Latest / Partnerships Unraveled / Adam Winston - Balancing Vision & Execution in Cybersecurity

Transcript

Adam Winston - Balancing Vision & Execution in Cybersecurity · Partnerships Unraveled

• 0:05
  SPEAKER_00: Hello and welcome back to Partnerships Unraveled, the podcast where we dive deep into the mysteries and secrets of partnerships and the channel.
• 0:13
  SPEAKER_00: My name is Michelle.
• 0:14
  SPEAKER_00: I'll be your host for today, and I'm excited to sit down with Adam Winston from WatchGuard.
• 0:20
  SPEAKER_00: Adam, how are you this early, early, early morning?
• 0:25
  SPEAKER_01: It's not bad.
• 0:25
  SPEAKER_01: 24-7, you know, 7 a.m.
• 0:27
  SPEAKER_01: is not the worst time to get started.
• 0:29
  SPEAKER_01: So, you know, not super early for me, but I appreciate it.
• 0:33
  SPEAKER_01: Glad to be here.
• 0:34
  SPEAKER_00: Amazing.
• 0:35
  SPEAKER_00: Hey, um, the first thing I want to start off with is just a little bit about you.
• 0:38
  SPEAKER_00: You've had a storied career.
• 0:40
  SPEAKER_00: You have an interesting background.
• 0:41
  SPEAKER_00: Could you give us a little bit of an introduction?
• 0:44
  SPEAKER_01: Yeah, I think, you know, by way of starting a company, I think a lot of people would sort of say, you know, what was your sort of secret?
• 0:50
  SPEAKER_01: What was the success, you know, arc?
• 0:52
  SPEAKER_01: Uh, and I guess out of school, the idea was that I started a company with no particular vision in mind, just something around the realm of IT and cybersecurity, and you know, doing cold calls on my parents' carpet to try to start to get revenue for that company with no product, no service, and a computer science degree that was barely, not even the certificate had shown up yet.
• 1:13
  SPEAKER_01: And so the the idea is that several years later, you know, there was there was you know something to be proud of than the fact that we'd kind of grown to you know 25 people.
• 1:22
  SPEAKER_01: We had around 12 million dollars a year uh in in revenue, and we did it without borrowing a dollar, we did it without any type of you know magical product, right?
• 1:32
  SPEAKER_01: And this became, I don't know, I guess, what people would call the MS fee space or what people would call resale, right?
• 1:38
  SPEAKER_01: Uh but the idea that you you could very much run a very successful business just doing that.
• 1:42
  SPEAKER_01: Now you you also run into a lot of different challenges there, right?
• 1:46
  SPEAKER_01: There's this sort of very difficult step between$0 and$12 million, and that is having to partner with some of the uh biggest, scariest, most, you know, uh, I don't, you know, selective uh partner companies in the world, which are software and hardware companies that are pretty choosy in terms of who they pick as their partners, right?
• 2:06
  SPEAKER_01: They have the world's global service providers, they have you know giant companies like IBM and all the good contracts either go direct or they go through those partners.
• 2:14
  SPEAKER_01: And if you're a little guy with no clients, they're kind of like, what?
• 2:17
  SPEAKER_01: You want to, you know, you can have a partnership.
• 2:19
  SPEAKER_01: Here's a little piece of paper.
• 2:20
  SPEAKER_01: Call me when you sell something and I'll try to take it from you, right?
• 2:23
  SPEAKER_01: And so the the navigating of the of the just this big pressure to be like, okay, well, people are wanting to are asking for and trying to buy the best, but they're also buying it from the biggest, right?
• 2:34
  SPEAKER_01: You have this other aspect that like there's a bunch of other vendors out there, many of which are startups, maybe their start their software doesn't really work.
• 2:41
  SPEAKER_01: So there's this huge kind of balancing act you have to do with just picking partners, picking a story, and then getting people, frankly, to trust you uh over the phone, which is incredibly difficult when you're you know a 24-year-old kid with not a single other reference customer in the world, right?
• 2:55
  SPEAKER_01: So breaking through that is is is pretty pretty difficult.
• 2:59
  SPEAKER_01: Um, and then once you get kind of to the other side, there's this plateau that hits a lot of companies around the 10 million mark.
• 3:05
  SPEAKER_01: Everybody says your first million is one of the hardest million to make.
• 3:08
  SPEAKER_01: I would disagree.
• 3:09
  SPEAKER_01: I think you can make a very unprofitable, mixed bag, waste of time, million dollars to say that you did it with a profit of 10% doing all kinds of random things.
• 3:19
  SPEAKER_01: And then, you know, as you sort of rise up and try to actually have a business in and around four and five million or ten million, it's much, much more difficult to break through to higher revenues, higher employee counts, and still maintain profitability and a real kind of momentum that you've built up to get to that place in the beginning.
• 3:36
  SPEAKER_01: So very interesting story, I think, because it's it's uh the more common story, right?
• 3:42
  SPEAKER_01: We read all the time about the like series A, series B.
• 3:45
  SPEAKER_01: Here's some money.
• 3:46
  SPEAKER_01: You know, they they came up with a cool idea, they didn't have product market fit, and then they pivoted.
• 3:51
  SPEAKER_01: That's like the engineer's version of a business, right?
• 3:54
  SPEAKER_01: It's it's not really what most people in the world go through to run a business.
• 3:58
  SPEAKER_01: Uh, you know, most businesses are family-owned, most businesses are less than 10 people, most businesses have, you know, an existential crisis every few years to put them out of business.
• 4:07
  SPEAKER_01: Uh, and so it's navigating that kind of problem uh that is much more common in the business world uh than the other one.
• 4:14
  SPEAKER_00: Yeah.
• 4:14
  SPEAKER_00: Well, something you just said made me think like, yeah, you're competing with all these massive company uh companies.
• 4:21
  SPEAKER_00: You're competing for mind share, you're competing for them to even pick up the phone.
• 4:24
  SPEAKER_00: How did you approach that?
• 4:26
  SPEAKER_00: How did you break through that noise?
• 4:28
  SPEAKER_01: Yeah, early on I realized there wasn't going to be a product differentiator, right?
• 4:32
  SPEAKER_01: You weren't gonna walk in and say, like, oh, I'm selling a product that someone else isn't, right?
• 4:36
  SPEAKER_01: So you have this sort of commodity problem.
• 4:37
  SPEAKER_01: You're selling hot dogs, the next guy's selling hot dogs.
• 4:40
  SPEAKER_01: Okay, you know, you try the entertainment factor.
• 4:42
  SPEAKER_01: Can I be funnier?
• 4:43
  SPEAKER_01: Can this be kitschy?
• 4:45
  SPEAKER_01: People are frustrated by that, right?
• 4:47
  SPEAKER_01: They don't nobody wants to yeah, yeah.
• 4:50
  SPEAKER_01: Nobody wants to clown selling hot dogs.
• 4:52
  SPEAKER_01: And you know what I mean?
• 4:53
  SPEAKER_01: Like they, this is food.
