to you and your development to say and do the right thing. And so I think you have to have the flexibility to be able to let go. Yeah. Yeah. Well said. Especially if you're looking out for their interest, right?

[00:52:13] Sometimes they just need to bloom in a different garden because we don't have that opportunity for them. Yeah. Yeah. And I don't see any value at all in burning bridges, whether it's a client or people. Now, does that mean that I'm Mr. Nice Guy all the time? No. There's situations where if appropriate, I'll take a hard line, but I'm still not going to burn a bridge.

[00:52:38] Because ultimately this whole life, this whole professional, it's all about connections. It's all about people and who you know. And, you know, I've been amazed by how many people have come full circle. Like I had them 15 years ago and now they're working somewhere else and they're back and they're saying, hey, we love you guys. We want to use you. And you just never know when someone's going to end up. Yeah.

[00:53:05] And so I've heard the saying, you know, we want to make good alumni. I don't necessarily want that to be a motto because that's kind of like you start and at the beginning you already know you're leaving. It's like, no, that's not really what we want. But that mindset is apropos. Like we want to leave you leaving better than when you came in.

[00:53:32] If there's one thing you could do over or differently, what would that be? That's a tough one because I think even on the hard things, the difficult things, and again, you hear this all the time, but how much you learn from mistakes or when things don't go well. I look at maybe some missteps and think, well, it would have been nice to not have that, but then we got more out of that that we were able to carry forward.

[00:54:03] So honestly, I don't know that I would change anything. We're not as big as we could probably be, but I know we're not because, again, I didn't do it just to go after money and all that, and there's a way to do that. But even now today, I like what I do. I enjoy my job. I enjoy getting up and coming to work because I know it matters. I know it has value.

[00:54:33] And so the idea of retirement really doesn't resonate with me because I'm not doing something that's like I dread, that's painful. And I see and hear that all the time. And so if that's how I feel now, then it's harder for me to look back and go, I wouldn't feel this way, I guess, if I felt like I had a lot of stuff I would have done differently. Mm-hmm.

[00:55:02] For those that are listening, is there one thing that they should keep an eye out during that journey? Like something that might have been nice to skip? The number one thing for me, and you could argue it's a pro and a con, is I'm very trusting. Mm-hmm. And I'm very giving. And so that has bitten me pretty harshly a few times because I trusted people to either do the right thing or not do something they did.

[00:55:32] And, you know, there's one particular case where I always said also from the very beginning, and it's not that I don't like attorneys, but I don't really want to have one on the payroll. Yeah. So, you know, not having attorneys is part of the business other than the requirement for contracts and things like that, but meaning I'm not going to sue anyone. I'm not going to go after anyone.

[00:56:00] You know, if someone doesn't pay me, yeah, I'm not going to go to, you know, because I'm spiteful. But also on the other side, I don't want to be sued. And so I've never had that, but I did have on either side, either, you know, me being sued or anything like that. But I did have a couple situations where legally people did some things that were just not kosher. Like there's no way they should have done it.

[00:56:29] And you have a choice at that time. And in the moment, you're really angry. Let me go do this. But in the big scheme of things, what's the end game? And if it's protecting your intellectual property and your brand and your company, that's one thing. If it's someone just did something to make you angry, knowing they didn't make you angry, that's different. Right.

[00:56:51] And so I think, you know, being very careful about how you proceed in those situations, because unfortunately, I think what I've learned is the more trusting you are, the more that's going to happen. And then you but you don't want to get jaded, you know. And so, you know, a really simple, silly example is when we were really small and someone wanted to go on vacation, you just say, hey, tell me when we'll get it on the calendar.

[00:57:23] And then eventually, you know, you don't need to have a big policy written, but then someone takes advantage of that. All right. Now I need to have an approval form because it's being taken advantage of. And those kind of things happen as you grow and you scale. And so you end up with things like we have a handbook, like why do we need a handbook? Well, because if you don't, people will come to their own conclusions about what, you know, what they're allowed to do.

