How a Non-Tech Founder Built an Inc. 5000 MSP (7x in 10 Years!)

[00:00:00] As you may know, it's my mission to interview 100 of the fastest growing and most interesting MSPs on the planet. What you may not know is I am distilling all of that knowledge into one battle-tested book. If you'd like early access to that book, make sure to click the link below. A quarter of losing money, half are kind of just break even, very low single-digit profits, sometimes running slight losses and vacillating around that.

[00:00:27] And only like a quarter of the market is really making healthy earnings margins. So when you just look at the market as your sample on what pricing should be okay for you, it's a very misleading notion because the vast majority of MSPs are undercharging. Hey guys, Damien Stevens, host of MSP Mindset.

[00:00:51] Today, I continue my mission to interview 100 of the most interesting and fastest growing MSPs on the planet. Now, I've had a lot of interesting conversations lately. One was a really interesting MSP that his business partner was a CPA and he had a sales background. So they couldn't go be the techs and kind of cook in the kitchen.

[00:01:14] They had to hire techs from day one and that forced them to grow to over a million dollars in the first year and continue to grow really quickly. I had another conversation recently where their processes are so good that their sales and other processes ended up being in the Harvard Business Review. I had another conversation where we talked about AI and how, as an MSP, support is often our differentiator. It's where we hang our hat and it's frankly why a lot of our clients pay us.

[00:01:41] And if AI is going to come in and deliver some of that support, then what are we going to hang our hat on from a value perspective? And we talked very candidly about the threats as well as the opportunities and from a business model perspective. What if I told you this is all the same MSP? My conversation with Adam Barney today, it's the same one. Don't miss out on our conversation today. So, Adam, you have a really, I think, unique background.

[00:02:10] Tell me about how you came to even be at an MSP. You weren't the typical tech guy. Sure. Yeah, I actually went to school for finance and business administration. Kind of fell into, through internships, the financial advising world, which is really sales of financial products. And after college, I really thought that would be my career. I was working at Northwestern Mutual.

[00:02:36] I was kind of networking and working with a former acquaintance from college as a potential client. And he worked in the merger and acquisition space. Actually came from an accounting background, kind of a CPA by trade. And he was starting this company with another gentleman that kind of actually did work in technology. And he really just intended to help this other person kind of set up this company and help them run it on the back end, provide kind of the legal and financial guidance, etc.

[00:03:05] But due to some unique circumstances on his end, he decided to leave that consulting career and pursue framework IT ultimately as a full-time endeavor. And with that, he was looking to raise some capital, some little startup investment. Him not being an engineer, he needed to hire some engineers, get office space, kind of really build out the business. And in speaking with me, he kind of realized there was going to be some talent gaps in the organization.

[00:03:33] He was close to taking some money from some of the partners at the M&A firm he worked at. And while they're brilliant people and they provide excellent guidance, he realized they aren't going to fill any talent gaps in the organization. They're not going to come work here. They're not going to provide any kind of skills, etc. that we're lacking. And in talking to me, he kind of put the two and two together that, you know, financial services is really sales. He liked that sales background, wanted to know if I had any interest in investing and ultimately joining the firm as a partner.

[00:04:03] And for a number of reasons, I had some qualms about the financial advising world. The idea of getting in technology services, B2B sales was really appealing. I've always had kind of an entrepreneurial streak. And a lot of respect for my business partner, John, who founded the organization. So I left at the opportunity and ultimately joined, signed on to the operating agreement in April of 2010.

[00:04:29] And, you know, since then, largely spent a lot of the time running our sales and marketing, although I did do a stint for several years as our COO. Due to some growth pains we were going through, we really needed to rebuild the foundation there. And then I kind of married those two experiences, I guess, a few years ago, moved into the president role and started leading our executive team. What's your take on doing the reverse, right? Starting as sales and EPA kind of backgrounds?

[00:04:55] Yeah, I think from what I can tell, 90% of our peers come from a tech background. They were usually an engineer at another MSP or consulting firm or maybe in-house. Started working with some folks on the side quite often, friends, family, etc. And then they reach a point right where they realize, hey, I could do this on my own. I could go my own way and do things the way I want to do. And they start out.

[00:05:21] And there is some luxury to that route in that you can go do the work yourself, right? I think it makes it a little less risky and capital intense maybe to start that way because you don't have to go hire a bunch of engineers. You can do the work yourself. Now, on the other hand, in our situation, because my partner, John, again, CPA background, he couldn't fix things himself, right? And neither could I.

[00:05:48] You know, I wouldn't say I'm the most tech-savvy individual, you know, in my background or historically growing up. I've certainly learned a lot being in the business, but certainly not the person you'd want trying to fix a server issue or a firewall either. And so it really put us in a position where we had to scale pretty rapidly to get to a point where we could sustainably afford the engineers to do the work. And so I think it created a sense of urgency.

[00:06:16] I think it forced us to kind of build a machine instead of just kind of using muscle and feel and kind of doing all the work ourselves. So in a way, I think it accelerated our growth. I think it forced us to kind of build more processes and systems earlier than maybe some other MSPs would have.

[00:06:37] I think it also put us in a position where we really had to kind of like master the sales and marketing because, you know, we had to hire engineers really earlier, probably earlier than most MSPs start hiring non-owner tech support staff. And that kind of created a burn rate, right, where the little good of capital we'd raised. And, you know, this isn't a SaaS startup, right? We didn't raise $20 million from angel investors. We raised, you know, something like tens of thousands or $100,000.

[00:07:05] And I worked for free in the beginning and, you know, things like that. We really bootstrapped it and didn't have kind of a long runway. So, you know, in a way, it was beneficial because it forced us to build, focus on building a business instead of kind of doing all the work, et cetera. So I think it kind of created a higher barrier maybe in the beginning, you know, a little bit different kind of challenge that had to be overcome kind of quickly or we go extinct.

[00:07:35] But long term, I think it was very beneficial because, you know, we didn't get stuck in the weeds of doing the tech work. We could focus on actually building the business, on building a sales and marketing engine, on, you know, managing the company's finances and things that a lot of the times I think the tech-led businesses, you know, they don't get to that till much later, right?

[00:07:57] They usually can scale the organization to several million, five to 10 million in revenue, still kind of being that all-star sitting at the center of the organization, still involved in the service delivery, still heavily involved in managing the clients directly, not just the relationship, but even kind of being that highest point of escalation. And they have to start getting through those scaling challenges much, much later.

[00:08:24] So I think it's just kind of a trade-off of when the hard part is. For us, it was right at the beginning. For other folks, I think they have to really focus on the business side of things and grow some skills and experience there kind of much later in their growth. So in a lot of ways, when we look back, we're kind of thankful, actually, that we didn't have the tech background, couldn't do the work ourselves, and instead had to focus on really building kind of a sustainable engine.

[00:08:51] Yeah, I think a forcing, I'm a big believer in a forcing function. You know, it forces you to get there, that burn rate that we couldn't be the engineers in the interim. Do you recall what that was early on? Like, what was the, like, near-term goal? Because I know when you have a finite amount of cash and a burn rate, there's usually some like, okay, we're ramen profitable or, you know?

[00:09:18] Yeah, I think our initial kind of thoughts or estimates, right, where we probably needed to get to about $80,000 to $100,000 in revenue ASAP to be able to pay ourselves a basic living wage, afford the office, insurance, the tech staff, you know, the kind of ongoing expenses.

[00:09:37] And obviously, it's a bit of a moving target, because once you're out there and you start doing the work and you start growing and making other investments or taking on clients you didn't necessarily anticipate that require kind of additional staffing, that figure can kind of move on you.

