Automating Your MSP to Scale

Welcome everybody, episode one 50 in the cyber call, and we hit 6,000 in our community. Very, very cool. And we've got an awesome, uh, session today. Um, really excited to have Bill Tyndall with us. We'll introduce him momentarily. Um, and no fan. If you notice, I'm in a hotel room, um, and, uh, very excited to be taking my daughter on our summer trip, which we always do each summer. Uh, we are in the lovely city, Utah, doing some hiking and, uh, heading over to see Phyllis and Kurt at the Ms.

ISAC event and, uh, going to the Foo Fighters concert tomorrow night. Um, so it's gonna be pretty cool. So welcome everybody. Um, just a few quick announcements. One, um, I have the right of boom, as I told you guys, registration early birds open through the end of the month. Uh, believe it or not, the huntress pre-day is already sold out. Um, the SaaS alerts is in a close second. Uh, I was blown away that they're, you know, these, these pre-days are getting sold out so quickly.

Um, so, um, I'm telling you now, uh, so that you don't come to me after, uh, and go, can we get in? Um, unfortunately, the rooms only hold so many. Um, so, um, and the only other thing, Wess, and you're welcome to put it in, is I know you're on a road show, um, with this Cochran and the folks from Huntress, feel free to put that URL and that's pretty cool what you guys are doing. I'll do it. Um, alright, so I'm just gonna set the stage real quick.

I thought last week, you know, and I probably a, after in hindsight, I should have promoted it differently. I promoted it all about the DOD and what was going on there, but really, I think Scott Edwards, um, the CEO of Summit seven said something really profound.

And we had talked about this offline, and that is the fact that, you know, if, and when this goes through, um, you know, how, um, you know, regulation will, uh, come for anybody in the DIB with CUI, chances are the other, uh, areas in critical infrastructure, I believe there's 16 total West. Keep me honest, total, um, in terms of industry, I mean, by and large, if you're an MSP, more than likely your portfolio has one of those areas of critical infrastructure.

And more than likely, in some way, shape or form, these organizations are gonna start to follow these types of regulations because the, in, you know, the government's gonna say, look, we don't want to have, you know, 7, 8, 9 different types of regulation. We're gonna say, Hey, there's a standard here. Let's all start to follow this standard.

So in taking that mindset, I thought about what are some of the needs that MSPs are going to have to have, you know, aside from all the changes Gary, we've been talking about in terms of their sales maturity, their security maturity, but one of the big ones is gonna have to be their operational and automation maturity.

Um, an organization that has done that incredibly successful as electric ai and, um, led me to my conversation with Bill Tyndall, one of the co-founders of that with a successful exit strategy now doing some very other very cool stuff. So, bill, uh, welcome and if many, probably don't, many may know of electric, but may not know of you. So tell us a little about yourself and welcome to the cyber call. Yeah, uh, one, thank you for having me. This is, it's awesome.

You know, I, uh, we met a couple weeks back and just in getting to know you and, and getting to see this, it's been incredible to just see what this community really does. And between managed security and managed service providers more traditionally speaking, I love this community so much. Like, it's, it's amazing to see 6,013 people registered in this right now. I mean, that's, that's incredible.

But for, uh, for ways of the, the TLDR background, I guess I spent about a decade looking at opportunities to build automation into what we refer to more commonly as back office infrastructure. So you see technology coming into the world of accounting and bookkeeping and, uh, general ledger reconciliation. People were automating HR benefits, payroll, there was legal technology coming out.

So, uh, another large opportunity, as everyone in here probably knows, is looking at, uh, it and cybersecurity for small to medium sized businesses as well as enterprise.

And so, um, we'll talk probably a little bit more about the history and more depth, but one of the big things that we came to really realize in, in building electric was there's a, as we see everybody moving into the cloud, so what we refer to more broadly as digital transformation, as we're moving people into the cloud and we're moving away from homegrown software, the ability to build really high impact automation becomes really much more readily available.

Um, and there are incredible tools out there doing this on a number of different fronts, whether you have products like Roost Electric, obviously, um, and a number of others just really changing the way that services are being delivered. And, and all of the automation in my mind is, is with the goal of just making a better and more profitable customer experience. Yeah. And I would say Bill, right? More secure too. We'll talk about that.

But I mean, it's not just for the MSP, if we can do repeatable things, configuration wise, et cetera, we're helping our customer. I mean, this is good business, not just for us as profitable. I, I don't think you can have one now without the other. Yeah. I don't think you can keep yourself or your customer secure without some level of automation because there's no other way, right. To have the alignment that you need. Yeah, good point. I fully agree with that.

I think that there's one fallacy that I want to bring up though, which is that robots are better than humans. I think that there's a fallacy around AI of, oh, if I turn this widget on, this thing will be done perfectly. And we're still in the early innings of the application of AI across a number of fronts.

And so using, using AI and machine learning and RPA and all these, these things that people talk about and hear about, but remembering that a, a human really still does have to train a lot of this, it can't, it can't just be uns chaperoned technology at this point, otherwise it can cause the opposite of, of increased security.

And so just being really mindful as people are playing with tools and, and looking to figure out how to maximize their own, what I call like the expansion of their capacity, it's, uh, it's remembering that and just making sure that you don't just take for granted, um, the truth that you're trying to get to, so to speak. Yeah. I, to steal a page from Reg Harnish's book, the founder of Autotask, he says, sometimes automation, if done correctly, just means dumb tasks are done faster.

