Boosting MSP Growth with JV Partnerships

[00:00:01] Welcome to the Powered Services Podcast, your go-to source for all things MSP. Each episode, we're diving deep into the world of MSPs, exploring cutting-edge solutions, strategies, and insights that empower you to supercharge your services. Join us as we connect with industry experts, thought leaders, and tech visionaries who are reshaping the managed services landscape.

[00:00:31] Plug in, power up, and prepare to elevate your MSP game to the next level. Now, here's your host, Dan Tomaszewski. Greetings, everybody, and welcome to another episode of the Powered Services Podcast. Super excited to have you along. Today's going to be an action-packed podcast.

[00:00:58] It's about a topic that I know that is near and dear for me, and I also have my special guest host again, two times returning guest host, Andrew Moon. Two in a row. Two in a row, Dan. Two in a row. Keep this momentum going. Two in a row. And we're going to talk about joint ventures. It's something JV partners, a lot of people, some people might call them centers of influence.

[00:01:23] There's a lot of different ways that you might hear this, but one thing is for sure in common is that this is something that is an underutilized growth strategy for a lot of MSPs. And I want to go through because the common things we hear when we go and we talk about JV, centers of influence, and things like that, people are like, look, can you define it? Can you talk about who would be, how to do it? What are the services? What are the opportunities?

[00:01:49] And so we're going to do a little sneak peek behind each of those areas, and then later on, we're actually going to do a webinar and dive into all of this. So what you hear today is just going to be getting you thinking, kind of getting your brain going, and then we're going to dive into it even more. So let's get into it. I mean, first and foremost, what is a JV? How would you define this in terms of the MSP space? I don't want to look at it from any other place other than working as an MSP.

[00:02:18] And so let's talk about it for a second. I use these pretty heavily at my MSP. I had insurance companies. I had banks. Chamber of Commerce were kind of my three. And then we started to get into the senior living associations and really latched into it. And I'll tell you something. It changed the game for us.

[00:02:40] It was what really propelled a lot of the growth, and we're going to get into why some of those things later on and the comp strategies and some things you can really get into with it. But it really opened doors that I have never seen before by partnering with people that were like-minded, really fit our style, our brand, who we were. And we found companies that matched it only in another profession. And I'll tell you, it really put us ahead of our competition and helped us build so fast. And I know you did the same thing, Andrew.

[00:03:10] What did you do when it came to some of your joint venture? Like, what was it that you – who did you partner with? Yeah, our vertical market was specialized around attorneys' property management companies. So what became evident was there's other businesses that service those exact same customers. So I started getting connected with other people, specifically like in the software space. Maybe it was the copier company. I know copier companies are now selling MSP stuff.

[00:03:40] But those were two of the big pain points that I had from an MSP perspective for my customers. So I'm like, okay, how do we solve that? So I started partnering with some of the software companies, started partnering with the copier vendors, and started co-branding, having a relationship where we can – we're all going after the same customers. So how do we pull those resources together, build – each of us can build a business that is around those two vertical markets.

[00:04:10] And, yeah, it opened up a completely different revenue stream. It gave me a sales team that I didn't have to, you know, provide vacation and sick days and all that stuff for. It's just business kept on coming. Yeah. And it was reciprocal back the other way. We were able to drive business for the companies we partnered with. And it was just a win-win relationship. Yeah, and let's get into this. So, I mean, a lot of people, when they hear the word joint venture, it gets really scary. And look, it's not. It really isn't.

[00:04:39] And let's get into how can you identify different opportunities with some joint ventures. And the first one is the types of potential partners that you could go out there. You know, there are a lot of things. You know, the obvious one that comes out is the insurance companies. That's the easy one, right? A lot of insurance companies today are selling cyber insurance.

[00:04:59] You, as an MSP, are going out there and you're selling your services to where when they get that cyber policy, the MFA, the compliance, the regulatory needs, all those different things. You're helping them cover themselves on those to where as if they need to use their cyber insurance policy, that the claim actually gets, you know, approved or the funds are issued, you know, in regards to it. But there's some other ones, some kind of hidden gems, right, like in other industries that people overlook.

