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Jason Henry - The channel opportunity nobody talks about · Partnerships Unraveled

• 0:04
  SPEAKER_01: Welcome back to Partnerships Unraveled, the podcast where we dive deep into the mysteries and the secrets of partnerships and the channel.
• 0:12
  SPEAKER_01: My name is Michelle.
• 0:13
  SPEAKER_01: I'm head of marketing at Chanax, and I'll be your host for today.
• 0:16
  SPEAKER_01: Now, today I'm sitting down with Jason Henry, Vice President for MSP Platform Sales at Hornet Security.
• 0:22
  SPEAKER_01: Great to see you.
• 0:23
  SPEAKER_01: How are you doing today?
• 0:25
  SPEAKER_00: I am doing great, Michelle.
• 0:27
  SPEAKER_00: That is very professionally done.
• 0:28
  SPEAKER_00: I'm impressed with that intro.
• 0:30
  SPEAKER_00: You've done this once again.
• 0:32
  SPEAKER_01: All off the top of my head.
• 0:33
  SPEAKER_01: You know, I didn't script this beforehand at all.
• 0:35
  SPEAKER_01: I just used AI to make myself sound better.
• 0:37
  SPEAKER_01: No words.
• 0:38
  SPEAKER_00: There you go.
• 0:40
  SPEAKER_01: Hey, I'm really happy to sit down with you, uh Jason.
• 0:43
  SPEAKER_01: Um, to start off with, could you tell us a little bit about yourself, your background, and a little bit about Hornet Security?
• 0:48
  SPEAKER_00: Sure.
• 0:49
  SPEAKER_00: So, Jason Henry, I am the vice president of MSP Platform Sales for the Americas for Hornet Security, which is now a wholly owned subsidiary of Proof Point.
• 1:00
  SPEAKER_00: So we were part of an acquisition, but towards the end of last year, I came in in January to help lead and grow our Americas business.
• 1:08
  SPEAKER_00: So Hornet Security traditionally is a EMEA-based business, really 100% focused on the MSP business.
• 1:16
  SPEAKER_00: And of course, everyone knows who uh ProofPoint is, one of the largest cybersecurity uh companies in the world.
• 1:21
  SPEAKER_00: And they um had a they've had a business for SB and MSP traditionally, but it really has never been a focus for Proof Point.
• 1:31
  SPEAKER_00: And so as part of this acquisition, what we're really doing is making MSP and SMB a true focus of Proof Point.
• 1:39
  SPEAKER_00: So that's why I'm excited to be here.
• 1:40
  SPEAKER_00: My background, I've been in technology services, leadership, sales leadership, partnership building for the better part of three decades.
• 1:49
  SPEAKER_00: Now, I'd say I'm probably a little bit unique for this role in that my background has been on the enterprise side.
• 1:56
  SPEAKER_00: That's where I've spent uh the last several decades is building businesses, sales teams, partnerships in the last 10 years or so really focused in the hyperscalers in the cloud space.
• 2:08
  SPEAKER_00: So building uh AWS ecosystems, GCP ecosystems, Microsoft ecosystems, and then all of those ancillary solutions around that that you would expect, like a Databricks or Snowflake, et cetera.
• 2:19
  SPEAKER_00: I came here because I think it's a really, really exciting time for SMBs.
• 2:24
  SPEAKER_00: And I think there's so much change happening in the MSP space.
• 2:28
  SPEAKER_00: And then if you think about where their growth is, in my opinion, where growth and change is going to happen, it's gonna be in the SMBs with the technology changes that were that are going on right now.
• 2:40
  SPEAKER_00: It is a really cool time to be launching new businesses, new small businesses.
• 2:44
  SPEAKER_00: And it's a really cool time to be delivering services to them.
• 2:47
  SPEAKER_00: So when I saw this opportunity, it really ticked a lot of boxes for me.
• 2:51
  SPEAKER_00: One, let's build something really cool from scratch, a pure channel business for the MSPs with a platform that's tailor-made and built with the backing of a company like Proof Point.
• 3:03
  SPEAKER_00: So super excited.
• 3:04
  SPEAKER_00: Uh, I think it's a great time.
• 3:05
  SPEAKER_00: And I'm just looking forward to learning and the challenges.
• 3:08
  SPEAKER_00: And I think it's going to be fun over the next year or two years.
• 3:11
  SPEAKER_01: Yeah, no, it sounds like an incredible challenge.
• 3:13
  SPEAKER_01: And I'd like to dive into that right off the get-go, right?
