How to Differentiate Your MSP

[00:00:00] But we've done a poor job educating that there is a place and a time to add margin.

[00:00:05] There's a tight time and a place to add Marko.

[00:00:08] And there is a time and a place to where you need to know how many dollar, how much cost

[00:00:13] you have in each of your price per user or price per endpoint

[00:00:17] to support those that I then need to add margin on top of and then Marko.

[00:00:21] All of that bundled will create that healthy

[00:00:25] gross margin that will get us to that eight logos a year.

[00:00:34] Hey guys, I'm your host of MSP Mindset Damien Stevens and I got the amazing opportunity to

[00:00:40] speak with Kyle Christensen today of Empath. You're not going to want to miss this. We cover

[00:00:46] everything you need to know to sell, to understand your pricing and your profit margins,

[00:00:51] to understand operations and the future of our industry and what's coming down. Spoiler,

[00:00:57] it's not AI. So you're not going to want to miss this conversation.

[00:01:02] He is the co-founder and chief accountability officer of Empath. So I'm going to let him tell

[00:01:10] you a little bit more about that, but we're going to dig right in and get into some of the

[00:01:14] heart of this. So many MSPs are coming to me, Kyle, and I'm sure to you and saying,

[00:01:19] um, how the heck do I generate revenue and generate leads? What does that look like?

[00:01:30] And maybe they're good at closing with relationship skills or decent, but generate leads. How do I

[00:01:35] price this stuff? Um, and, uh, I don't know. I'd love to hear your thoughts. I feel like we

[00:01:41] were also entering an age or an era where buying the same managed services tools and then delivering

[00:01:49] the same managed service does no longer differentiate you from the 200 others in your market.

[00:01:58] What are you talking about? My website says that I'm the best at customer service and we are

[00:02:02] the nerds of all nerds and can fix all of their technical mumbo jumbo with my cool widgets

[00:02:08] that I bought from the same store that my competitor bought them. That's right. We're all using the same

[00:02:12] RMM. Yeah. Yeah. And like you hit the other point, right? You can't differentiate it as an MSP on

[00:02:19] service. No, your competitor doesn't say ours is mediocre. Right. Um, so let's, let's start with

[00:02:26] that because I feel like that's where a lot of people have failed out of the gate. What

[00:02:30] questions do I need to be asking myself to differentiate my MSP? So

[00:02:38] before you even go into the growth conversation, what you really have to figure out is what do I

[00:02:43] want from my business. And nine times out of 10, I find people that say I want to grow. What they

[00:02:49] really mean is I want to grow enough to just sustain what we currently have. And that's typically

[00:02:56] 10 to 13% year over year. Now, why that may sound high to a lot of people. What you have to consider is

[00:03:02] inflation with cost of living increases are about 6 to 8% year over year, meaning my costs are

[00:03:08] going to go up 68%. So I need to be able to increase my revenue 6 to 8% just to maintain the margins

[00:03:13] I'm making today. And then you're going to add 2 to 3% churn, which means I'm going to have

[00:03:18] 2 to 3% of my revenue from either customers leaving, customers getting acquired, customers

[00:03:22] having to downsize for whatever reason. So you're looking at that 11 ish percent. Then you got to

[00:03:28] consider, hey, I might want to grow my business a little bit more to either add on some extra fee

[00:03:33] like we're talking about sales and marketing. Right? We may want to be able to add on some

[00:03:36] extra costs for some buying some of my time back as an entrepreneur, which means I might not

[00:03:41] need to add a bookkeeping service. I may want to add a dialing service. I may want to bring

[00:03:46] on an admin. I want to may bring on a manager, right? So I can delegate to somebody.

[00:03:50] So when you start to have all these costs come up, 13 to 15% just keeps you where you are ultimately.

[00:03:59] So I say all of this to say before I want to grow, whether that's fast growth, which is 20 to 22%

[00:04:05] or hyper growth, which is pushing that 30% on boundaries. And for those that don't know me,

[00:04:11] I actually went from 4 to 15 million within about 18 months. And we did that through really

[00:04:16] knowing we're going to do everything we can to get to this goal. However, we know we're not

[00:04:20] going to go in day one to day two. It's going to be day one, day two, day three, day four,

[00:04:25] day five, day six, day seven, day eight, right? And you multiply that and it's a slow growth of

[00:04:28] incremental improvements time over time. So a little bit like compound interest, right?

[00:04:33] It's exactly like compound interest. But if you don't know where this is, then you are

[00:04:38] just a boat without a destination and you're just letting the trade winds take you where

[00:04:42] the trade winds want to take you. I got to learn how to use the winds behind me to my advantage

[00:04:48] to get me to my destination. Kyle, that sounds really nerdy. What the hell are you trying to say?

[00:04:54] Yeah. So as a operations guy at my core, I need to know how many customers that's going to

[00:05:03] take me to get to my pinnacle, my goal, my achieving plateau in the next, let's call it

[00:05:09] three years, four years, five years. Say that's 15 logos, 20 logos, 25 logos. And I also need to know

[00:05:18] that simple math, right? I know if they're charging two grand a month in recurring revenue,

[00:05:23] that's $24,000 a year. You times up by X number of customers and that gets me to my revenue goal.

[00:05:28] Oh yeah, I know. I can increase people and I can sell them extra widgets and do all this

[00:05:33] other stuff. But I need to think proactively, leading indicators. It's a lot easier to bring

[00:05:39] in net new business because that makes my business maturity a little bit more stable because now

[00:05:44] I have a lot of customers paying me revenue than rather they're a little amount of customers

[00:05:48] paying me a lot of revenue, which is terrifying. You've probably seen this Damian, right? Where

[00:05:52] you sit there going, oh, I have a client that pays me 40% of my revenue.

[00:05:57] Yeah, that is not a good place to be. That's right.

[00:06:00] No. And if I can account manage them, like I did when I was at Geek Squad corporate where we can

[00:06:06] add on revenue, that's great. That goes right to the bottom line. That makes your business grow a

[00:06:10] little bit healthier. So if I know I need to get to 15 customers, then I need to figure out

[00:06:17] through revenue operations or RevOps, a lot of people call it, how many proposals do I need

[00:06:23] to deliver to get that many customers? How many discoveries do I need to do to write proposals?

[00:06:30] How many meetings do I need to have to get to be able to get permission to do discoveries, right?

[00:06:36] Like customers have to know, like and trust you, there's a triangle of why they buy from me.

[00:06:41] So I got to build up that know, like and trust. And then how many people do I need to just meet?

[00:06:49] How many people do I need to engage with? How many people do I need to shake hands with

[00:06:53] in order to have a meeting? Right? We call that first contact or first touch or

[00:06:58] outbound activity in the sales world. Yeah. And it becomes math. And Damien, this is any business,

[00:07:06] right? We call it a sales funnel. And I'm sure even at Cervasi, right? You guys have a sales funnel

[00:07:11] that goes, Hey, here's how many people we start with and we can kind of expect to get to this

[00:07:16] many people. Exactly. Have you ever wondered if you could recover your backups? Let me ask a

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[00:08:18] or visit Cervasi.com slash learn more. Yeah, and the point though is like you're about to say,

[00:08:26] right? As I get too many people that are like, but I'm different. It's about referrals,

[00:08:32] relationships. And if you're saying that, if you're listening and you're saying that,

[00:08:38] that's what everybody's saying. Right? And I'm not saying growth by referral isn't amazing.

[00:08:42] It's one of the best ways I grow. But if you're sitting there waiting on referrals

[00:08:48] and you're only getting referral growth and you're not out there growing the business in some

[00:08:53] proactive way, you're just like everybody else. And just like selling the same RMM is not going

[00:08:58] to differentiate you, you know, waiting on referrals, sitting back as the, especially if

[00:09:03] you're that owner that's the salesperson and you're just sitting back waiting on these

[00:09:08] referrals to come in. Yeah, they're easy. Who couldn't close those? But yeah, that's not enough.

[00:09:14] That's not, I mean, you know, like you were saying, you might not even outpace turn. You're

[00:09:18] going to celebrate that you got a new logo. And by the way, if you're listening and you're

[00:09:23] getting two or three logos a year, this is you. Right? This is the two or three celebrations

[00:09:28] a year. And you might not, if you're doing them out, be outpacing the turn.

[00:09:32] Well, and that's the whole thing is they're there. So look at the mid-dress referrals before I get

[00:09:38] them in the Southern thought referrals are a fantastic way to grow your business because

[00:09:42] in that whole triangle of no like and trust, they're already going to now know you when

[00:09:47] they're already going to trust you. Now I just got to get them to like me, right? Because

[00:09:51] they were referred by someone that they respect. But let me counteract that because I also

[00:09:56] hear a lot of MSPs telling me, Kyle, I don't have churn. My customers love me. They've

[00:10:01] been with me for seven, eight, nine years. How many referrals have they given you?

[00:10:09] One. They've given you one referral in seven years. So if you can systematize referrals,

[00:10:18] we still have a funnel, right? I still have to say I need to have 50 referrals

[00:10:24] to get 25 meetings, to deliver 17 discoveries, to then deliver 12 proposals. That gets me my

[00:10:33] five, six, seven logos. So regardless of if I'm going for cold leads, meaning I'm just brute

[00:10:39] forcing it, I'm pulling on doors and saying, Hey, who are you? My name's Kyle come buy my

[00:10:45] shit. I also need to know, Hey, I'm Kyle. I'm friends with Steve and Steve said,

[00:10:50] you're cool people. Let's meet. It's still a system. And where I think a lot of defeat happens

[00:10:58] is most MSPs are founded by accidental entrepreneurs. That's the IT guy that was in love with

[00:11:04] technology and he was a consultant and as a consultant, you go, shit, I can't sell any

[00:11:09] more hours. So I'm going to hire an assistant. Boom. You've just converted into a service

[00:11:13] business. You've spent the last five, seven, 10 years maturing your operations and service

[00:11:20] and you have spent zero years maturing your operations and revenue and sales. And if I was

[00:11:27] to show you, I did a video with Alex Farling where we actually overlayed a help desk ticket

[00:11:33] flow and a sales workflow. And if you look at them, they're almost exactly the same.

