WIN x West McDonald: Closing the AI Readiness Gap in the MSP Channel

Good afternoon, everybody. Welcome to WIN. My name is Carrie Richardson and I am your host. With me today is West McDonald, no stranger in the MSP space. if you're talking about AI in the managed services arena right now, West should be one of the first people that comes up in your LinkedIn feed. West is the founder of goWestt.ai and BizVantage. West, thanks for joining us today.

Oh, thrilled to be here. just really excited to be able to hang out with you. I know we've talked about this a few times, and it's exciting to finally get it, lined up, so thank you.

We haven't talked for a little while. Last time I saw you, you were in Hilton Head presenting.

Yeah, TSPs, or technology solution providers. Make their bread and butter on, copiers, printers, and toner. They have toner in their blood, as they like to say.

Thanks for joining me. We talked a little bit before we went live today about what we wanted to talk about, and did a little bit of poking around in the Fox and Crow Instinct platform to find out what people were saying about AI and, more importantly, how many people were saying it. Out of the 110,000 technology service providers, and that includes MSPs, people that sell managed services, and companies like VARs or office equipment organizations that have a managed services practice, 110,000 across the database when we searched for three different terms. One was AI workflows, one was

workflow I policies Monetizing AI

Under 250 companies in our database at this time across Facebook, LinkedIn, or what we call the corpus, which is the stored versions of everybody's website over the last 30 days. Under 250, of each, what do you think about that?

I'm not surprised. it's one of those things that, we've been in this business now officially for four and a half years, And we thought that MSPs would've taken this on like lightning, It's like when you're an IT services provider, once cybersecurity offerings came along, being able to add that to the stack, they've been very good about, that. I think part of the problem, is for the MSPs is that they expected it to go the same way. And I remember these conversations. I'll share one with you, actually. It was an MSP that we were speaking with about how we monetize and how we help customers with, AI, and he said, "West, that's... it's too complicated and it's not, vertical enough. And, this horizontal thing, I, I don't like this, So we were speaking with, HP. They're gonna come out with some chips in their laptops. And, speaking with Dell, they're doing the same thing. And, Microsoft with their, Copilot, we think that's the direction we're gonna go, 'cause we can resell those things and then we're in the AI game." Well, all these years later, guess what hasn't happened, So the internal AI chips on, both the servers and the laptops, it didn't have a place or a function because everything ended up in the cloud, And the third piece is, is that the, Copilot piece is, although they can get paid for it, it's very complicated, so there's a lot of learning involved in a- actually how to implement it. I'm not surprised. And the difference is, and I'm sure we'll talk about it in the interview today, is that there is a much more horizontal play, with how they can make money at AI. So no one's gonna get paid to sell ChatGPT, or Claude, however, to be able to incorporate those into customer environments, that's where the money lives, So it's a different model, so I know that they've been uncomfortable with, jumping into that different model or even knowing where to start.

when we look at companies that are coming into the managed services space and competing dollar for dollar for technology spend now, we've got newer companies. the median age of, managed services providers in our database is 16 years. So we're having companies come in now that are two years old, three years old, and they are taking business from managed service providers looking like more mature businesses, looking like modern businesses. So not only are you competing with the other MSPs in your space now for the same dollars- You're competing with brand new people who are presenting to the market as if they've been around for a significantly longer period of time.

Yeah, and we've seen this before, it's almost like in every generation we have this happen where, let's look at an MSP with their existing tech stack, for example, that also translates to tech debt because they're accustomed to doing things, in an older established way. And when this new way comes along, because it doesn't fit with what they're already doing, then they're actually, more inclined to be behind on, being able to accelerate. Whereas these new providers, as you've mentioned, they came into the business with no preconceptions, It's like, okay, we're gonna help. This is how we think we have to do it. and actually, this is the only way we know how to do it, because we can't sell this stuff directly. Here's how we're gonna operate, So yeah, every generation we see it, And these players come in. I can remember, in the browser war days, When, Netscape and, Yahoo and others, they were charging for browser functionality and Google came along and said, "Nah, Chrome's free." but they were making money in different ways, through advertising and, through other mechanisms, Completely upended that existing model, so we might be due for a little of that.

I'm going to be really interested in watching how costs change Like, my AI workflow, I used to pay 20 bucks a month for ChatGPT, now I'm probably $1,000 a month in on Replit, GPT, Claude. I don't even know what we're spending on the coding side of the business.