• 3:16
  SPEAKER_01: So you started in January, which, like at the pace of change right now, you've basically been there for 20 years, right?
• 3:24
  SPEAKER_01: It'll probably feel like.
• 3:26
  SPEAKER_01: Um, but you just mentioned you're building this MSP motion from scratch.
• 3:30
  SPEAKER_01: When you're launching something like this, something with this level of ambition and relevance, especially when you take into account Hornet Security's massive partner base, what do you prioritize, prioritize first?
• 3:41
  SPEAKER_01: Why do you prioritize what you prioritize?
• 3:43
  SPEAKER_00: Two things.
• 3:44
  SPEAKER_00: Uh, one, it's our folks, so our people.
• 3:48
  SPEAKER_00: And then the second is our partners and customers.
• 3:51
  SPEAKER_00: So what I've been doing in the first 90, 100 days is one, really trying to talk to our top partners, first of all, get their feedback.
• 4:02
  SPEAKER_00: What are we doing really well?
• 4:04
  SPEAKER_00: What are they excited about with this new partnership, with this new Hornet Security Improved point and the new products that we're launching?
• 4:11
  SPEAKER_00: What are they excited about that?
• 4:12
  SPEAKER_00: And what are they expecting from us?
• 4:14
  SPEAKER_00: Right.
• 4:15
  SPEAKER_00: So um, you know, when we think about building a channel, and if there hasn't been a full channel in that space before, they've made it work for the last number of years already.
• 4:26
  SPEAKER_00: So now that it's available, what's new and what can we put on, right?
• 4:31
  SPEAKER_00: So those are the conversations that are having.
• 4:33
  SPEAKER_00: And then from that, we take a look at how are we gonna build our organization to support that channel?
• 4:39
  SPEAKER_00: And uh, where do we need to pivot?
• 4:41
  SPEAKER_00: Where do we need the right type of skill set and getting my team and everybody in the Americas super excited about that mission because it's not gonna be easy?
• 4:51
  SPEAKER_00: It's not gonna be rainbows and puppy dogs every single day.
• 4:54
  SPEAKER_00: There's gonna be hard stuff that we have to figure out.
• 4:56
  SPEAKER_00: But I think if we're excited about it and we have the right people and we have the right partners, then this is gonna be something really cool.
• 5:03
  SPEAKER_00: What I'm finding is that our partners are really excited.
• 5:06
  SPEAKER_00: And that's the great thing is that Hornet and Proof Point have partners and customers that are really involved into the mission.
• 5:18
  SPEAKER_00: They want to see help, they want us to succeed.
• 5:20
  SPEAKER_00: They're really excited about what we're able to deliver and what we're gonna be able to deliver in the future.
• 5:24
  SPEAKER_00: And so once you have that, that actually makes a lot of things a lot easier.
• 5:28
  SPEAKER_01: It's great to start on a foundation of a strong mutual relationship because I think that's where a lot of channel building really runs into challenges when you talk to companies who have not traditionally had a channel first motion where they try to re-engage their partners in a different way, but the partners are so used to kind of being an afterthought that that becomes a blocker for them.
• 5:50
  SPEAKER_01: But indeed, if you have the relationship, then building the framework around it is I wouldn't say easy in any way, but easier to do than if you're completely starting from scratch, also re-engaging with partners, getting them excited about working with you in the first place, right?
• 6:04
  SPEAKER_00: Yeah, absolutely.
• 6:05
  SPEAKER_00: The partners that we have that I've been able to talk to, they they've given us, they've given me personally the best advice that I've had.
• 6:13
  SPEAKER_00: Hey, this is this is what you can really do to help us.
• 6:16
  SPEAKER_00: This is what we're hearing in the marketplace, this is what customers are trying to do.
• 6:20
  SPEAKER_00: This is where the MSP market is going.
• 6:23
  SPEAKER_00: So I think that's that's been great.
• 6:24
  SPEAKER_00: That's been the best part.
• 6:25
  SPEAKER_00: And then we've got, I've been able to already put together a team of really, really strong leaders that have decades of experience in the space.
• 6:33
  SPEAKER_01: Yeah, I think it's super valuable.
• 6:35
  SPEAKER_01: And this this term I keep humming, I hear come up more and more is moving from MSP to MIP, so managed intelligence provider.
• 6:44
  SPEAKER_01: And obviously, like it's a buzzword, but it does say something because I feel like understanding that your MSP network and your SMB partners are also your boots on the ground, your ears and eyes in the market is so incredibly valuable.