[00:11:38] You just have opportunities that need to be triaged and escalated and escalated versus tickets

[00:11:43] that need to be triaged and escalated, escalated. It's still a process. So as a technical person,

[00:11:48] I loved it because it allowed me to reverse engineer. Hey, we're able to write a lot of

[00:11:54] proposals, but not a lot of them get signed. Why? Well, let's just iteratively improve

[00:11:59] that one step in our process, which then goes, okay, now we're wasting less time.

[00:12:05] And all of this is time at the end of the day. Each steps that I just outlined,

[00:12:09] it may take you two hours to deliver a proposal. It may take you a half hour

[00:12:14] to follow up on that proposal. And if I have to do a hundred proposals to hit my target,

[00:12:19] well, right there, that's 200 and or 300 hours, I have to spend just to get those

[00:12:26] logos closed in just those two steps of the fun. And if you're an owner right now on this

[00:12:31] call and you're like, I spent 5% of my week doing business development,

[00:12:35] that's not even enough hours in 5% to write that 300 hours worth of proposals and follow ups.

[00:12:42] And a lot of them skip the follow up stage. I would say 90% of them skip the follow up stage.

[00:12:47] They send the proposal and then they disappear on the customer or on the prospect.

[00:12:51] So anywho, that's a long way of saying referrals are fantastic if you can build

[00:12:55] a process. So what I did at my MSP and people may love this, take this away

[00:12:59] and run with it. When you do a QBR, technology business review, whether you do a quarterly,

[00:13:04] semi-annually, annually, however you meet with your customers. If you know that they're a customer

[00:13:09] with a high NPS or high C-set and they love you and they're good margins, good profitability,

[00:13:15] have a page or a slide deck prepared. And what I want you to do on that slide deck,

[00:13:20] go on LinkedIn, click on their name, find all the people that they are connected with,

[00:13:26] the ones that are second and third degree connections, filter it for CEOs and business owners,

[00:13:33] filter it for your area and just grab five, six, seven people. Grab their actual photos of

[00:13:38] their face. Put it on a slide and say, Hey, Mr. Customer, you just said that you love me and

[00:13:43] you would refer me rather than ask you who do you know or would you refer me? I'm going to

[00:13:48] ask, there's a lot of names that you know, there's a lot of connections that you have.

[00:13:52] I'm not going to ask you to work for me, Mr. Customer. I'm just going to say,

[00:13:55] I've done the work for you. Do any of these five to seven names, would you refer them to me?

[00:14:03] They're going to go, that guy, I don't know. That was a LinkedIn bot. I just hit yes and

[00:14:08] it's been bugging the shit out of me for weeks. That name, that guy's an asshole. I would

[00:14:12] never refer you to him because you just don't want to work with him. And then Sally, Jake

[00:14:18] and Kevin, great people. I'll refer you right now. I love that. And it's a psychological process.

[00:14:27] Your brain has too much in long-term memory. When you ask the question, who do you know?

[00:14:31] Your brain has to go into overtime to think of all the freaking people that I've met

[00:14:35] and had friendly with in my career. Yeah. And if you're lucky, it's one.

[00:14:39] Right. If you're lucky, it's one. You do the homework, you give them,

[00:14:43] you've made their job easier, which will differentiate I think. And the odds of getting

[00:14:48] more than one, they're going to increase. And as you said, systematize. Turn this into a process

[00:14:55] that you can repeat. It takes no, what, three, four more minutes? And if they really go and say,

[00:15:00] I'm not going to refer you to anybody, then you get to lean and say, so do you really like me?

[00:15:06] Give me real feedback. Let's have radical conversation. Why would you not refer me

[00:15:10] to your buddy? That's right. Now I will say, you got to be careful with that. I've definitely had

[00:15:16] the extroverted entrepreneur go, hell yeah. And they sit there, they grab their phone and they,

[00:15:21] hey Steve, meet Kyle. There you go. And then I've had the introverted ones that are like,

[00:15:28] so I actually built a template that they could actually just forward to their customers to

[00:15:33] refer me. Nice. There we don't have to put them on the spot. Quite as much. Right?

[00:15:42] Well, exactly. The whole idea is you referral programs don't work. I'm just going to say it.

[00:15:49] Because what you're essentially asking your customers to be is your sales rep.

[00:15:55] You're saying, hey Mr. Customer, I'm too lazy in sales and can you just work for me?

[00:15:59] Can you be my account executive? Can you find customers for me? I'll give you 500 bucks.

[00:16:05] I'll give you a thousand bucks. They're too busy. There's no empathy in that. There's no

[00:16:09] conscientiousness in saying, can you stop what you're doing and help me with my business's problems?

[00:16:15] I love the part you brought up is empathy because I get so many people that their system

[00:16:21] is I'll give you 500 bucks or a thousand bucks. But I've yet to be a business owner of any success

[00:16:27] that that moves them. That's not what it's about. If you do a great job, I'll refer you either

[00:16:35] way. I think I'd probably be more insulted by the offer than anything. If you can make an

[00:16:44] empathetic offer of why I need your help, why this is the right time, why this will really

[00:16:50] impact what we're doing or our mission. Okay, now I'm interested. But like you said,

[00:16:56] here's some money. I'm too lazy to prospect due sales. That's not going to work.

[00:17:04] I might be insulting on the other end. Right? No, completely. Let's put it that way.

[00:17:09] If I'm an entrepreneur and I have a friend that's an entrepreneur, I want nothing more than to help

[00:17:14] him succeed. And maybe I'm rarer in that. But I can tell you right now, shameless plug. Anytime

[00:17:20] someone says, hey, Kyle, I need help managing my backups. I'm like, hey, call them. And I

[00:17:24] don't say that in the aspect of trying to do a pitch, but I'm saying that because

[00:17:28] us business owners are our own community and we all know how hard it is to grow our businesses.

[00:17:34] And I am so excited when someone asks me like, hey, who do you know? Because I'm like sitting

[00:17:39] there going, oh my God, I get to help out a friend. Right? That's just what we need to do.

[00:17:45] But when you say, hey, go find me my customers, I'm going fuck. Dude,

[00:17:52] I already spent too much time on LinkedIn trying to find my own customers.

[00:17:55] Yes, that's exactly right. Yeah. And then you mentioned that LinkedIn or others,

[00:18:02] not everybody you're going to ask is extroverted or as good at social media or as well connected on

[00:18:09] LinkedIn or whatever fill in the blank. So they're sitting there and they think of the same three

[00:18:14] people. And so the one they think of giving you is probably the guy they met at the last

[00:18:21] business after hours that annoyed them the most. It's not always a solid referral.

[00:18:27] No, but the whole thing we're talking about right is it's a numbers game.

[00:18:33] You're not going to get one referral to one customer that is not 100% done deal. You always

[00:18:37] will get them as a customer. So just by that nature, I need to figure out what is it a four

[00:18:42] to one, a five to one, a seven to one, a 10 to one. And if I know it's a 10 to one,

[00:18:47] yeah, that's still a lot easier than 10,000 outbound making cold calls.

[00:18:52] Yeah. Right. It's a quality lead is what we would call that in sales.

[00:18:55] Right. It's a quality lead that has a higher conversion ratio. So if it's 10 to one, for example,

[00:19:04] then cool. If I want to close four customers this year, I need to find 40 referrals

[00:19:10] even in your scenario Damien. I can't just sit back and expect them to land in my lap.

[00:19:14] No, no, I still need to spend time. No, that's exactly right. Like

[00:19:19] if somebody trusts you to ask about backup in the R, that's wonderful. You get to connect

[00:19:25] them and it is a gift to me. And I appreciate it. You appreciate it. They appreciate it. I'm going to

[00:19:30] take extra good care of them, but you've already built that trustor and poor where you're kind of

[00:19:35] the trusted advisor. You're coaching them. You're teaching them. You're already in a spot and

[00:19:41] are you in that spot as the MSP? Are you engaged that often? Maybe not. If you are,

[00:19:47] this will flow more naturally. But goes back to what we were saying. Are you generating

[00:19:52] enough to turn this into a system? Because referrals are quality leads, but is that going

[00:20:00] to get you to your number? If you need 10 new this year, is that going to give you 10 new when

[00:20:05] you're not closing 100%? Nowhere near that. Well, and it goes to your initial question.

[00:20:11] And I think for this one, I'm going to have this over here. For those that don't know,

[00:20:17] I have a baseball bat with accountability written on it. And yeah, it's upside down,

[00:20:20] but because my camera's mirrored. But why this exists is as basic human beings, we have three main

[00:20:30] needs. We need food, we need shelter, and we need some form of a relationship. You could say that

[00:20:36] any way you want. Well, if we look at animal culture, there's a fourth, which is some type

[00:20:42] of drive to be alpha, right? To be the leader. And in business, it's very easy to have your

[00:20:50] three needs met, right? I've got relationships, I have food and I have shelter. So when you go,

[00:20:59] Kyle, I don't want to go 15%. What you're telling me is I'm satisfied. And right now,

[00:21:07] I don't have drive or motivation to continue growing my business.

[00:21:11] I'm not willing to work that hard.

[00:21:13] I'm not willing to work that hard. I didn't think I needed to work that hard. And that is a dangerous

[00:21:18] place to be as an entrepreneur. Motivation is extremely, extremely tough. And Damien,

[00:21:25] we've had the fortune, it, functionality to work with each other in some other aspects.

[00:21:29] And one of the things that I found when I used to do business coaching heavily was

[00:21:34] I don't know more than most of the people I work with. The difference is I would run after them

[00:21:42] with the baseball bat saying, dude, did you wake up and find your next customer today?