But still cheaper than hiring people, And that's one of the other paradigms and, one of the fears.

The roles are just changing. I can debate this with my kids, for example, who aren't pleased about AI taking jobs, I still need somebody to go and edit the plonk that AI cranks out for me. I can't have AI, for example, take my podcast with West today, produce it perfectly, publish it, make sure there's no spelling errors in it, make sure that it's captured the right segments for it. We still need people. We're going to continue to need people.

Yeah. We're very human-centric. We actually say it on our website, That it's a people first approach to AI. In other words, we don't ever think about replacing jobs. rather, we think about replacing the pieces of jobs that people don't like, that are too cumbersome, that are too repetitive, that are holding them back from, actual, higher learning, since we've incorporated AI into our businesses and our lives, it allows us to be much more like, managers and orchestrators, versus, just people that are cranking out tasks, I know people say that AI's making us dumber, but if it's used properly, it's actually in a lot of ways made me a lot smarter, Because I have to think about how to manage teams now. I have to think about the outcomes that I'm trying to drive versus the pieces that, necessarily get me there. So yeah, definitely we are on the verge of, something very different. I'll say selfishly excited, 'cause I've been so neck-deep in it for four and a half years, that a lot of the fears and the different things that people traditionally worry about- simply have not come true, because human-human interaction will always, always in my mind trump that. You know when something's written by AI. You know when, someone's taken a lazy shortcut with an email or a blog or whatever. and people don't like it. You still need people, you still need to do it. I like what you said about getting you a little bit of the ways there. you remember earlier in the call I was talking about my email inbox, assistant, and we built this agent, for so many clients it's unbelievable, 'cause we all have a nightmare with email, if you have 14,000, emails in your inbox, you're getting, 1,200-plus a day, how can you move through that? And the answer is you can't. So things get dropped, things get missed. we built an agent that sorts through that and gives you the priority list. And it creates a draft folder for me with bullet points for responses so that we can then go in and write the email, because now we have a draft open with the bullet points we need to speak to, and now we can write the email and be connected to it, we're firm believers if someone asks us to build something for them, to write blogs or to write emails, our answer is no. We're human-centric. You can use it as a tool to help you better your job, but, certain things, people are just gonna simply be better at. And we always will be, 'cause we're people.

I've, really enjoyed experimenting with AI. I built a voice generator. but it's just not perfect, I fed it a corpus of every blog post I ever wrote before AI could be used so that it would sound like me when I wrote. It takes me longer to create guardrails for AI to create content that I can just write the content myself in the amount of time it would take me to generate all of the- rules that I need it to follow.

Yeah. I like to use it as an editor. So once I've actually written my blog, one of my problems with my brain is, 'cause I have ADHD, is that, the flow bounces around a lot, That sometimes I don't have the structure that I need. So I will write the blog, and then actually have AI help me as an editor, to make it structurally more sound and come up with suggestions. And it's really cool because as acting as an editor, it says, "Well, I think in paragraph three what you're trying to say is this, but it's a little clumsy." And then I can rewrite that. Or reject it, So again, there's smarter ways to use AI in that process, but it's, I guess all we ever see really is the evidence of the AI slop, because there's so much of it out there now, right? But- But

you don't know how terrible my writing was before AI touched it. So maybe it's better than what they could have put out. I don't know.

Yeah, but lots of other cool ways to use it, And, what's exciting for us is that we, when we move a client, through the traditional chat stuff and writing, blogs or wanting to write emails and the things... You remember when it first came out? write me a poem about, MSPs in 2024 in the voice of Shakespeare, You remember? Like it was all, it was just so new, and it was all so crazy, and it was just really neat to be able to see that. It turns out that's not its strongest function, That when we can actually- use it in our workflows to take, those, pieces of work which are hard and tedious and everything else away, those are mostly invisible. Like by the time we build them, it's not like something that we're proactively using. And that's actually good because teaching people how to use AI tools, that's not really our job. Our job is to say, "Where do you need help with your work?" It should always start with work, and that was the birth of, BizVantage, which we'll talk about later.