• 6:57
  SPEAKER_01: They should be, they should feel like an extension of your organization, bit.
• 7:01
  SPEAKER_00: Yeah, I I love that term.
• 7:02
  SPEAKER_00: And I think that the MSP providers that make that pivot successfully are really going to be the ones that are going to win in this new economy, AI, token economy, call it whatever you want that's coming down the pipe.
• 7:19
  SPEAKER_00: I, you know, when you my background in the enterprise space, you have big consulting companies that are that are always going out and they're giving opinions about what's going to happen in the market.
• 7:31
  SPEAKER_00: They're talking to CEOs, they're talking to CFOs.
• 7:34
  SPEAKER_00: In the SMB space, you really don't have that, right?
• 7:37
  SPEAKER_00: And I think that in a lot of ways, our MSPs are the ones that are going to need to be filling that that void.
• 7:44
  SPEAKER_00: Our MSPs are the ones that are talking to founders, they're talking to CEOs of small businesses, and they need to give thought leadership back.
• 7:53
  SPEAKER_00: Like that thought leadership is really important.
• 7:56
  SPEAKER_00: So I think the pivot that MSPs are going to need to make is they're going to have to become business consultants as much as anything else.
• 8:05
  SPEAKER_01: No, I I completely agree.
• 8:06
  SPEAKER_01: I love that perspective.
• 8:08
  SPEAKER_01: And it's bringing things together and taking the MSP and the SMB more seriously, I would say, right?
• 8:15
  SPEAKER_01: Because there is so much value in volume and volume in value, right?
• 8:20
  SPEAKER_01: And I think it's super important.
• 8:21
  SPEAKER_01: Now, something did come to mind just now, and we we talked about what you would prioritize building something like this, but what are things you're purposefully leaving for later, if I can just throw that at you?
• 8:32
  SPEAKER_00: Yeah, that's a great question.
• 8:34
  SPEAKER_00: I think for us, we really have to look at how do we support the channel today, right now.
• 8:40
  SPEAKER_00: Uh so you know, we're in the midst of launching a whole new um cybersecurity platform, uh, Total Protection 365.
• 8:50
  SPEAKER_00: Um, that's a sea change from where we have been before.
• 8:53
  SPEAKER_00: So right now, that's the most important thing is to make sure that we are enabling our channel sellers.
• 9:02
  SPEAKER_00: We are enabling our customers, we're enabling our MSPs so that they know what that's coming, that's coming down the pipe.
• 9:09
  SPEAKER_00: Beyond that, we are looking at long-term.
• 9:13
  SPEAKER_00: What do I want to see out of my business in the next year, 18 months, two years?
• 9:19
  SPEAKER_00: And just like everybody else, we're looking at how can AI be a part of that?
• 9:24
  SPEAKER_00: How can I take, how can I AI enable certain processes and utilize that not so that we're moving people out of things, but we're allowing people to be more strategic.
• 9:36
  SPEAKER_00: So, you know, what are the repetitive tasks that we can use an agent for so that my partner account managers can spend more time having strategic conversations with MSPs?
• 9:48
  SPEAKER_00: No one should be spending 40 hours building a QBR deck anymore, right?
• 9:55
  SPEAKER_00: That deck can be built in an hour with in Anthropic, right?
• 10:01
  SPEAKER_00: Spend the rest of those four days on the strategic part of that QBR, on making sure that we understand what the go-to-market is with our strategic partners.
• 10:11
  SPEAKER_00: All of those tasks, I think, those are the kind of things that I'm looking at down the road, is how do we use internally my business so that because if we can become as operationally efficient as possible, that allows us to support our channel better.
• 10:27
  SPEAKER_01: Yeah, I fully agree.
• 10:28
  SPEAKER_01: And I think the entire topic of AI, it's it's almost as if every week I have a conversation about that.
• 10:34
  SPEAKER_01: The the perspective changes slightly.
• 10:37
  SPEAKER_01: Um, and I have to be absolutely honest, I'd love to hear your thoughts on this as well.
• 10:40
  SPEAKER_01: Like I was hesitant to dive much deeper into AI because there's always this kind of nagging fear in my mind, and this is just my personal opinion, where it's like, oh, at one moment, like, will I become obsolete?
• 10:53
  SPEAKER_01: But at one moment, I kind of took that plunge, right?
• 10:55
  SPEAKER_01: And I thought, let's try to figure some stuff out with Claude.
• 10:59
  SPEAKER_01: And working together with this system, it almost felt like I was being more innovative and more creative than I had been before, streamlining the ways I worked, exactly like you just mentioned.