• 4:54
  SPEAKER_01: I don't want you to touch it with makeup on.
• 4:56
  SPEAKER_01: There's this concept of like trying to make jokes over the phone, be charming, have a kitschy thing.
• 5:01
  SPEAKER_01: What if I told you you never had to pay for cybersecurity?
• 5:04
  SPEAKER_01: The hackers were gonna pay, like just weird things that made no sense, right?
• 5:07
  SPEAKER_01: And and people don't have a lot of time for that.
• 5:09
  SPEAKER_01: And I think what broke through for me at least and what made sense was to say, okay, well, I'm not gonna be able to stand on my own credibility.
• 5:16
  SPEAKER_01: I'm gonna have to do something that is probably a little bit different, and say, well, there's credibility of others who I'm going to staff on this project.
• 5:24
  SPEAKER_01: And so what I would do to start, and this took me three or four months of calling about a hundred calls a day just to figure this out, was to say, okay, well, they're never gonna trust a kid, why would you?
• 5:33
  SPEAKER_01: With something as crazy sensitive as cybersecurity, even a small company wouldn't be interested in doing that, right?
• 5:38
  SPEAKER_01: And so the the uh the math after calling your friends and your family and everybody else and begging and borrowing for favors and doing everything you can to debase yourself on the phone is to then turn around and say, hey, um, you know, I've got this PhD, you know, call center designer who worked at Cisco and worked at you know Bell Labs.
• 5:57
  SPEAKER_01: He is uh currently uh an adjunct professor looking to you know design a new call center.
• 6:02
  SPEAKER_01: Would you be interested in a project where we could develop your call center?
• 6:06
  SPEAKER_01: And I got um a telco who had tried to staff for these this call center build-out, had basically said, okay, we don't have enough people in house.
• 6:14
  SPEAKER_01: We are using, let's call them recruiters to do this.
• 6:17
  SPEAKER_01: We could do this project thing.
• 6:18
  SPEAKER_01: And they're like, look, kid, we're not gonna pay anything more than 15% of the salary for this for this recruiting job.
• 6:24
  SPEAKER_01: And I'm like, you're gonna pay 15% of the salary.
• 6:28
  SPEAKER_01: And so I literally ran out.
• 6:29
  SPEAKER_01: I'm like, I got five more.
• 6:31
  SPEAKER_01: And then uh, and then yeah, they hired four out of the five.
• 6:35
  SPEAKER_01: And that obviously, with the about$150,000 per person, that 15% really kicked in.
• 6:41
  SPEAKER_01: That was my first big deal.
• 6:42
  SPEAKER_01: And that's when I got my first check and realized how much the government takes off the check and was like, oh, I need to be doing a lot more than this.
• 6:48
  SPEAKER_01: This this is not a lot.
• 6:50
  SPEAKER_01: I can't live off of this, it's worse than minimum wage.
• 6:53
  SPEAKER_01: Uh, but the the uh the math there was that there was uh you know a different arc that you could take into getting you know trust because it really is about trying to sell trust.
• 7:03
  SPEAKER_01: And you you can't sell trust without a brand, you can't sell trust without experience.
• 7:07
  SPEAKER_01: Um, you can't just say I'll work hard or like that doesn't mean anything if you don't know what you're doing, right?
• 7:12
  SPEAKER_01: So you you you do have to build on the credibility somehow, and that's that's how I did it.
• 7:16
  SPEAKER_01: At least to start.
• 7:17
  SPEAKER_00: Especially in a complicated domain, it's almost like utilizing thought leadership within that process, right?
• 7:22
  SPEAKER_00: I think that's a really smart approach, uh, especially because you're proving that that person trusts you enough to work with you, and therefore you've got a better proposition to your to your prospects.
• 7:33
  SPEAKER_00: I think that's a really smart approach.
• 7:35
  SPEAKER_01: Right.
• 7:36
  SPEAKER_01: In some ways, I was kind of it was diminishing my own contribution to the game because it was basically saying, like, look, I know I know nothing.
• 7:42
  SPEAKER_01: You can see you hear salespeople say this all the time.
• 7:44
  SPEAKER_01: I know enough to be dangerous, but I've got really smart people with me who are gonna do this, right?
• 7:49
  SPEAKER_01: And it's such a like, it's a cheesy tactic.
• 7:51
  SPEAKER_01: Uh, but it does work because then you're not speaking on behalf of some IP contact center Cisco product you've never installed before and understanding how latency and jitter affect call center, you know, voice stuff and stuff I never knew at the time.
• 8:03
  SPEAKER_01: I had a CCNA or whatever that I read on the weekend, right?
• 8:06
  SPEAKER_01: Like, this is not the kind of guy you want designing, you know, lossless uh phone calls uh on your network.
• 8:11
  SPEAKER_01: So so coming back to that, you know, that that other skill is is really important, right?
• 8:17
  unknown: Yeah.
• 8:18
  SPEAKER_01: Other people's skills.
• 8:19
  SPEAKER_00: That's an incredible journey.
• 8:20
  SPEAKER_00: So just a recap, you've scaled a tech company from basically your basement to 12 million in annual revenue.
• 8:28
  SPEAKER_00: You've gone through a successful MA.
• 8:30
  SPEAKER_00: Now you're field CTO at a global security vendor.
• 8:33
  SPEAKER_00: Now, throughout all of that, what's a painful truth about building channel businesses that that people you've seen only learn the hard way?
• 8:43
  SPEAKER_01: I think that when you look at trying to develop your business through a channel, you you suffer the same problem I did.
• 8:49
  SPEAKER_01: Calling the big companies.
• 8:50
  SPEAKER_01: They want to work with the big companies, they want the big badges.
• 8:53
  SPEAKER_01: They want the channel, they want to buy the best in the business, and they want their customers to, you know, be the ones driving, you know, hey, uh, we need more.
• 9:01
  SPEAKER_01: We need more, right?
• 9:02
  SPEAKER_01: Like that's that's most of the time when you come go to the customer and say, it's really difficult to prospect to call call a customer and say, hey, would you be interested in this weird product nobody else has that's a designed, you know, for from you know some country that isn't this one?
• 9:17
  SPEAKER_01: Like it's just it gets to the point where you know that they're not going to waste their cycles because they know how valuable each one of those interactions is with their clients.
• 9:24
  SPEAKER_01: So they want almost every visit to be a hit.
• 9:26
  SPEAKER_01: Hey, what project are you working on?
• 9:28
  SPEAKER_01: We can be a part of that.
• 9:30
  SPEAKER_01: Would you be interested in our version of the solution?
• 9:32
  SPEAKER_01: And so this kind of like you know, whiteboard portfolio selling where you have this big line card, is how a lot of people are sort of driven.
• 9:39
  SPEAKER_01: And when you're calling, I guess, from the the vendor side or trying to be in the middle, but the vendors are calling you, you do get your hackles up when they're like, oh, okay, we got this new antivirus or we got this new firewall, we got this new thing.
• 9:52
  SPEAKER_01: So a hard truth is that the incumbents, and I'm being on the being on a 30-year incumbent side now, being on the watch guard side, you see how valuable that brand that you've built over 30 years is.
