About the Episode:
Today we meet Rich Freeman and Matt Whitlock, hosts of the ChannelPro Weekly Podcast. Listen in on them interviewing Rick on his expertise on how he has built his brand, maintained it all while building his business and how Rick, Matt, and Rich want to give this knowledge back to the Managed Services Provider community.
About Rich and Matt:
Rich Freeman is founding and executive editor of the ChannelPro Network, where he’s responsible for setting overall editorial direction, covering industry trends, and reporting on breaking news in the SMB technology market. A veteran writer and editor, Rich has more than 25 years of experience in the IT industry. His articles and white papers have appeared on the websites of Computerworld, Network World, CIO, InfoWorld, and Redmond Channel Partner magazines, among others.
Matt Whitlock is Online Director and Tech Editor for the ChannelPro Network. He brings more than 20 years’ experience working in the technology industry to his reviews, analysis, and general musings about all things gadget and gear. Matt’s decade of experience in online media, community management, and web development has been instrumental in propelling the ChannelPro brand into the digital future. Matt also co-hosts the ChannelPro Weekly Podcast, a weekly audio program specifically tailored for resellers, VARs, MSPs, and system builders.
Listen to the podcast here
Watch the episode here
- Virtual Handshakes
- Consistency with Social Media posting
- What if your neighbor is a real joke?
- MSP Community
I’m your host, Rick Jordan and today we’re going all in. Today’s an interesting day because we’re doing a cross post with an amazing podcast that’s my industry. Today I’m bringing on Channel pros, Matt Whitlock and Rich Freeman. What’s shakin, guys?
Matt: How are you? Alright, good to see you.
Good to see you, too. It’s great to be on your show, too.
Yeah, it’s great to have you on our program as well. I think that this whole kind of cross collaboration show that we’re doing, why don’t we take a couple of minutes and just kind of introduce each other to each other’s audiences?
Yeah, that’s cool, guys. I love that because our audiences are similar, yet different.
In all the ways that matter I hope.
Yeah. Right on.
So Rick, why don’t why don’t you go ahead and go first, once you tell the ChannelPro audience a little bit about you?
So I am an MSP, the first and only publicly traded managed service provider within our space, and there’s 143,000 of us across the United States. Everyone on my show knows this already. We’ve been talking about this for the last several months as we got to the point of our public offering, and there was a lot of interesting media attention a couple years ago, I’m sure you guys covered it when data went public, right, and I know you’ve covered reach out a little bit as well. But here’s the difference. It’s like, this wasn’t an exit for me or anything. It’s like this is a motive building.
Now, because it’s a roll up of managed service providers of MSPs. That’s going to take place over the next two years, where we’re acquiring about 50 million in top line revenue. It is just phase one, or around 50 to 75, plus managed service providers, and still to this day, I’m the CEO. So this isn’t, you know, something like where I’ve sold and moved on, which we see a lot in our space, right? Then they become coaches, the sellers become coaches and all these other things that I see. I’m still doing it, and I love helping MSP just make more income, because even out of 50, you know, there’s 143,000. I’m only going to acquire around 50 to 75 over the next two years. But in that I just want to help everybody else along the way, guys, whether that’s happiness, you know, cars, whatever it is build a family, just to acquire more joy in what they have. Because I know what this is like, going from being broke, and starting an MSP to where I’m at right now, and I’ll leave this with a question, did you know that the average man of service provider only takes home about $80,000 a year in personal income? Isn’t that kind of crazy?
Rich: It is, absolutely. Yeah, and it kind of speaks to the fact that folks in our audience at ChannelPro definitely need the kind of expertise that we pass along from people like you because there really is no reason why even a relatively small MSP the owner of that company shouldn’t be doing better than that, and so for the benefit of your audience, I’ll go ahead and introduce them to ChannelPro. So we are a publication 100% dedicated to its providers and MSPs, who serve small and midsize businesses. We went into business in 2007. Which if you think back to what was happening in the economy at the time was maybe not the perfect time to launch your business, and yet, here we are in 2022. Bigger and better than ever, we have a website, channelpronetwork.com. We do events in person and, and online, and you’ve been a part of some of those, Rick, even just within the last few weeks.
So we really like to think of ourselves as the voice of the the SMB oriented Channel and Channel per weekly, which is the podcast that we are co broadcasting with right now is a show that Matt and I host every week and we discuss any and all things related to running an IT business, but you know, from sales and marketing to new products, new solution opportunities, new tools, new technologies, etc.
That’s awesome, Rich, thanks, my man. Matt, I know that you and I always enjoy hanging out in the back right before I go on stage right at the channel pro event.
Matt: Well, so I’ve taken at our events, I’ve taken a little bit more of a production role these days, although you’ll catch me on stage every now and then doing stuff. So I’m part of one of our Sessions in Dallas. But the rest of the time I’m channel pros, online director, I kind of manage our online infrastructure. I had a lot of our web stuff. I handle tech editorial. So I’m part of the editorial team, I don’t get to write quite as much as I used to, but you’ll see my name in the magazine every now and then talking about technology and generally hardware kind of focus.