• 11:10
  SPEAKER_01: We don't need to spend a week on building QBR decks.
• 11:13
  SPEAKER_01: We need to start to think about what the value is of these QBRs and how we can drive stronger relationships.
• 11:18
  SPEAKER_01: So I think that's also a mindset change where it's like stop seeing AI as this complicated thing that's hanging over us, but start using it as a value accelerator to get to doing what you actually want, right?
• 11:33
  SPEAKER_00: Yeah, that's absolutely right.
• 11:34
  SPEAKER_00: I've been extremely fortunate this week to be able to spend time with one of our largest distribution partners, several of their largest MSPs, some of our other cybersecurity vendors, all in a room talking about their executives, their senior executives, the MSP senior executives.
• 11:53
  SPEAKER_00: And we really spent the day talking about what does transformation look like in the MSP space and the SB space over the next not three years, but a year.
• 12:03
  SPEAKER_00: What is that going to look like?
• 12:04
  SPEAKER_00: And AI is going to be a huge part of that.
• 12:11
  SPEAKER_00: Personally, you know, and this is just my opinion, I think that AI is going to have a bigger impact in the S and B market than it will in the uh enterprise market.
• 12:21
  SPEAKER_00: And the reason I say that is because it's going to allow small businesses to do more than they ever could with fewer resources, right?
• 12:30
  SPEAKER_00: And when we think about what's going on in the MSP space, that is going to be massive.
• 12:36
  SPEAKER_00: It's going to be a massive change, a huge and it's not disruption, it's transformation, right?
• 12:42
  SPEAKER_00: And the companies that are successful in that transformation, they're going to be the ones that win in the future.
• 12:48
  SPEAKER_00: Um, and I think that's really, really important.
• 12:49
  SPEAKER_00: I think it's really exciting to me to be part of that.
• 12:54
  SPEAKER_00: And so I'm thinking about how how are we gonna fit into that?
• 12:57
  SPEAKER_00: How is Proof Point gonna fit into that?
• 12:59
  SPEAKER_00: And how is our MSP platform gonna fit into that transformation going forward?
• 13:03
  SPEAKER_00: How can we part be part of that and lead the wave?
• 13:06
  SPEAKER_00: How can we ride that wave with everybody else?
• 13:10
  SPEAKER_00: And you know, you talk about what's in it for the MSPs.
• 13:13
  SPEAKER_00: Well, you know, there's a lot of consolidation going on in our industry right now.
• 13:17
  SPEAKER_00: If you just think about one thing, the people that do that right are gonna have a valuation here, and the people who ignore it are gonna have a valuation here, right?
• 13:27
  SPEAKER_00: That consolidation is gonna still happen, but there's gonna be a lot of value in there's gonna be companies that they're not, they're just gonna say, you look, it's too hard, I don't want to do it.
• 13:38
  SPEAKER_00: Their valuation is gonna be very low, and it's gonna be a bargain for somebody who's then gonna take that same organization, make that transformation, and that just blow that valuation up.
• 13:47
  SPEAKER_00: So I think it's really, really cool.
• 13:50
  SPEAKER_00: But again, we talked about what does it mean for the MSP.
• 13:55
  SPEAKER_00: I think MSPs really become true business consultants.
• 14:01
  SPEAKER_00: Yeah, because we've got to be able to lead uh from the front, we've got to be able to bring that value.
• 14:06
  SPEAKER_00: And I think that small businesses are gonna turn to the MSPs and say, okay, deliver agents for me, right?
• 14:12
  SPEAKER_00: Manage a manage service for 20, 30 agents that are helping to run my business.
• 14:19
  SPEAKER_00: I think that's the future.
• 14:20
  SPEAKER_01: Yeah.
• 14:20
  SPEAKER_01: So then I have to ask with MSPs changing rapidly, distributors changing rapidly, obviously vendors also changing rapidly, responding through the threat landscape, but also to consumer and customer demand.
• 14:34
  SPEAKER_01: What do MSPs expect from companies like Hornet Security in this age of rapid consolidation, AI challenges, opportunities?
• 14:43
  SPEAKER_00: Well, I think the threat landscape becomes more complicated, a lot more complicated.
• 14:47
  SPEAKER_00: Right.
• 14:47
  SPEAKER_00: And so the things that they're going to look to for companies like us from a cybersecurity perspective is that one, we understand the AI threat.
• 14:56
  SPEAKER_00: We also understand the AI opportunity.
• 14:58
  SPEAKER_00: So all of our products becoming more and more embedded with AI, uh, agentic frameworks.