• 10:03
  SPEAKER_01: It's never for nothing, right?
• 10:04
  SPEAKER_01: The idea is that you now have mind share trust, you talk to them all the time about the renewals, about their refreshes, about their business, about their profits.
• 10:12
  SPEAKER_01: That's something you could never do before as a startup, right?
• 10:15
  SPEAKER_01: So one of the painful truths coming from, I'd say, the sort of act zero channel world into the watch card channel world is just how much, honestly, respect they give you the time.
• 10:26
  SPEAKER_01: They used to say this all the time.
• 10:28
  SPEAKER_01: When you get a rep, it's like if when you walk in with an IBM or a Cisco or a Deloitte business card, they listen to you.
• 10:33
  SPEAKER_01: The customer takes your call, right?
• 10:35
  SPEAKER_01: And that's true here.
• 10:36
  SPEAKER_01: So it's a hard truth to say that like at Watchcard, when you have a partner that's lasted for a decade, you you do get them to answer the phone.
• 10:44
  SPEAKER_01: You do get to walk into the room and demonstrate the portfolio.
• 10:47
  SPEAKER_01: They give you the opportunity and they look at it with a, okay, I could add this here, I could add that there.
• 10:52
  SPEAKER_01: It's almost like a contractor's already renovating your kitchen, getting, you know, the cabinets too, or something.
• 10:56
  SPEAKER_01: It's it's just a it's a much more uh frictionless motion.
• 11:01
  SPEAKER_01: And I feel like a lot of companies waste that.
• 11:04
  SPEAKER_01: They they have these channel opportunities and they sell them weird, maybe new, maybe underperforming things.
• 11:10
  SPEAKER_01: It kind of reminds you of like the restaurant turn that's like the fish is about to turn, let's go flip them the salmon tonight.
• 11:16
  SPEAKER_01: Yeah.
• 11:16
  SPEAKER_01: And you know you're getting the crap product.
• 11:18
  SPEAKER_01: So, like you never want to abuse that relationship, but it's a very hard truth that without that, it's much, much more difficult to get people to listen to what you're saying.
• 11:27
  SPEAKER_01: And frankly, if you don't have anything to sell, there's almost nothing else to talk about, right?
• 11:31
  SPEAKER_01: Like, thank you for buying box.
• 11:32
  SPEAKER_01: I hope you enjoy box, right?
• 11:34
  SPEAKER_01: Like, there's not a not a lot else in the suite that you're gonna give them over at box.
• 11:39
  SPEAKER_01: No knock the box, but yeah.
• 11:42
  SPEAKER_00: I gotcha, yeah.
• 11:44
  SPEAKER_00: Have you ever heard of the term saunder?
• 11:49
  SPEAKER_00: No, saunder, yes.
• 11:51
  SPEAKER_00: Saunder, no, saunder, S-O-N-D-E-R.
• 11:54
  SPEAKER_00: Uh it's a it's a word I uh I recently heard for the first time, and it applies to this um quite quite directly.
• 12:01
  SPEAKER_00: And it's the realization that everyone around you isn't just like an extra in your own life, but they each have first person energy.
• 12:09
  SPEAKER_01: Okay, yeah.
• 12:10
  SPEAKER_00: But they like all have rich, full lives of their own.
• 12:12
  SPEAKER_00: And I think this applies as well to kind of the vendor partner relationship.
• 12:17
  SPEAKER_00: Um, while we were prepping for this uh podcast, we talked about how easy it's it is to like develop blind spots when it comes to the reality that many MSPs live with, like low margins, limited engagement, trying to survive in this constantly challenging landscape.
• 12:34
  SPEAKER_00: So how should vendors then rethink partner engagement if they do want to support these MSP or like these SMB focused MSPs, as opposed to doing the our salmon is gonna turn, let's put it on the specials board kind of approach?
• 12:48
  SPEAKER_01: Yeah, you I mean, almost every interaction you should start with, not trying to talk about yourself, right?
• 12:52
  SPEAKER_01: I think one of the guilty, you know, uh every product marketing team that comes in, look, here's the slide.
• 12:58
  SPEAKER_01: We've been around for 30 years.
• 12:59
  SPEAKER_01: We have a red box, it's shiny, we've got this customer, that customer.
• 13:03
  SPEAKER_01: I, you know, we give to charity, look at this cute dog I have.
• 13:06
  SPEAKER_01: You know, this is ridiculous, you know, selfish energy.
• 13:08
  SPEAKER_01: It's almost like reverse saunders to say, like, look, if you if you're not putting, if you're not putting yourself in the head of the person, if you're just walking in there with main character energy, being like, you know what they're gonna want to hear about is everything I gotta say.
• 13:19
  SPEAKER_01: You're wasting a tremendous amount of time and a very valuable thing.
• 13:22
  SPEAKER_01: And every time you start, every one of those points you're making, you're starting to lose people big time where they just want out.
• 13:27
  SPEAKER_01: They're like, gosh, by three o'clock, I could actually be having lunch at the Greek place downstairs.
• 13:32
  SPEAKER_01: I don't really need to be, you know, doing this, right?
• 13:34
  SPEAKER_01: Uh the the math there is that we're never really talking, especially technology companies, super guilty of this.
• 13:39
  SPEAKER_01: We think the tech is so incredible.
• 13:41
  SPEAKER_01: We just start blabbering on about the tech.
• 13:43
  SPEAKER_01: And these partners, these managed service providers, of which many of whom are basically sitting there with some of them 10% margin on their deals, some of them customers who cannot spend another dollar.
• 13:53
  SPEAKER_01: The dentist office has kind of solidified a package with them for two or three years to say, you're gonna manage my Wi-Fi and IT, and I don't know anything about tech.
• 14:01
  SPEAKER_01: So don't come in here and try to sell me more stuff, right?
• 14:03
  SPEAKER_01: They didn't even have the premise in many cases to say, like, hey, by the way, so that you know, technology is gonna grow broadly and it's gonna grow in in the depth here for you as your business matures and as technology changes.
• 14:14
  SPEAKER_01: So we're gonna have to come in with different stuff.
• 14:16
  SPEAKER_01: So there's kind of like no, there's no almost no future proofing of some of these contracts in the customer's mind, then the MSP's cut in the middle.
• 14:22
  SPEAKER_01: So this there's this really difficult sort of thing that nobody's ever really talking about, which is their profitability, which is how much how much you know the annualized recurring revenue will multiply the value of their business, right?
• 14:34
  SPEAKER_01: You know, most businesses, if you're an MSP business, sell one time your contract value before six times the annualized recurring revenue if there's a healthy EBITDA in there.
• 14:42
  SPEAKER_01: If there's healthy, you know, cheaper word for margin, let's say, like good money left over, right?
• 14:46
  SPEAKER_01: So if you have this concept of like a beautiful rolling snowball of annualized recurring revenue, you have this very sellable company.
