In the past year, not only have many of our worlds been turned upside down, but the MSP community continues to grow and mature.    The last year has brought on many new challenges forcing small businesses to innovate, perhaps more than larger businesses.  This is not because they wanted to, but because small business owners have had to pivot more quickly in order to stay in business.  With many small businesses having to innovate they heavily relied on their MSP and their knowledge of what to do.  Harry is joined by Jeff as they explore the current world as an MSP and what you should be doing moving forward.

 

Video Transcription

Harry Brelsford  0:05 

Hey, SMB Nation. Harry here back with Jeff Connally. We’re both coming to you from Austin, Texas. Just separate locations. Good morning, how you doing Jeff?

 

Jeff Connally  0:14 

 Great Harry and Good to see you, man, you’re looking quite dapper for our summer heat here.

 

Harry Brelsford  0:21 

 This is a thin fabric shirt. So that helps. Let me tell you, the Yeah, the heat is arrived. Hey, I wanted to let you know that I set a goal. At the beginning of the year to land bill, one billable hour to private equity, or VCs, as a principal analyst and trying to is we should all do recreate myself or I like to say expand what I’m capable of doing. And I met that goal in July for a midsize private equity firm. And I’m performing the technology due diligence for an acquisition of an MSP. And you know, you and I have kind of talked about this before. But give us some context on you know, where we’re at the Modern MSP why they need to be acquired. What are you seeing out there? Because it is a frenzy right now and acquisitions? Yeah,

 

Jeff Connally  1:11 

Yeah, yeah, there’s apparently just a whole lot of money recognizing our industry. And I feel like it is my industry, your industry. Yeah, we’re the father of so much of this Harry and building the tribe. And it’s growing up. And so there’s, I think there’s a lot of ready to sell owners that are hitting a stage in their life where they’re ready to move on to something else. And frankly, I think that the maturity of the industry is is calling for this back, when we were a group of independents working, break, fix and barely getting into MSP there wasn’t something there there for consolidation. Now there is, there’s a lot of clarity about the fundamental infrastructure, what it takes to be good at that. We’ve been learning over the last few years, what it takes to be good in security, got what it takes to be really good in those industries that have got some fairly rigorous regulations to pay attention to. And so now our industry is real. And it’s we’re going to see more of this, I think, the private equity guys and ultimately venture capital people, when we get into a bit of a larger space, we’re going to see a lot more activity, which will bring out even more rigor, I think more resources, and more consistency for the for the end user. And again, I’m still thinking very much about the end market being the small and medium business segment. Yeah, this morning, I was reading one brief thing before I turn it back to you. But how small businesses are innovating, perhaps more than larger businesses are take because they’ve had to these small business owners have had to pivot more quickly. And we’ve seen those that can are still with us. Many in the retail food space that couldn’t pivot are not here. And and so the lessons are pretty clear in small business, the realities harsh if you aren’t embracing, and, frankly, they’ve been hearing the message for years and years and years. And when it sent came time to send employees home to work securely from home. Many small businesses, in fact, I’ll say most small businesses weren’t really ready, although they knew what they needed to do. This last year and a half is really shown us what the MSPs are able to produce? So

 

Harry Brelsford  3:51 

yeah, a couple of takes. What is I’ll start out as a curmudgeon that about, I’ll end up as a modernist, on the convention side. You know, it goes back to the early SBS era, we really liked doing the work and getting our hands, you know, on the server and the server room are more likely to closet. And that’s still the case with a lot of my audience and SMB Nation, they don’t get super excited, I’ve had this talk with you. But you know, this idea of getting a little commission or rev share this or that. That’s that’s not what they were built for. They were built for doing the actual work and they like being small. So that’s the convergent side. Now the modern side is, unfortunately, I think there’s going to be a flight to quality in the way that looks is these MSPs are going to you know, there’ll be roll ups of little msps that are open and receptive that if you get the scale ability, you get the you know, the cool tools, you can use the automation and so that’s, you know, to your point That’s the reality. And, you know, we’re gonna lose some people along the way. They’re they, they’re either not excited about it. I’ve learned a lot about myself, you know, in this last couple of years. And that’s in part how I started the the conversation, maybe we’ll end on that is that I learned a little bit about myself in you know, the way I build SMB Nation and we rode it hard with SBS. And then we’ve been evolving and all that, it became very clear professionally, I need to expand my horizons, right? And start doing new things. I’m not stopping what we’re doing by any stretch, but we got to do new things. And it’s a look in the mirror, Jeff, it’s, it’s a look in the mirror to say, Okay, I’m going to make real change. Go ahead.

 

Jeff Connally  5:45 

No, the you use the phrase, when you’re describing your engagement with the private equity group. You use the word knowledge worker. And I think that’s been a confusion many people within our space have had for a long time they think about the doing, I need to get out and do something when it was all break fix, or I need to remediate something now that will remote or I need to make sure that the monitoring is covering all devices within the entity that I’m providing support to, and they think of the doing, and I think our industry has done this, myself included for too long. And it really what people pay for is our knowledge, knowing what to do. the doing of it is current sort of secondary, build the plan, have a plan, and then execute on the plan. But the owners of our businesses in our space, really need to embrace the idea. It’s about their knowledge. And knowing who the right providers are to use as partners, when they’re delivering their service. And understanding how to explain that to a client, not just roll up your sleeves, something broke, I’ll jump in, fix it and charge you to remediate is it’s about that long term knowledge. And I think that’s what’s sustainable. About what it is you walk, you know, you’re not walking away from the industry, neither of us but what you have, what you’ve gained along the way, is what’s really important. Understanding the space, understanding the options, understanding the risks to the client, how do we protect them from those risks?

 

Harry Brelsford  7:27 

So there we go. Make that the final word. Let’s get together and go bicycling down here in the Texas Hill Country soon and we’ll talk to you next quarter.

 

Jeff Connally  7:36 

So I just want to wait till it’s 110 degrees. Harry, I’ll be I’ll be with you in about two weeks, I think.

 

Harry Brelsford  7:40 

Yeah, there we go. Alright, keep it safe. Thanks, Jeff.

 

Jeff Connally  7:44 

You bet. See you