[00:05:28] And one of them is banks. I know a lot of MSPs. I hear a lot of MSPs on calls that I'm on that leverage their local banks. Most of the banks have like those tables or like when you walk into the lobby, there's a thing in there that says like, hey, thought of the month or security update or, you know, best practices. And then they highlight a business. And I know a lot of MSPs that do that, but also go and teach like a seminar of like safe banking. You know, how do you protect yourself?

[00:05:55] You know, what can you use from the business side, you know, from the SMBs? And then they're bringing in the business owners. That's a hidden one. The Chamber of Commerce. Look, we talk about it on a lot of different shows, Andrew. People overestimate the Chamber of Commerce. People say that, oh, the business is there. They're too small. They don't work. All of those things. But there are some great JV opportunities where you can bring value to the Chamber of Members and get your bill.

[00:06:23] It helps you build your brand and really helps you take your company to the next level. That's another one that it's a little more broad, right? Like it's not as defined as like an insurance, a bank, an attorney, a financial firm or an association like dental, legal or, you know, different things like that. But there's lots of ways and lots of different potential partners out there for you to dive into. Yeah.

[00:06:50] And you think about the Chamber of Commerce, like their whole goal is to help business owners. Like they're a membership association. Yeah. So like they are always on the hunt for content and value that they can bring to their members. And like the fact that IT is like you can't escape the fact that everybody has IT. And, you know, cybersecurity, like you mentioned, all of those things are increasing and they all have the same needs.

[00:07:20] So Chamber of Commerce is like they'll bend over backwards to help you out, give you space, market for you. Like it is. It's a win-win because you're providing something that every single one of those Chamber members need. Yeah. And think about it this way from a JV partnership. I want people to think about this. This is a great way to you for you to expand in new markets. So think about if you're someone that's not in the health care market today.

[00:07:47] Think about it if you're not in the legal or you're not in like manufacturing, for example. This is a way for you to go get a partnership with someone that is very much complementary services that support you from an MSP perspective. Right. So maybe it's the manufacturing association. Maybe it's a health care association, you know, where they have an obligation to help their members stay informed. They have an obligation to help protect and let them know the latest trends.

[00:08:16] And you have an ability to come in and show and showcase how to help secure their businesses or help do different things. Now you can partner together and they're bringing their membership in front to see you and hear your vision, your strategies while explaining to them the value and the perks of the association. So it's a win-win. You're working together. But it allows you to expand into new markets.

[00:08:40] With kind of building your list, getting some potential warm leads and kind of getting that introduction from the bigger associations. It really helps seed you in a different way than just trying to go out there, send a bunch of letters, mail, phone call, dial. Like this gets you kind of going as a part of the bigger strategy while maintaining doing what we just said. Yeah. And it was amazing. Like the property management companies, those are basically companies who run apartment communities.

[00:09:07] And on Ohio State campus, the largest campus in the country, there were tons of rental and real estate companies. I fell into that by accident actually. I was introduced to somebody who ran the apartment that I was renting at the time. And he introduced me to the director of the local Columbus Apartment Association. He's like, hey, they need help with their IT. Can you go help a good friend of mine? I'm like, sure.

[00:09:37] So I signed the association on as a client. And lo and behold, I started that whole market opened up to me now of, you know, they started coming to me because they found out through the association that we were taking care of their IT. And they're like, hey, can you come? Can you come help us? So it was a vertical market that I stumbled into. But I can't tell you how lucrative that was.

[00:10:03] And really, some of the largest vendors on Ohio State campus were our customers from that one joint venture slash client. Yeah. I mean, that's really it, though. I mean, you had some complementary services that you worked with on this. And so think about this. If you're an MSP listening right now and you haven't done a joint venture before, who has a complementary service? We mentioned the insurance companies. Insurance companies selling cyber insurance. That's an easy, quick win, right?