I'm like, yeah, that's so true. So you gotta be careful. It's well said. Yeah. Gary, I'll let you, uh, kick things off, bud. Yeah, for sure. So, uh, yeah, so Bill, you and I go back a little ways now. We met, it's over a year ago, right? And, um, this is kind of just maybe pre 10 rows. Yeah, just Concept level. When we, when we met Just pre 10 rows, I had taken some time off to spend time with my family. I have a, I have a three and a half year old and, uh, yeah, we got connected.

I think it was, was it by Jim? Yeah, I think Jim Libby. Yeah, Jim connected us, introduced Us. And then I'm gonna put in the chat here. I think this is it. Uh, I recently did your podcast all ground up so people can go and uh, check that out. That was a lot of, uh, that was a lot of fun. So let me go back and I want to talk a little about your background and then maybe touch on some philosophies that you and I have the have already discussed, um, you know, privately.

Um, but one thing about you is you played Division one football. That's no joke. I did. Yeah. Yeah. So, um, uh, and then you spent a semester, um, in Russia. So tell me a little bit about that. 'cause you were, it sounds like if you do that, you're on your way to trying to work in the state Department or something. Did you have other ideas back then when you were young? Or did you get, maybe, did you get hit in the, in the head a couple extra times on the football field? Well, I definitely did.

I had, uh, I definitely had quite a few concussions. Um, but yeah, to get, so to go back, so, um, I was fortunate enough to get a scholarship to play Division one football at uc, Berkeley, Cal Golden Bears. And, uh, my brother was also playing there at the time, which was great. I was about to actually go to UCLA. Cal actually hadn't offered me a scholarship. I had scholarships all over the place, but Cal, for some reason, the, the recruiting coach at the co time wasn't, wasn't about it.

And I was gearing up to fly down to LA to go sign my paperwork when my brother, uh, told his coach what was going on. Long story short, I got a call from the offensive line coach. He's like, do you have 24 hours, more or less to come up here, signed an offer for them, went to Cal. But, uh, division one sports is intense. I mean, that was eight hours a day on top of a full school or a school load outta university, where 80% of the staff doesn't think that sports should be played there.

'cause it's a research institution, uh, best experience of my life, you know, um, football teaches sports in general teach you a lot about being a good teammate. How being a teammate makes you a good leader, being able to just fight through adversity at all kinds of things. And granted, when, when it gets cold, my leg kills me every once in a while and probably suffer some short-term memory loss from concussions. But it was a, it was an awesome experience.

But on your, on your piece about Russia and all of my work, one of the things that Cal did really, really well was help guide student athletes on the path that they wanted. And that path for me is somebody who grew up in Monterey, California, which not a lot of people know about, but was a very large CIA hub for a long time. Um, Leon Panetta is from there, which gives you an idea. Um, but I wanted to go into clandestine services and serve my country via the government, so to say.

And so I studied politics, econ and Russia. And at Cal ended up getting a grant from the State Department to go over there and finish some studies. And this was back in 2013 when, if you guys remember, Russia had invaded Crimea for the first time. There was a lot going on, like cyber was really starting to pick up, and it had been going on for long before that. But in terms of some of the intensity of attacks and all this stuff.

And so groups like IBM were coming in and, and poaching more or less talent. And my mentor at the time gave me a call while I was in Russian, just said, Hey, um, I just wanna let you know, like at the end of, at the end of this contract I'm resigning, I'm gonna go work for IBM for half a million dollars a year. And, uh, Back when half a million was a lot of money. Exactly. Well, and especially if you've been making 60 grand for the last 20 years Yeah. Waiting for your pension.

So I was on this river in, uh, in Russia, and I was thinking about what I really wanted. And I grew up in a, an amazing home for all intents and purposes, but we were lower middle class, you know, like I couldn't afford to go on the fancy vacations or the fancy field trips. And I had told myself, um, I never wanted that to be a reality for my kids. You know, like I wanted to be able to give them unique experiences, take them all over the world.

And so I was reading the tea leaves a little bit when the guy who I looked up to tells me that he is leaving. And, uh, and so I ended up going into tech. I hopped on my computer that night. I started interviewing for companies in the Bay Area, uh, an incredible entrepreneur named Jessica Ma. The CEO of Indera was crazy enough to hire me. Well, I was interviewing at 3:00 AM from my St. Petersburg apartment.

I, uh, got on a plane, went back to the States and started my, my career in that world two days later. So, So when you started, were you in sales? So I was in sales. Yeah. I, so I skipped the, the SDR stage, and I had convinced the company that I've been selling things my whole life, um, from candy bars to magazines. And so I was ready to go and be an account executive, and they were once again, uh, bold enough to, to hire me to do that. So I came in fresh outta college as an account executive.

So how do you make there from the jump to electric? Yeah, so, so it's a fun story. Um, so I'm two weeks in, I'm two weeks in to, to work at indro. And Jess is such an incredible entrepreneur. Um, she held these all hands and at the end of every single all hands, they, they had this, one of our core values was rethinking the obvious. And so she'd open up the room to, uh, anybody, it doesn't matter if you're day one or you've been here forever.

Like, what if you have any feedback or think that we could be doing anything differently, let me know what you think that is. And so two weeks in fresh outta college, really fresh off the plane, I, I stood up in that meeting and just said, Hey, I think that the way that we do sales today is really messed up. And it feels to me like there's a, an entirely different way for us to do this.

And it has to do with finding businesses in what I now call catalyst moments where they're in the buyer position and you have to beat them to the place where they've already been pre-educated on a different company. And so, because when you look at systems very similar to MSP, it is much harder to uproot somebody from another managed service provider, even if they aren't happy.

It's still a process that if you catch somebody in that initial catalyst, what I call the latent to blatant pain transition, where they're assessing a provider or hiring in-house for the first time, if you can beat somebody to that point, the entire experience of onboarding 'em and getting systems set up to scale, it's just dramatically easier.