Yeah, I remember sitting down and talking about building GPTs, and I I studied agentic at, Vanderbilt- And all of what I learned back then is useless now. I can build a skill in Claude now just by talking to Claude and telling it what I want it to do, whereas before I'd have to train it on 20 different examples of this and 20 different examples of that. And it was so- cumbersome and time-consuming, and now it's just like, "Hey, I need you to do this." And then it'll ask me a bunch of questions. "Well, would you like me to do it this way?" No, no, that's not what I want.

we've been doing this for four and a half years, so we've gone through the same iterations, the ways that we used to do things. We had a client today that we were presenting for an MSP partner of ours, and one of the initiatives they wanted to do, there was three. We always get them to choose their top three once we've done their assessments. The first initiative, by the time we did the build cost and everything else, it was gonna be about $110,000 when it was finished. The other two, which were much more I would call a current state of the art, that was more like a $5,000 build and an $8,000 build, don't even look at that first one. Let's revisit it in six months, because I guarantee you that when the tools evolve and everything else, that $100,000 build is now gonna be a $30,000 build, So that's not to say don't do things, but there are certain things that we just, shouldn't do, and, things that we have to wait on, that the technology's not quite there yet. And That's an MSP, if you will, their job to help their clients to understand that, The number of, clients I've, seen that were once bitten early on, by spending too much money on AI that simply didn't deliver what they were looking for, there's a lot of those stories. Imposter syndrome and MSPs. we work with, business consultants as well, So think of smaller, McKinseys and others, that are all touching, customers', business in some way. And all of them have this imposter syndrome. It's like, "It's not our job to do, AI," but the answer to it is, it absolutely is, because customers are begging. Like, they're just begging for help, to figure out how to navigate this. And MSPs, I think, are in the best position of any, because AI, at the end of the day, is a technology, So- Mm like managing desktops, like managing servers, like managing cybersecurity and other technologies. But on this imposter syndrome, like I said, MSPs are in a pole position because people trust them with their technology needs, And it's not to say that, they can't learn how to do this as well, but as I said at the beginning, it doesn't fit into their technology stack, the same way that other things they offer do, And I think that's what's slowing them down, another expression I love, I heard this years ago, and it was, "In the land of the blind, the one-eyed man is king," or, "The one-eyed person is king," however you want to express that, but the thing is that if you spend the time and you learn how to help customers with, let's say, a couple things. There are AI policies and guidelines which they need to be safe, that that's actually fairly relatively straightforward, to do as a service, You don't need any fancy tools other than simple AI to be able to do that. The second piece is to get really good at understanding how your customers are working, and I think this is where MSPs fall down a bit because they don't usually ask that question, Like, tell me about the worst part of your day. and they'll say, "Oh, what do you mean? Like, managing, server, patches or..." you're using those things to get your work done. Tell me about the worst part of your day, something that you would like some help with. And don't worry about what the solution's going to be. Just share that. And it's like being a bartender, where people offload their worries and concerns, and how good you feel after you've done that. And you feel even better when the MSP comes back with a solution to fix that problem. So to say, look, you told me it takes you this many hours to do this and everything else. We know how to fix that. Like- Yeah tell me that's not a perfect, scenario, But it is different. It's different than what they're accustomed to doing.

"It's gonna be a lot of work, and you're gonna have to do it like this." And they're like, "Oh, well, no. we'd like something easier, simpler, and just not that, please."

Yeah.

nobody wants to do the sales work, but everybody wants the sales outcomes.

Yeah, it's true, isn't it? And I think there is that because we actually have a sales structure, And one of the things, obviously with the BizManage platform, it produces a very nice document once the interviews are done and everything else. But you're not done there yet, You can't just give them the findings and say, "What do you want us to do?" That there are steps in that sales process. And we actually, Carrie, we got asked early on, like, "Why do I have to do these interviews? Why don't we get AI to do the interviews?" And I'm like, "Because you need eight, nine, 10 points of contact in a sales, process with a human being for them to trust you and buy from you." And that important part of the process where you're actually, asking the person about what keeps them up at night and getting-

Oh, they wanted AI to do their sales discovery.

Yeah.

Ooh.

And yeah, just no. So that- I get- that's where I get back to can AI do something like that? the answer is yes. You can phone a phone number and you get an AI on the end of it which can ask questions. But what it doesn't do is have the empathy and the understanding to dig deeper, So, so Kerry, you're telling me that you have to input that data into two systems. Let's dig into that more and what are those two systems and those details, And for me to express to you, to say, "Carrie, I'm sorry," like that does suck, Like, that connection we start to build a relationship. and again, AI cannot build relationships, And if you're selling, at least that's my belief, is that you need a relationship before somebody buys from you,

I think AI comes in really handy after a discovery call. For example- identifying where you could have dug deeper or what you missed. we've got 26 different points that our AI coaching platform will identify, saying, "Here is, here's where you did well. Here's where you could have improved." It will compare it to every sales call you've ever made are you improving? Are you getting better at this? Or are you getting worse at this?"