• 14:54
  SPEAKER_01: And trust me, I've tried to sell the company that didn't have that, and I tried to sell the company that did have that.
• 15:00
  SPEAKER_01: And it on the one hand, you feel like it's a yard sale.
• 15:03
  SPEAKER_01: You're giving things away for pennies on the dollar in the one-time revenue world.
• 15:07
  SPEAKER_01: And the other one, you almost can't believe that they're giving you four X.
• 15:10
  SPEAKER_01: You're like, this is this is an incredible, you know, value multiplier for me.
• 15:13
  SPEAKER_01: It's a great, you know, financial setup for me in my life.
• 15:16
  SPEAKER_01: And if you're telling people that, there's a lot more to your story than, hey, I got a red box and it's better than the blue box, right?
• 15:25
  SPEAKER_01: And at WatchGu, that was, I think, one of the greater unlocks is to walk in here and finally see this.
• 15:30
  SPEAKER_01: You can tell people have been around 30 years, they kind of came to those clues themselves.
• 15:33
  SPEAKER_01: You sort of walk into the company and they're like, they're already talking that way, right?
• 15:36
  SPEAKER_01: They already have this concept of like, we really are managing our profit, uh, the margins of our customer.
• 15:40
  SPEAKER_01: We're managing the sell books that they go and use to grow their business.
• 15:44
  SPEAKER_01: We're showing them how complimentary and how simple it is to grow their business with adjacent products uh into different bundles that they're gonna offer their customers as opposed to like you can use this for that.
• 15:54
  SPEAKER_01: No, it it comes as always part of a package.
• 15:56
  SPEAKER_01: And if you think about like early stage Microsoft and late stage Microsoft, the power of the bundle is like second to none, right?
• 16:04
  SPEAKER_01: If you think about, you know, you're on Teams, why are you on Teams and not Slack or Zoom?
• 16:10
  SPEAKER_01: It's the bundle.
• 16:11
  SPEAKER_01: It's not the product, right?
• 16:12
  SPEAKER_01: It's the bundle.
• 16:13
  SPEAKER_01: So an understanding that customers buy that way and that partners sell that way, and that everybody is sort of working that way in this industry, it's a it's an incredibly powerful mechanism.
• 16:23
  SPEAKER_01: But does start with not main character energy talking about yourself, focusing on the cut, what the what that poor MSP is going through and making them a rich MSP that's going through it, you know?
• 16:33
  SPEAKER_00: Yeah, no, no, I think that's a fascinating perspective because I can imagine that that when you're an MSP, sometimes it feels like you just you just have to sell, right?
• 16:42
  SPEAKER_00: But having that more long-term vision, thinking about the bigger picture and really kind of taking those steps towards this higher recurring revenue and focusing on even just in general, I know that's not a mindset some some companies have.
• 16:56
  SPEAKER_00: And and I think that's tricky to get in, because if it does feel like you're struggling, um, you're focusing on tomorrow.
• 17:02
  SPEAKER_00: You're not focusing on on let's say next year.
• 17:05
  SPEAKER_00: Do you have any tips on like how you can shift that mindset?
• 17:09
  SPEAKER_01: I think part of it is that you, I mean, some of these guys aren't accountants, right?
• 17:14
  SPEAKER_01: So when you get into the business and you're a technician, you're a technology person, you don't know a lot about finance or accounting, uh, it it's hard to let that drive your decisions, but it must, right?
• 17:25
  SPEAKER_01: Like these are the truths that that just, you know, I've seen so many companies, some of my best friends' companies, you know, go under because they just couldn't honestly do difficult things when the time came.
• 17:34
  SPEAKER_01: They didn't set up their businesses for recurring revenue and they didn't have a healthy profit, they couldn't make very good calculated decisions, and then they'd run over on labor and have to let go of their friends, or they'd you'd see these horrifying stories of people sacrificing.
• 17:45
  SPEAKER_01: Every time you watch like one of these reality shows about like a restaurant or something, and they're in super huge financial trouble, they've like mortgaged the house and gone into credit card debt trying to like keep the lights on for a restaurant that is just not performing, right?
• 17:57
  SPEAKER_01: And it's because they really didn't, you know, work through the financial math to say, you know, yeah, this was going to be an eventuality unless we had predictable revenue from some income source that was going to give us a margin enough that we could actually relax and actually work on the business instead of in the business, right?
• 18:13
  SPEAKER_01: They just there's such an entrepreneurial story is to sacrifice yourself when times are tough to do the install or to, you know, uh stay up late on the weekends or or do the you know the Christmas holiday shift because you want to do it.
• 18:26
  SPEAKER_01: I'm guilty of it, everybody's guilty of it, right?
• 18:28
  SPEAKER_01: They put themselves into the hot seat because they're like, well, I'm a leader, I should sacrifice.
• 18:33
  SPEAKER_01: And you're like, well, if you're a leader, you should understand how this game is played so that you can be there for your people.
• 18:39
  SPEAKER_01: Uh and so shifting the mindset from working in the business to on the business is an incredibly difficult thing to do because I think honestly, people will always trade effort and just say, if I trade effort, effort's always on the table and effort's gonna keep me whole, right?
• 18:55
  SPEAKER_01: Effort's the right thing to do.
• 18:57
  SPEAKER_01: If I just put more elbow grease into this, then I should be bestowed with a success, right?
• 19:03
  SPEAKER_01: Like it should happen.
• 19:04
  SPEAKER_01: That's like that's like a divine thinking.
• 19:06
  SPEAKER_01: Like something's gonna come here, Deus Ex Machina, and pull you out of the dirt when you were a good soul.
• 19:11
  SPEAKER_01: And it's like, I understand that trade better than anybody, but that's not the trade.
• 19:16
  SPEAKER_01: The trade was you have to set up a healthy business that can survive multiple contracts, lots of different diverse types of customers, not single, you know, rev revenue focused, single vertical focus, uh, good enough margin to keep your people employed and healthy employed.
• 19:30
  SPEAKER_01: Because here's the other thing with small businesses you have a really good, talented person, and they might love you.
• 19:35
  SPEAKER_01: And my staff loved me.
• 19:36
  SPEAKER_01: I know this.
• 19:37
  SPEAKER_01: We hung out well after they'd been gone.
• 19:39
  SPEAKER_01: But if Palo Alto comes and pays them three times the salary to work there, they're gonna work there, right?
• 19:45
  SPEAKER_01: But love only goes so you can't take my love to the bank and buy a new house, but you can take their money to the bank.
• 19:50
  SPEAKER_01: So it's over, right?
• 19:51
  SPEAKER_01: So, you know, you have to prepare for like I have three good people, things are going great.
• 19:55
  SPEAKER_01: What if all three left tomorrow for a better salary?
• 19:59
  SPEAKER_00: It's almost like that a triangle of of tactics, strategy, and and empathy, right?
• 20:05
  SPEAKER_00: Where you bring all those three things together and that's when you can build success.
• 20:09
  SPEAKER_00: And it it reminds me of almost 10 years ago, which is kind of shocking to me, I was in an MA trajectory where our scale-up was being acquired by a larger corporate.