[00:10:33] Like if you can get with somebody like that, that's a good JV partner to be working with. But you want to find someone that has that complementary. What in a lot of things touch IT, believe it or not. So like when you're talking compliance, when you're talking regulations, when you're talking security, when you're talking employee efficiency, AI, there's so many ways that you can find complementary in today's world now. Because a lot of things are touching us in the IT space. So go and do that.

[00:11:02] And then really, then the next big thing is, you know, starting that conversation. What is the best way for you to approach that business? And I'll tell you how I went about it. Is you got to make it about them first. Like don't go in with your agenda for you to get your money and things. Those things will come. That will happen. You have to go in with that JV partner first and foremost. And say like, for example, with the insurance company.

[00:11:29] Hey, Andrew, I see, you know, I know, do I hear a lot of people that purchase cyber insurance through you as well as other insurance. But I would love, you know, if we could do something for like your customers around, you know, talking about cyber insurance. And then also like allowing us to talk about the back half of it. Like it's a good way for us to partner together. I can bring my customers in that. So potentially you can get some great things, you know, out of it from the insurance side.

[00:11:57] And then also for, you know, for us, then like once they get your insurance policy, we can take them through the whole behind the scenes, what they have to have in place to make sure that if something does happen, that they have a chance of getting paid out. But like you want to go and say, hey, this is a good deal for both of us. And this is a win-win. And this is something we can promote together. We can normally get the chambers to promote. We can normally get other associations to promote. But like, let's dig down it.

[00:12:26] But you want to go and start to have that kind of talk, you know, like try to build it out. Because a JV partnership is not, I don't look at it as just to go and do some short-term wins. I look at it as it's got to be sustainable. And we want to look at a partner that we can look at for long-term growth. Because I want to invest my time and my energy into a JV partner that's going to give me sustainable long-term growth. And it's not just that quick win, one or two customers.

[00:12:55] I'm looking for something that could be that gift that keeps on giving, knowing that I'm going to have to do some giving as well, some time and resources. So really important on that front to get out there and to be able to scale that, you know, you have those good conversations and, you know, start to approach those JV conversations with people. Yeah, accounting firms are the other one. If you think about all your small business customers likely have an accountant.

[00:13:23] Like, so it's what I did was started to do with accounting firms was like, I have customers that need a good accounting firm. How can I send business your way? Like you said, it starts with you got to give something first. And honestly, I didn't have any intention of getting into the accounting space. Like it was just a need that kept coming up as I'm listening and I'm on my QBRs with my customers. They're like, yeah, we really don't like our accounting firm.

[00:13:52] And I'm like, hey, we all like we all got a guy. Yeah. So you get them connected with that guy. Right. And then you got relationships blossom, business opportunities come out of nowhere. Yeah. It's just it is an awesome thing once you get that ball rolling. Yeah. And then, look, you got to structure the deal. This is the other thing that I would say that I hear the most is is with people is is structuring it. Right. So you've got to make sure that there's some sort of an agreement with you and that other that JV partner.

[00:14:22] I'm not saying you got to get a docu sign out, but even just a level of bullet points in an email that says, hey, this is what success looks like. This is what I'm inviting. This is who you're inviting. At the end of it, this is how we're going to share or pass opportunities to each other. We want to be clear to each side in each party what success is, what each party is going to do and what we're each going to put in from a level of effort. So it's not at the end of the day where it's lopsided one way.

[00:14:51] It's an equal thing and we cannot we're not going to ruin a relationship because we thought you were going to invite 100 people and you only invited 10. Like, why? Like, we had it clearly defined in the beginning as to what success is. What does that relationship look like? What are we both looking to get out of it? We need to make sure that that is clear and that we both agree on that to where is there is no frustrations and we don't walk ourselves down a path.

[00:15:16] Because I've seen so many MSPs make mistakes when entering a JV partnership. They don't do any of that. And then next thing you know, they're mad. They're upset. They never want to do another one again. They think they're a waste of time or they think they got screwed. And it's just you'd want to avoid those things. So take the time. Take the time, you know, and really look at it from a different standpoint from that point of view.