[00:21:46] Right. Did you wake up and do this, right? It's, it's this motivation or it's this,

[00:21:51] it's like a gym coach, right? Like if he knocks on the door and says,

[00:21:54] you're working out today, I'm going to go work out. That's right.

[00:21:57] If I don't have that person, I have to be able to self motivate. And that is a very difficult

[00:22:05] trait to learn as an entrepreneur. And I struggled with it.

[00:22:09] Well, the thing is,

[00:22:09] I don't know you, but you've probably had moments.

[00:22:11] Well, the thing is, speaking about myself, like you're the boss, right? So,

[00:22:17] you know, you could tell your wife or whoever, how was it? It was good day,

[00:22:21] you know? And, you know, your team, they're, you know, they report to you. They're not going

[00:22:28] to tell you what to do. Now maybe if you're in a good enough peer group, maybe if you have a

[00:22:32] good enough friend, maybe if you've got the right coach, like there's a lot of things,

[00:22:35] but I feel like you need those things. At least I did to say, hey, because the other thing is

[00:22:40] there's getting out of your comfort zone, because I think there's staying in it and

[00:22:46] there's the awareness of am I growing? Because you're all growing. I've never talked to MSP that says,

[00:22:53] you know, hey, I'm not, everyone's well, they're aware that they're not because then they know that

[00:22:57] 10% growth is actually going backwards by the time you count the things that

[00:23:01] you laid out there, Kyle. And, but then it's like, oh, well, I didn't, you know,

[00:23:05] so you're either not aware that you need to be doing more growth,

[00:23:08] you're actually going backwards or you're aware, but you're unwilling to get there.

[00:23:13] And at least my personal experience is it's not that Kyle was born 10 times more motivated than me.

[00:23:23] It's that Kyle's got the accountability set up. He's got somebody asking him and he's told him,

[00:23:29] he's told somebody there, he's getting 10 new logos this year, or he's going to get, you know,

[00:23:33] 10 new proposals this month, or whatever, whatever it is you need. I know for myself, I was very

[00:23:40] fortunate to establish an accountability partner with a peer. And this has been ongoing for 18 years.

[00:23:49] And it started out weekly, every week. There's the unglorious part about building a business.

[00:23:55] Did you make the calls? I'm an introverted tech guy that stared at my shoes.

[00:24:01] I didn't want to make any, I didn't want to do it. All of a sudden, frigging accounting became

[00:24:06] exciting. All of a sudden filing my taxes became it more like I would, you know, whatever. But

[00:24:12] I had to answer, did you do it? And that was the difference. I finally got tired of saying I

[00:24:19] didn't do it. And so yeah, I can't speak for myself. I can't, whether you get through a coach,

[00:24:26] a peer, a peer group accountability, right, can change your life if you're willing to,

[00:24:34] because as an owner, you don't have to listen. You could say, you know what? I'm going to fire the

[00:24:38] coach. I'm going to get out of the group. I'm not going to listen to him. But if you change your

[00:24:42] mindset and you say, I'm going to be accountable, because I think as entrepreneurs, we like to

[00:24:47] bend the rules. We like to hop over the fences that are laid out. We're unemployable.

[00:24:52] We're very unemployable. So that's the friction, right? Is am I willing to still be accountable

[00:24:58] to growth? And that means you've got to basically subject yourself to answering that.

[00:25:04] In somebody, you can't say I am the Alpha that is all alone. I'm just going to blaze my own path

[00:25:09] and figure it all out. A thousand percent. So there are ways to increase your discipline.

[00:25:19] Like I went through a lot of mental exercises in like 2015 to 2019. That's actually what led

[00:25:25] me to do an Ironman was I wanted to see if I could take the mental fortitude of training

[00:25:30] three to four hours every single day for an entire year. And I'm not going to lie, it broke me.

[00:25:35] It broke me like a wild Mustang. Like it killed me almost. There were moments where

[00:25:40] I thought my now life was going to leave me because she didn't see me for almost a year.

[00:25:47] But one of the early exercises or assessments, I guess that I go through with some of my MSPs

[00:25:53] that I coached was I would literally send them five of something. So right, whether it be five coins

[00:25:59] on your desk or I sent one, five rubber duckies with one, two, three, four, five written on it.

[00:26:04] Same thing that your accountability partners said. I said every day,

[00:26:07] I want you to take these five rocks out of your box and put them on your desk.

[00:26:13] And I want you to call five random people. Just have a conversation, five conversations a day.

[00:26:22] Let's just start easy. And if you can want you to have a phone call, you take the coin,

[00:26:26] you put it in your desk, you have the phone call, you put a coin, you put it in your desk.

[00:26:31] And voicemail doesn't count. And if you get through all five,

[00:26:33] voicemail does not count. So you might do the same exercise. And then I want you to just

[00:26:39] do a tally mark, right? That's your KPI. Did I get through my five calls today?

[00:26:45] It's crippling. Yeah. It's crippling. Yeah. If you haven't battled that yourself,

[00:26:49] it is, it sounds simple. It's frigging tough.

[00:26:54] It is tough because you're going to have that person that I started to get to a point where

[00:26:58] I would just play Russian and what I would just go through my contacts and I would go

[00:27:03] call that person and I literally would be like, oh, shit, I don't even remember who this is.

[00:27:08] For some reason there are contact in my phone, but I'm going to talk to him.

[00:27:12] Uncle Bob, you need MST services?

[00:27:15] The first time I did it, I called my mom as the very first call.

[00:27:19] All right. And the second call was my grandma. And the third call was one of my old mentors.

[00:27:24] But you get to a point where you break free and all of a sudden it's not as awkward because

[00:27:30] if you look at resilience, one of the number one ways that resilience starts to lessen cortisol,

[00:27:36] which is the stress hormone, that's what makes you anxious, is through repetition

[00:27:42] because your body starts to expect it. You know what the outcome is going to be.

[00:27:46] That's why you see kids in the Congo that live through war. Day one, they see people being killed

[00:27:52] and they're like six months old. It doesn't faze them because after the 4,000th time,

[00:27:56] they're like, eh, that's just life. Yeah. That's fight or flight. We learned to overcome our

[00:28:04] hormonal response. So you have to as a business owner always be remembering your body is just

[00:28:11] trying to save you when you are uncomfortable and you just have to go, you know what?

[00:28:16] I'm uncomfortable but I can get through this if I do it five or six more times.

[00:28:20] Yeah. You just made me uncomfortable because I was whining about making cold calls and then

[00:28:23] you compared that to the kid and staring death in the face. Well, hopefully you get

[00:28:28] to a point where your cold calling becomes more mature and it's not just going to a phone book

[00:28:35] and saying, oh, Damien services dry cleaning. Yeah. I'll call that. Right. That's right.

[00:28:43] Yeah. I remember in the early days of doing that, you know, messing up so many things,

[00:28:48] messing up everything and I would get somebody and they wouldn't be the right fit and, you know,

[00:28:52] ask them, you know, do you know, you know, first time in services, do you know who's

[00:28:57] interested in managed services or whatever? And that was when I learned that there is a little

[00:29:03] more to it than that when you're asking for referral because I remember feeling so

[00:29:11] frustrated and embarrassed because this guy answered and they were like, Bob told me that

[00:29:14] you are looking for people to call. And I was like, no, that's not at all really what I'm looking

[00:29:20] to do. It's a means to an end that works and I don't think most people are willing to do it.

[00:29:28] I love the mindset piece. So why, uh, we'll go back to that. Why

[00:29:33] triathlon or why a marathon? So I was always in the cycle. So I've been out of the mountain

[00:29:42] bikers since 10 years ago, 12 years ago. I went to the University of Santa Cruz up in the Santa

[00:29:48] Cruz mountains, Redwood Forest and I just got super into mountain biking. And what I recognized

[00:29:54] with biking, especially back then I couldn't wear headphones because Bluetooth hadn't exist

[00:29:59] and the cable will get wrapped up. Boom boxes were too big. You're not going to strap it to your back.

[00:30:04] So you always had to be in silence. And I started to notice that I would work through a lot of my

[00:30:11] bullshit in these moments of silence. So just a mental exercise of being with your own thoughts

[00:30:19] and you're going for two, two and a half hours. And right? It's a long time to have to live with

[00:30:25] yourself in your own thoughts. It's a dark place for some. And then I got into road cycling where,

[00:30:32] you know, now you're going three and a half, four or five hours on a bike, right? Same thing.

[00:30:37] You don't want to put headphones on a, yeah, on a road bike. You got cars,

[00:30:40] you're riding in traffic, right? You need to be aware. And then it progressed into

[00:30:46] doing some races. And I, at one point, one of my friends, Eric Speck, he, best friend, him and I

[00:30:54] still go to the movies by ourselves or do little mandates and we go to the theaters and just watch

[00:30:58] a movie. He did an Iron Man in 2016, 2017. And all he talked about was he hated every minute

[00:31:06] of it until the day after. Because when he looked back on it, it was being able to

[00:31:12] get him to do some, get himself to do something that seems unachievable. So it almost became a

[00:31:22] detriment motivator to a hyper motivator when you go, holy crap, I can get through anything.

[00:31:29] And just as having a challenge, just as having something to try, I said, you know what? Let me

[00:31:34] try it. And I can't tell you, when you are in the pool during winter at 6am, swimming laps

[00:31:42] for an hour, that is one of those things that will break most people. Like you are sitting there

[00:31:49] going, I do not want to get into the damn pool. I want to sit in bed. I want to drink my coffee

[00:31:53] and I just want to deal with anything. And then you do it second day. You do it a third

[00:31:59] day. And then the fourth day you decide, I'm going to go on a run during my lunch break

[00:32:03] and you multiply that through the months. And you have so much head trash during this process.