• 20:19
  SPEAKER_00: And one thing I'm so incredibly grateful for is that my manager at the time told me, a product marketing guy then, hey, do you want to understand how this MA works?
• 20:29
  SPEAKER_00: And I was just blown away, and it completely changed my perspective on working in an organization, working with other organizations.
• 20:38
  SPEAKER_00: There's so many moving parts, there's so many things happening under the surface that are completely inscrutable if you don't have knowledge of this.
• 20:47
  SPEAKER_00: So, yeah, balance balancing those tactics of just doing the work with focusing on the bigger picture and sometimes making a what seems like a worse tactical decision to support the longer-term strategic decision, it's really difficult, but it's incredibly valuable.
• 21:03
  SPEAKER_01: It's some, I think so.
• 21:04
  SPEAKER_01: It's almost like no one ever talks about health issues, mental health issues.
• 21:07
  SPEAKER_01: There's some things that have this stigma, and accounting within a business just happens to be this massive stigma.
• 21:13
  SPEAKER_01: If we explain to people, and this is always the philosophy, if we explain to people how much money they're making or what made money we're making and for what reason, and move to what like the, you know, the here's the profit, here's the loss, here's the retained earnings, here's the value of the company.
• 21:26
  SPEAKER_01: People assume that their employees will come out with knives out and be like, well, then we should get, you know, this much bigger part of the pie.
• 21:33
  SPEAKER_01: But there's so much value in ownership thinking that's distributed to the employees that's given to them from the startups.
• 21:40
  SPEAKER_01: They knew this immediately.
• 21:41
  SPEAKER_01: You give them equity, you explain the cap table, you show that we raised this much money.
• 21:45
  SPEAKER_01: Here's our spend table, here's the objective key results.
• 21:47
  SPEAKER_01: And they have this beautiful trick with startups because it's not their money, right?
• 21:51
  SPEAKER_01: With a with a with an owner operator, it's their money, right?
• 21:54
  SPEAKER_01: Or their loan that's tied to their personal liability.
• 21:57
  SPEAKER_01: So there's this risk that it's like, I'm deploying the cap or And then you get kind of this us versus them.
• 22:01
  SPEAKER_01: In the startup, you have the beautiful, you know, here's the capital, everybody knows how it's distributed.
• 22:05
  SPEAKER_01: We should do the best by this.
• 22:06
  SPEAKER_01: Because if we leave, if we exit, then there's this multiple to the shares that you all were given, right?
• 22:11
  SPEAKER_01: In the MA discussion with you, I bet one of the most striking eye-opening things was a little bit of transparency into the accounting, right?
• 22:18
  SPEAKER_01: A concept of saying, like, here's the multiples, here's the revenue, here's the profit, here's what that means to the buyer, here's what that means to the shareholder.
• 22:28
  SPEAKER_01: As soon as you put a couple of those pieces in place, you can start to envelop the mind with a little bit more ownership thinking.
• 22:33
  SPEAKER_01: And people will start to say, okay, well, now I know what all this is for.
• 22:36
  SPEAKER_01: I know what these people are going for.
• 22:38
  SPEAKER_01: That way it's not like, oh, he's really angry at the end of Q4.
• 22:42
  SPEAKER_01: He must be having a bad Christmas.
• 22:43
  SPEAKER_01: It's like, no, we're having a terrible quarter.
• 22:45
  SPEAKER_01: We had to have a run rate of four good quarters for this acquisition to go through.
• 22:48
  SPEAKER_01: And now that's not going to happen.
• 22:50
  SPEAKER_01: My valuation in your stock price just went down, right?
• 22:52
  SPEAKER_01: So the the idea that like there's ownership thinking that you have to bestow on people, the simplest way, I think, is to try to go through MA.
• 22:59
  SPEAKER_01: Now, the opposite can happen.
• 23:00
  SPEAKER_01: This happened to me a couple of times.
• 23:02
  SPEAKER_01: When there's a knock at the door from a fancy company and they start imagining themselves working there and that falls through, the attrition is huge because you've now got an expectancy violation.
• 23:12
  SPEAKER_01: They imagine themselves in the consulting uniform that they were going to go to the big building that we toured them through.
• 23:18
  SPEAKER_01: And this is a classic mistake of the small getting acquired by the large, is that they will wine and dine you, and it's all champagne and roses about how great the big co is and how you're not gonna have to struggle anymore.
• 23:30
  SPEAKER_01: No more weekends, no more night shift, all this stuff.
• 23:33
  SPEAKER_01: And then you unlimited budget.
• 23:35
  SPEAKER_01: Look at all we have a we have a really good, you know, coffee machine.
• 23:38
  SPEAKER_01: Your coffee machine sucks, right?
• 23:40
  SPEAKER_01: There's this there's this element of like you just start dreaming about it.
• 23:42
  SPEAKER_01: And what I ended up finding was unless you actually have a ratified deal, if you're at like the letter of intent stage, trying to get ownership thinking by letting them in too much can completely backfire.
• 23:52
  SPEAKER_01: Because then immediately, once Big Co decides they don't want you anymore for whatever, they found somebody else, they tucked in and bought somebody, whatever the thing is, where do all your employees now want to still work?
• 24:03
  SPEAKER_01: And you kind of can, right?
• 24:04
  SPEAKER_01: Like there's a not in competition, but you know, those aren't really important.
• 24:07
  SPEAKER_01: So they just all of them go, okay, well, I'll just go to Big Co anyway, because that was that was the plan and the dream.
• 24:13
  SPEAKER_01: And so it could still work out for me.
• 24:15
  SPEAKER_01: And so there's there's a danger, I think, for these owner operators to try to do that when they when they don't have a good handle on it.
• 24:21
  SPEAKER_01: But the risk is always worth the reward, in my experience, that you should include people, ownership thinking, much more transparent KPIs, OKRs.
• 24:30
  SPEAKER_01: That plays a huge role in in getting them to think about exactly what it is the company needs.
• 24:35
  SPEAKER_01: And then they'll be inspired to start doing some things.
• 24:37
  SPEAKER_01: Like maybe we shouldn't have the Christmas party.
• 24:40
  SPEAKER_01: We should put the money over here where we'll all benefit in six months.
• 24:44
  SPEAKER_00: Yeah, no, I I completely agree.
• 24:46
  SPEAKER_00: And I think engagement and ownership are such incredibly powerful tools.
• 24:51
  SPEAKER_00: But one thing that I often see is that requires actually constant reinforcement and constant communication.
• 24:58
  SPEAKER_00: And that dovetails into something we discussed in the prep call.
• 25:01
  SPEAKER_00: And uh you mentioned being a fan of something you call the placemat strategy, basically putting the message right in front of people.
• 25:09
  SPEAKER_00: Could you speak to this uh a little bit?
• 25:12
  SPEAKER_01: Yeah, after this conversation, and anybody who's listening to it will retain about 10% of the information the next day.
• 25:18
  SPEAKER_01: And you have to operate on the assumption that that's true with every conversation you have.