• 15:04
  SPEAKER_00: But at the same time, we have to understand where the threats from AI come from, right?
• 15:09
  SPEAKER_00: They become threats become much, much more sophisticated with the use of AI, and we need to be on the forefront.
• 15:14
  SPEAKER_00: The good thing is with uh Hornet Security and with Proof Point, we are on the forefront of that.
• 15:18
  SPEAKER_00: So I think that's really cool.
• 15:20
  SPEAKER_01: Yeah, no, I I love it.
• 15:22
  SPEAKER_01: And I think it's almost as if we have to do this together, because otherwise we're all screwed, right?
• 15:29
  SPEAKER_01: Because the the the threat, but also the opportunity comes from every angle, right?
• 15:33
  SPEAKER_01: It comes from the consumer space, it comes from the enterprise space, it comes from partners, it comes from vendors.
• 15:38
  SPEAKER_01: And figuring out this new paradigm together, I think becomes essential to success.
• 15:45
  SPEAKER_01: And that's something I'd like to hear your thoughts about, basically honing in on channel strategy when it comes to distributors, right?
• 15:52
  SPEAKER_01: I mean, we talked about this during our prep call, like building channel first go-to-market motion.
• 15:57
  SPEAKER_01: Some companies hire dozens of extra channel sales specialists to hit their scale, right?
• 16:02
  SPEAKER_01: Other companies look to their distributor relationships to increase reach, which it sounds like uh you're doing quite effectively.
• 16:08
  SPEAKER_01: So, yeah, they're a big driver for you.
• 16:10
  SPEAKER_01: But driving distributor-led success relies on so many factors.
• 16:13
  SPEAKER_01: So, my question is this how do you ensure that your distributor-driven sales strategy is sustainable, results focused, but also resilient to these kinds of changes?
• 16:23
  SPEAKER_01: Because there's so many layers.
• 16:24
  SPEAKER_00: Yeah, that's a great question.
• 16:26
  SPEAKER_00: You know, one of the things that I'm finding too is that not every distributor needs the same things from us, right?
• 16:33
  SPEAKER_00: Some distributors want us to be very, very directly involved with their sellers, with their sales teams, co-selling, co-developing, talking to customers together.
• 16:45
  SPEAKER_00: Others don't.
• 16:46
  SPEAKER_00: You know, others want us to be to have a marketing focus, to have a go-to-market, to be strategic with them from a product perspective, but they they their sales teams will handle everything.
• 16:58
  SPEAKER_00: And we have to build that flexibility into those models so that we know that we're not going to be one size fits all to every distributor.
• 17:06
  SPEAKER_00: The other thing is change is going to happen to the distributors as much as to the MSPs.
• 17:14
  SPEAKER_00: And so what does that mean for us from a channel perspective this year, next year, three years from now?
• 17:20
  SPEAKER_00: It's a little difficult to say.
• 17:22
  SPEAKER_00: I think the biggest thing is what are the distributors, uh what's their specific value gonna be in this new world?
• 17:30
  SPEAKER_00: And then and then understanding, okay, where is our pivot in there and how do we how do we continue to provide that value from a marketplace perspective, et cetera?
• 17:38
  SPEAKER_00: Staying, I think, connected to the MSPs as much as possible, because at the end of the day, they're gonna decide where where the value is.
• 17:48
  SPEAKER_01: Yeah.
• 17:49
  SPEAKER_01: I love that perspective.
• 17:50
  SPEAKER_01: And it's it's almost like the Distys need to figure out how to be the most weatherproof umbrella within this industry, right?
• 17:57
  SPEAKER_01: They they really need to figure out how to, again, build that web and and connect effectively with their vendors, but also with their MSPs.
• 18:04
  SPEAKER_01: And what I do love, by the way, is I sometimes speak to MSPs as well, uh as well, outside of this podcast, and I hear so much excitement.
• 18:13
  SPEAKER_01: And it's something that makes me makes me incredibly happy to hear them say, look, I'm suddenly able to streamline my internal processes that used to cost me a lot of headaches, right?
• 18:22
  SPEAKER_01: And a lot of head space.
• 18:24
  SPEAKER_01: Now I can streamline that and start to focus on the products and the landscape, and I'm seeing so many opportunities arise, especially in cybersecurity, by the way, which is just the market's going crazy right now, right?
• 18:34
  SPEAKER_01: In a good way, where they can jump in and focus and refocus.
• 18:39
  SPEAKER_01: And I don't know, it just it heartens me to see MSPs kind of embracing this change and moving forward.