[00:15:45] Yeah, I think the other thing to avoid, especially with like your first one, is to overcomplicate it. Like, we have that tendency that like this has got to be super structured. Like, it can be an informal thing to get started. Hey, we're going to do this one webinar together. We're going to do this one lunch and learn together and debrief and see how it goes, see how we improve. And, you know, if not, this relationship has legs and we can continue on. Great. If not, we part friends.

[00:16:13] But, yeah, it's just the mechanics of it once you get that down. And what I found, like, the easiest way to facilitate is owning as much of that process as possible, especially like if you're doing events. Mm-hmm. Where, like, I had all the email campaigns. I had the landing pages. And I would give those to my JV partner. That way, here, I make it super easy for them to say yes. And especially with attorneys.

[00:16:41] Like, they don't have somebody who's going to go create landing pages and emails and registration pages. But I said, hey, we got all this done. Do you want to do a lunch and learn together? All you have to do is invite your list. And, yeah, you make it just dead simple. And, yeah, before you know it, yeah, you've got multiple lists. You've got people showing up. You've got business opportunities galore out of one single partnership. Yeah. And, look, we talked about it just a few.

[00:17:09] When you're going and having that conversation, you're looking for that long-term sustainable growth. So when you're going in there and you're having these conversations, you've got to look at what is the value, right? Like what is in it for the long term? What's the growth in the conversations we're going to have? And one thing that I like to bring up that I don't think a lot of MSPs do, Andrew, is like a revenue-sharing profit model. And I think this is just an awesome field.

[00:17:37] And how you can even in some cases be the one that more and more people want to partner with is, look, I went through. If we did a Lunch and Learn or you put your stuff in, you put like tech tips in your newsletter or you communicated things out in your email blast or you just referred people from your office, let's give you the first month monthly reoccurring revenue if they sign an agreement with us. Most of my agreements were 24 to 36 months.

[00:18:07] But if they're going to come in and I got a $5,000 customer, they're going to get $5,000. It's financially good for them too. So it doesn't seem like they're just giving Dan and building my business. For them, they look at it as another revenue source of their customers that they're putting in. But for me, like you said early on, I'm not paying for PTO for them. I'm not paying the benefits for them. It's a really good thing.

[00:18:34] And my cost per customer acquisition was right in line and if not lower in most cases than if I was doing all kinds of other marketing. So it does have a good thing. So I know a lot of us don't want to give up money and things like that. But think of the revenue sharing and the profit models. Now look, I said first month. Typically, you want to make sure that they're a customer longer than two or three months. But you make that payment in the first month or two, right? Like just maybe it's the second month when you're going through and doing it.

[00:19:04] But you want to look at it and structure something because why would somebody want to come do business with you? Like why would I as the insurance guy want to refer 40 people to you? Well, now I'm financially motivated. If every one of those is three grand, I'm going to send you all 40 because my hope is you can close all 40 and I'm going to be looking really good over here. And that's going to help me in my business as well as guess what?

[00:19:32] You know, now me, the MSP, I'm doing really good too. Yeah. And it's vice versa. I started working those deals out where it's the same. If I refer my customers and they become an accounting firm's client, it was the same. I started getting revenue from those relationships. So, yeah, it can work both ways. And it is amazing when you've got people out, like you said, just selling your business for you.

[00:20:01] You know, most MSPs rely on word of mouth and referrals. I hesitated and didn't really like the idea, like you said, of giving up revenue. But I'm like, if you hire a salesperson, you're going to pay 20% commission. You're going to give somebody money to get you a sale. Like I would rather give it to somebody that I don't have to babysit. Like I don't have to do PTO. I don't have to worry about their kids.

[00:20:26] Like it's so much easier to have salespeople working for somebody else that are working for you. Yeah, it's just, it's great. Yeah. And look, it's important, right? Because this is where, look, there's two things that are going to happen when you get into it. There's going to be a success story or a failed partnership, right? Like there's two of those. There's two angles that we can go. Now, both aren't bad. Like we might think, well, failed is bad.