• 25:22
  SPEAKER_01: Like they're not gonna remember that you said, oh, you know, I'm free at Christmas if you want to do that cycle class.
• 25:27
  SPEAKER_01: You gotta have this like uh some some kind of leave behind, something that's more than just, you know, every day, you know, you put your brand on something that you use, my cable management, it says watch guard on it.
• 25:39
  SPEAKER_01: The more effective thing, especially because a lot of these MSPs you're calling out was uh what we what we put together was placemats.
• 25:45
  SPEAKER_01: It's something that you just kind of put your coffee on, but it has the talk track, right?
• 25:50
  SPEAKER_01: Because I come in, I say, okay, we've got 12 products, we got you know a hundred features, and we've got you know 65 competitives for each one of those things.
• 25:57
  SPEAKER_01: That loom of exploding, you know, things to memorize is very difficult.
• 26:01
  SPEAKER_01: Okay, what was your thing about you're better than CrowdStrike or better than Sentinel One because you do what was the feature?
• 26:07
  SPEAKER_01: Zero trust.
• 26:07
  SPEAKER_01: I forget the name, right?
• 26:08
  SPEAKER_01: Like this, it's gonna be very difficult.
• 26:10
  SPEAKER_01: But you put it on a place, Matt.
• 26:12
  SPEAKER_01: And then you have this concept that you know, as they're making the calls, as they're on the Zoom conversation, their eyes will just naturally drift downwards and they'll just start reading the memories to be like zero trust.
• 26:21
  SPEAKER_01: They'll start circling it nervously with their pen, right?
• 26:24
  SPEAKER_01: And so eventually you have this concept of saying, well, whatever was 10% now, maybe it's 25%, 30%, 40%, 50%.
• 26:31
  SPEAKER_01: Even if they're just looking at the technology name, the words, a picture of it, you know, the fact that it's now reinforced, really, really cool.
• 26:37
  SPEAKER_01: Um, and it's hard to do that because it in in in your employees or your your MSP's, you know, space, right, there's not a lot.
• 26:45
  SPEAKER_01: You see, this this always bothers me is the sticker on the back of the book, right?
• 26:50
  SPEAKER_01: On the back of their uh on the back of their laptop.
• 26:52
  SPEAKER_01: That's good because then the customer might is just gonna inherently read what's on there.
• 26:56
  SPEAKER_01: But it's always some cartoonish like snowboarding picture.
• 27:00
  SPEAKER_01: It says like, you know, stove Vermont, and then it says McAfee at the same time.
• 27:04
  SPEAKER_01: And you're like, okay, so he's a thing, he's like a kind of a rocker guy.
• 27:07
  SPEAKER_01: Like this is the like bizarre collage, right?
• 27:10
  SPEAKER_01: So you're there's so much real estate that you're not in control of that if you had a cool sticker, I don't think it works as well.
• 27:15
  SPEAKER_01: But something like a place net, it does does a lot.
• 27:19
  SPEAKER_00: Yeah, so it's really about that getting the most out of every single interaction you have, basically, using every trick in the book.
• 27:26
  SPEAKER_00: And they're not really tricks, right?
• 27:28
  SPEAKER_00: They're they're just inherent ways of speaking to and with people that that I think is really important.
• 27:34
  SPEAKER_00: Um sorry, go ahead.
• 27:36
  SPEAKER_01: I was gonna say that the trick aspect, it's so much of this, it's kind of like there's a little bit of like, uh, it's like a magic show.
• 27:43
  SPEAKER_01: Like, oh, good swag.
• 27:45
  SPEAKER_01: It's the difference between swag and a tool to help you sell is you actually use one to help you sell, right?
• 27:53
  SPEAKER_01: And so if I look at like this concept of like when we put stuff in front of people, especially if it's like, you know, t-shirts, hats, pens, books, whatever, the the idea isn't just that they're going to use it, it's what they're going to use it for, right?
• 28:05
  SPEAKER_01: And are you going to use this thing to help you sell something?
• 28:08
  SPEAKER_01: Are you going to use this thing when you have a question?
• 28:10
  SPEAKER_01: Are you going to use this thing to sort of represent what the brand is or demonstrate something?
• 28:14
  SPEAKER_01: And to me, like that's that's a big part of it, right?
• 28:16
  SPEAKER_01: The the one of the cooler ones, this is way back in the day, was a company called Bromium, and it got acquired by Gular Packard.
• 28:21
  SPEAKER_01: And they had a very interesting way of kind of stopping malware using sandboxing, but it was something that ran on your operating system instead of the cloud.
• 28:28
  SPEAKER_01: Long story short, behind this, you know, micro pitch, which most people wouldn't really understand, they had a cool little USV with a little pop-top opener.
• 28:36
  SPEAKER_01: On the USV was two things.
• 28:38
  SPEAKER_01: It was their software, and it was a folder called malware.
• 28:41
  SPEAKER_01: And it was all the worst malware that they had.
• 28:44
  SPEAKER_01: And they would slide the key at the keys at the end of the presentation to the engineers and go, now, how many of y'all are confident that if you plug the USV key and run the malware folder, you're going to be fine?
• 28:55
  SPEAKER_01: And how many of you would like to run our software and run the malware folder and show you that we know you're fine, right?
• 29:00
  SPEAKER_01: And so it was like people were started scrambling for the keys.
• 29:03
  SPEAKER_01: They love the idea, but it's because of what they were going to use it for.
• 29:07
  SPEAKER_01: They were going to use it to prove that the software really did what they said it was going to do.
• 29:11
  SPEAKER_01: They could use it to run the toy and see, not, you know, a blinking lights little, you know, moving puppy.
• 29:16
  SPEAKER_01: It was, it was real, right?
• 29:18
  SPEAKER_01: So like things like that, I think, have a really nice uh effect on people when it comes to trying to set up, you know, what they can remember the next day.
• 29:27
  SPEAKER_01: Because the day after that, what do you think the guys remember?
• 29:29
  SPEAKER_01: Do you think they remembered the slides, the name of the products, anything?
• 29:32
  SPEAKER_01: They hold up the key and they go, Do you know what's on this key?
• 29:35
  SPEAKER_01: And it just becomes this whole thing.
• 29:36
  SPEAKER_01: So yeah, the placemat strategy, the key strategy, these are all just different strategies that I think embody the idea that you're doing something that something, something people are going to use and use to sell or use to test, right?
• 29:48
  SPEAKER_00: Yeah.
• 29:48
  SPEAKER_00: Well, it's it's actually incredible because while you were talking, I was thinking of um a giveaway that when I was at Cinch, this communications provider we we we gave away at at events, which is pretty much what you have with WatchCard.
• 29:59
  SPEAKER_00: It's uh it's a cable organizer.
• 30:01
  SPEAKER_00: And the one thing, the one response I got from everybody was I don't have this and I need this.
• 30:08
  SPEAKER_00: Well, it's true.
• 30:10
  SPEAKER_00: It's incredible.
• 30:12
  SPEAKER_00: Yeah, but the one thing that you just mentioned about the USB stick, that's like a next level.