[00:32:10] You have that little demon on your shoulder saying, motherfucker, just give up. Just give up. Just give

[00:32:16] up. And as someone with daddy issues where all I want to do is prove daddy wrong, right? That's

[00:32:23] kind of my, I guess, origin story is growing up on a ranch, it was always of you got to

[00:32:30] bust your ass and you got to find a way to work through it. So having to use my own willpower

[00:32:35] to get through something every single day, even when you're tired and you're in pain and you

[00:32:41] don't want to do it. And some weird pain that I don't even want to talk about. Very odd and very

[00:32:48] embarrassing pain. You do it. And I started to realize in business that it's the same thing.

[00:32:56] You as the entrepreneur, as the CEO, your job is to do the shit that no one else wants to do.

[00:33:03] And I see too many business owners that go, oh, I'm going to grab on. I'm going to grab

[00:33:09] onto this one thing that I love doing and I'm not going to let anyone else do it because I like

[00:33:14] doing it. I'm going to be the super tech, right? Yes. And I'm going to go buy all the stack

[00:33:19] in the software and the toys. Well, then what does it change? All the other crap in your business

[00:33:25] that needs to be worked on. And when you're small, the only valuable thing you have is your time.

[00:33:32] So if I have a bunch of nerds that work for me, then I need to delegate those nerd things,

[00:33:36] even though I love doing them because I got to go do the stuff that no one else

[00:33:39] has how to do. Whether that's my bookkeeping, whether that's my sales, whether that's my

[00:33:46] marketing, whether that's my social media, whether that's networking, right? Whatever it is,

[00:33:52] I got to go do it. And there's even this video of Elon Musk where he talks about the biggest thing

[00:33:56] with an entrepreneur is being able to do the job no one else wants to do in your company

[00:34:00] and do it on a minute's notice. Go, someone, the bathrooms are over flooding.

[00:34:06] Okay. If no one's picking up a mop and a plunger, then I got to go do it.

[00:34:11] That's right. Have pride in your business because those at the end of the day,

[00:34:17] you are an employee to your employees. They've depended on you. If that business does not grow

[00:34:21] 13% year over year, that means your margins are going to be eroding. And if your margins are eroding,

[00:34:27] you can give your employees your raises. And if you can't give employees their raises,

[00:34:30] they're going to leave or think that you're an asshole. So you have to grow your business.

[00:34:35] If you're not growing your dine as a thing for a reason, it's called inflation.

[00:34:40] Yeah, nothing. If you're not changing your dine,

[00:34:46] you know, as a person, right? And that working out is a big metaphor for that.

[00:34:51] Right? You can put it off. You can eat the, you can eat a little worse this day. You

[00:34:55] can skip this. You can skip a few days. But if you're not investing in your health,

[00:35:02] then you're not showing up for your family, for your team in the way that you could be.

[00:35:06] And if you're not willing to do that hard stuff, then you have to ask yourself,

[00:35:12] am I willing to do the other hard things when that?

[00:35:15] I had over 100 employees in my MSP. I had 60 employees that's here at Pacific Group,

[00:35:20] right? Like an empath, we're building out that employee thing as well. If I die,

[00:35:24] they all lose their jobs. Their family is no longer have the income they need to get that

[00:35:29] roof over their head or their stomach bed. Right? I have a responsibility to those people.

[00:35:34] Huge responsibility.

[00:35:36] But it's also a huge gift. And we talk a lot about empath where as MSPs,

[00:35:43] we are more like college football teams than professional football teams.

[00:35:48] You're smirking. You already know the answer?

[00:35:50] Yeah. No, let's hear it. Let's see. I love the analogy.

[00:35:56] Professional football teams have a big bucket of cash. They can do something called franchise

[00:36:01] tagging. Patrick Mahomes, best quarterback in college that we've ever seen. I'm going to pay him

[00:36:07] a billion dollars to never leave us. Even a hundred million dollars MSP still only makes 10 to 12%

[00:36:16] net profit. They do not have the cap and they're borrowing money from private equity.

[00:36:20] They do not have the cash to franchise tag somebody. College football team,

[00:36:28] you only get three to four years with a player.

[00:36:31] Mm-hmm.

[00:36:33] And then it all starts over again. I have to be able to get that employee from

[00:36:39] kind of good to a championship in that small amount of timeframe. So I got to be strategic.

[00:36:45] I got to be able to train them. I got to be able to get them the tools that they need to be the

[00:36:50] best version of themselves. In the best case scenario, I got that player to a position

[00:36:56] to where now they get franchise tacked. Same with MSPs. I'm going to get someone that's a tier one

[00:37:04] or an SDR or a AR clerk. I'm going to give them the tools that they need and eventually they are

[00:37:10] going to leave you. You are not going to have employees that last 12, 15 years because you

[00:37:15] can never pay them enough to let them achieve their goals. Not if you got amazing people.

[00:37:20] I need to... Even if you have amazing people though, right? Like I even think back to like

[00:37:24] myself, if I have an amazing business and the most I can do for an employee is get them to a career

[00:37:32] position to where they're desired and they can make as much money or lifestyle as they want.

[00:37:39] Hell, a lot of my employees have become their own entrepreneurs.

[00:37:45] There is nothing worse than like I did to my girlfriend in high school and being like,

[00:37:50] don't leave me. I will do whatever you want to not break up with me.

[00:37:54] That's not your account management strategy.

[00:37:58] No, it's not my account management strategy either. I have a whole other tirade on that one.

[00:38:03] But to me, right? Like if I only have four years with a player, with an employee,

[00:38:11] if I can make them double their salary in that four years,

[00:38:16] I should be like celebrating. We should be having a party saying, oh my god,

[00:38:20] we got someone to the majors. We should be excited because if you don't and you do try

[00:38:26] to franchise tag them, now your inflation is not 68%. Your costs aren't going up just 10%.

[00:38:34] Your costs are going to go up 11%, 12%, 13%. I used to make a joke that I could

[00:38:41] increase any... Not a joke, it was a proven fact. I could increase an MSP's margins by 20%

[00:38:47] in six months. Okay, how's that? I was never unsuccessful ever.

[00:38:54] However, if they wanted to hypergrow or fast grow, I would tell them that you're probably

[00:38:59] going to have 10% to 15% of attrition because as we start to look at the financials,

[00:39:06] know where we are, know where we're going and then look at the roster of players we

[00:39:11] have to do that with. We're going to either be overstaffed, overpaid which causes under employees

[00:39:17] to be underpaid. So for those employees listening and going, you just chop in heads.

[00:39:22] Well, if we have 12 employees and we only have the budget to hire eight of them, I have a feeling

[00:39:26] most of you haven't gotten raises because you have too many employees. And then from there,

[00:39:33] adjusting the price because the only two ways in business to make money is charge more or do less.

[00:39:38] Right? And those are things like automation and process all start to improve your business,

[00:39:44] outsourcing, offshoring all that good stuff. So I mean, that's a long-winded way of saying,

[00:39:50] right, if you took the financial exercise and applied sales and marketing strategy,

[00:39:54] you can get wherever you need to but you are going to have to adjust your product and

[00:39:58] as MSPs our product typically involves people. Absolutely. So on the people note,

[00:40:04] I know you mentioned a lot of things but I know I'm asked to earlier differentiate.

[00:40:08] I think, I believe and I think you do that you need to differentiate not just in sales and marketing

[00:40:12] but to the team if you're going to recruit that team. So as an MSP, I feel like most of us

[00:40:20] struggled when I was back as an MSP has struggled. I was like, we do tech stuff. Isn't that cool?

[00:40:26] That doesn't differentiate you at all. That doesn't tell them why they should join you.

[00:40:30] So how do you convince the folks, whether they're senior or whether they're senior tech,

[00:40:37] level three CTO, whether they're level one just getting a foothold in the door,

[00:40:42] wherever they fall on that spectrum. Like you said, AR, clerk, marketing, there's all these folks.

[00:40:48] How do you attract the right team? Because as you mentioned, you got to have the right people.

[00:40:57] So while I know I make a joke about accountability bet, right? And everyone thinks of accountability

[00:41:03] is I need to hold somebody accountable. There's a yin to that yang which is I need people that

[00:41:09] know how to be accountable. Now what does that, how is that different? Being accountable is

[00:41:16] I know what is expected of me and I'm going to do what I need to do to get the job done,

[00:41:22] to cover for the rest of my team. So as an operations employee, service manager,

[00:41:28] service director, operations director, whatever you call yourself, being accountable recognizes

[00:41:32] that if I let too many customers out the door and they fire us for shitty services,

[00:41:37] I'm going to make the job of my sales team more difficult. So it's being accountable to my peer

[00:41:44] and sales saying I'm going to do everything we can to make us have a rock solid service

[00:41:48] that people are happy with and we bend over backwards to make sure most of our clients

[00:41:53] there's I don't say all of our clients, but most of our clients fit within our model.

[00:41:58] However, I also recognize that we need a certain amount of product margin to also pay for the service

[00:42:04] or the sales and finance team to where if we do have a customer taking advantage of us,

[00:42:08] I'm going to partner with my sales team and say, Hey, ACME Co, they call every time the

[00:42:14] microwave stops working. We are not profitable on them anymore. And they're going to get

[00:42:19] their account management team to talk to that customer and say, Hey, we're trying to do less

[00:42:23] to not increase your price. So now we're going to have to charge you more if you want to keep calling

[00:42:28] us about the microwave network, which then makes my finance teams jobs a lot easier because they

[00:42:33] don't need to chase us down saying we're spending too much money and going over budget.

[00:42:37] So finding people that know how to be accountable is a difficult road where you do need to hold

[00:42:44] people accountable. And going again to say, Hey, my goal is here, right? I have to there's an adage

[00:42:51] which is sometimes the team that got you here won't get you there. And you have to recognize that

[00:42:57] if you have employees that are not thirsty for knowledge, thirsty for education, trying to

[00:43:03] figure out the how they bring you problems, not solutions, then you may need to assess saying,

[00:43:11] Hey, if I've told my services team, we need 48% margin on everything that we do fully blended.