And so long story short is Jess challenges me and says, okay, if you, if you're so passionate about this, you have 90 days and if you end up not hitting your quota, well then you're just, you're obviously fired 'cause you didn't do it. And so, uh, when you look at it, I had pitched more or less what I now know to be called channel sales. And we ended up partnering with like Combinator 500 startups, Techstars WeWork, back when that was a cool thing.

And it became overnight over 50% of the company's revenue. And, uh, and I ha and long more other stories than that. And Jess moved me out to New York to, to help launch the office out there. But she pulled me aside fairly early on and, and told me something that I now talk to a lot of people about today. And she said, bill, you are what I refer to as an unemployable person. And at first I thought that that meant that she was firing me.

Um, but what that really meant was that I refuse to, to live inside of the boxes that people think, like everything is an opportunity to rethink the obvious. Talking about automation inside of managed service providers, a great example of rethinking the obvious. And so she started to encourage me to more or less learn about entrepreneurship and how to be a founder and how to build teams, and really encouraged me to, to go out on my own.

And that was when I ended up reconnecting with somebody who I, I'd met right when I graduated from college, Ryan Dennehy, who's the, the CEO of of electric. And we started talking about different types of businesses that could exist. We, we both had this hunch me coming from, uh, the world of, of back office infrastructure automation.

I had started forming this thesis that every, there was automation all over automation and accounting automation and HR benefits, payroll automation and, and legal. But when you actually look at one of the largest pieces of life cycle, so to say, in terms of small businesses and any business for that matter, it's who's managing the infrastructure, who's doing the help desk, who's doing the onboarding and offboarding of employees, who's doing the systems administration access controls?

And back then, the only thing that existed was either working with an MSP or hiring somebody in-house. And so Ryan, coming from the other side, he had scaled and su successfully exited a company called Swar Mobile, which was actually really using, uh, like IB can wifi technology.

And I'm sure many people in here know that the government can track where you're at at any given time based on your cell phone pinging towers and pinging access points, which is how, if you use running apps or anything like that, it knows where you're at. But he had used, he had built, uh, more or less a, an adapted, uh, AP to actually allow brick and mortar retailers to get what they called bringing online analytics into the brick and mortar retail store.

So how, how are people moving around your store? Where are they staying to figure out what, what's working from a marketing perspective? And so Ryan Ryan's coming into it was from, really from this exposure, and this is something that we'll talk about a lot probably in this call, the biggest issue that that business had was in the level of inconsistency with the actual people who did the installs. And those were all managed service providers. Yeah.

So, so what was like, gimme the thesis as clearly as you can of electric when it started, like what was the thesis? Thesis was really simple. If we all fundamentally agree that we're moving businesses into the cloud and away from on-prem, and that we agree that those in the cloud resources and apps and tools are out of the box and no longer homegrown software, the amount of hours that need to be spent in office for a customer goes down exponentially.

Our thesis was that 95% of tickets should be able to be done remotely and should be able to be done for out of the box software. Yeah. And that was the, that was the, and there was another part of it, which is, and this was the, the big pitch for us. We live in a world where we can collaborate with a hundred people in real time on a document. We should not have to wait an hour to have a Google password reset.

Like there is high o or opportunity for automation in the IT and security space to be able to increase and improve the experience of end customers by bringing real time IT and security Yeah. Into their hands.

And it's interesting, right, because, um, and again, this is the, you know, when we spoke right as you were getting started with, um, Ken Rose was to take that approach, but to base it on acquiring, you know, traditional managed services, uh, managed service providers, but with the idea of putting first this idea of, of leveraging automation and in many ways is possible, right? To change, uh, the experience. So that, that's kind of, I'm, I'm summarizing it right? Yeah.

The, the short, the short answer is 10 rows is focused on delivering impeccably good services to businesses and doing that by empowering people to be more efficient using technology. And so sometimes those might be things that we, we build ourselves, but sometimes it's about not reinventing the wheel and not spending dollars that don't have to be spent and using products in companies in like partnerships with electric partnerships with Bruce.

And how can you just figure out where you or as an MSP leader have large amounts of repetitive manual tasks that one create inconsistency, onboarding and offboarding is probably the, the most trauma response filling example of that for everybody. But it's figuring out how can I, how can I turn automation into my ally not to eliminate jobs, but to empower people to do more. You can take a tech from doing 20 tasks to a hundred tasks.

What that means is you can now onboard more customers without getting to a place where you're hitting service degradation. And that is, that is the equation of managed services to me. It's how do you continue to scale your business in a way that maintains a high, high accountability level on service delivery? Because that's, that's what it matters at the end of the day.

It's, it's, am I delivering really, really strong products and services to my customers, and can I do it consistently as I scale? So last, last question I have for you is, um, electric scale pretty quickly.

Like in terms of managed service, if I, I don't really know that I would call them an MSP, but what in the business model and in the delivery process fueled the go to market and then how, how, how will you try to do that now in terms of having what you're offering is change your go to market, if that makes sense? Yeah. Well, so there's a couple of pieces. And, and this is a whole conversation in itself when we talk about building out go-to market strategies for businesses.

But at the end of the day, what, what electric did better than any company I've ever seen is formed a rigorous understanding of their ideal customer profiles and their i their buyer personas inside of those. And so an example, an example that I'll give you guys, and, and we talk about this a lot, and this is not new information for anybody in here probably, but let's just to make the math simple, there's about a third of companies that are what we call strategic buyers.

These are people who get it, they want it, they know it's gonna benefit them down the line. So they're just gonna, they're gonna sign on early with an MSP, they're gonna get security tools in place. They're, it doesn't matter if anybody cares about it, they're just gonna do it. About a third of businesses are what we call tactical buyers.