[00:09:53] But yeah, I would say it was, you know, we kind of had to get to over a million in revenue to reach a point where we could kind of afford the basics that we really needed to run a business and afford to pay ourselves, again, even just kind of a minimal living salary.

[00:10:11] I think there's a lot of people that need to hear that because when I started a business, I thought a million, like as an individual, when I hadn't run into my first business, a million dollars seems like just this crazy amount of money, you know, because if it was sitting there liquid that I could spend, like, that sounds great. But a million dollars in revenue is really just getting going. If you, you know, you've hired engineers, how many did you start with? Was it more than one?

[00:10:42] It was two initially. And I should explain, we always have kind of done managed services and been in the telephony space. So one of the engineers came from more of a telephony background. The other very much came from an IT background. And on top of that, we couldn't just hire like an entry level, level one engineer, right? That wouldn't meet all of our clients' needs.

[00:11:07] So to add to the challenge we had, we kind of had to start with the level three, the senior engineer, the very expensive, very experienced person who could kind of do it all. Because that was the only way to be able to meet all of the clients' needs. And then we pretty quickly had to hire, you know, a third and a fourth as well. I know mostly when I was early on, I tended to wait too long to hire.

[00:11:34] So I'm curious, you guys were pretty early on making a pretty high number of hires. What gave you the vision or the confidence or I guess what was driving that? Some of it was just necessity. We were kind of fortunate to, you know, I mentioned we did telephony as well.

[00:11:57] And, you know, we were really kind of lucky in that we stumbled upon a big contract to maintain a phone system for the largest hospital, I think, in Northern Illinois. I'm pretty sure it's the largest hospital group. And it was a very significant contract for us, at least at the time. I believe it was over $10,000 a month. But the type of phone system they had is, you know, it was a higher-end enterprise phone system.

[00:12:26] And it really required a pretty, you know, high-end engineer to properly support it. So that triggered one of the hires. We had to hire arguably one of the best telephony techs in Northern Illinois. I would say maybe even the Midwest. And so that forced our hand on one of the hires. And then the other was, you know, we didn't have tons of clients early on. But we had 10 to 20 clients.

[00:12:47] And just kind of keeping up with the help desk, service desk aspect as well, that initial Tier 3 IT engineer we'd hired, he needed help. You know, he couldn't be in two places at once. He couldn't be taking care of projects and getting to service requests from clients simultaneously. And, again, the rest of us couldn't really help out beyond some best guess kind of guidance.

[00:13:11] So that forced us to kind of bring in, you know, more of an entry-level engineer to help in the help desk. And then we also, I didn't mention this, but, you know, we also kind of made pretty early investments in sales. We had some, you know, attempted at least to kind of get some sales development representatives in the office helping generate business early on. And I think that stemmed from, again, that urgency that we felt like we needed to scale to a certain amount of revenue rather quickly.

[00:13:39] Or we were simply just going to run out of money or kind of hit a stalemate where we couldn't really invest in growth, couldn't afford the engineers, could barely afford to pay ourselves. So, yeah, we made pretty heavy investments, you know, early on, both in kind of service delivery and, I guess, in kind of sales and marketing as well. Well, about what headcount were you? Yeah. I mean, SDR is usually something much later.

[00:14:05] Yeah. Yeah. We were, let's see, at the time we were three partners, a couple engineers. I mean, we were at 10 people pretty early on in the organization. I would say by 2011, you know, we probably had 10 people in the organization, in the office daily. And so about a year in, is that what you're saying? Yeah, about a year in. Yeah. I think after I joined the organization, it was probably within the year.

[00:14:32] And that's why I mentioned, you know, kind of our original estimate, too, of how much revenue we need to get to, to be really sustainable, kind of shifted as we got in the business, started adding clients, understanding what we were going to need in staff to support client service delivery, while also to support continued growth.

[00:14:50] So we were really in bootstrap mode for a few years, I would say, you know, easily, until late in 2014, running, you know, very kind of thin on cash flow, managing months to month. Sometimes it's shocking that we never, you know, had to pay a vendor really late or anything like that. But we were able to thread the needle. You know, I think maybe the accounting and finance backgrounds helped a bit there as well. Yeah. Yeah.

[00:15:21] Well, tell me about the challenges of you're forced to sell. Well, I understand that. Got to make payroll, got to make revenue. But tell me about the lessons learned in selling to just anyone. Yeah, I think because we had this short bridge, right, of needing to sell because myself and John, my partner, right, weren't really even paying ourselves in the very beginning.

[00:15:48] There was so much urgency to go out and get revenue to afford these engineers we had to have, right? And I think that created a scarcity mindset, unfortunately. And that scarcity mindset led us to kind of pursue all revenue, all growth at all costs, so to speak. We just didn't, you know, have a ton of experience in this industry.

[00:16:11] We didn't, I think, fully understand the cost to deliver all of the services we were providing. Or we didn't understand maybe the service gross profit margins you really needed to have a very sustainable, long-term profitable business and to be able to provide a high quality of service to clients. And so, like many MSPs early on, we kind of worked with everyone that was, you know, had money and needed something we did.

[00:16:38] We would do one-time projects. We would do hourly work for folks. Of course, you know, we knew we wanted the managed services contracts and other monthly recurring contracts on the telephony side as well. But we would take everything else. No job was kind of too small. And, you know, in hindsight, it took us a long time, I think, to kind of totally phase out of that. We're fully phased out of that kind of mindset at this point. We're hyper-focused on the ongoing contractual relationships.

[00:17:08] We won't do projects for clients that aren't a managed services client or have, like, our cloud-based phone system, et cetera. But that took us a long time to get comfortable with that and to really narrow our focus. So early on, kind of working with everybody, you know, I look back and I wonder, you know, was it necessary because we needed that revenue and we had a short bridge? Or had we been more disciplined, might it actually have been better off?

[00:17:36] Might we still have made it through that period but then have built a better foundation moving forward that kind of accelerated getting to where we ultimately are today? And so I think that was one of the biggest lessons I've learned is, you know, not all revenue is good revenue. We've heard that so many times, but so many of us, I think, still make the mistake coming from that scarcity mindset that I have to take this, I have to do it.

[00:18:00] But what ends up happening is it distracts you from going out and getting or serving your A and your B clients. And those are usually the ones that provide 80% of the profit, right? And maybe you're only 20% of the work and you take on these kind of D clients, D clients, et cetera, that really aren't an ideal fit for you. They can take 80% of your time, your energy and your focus.

[00:18:25] And they may only be contributing 20% ultimately to kind of the bottom line, so to speak. And so it can be very detrimental, but it's a scary thing to walk away from. It's kind of one of those letting go of the vine moments, you know, or taking a leap of faith and stepping off the cliff and, you know, hoping you're going to land okay. And so it's tough, you know, and I see a lot of, you know, peers that are right going through that.

[00:18:50] And I really empathize with that because I know it's scary to walk away from some of that business and to wonder, you know, is this going to possibly tank the business? From my experience and from a lot of the peers I've spoken with, it's one of those things where we all look back and wish we would have done it sooner. It seems to work out for the best for all of us who have gone down that path.

[00:19:17] But that doesn't change the fact that it's really scary, you know, in the beginning to do that and start passing up on those things, to start really focusing on your ideal client profile and ignoring everything else. But once you find that discipline, you know, the business is so much better. Life feels so much better. You're less stressed. You're less pulled in a million different directions. You can feel better about the service and value you provide.

[00:19:43] So overall, it is, I'm a big advocate that it's the right move, that focus and discipline to walk away from everything that doesn't fit within your focus. But again, I understand, you know, just how challenging emotionally it can be to decide to do that and how fraught with fear, etc. It can be.