[00:43:18] They should be coming to me saying, Hey, we're not 48% margin. This is going to cause problems.

[00:43:25] You shouldn't have to go to them. But again, this and this is where I've built in it.

[00:43:30] You've seen a day in my entire expectation flywheel of I need to be able to set expectations

[00:43:36] and have expectations, which is the prerequisite to setting expectations, right?

[00:43:40] Have an idea of where I want to go again, going back to the sales goal. If I want to grow,

[00:43:44] I need eight logos. If I know I need eight logos, then here's how I'm going to pay for a sales

[00:43:48] team to get me eight logos, which means my service team, right? All of that starts to kind

[00:43:53] of fit in the wheel. And if your team doesn't want to be accountable to the goals of the

[00:43:59] business so everyone can be paid fairly and everyone will do what they can to compensate for

[00:44:06] the rest of the company, then they may not be the position or the person to get you there.

[00:44:11] And it's your job as the owner, the unfun part of your job to find someone that will do that.

[00:44:19] So what do you look for? How do I find that person? What's the secret sauce?

[00:44:26] Everybody's hiring, but not everybody's hiring people that are accountable,

[00:44:29] people that are the right fit. I see too often, in my opinion, a lot of focus on hard skills.

[00:44:37] You got this cert, you got this degree, but you're a jerk. You're not thirsty to learn.

[00:44:43] You don't play well with their team. Maybe you put on a good faith for the clients,

[00:44:48] but you're otherwise wrecking our culture. Everybody interviews well. How do you

[00:44:56] find the right people? So finding the people to me

[00:45:03] isn't as difficult as it is. Let me think about how to say this.

[00:45:11] Finding the people is a lot more difficult than it is or less difficult than actually putting a

[00:45:16] path that is going to make someone successful, building that path, knowing what they need to do

[00:45:20] to get you the needs that you have. And people then you need to give them the ability to raise

[00:45:26] their hand and say, I don't know what I'm doing. I need help. Can you get me a consultant?

[00:45:31] Can you get me a coach? Can you buy me education to figure it out?

[00:45:35] And there's an old adage of higher, slow, fire fast. And really where it comes from is,

[00:45:40] and I use this analogy a lot, everyone knows that Tier 2 engineer that clocks off at four o'clock.

[00:45:48] They close less tickets than you. They make the same or possibly more money than you do.

[00:45:53] And you sit there until 530 and get the job done. That is not the problem of the guy

[00:46:01] that's taking advantage of the situation. That is the problem of your manager who is not building

[00:46:05] a system or an environment where everyone pulls their own weight. I'm a firm believer that most

[00:46:12] people with the right expectations and the right tools, they will do a good job.

[00:46:18] Right? If they're compensated fairly, if they get the time off that they need,

[00:46:22] and they have clear direction on where to find knowledge, what money that they can spend

[00:46:27] without permission and what they should do if they don't know how to make a decision,

[00:46:35] they will rise to the occasion. Google actually found that SMART goals,

[00:46:40] specific, measurable, attainable, relevant, time-based were actually not motivating.

[00:46:45] And why they found that out was that attainable, that A,

[00:46:50] a lot of people were setting goals to be just easily passable. They're attainable,

[00:46:55] meaning I can achieve them. They weren't stretch goals, meaning they're a little difficult,

[00:46:58] they're a little hard. Right? Not zero to best in class, not zero to record breaking,

[00:47:05] but zero to two if the expectation is one. So if you ask them the questions of we need to get

[00:47:12] to two, you know how to get to one, bring me a plan. Start to ask the questions of

[00:47:18] give me, I'm giving you a week to bring me your solution. I'm giving you a week,

[00:47:23] but I see this with rocks all the time. People build their quarterly goals

[00:47:28] and they're not measurable or they, if you don't know the term rocks, just think of

[00:47:33] misprints or quarterly projects, projects to mature the business, or they pick some recent

[00:47:38] thing of like, Hey, this shit burned down yesterday. So I guess it's my rock today.

[00:47:42] They don't go through the strategic process to say we need to improve margin by 2%.

[00:47:48] But a key differentiator is on week two, have them come to you with their plan on what

[00:47:53] they're going to do to achieve it and what measurement means achievement is finished

[00:47:57] and ask them, can you do 10% better? Can you do 15% better? Can you do 20% better?

[00:48:03] And you're not doing it to just get more out of people, which might be how some people hear

[00:48:10] this. You're doing this to see their thought process. How do they solve problems? How do

[00:48:14] they solve, how can they achieve things? Another good thing that I've seen in the

[00:48:19] past is don't be afraid to hire people part time or on contract in the beginning.

[00:48:23] Ask leaders to come in, work with you for 30 to 45 days. Just observe, I'll pay you.

[00:48:30] And what I want to know is if you truly want this job, I want you to present me with a plan

[00:48:34] on how you're going to help us achieve our goals. Don't bring me problems, bring me solutions.

[00:48:42] All the difference. There's an old adage and EOS has this old adage of identify, discuss,

[00:48:48] and solve ideas. Why do I want you to identify problems and bring them to me?

[00:48:55] Right. If I hired you to be a director or manager, why don't you identify, tell me the solve,

[00:49:03] and then let's discuss if we want to go with that solve or not.

[00:49:08] So all of these little actions are putting you in a position to where you are enabling people

[00:49:13] to make decisions. You are enabling people to fail. My mantra is dare to suck and I

[00:49:17] should allow my employees to have the same respect of I don't hold you accountable

[00:49:23] for your failures. I hold you accountable for learning from those failures. Sales and marketing

[00:49:30] is a great example. I may put your quota at we're going to grow by 30%. I know in my heart of hearts

[00:49:37] that is a difficult thing to do. You are in the upper 1% tile of CROs or sales managers.

[00:49:45] Am I going to fire you if you hit 25%, 23%, 20%? No. No way. But what I do want is that

[00:49:58] respect to come to us and say, hey, we're supposed to hit 30%, we're going to hit 20%.

[00:50:04] Here's the things that are happening. Have that transparent nature to where they can come to

[00:50:08] me and present the data. Tell me what they learned and tell me what they want to try,

[00:50:13] something new. Because times change. Who thought that TikTok was going to be a big thing in

[00:50:17] business? Who thought that YouTube would be a good big thing in business? Podcasting,

[00:50:23] people laughed at it. They thought it was the dumbest thing in the world.

[00:50:26] So yes, there is that nature of your buyer tomorrow is going to want to be presented something

[00:50:32] differently than tomorrow. And you brought up an interesting point of differentiators when

[00:50:37] you're talking to prospects. If I have to rely on something shiny, something marketing that I

[00:50:43] put on my website for you to sign a deal, I've probably gone about the whole process wrong.

[00:50:50] Why do I say that? Not like this interview, but in sales there's a 75-25 rule, 80-20,

[00:50:58] whatever fraction you want to give it to where the majority of the time your prospect should be

[00:51:02] talking. I used to have my sales reps on a piece of paper. I said, I want to see this on every

[00:51:11] single questionnaire you fill out. You already know what I'm going to say. W-A-I-T. Wait.

[00:51:21] Why am I? And I wanted to see this on every questionnaire that they asked because I wanted

[00:51:31] to know that something stared them in the face. They saw me saying, hey Damien, shut up. Listen,

[00:51:42] you got two ears and one mouth. Again, unlike this interview where I'm talking a lot.

[00:51:48] Yeah, but I totally relate because you come through and you learn and in the beginning,

[00:51:55] you're day one, day week one, you're excited. And then somewhere in the first week or two,

[00:52:00] you start to realize you have no idea what you're doing. And maybe you're going through

[00:52:04] imposter syndrome. But then within a month or two or three, you're like, I know this stuff.

[00:52:09] I can answer these questions. Yay. And so they say something and you just jump on it.

[00:52:13] You're just so excited to answer. Ooh, I know about cybersecurity. Let me tell you.

[00:52:18] We have all these XDR, MDR, DR, whatever fill in the DR. We got all kinds of cool things that'll

[00:52:26] make you just more handsome and taller. I don't know. This just does these things.

[00:52:33] Mr. Business Owner, you'll be more attractive to other nerves.

[00:52:35] That's right. So I show up and throw up with all this tech jargon and

[00:52:44] overwhelm them instead of listening. And like you said, weight, I love the acronym.

[00:52:49] And that I found it, you have to weight through what can feel uncomfortable in the silence.

[00:52:57] And depending on them, they're still processing. There's a little more that's going to come out.

[00:53:01] But sometimes that last part is the part they need you to solve. Maybe more than everybody.

[00:53:09] And if they had mentioned a problem, you only need to say one thing Damian.

[00:53:12] What's that? I can help you with that.

[00:53:17] But they're not looking for widgets. They're not looking for nerd stuff.

[00:53:21] Let's take a law firm, for example. What do lawyers obsess about? Winning deals

[00:53:29] in the weekend. That's it. They're a partner. They have spent the last 25 years of their life

[00:53:40] obsessing about law, obsessing about their practice. You have spent the last 25 years

[00:53:46] obsessing about servers, cloud, cybersecurity, all of this stuff. So what is passionate to you

[00:53:55] is not passionate to them. So if you start there and would you say throw up?

[00:54:02] Show up and throw up.

[00:54:03] Again for me. Show up and throw up. You are not giving them the opportunity to tell you what

[00:54:08] is important to them. I have a post going live tomorrow, so probably a week after the Saras or

[00:54:16] something where I'm talking about do you want a partnership with your customer or a relationship?

[00:54:24] You know the differences? Tell me.

[00:54:27] So a relationship is like what I have with my cousin. He's always going to be family to me.

[00:54:33] But three years ago, I lent him $100. He never paid me that.

[00:54:38] You got some kind of cousin I did.

[00:54:40] Right? Yeah, exactly. We all have that person, but he's still family. I still love him to death.

[00:54:45] But it was mutually beneficial to him, not beneficial to me.