• 30:17
  SPEAKER_00: It's where you almost gamify your pitch.
• 30:22
  SPEAKER_00: That's that's the way they're putting it because everybody has a USB key, but you basically transform the USB key into a tool, which I I find a fascinating approach, and my mind's already spinning with like how am I gonna operationalize this for our next event?
• 30:36
  SPEAKER_00: That's uh that's incredible.
• 30:38
  SPEAKER_00: That's so cool.
• 30:39
  SPEAKER_01: Yeah, if you sell software, I mean, the number one way to get it into people's hands is for them to try it.
• 30:44
  SPEAKER_01: Yeah.
• 30:45
  SPEAKER_01: Can you give it away?
• 30:46
  SPEAKER_01: So, like over here, if you go to the WatchCard uh console, every single product we sell, you can hit trial, right?
• 30:51
  SPEAKER_01: And it's just it's self-deployed, like it's just self-deployed, right?
• 30:54
  SPEAKER_01: The idea is that like there shouldn't be anything, nothing between you and trying the software to be like, oh, okay, I get it.
• 31:02
  SPEAKER_01: Oh, I like it, I don't like it, right?
• 31:04
  SPEAKER_01: That's it.
• 31:04
  SPEAKER_01: That's like so many software providers.
• 31:06
  SPEAKER_01: The fact you have to go through like nine hoops, call me for pricing is my favorite one.
• 31:11
  SPEAKER_01: Like if you just have to go, you have to go through this huge chain of people.
• 31:14
  SPEAKER_01: It's like, come on, just let me just let me download it, tell me how much it costs.
• 31:18
  SPEAKER_01: And the most successful companies, you look at like our integration with like uh professional services automation tools, PSAs, right?
• 31:25
  SPEAKER_01: This is like the number one feature request for people is to say, Hey, uh I on my PSA, I can see on Halo or whatever the Adobe Acrobat and how much it costs.
• 31:36
  SPEAKER_01: And then it'll click it and sell it to my customer.
• 31:39
  SPEAKER_01: That's that's it, right?
• 31:41
  SPEAKER_01: We're in that mode, right?
• 31:43
  SPEAKER_01: Where like you go to Amazon to find out the price when you're in the store, right?
• 31:46
  SPEAKER_01: So like people who are not living in the era we're living in when it comes to like pricing, sales, billing, trials, uh, they're not gonna be around much longer, right?
• 31:54
  SPEAKER_01: Like the the the cloud kind of did this for like everything from wireless to firewalls a while back, where just making it easy to just plug something in and it phones home and you got the whole thing set up through a browser without any extra work at all.
• 32:07
  SPEAKER_01: Now you can click the buttons, get the rest of the software.
• 32:09
  SPEAKER_01: That's it.
• 32:10
  SPEAKER_01: You can you can find out how much you need to pay for something and and pay for it, right?
• 32:13
  SPEAKER_01: Or or change how you bill for it.
• 32:15
  SPEAKER_01: Those are all things that I mean sound so benign to a person who's used to using Amazon on the retail side or, you know, uh even eBay a million years ago, right?
• 32:24
  SPEAKER_01: And so it's it's not like this is new new ways of doing things.
• 32:27
  SPEAKER_01: It's how people are used to working with tech now, more importantly on the business side.
• 32:31
  SPEAKER_00: It's such a good point.
• 32:32
  SPEAKER_00: And there again, we come back to Sonder, right?
• 32:34
  SPEAKER_00: That we as sellers, so to speak, we we kind of almost assume that that everybody understands our go-to-market motion, which is not necessarily the case.
• 32:43
  SPEAKER_00: They might have a totally different cares.
• 32:45
  SPEAKER_00: Or cares.
• 32:47
  SPEAKER_00: I think contact me for pricing.
• 32:49
  SPEAKER_00: What I also love is uh when you ask, oh, so so what results can I expect?
• 32:53
  SPEAKER_00: And you get, well, you know, that's no outcomes, yeah.
• 32:58
  SPEAKER_00: It's it depends.
• 32:59
  SPEAKER_00: It's uh it's a big red flag for me as well.
• 33:01
  SPEAKER_00: Hey, I I I feel like we could talk about all this for hours, but I want to ask a couple more uh what I hope are salient questions.
• 33:09
  SPEAKER_00: Um the most important one being looking at your career trajectory, your arc, like like you said, um founder scars, MA insights, uh you got a global field experience.
• 33:21
  SPEAKER_00: Where would you see the biggest opportunity for the channel and for MSPs in, let's say, the next three to five years?
• 33:29
  SPEAKER_01: So very interesting, three to five.
• 33:30
  SPEAKER_01: We're in the most interesting time in all of computer science where we're gonna get a refactoring of almost every technology, whether they like it or not, using new science around how everything from structured data query languages, we're moving from deterministic models to probabilistic models.
• 33:45
  SPEAKER_01: It doesn't sound like it means much, but we're moving from a database to AI, right?
• 33:48
  SPEAKER_01: And so this idea that like even something as simple as like what a file is might get refactored over the next three to five years changes the aspect, I think, of what an MSP can imagine themselves doing, right?
• 34:00
  SPEAKER_01: For for probably the last 30 plus years, an MSP really was just sort of a technician and handled the break fix, the labor arbitrage of the setup, the management, the maintenance, the coordination between different products.
• 34:13
  SPEAKER_01: Uh and for many kind of organizations in cybersecurity, this was this is the biggest fan.
• 34:18
  SPEAKER_01: If you look at$200 billion in cybersecurity,$50 billion is still spent on pro services.
• 34:23
  SPEAKER_01: Tech takes up a very tiny trunch of that, right, that's that's left over, of which in cybersecurity firewall is still the dominant number one.
• 34:31
  SPEAKER_01: And then it goes to endpoint security identity and on down, right?
• 34:34
  SPEAKER_01: And you have this kind of thinking of saying, well, okay, does is that revenue bucket, total addressable market, is that gonna still be uh the way it is?
• 34:42
  SPEAKER_01: And AI is now about four or five years old, and we've been watching what it can and cannot refactor very quickly.
• 34:49
  SPEAKER_01: We assume that it's gonna refactor everything in the next three to five years.
• 34:53
  SPEAKER_01: And so I think that the opportunity really is in is in that.
• 34:57
  SPEAKER_01: If it's it's like if I turned around to you in 2004 and I drew the exact same picture around the internet build-out, around like who's gonna profit?
• 35:04
  SPEAKER_01: Cisco, who's the most valuable company in the world at the time, or is it e-commerce apps that are gonna be built on top of this layer?
• 35:12
  SPEAKER_01: Most people would say, I'm gonna make a lot of money with the Cisco of our day.
• 35:16
  SPEAKER_01: Nvidia AI companies like OpenAI, it's 70% of the you know, equities market.
• 35:21
  SPEAKER_01: It should make a very clean and simple way is to say, if I can attach myself to that, if I can work on you know getting close to that build out, I'm gonna be successful.