[00:20:08] But ultimately, it's one of those things in life where I think, you know, the fear itself is what's holding you back. It's, you got to be able to kind of push past that fear and push through it, do the thing you ultimately probably know is the right thing to do anyway. Well said. Was there a moment in time that helped you understand this is when I've got to do this and I can't let fear hold me back? I think there was not just one kind of crystallizing moment.

[00:20:38] I think it was a phased evolution. You know, we were still fairly open to taking a lot of different business and didn't have a focused target market all the way up until 2019, actually, I would say. In 2019, we started asking ourselves some tougher questions, I think, about kind of who are we and what makes us different.

[00:21:06] And honestly, what it stemmed from is we had some sales development reps and, you know, they're calling in the businesses. And one of the things they're hearing is, you're the third IT company that's called me this week. Mm-hmm. Why are you different? And, you know, they'd say we have great people, great processes, clients are thrilled with us. Mm-hmm. And even the people they're speaking with would say, well, that's what they all said. Mm-hmm. Yeah. And we were like, they're right.

[00:21:37] You know, a lot of us in this industry do have good people, do provide good service. And whether that's true or not, you know, so many customer services businesses make claims like that. So it's not much of a differentiator. It's a very soft and fuzzy one. And clients recognize that, and they don't see that as very compelling as a result, right? And so we started having conversations around this of, well, how can we be unique? How can we stand out?

[00:22:05] There's tens of thousands of IT services companies in the country. We're in the Chicagoland area. It's a big competitive market. I don't even know how many competitors just in our backyard. We need something that really stands out. And so I wish I could take credit for this. I can't. But two people on our executive leadership team kind of just came up with this fuzzy concept of,

[00:22:31] what if we kind of have these best practices? And if clients align to them, we give them better pricing. And we're like, well, can we even do that? Is that even supported by any facts or data? I mean, empirically, our gut instinct and our engineer's gut instinct says, hey, if we build their tech a certain way, it's more streamlined. It's easier to service. They have less problems. We can fix their problems faster. They're more secure. They're more scalable.

[00:22:58] So we believe these things, but we didn't know if the data supported it. So one of those individuals that was involved in kind of birthing this concept was actually our CFO. At the time, I think he was our COO, but he's our CFO now. And he's fantastic with data.

[00:23:15] So he pulled a bunch of data out of our PSA, looking about the last 10 years of service metrics, and then looked at the client environment for each of our current clients and kind of scored them according to what their tech looked like in different areas. And this went back and forth with our engineers of what areas should we even look at? What do you guys think matters most, et cetera?

[00:23:41] And so kind of came up with a model to look at about eight areas of their technology. We asked the engineers kind of what's the preferred ideal state? You know, what would be best for them and best for us? So this is, again, just going off their raw gut instinct, came up with this model and then compared it to all of that service data and looked at KPIs like hours per endpoint. And how much time on average we put into resolving their issues, et cetera.

[00:24:08] And what this data analysis kind of showed was that the engineers' gut instincts were right, that the data actually did support that if the client's tech was aligned to what they felt was best, we saw improvement in metrics. People were reporting less issues to us, and we were fixing their issues faster, actually.

[00:24:30] So it validated what we all suspected with the actual data and then kind of cemented on this idea of, okay, since it's supported by data, we can now say, hey, we have these high-level best practices. This is not nitty-gritty stuff down to the settings on a firewall. Those best practices are very important, right? But too complicated to kind of get involved into a pricing model for these services.

[00:24:55] So, you know, we started, you know, conceptualizing this idea of, okay, real high-level, we're going to look for a certain type of kind of architecture or design to their technology in these eight to ten major areas. And the clients that we're meeting that are highly aligned already to our ideal state, we're going to offer them better pricing up front because we actually know it costs us less to service them.

[00:25:18] That kind of led to the epiphany of, well, why don't we also just make it our process, our model, to guide all clients towards alignment to these best practices and offer reduced pricing as an incentive or a reward and creating kind of this mutually beneficial shared incentive relationship. And that if they do these things, it's good for their business anyway, right? They'll have improved productivity, they'll have less business interruption, et cetera.

[00:25:46] And for us, as their partner in this case, that leads to a lower cost to service them. So by sharing in that value, it creates kind of an aligned win-win relationship. And I think it changes a bit of the dynamic in the partnership as well because many of us have heard this, I'm sure, from clients or potential clients of, you know, every time we meet with you guys who recommend these projects, and I truly believe that the vast majority of people in our industry are doing it because they believe it's the right thing to do for the client.

[00:26:15] They're not coming from some nefarious standpoint of just selling to sell things to clients, but that's not always the client's perception. You know, they don't come from these backgrounds. They don't always understand why do I have to keep making these significant investments, especially for small, mid-sized businesses, right? They're not the most operationally mature in their budgeting and understanding of the impact of technology on their business. And so they can feel a bit of this adversarial relationship where are they just selling to me because it's good for them?

[00:26:44] So I think our model helps dispel a little bit of that because they understand that, yeah, I am recommending that you upgrade your network or that you migrate to 365 or what have you. But I'm also on the back end reducing your monthly price. I think most people, you know, could conceptually just kind of guess that the recurring revenue is more important to us than that one-time project.

[00:27:06] And the fact that we're offering a reduction there is a really strong signaling mechanism that I must really believe that this project is going to improve business results for both of us. Or why would I be willing to reduce my monthly fee on the back end? And the other kind of neat thing that that pricing model created for us was it requires a lot of diligent discovery because you can't go in and tell somebody,

[00:27:34] hey, I have this really cool pricing model where you're going to align our best practices. It's going to improve results for you and we're going to reduce your price. But I can't, you know, give you any details of how that works, right? That wouldn't be sellable. They have to have clarity on how is this actually going to work? What do I actually need to do in my business? And how and when is that going to impact my pricing? Otherwise, it sounds like a bait and switch pot position of, yeah, in the future we can reduce your price.

[00:27:59] So we have to go in there and put together a basic strategic roadmap to say here's our suggested phased approach to adopt our best practices. Here's realistic timelines based on our professional experience to hit certain milestones. And at these milestones, this is what your price reductions can look like. You know, so because we have this unique pricing model and we have to put together this pretty thorough roadmap up front,

[00:28:23] it necessitates a very detailed understanding of their technology and where they align and don't align to those best practices. And also, we want to spend a lot of time just understanding their business, etc. So our unique pricing model, I would say, has kind of created a secondary unique in that we're often told by prospects that we are the most thorough and diligent organization they've spoken to. We spent the most time in conversations with them.

[00:28:48] We've asked for more information than anybody else, just showing a lot of genuine interest in their business and wanting to really make sure we have an in-depth understanding that we're aligned in expectations with them. And we're aligned on kind of a strategic plan. And so because we really have to address all of that up front before we can even deliver one of our proposals, that is viewed as somewhat unique.

[00:29:13] So many in the industry are quick to hop on to a one-hour discovery call, bust out their PowerPoint, and then come back with a proposal. And they've spent all of about two hours maybe really getting to know the client. We've probably put in 10 to 12 or 15 hours sometimes before we even are showing them a proposal. So that's been that unique has been really, really helpful. I think people appreciate the symbolism in it, the kind of alignment.

[00:29:42] And I think it also has created another benefit as well in that it forces us to really evaluate and have kind of a litmus test around the clients. I'll call it psychological or psychographic alignment. Do they value technology? Do they see it as an asset? Are they willing to invest in it? Our process and showing them up front very transparently these things they're going to need to do to align to our best practices really tests that, I think.

[00:30:10] Because we may be recommending significant projects and having to have these discussions in that sales process, whereas a lot of competitors, again, are just quick to kind of put out the proposal for their monthly services, hopefully win the client, on board the client. And then they start looking at what does that roadmap need to look like? And here's all these projects you need to do.