• 18:44
  SPEAKER_01: But I think as vendors, we need to listen, right?
• 18:47
  SPEAKER_00: Right, exactly.
• 18:48
  SPEAKER_00: I mean, it's an exciting time.
• 18:51
  SPEAKER_00: It really is.
• 18:53
  SPEAKER_00: I know you know there are people that that will tell you that AI is going to completely change humanity and all these things.
• 18:59
  SPEAKER_00: I don't know if I'm there yet.
• 19:00
  SPEAKER_00: I don't know if I'm I'm I don't know if I'm quite quite to that point, but I do believe I I and I was thinking about this yesterday.
• 19:09
  SPEAKER_00: I've been through essentially the launch of the internet.
• 19:13
  SPEAKER_00: I've gone been around for distributed computing servers, cloud.
• 19:20
  SPEAKER_00: I was through all that.
• 19:21
  SPEAKER_00: The launch of ERPs, SaaS, cell phones, right?
• 19:26
  SPEAKER_00: In my lifetime.
• 19:28
  SPEAKER_00: And I do honestly believe that social media, I do believe that AI is probably going to be the thing that is the most transformative of all of those changes, all of those technology uh waves.
• 19:42
  SPEAKER_00: I do believe that, that AI will have the biggest impact, more than even the internet, which is kind of crazy to say, but I do believe that.
• 19:50
  SPEAKER_01: Yeah, I I think I agree.
• 19:52
  SPEAKER_01: And and at the risk of sounding stupid by over-generalizing, I think the the reason why I see Yeah, yeah, I'll cut this out.
• 20:00
  SPEAKER_01: I'll cut this out.
• 20:01
  SPEAKER_01: No, I I think at the risk of overgeneralizing, I think if you look at something like the internet, which had a massive impact on us as society, what if you drill it down to the fundamentals, it made things faster and easier, right?
• 20:12
  SPEAKER_01: Things we already did faster and easier, made accessing things, sharing things, doing certain types of work faster and easier.
• 20:18
  SPEAKER_01: But I think AI, there's a black box to it that makes it incredibly exciting that we simply we can't comprehend where it's going.
• 20:27
  SPEAKER_01: The pace of change is so fast, but the pace of innovation is as well.
• 20:30
  SPEAKER_01: And that's what I'm most excited and slightly scared about to see where that where that really goes.
• 20:36
  SPEAKER_01: And I think that actually dovetails nicely into something I wanted to ask you around forecasting and measuring stuff in this age of crazy change.
• 20:46
  SPEAKER_01: You you come from a large enterprise background, you mentioned working with hyperscalers, large enterprise sales environments.
• 20:53
  SPEAKER_01: And I mean, I've been in those environments as well.
• 20:56
  SPEAKER_01: I know how important and strict forecasting is, measuring, they're all foundational disciplines and foundational systems.
• 21:04
  SPEAKER_01: But then you look at MSPs, and they sometimes describe their space as more variable and sometimes hard to forecast.
• 21:11
  SPEAKER_01: So, what I want to do with you is figure out how we can marry these two perspectives, basically.
• 21:16
  SPEAKER_01: So, what metrics do you believe every MSP channel business should be able to forecast, and where is their space for flexibility?
• 21:23
  SPEAKER_00: Yeah, and there's another complexity on top of that too, because there's so much variability in the MSPs in the SMB market because they're, you know, they're they're serving SMBs, and then there's a channel on top of that, right?
• 21:34
  SPEAKER_00: So a distributed channel go through, right?
• 21:36
  SPEAKER_00: Um and I and I think there's a couple things.
• 21:39
  SPEAKER_00: One, churn is is always going to be there.
• 21:41
  SPEAKER_00: It's gonna be, it's part of our business.
• 21:43
  SPEAKER_00: Okay.
• 21:44
  SPEAKER_00: You have to be able to accurately measure churn, at least on a quarterly basis, right?
• 21:50
  SPEAKER_00: And there are predictors for that.
• 21:52
  SPEAKER_00: There are certainly ways to do it.
• 21:53
  SPEAKER_00: There's also ways to influence it.
• 21:55
  SPEAKER_00: And I think that's predictable and measurable.
• 21:57
  SPEAKER_00: So churn is one, probably one of the most important.
• 22:00
  SPEAKER_00: And the other is so NAR and ARR, you need you have to be able to predict those as well.
• 22:07
  SPEAKER_00: While there's variability in those things, you should be able to use historics.