So this is, I'm trying to work with a Fortune 500 company, and I just got a 10 tab by a hundred question vendor risk security assessment, and this is the biggest contract I've ever had the chance of winning, and I need to get all this in place. And then we call those tactical buyers, and then the bottom third of what we call oh s**t buyers.

And they, and these are the people who realize that they didn't onboard their CTO four months later and that he's been pulling stuff out of their, uh, out of their OneDrive or their Google, or the worst case is they get hacked and ransomware, Right? And so, So what we did, so those are the, those are the high level personas, but then inside of that, you have the buyer personas.

You have the office manager that's been doing this for the last 15 years, and now they're at 50 employees and they're, they're about to lose it. They have all these other things that they need to do. They're dropping the ball on onboardings, and so they wanna outsource it. Or you have the CTO that's still managing this themselves and walks into the CEO's office one day and just says, like, I'm, I've had it. I'm not doing any more it, I need to be building this stuff.

Or the CEO who finds out that the sales team just lost the largest contract ever because they weren't able to sign off on that vendor security assessment. And so the, what we did is we got really good at understanding who are these personas and how do you actually think about not just, not just what I call feature vomiting, but how do you actually put together email campaigns that speak to those personas and those use cases, and how can you get really good at that?

And so that you're not just sending a bunch of white noise, but you're sending an email that resonates with the person that's actually receiving it. Gotcha. I think, I think if you get that automation dialed in, right, you can get your team really focused on, on the client experience, right? You, you shift by, um, really that, that moving up the stack and creating a, a, a better overall experience for your clients across the board because the mechanics are there with the technology. Yeah.

People are stuck. They're, they're, and this is why security is faltering Andrew, the same why the, the MSPs don't mature fast enough or grow organically in the way they should compared to other businesses. There, there's so much noise still in projects in support that it just, it sucks the life out of a, out of a managed service provider, you know, right up to the CEO level. And so whether it's growing the business or making your customers more secure, all of it is proactive.

All of it takes energy and initiative, uh, that's balanced against all these things you have to do because the businesses are so inefficient. And by the way, statistically I see 400 numbers, um, productivity wise in terms of compared since the pandemic. Uh, people close less tickets, techs less tickets a day than they did then. Like, that's the opposite direction, man. Uh, you don't make people more secure by doing more tickets that much. I know I'm not a security genius, but I do know that.

Well, it is a great look. There's a, I'm just gonna give a 32nd segue and I'll let Keith briefly introduced himself. Keith, Keith Bartol is filling in for Phyllis and is a great that he's on, 'cause he is an MSP who has scaled his business rapidly. But Bill, what I think what you said why it's so important is by and large, not all the MSPs on on today, but by and large, if you look at 90% gear of MSPs out there, I think it's safe to say their business comes via referral. Yeah.

Give or take, right? Let's just use that. Yeah. Well, Andrew, let me, let me say where I think it is. They do, they, some of 'em spend money on marketing, all of it's aimed at the very top of the funnel. So it's really inefficient, right? The leads they get aren't really closeable and then they get a referral. But now half of those aren't even people you really wanna do business with. They have nothing in the middle of the funnel.

In other words, there's no, there's no buyer's journey Really fair. But why this is so critical today more than ever, because of, and I'll bring this back to security and segue to Keith Bill being able to develop your ideal customer profile. And then, you know, the, the saying goes, the riches are in the niches, right? So then being able to develop your messaging to that profile, right?

And then you guys were probably strategic in having them opt in for something free and then they would get engaged in your funnel and on and on and on. But what, on the flip side, what that does, Keith, tell me if this is true, and I'll let you segue, is if we know who we're gonna sell to, right? Who these personas are, bill mapped out three of them for electric, we also then look at our maturity and our delivery and our support offering on our side.

And those two scenarios really match up well so that we are very highly efficient. Um, that's, and, and if we do that, then we can start to look at delivering the security services and get to the all inea price that, you know, we really want to try to get to. So, Keith, how does that sound to you? Tell us a little bit about real quick vignette about you for those that don't know you. 'cause I think there's a good segue having an MSP on here, uh, asking Bill these next questions. Yeah.

So, um, I I, I think you're spot on. I think it's about using automation to create that efficiency. It's cer certainly what we've done because you've gotta get, you've gotta get operations really humming to, to get focus on security and to get focus on the proactive and focus on the client experience really hard to, um, work on the business when you're just putting out fires in your service desk and you don't have that, that that efficiency that automation really brings you.

Um, so CEO of DKB innovative, um, started the company about 10 years ago and, um, a $12 million MSP 63 employees. And, uh, and, and really, I a Little choked up when I hear you say that. Oh, yeah, yeah, yeah. Gary, Gary gets a little choked up. So, yeah, my story is, uh, I, uh, I took vacation from Dell, my previous employer, and, uh, went to like the second Snz fest and met Gary and said, yeah, I'm thinking about starting an MSP. And he said, yeah, it'd be really easy. Just come on over.

A lot of people came back and told my wife. Yeah, see that Schnoz Fest is like a, it's like a, um, destination. It's like you can go to Club Med or you can go to Schnoz Fest. Yeah, yeah. So I came home and I told my wife, yeah, I'm quitting my job. Gary says to start an MSP. And she's like, what? It's been on Journey and, uh, when it, when it comes to automation, yeah. Like that's, that's an area from day one. We, we took very seriously.