[00:30:29] I think there's more discussion around how to automate the ability to deliver a proposal than there is actually asking better questions. Because, like you said, they might only spend an hour with the client, but we can get, especially on the technical side, excited about automating proposal delivery or reducing the work, which is not bad in itself.

[00:30:52] But when you miss the point and you have a short conversation and a semi-automated formula or process in which your proposal is delivered, you know, you're really kind of throwing things against the wall. How do that impact your sales organization? Because a lot of times sales, like I just want to move quickly. I want to know, you know, like there are companies that's this size and can pay this much and I want to close the deal, right? So we got to ask way more questions.

[00:31:21] I got to bring in sales engineering for longer, right? That if I was a quota carrying rep, I would say, huh, that sounds like an extended sales cycle. Yeah. So, you know, for a lot of the organization's trajectory, like many MSPs, it was owner-led sales. You know, I had some SDRs, et cetera, but I was pretty much involved in the closing or was entirely kind of closing all of the business.

[00:31:48] So I mentioned that unique pricing model kind of, you know, came to be in 2019. It was, I think, the second half of 2019 was when we really started fleshing it out. In tandem into that, we really started focusing and narrowing a target market more than we ever had. Started getting, again, more disciplined about, you know, the types of the way we would engage in client relationships.

[00:32:11] And it was in 2020, it was the first time we really kind of brought on, I would say, some more seasoned sales reps. They did start in more of an SDR role, but that's just because there's so much to learn to go out and fully sell in this business. So brought in two individuals that had more of a sales background, not in technology sales specifically. And at that time, I actually engaged an outside sales consulting organization.

[00:32:38] And the reason for that is we started realizing, you know, one of our challenges to keep scaling past where we're at today is this owner-led sales. And Adam has so much up here, but this is not, there's no sales playbook. It's kind of vetted. What size were you guys when you realized this? I'm sorry, what was the question? What size were you when you realized this? We were probably in the $6 to $7 million in revenue range around that time.

[00:33:07] It's pretty possible to still be owner-led sales. Yeah. Yeah. So, yeah, we engaged as a sales consultant because it was like, okay, well, I could probably build a sales playbook myself, but I can't do it and be managing the pipeline at the same time. And trying to train these new sales reps that I have as well. Like, something has to give. And didn't feel like I had the luxury of putting pause on sales in the pipeline, of course, right?

[00:33:36] So, you know, brought in the sales consulting organization to help us, well, one, kind of go back to scratch and reimagine the entire sales process, document it, and kind of recreate all of our sales assets along the way. And so we engaged in a very, it was like a six-month long engagement with them where, you know, we started back at who's the ideal client? Who are the stakeholders we sell to? What do those people look like?

[00:34:05] What are their desired gains? What are their pain points? What are their fears and hopes and things like that? And then, you know, worked our way through what's their discovery process look like? What's the proposal process look like? Even all the way down to how do we hand this off to service delivery? And so we ended up building a large sales playbook.

[00:34:25] But I bring that up because we engaged these sales consultants right around the time that I brought in to kind of more professional sales reps with the intent to grow them into true outside sales, you know, hunters and closers. And so one in particular, I was having a lot of success kind of doing the SDR type of responsibilities, but was also just very communicative and intelligent and hardworking, etc.

[00:34:52] Really benefited from going along this process with these sales consultants where we reimagined and rebuilt and documented the entire sales process.

[00:35:01] It was, in a way, a fantastic training experience for these individuals to be a part of that because they heard kind of the discussions and the thought processes and they got to see behind the curtain and actively participating in building this and contributing to it, I think, also creates more buy-in, you know, because you're kind of invested in it. This is your baby, too, so to speak. But it ended up being just wonderful training.

[00:35:29] And so, you know, as they were setting meetings, etc., I would bring them to the meetings, right? They would kind of shadow meeting support, but learning from me managing those meetings. And then over time, what I did was just shifted more and more of the sales process and phases to them. Have them take over maybe the part of a pre-qualification meeting or a discovery meeting where we're just talking about us.

[00:35:53] That part's more easily scripted and follows a pretty standard outline, for example, as opposed to, you know, the part where you're uncovering things about the client. There's more you need to know there about the business, about the tech, etc., to really do that successfully.

[00:36:09] So I just kind of kept handing off more and more of the sales process in chunks and flipping it to where I was more kind of meeting support there to jump in and help with kind of really hairy or difficult questions or things that were maybe outside of their understanding from a technical standpoint. And then it just kind of kept going that way and faded more and more to where I didn't really need to participate so much.

[00:36:33] I could become a fly on the wall and largely there just to provide feedback and coaching to the rep, not because they actually needed me there to help kind of progress the sale. So, you know, that whole circumstance of going through that revamp with the sales consultants in conjunction with starting those new sales reps, I think was very fortuitous because one of my sales reps I hired at that point is now my director of sales.

[00:37:01] It's extremely autonomous at selling managed services. You very, you know, needs very little support from me. And when she does, it's largely because of, you know, tech complexity, etc. I still do like to go to meetings, you know, especially late in the sales process. But that's just more to, you know, build a relationship with the client.

[00:37:22] And, you know, in my role as president, I think that offers some comfort and assurance and et cetera to a potential client who's often a business leader and often an owner themselves to see that level of investment, right? That the leader of the organization is joining for the proposal meeting or for a Q&A call afterwards and is helping discuss some of their maybe challenges or concerns about moving forward. Yeah. So much to unpack there.

[00:37:46] I want to jump back to the unique pricing model and figure out how did you like what I like about that is if you really believe that aligning to these, you know, eight areas will drive lower cost for you and the client, then you should be able to offer a discount. And I like that you put your kind of your money where your mouth is on that.

[00:38:14] How long did it take to align to how many areas? And we don't need to get into the all settings about the firewall. Yeah, you know, that roadmap can be very different for each client, right? It truly is customized because depends where they have those gaps and how significant challenging those gaps are to close.

[00:38:37] But I would say, you know, generally speaking, it usually takes a client a year to two to be able to fully align to it. You know, there are a discount. What are we talking about? Like, are you talking about 1% or?

[00:38:50] That's a really interesting, actually, question because initially from our least favorable pricing tier, least aligned to our best practices, to our most favorable pricing tier, it actually could be a total cost reduction of 30 to 40% when we first came out with this pricing model. Wow. What we realized with the help of a peer group, actually, that we're in, they said, hey, guys, that's a really neat pricing model, but I'm concerned about something here.

[00:39:20] I think you might inadvertently be attracting. I know you're not intending to do this, but you may be inadvertently attracting price sensitive buyers because if maybe they're buying in to the price, they can get to at your lowest pricing tier once they've aligned. And we're like, huh, that's interesting because our least aligned pricing was intended to be kind of on the higher end, you know, to not want people to just come in and stay there. Let's put it that way.

[00:39:48] And we hadn't thought of that, though, that, hey, these produce reductions, they're significant. And people might be buying for that reason because once they really get fully optimized and align with our best practices, suddenly we are one of the better priced people in the market. And we hadn't thought of it or looked at it from that angle. And I think that they were right. You know, at this point when this was pointed out to us, we had been selling, you know, with that pricing model for over, you know, for about a year.

[00:40:18] And I think we were starting to see signs of that. We're starting to realize that, wow, some of these clients that we were attracting with this maybe were the price sensitive buyers that we knew we didn't really want. And we didn't see it. We didn't realize it because, hey, they're willing to go along and align to these best practices. That's great psychological alignment. They're willing to make some investments, et cetera. Well, some of them, that was absolutely 100% true for. But others, yeah, they were willing to do it so they could get to a really competitive monthly rate.