[00:54:49] He put me in a less position for his own good. But you know what? It's a relationship.

[00:54:54] He's that guy. At the end of the day, I still love him to death, but nothing's going to change.

[00:54:59] It's just what it is. A partnership is what I have with my wife. There's going to be ups.

[00:55:06] There's going to be downs. But we should always walk together to solve each other's problems

[00:55:11] so that it's always mutually beneficial. Sometimes she'll win, but then sometimes

[00:55:16] I have to win. But at the end of the day, it needs to balance out. The scales need to balance.

[00:55:20] And if you're going through your customers, I make all my customers do this exercise of

[00:55:27] rank your clients most profitable till these profitable. And I can guarantee you,

[00:55:32] if you were to rate your customers from partnership to relationship,

[00:55:36] you're going to see your credit customers that are most profitable will be partnerships.

[00:55:39] Where if I tell them, hey, Mr. Customer, we're going to talk about a 6% increase this year.

[00:55:44] They're going to go, yeah, costs are growing up, man. We know it. It's painful.

[00:55:48] It's not going to be a gross conversation. You're going to be able to tell them,

[00:55:51] like I am trying to provide this service to you. The only way I can guarantee this quality that

[00:55:54] you expect is I got to pay my guys more money or I need to offshore them to India or Philippines

[00:56:01] or wherever. And that's not the service that I've promised. They're going to go, yeah,

[00:56:05] we get it. It's painful, but we're going to increase our pricing too. So whatever.

[00:56:10] Relationship, that's a whole different conversation. That's, oh, no, we're not

[00:56:14] paying that increase. Your price was your price. Now you're trying to go back on us, right?

[00:56:20] It's a weird conversation. And I actually did some research. There's a Forbes article about this

[00:56:25] partnership and relationship. There's a third category called the transaction

[00:56:33] where they are fully in power. They come to you. They say, Danian, you are going to do this

[00:56:38] for me because on your website it says you do this and I want you to do that.

[00:56:41] Wow.

[00:56:42] Don't tell me anything. Don't consult with me. Just do as I say, backup boy.

[00:56:48] That sounds like you should. I'm trying to keep a straight face.

[00:56:50] Yeah, that's right. The transaction sounds like what you do with the e-commerce site,

[00:56:56] right? Not a services business.

[00:57:00] But how many MSPs have managed service contracts with people that are treating it

[00:57:04] like a transaction? Yeah. So Peter, you come with that 6% increase and they say,

[00:57:09] well, I can get a cheaper elsewhere. Bob and some Bobs and MSP can do it or I'm going to leave.

[00:57:15] They don't value even the service, right? They're not even saying we'll just continue

[00:57:19] to pay the current rate but we're not doing an increase but we're going to stay with you.

[00:57:23] They're saying no, we're just going to take our business also. Bye-bye.

[00:57:28] Yeah, that's exactly right.

[00:57:32] I don't remember how I got on that track but really that's that understanding of

[00:57:39] there is good churn but if there's good churn, Kimberly Clark in the paper mill,

[00:57:45] Jim Collins, Good to Great, they made the decision in the 60s I believe, 50s,

[00:57:50] where they were proud of making all of their paper products from their own paper mill.

[00:57:56] But what they discovered was that and there was a lot of controversy,

[00:58:00] they pissed off the board, the CEO at the time decided we're just going to sell

[00:58:03] the paper mill. We're just going to do distribution of paper products.

[00:58:06] It was crazy at the time, right? It was almost all the revenue.

[00:58:09] It was what they were known for.

[00:58:10] Almost all of the revenue, yep, exactly.

[00:58:13] And everybody manufactured things and like doing it in-house, it was the thing,

[00:58:17] right? That was the way to do it back then.

[00:58:20] But what they found out was not only was it 80% of their revenue but it was also like 99%

[00:58:26] of all their costs. So it was all revenue that they weren't making money on anyway.

[00:58:33] So they could maintain 20% of their revenue with none of their costs,

[00:58:39] right? Quadruple, like 10 timing basically their profit by that one simple decision.

[00:58:47] I want to speak- That's why they lasted 30 years.

[00:58:49] Speaking of that, I want to talk about a question I get all the time,

[00:58:53] which is how do I price my managed service? Of course, being back up in DR,

[00:59:01] how do I price that? And I get so tired of them going, well, I bought vendor A

[00:59:06] and I marked it up some random percentage 30, 50, whatever. First of all,

[00:59:12] how do you know that's what to start from? That certainly is not a value driven price.

[00:59:16] Second of all, now you're kind of locked into the vendor because you can't go to one that

[00:59:20] if they need to charge more to deliver a good service, maybe you chose the cheapest one,

[00:59:23] you marked it up 30%. You're stuck. You couldn't switch

[00:59:28] tools in your stack if you needed to without just killing your margin.

[00:59:32] But it seems like everybody's been talked. That's the way you price those things. And then

[00:59:39] worse, I feel like they make a wild guess of if I mark it up and the other thing

[00:59:50] people that I've heard people say, well, I marked it up 100%.

[00:59:54] You're not making that kind of margin on it. They think they are. What they mean is they

[01:00:00] go from $50 to 100, but you're not making that kind of margin on it. And what's worse is they

[01:00:05] have no idea. They might track which customer consumed the most time, but they don't actually

[01:00:10] know how much time they're spending on managing back up or security or whatever managed service

[01:00:16] subsection that they're delivering. And so therefore, it's a wild guess. Like I'm going to,

[01:00:22] it costs 50. I'm going to charge 100. I'm making it both those numbers, of course.

[01:00:26] And then I also have no idea how much labor I have in it. So why are we doing this? Is there a better

[01:00:34] way? So in business, the founder of Netscape actually said there's only two ways to differentiate

[01:00:43] yourself in business. It's a bundle or an unbundle. Not many new ideas this day and age. Right?

[01:00:53] I mean, even the Quaqecea did this week during our interview, right? The whole let's

[01:00:57] bundle all of the MSP products together. So your stack is no different than your neighbor.

[01:01:02] So again, relationships are really going to matter, right? Building partnerships is going to be the

[01:01:07] creme de la creme at that point because we will become a commodity. Uh-oh. I said the C word.

[01:01:12] Right. Let's talk about the truth here. So before I get into the commodity piece,

[01:01:21] you're completely right. The whole, I'm going to market up 100%. Therefore, I'm profitable.

[01:01:27] Right. Homie, it's a $3 endpoint.

[01:01:33] You made three bucks. Good for you. And then like you mentioned labor, how much time did it take

[01:01:41] you to install that product for 20 hours? Okay. Average IT salary is going to be about $40 to

[01:01:49] $50 fully burdened. So three hours, 150 bucks. So it's going to take you,

[01:01:54] let me think about this 50 years for an ROI. Right. Something doesn't add up.

[01:02:01] That's if they never call about that product. And that's if they know you exactly, right?

[01:02:05] That's if they never recall. And what's missing is we have a new generation of MSP

[01:02:11] owners where all they've heard is this all you can eat. Well, all you can eat doesn't mean

[01:02:16] all you can bundle. And if I think back to 2009, 2010 when I heard people like Dipple and Bellini

[01:02:25] talking about this kind of bundling of your MSP products, it was a form of differentiator.

[01:02:30] Go to your customers and tell them how many endpoints and workstations they have or servers

[01:02:33] they have and just give them an easy price to do all of their IT services unlimited.

[01:02:39] Because back then we didn't have MSSPs in cybersecurity and SOC. We didn't have disaster

[01:02:44] and recovery devices. We didn't, hell, think about it this way. We had exchange servers that

[01:02:49] we were billing for. Right. And then they all migrated to 365. Yeah. Yeah, ransomware

[01:02:55] was like this little thing that you got on Windows XP that you ran as disk and it

[01:02:58] completely took it off. That's right. But we migrated into 365 and we don't recoup that revenue

[01:03:05] of managing the exchange server. We just, oh, poof. Yeah. I'll spend four hours a month in 365 for

[01:03:12] free. Yeah. No, that's the other thing. For getting the backup part, some of you have talked to

[01:03:18] there like, well, you know, Microsoft gives me the margin. That's what I get to make.

[01:03:23] 16% exactly. And you're like, really? Why would you sell that for 16% and manage it and take all the

[01:03:30] burden? I did a YouTube video in January. I did a three-part series. If I started MSP in 2024,

[01:03:36] what would I do? So I went through the strategy. I went through the operational journey and then

[01:03:41] I went through the sales process. Okay. And one of the things I said in that video was I would

[01:03:47] do no distribution. I would do no product sales in the first year. I would just put their credit

[01:03:53] card into 365. Why? It's not worth the time to set up the vendor, to manage the reconciliation,

[01:04:01] to deal with Mr. Customer. What license do you need to have? I don't want to deal with any of

[01:04:05] those conversations because my labor is what I make the most margin dollars per capita on.

[01:04:11] So going back to this conversation on pricing, what I see so often when I used to do a lot of

[01:04:19] MSP coaching, I don't do as much as I used to, I would break out their product. And when I say

[01:04:24] product, it's their bundled MSP product that we would call managed service agreement.

[01:04:28] And I would put them into pillars, right? Your SaaS, your hardware software, your labor,

[01:04:34] whatever other categories that you have, backups. And I would look at the individual margins

[01:04:44] and margin dollars of each of those categories. And they'd be 100% right. I'd be making 100%

[01:04:51] on backup and 16% on 365. And hardware software wasn't bundled in so it's a zero.

[01:04:58] And like, guys, how much of this is labor? You're telling me you're pricing $100 a user.

[01:05:12] What of that $100 goes towards labor? Oh, we just mark up our product. If our hardware,

[01:05:21] if our software cost is $80 a user for all the hard costs, we just mark it up to 150.

[01:05:29] Right. So what you're telling me is you're just marking up products and you're giving

[01:05:35] the labor away for free? Right. But it seems to be the rationale, right?