[00:57:54] I've also learned that because, as you said, I've had fluid for 23 years and in IT for a long time. I've seen a lot of people come and go and I've seen a lot of generations and I don't like to paint with a broad brush. But I do feel like more so now than ever before, I feel like the people we bring in that are younger.

[00:58:17] We're almost in a way a second set of parents for them because we're having to deal with things that I didn't imagine we would have to deal with. And a lot of times it's on a personal level, but also it can be I had a guy that we were in a meeting and he's just almost had a panic attack. I'm like, man, what's up? He's like, I've never had to take notes before.

[00:58:45] You know, I never crossed my mind, you know, that that. Not one that you wouldn't know how to take notes, but to get it would work them up that bad, like it really impacted them. And so when you start to recognize that and then you also recognize a lot of people aren't going to be the type that raised their hand proactively and say, hey, I don't know this because they don't want to appear like they don't know. New people especially want to make sure that they are showing value so that they buy.

[00:59:15] So then they buy more than they can chew. So being aware of those things and then having an environment that can accommodate that at the same time, not allowing yourself to get taken advantage of. What's a myth about running an MSP that you'd like to dispel? Well, I don't know if it's a myth. I don't know if anyone thinks it's easy, but if they do, that that would be a myth. That.

[00:59:46] If you line things up and getting get them where you want them, you're just good to let the thing let the machine go. Yeah. Now, you're constantly got to be working on the machine. The other and I think this is part of your premise is MSPs are very different and they get lumped together as we're all the same. We all do it the same way and think the same way. And that is just absolutely not the case.

[01:00:13] And unfortunately, this is what I've struggled with with the market because I deal with the buyer and the only information they get is very surface level. And at the surface level, everyone does say the same thing. It's only until you get under that a few layers, you see, well, how do they think? How do they operate? What's their set of values?

[01:00:39] You know, that's really hard to get because buyers don't know to ask those questions. So whenever I talk to anyone that's looking at us, I always tell them, look, whether you choose us or not. It's fine. I my job is to educate you so that you feel good about making the right decision. So you can redact or whatever. But, you know, if you want to run things by me, feel free. Now, they rarely do it.

[01:01:09] But I feel like I have to offer that because I've had enough that kind of boomerang back to say, man, I did it because of price and it was awful, you know, or whatever it is. And those are things that sting the whole market. I think it hurts the whole marketplace when that happens, because I think where we are now is MSPs.

[01:01:33] At least from what I hear feedback wise, if you have a business that's used an MSP before. They typically don't have just a great feeling about it. If they've never used one, like let's say it's a small business and they've grown and they're like, oh, we need to formalize this. Not as much. They're just more relieved to have someone that knows what they're doing. But there's a lot of them out there that just they're there.

[01:02:03] I don't want to say they're bad because they may serve a purpose for a certain segment. But as far as the way we do it, it's just it wouldn't hit the bar that we have raised for ourselves. And buyers don't know that until they go through it. So, Wade, what is it that you're looking forward to?

[01:02:28] I'm looking forward to where we're headed next, both as a company, but also as an industry. I think we're at a really interesting. So if you look at big inflection points in technology, an easy one would be the Internet. Right.

[01:02:49] And if you look at the timeline on that, we had the dot com bubble, which was in the late 90s. And everyone could get money and everyone popped up a website. And then the buzz went away. And it's like, wait, you got to actually make money at this.

[01:03:09] And so then the bubble burst and then it took years for it to kind of normalize and to where it actually that technology now can literally change the way IT is as far as adding new value to the business. They could not have gotten before. Right. I mean, you now have access to do things you could. Very exciting. There's not a lot of those things that come around.

[01:03:33] I think the one we're in right now with AI is we're at that early phase, like in the dot com where everyone wants AI. There's a ton of money going into it, but we're still way too early. You know, it's going to take a while to figure out because you have everyone now is starting to see the. The dichotomy of, oh, I have all these benefits, but it's really scary, the responsibility and all the fake stuff. And, you know, and so that's got to all flush out. But it's a really exciting time.