• 22:14
  SPEAKER_00: You should also be able to use standard pipeline development practices.
• 22:19
  SPEAKER_00: What is our pipeline?
• 22:20
  SPEAKER_00: What is our conversion rate?
• 22:22
  SPEAKER_00: What is our conversion rate from, say, trials to new customers?
• 22:26
  SPEAKER_00: All of those things are predictable.
• 22:29
  SPEAKER_00: Those are things that AI is really good at as well.
• 22:32
  SPEAKER_00: Yep.
• 22:32
  SPEAKER_00: As predicting those things.
• 22:34
  SPEAKER_00: Where it becomes challenging and complicated is you're dealing with large numbers of large bits of data.
• 22:43
  SPEAKER_00: So it's a lot of different data points and historicals.
• 22:47
  SPEAKER_00: If you you were just to take, say, one month, a snapshot in time, it would be really difficult to predict that, to forecast that, right?
• 22:57
  SPEAKER_00: But once you have built out your model and you really understand, say, what is your book-to-bill process?
• 23:05
  SPEAKER_00: How long does it take from the first time that you speak to a customer?
• 23:10
  SPEAKER_00: What is what's that timeline?
• 23:12
  SPEAKER_00: What's that process?
• 23:14
  SPEAKER_00: Um, what is your expected conversion rate?
• 23:17
  SPEAKER_00: Um what is, and then how long does it take from someone to sign up as a new partner to first dollar?
• 23:26
  SPEAKER_00: Once you've built all that process out, and again, we're still figuring it out here, Hornet Security is 20 years, and these things are we're still getting better and better at, right?
• 23:36
  SPEAKER_00: But once you have those things built out, that model, you can actually predict this business.
• 23:41
  SPEAKER_00: Um, you know, I I think a lot of people say, well, it's S and B, you know, there's a lot of change, there's too many things.
• 23:47
  SPEAKER_00: You really can't.
• 23:48
  SPEAKER_00: I don't believe that.
• 23:49
  SPEAKER_00: I believe every business can be predictable.
• 23:51
  SPEAKER_00: And when you get into the world of, say, private equity, like we are, you definitely need to be able to do that.
• 23:57
  SPEAKER_00: And I do believe that you can predict this business like any other business within, say, 3% to 5% on a quarterly basis.
• 24:04
  SPEAKER_00: But you have to really understand the business, right?
• 24:07
  SPEAKER_00: And the good thing about where I'm at here is there are people like Daniel Blank, the CEO, who has been in this business, built this business up for the last couple of decades.
• 24:17
  SPEAKER_00: Daniel knows this business extremely well.
• 24:19
  SPEAKER_00: And he has put the mechanisms in place so that we are able to predict the business.
• 24:24
  SPEAKER_00: But it does take making sure that we have really clean data and that we stay on top of that.
• 24:29
  SPEAKER_00: Now, for me, the next phase of that is okay, let's take all of these data points, right?
• 24:36
  SPEAKER_00: How can we put these in a database or a data lake and then add AI on top of that and be able to measure that out?
• 24:44
  SPEAKER_00: In my opinion, you should be at some point, we should be able to measure this business out a year, 18 months out pretty accurately.
• 24:50
  SPEAKER_01: Yeah.
• 24:51
  SPEAKER_01: And I also think that there's just value in the fact that you're working with big numbers, right?
• 24:55
  SPEAKER_01: Because numbers are the weak.
• 24:58
  SPEAKER_01: Yeah, because if you if you have that variability in single instances, it kind of evens out when it comes to the the the mean, the median, you know.
• 25:07
  SPEAKER_01: Um and I think that's super valuable to be at least be able to see based on so many data points where kind of where are the gaps in the value chain.
• 25:15
  SPEAKER_01: Like what do we need to focus on?
• 25:17
  SPEAKER_01: Hey, do we see trends when it indeed comes to like trial to paid customer conversion or things like that?
• 25:23
  SPEAKER_01: It's so much easier to do when you have 10,000 partners as opposed to 10.
• 25:28
  SPEAKER_00: Exactly.
• 25:29
  SPEAKER_00: Exactly.
• 25:30
  SPEAKER_00: And that's something that we are very fortunate is to have a large enough base of business that we can be pretty predictive.
• 25:36
  SPEAKER_01: Yeah, exactly.
• 25:37
  SPEAKER_01: And it's funny, I used to do this, it's almost like a parlor trick when I was at like SKOs for the large corporate that I worked for to show the sales teams the value of working together, where I would have a jar of gumballs on stage and I would ask everybody individually to tell me how many gumballs were in the jar.