[01:05:41] Well, and we say this, I want to be very empathetic here. It's because we've done a poor job educating

[01:05:49] new MSP owners. Here's how to build a product. Here's where we were in 2000. Here's where we

[01:05:55] were in 2004. Here's where we were in 2008 because there's a progression from TNM to VAR

[01:06:03] to, or I should, it even goes back to like internal IT, right? If we want to really rewind

[01:06:08] back to mainframes. I did a video on YouTube as well about the history of the MSP.

[01:06:12] But it gets to a point in about 2008 where being a VAR was a cash flow problem. I had a lot of

[01:06:17] really expensive engineers with customers that only called me once in a while and their projects

[01:06:22] weren't consistent. So I had to do a lot of deals to keep those employees fed. That's

[01:06:26] right. This thing called recurring revenue would solve all those problems.

[01:06:32] We built it to fix a cash flow problem, not really to be a differentiator. But we've done

[01:06:43] a poor job educating that there is a place and a time to add margin. There's a tight

[01:06:48] time and a place to add markup. And there is a time and a place to where you need to know

[01:06:53] how many dollar, how much cost you have in each of your price per user or price per end point

[01:07:00] to support those that I then need to add margin on top of and then mark up on top of

[01:07:03] that. All of that bundled will create that healthy gross margin to pay for that sales and

[01:07:12] marketing team to go back to our initial statement that will get us to that eight logos a year.

[01:07:17] Yeah. I don't know. I'm not trying to pick. I'm not trying to laugh if you're listening,

[01:07:21] but it seems like every MSP says I'm going to buy it for 80 until it for 150.

[01:07:26] And then in my point is- Because I saw on Reddit I should be charging that.

[01:07:29] Yeah. And no doubt. Yeah. And then this is my point.

[01:07:34] One, the vendor determines the price. Now, maybe you try to get a better price,

[01:07:37] but they're determining the price and you switch vendors and your cost is going to be different.

[01:07:42] Two, most often I'm like, why are you charging 150? Well, I can't get any more than that in

[01:07:46] my market or I sell it cheaper. You don't understand. My market is price sensitive.

[01:07:54] Every market is price sensitive. So I'm not trying to be insensitive to this

[01:07:59] I'm just saying that like, okay. So what you're telling me is you let the,

[01:08:04] what you perceive as the market and your geography and your vertical

[01:08:08] define the price at which you're allowed to sell it. And then you let the vendor define your

[01:08:15] cost at which you're allowed to buy it. I'm no rocket surgeon, but

[01:08:23] that seems like a bad business model when you're saying you control neither. I give up.

[01:08:28] I can't control the cost. I can't control the price. Therefore, I have no control over the market.

[01:08:34] Well, and here's some tough love. If we go way back to our lead generation conversation,

[01:08:39] did you truly do market research on your price? Did you truly go to 100 people and say,

[01:08:46] what does this price mean to you? Probably not. You probably talked to two people,

[01:08:51] one being your cousin and another one being that customer that doesn't pay you enough money

[01:08:55] in the first place. Here's what I think it comes from. Now, I can't charge that comes from,

[01:09:01] I think I don't have the pipeline. And what happened is one guy said no.

[01:09:06] And so I can't afford to lose that many because I need all these logos and all this business. So

[01:09:11] if one said no, then I just need to drop the price from 150 to 120 just like that.

[01:09:17] That's a massive variable on this. Like it's the I got no once and now I'm nervous

[01:09:22] because cortisol went up and that's fight or flight. I need to fight now for survival.

[01:09:28] And I only had one lead this entire quarter. So I need to now decrease my price,

[01:09:32] which now decreases my ability to grow my company and decreases the raises I can give my employees

[01:09:39] because I'm not putting the time and cycles to grow my company.

[01:09:43] And if someone says no, I just go, okay, that's just no right now. I'll come back later.

[01:09:48] Have a great rest of your week. Let me find the next customer.

[01:09:51] There I think there is it. Let's just though for a second, let's play the scenario of

[01:09:55] let's say that they're in a market that truly is impoverished. I've worked with a lot of MSPs

[01:10:02] and like Brazil and some countries that don't have that market. If you truly have a market

[01:10:09] that does can't afford the stack that you're trying to sell them.

[01:10:14] Your problem is then you over engineered your solution for your target market.

[01:10:19] You don't need to settle in a $10 seat stack or whatever.

[01:10:28] No, no 1000% or maybe they can't afford unlimited on site. They just get unlimited remote,

[01:10:35] like adjust the solution then to fit the market. Don't try to force the square peg in the round

[01:10:41] hole because at the end of the day, you're only going to make 16% margin on Microsoft 365

[01:10:45] no matter what the price is. Then let's say if they can only afford 50 bucks a user,

[01:10:53] why don't I make the majority of that the labor so that I can at least guarantee those margins

[01:10:58] since that's what I make the most margin dollars on? Yeah. Those are the two variables

[01:11:04] that I really see as it's opportunity and it's you how price the market.

[01:11:09] Yeah. Measure your actual hours invested to understand your actual cost because if

[01:11:17] like it's into MVP and product ROI and we could talk about that too of, oh, I'm going to be an MSSP.

[01:11:24] Okay. Well, it cost me a million dollars to build out my MSS. Right. That's right.

[01:11:28] I put an extra S in there just because it's a stupid name.

[01:11:32] It's probably super secret service or something. Super secret service provider.

[01:11:37] Ooh, we just came up with managed super secret services provider.

[01:11:41] It's going to be the new name of the episode.

[01:11:43] It's going to be the new thing. We're going to have to start it. You heard it here first.

[01:11:49] Oh, can I buy the domain right now?

[01:11:50] Yeah. Last thing I want to ask about what are the top things you do if you're starting an MSP?

[01:11:57] What are the top things you think you need to be thinking about as an MSP right now?

[01:12:03] What do I need to be thinking about changing? What do I need to be investigating?

[01:12:07] What am I sleeping on?

[01:12:11] So is this like for any MSP or if I'm just starting?

[01:12:15] For any MSP.

[01:12:17] Any MSP. Current market shows us around 50 to 60,000 MSPs in North America.

[01:12:25] That's a lot of MSPs. Back in my day, back in your day was probably a quarter of them.

[01:12:31] Why? The private equity market is also a hydro effect.

[01:12:34] I acquire one MSP to come back. I chop one head off to come back.

[01:12:40] So if I'm going to be Hercules in this situation, I need to think with my mind.

[01:12:43] I don't need to think with my brawn. I'm not going to ever out-widget a competitor.

[01:12:47] I'm never going to out-customer service a competitor.

[01:12:53] My MSP way hard from Nordstroms and retail and restaurants.

[01:12:57] Like you said, I was hiring for soft skills on hard skills.

[01:13:01] So there's a couple of things that you really need to be cognizant of.

[01:13:04] If it's going to become a commoditization in a commodity market,

[01:13:10] right? Price goes down. Now we have to compete on price, which means I can't go in there $190 a user.

[01:13:18] I need to be prepared to offer something at 150 a user.

[01:13:21] I need to be prepared to unbundle if I want to take the advice from Netscape.

[01:13:25] Because I need to be able to say, yeah, I'll take you and just do cyber.

[01:13:29] Yeah, I'll take you and just do your firewall.

[01:13:31] As long as I'm labor conscious and I'm conscious of my margins,

[01:13:35] total blended, then I can grow and scale my business because now I'm willing to take

[01:13:40] more customers because it's going to take more customers if the revenue per customer is less.

[01:13:46] Right? Supply and demand is really what I'm talking about.

[01:13:50] So if I'm an MSP, I need to be conscious that, and I have this theory that as we commoditize,

[01:13:55] we are going right, whatever you want to know what's going to happen in the future,

[01:13:58] you look at the patterns. I've done a lot of research into two main verticals,

[01:14:02] and I'll say it here. I was going to make a YouTube video, but I'll say it here.

[01:14:07] The two main verticals were industrialization, so manufacturing

[01:14:10] and the finance market. Finance market like bookkeeping, accountants, CPAs, CFOs.

[01:14:19] So you look at what happened in the manufacturing market. Automation was their number one focus.

[01:14:26] Number one, right? Henry Ford in the assembly line. That's automation.

[01:14:30] Why did you do it? Because I want to be able to put out more products with less effort, economy of scale.

[01:14:37] Less effort means less cost. Less cost means I have more to put into building said product.

[01:14:46] Well, if I can automate everything in the IT world when it comes to IT and I can offshore

[01:14:51] everything, you as an MSP will never be able to compete. Just on price alone,

[01:14:56] you are going to lose deals. A small business of less than 10 users, which is 70% of small businesses

[01:15:02] in the United States is always going to go with someone that's cheaper. Same if they're 20 users,

[01:15:06] same if they're 30 users. Yes, you will get a foot in in specialties and professional services,

[01:15:11] but it'll be very difficult for just mom and dad shops that don't want to grow.

[01:15:16] So I need to go back and go, okay, what markets we're able to succeed? Well,

[01:15:22] if you look at the finance market in the 50s and 60s, we recognize the world of industrialization

[01:15:29] and growth. And we had this baby boomer era where businesses were growing, right? That's where a lot

[01:15:34] of the good to great examples came from. They had to build out accounting teams because you have

[01:15:40] a lot of customers, right? You have this commerce market that's appearing. So we have a lot of

[01:15:44] APAR. And what happened? Well, these fractional bookkeepers started to come out. I'll do

[01:15:51] your bookkeeping as a service. I'm a consultant. I'll do all of your bookkeeping for whatever the

[01:15:57] hours are. Sounds familiar, right? Well, what happens when all these bookkeepers appeared and

[01:16:03] they started to offshore? Well, okay, now I'm overworked and I need to be able to do more

[01:16:08] customers. So I hire assistance. So now I have a bookkeeping service. Now maybe I bring

[01:16:14] on a CPA to do tax advising. Or maybe I'm a CPA that wants to do bookkeeping.