• 35:30
  SPEAKER_01: And I would argue it's the opposite.
• 35:31
  SPEAKER_01: If history has taught us anything, Cisco wasn't the money.
• 35:34
  SPEAKER_01: It was Facebook, it was Google, it was these companies that rose on top of the internet that could offer those services.
• 35:40
  SPEAKER_01: And so if I look at the MSPs today, I'd say, kind of look for three to five years as to what you would be building on top of AI as a as a service that you think would still be relevant.
• 35:51
  SPEAKER_01: And it probably isn't, you know, uh break fix on Windows, right?
• 35:55
  SPEAKER_01: Maybe Windows won't even exist.
• 35:56
  SPEAKER_01: Maybe they'll refactor the whole operating system and everything will run on top of AI, and that'll just be a different form factor, right?
• 36:01
  SPEAKER_01: Um, now that's a pretty extreme pivot in three to five years, given how all the supply chains work and how people work today with all the different products they have to get through their operating system to get to.
• 36:12
  SPEAKER_01: But that's how you should think about it is what services would I layer on top of AI?
• 36:16
  SPEAKER_01: And I think there's going to be some pretty interesting ones that manifest.
• 36:19
  SPEAKER_01: There's there's still space to create, you know, a self-driving Uber Uber app, right?
• 36:24
  SPEAKER_01: There's still space to create uh, you know, a robotic delivery service.
• 36:29
  SPEAKER_01: There's still space to set up a you know a home cleaning service based on you know artificial intelligence row.
• 36:35
  SPEAKER_01: There's still space for that, right?
• 36:36
  SPEAKER_01: We're still we're still not the Jetsons of Star Trek.
• 36:38
  SPEAKER_01: Um and there's still space for it.
• 36:39
  SPEAKER_01: And so if as MSPs, I think, look at is there a pivot?
• 36:43
  SPEAKER_01: Is there something they could do?
• 36:44
  SPEAKER_01: Adopting artificial intelligence early stage might be expensive and they might have a couple of scars from it.
• 36:49
  SPEAKER_01: Um, so it's probably frankly still early.
• 36:52
  SPEAKER_01: Half of AI is sort of sort of bullshit anyway, is that they you can't really sell the outcome uh of the AI.
• 36:58
  SPEAKER_01: They sort of tell you what they their thing does instead of you telling them what it does uh or should do.
• 37:03
  SPEAKER_01: So think about what things you would do as an MSP if you had all the time.
• 37:08
  SPEAKER_01: If you had a time machine, you can hit stop and do everything you wanted to clean up today.
• 37:11
  SPEAKER_01: Great.
• 37:12
  SPEAKER_01: Okay, is all that tech debt worth it?
• 37:14
  SPEAKER_01: Is that gonna be maintained as you have sort of AI as a service that you're gonna be able to use and build on top of it?
• 37:19
  SPEAKER_01: And then, you know, lastly, if you're saying, well, how much should I dig into the technology?
• 37:23
  SPEAKER_01: People are saying, you know, a computer science degree is worthless, that you got this, you know, AI vibe coding is gonna take over and all that.
• 37:30
  SPEAKER_01: You have to answer the question do you think there's gonna be more technology or less?
• 37:33
  SPEAKER_01: Do you think there's gonna be more maintenance or less?
• 37:36
  SPEAKER_01: No sign points to less, right?
• 37:38
  SPEAKER_01: I have no love for somebody that says, oh, we're gonna contract somehow in terms of the number of devices and the number of kinds of monoconnectivity, the number of applications, the number of things that we're gonna need to manage.
• 37:49
  SPEAKER_01: And that just makes the MSP's job a lot harder, right?
• 37:52
  SPEAKER_01: It makes there's so many more dynamic things that you have to do, but you now have this cool new tool to help you do it.
• 37:56
  SPEAKER_01: So I don't think you get out of the business.
• 37:58
  SPEAKER_01: I think there's probably an interesting cycle over the next couple of years, probably a lot of acquisition.
• 38:03
  SPEAKER_01: If you're if your books aren't ready for ARR, EBITDA, and an acquisition, get ready, MSPs, because you guys are being consolidated at the speed of light.
• 38:10
  SPEAKER_01: Private equity is scooping you up.
• 38:12
  SPEAKER_01: All of our biggest partners are roll-ups of of former partners, right?
• 38:16
  SPEAKER_01: So it's gonna, it's, it's coming for you too, right?
• 38:19
  SPEAKER_01: Be ready to be acquired or or to do some acquiring yourself uh to stay around because uh it's it's gonna be tougher and tougher to compete when you know those folks at business are gonna end up going to the to the bigger, more you know, margin ready, price sensitive.
• 38:34
  SPEAKER_01: They can lower their prices, they can do all kinds of things that smaller guys probably won't be able to, but there's still a chance to compete.
• 38:41
  SPEAKER_01: You have an ability to scale up, that's your chance.
• 38:44
  SPEAKER_00: I think those two things are almost inextricably linked as well, like boosting your ARR by also increasing your margins using smart AI tools, thinking ahead, indeed, not not kind of betting all your money on a single horse.
• 38:58
  SPEAKER_00: Uh I think that's a brilliant approach.
• 39:00
  SPEAKER_00: And it also shows maturity and again that triangle of tactical, strategic, and and empathetic, where you're kind of thinking ahead and pulling people along into this next phase of the life of an MSP.
• 39:12
  SPEAKER_00: I think that's uh really, really great advice and a wonderful point to uh to end this conversation.
• 39:19
  SPEAKER_00: Now, um, first of all, I want to thank you so much for all of this because this has been super insightful.
• 39:24
  SPEAKER_00: Thank you.
• 39:25
  SPEAKER_00: Um secondly, we do always ask our guests to invite the next guest on the podcast.
• 39:32
  SPEAKER_00: Um who should we have next?
• 39:35
  SPEAKER_00: And you feel free to be cheeky.
• 39:37
  SPEAKER_01: Uh okay, so I haven't asked him yet, but I do want to nominate Chris Feynon in Anitian.
• 39:42
  SPEAKER_01: Uh he is my former boss.
• 39:44
  SPEAKER_01: He's great in few, works, uh, has worked in, you know, uh sort of government compliance, FedRAM compliance, you know, the defense tech space uh in his career.
• 39:53
  SPEAKER_01: Uh he's got a whole bunch of other accolades, and I think he's a great interviewer because I've spent a lot of time talking to him.
• 39:58
  SPEAKER_01: So I would I would nominate him for the next podcast.
• 40:01
  SPEAKER_00: Amazing.
• 40:02
  SPEAKER_00: Well, if if he's anything like you, this is going to be a blast.
• 40:05
  SPEAKER_00: Um, cool.
• 40:06
  SPEAKER_00: Thank you so much again for sharing your thoughts and taking the time to speak with me.
• 40:10
  SPEAKER_00: And uh yeah, to the dear listeners, thank you so much for tuning in and see you in the next episode.
• 40:17
  SPEAKER_00: Thanks, Adam.
• 40:19
  SPEAKER_01: Thank you.