[00:40:46] And then after that, you know, they weren't so aligned with wanting to make continued investments and stuff. And so we've changed that to make sure that incentive isn't there. We narrowed the range from our least favorable price to our most optimal pricing. I think as of most recently, it's about a 10% total reduction that they can achieve.

[00:41:11] We wanted to make sure that, you know, that we weren't providing this really attractive incentive for the very price sensitive buyers. And then also we've realized, you know, I think like many MSPs that we weren't charging enough for the value we provide. We offer a very comprehensive flavor of managed services. We have a really high quality, you know, customer service, excellent CSAT, excellent net promoter scores.

[00:41:38] You know, we include the virtual CIO consulting and actually deliver on it. And we deliver above average cybersecurity. And we also kind of realized that we were offering very middle of the road pricing for a long time. We were falling into that trap. I think a lot of us do. Well, I see lots of competitors selling around this pricing. You know, they've been in business a while. They must be profitable. This pricing must be profitable. Maybe I just need to get more efficient to make it more profitable or something like that.

[00:42:08] And, you know, what we realized, be it participation in peer groups and looking at like service leadership index data, et cetera, is that notion is just false. Half of MSPs, you know, a quarter are losing money. Half are kind of just break even, very low single digit profits, sometimes running slight losses and vacillating around that. And only like a quarter of the market is really making healthy earnings margins.

[00:42:34] So when you just look at the, you know, market as your sample on what pricing should be okay for you, it's a very misleading notion because the vast majority of MSPs are undercharging. And when you undercharge like that, it's hard to either, you know, keep that service quality up or hit a really sustainable kind of profit model. And so we've really adjusted that in the last two years as well.

[00:43:00] You know, we were maybe not the most expensive on the market, but we do intentionally aim to be kind of in the upper quartile, again, to not attract price sensitive buyers, to attract the people that are really want to get good outcomes from their technology and are willing to put money and invest behind it.

[00:43:18] And to attract clients that can provide a win-win relationship, meaning that we can provide a high value service we feel great about and they feel great about, but also providing a high value service while it being profitable for us as well and sustainable and scalable. I'd like to understand a little more about your eight areas, right? You don't have to go over all of them unless you'd like to, but I'm curious, is it just, you know, you're not on the same firewall brand or you're not in the same cybersecurity stack, so you have to swap one for the other?

[00:43:47] Or is there actual something about, you know, the way that we interact or other facets to it? Or the technology alignment, it is just focused pretty high level on technology architecture. So, and there's no secret sauce to this. I think a lot of other MSPs would even largely agree with many of these best practices. So, you know, in terms of like their collaboration suite, we want to see them in Microsoft 365 or Google, at least as a second choice, but not some obscure kind of third-party provider.

[00:44:17] When it comes to their network, we're looking for kind of our preferred network stack there, which is Meraki or Ubiquiti, call it manageable networking. And as an aside on that, it doesn't mean that lots of other networking equipment isn't great or that we don't have experience with other networking equipment. We do.

[00:44:37] But one of the things that you kind of need to do as an MSP if you want to really scale profitability is narrow your technology stack that you support for clients so that you can be very specialized and streamlined in it. So that you can train down to lower level of engineers to handle issues on that.

[00:44:55] If you're trying to support 10 different brands of networking, it's harder to develop that specialization and to proliferate that knowledge throughout the organization, especially when you're 10, 20, 30, 40 staff. You know, if you have hundreds of engineers, sure, I guess you can have expertise and enough breadth in any given area. So that's on the networking side.

[00:45:19] From an internet connectivity side, we want to see a dedicated fiber primary internet in any major office, which I won't get into how we define that. But any major office dedicated fiber primary, a backup internet, ideally SD-WAN and failover in place as well, or at minimum, I should say failover. Then from the compute standpoint, we have minimum specifications. Those change about every year or two. We increase the standard there, right, in alignment with evolving technology needs.

[00:45:48] And, of course, no end-of-life operating systems are part of that as well. And then from a cybersecurity standpoint, we have a foundational level of cybersecurity, essentially, that we're looking for. And that has grown as well. Initially, it was, you know, next-generation antivirus, anti-malware, email security, cybersecurity awareness training, and multi-factor authentication. But over time, right, we started bringing in endpoint detection and response.

[00:46:14] And then even more recently, we kind of drastically increased our standard cybersecurity package to include managed detection response, vulnerability management, and a few other things as well. And then, you know, if they have dedicated kind of servers, et cetera, we want to see those move to the cloud, get away from on-premise server and storage environment. So we actually move a lot of clients into public cloud.

[00:46:41] It is often what is a good fit for our clients. Because we're very heavy in the SMB space, right? So many of them can meet all of their needs kind of using public cloud. And then in terms of their line of business applications, we really encourage clients to adopt SaaS, you know, cloud-based SaaS applications, ideally kind of fully managed and supported by those SaaS vendors, as opposed to running these heavy line of business applications on their own, you know, server environment in their office, et cetera.

[00:47:11] So I think that's pretty much kind of the major areas of those best practices. Our data suggests that organizations that are highly aligned to that have about 30% less reactive service tickets come in. And we actually see similar, about a 30% reduction in average resolution time when they align to those best practices.

[00:47:30] And, you know, part of it may be the tech itself, but part of it, again, I think is that technology standardization amongst your clients as an MSP allows you to get really good at those things, right? So, you know, our best practices don't need to be everyone else's best practices, I guess is what I'm saying. I think everyone needs to come up with a tech standard that's right for them, their organization, their background, their experience, and their clients.

[00:47:55] You know, those best practices I just highlighted, they don't work for every type of business. Some businesses, they're still, they have to have on-premise applications because the only viable solutions that really meet their need in their industry are still prem-based, right? So it's not right for everyone. It doesn't mean my model, right, is the model everyone should adopt, but what every MSP, I think, should adopt,

[00:48:18] and is something I've really learned or really cemented in the last few years is a tech standard for their clients. And they need to move all clients toward that standard as far as much as possible and need to be really willing to also even maybe walk away from clients that will not align to that standard. Because, again, when you're trying to support every technology under the sun, you know, jack of all trades, the master of none, you will not be as efficient,

[00:48:47] you will not deliver as high quality of service outcomes for your clients, and you will not be as profitable. And that's just not just my opinion. You know, Service Leadership Index gathers data, I think, from something like 30,000 IT services companies globally and indexes and benchmarks it. And their data suggests as well, the more you narrow your tech standards in the managed services space, the higher your profitability ultimately can be, and typically the higher your customer satisfaction as well.

[00:49:17] I love the not only profitability, but the CSAT tie, because ultimately that's what people want, you know, meaning not only us, but the client. Okay. What about, have you had clients that failed to invest so they ended up not, you know, they were in alignment and they fell out of alignment because they lag behind on the investment,

[00:49:39] whether it's end-of-life OS or, you know, when you added MDR, or maybe the other thing is you just used up, you've raised the bar, right? We all know MDR was not a thing for most people many years ago, and now it has become a standard. So for one reason or another, do they kind of fall out of that? And how do you handle that? For the most part, no. They usually don't fall out of it.