Um, you know, we're on the advisory board for roost and, um, really an early adopter in that. So Bill, let, let, let, man, let's talk a little bit about, um, like limiting factors and, um, MSPs building a business. I know when I, I listened to your all ground up podcast, you and Gary were talking about favorite books. Um, Gary mentioned the Big Leap, which is all about upper limits, limits fighting through those.

So maybe Bill share some wisdom on those limiting factors that you see MSPs hitting when they're trying to build their business. Yeah. Well, so, and we will just talking about this idea of the big leap really quick in this, this concept, we'll, we'll bring it back into those limiting factors in a second. But the, the philosophy that, that I take to business and that my team takes is whether you think you can do something or whether you think you can't, you're right.

You know, like everyone always says that, but we, we take such a focus on constant transcendence. Like the pers the the business that I was today, the business that I was yesterday is not and should not be the business that I will be tomorrow, otherwise I'm really stuck. And so constantly looking at how can we reinvent things, how can we be doing things just a little bit better as imperative as an MSP?

The areas, the areas that I think, and that I have seen through conversations, a lot of MSPs really get stuck and we'll, we'll start with sales as the example. Sales is really hard. It takes a lot of, it takes a lot of courage to, to say, Hey, I'm gonna invest some of my earnings in trying to figure out how to do a repeatable sales motion.

And, uh, and then if you are able to figure it out, well then the question becomes, okay, well shoot, I've now turned on this sales funnel and I went from getting maybe one customer a month to two customers a month to now I'm getting five or six. Well, now the question is, is, well, can I actually onboard that revenue and can I service that revenue? Because if I can't service the revenue, that service degradation, service degradation leads to churn and lack of trust.

And that's the one thing that we can't afford in this business. We can, we can slowly get those referrals and 15% year over year, but how do I actually productize my offerings and how do I actually productize sales? And then on the other side of that, as we get productized in sales, which to me really be means sales predictability, how can I use that predictability to then forecast my hiring needs to cultivate the talent to service the revenue coming in?

And I think that that is one of the hardest parts of, of scaling a managed service provider past five to 10 million and continuing to grow at the same click. It's, how am I thinking about getting new customers? How am I making sure that the customers that I'm bringing on? 'cause we were talking earlier about specialization, and I'm sure that a couple of thinking people are thinking, well, how can I stay specialized if I'm trying to continue to, to scale rapidly like that?

And the reality is, is, um, over time, like you can build specializations that you're able to scale into. And so you can, as you, I I always talk about one of the biggest underrated things inside of managed services for, for all of us that understand computers and, and understand data, so many people fail to look and realize that their companies are data companies at the end of the day. Mm-hmm. Every single thing is a data point. Whether it's how many leads am I getting right now?

How are those moving through the funnel? How many support tickets am I closing? What applications am I actually doing all those on? Where's the time waste? And so the biggest piece of advice that, that I give to people and, uh, the companies that we work with on the managed services side is like, think of yourself as a data company and it will change the way that you look at everything about what you do, customer success, delivery, et cetera.

Bill, bill, can I just keep chime in just a second because we're talking about, you know, five to 10 million. A lot of MSPs on this call may not be there, but I think what's really important, we had John Barrows on a, um, who's, who's one of the best in sales. Phenomenal. Yeah, yeah. Meaning, you know, and again, built his, you know, cut his teeth in MSP. So this is a guy that was, you know, ground up at Thrive, so knows our business.

He talks about, you know, the AI machine learning right now, if used correctly in sales, which it can be, you could have very small MSPs doing lots of recurring revenue. So I just, for those that might go, well, we're not a five, we're not a $10 million MSP, these principles you're talking about, if you were starting an Ms P today bill from the ground up, they're, He just did. Right? So I wanna be very actually clear about this. 'cause, uh, you just brought up such a huge point.

So many people look at this, and I'm gonna use some tech terminology for a second, but so many people look at this and say, okay, I'm just gonna start an MSP and you know, I'll sign on my first customer and I won't even use a PSA, like, we'll just go emailing back and forth and, and all this stuff. But in order to be able to scale, it's all about building the ship before you put it in the water.

Trying to, trying to build a ship once it's already floating and trying to keep it afloat is just a constant battle. And so for people starting today, I would encourage them, look at the tools out there, make sure you get the right setup. Make sure that you're signing on with ConnectWise that you're, you're working with a consultant to help you actually build it out for scale.

Because the only thing worse than not having it is not having it when you do become a two to $3 million managed service provider, now you have what we call technical debt. Mm-Hmm. You have no idea about what's been going on. You're having to switch up a bunch of process, nothing's documented. So when you, when you unfortunately lose one of an employee that has a ton of tribal knowledge in their head, there's no documentation. Everything comes for building to scale.

Even if you never plan on selling, if you want to just run this your whole life, it will make your life better to have strong foundation and infrastructure in place. And that is, that's, Yeah. Not everybody's building an MSP to sell it. No. You know, I got a bunch of friends who run really successful, 20, $30 million MSPs. You could, you're gonna probably have to pry it out of their cold dead hands. Yeah. Uh, yeah, totally agree.

So, so Bill, you, you built a, a huge like, scalable platform with electric ai. I mean, was it, was it smooth sailing or you hit some rough patches along the way? Maybe, maybe tell us a little bit about that journey. Yeah, well, I mean, I, just to normalize it, I don't think any business is smooth sailing. And if somebody tells you it is, they're either delusional or, or lying to you about it.

And I, I would say that anybody in here who is a founder would know that it is just generally hard work. Um, there was a lot that did go really smoothly. Like we were very fortunate from a, from a partner perspective to be coming into the market really at a time when, when managed service providers was starting to, to see some of these tailwinds come in.