[01:16:20] Well, in the 90s, this thing called PayPal and QuickBooks, and the internet started to appear

[01:16:26] and AR became automated. Now I don't have to think about depositing checks. Now I can just

[01:16:32] send invoices online. I don't have to worry about the mail. Now it takes less effort to do

[01:16:36] bookkeeping. In what happened around 2005 to 2010, a lot of those guys became something

[01:16:42] called fractional CFOs, where I am a fractional CFO with a bunch of services that are low cost,

[01:16:49] but they get the job done. So I don't have to do it. But at the end of the day, I have the

[01:16:54] relationship as the fractional CFO and I will help you improve your business.

[01:16:59] I'm starting to with especially with cybersecurity and all the stuff that's

[01:17:03] happening, I'm seeing us go back to a little bit more consulting. Can I help you with

[01:17:08] business automation? Can I help you improve your business? Can I look out for shadow IT needs?

[01:17:14] Can I make sure our risks are mitigated? But I'm going to do that as a board member of this business

[01:17:20] that you hire to sit on your team, like the whole virtual CIO thing. Well, it's great. I think

[01:17:24] we've underserved it to create it just as a glorified account management. When traditionally,

[01:17:29] it needs to be somebody that is the key point of contact for that customer saying,

[01:17:34] I'm going to sit in December on a budget meeting with you guys to say, here's what I think IT is

[01:17:38] going to need to spend next year to get us to our business. You wouldn't expect anything less from a

[01:17:42] CFO. Why would you from your virtual CIO? Right? I mean, the CFO, they've got to be on there.

[01:17:48] They've got to understand the business. They've got to model your business. You can't just

[01:17:51] come in and say this the same financial model works for everyone. Right? You can buy quick

[01:17:56] books. No, but like you need my advice completely. And Matt Lee came on the cybersecurity

[01:18:02] leadership summit that Wes and I do once a month, and he made the statement of, yeah,

[01:18:06] they're CIO. Yeah, they're CISO. But in some businesses, you probably only have the opportunity

[01:18:11] to have one person. So if I'm the consultant, I need to go in there representing not only the

[01:18:18] collection of information, but the protection of that information. Because if you're a law firm

[01:18:23] and you're using Microsoft 365, what happens when co-pilot is scanning your document

[01:18:27] management system and putting ingesting all of this protective information into an AI language

[01:18:32] model that now someone in your marketing team is throwing off and sending to bad press?

[01:18:37] Yes, thumbs down. Yeah, thumbs down. So I, and that takes time and building a consulting firm

[01:18:44] is difficult. I've tried myself, right? I built a giant consulting firm, the MSPs.

[01:18:50] It's not easy. It's a partner model. It's why a lot of law firms go to LLP's,

[01:18:54] not LLCs. I have to buy in. So I've been thinking about this a long time. I think

[01:18:59] that's something a lot of MSPs need to be cognizant of. As a small MSP, you are going to

[01:19:04] be more expensive. So what can you do being more expensive to pay for your family

[01:19:12] to where you bring more value that a big MSP could never deliver on?

[01:19:16] I love that. So I agree with you. So let's say I'm listening and I do agree. What action can I take?

[01:19:23] What action can you take? Learn, learn, learn, learn, learn, talk, talk, talk, talk, talk,

[01:19:29] talk, converse, converse, converse, converse, converse. When you have a shift in a market,

[01:19:34] shift in a landscape like we're going through, the more data you have, the more education you

[01:19:40] have, the more people you work with that are in similar situations and you don't think of

[01:19:44] them as competitors because right, there's a huge market. There's millions of businesses

[01:19:49] in the United States and most of them are small businesses, a huge proportion.

[01:19:53] Absolutely. Then we need to work together to find a model. Chris Ryan, he has something called VCIO

[01:19:59] University. I love what they're doing. They're talking about this topic quite a bit.

[01:20:04] Net Lynch, she's a VCISO for a very large MSP where they're truly doing fractional CIO and

[01:20:10] fractional CISO. One of the things we're doing with MPath as a shameless plug is we're having

[01:20:15] all of these super smart people come into the platform and create courses on the little genius

[01:20:20] areas that they've built that differentiate them as a service employee. We're all service. We're

[01:20:25] there to service our customers. I think we forget that so often that your customer is why you are

[01:20:33] in business, which means they have a problem and it is for us to solve. You're there to make

[01:20:38] their problems less. You are there to listen, to not throw up on them and go, hey, you

[01:20:44] just mentioned the problem. I can fix that with information or technology. Let me come back to

[01:20:49] in a week with a solution. Absolutely. Ultimately, that's what we're trying to do with MPath,

[01:20:56] is can we get rather than having thought leaders, we have thought visionaries, we have thought

[01:21:01] sharers, we have people that can bring out all of these little things that can make people

[01:21:06] stronger and have a bigger toolbox to service their customers. Speaking of that, tell me what

[01:21:11] you're doing at MPath, Kyle. I won't go too much longer on it just because I don't want to bore people,

[01:21:16] but essentially MPath is a learning management system that is affordable for MSPs and lessens the

[01:21:23] burden of building a upskilling learning pathway for their Tier 1 engineers, their sales reps,

[01:21:27] their finance employees, all those areas that you may have blinders on as an MSP owner,

[01:21:32] including training for MSP owners. A lot of the concepts I'm talking about,

[01:21:35] I've built courses on inside of MPath. As my MSP, I would hire a new Tier 1 engineer

[01:21:40] and I would give him the basics, which I had in a learning management system that cost me a lot

[01:21:44] of money to build out in 2015. What did I have to do? I had to give them a bunch of links to go log

[01:21:50] into 43 different vendor portals to go learn about their stuff. Did I ever trust and verify?

[01:21:57] Did I ever go follow up that they actually took those courses? No. I said, go hip to hip.

[01:22:02] We give a two-way model or a three-way model actually where MPath is bringing 101 content,

[01:22:09] all the stuff that gets your team ready to the next level. 201, we're working with a lot of vendor

[01:22:14] partners to bring their training into MPath and we've actually got a pretty long waiting list of

[01:22:18] vendors that we're bringing in. And then 301 is allowing you as the MSP to bring in your

[01:22:23] own training into MPath so you can have your employees truly take a pathway that may take

[01:22:29] them eight months, a year, two years to get to the career path. We talked about the franchise

[01:22:33] tag. Can I get them to a championship within a couple years, be a championship level player

[01:22:39] without having to rely on the single largest bottleneck of an MSP, which is recruitment,

[01:22:44] not sales. There's two funnels in a business, right? Recruitment and sales. You're not working

[01:22:50] that one. Exactly. And that could be a different. Sales is just effort. Yeah.

[01:22:54] Yep. Yeah. And that could be a massive differentiator. I don't care if my employees leave. I've

[01:22:58] got two in the hopper. They'll be ready in two months. Well, that but also just

[01:23:04] we're used to throwing things at people, I think in the technology industry because it

[01:23:07] changes so often. So if I'm interviewing for a couple of places and they both sound pretty good,

[01:23:12] but one has got this incredible learning path where I can get to not just 101,

[01:23:16] but 201 and 301, I'm going to join that one probably even for a little less money

[01:23:22] because I've got the career growth nailed instead of just run around and

[01:23:27] do stuff and figure stuff out, which, you know, I think we all enjoy as tech people,

[01:23:31] but still that could differentiate, you know, attract the right talent.

[01:23:36] Nobody times I bought my employees some expansive education software and they never used it or

[01:23:41] they would be like boss, I don't use it because it's paralysis, right? It's option

[01:23:45] paralysis. There's a thousand different things and none of them seem applicable to my customer

[01:23:49] because none of them truly use VLANs and none of them truly have these complicated group

[01:23:53] policy structures. I'm learning stuff that has no value to our customers today

[01:23:58] because as MSPs, we are service providers. We manage a bunch of services to means we don't

[01:24:02] need to be the nerd of nerds, but I need to make it a pleasant experience with minimal effort.

[01:24:07] Yeah, I love that. I love that. Well, I know this has been a really, really cool

[01:24:13] discussion from my perspective. Thank you for this, Kyle. How can folks get connected to

[01:24:18] Empath or to you? So Empath is EmpathMSP.com. We're affordable, so you can literally without

[01:24:26] talking to a sales bro for transparent pricing, you can actually sign up without even talking to me.

[01:24:31] But if you do want to talk to me, look me up on LinkedIn. That's where I'm most active,

[01:24:35] Kyle Christensen. I'm sure the show notes will have that link and feel free to just book

[01:24:40] time with me. Let's talk. Let me see if I can help you with something. I'm

[01:24:44] so passionate by this MSP channel that I've dedicated the last 20 years to,

[01:24:48] that I just want to see MSPs grow and mature and stay ahead of things like regulation

[01:24:53] and as little lessons learned through failure as possible. Yeah, I love it. So if you're

[01:24:58] listening, you're not taking advantage of Empath or Kyle's offer, you're missing out on somebody

[01:25:02] that's built MSPs to 15 million, somebody that has started multiple, coached even more,

[01:25:09] been a largest, I guess, integrator or connect-wise integrator there was.

[01:25:13] It knows all kinds of things in the industry has probably made most of a mistake.

[01:25:18] And I love, I guess finally just say that you used and developed a learning management system

[01:25:25] in your company and that helped you get a scale on hypergrowth. So I love that you're now

[01:25:30] democratizing that and bringing to everyone. Now, I don't have to be an LMS nerd myself

[01:25:36] to figure out how to do this. Yeah, if you think engineers are expensive,

[01:25:41] they'll look how much instructional design engineers. I didn't know that was a thing.

[01:25:46] Awesome. Well, Kyle, thank you so much for being on MSP Mindset today. It was a true gift.

[01:25:52] I had to hang this was really fun, man. We should do it again. We'll do it. Thanks.