[00:50:05] You know, and we're pretty meticulous about doing strategic business reviews and things like that. So they should be planning ahead with us, right, and be budgeting, forecasting that, hey, you know, a quarter of your computers are going to go end-of-life next year, or their specifications aren't going to be adequate anymore. So for the most part, no. I would say that there are some clients, and they're usually probably not the best clients, right,

[00:50:33] that do slightly fall behind because of their own budget constraints, et cetera. And we try to be, once we're in that client relationship, a little bit understanding, but not abandon our pricing model either, meaning we may give them some leniency and say, hey, look, you technically are supposed to actually go down a pricing level and up in price if you don't address this by X date. But, you know, could we give you a few more months where we honor the current price,

[00:51:01] and you agree that in the meantime, you know, you'll approve this project or whatever's needed to kind of bring that back in alignment. So for the most part, that has not been too big of a challenge. The one challenge we have seen, though, is, and I think this sometimes can come into play when the most important decision makers, despite our best efforts, don't come fully into the sales process. Then when they've delegated this down to office manager, operations manager,

[00:51:31] I think sometimes they don't maybe fully understand or appreciate the R model, the technology alignment aspect, the business benefit aspect, et cetera. And so, you know, we have had cases where you get into the partnership and, you know, suddenly that individual's seen the detailed proposals to do some of these alignment things. And they're like, oh, you know, it's too much. I don't want to do that, et cetera. And then six months or a year later, they're going, well, hey, I don't understand.

[00:51:57] How come my price hasn't decreased and we have to kind of pull back out the roadmap? And remember, this was, you know, the roadmap in our proposal. And, you know, we're kind of stuck on these things. You're not approving them. And it's ultimately okay if you don't want to do it. You know, our model isn't to force every single person to adopt all of our best practices. It's to align them as quickly as possible within the constraints of their business needs and their budget to these best practices because we truly believe in the results.

[00:52:27] So, you know, there is a little bit of a challenge there. And, you know, it's one thing that I think might cause hesitation for some other MSPs to mimic this model is it really requires staying on top of the strategy, you know, with your clients. And it requires kind of, I think, a closer relationship with the clients than maybe some MSPs have had historically and in a bit more of a strategic relationship as well.

[00:52:56] Yeah, I noticed you said you include the VCIO. So that's not typical. It doesn't seem like. Yeah, I think we couldn't do this business model, right, without that kind of resource and relationship in place with the client. Interesting. Yeah, I could totally see that. We were talking before this about how you, before your imperial groups and maybe since,

[00:53:25] but there's just a ton of emotion into this, right? Like, how do you do this? And what are we going to do? And like you said, the earlier days, it's like if we don't grow fast enough, the business will, you know, won't make it at all. We won't pay ourselves, let alone maybe even pay our vendors on time. You know, I think depending on where you are and what those decisions are, we're all going through this, right? So I think you said something to the effect of, you know, you're not alone. Yeah.

[00:53:54] And I don't think it necessarily stops. You know, there's other moments, other decisions that have to be made that are going to require that similar feeling of kind of taking a leap of faith, you know, jumping, jumping without a parachute type of thing.

[00:54:14] You know, as another example, you know, of that, you know, we, we decided a few, you know, I'm guessing about four or five years ago, we started cutting off all the project only clients all the time materials clients. And, you know, that there was like a million of revenue there. So for us, that was, that was scary. You know, how's that going to impact us financially, profitability, you know, culturally, if we ultimately have to cut some people's that can hurt morale, things like that.

[00:54:44] So that was another, you know, one of those leap of faith moments you're hearing from those that have walked the path before you that it's the right move, that it worked out well for them, that it works out well for the almost everyone that does it. But there's still that fear of what if I'm the corner case? What if this doesn't work out really well for me? Really committing to your target client profile. You know, there might be someone that's outside of it. That's a big deal. Of course, you're still tempted to take it, right?

[00:55:15] That's right. Committing to those tech standards also can involve, again, some leap of faith because you could be sitting there going, well, you know, what if I lose? What would otherwise be a great client? Because they don't want to align to my tech standards. Increasing pricing. So many MSPs underprice their service, especially, I think, you know, tech-led MSPs in particular can fall into that.

[00:55:40] Because in the beginning, that contract that you can largely support yourself, you know, might look really attractive at $1,000 a month. Because you build out infrastructure and people and you can't do all the work and stuff, you start realizing, I need $2,000 a month to do this profitably. So, you know, we've made that mistake, too, of not fully understanding the cost to deliver our services. And at the same time, we also kept upping our game and delivering more and more proactive things and stuff as part of our services.

[00:56:10] Our costs were also moving up. And, you know, again, we realized we need to charge a lot more. We really want to go where we want to go and get the profitability that we deserve to get, you know, at this point. We've been at this a long time. Really good client service, right? We deserve to make healthy profitability. Having to go out and have these conversations with clients that maybe have been with you for 10 years that you need a 40, 50.

[00:56:35] We've even had to have some clients, you know, have conversations around 100% price increase on their managed services. And for a small business owner to, that is tough for them to hear, right? It may not even be possible for them to agree to it, even if they love you, right? And that's our most recent, you know, fear that we've had to overcome and leap of faith moment that we're actively in right now.

[00:57:01] We're still repricing some of our legacy managed services agreements, our, you know, really old clients that were still a bit too underpriced for who we are and what we deliver today. And that's, you know, I'll admit, again, I hear from peers, service leadership index data. They all say that this works out better in the end. That, yeah, you may lose some clients when you go through these big price increases, but that the increases will offset the losses.

[00:57:27] And you'll net out either positive or at least where you were roughly on revenue and you're serving less clients so you can do so more profitably with less stress, etc. So everybody says that the data, reportedly, right, backs that. And I've already gone through a lot of leap of faith moments and have had to learn that lesson of let go of the fear. And I still feel it.

[00:57:49] You know, it is still frightening to go out and talk to these clients about these price increases and sit there wondering, you know, who, you know, maybe leaves over this and who do we end up keeping? And how does that where all the chips fall financially as we kind of wrap up this process of rectifying the pricing in the old client base? So that's why I would let people know it's not like any of us just get completely hardened, brave. We feel no fear.

[00:58:18] We've gone through those hard, painful moments, and it's all in the rear view. New decisions, new moments, new leaps of faith come up. And I think that's honestly just the journey of entrepreneurship and being a business leader.

[00:58:32] I mean, who knows what the next 10 years entail, right, with changes in technology, but with what's happening in the automation space and AI, you know, there might be some real leaps required in our industry to continue to stay relevant and to add, you know, the right kind of value to clients. And I don't know exactly what those things are, right?

[00:58:57] But those big pivots are going to also require one of those moments of making a big leap of faith. And then there's a fear that's going to come with that, probably even more so if you're an owner, founder, executive, because it's not just the business and your employees you care about and the financial stability for maybe yourself or your family. But it's also like your baby. It's your legacy.

[00:59:27] It's this thing you've built and you care deeply about and you want to see succeed just for the sake of it succeeding, right? You really kind of can attach yourself emotionally to your company. And so it can induce even more fear when you're making these kind of big decisions, big leaps of faith that they're scary, right? So I think that it's just something you get better and better at dealing with, but it doesn't go away.

[00:59:55] So when I switch gears, what's the biggest lesson you learned over all these years, Adam? So many. It's like sometimes it's hard to pick one. And, you know, I think. I might have to say, too, right, because I think these I've touched on these, but they're just so important.

[01:00:17] I think one lesson, and this one's very specific, I would say, to managed services providers, not that it doesn't apply to other businesses. I think a lot of businesses need to hear this, but I think it's one of the biggest shortcomings for many MSPs is need to charge more. I think so many small businesses think they cannot charge more. And most of us can charge more than we're charging, and we need to.

[01:00:44] And I think this relates to the second one that I kind of touched on, too, is don't let the fear stop you. Embrace it. Accept it. You know, you don't have to ignore it. You don't have to bury it. Pretend it's not there. Accept that it's there, but don't let it change your decision when you know or you believe strongly or you have evidence to say that this is still the right move.