So we just saw each other about a month and a half ago, right. It was in Chicago in my own hometown. I’ve got to say that I was really really impressed because there were probably close to 200 people that were there, there were attendees, or at least from what I could gather in the room, you know, about 20 tables of 10 people. I mean, that’s easy math, right? That’s 200 people, and it was incredible to see so many people in the room again, and I’ve been to other events like in Florida, last year at Funnel Hacking live, there were 3000 people there. But generally speaking, it’s been slow for our industry, from what I feel compared to the general entrepreneurial space, which is a lot of who’s listening right now. You know, in the general entrepreneurial space, it’s like these events have still continuously gone on during the past couple years, anywhere they could they just moved to states that were open almost the whole time. You know, but it’s different because you guys do regional stuff, right?
What’s it been like the past couple years continuously to try to engage and build a community without the ability like Los Angeles last year, right? I remember, I was gonna be there, I was speaking, and I remember that one was canceled, just because it was like two weeks prior, there were more mandates that were placed on I think it was vaccine requirements or something during that time. I don’t remember what I just remember that you guys made the choice to go all virtual or something or canceled entirely. But how was that trying to maintain an engaged community when a lot of stuff is out of your control?
Rich: Yes, it’s been an exciting two years. And we had all of these face to face events scheduled for the year. We knew right away, we were almost certainly not going to be able to do any of those, and so we had to learn a ton about hosting virtual events that kind of lived up to our quality standard on the fly, and Matt played an enormous role and continues to but he had to figure out in a really short time, like the right set of tools and technologies and the production techniques to use to deliver channel pro grade quality online like that, and then last year, kind of, you know, to your point, everyone, including us, went back by about mid year. We started doing in person events, again.
I think it was your event, it was your event, right? Well, there was almost it was Dallas, I think last year was almost in our industry anyways, it was like the first in person, one that came back out of all of the events in our space, because I remember talking with other guys, they’re like Rob Ray, and Matt Solomon and discussing it with them, I’m like, “Oh, man, it’s so good to be back,” in just seeing people in the room, and I remember that it was still a little skittish, right, because there might have been about 50 people there that were present in the audience at that one. But then there were like another 250 online.
So you guys pivoted extremely well, that I saw, and that was just interesting to see that just the excitement of everybody to be back there in person too.
Matt: Yeah, we were really early going back in 2020, knowing full well that we were going to do what I commend a hybrid mareel to jump right back into and be the pioneers?
So how’s the publication doing? You know, cuz it’s, that’s, is that what started rich in 2007? Or was it the events that started first?
Rich: No, it was absolutely the publication that started and, you know, we came out of the gate, it was just a 12 times a year magazine that was available exclusively on paper, I barely remember what the website would have looked like back in 2007. I know that it just wasn’t, you know, that wasn’t core to the business, and it was a few years before we started doing events and so on, you know, as we kind of branched out into webinars and stuff like that over time. So it was a very different model back in 2007, and it’s been kind of fascinating to watch the publishing industry evolve, and then we’ve had to evolve along with it, we still do a monthly magazine.
I love that I just saw friends of mine, actually on the cover of that for this last quarter, Brian and Mary Hamilton, and now she’s hosting events for clients. Right, and this is amazing. She just had her first like cybersecurity. I don’t remember what she called it, right, aut she had jeez, at least from the videos, I saw, like 75 people that were at these events, but that’s the thing is Brian and Mary had 75 prospects for business sitting in the room. This is one of the things that has industry has changed and morphed into how you’re supposed to sell nowadays too, you know, just like you guys lead with education at your events, right, because that’s what it’s supposed to be the sponsors are there and you see me go up on stage, I’m not selling when I go up on stage, right? I’m not trying to be like, “Hey, come to the back of the room, and I’m gonna see if I can acquire you,” you know, that’s not it’s like, I’m just here to help. I’m here to educate you on what the industry is doing, and I really appreciate your approach with that to now just encourage some of the other sponsors to do the same. Because it’s, they’re gonna go a lot further right, that works for you. Isn’t that rich what the publication was set out to do originally, it was just to educate people in the channel.
Rich: Absolutely the original, very original vision, I was like the founding editor of the publication, and the idea was there are all of these entrepreneurs out there, and you know, by and large, these are people who started out as a technician, they were working for somebody else, somewhere along the line, they decided, for one reason or another, I can do this at least as well as my boss can, and I want to give that a shot. They went into business for themselves, despite the fact that almost none of them had any experience or any training and just on the job there kind of learning how to sell and market and serve customers, and then eventually, how to hire people and manage people and, and grow employees and keep the books and just all the stuff that goes along with running a business, that there was this whole population, like you were saying, you know, 143,000, MSPs, but huge population of people figuring it out on their own day by day. So we thought that there was definitely a place out there for a magazine that would pull together information that these people could draw on to be more effective at what they were doing. We also had this idea from the beginning that a lot of what we could do is connect peers to peers that, in addition to, you know, providing the guidance and information from a variety of sources that we might know, one of the best things that we could do is connect peers to one another so that they could ask questions of one another.