[00:20:54] No, actually sometimes, you know, you go in with the wrong person and you realize that, look, this will work. I just had the wrong alignment. You want to make sure like your brand from that standpoint, right? Like the morals of the company, the brand you're built off of, what you're known for, super critical that you partner with a company that is very much aligned in that front. If they've got a bunch of one and two star reviews and you've got a bunch of five star reviews,

[00:21:23] is that really the company you want to be seen on out publicized with and things like that? Do they have a good community name? Are they someone that you would want to be associated with in the community? Like you've got to think through those things. You can't just go partner with everybody because it can tarnish your brand just as fast as it can help you build your brand. So I will tell you there are MSPs that have, that's the failed side.

[00:21:48] And that's most of the time what I hear is they just partnered with the wrong group that doesn't align with them. And that's a recipe for disaster when you're going through and you're doing that. So be very mindful there. Super important. You don't want to go down that path. Now, flip the script. Success stories? Man, we could go all day long with success stories here. I was a peer member here about three, four months ago. I was on a call.

[00:22:16] We were on a group call sharing success stories, partnered with the bank. The bank actually got everybody through and was able to like they did a joint thing together, pulled one or two people. They had like 32 people show up for a seminar. He pulled a couple people out for meetings, closed a $13,000 monthly reoccurring revenue from sitting in front and having the bank. And then the bank put the podcast out. The bank put them in their newsletter. And that kept going for months and months afterwards.

[00:22:43] They've created a really good partnership that now is every month. They are, their MSP is in front of all of the bank's SMB customers that get those emails. Win, home run, take it all day long. I know another MSP I just spoke to probably about a month ago on a pulse check. They do a lot within the healthcare space. And they work with a lot of different pharmaceutical companies and things like that. They have a great partnership.

[00:23:10] And like the, when I say pharmaceutical, like the software side of it, where they only care about the software. They don't care about all the IT other things. They actually want MSPs to be able to do that. So now when they go in to do doctor presentations, they bring them along. That's part of the partnership. And they've closed like seven deals this year so far. And we're only talking, we're in February right now. And they've gotten seven deals. Average deal size, I believe was around $2,500 a month.

[00:23:39] That's a good, good deal, right? From those and to get seven of them. That's awesome. And it all came from having that partnership. So I know there's hundreds out there and we do the webinar. We're going to bring even more of those ideas and things up there, but there are real world things happening around us. And these are things that don't have to take as dry, like a webinar. Everybody should be able to do a webinar a month. Everybody should be able to do one JV partnership a quarter.

[00:24:08] Like do one a quarter. But I know a lot of MSPs that do one or two a month and are extremely successful, but that's their activity. They broadcast it. They have landing pages. They put it on social. It's everywhere, but they do one a month with different places, different flavors, different things. Like they change it up and man, it's a great way to be seen. And now everyone's like, oh my God, Dan's MSP is seen with the bank. Dan's MSP is being seen with, you know, the insurance company.

[00:24:37] Dan's MSP is now over there working with the bank or the, you know, the attorneys or whatever. Just being associated to all these brands that people can put two and two together is building you credibility that is hard to get. And people want that feeling of credibility, you know, because we want them to hand over the keys of the kingdom to us. And basically if we screw up, we're screwing their business.

[00:25:03] We're getting that sense of people getting a little more comfortable and that reputation that we're looking for. They're getting it through seeing us doing all these JV partners. So you got to take advantage of it. Yeah, that was probably in 10 years of running my last MSP, the most productive marketing we had were in-person lunch and learn events. And, you know, I was scared to death to do the first one, but we did it. It wasn't great.

[00:25:31] But I started to improve the process a little bit over time. But by the end, by the time I sold my MSP, like the best one that we did was a joint venture with one of our attorney clients. He came in. We covered bring your own device was the topic. And we talked about the cybersecurity side of things. And then he talked about the legal compliance in the state of Ohio. But it was super eye-opening because he's telling things like he was telling real case law that was going through the court at the time.