• 25:55
  SPEAKER_01: And then at the end, I'd show them like, hey, I had one person say, let's say there were 250 in the jar.
• 26:00
  SPEAKER_01: So one person would say 700, and another person would say 50.
• 26:04
  SPEAKER_01: But if you add them all together and divide them by the total, you get scarily close to the actual number of gumballs.
• 26:10
  SPEAKER_01: And it's such a like a visual and almost visceral way to show people like you might all have different ideas individually, but when we come together, we're gonna hit that sweet spot.
• 26:19
  SPEAKER_01: And I think it's the same with uh the again, the value of volume in MSPs and the SMB.
• 26:25
  SPEAKER_00: Awesome.
• 26:25
  SPEAKER_00: Absolutely.
• 26:26
  SPEAKER_00: Absolutely.
• 26:27
  SPEAKER_01: Before I ask you for your final words of wisdom, we do always ask our guests to nominate the next guest on this podcast.
• 26:34
  SPEAKER_01: Who do you think we should have next, Jason?
• 26:36
  SPEAKER_00: So I've actually got a twofer for you.
• 26:38
  SPEAKER_00: So I've got two.
• 26:40
  SPEAKER_00: So uh the first is Nadav Shinniker.
• 26:43
  SPEAKER_00: So Nadav is the CEO of Vercom.
• 26:45
  SPEAKER_00: Do you know Nadav?
• 26:47
  SPEAKER_01: I I think I've heard his name in the ether, but uh not personally.
• 26:51
  SPEAKER_00: Great guy.
• 26:52
  SPEAKER_00: Really loves the space.
• 26:54
  SPEAKER_00: He's building out some really cool stuff there.
• 26:56
  SPEAKER_00: Definitely somebody you should reach out to.
• 26:58
  SPEAKER_00: He's somebody that I look to to get what is really happening in the MSP space.
• 27:05
  SPEAKER_00: And he's somebody that's really helped me to understand: look, this is what we really need from a channel partner in the space.
• 27:10
  SPEAKER_00: So Nadab is great.
• 27:12
  SPEAKER_00: Uh the next one is Andy Rose.
• 27:14
  SPEAKER_00: Andy is the chief growth officer for Clear Scale.
• 27:19
  SPEAKER_00: Uh Andy and I go back um, wow, probably 20 years at this point.
• 27:25
  SPEAKER_00: And Andy is probably the person that I know who is the most successful and best uh person to develop partnerships for the hyperscalers.
• 27:39
  SPEAKER_00: Uh so she's an absolute expert there, understand what that takes, which is pretty difficult and pretty uh pretty specialized.
• 27:46
  SPEAKER_00: Andy's fantastic.
• 27:47
  SPEAKER_00: Um, can't speak more highly of her.
• 27:50
  SPEAKER_01: I'd love that.
• 27:50
  SPEAKER_01: I'd love to pick her brain on that because that's something I hear coming back over and over.
• 27:54
  SPEAKER_01: Like it's such a complicated market to enter, you know, the hyperscaling.
• 27:58
  SPEAKER_00: She's done it multiple times.
• 27:58
  SPEAKER_00: She's done it multiple times in multiple places successfully.
• 28:01
  SPEAKER_01: Awesome.
• 28:02
  SPEAKER_01: I hope she can share her secrets.
• 28:03
  SPEAKER_01: That's wonderful.
• 28:04
  SPEAKER_01: Jason, to wrap this up, do you have any final insights, tips, or tricks that you'd like to share with the audience?
• 28:10
  SPEAKER_00: The only thing I would say is, you know, just something as a sales leader, whether it's in the MSP space, whether it's mid-market, whether it's in the enterprise, I think the thing that I've learned over the years is that the most important thing is to believe in our people, believe in your team.
• 28:31
  SPEAKER_00: Build great teams, support great teams, and build the next the next leaders.
• 28:37
  SPEAKER_00: If you're doing that successfully, I think you'll always be successful.
• 28:42
  SPEAKER_01: I love that.
• 28:43
  SPEAKER_01: I've I have nothing to add.
• 28:44
  SPEAKER_01: I completely agree.
• 28:45
  SPEAKER_01: Jason, thanks so much for sharing your thoughts and taking the time to speak with me.
• 28:49
  SPEAKER_01: And uh you, dear listeners, thanks for tuning in and see you in the next episode.
• 28:53
  SPEAKER_01: Thanks for Jason.
• 28:55
  SPEAKER_00: Thanks.