[01:01:13] The fear itself is not evidence that you're making the wrong decision necessarily. Fear is helpful, you know, and it can get you to kind of check yourself, sometimes your whims, your gut instincts, to double check and really reflect on the decisions you're making, right? There's a reason we have fear. It's been evolutionary beneficial. But I think a lot of times it is holding people back and creating more harm. Than good for a lot of, you know, business leaders. So don't let it hold you back.

[01:01:43] But, you know, don't ignore it either. It's okay to feel it type of thing. And so I think that's a lesson I kind of keep learning, you know, and have to kind of keep coming back to. You know, in my own mind, like our decision about a year ago to pursue very aggressive increases on those legacy clients. You know, watching some of the clients I've known for 10 years possibly leave over that. That's hard. That's, you know, again, it's like a baby, right? And you're afraid of where that's going to land.

[01:02:13] And I remember I was at a peer group meeting, actually. And I was in my hotel room after dinner and drinks with the group or whatever. And I was just kind of staring out the window and reflecting on this kind of thought of, I cannot let the fear get in the way of this. Everybody says this is the right thing to do. The data says this is the right thing to do. My leadership team's all on board with this. I'm probably the one holding this back, actually, the most.

[01:02:43] You know, we might have done this sooner or more aggressively already if it weren't for my fear. Like, I need to get out of my own way and realize my full potential and, you know, and the business's full potential. And right now, you know, my fear is creating the roadblock, so to speak. And so I kind of just had to double down, you know, in that moment and say, okay, I'm just, I'm going to commit to doing this. And the fear didn't go away.

[01:03:11] The conviction that I needed to do it probably increased, but the fear was still there. And I just kind of had to say, that's okay. It's going to be a little uncertain or feel scary. But I know we need to do it. And we'll get to the other side. And it probably end up being less painful than all these worst case scenarios. I imagine in my head anyway, right? Yeah. You still have to have courage because, like you said, it's a healthy emotion. You don't need to bury it. But that's what courage is.

[01:03:39] It's going forward even in the presence of fear, right? So you can still have some fear that my client for 10 years is going to hate me. And all these sort of things that are very real. So that's something I need to hear. Fortune favors the bold and the brave, right? You know, I think having a lot of success in many areas of life often requires that you take some big risks.

[01:04:08] It doesn't mean you take risks willy-nilly, right? And you have to manage your risk too, of course. But, you know, if you want to grow as an individual, as a company, et cetera, you're going to have to take some risk. It's just part of the game. Speaking of that, of all the time you've been in business, if there were one thing you could do over or differently, what would that be?

[01:04:36] I really wish we had joined peer groups many years sooner. I think, you know, when we started this organization, when I came in and joined, I was, gosh, was it 22? Something like that? 23? We were young. We were naive. I think we thought we were smarter than we were. And, you know, we really just, we didn't think we had all the answers, but I think we thought we could get all the answers ourselves.

[01:05:05] We'd figure it out. And, you know, that was a lot of two steps forward, two steps back at times. Three steps forward, two back. Three forward, four back. You know, it's just a very, we did a lot of learning by taking some risk and trying, falling on our face, getting back up, pushing forward. Over and over and over again. And look, that's always kind of part of, I think, an entrepreneurial journey, right?

[01:05:32] But what I've realized now being in these peer groups is we don't have to reinvent the wheel. You know, we're lucky in the IT services space in that our industry is so fragmented and there's so many of us that we rarely actually directly compete with each other. And so there's a lot of willingness and openness to help each other and to share information about your practices, what works for you, what doesn't work for you, even about, you know, financial details.

[01:06:00] Sharing this level of information with other people that do the same thing you do is almost unheard of, right, in a lot of industries. And it's very open and transparent and collaborative, I think, in our space. And so, you know, the peer groups was a very pivotal, joining those peer groups was a pivotal moment for us. And really diving into all the benchmarking data, understanding what the highest profitability, highest operational maturity MSPs were doing in different practices.

[01:06:25] And, you know, they're kind of like policies and things like that was it was a game changer for us because we realized instead of this constant iterative experimentation and falling on our face, we have the opportunity to copy what the successful have already done. There's no penalty for copying in this case. And let's stop trying to completely reinvent the wheel. I mean, yes, you want some unique things, you know, for us, like that pricing model.

[01:06:55] You do need to be unique to stand out in a crowded competitive space. But that doesn't mean you need to be unique and reinvent the wheel on every part of your processes and operations, et cetera. So much has already been proven. It's vetted. It's backed by data now. So you can kind of just go and benefit from that. And then I think the other part of it is, you know, not only do we feel like we have a really clear roadmap to increase our maturity and increase our profitability as a firm, as a result of these peer groups.

[01:07:23] But I think the other thing it also provides is like a support network, so to speak. You know, the entrepreneurial journey can be lonely. You know, I have a business partner, fortunately. They have really good and I've always had a good relationship with. But a lot of, you know, MSP founders are one individual on their own. And I can't imagine how lonely that journey is if I already feel a little, at times, isolated and lonely, right?

[01:07:49] Not a lot of people in general can relate to what business owners go through in terms of the ups and downs and the fears and uncertainty and pressure that can be felt, et cetera. So being in these peer groups is really helpful because you're surrounded by people that are going through it, have gone through it. Almost all of us are all having the same challenges or have had in the past. And so you realize you're not alone. You're not unique. Your fear is normal.

[01:08:18] You're, you know, all of these things, right? You start to understand that we all feel this way. We're all vulnerable. We all struggled with these things. And you can lean on each other for that support. And, of course, actually the guidance, too, to work through those issues. So in hindsight, it's for me, you know, one of the things I think if I could go back and do this all again, what would have changed the trajectory of the business most significantly?

[01:08:47] That doesn't require some broad stroke of luck. And for me, honestly, now I look back, if I would have joined these peer groups in 2012 or 2014, it pains me to say where our revenue could probably be today, what our profitability could be, you know, the progress towards my personal wealth target, where that would be. You know, you don't want to focus on it too much because it's not healthy. It doesn't really provide much constructive. But I think it really would have accelerated.

[01:09:16] I think we would be where we are today. We would have got there three, four years ago easily. How do you join? Join the peer groups and not just join, but embraced it. You know, the things we're learning from it, right? It's not enough to just show up. You need to contribute. You need to absorb all that supporting material you're going to get access to in those groups. So I should have done that sooner. It's a relatively small investment and the payoff has been massive already. That's wonderful advice. What's a myth about running an MSP that you'd like to dispel?

[01:09:45] Oh, that's a good one. You know, I think a lot of people think that IT services are in such hot demand. It's probably pretty easy to have a profitable business providing managed services. And it's a recurring revenue model, even more easy to make money. I think potential clients think we run these very profitable businesses.

[01:10:10] I think most people that go out on this path and start an MSP think it's going to be very easy to be profitable. But the truth is it's a pretty complicated business. You know, this is not a single process. We build one widget. We ship one widget. We sell one widget kind of business per se. There's a lot of moving pieces. It is a customer service business as much or more than it's a technology business. So it comes with lots of complexity of managing people, clients, vendors, employees, et cetera.

[01:10:41] Then you add the complexity of technology itself and the complexity of all the systems and tech we need to kind of have built on the back end and to be working really harmoniously with each other on the back end. So there's just a lot of moving pieces in a managed services provider business. And there's a lot of competition. You know, as we've talked about, it's a very crowded space. A lot of people are out saying they do the same things. There certainly is variance in ability to deliver on that.

[01:11:09] But a lot of people say they do the same things as well. And for those reasons, you know, it can be a very profitable business. But it is not as easy as I think anyone thinks it is. It requires a lot of discipline. It requires a lot of operational maturity, which is not something you just flip a switch on. That has to be built piece by piece over time. And, you know, you've got to really kind of get your target market and your pricing and all of those things right.