[00:26:01] He was actually litigating a claim against workers' compensation because somebody had put in their acceptable use policy about not using devices after hours. One of his team members, she fell down the steps while she was on the phone with the CEO at 1030 at night. And he's like, guess what? Even though you had an acceptable use policy in place, you are still liable as a business owner.

[00:26:29] But just to watch everybody's face and we're like, whoa. And it was great because it was all my customers. I had clients in the room. And we actually had that law firm make the acceptable use policy that we gave away to everybody that attended that lunch and learn. And we're like, hey, you want more of this? You want somebody who knows what they're doing with this? We were able to get him three new clients. We got two of his clients out of the deal.

[00:26:53] But it's just, you know, looking outside that norm, you know, we kind of get stuck in a rabbit hole. We just want that easy button, that one marketing thing that's going to, you know, drive clients in. And there's a little bit of work involved with this one, but this will pay in spades if you just, yeah, you got to take the time. And I'm looking forward to being able to break that down into a whole webinar and possibly some few additional stuff on Lightning Learning that we'll have.

[00:27:21] Just giving people resources to get started and make that a system inside your business. Yeah, it's super important. Like this is something like the market's changing. You know, you got cybersecurity compliance, cloud services, and, you know, things are becoming more and more critical. There's ways for us to get out there, ways for us to get plugged in, like you've been saying, and different things. So some next steps as we wrap this up is, look, consider if you're not doing joint ventures today, step one, find somebody.

[00:27:50] Find like a friend, a family of a friend, someone in a B&I, a rotary, a chamber that you know that you can align with, that really fits your style, who you are as a company, that you think you could go have a great relationship. They have the ideal customer base as customers and that you can start. And if you need help identifying that, reach out. Oh, we're happy to help. That's what we're here for. We want to try to help you guys to go through that, that lay of the land. But step one, have that conversation. Step two, get something.

[00:28:20] What does success look like? Build that agreement with them and kind of get there. And then step three is have your first one, like go from it and don't be discouraged if your first one doesn't go good. A lot of firsts don't go great. But what we want to see is, is that over time it gets better, it gets better, it gets better and better and better and better and better. And then that's really where your next thing you know, that is an oil well that is pumping really good for you.

[00:28:44] And it's a great resource of your time and energy because you know that you're going to bear the fruits from it. So don't wait because the MSPs that I hear that are doing this are probably taking business away from you. They're building community relationships. They're getting their name out there and they're putting themselves in places that are going to make it harder for you if you're not doing this. And I think that is the goal is if you're doing this, you can make it harder for people to come into your market.

[00:29:11] You're going to make it harder for any size company to come into your market and take business away because you will own the market if you're seen everywhere. And you're seen as the number one company in your area. That's how you win. And that's how we get people going and really changing it. So, Andrew, my ask everybody is get out there. Let's go. We're here to help. Reach out. Andrew, myself, the team, everybody's here. Let's do it. We're willing to take you on that journey. Absolutely, man.

[00:29:40] Version 1.0 is version better than version 0. Yeah. Let's get it. Just do it. Yeah. 100%. So, that's it for this episode. Andrew, this was fun. We're going to dive into some more. I know as we keep going along here, reach out. If you want to be on the podcast and you want to share some of your JV experiences, we'd love to have you on. Let's do it. I think people love hearing from you as an MSP. So, you want to come on the show? Message me. We'll have you on.

[00:30:07] We'll do it and talk through the whole thing of what you're doing. But that's it for this episode, everybody. Until next time, let's go, people. Make it a great day. And that's a wrap for today's episode of the Powered Services Podcast with Dan Tomaszewski. We hope you're leaving with your mind buzzing with new ideas and strategies to revolutionize your MSP offerings. Don't forget to subscribe for more insights.

[00:30:35] And join us next time as we continue to decode the complexities of managed services. Until then, keep powering through. And remember, the future of MSP is bright and fully charged. Thank you for listening and stay connected.