And something to talk about later on is some of this downward pressure that Andrew was mentioning earlier, and Gary was mentioning around government regulation, insurance providers, et cetera. Like, we were really starting to see that pick up in 2016 when, when the company started. Um, but no, is it, is it easy? We had sleepless nights. I, um, I, I've told both Gary this and, and Andrew and, and you as well on our calls that we've had together.

But I mean, I had stomach ulcers and mouth ulcers and sleep paralysis, and I thought that was all super normal for building a business. But when you're scaling a business 300% year over year and trying to figure, we went from two of us to 500 employees in four years, that's wild. And for anybody who's managing even a couple of employees right now, you know that people are hard.

Um, but people are the business and you have to really take the time to cultivate and, and help to inspire those people. And we did a great job at that. We did a great job at, at scaling that brand. And Ryan's just been absolutely phenomenal in, in executing that vision and, and continuing it on. But no, it's, uh, I'd be lying to you if I said that it was an easy path, but the one thing that we did is we always kept walking. You know, and that's, that's what all of these businesses are about.

It doesn't matter if you're an AI company or a plumber. You just gotta be able to punches and roll. What would you say, like, if, if you had to say like, these are my top three lessons learned at growing a, growing a business, that crazy rapid face like that, what, what would that be?

Um, I would say, and this is, this isn't even necessarily if you're doing it at hyperscale, 'cause I, I think that this is important for everybody, but, um, be rigorously honest and in control of your data at all times. So understanding for MSPs, what's the level of quality on my data labeling, categorization, and classification of tickets? Do I actually know that I reset a hundred passwords last month for Google? Or was it actually a thousand?

And people just aren't categorizing this correctly. So data integrity is everything. And if you don't manage data integrity and you think about how am I going to incorporate in automation to my business? Once again, going back to the concept of technical debt makes it very difficult. Mm-Hmm. Um, the second one is, is everything about people.

Like, it doesn't matter, once again, if you're a plumber or the open AI team, like we are all people businesses and really focusing on how do you inspire growth in your team. That is how you inspire growth in your clients, and that's how you drive actual impact.

And so, once again, the thing that we did, Yeah, I don't think you can do number two, bill, if you don't first start with number one, like if you don't have good data integrity, if you don't have command over your operations and sales, you're not even qualified to put someone, people in a position to do or be their best. Like, people skip over one to get the two and like they're gonna have some mystical culture. They're without accountability. Right.

And without really great command over the business, you, you don't get there. Gary, just quick point there, um, roles and process, because again, you're talking about data integrity, how you align things, right? And so if, if you don't have that, how do you give somebody a path of growth in your organization? How do you know they're doing a good job or bad job? How do we know as a company our level of profitability and on and on and on? Yeah.

Jess, going back to Jess ma, she, uh, she had a saying that, um, that I always, that really stuck with me. And it was that if, if I ever had to fire somebody, it was my fault because I either hired the wrong person 'cause I didn't totally understand what I needed them to do, or I didn't have the proper resources and infrastructure and, and training in place or doc or more or less KPIs and expectations to help them understand what it is that I needed them to do.

And that's a, it's a failure of leadership at the end of the day. And That's extreme ownership for like, right. Thank you. We're reading that right now, which is fine. Keith, Let's wrap up this last one. I always, Wes has been last these last few weeks. I just wanna make sure he has time. Yeah. Yeah. So my last one would just be, if you're not First, you're last Wes, Go Ricky, Bobby, Hey, I'll take it, um, Automation.

Like if, if, if for the MSPs out there that are really getting started in, in automation, um, can you break it down on how, I guess like what are the areas, how do you even get started? First off? And especially for, for smaller organizations, like where are the important things to look at when getting automation going? And I wish I would've had this conversation like six years ago, by the way. Yeah. I, I wish, I wish as well. Um, there's so many, there's so many pieces to that.

Um, and the first thing, the first thing that I'll start with for let's just call them like AI curious people, people who are just curious to, to figure out like what does, what does this mean? For me, the first place to really start in terms of just looking at potential levels of impact is just looking at your ticket data and trying to get a sense like, man, how many, how many times? Like what, when I look, look at my ticket breakdown, what does this mean?

So how many password resets am I doing versus how much, how many out of scope tickets am I processing? You know, and where people are gonna be Googling stuff. So just at first, going back to data, it's just look, just look at the data and see what it tells you. Where are my, where are my opportunities?

And then for MSPs that are already set up in like PSAs and they have a little bit more detail just around, um, the concept of what, what we, we refer to as job costing, you can then pretty quickly start to do math. Like, okay, well if, if Andrew is doing all the password resets and he did a thousand password resets last month, that cost me how much money, and you can start to figure out like, oh my gosh, not just on that, not just on the efficiency side, but also thinking about gross margins.

If I was able to take him from doing a thousand of those tasks to where he only had to touch it 50 times, I mean, you've just completely freed Andrew up to do other things. So, so can I just jump in here, Andrew? I I don't want to take Wes, I know we want to get to you, but this is such an important point. People do not have command over what's happening in, in these areas of their business.

And I'll tell you, way back in the beginning, I literally got all my texts in a room with some pizza and beer one night, okay. With all the tickets we had done for like 60 days. And I gave 'em each a copy and a highlighter and said, highlight anything on here that if you knew this was gonna happen, you could have prevented it if you would've known a day before. And they highlighted them, then I handed them a red pen and said, tell me what you would do.

Then I stayed up all night with a spreadsheet, organizing them in the categories, putting them into a book. And the next day going out and seeing clients and saying, Hey, here's what we did. We analyzed all this, we saved all this. What if all those things didn't happen? All we have to do is we have to do this on a regular basis. We pay some extra a thousand a month. That's, that's, so, and we went from like a ticket and a half a month per user down to 0.2, 0.