I love that use case, 'cause you know what the other part of it is, is that it's not, it's not personal, right? If a person does that part of the job, sometimes you can feel a little combative almost. But when it's AI delivering that news, it feels more objective, Like that you're not worried about how it feels about you, 'cause it doesn't feel, so you can learn I love that. That's a perfect use case. Like I said, we're people, focused first. That's always been our approach to AI. So, right or wrong for the majority, that's how we're doing it. It's people first.

What are the simplest, easiest ways to start- Yeah using AI in your business?

This is gonna sound counterintuitive, but don't think about AI. Like, if you wanna know the best way to use AI in your business, start with the work. In other words, find out the areas of your business, that you think you need the most help in. And, we've had those calls where we've, dealt with a client that's like, "Yeah, we already know what we wanna do. We wanna, implement, Copilot, and we have to do the permissioning and everything else." And we stand them back and say, "So why are you doing that? Like, what's the purpose? 'Cause, the spend on the licenses, and if you're gonna do this and everything else, what's the why?" And they're like, "Well, we don't know yet, but we know we have to do it." and that's the wrong place to start, The real place to start is say, "Well, we have, a document management platform that's outdated. We can't find anything. Our SharePoint is an absolute disaster. It's a mess, and we need a better way to search for things on the fly 'cause we have customers that we're trying to answer to, and we can't get them answers fast enough." Perfect. Like, that's where they should start because once they find those things, then we'll find the simplest ways to incorporate those, another one that comes up, I brought this up earlier, that one of the agents that we build, almost daily, Kerry, is, inbox, triage assistance for executives, I can't keep up with my email, and that's actually very simple because you don't need a third-party AI other than Claude or, ChatGPT. But at any rate, it's included within that existing platform. It's really just helping them to build it in the right way. So there's no extra cost. a build like that typically takes us about three hours, So it's not a heavy lift, and they get immediate, return. So think of those time-consuming, yet simple things in every day that, drive you crazy, and start there. but understand the thing first, understand the work first, and then, try and, figure out how to apply an AI to it. The second thing I would say is I love this. Leslie, actually, her cousin, he worked for PricewaterhouseCooper for a lot of years, very successful. God rest his soul, he recently passed away, but they said, "What do you want to say to people?" kind of your last, words for people. His last words were, "Outsource everything." In other words, don't be afraid, to find outside expertise to be able to help you get started, Just because you don't know how to get started doesn't mean that someone else- like Carrie and Ian or like Westt, having done this 1,000 times, And where I have to catch myself, and Leslie catches me on this often, is I'll say, "It's so easy to build that." And she'll say, "No, it's easy for you to build that because you've done it 1,000 times," for you in a sales scenario where you see a certain mistake that's being done all the time, it's easy for you to spot that because you have expertise. You have experience. Mm-hmm. And so don't be afraid to partner, I would say would be, number two, especially to get started. and number three, start with your AI policies and guidelines. Like, understand how you can keep your company safe because I guarantee you right now some people are using Claude, some people are using ChatGPT, some people are using Codex. God forbid that somebody's using OpenClara or something similar, even if they think they're doing it safely, I got a sandbox. It's all good. I know what I'm doing," This stuff is all happening in client environments, and what they first need to do is lay down an established set of rules to say, "Here's what we're allowed to do with AI right now, and if you wanna do something else with AI, here's the approval process. So we're gonna put it through a security analysis, and we're gonna put it through a business objective analysis. And once those two things are passed and measured, then we can, look at it. So we want you to think about things to do with AI, but don't just do it. Don't just start downloading applications 'Cause that doesn't keep any business safe,

I wonder, is that, You know what? I don't even wanna go down that rabbit hole today. we're gonna stop there,

Okay.

Thanks for taking the time to, share what you've been up to and share some advice- on how people can implement AI in their businesses or support other companies to implement AI in their businesses. How can people reach you if they want some more information?

Thank you so much for having me. It was an absolute pleasure to be on your show today. they can visit goWestt.ai. You can also visit, bizvantage.ai.

Have a great rest of your day.

Yeah, you too. All the best.