[01:04:03] And it's really scary from NSP because it's, well, where do we fit in all that? Right. Because I could argue over time, more and more has been pushed out to the end user to be self-service. Mm hmm. So I can go, you know, when I come in in the morning, I open my browser and I open like eight tabs and that's where I work. You know, I don't have any software on my machine.

[01:04:28] I don't have software on a server in my office or in a cloud, you know, or on a machine that we own. But things are cyclical to an IT. And so what we're starting to see now, too, is some of these things are coming back to either colo or on prem. But they have to have a very specific business reason, business case. It's not going to be, well, just because it feels good. So it's a really interesting time.

[01:04:56] It's also a scary time because. On one hand, you have all these. People entities wanting to be in the MSP space because it's recurring revenue and you have all these companies that are doing roll ups and buying them and the multiples are good and all that. On the other hand, you know, you still got to make money and you got to have longevity.

[01:05:22] And so that's why I say the organic and the acquisition side are so important, because if you're in an economic situation where we are now, where there's a ton of uncertainty. We had rates and inflation go up. People stop buying and then we have a little dip in a rate, but then they stop. They said, oh, wait, we added a ton of jobs, so we're going to stop that. Then you have the election and you have, you know, the war in Ukraine and you have all these things.

[01:05:51] And all that does breed uncertainty, which means people don't do anything. And so you've heard that saying, if you're not moving, you're you're you're you're losing. Right. So you have to constantly push to say, well, how are we going to evolve? How are we going to move past this? And so it's a very difficult time, but it's a very interesting time. What's the one book you'd recommend?

[01:06:19] I think anything by Stephen Ambrose is really good. Anything by Rick Atkins is really good. I think. What are some of those books that stand out by either of them? One of them is called Nothing Like It in the World, which is about the building of the Transcontinental Railroad. That was fascinating because. You know, there's so many. I didn't know that. Didn't know that. And then you see the name of these towns. You're like, oh, I didn't know that.

[01:06:48] Didn't know that. And they were laying miles of track in a single day by hand. I mean, it was just mind blowing. And then they met up in the middle and all these. It's just a really, really fascinating read because our country is still based on that. I mean, and the things they had to overcome. To make that happen. You know, like surveyors going out.

[01:07:17] A hundred miles ahead to survey and there's Indian territory. And are they even going to make it? You know, it's just crazy. Then I think I'm a big World War II history buff. So D-Day, Citizen Soldier. Those are really good. Gold Soldier. There is another book. The Oregon Trail and the Wright Brothers. Those are two separate books. Those are fascinating.

[01:07:43] Empire of the Summer Moon is a really, really good one, which is about Native Americans and things like that. I was born in Oklahoma, so that's kind of, I was actually born in Ponca City, Oklahoma. So that resonates with me. I think some of the fiction books that were really good, Demon Copperhead is the name of the one. The Women is another one. Really fascinating.

[01:08:13] Covenant of Water is a really good, really good one. And so, I mean, I could go on, but those are a few. Narrowing it down is the tough part, right? Yeah. I mean, they're so different. It's, you know, what's your favorite movie? Right. Which genre? It's kind of, you know, it's really hard to nail that down. Yeah. Yeah. Wade, for folks that are listening, how can they best find you online?

[01:08:43] The best way, well, you can go to our website, fluiditservices.com. You can go to LinkedIn to my profile, Wade Yeaman, Y-E-A-M-A-N. I do quite a bit of posting on LinkedIn, and I do a monthly webcast. And those are shown on LinkedIn, and then they're posted to our blog page on our website. And so, I'm trying to – the idea there is not really to sell anything.

[01:09:13] And the idea is to have more thought leadership and educate because there's a huge amount of education, and there's a huge gap between what businesses need to know and what they do know, even on the fundamental things. And cybersecurity is a huge one. And IT is always terrible with acronyms and communicating in business terms. Mm-hmm.

[01:09:37] Mm-hmm.