2 tickets a month per end user Gary. And like that was with a spreadsheet and a highlighter. Okay, now we got a thousand tools we can use like to surpass that. But the concept is the same. Most people just close the tickets. They don't code 'em, they go on to the next thing and they just don't reuse work. And, and you're never gonna get secure that way, by the way. Totally. Gary, as I transition to West, again, don't forget exactly what you said.

And Bill said on the sales side, why does Salesforce, their latest research show, 78% of things that salespeople do are repeatable. This is the area where people, like, again, I come back to if you're small and, and there's been chat out there, well, we have to do this, that and the other. I get it. But the same things hold true in sales. And this is where the organizations can be very small and nimble and go, oh, well my BDRs do this 72 times a week. Okay, what if we automated that?

Could we hit this many more prospects? That's where this is headed for, as Bill said, these companies that have huge amounts of technical debt. Right? It doesn't have to be that way anymore. Wes, over to you, man. This is good stuff. Really, really good stuff. So, um, let's Bill, let's let's change direction and go up a little bit if we can. Um, talk to me about, when you look at MSPs, let's say you're an investor, right?

Whether you belong to PE or you just have some money on the side and you're looking for an investible Ms p, what's, what do you look for as signs of success to say this Ms. P that's on a growth trajectory is somebody that is got the hallmarks of being successful. What, what do you look at? Yeah, it's, it's interesting. I, there's a couple of metrics and, and whatnot that I'll, I'll talk about. But to really emphasize this, I don't care that much about the current metrics of the business.

I care about the founder and the culture. Do I think that this founder is somebody who can rethink the obvious, can look bigger than themselves, can be a team player? Or is it entirely ego driven and politically charged and, and all of these things?

And the the sad reality is most businesses, um, are businesses that like we, we actually wouldn't look to, to partner with because we think that the mindset of the team and this idea of being ready and willing to challenge and rethink what we call rethink the obvious, going back to it, um, that is the foundation of everything that we do.

And so first and foremost, we look for what we call humble visionary thought leaders that while they've built an extremely strong business on their own, fundamentally think that they could do more and they could do it better with other people. And so What, what a great isn't isn't that humble, humbleness, tenacity, vision, isn't that like a paradox of sorts? It's like the very opposite things you'd think it'd be like, oh, I know exactly where I'm going. I'm headstrong and I'm confident. Yeah.

So that brings up a question. Can culture be changed? Can, can, can we like reverse engineer and reverse course if we realize, whoa, we've been the arrogant leader for so long? Yeah, you can, um, it takes time because it's trust that we're talking about. Um, there's a, there's a saying that I love to talk with my team. Uh, trust is earned and drops and lost in buckets. And so when you think about changing something that's been comfortable, it's possible, but it takes vulnerability.

It takes really good communication. It takes owning, uh, the, once again back to vulnerability. Like if I, if I'm a founder that's gotten wrapped up in 'cause once to take a step back and normalize this, it is hard not to become a narcissist. When you're running a business, everyone's looking at you. Everyone wants you to have the answer. You start to tell yourself, if I don't have the answer, everyone's gonna freak out and lose confidence.

And those are, those are things that make it really hard to be open and authentic and just tell people, Hey, I'm having a bad day, or I don't know the answer to this. But in order to, in order to really change the culture and, and once again going into these growth-minded businesses, the, the baseline of that is communication, vulnerability and trust. And if you have those things and you can be honest and you can communicate with people, yeah, you can change.

But it, it does take significantly more time to rebuild that trust if somebody's been running in the other world for 20 years. Can you give us a peek into electric's, um, culture, kind of how you define it, how you guys have built it, things we could lean, we could glean off of? Yeah, and once again, I've been, I've been out of electric now for about three years, but I'll tell you that the, the baseline fundamentals of that culture is built off of, uh, solutions, not problems.

So like there is 1,000,001 problems that happen in a daily basis, but it's not, Hey, tell me what's going wrong. It's, Hey, tell me how we're solving these things. And going back to the idea of a growth mindset, which is fundamental to being able to continue to grow, it changes the mindset from, oh man, like we just signed 10 new customers, how are we gonna onboard them? Which is a problem to man, that's awesome. We just onboarded 10 new customers.

Like, Hey, where do we have our talent gaps right now in this process? So we need to fill immediately to go. And so everything comes down to teamwork, collaboration, like we always used to talk one team, one dream to something I really subscribe to, but so much of it was, um, be bold. Don't be afraid to fail. But going back to this idea of, of these mindsets and uh, and Andrew had said this, it's really hard to be able to take a step back sometimes when you're going.

But the biggest thing that I look for in a leader is do they, are they extremely opinionated, yet willing to change? Are they willing to go forward with a vision until somebody raises their hand and says, Hey, I think we could do this better. And they actually listen to that person versus shoot them down. And that is how you build to scale. That's awesome. That's really great words of wisdom there, I think we can all learn from.

So maybe another question for MSPs that are like, look, you know, this whole like conversation is a little uncomfortable to me of like, I'm trying to grow my business. I actually don't want to sell it. I love what I do. Um, but at the end of the day, I think the reality is we all have an end point, right? Whether that's a transition to someone else in the family, whether that's selling that thing, you know, most of us don't have the 401k that well, maybe we do, we don't have the pension.

We're not, you know, it's not like the clock in, clock out. I've done my work, I retire and off I go. We're building something for ourselves. So is there's something to learn from with this growth mindset with an exit in mind? And what would you say to MSPs that are like, I don't have an exit in mind because I'm just too enjoying, I'm enjoying what I'm doing too much. Yeah. I mean, I would make it really simple. It has nothing to do with an exit or an exit.