[01:11:38] So when you get it right, yeah, it can be a cash cow, a very attractive one. That's why private equity is not moving in the space. They've moved in and they're not leaving as far as I can tell. But I think for many people on the outside or people about to or early into starting these businesses, they think it's a lot easier to get to that 10 million in revenue and 20% EBITDA and stuff like that than it actually is.

[01:12:04] And very few actually make it there, right? Because it is so challenging. So not to discourage anyone from that journey, right? I think that complexity that exists is why there is a lot of opportunity also and why if you do build a very healthy, profitable, somewhat scaled business, you can attract a really pretty impressive enterprise value in a sale transaction more so than a lot of industries.

[01:12:34] So, you know, we are in a very appealing, you know, kind of sector and business model to private equity until there's, you know, forms of capital. But, you know, it's not an easy road necessarily to get there either. So, yeah, I think that's one of the biggest myths I see out there. People just assume, well, tech company with this much revenue, you must be rolling in money. Right. Working on it. Right. Yeah. So true.

[01:13:04] Adam, what's something with all that's going on that you're looking forward to? I am. I think I'm really looking forward to seeing how automation and AI shapes the world, shapes our lives and shapes our industry specifically. And let's say like the next five years or maybe by 2030 ish. I think that in that time frame, like I don't have a crystal ball.

[01:13:29] I don't know, you know, for 20 years from artificial general intelligence, you know, AGI, true AGI or if we're never going to get it or if we're going to have it in five years. Right. But it is pretty clear to me these things are going to be massively disruptive. We're already seeing it. Right. But I think we're still in the beginning wave of the disruption these technologies are going to cause because it takes time for tech to kind of make its way into the business world.

[01:13:57] So, you know, it's McKinsey Consultants, I think this was years ago, but did a study and said like something like 60 percent of jobs today could be replaced with technology that already exists today. Right. So it's like a lot of those jobs years later are still there. It's just because there is a lag to implement technology into businesses and AI, you know, is on that very early cusp. I think there's going to be a lot of impact that it has across many industries.

[01:14:25] And I think it's going to impact the managed services industry potentially pretty heavily. You know, I don't know exactly what that's going to look like, but I could see a lot more of help desk type of services being provided via automation and AI. And less reliant on humans as it's been. And for the MSPs, I think that that's that's going to be a very pivotal moment because for so long we have sold a lot of the value being on the support side.

[01:14:55] A lot of the clients have assigned a lot of the value and the willingness to pay these pretty substantial fees, managed service providers charge. They portion a lot of that value to the support side as well. So if your computer now has a built in AI and your MSP software has AI tied into some of your tools and automation. Right. And it's able to provide that support, some levels of it, at least ultra low cost and ultra efficiently.

[01:15:24] We're going to have to reposition and shift where we provide value or watch a big part of like our revenue and business kind of get eroded by technology. Right. So my take on that is, you know, probably means leaning even more into the strategic consulting side and the cybersecurity side. You know, so there's it's a double edged sword. The AI can make an automation can make us as MSPs more efficient.

[01:15:51] It might erode the value and the support side of the business. Right. AI is a double edged sword in cybersecurity. It can make the attacks more sophisticated and it also can improve the defenses simultaneously. So I think this is in general, AI, right? Like it has possible negatives and positives. And so we really just have to try to navigate and land more on the positive side there and ultimately help our clients adopt it as well.

[01:16:16] And we're still so early into this that I think, you know, I'll admit we don't have the exact answer to what that looks like and how do we go out and help our clients implement this. Right. Because it is still relatively new, at least like the generative AI. Right. And because major players in different spaces are still taking shape, you know, it's not like a real cookie cutter clear thing of how do I go and apply this at my client?

[01:16:43] That is a marketing firm, whatever, you know, law firm, et cetera. But we need to figure that out, too, because as much as I'm talking about the impact of the managed services space, this is going to impact every industry. And for you to have successful business, you need your clients to be successful. Right. And this is, you know, this is an opportunity and a threat to everybody. And we need to seize the opportunity to help our clients leverage it, too.

[01:17:09] So I am nervously excited to watch how this technology kind of grows and impacts our lives and the world and and things like that, because there's incredible opportunity there. You know, so much abundance can be created by this, so to speak, in the midterm, long term. But there are some some real risks and some real disruptions it's going to cause to society.

[01:17:33] So that's something I guess I am looking forward to seeing kind of where does that how does this movie end, so to speak? Yes, I feel like I could ask so many more questions on that. And this is the time I won't. I wanted to ask one last, which is what's one book? What's the number one book you'd recommend? So many good ones.

[01:17:55] But this read this book a few years ago and then recently decided our whole executive leadership team is going to do a little book club and read it together. So it's called Extreme Accountability by Jocko Willink. I apologize. I might have butchered his last name there. But he was a Navy SEAL commander, eventually, I believe, kind of ran the SEAL training courses.

[01:18:19] He trained SEAL leaders and then went into the private sector consulting leaders on leadership. And extreme accountability, you can probably guess what the biggest theme in the book is. It's about accountability and not just the importance of it, but like how to build a culture of accountability within yourself, within your leadership teams and all the way down the ranks.

[01:18:43] And I think what makes the book so unique is it's interwoven with stories from the SEAL training, from actual campaigns. But then also with business cases because they've been out consulting in a leadership, etc. And the lessons that it imparts are pretty powerful. And I'm not going to claim to be the best student of it ever that I've adopted everything right.

[01:19:11] You always try to take what you can from books. And then sometimes you have to come back to them later. And you're like, okay, I can do more here. I could implement or adopt this now. But some of the things that I've kind of took away from that book and brought into our team. And I didn't tell them, hey, this is from this book or I'm doing X, Y, or Z. But taking accountability, for example, for some failures and owning it fully myself as the leader in the organization. I recently did that in an all-company meeting.

[01:19:38] And the amount of employees that pinged me in Teams afterwards and were like, just, wow, that was so impressive. That was so humble of you. It's great having a leader that is opening to criticize themselves, to acknowledge their own failure, and to own it in such a way. And honestly, it was one of the lessons I got out of that book. So it's interesting. It's engaging read.

[01:20:07] And I think accountability is so important in business, but it's also important in just achieving personal things as well. It's important in relationships. It's important in everything. So I think that's a great read. I couldn't agree more, actually. I read it. I love Extreme Ownership. And I'm reading The Dichotomy of Leadership, which is the newest.

[01:20:31] And so if you like that one, you may really enjoy The Dichotomy of Leadership. Some people took Extreme Ownership a little too far, and I think ended up being a little too militant. Maybe with yourself you should do that. But with your team, there's a healthy balance. Yeah. Yeah. Yeah. I feel like I could do this all day long if our time permitted, but I know it doesn't.

[01:20:57] Adam, how can folks that have listened and watched you here find you, connect with you, ask you questions? What's the best way to find you online? Sure. Yeah. LinkedIn. Pretty actively moderating my LinkedIn. You can also email us at info at frameworkit.com. I'm on the list there.

[01:21:19] So, yeah, happy if there's anyone in the industry, too, that wants someone to talk to or needs encouragement, etc. I'm happy to have those conversations. Again, I'm still learning and growing, and our organization is as well. I think we've learned a lot of valuable lessons, have a lot of valuable lessons we can impart on others.

[01:21:43] But I also am still learning from my peers in and outside the industry all the time and just love connecting with people and hearing what they're going through and seeing how we can kind of help each other grow. Make sure to take Adam up on that. He's a wealth of knowledge. Adam, I thank you from the bottom of my heart for being on MSP Mindset. This has truly been a gift. Thank you, Damien. I appreciate you having me.