Do you have a responsibility to your customers to be able to maintain the same quality of standards today as I would tomorrow, if not better? And so when you think about that, that means process is everything. Fundamentals are everything. And making sure that whether it's your passing it on to your son, you're promoting your number two, you're just gonna continue to run it, but hopefully able to spend a little bit more time with your family.

'cause we all know that those Saturday fire drills are a very real thing, but at the end of the day, it comes back to the customers and the responsibility that we have. It doesn't matter if you're gonna run the business for another 20 years yourself, everything comes down with your ability to deliver consistently. Okay. That, that's good. Um, that, that's really good. So maybe the Government wants you to keep your business so you can pay 39%. Exactly. They they like ordinary income. Yep.

They they sure do. They sure. Like, uh, sales tax out of, uh, uh, capital, capital gains too though, don't they? Yeah, they Do. Uh, or capital gains tax. I mean, um, okay. So maybe, maybe last question. You know, let's also, let's step up even higher and let's just look at the whole like MSP managed service industry as a whole.

We can lump MSSP into this as well, you know, if, if we are heading into a recession, and I'm not an economist, so I won't say that we are or aren't, but you know, a lot of people have that valid concern, you know, what does that look like from your perspective? Um, what does that look like for the average MSP? Does that, do you think we'll see more consolidation?

Do you think that we'll see a higher growth in businesses as, as like others are looking to outsource rather than just in, you know, invest in that, that, that CapEx What do you think is gonna happen through this, uh, the next few years? Yeah, so I'm, I'm a doomsday kind of guy. Uh, I call, so I'm a, I'm an optimistic realist is what I like to say. And so I'll give you my TLDR version of this. I think the economy's about to get a lot worse, um, for a number of reasons.

That's going to do a number of things to us in the MSP industry. I think that consolidation will continue to go. They're MSPs for, uh, no matter how much people say that these are boring businesses, these are some of the best businesses out there today. You find a business, you find another business that does uh, call it a blended 40% gross margin, 50% gross margin on its core. Its core recurring revenue that's able to, to have really strong retention rates.

Like they just, there's not that many out there that have the stickiness of MSPs. So like there will continue to be consolidation in this space. Multiples I believe will go down a little bit and that's not due to managed service provider performance, but when the debt markets continue to tighten up economics and there's, and there's covenants that you have to sell your firstborn child, uh, you end up in breach of covenants.

It's gonna make things really difficult for a lot of people looking to do deals. And there's gonna be a lot of funky things that that start to come in. But on the actual managed services side, and I'm sure everyone in here has looked at the data back in 2008 and pretty much back all the way from the early two thousands of, as we've looked at the last two uh, down cycles, managed service providers will crush it in this market.

If they're able to maintain service quality as, as the economy gets worse, budgets are going to change for businesses. They're gonna be looking for more cost-effective options and hiring in house. And it is going to create a tremendous amount of opportunity for MSP.

It's also going to create a lot of chaos for MS P because if I'm now going once again, if I don't have any sales predictability and I'm going from thinking that I'm getting one to two leads or customers a month, all of a sudden I'm now getting four to five or even even just up from two to three. If I'm not ready to hire and train and cultivate my talent and not just my entry level talent, I need to, as I scale, be able to hire and train mid-level management.

Because if I don't do that as I scale, every single one of those customers has the ability to hurt my level to my ability to support. I think that we're gonna see a lot of service degradation in those situations and that's gonna lead to what I call the big musical chairs that's about to happen in the next two years.

And so talking about the fundamental importance of of process right now, if you invest in process today and you are able to have a repeatable and scalable process in the next 12 months, you will be able to win out in your market and you'll be able to scale and dominate. And like once again, everything comes back to trust and process. Fantastic. Love it. Um, what a great way to end Andrew. Yeah, absolutely Bill, that was unreal. Phenomenal stuff.

And Gary, can I just close, maybe you could put a FI at the top of the hour here, put a finishing dot and with what Bill just said, if you had your MSP today, not only would you be more proactive going to your existing customers, again bringing the future to the present. Hey, let me tell you, if there is a downturn in economy, what people typically do with budgets, let me tell you how that impacts threat actors. 'cause they're gonna know that people are gonna cut costs, cut corners.

And also would you be from a prospecting, making it rain going up market into companies that you know will probably outsource look for, look for organ, look for industries that fit your persona that are probably gonna cut costs in a downturn and talk to those leaders, those business leaders about hey, if we go into this type of thing, here's what typically happens with tightening IT budgets, here's where they outsource, close us out with that kind of genre of how you might Yeah, E everything you just said there, but I'll put one caveat, like if in, in assuming that we're gonna have some change in our economy that you know, having more prospects to choose from having and having stronger relationships, right?

With your current customers to be able to have those tough conversations. I've had them with people and been able to manage through a couple downturns successfully with it. But if you're ready, there will be more people that will want to do business with you. But you have to have the process, not just the service process, but you have to that have the sales process in place to be able to take advantage of it. Yeah. And by the time you realize it's happening, it's already too late.

Yeah and uh, I looked at it as for me, both the downturns that I took my MSPs through were awesome. Like I called it real estate. We were, we said logos, this is when we go get logos. As many as we can collect those logos and as things return to normalcy then the revenue and everything else just was like a tidal wave that comes behind it. That's the opportunity. Great. Alright Bill, again, thanks a million. We'll have you back. That was fantastic key. Thanks for coming on as always.

It was awesome having you. Wes here to another what, one to 2000 more to the cyber call. Let's get it. Let's get it. Thanks Gary, as always. Take care everybody. See you next week. Thanks everyone.