You know, the people like you mentioned, Brian and Mary, were recently on the cover of the magazine, the people on the cover of the magazine every month are folks who are sharing some experience some best practice that helped them be more successful with other people like them, so that they can apply it in their business as well, and that from the get go has been the idea here is how do we help this community be more successful, and how do we help them help each other be more successful?
That’s how sales is these days, even within the MSP space, but even beyond is just having these sorts of micro events, to where you can educate people, and you invite them for free. But this becomes your marketing expense, right, the invitations, and then also the I don’t even think they had sponsors when they did this, I know I don’t want to do this, but we had you just feed people, right? You provide them with lunch or whatever it is, and they’ll come out and they want to learn because it’s a topic that makes sense to them.
Rich: Quite honestly, Rick, you are way way more sophisticated than we are a channel pro about social media and, and kind of leveraging social media to spread the word and to grow the business and so on. I feel like there’s an opportunity to get more sophisticated about some of these other venues so that once again, we’re kind of meeting the audience where they want to, to meet us.
The consistency in the content is one of the biggest keys that I found out, you know, and even personally with the two of you, I’m assuming that that was a question, right? By the way, this was a year ago from a social media perspective.
So I want to know more about how you use social media to grow your business and how that might apply to us and folks in our audience.
For sure, and we’ll put this into two buckets. Because first, most MSPs are never going to do what I do when it comes to social media, right? If you take a look at Instagram, it is by far my biggest platform. I have a little over 300,000 followers, but it’s gotten a lot of attention, and even when I do large media like Bloomberg, or Newsmax or Fox in Washington, DC or CNBC, all of these large media, global media networks that I’ve been on Reuters, you know, which is ticker news, and Australia, and all these places I’ve been on have generated so much back traffic to reach out to websites it’s just insane.
Now we measured about a month ago and we’re at 47% of the SEO traffic that goes to reach outs website is people just searching my name, and I even saw it too, you know, I don’t know if they’re listening but Malwarebytes now because there’s so much that’s around those that if you type Rick Jordan cybersecurity, there’s a Malwarebytes ad that comes up when you type that. So I know that malware but this is brought to me by one of my board members Malwarebytes is actually using my name to generate traffic to their website, you know, which is mind blowing to me. That’s the big bucket, right? When it comes to personal brand too, it’s because of this that, you know, the podcast is in so many countries and at some point there will be, you know, probably a b2c play. When it comes to cybersecurity. That’s, you know, later on down the road but as an MSP right now, you can start with just something because Instagram even though that’s my biggest platform, people still go there, you know not not necessarily b2b, but they will go there and look me up potential clients potential acquisitions, and look at my content because Instagram is a place where they actually get to know you as a human being.
That’s how you should see that because it’s meant to be photos of your life. You know, if you’re traveling, I put a lot of my most heartfelt content on Instagram, but then if you shift over, I don’t do much with Facebook. By the way, I’m just throwing that out there because Facebook is almost kind of like a dying platform. It’s great for families to connect for some groups and all those things, but I would never suggest to an MSP to put a lot of money into Facebook, where I would say putting money into to generate leads would be LinkedIn is that LinkedIn is just absolutely incredible. Because there’s so much that you can do. I mean, I host events for MSPs there right now, I just hosted one with IT glue and they were blown away because I sent 250 registrants to this joint event that we had. Just because of the efforts that we put on the on LinkedIn, that’s direct messages, Matt Solomon from Channel program would know, you know, formerly of Kasaya, too would understand this, because he’s super active. On LinkedIn, I launched a newsletter because I’ve been intentionally building my connections and followings on LinkedIn over the last year and a half. A year and a half ago, I had like 400 connections on LinkedIn, I never put much effort into it. It was always Instagram and podcasts and all this when I started putting effort into there strategically, now I’m close to 12,000.
Which is bigger than what most have in our industry, and it’s targeted to because my target isn’t customers right now on LinkedIn, but my target are MSPs because I want to help them and then maybe potentially look at some synergies for acquisitions. I don’t shy away from that, but you can do so much on LinkedIn, but you have to be active. You have to, I mean, I know that sounds like stupidity talk, right, but you have to have an updated profile pic. I can’t tell you how many times people come on to the show with guests or I’m on their shows when I guess on podcasts, like “oh my God, you look exactly like your picture.”
I scratched my head. I’m like, “That’s a thing. Like people are, you know, photoshopping themselves and doing all this weird crap. Or like a photo from 10 years ago, it’s still their profile pic on these things.” So if it’s for business, do LinkedIn, but I guarantee you guys that people who you’re trying to do business with as an MSP, if you’re trying to gain clients, from there, they’re going to go to Instagram to see if you’re there and see what type of a human being you are. That’s where they connect with you personally, because people buy from people, not from a machine or a company.
Rich: So different content in those two different places, which is interesting, I assume it’s more of a business conversation on LinkedIn, and more about, you know, letting you as a person shine through a little bit on Instagram, to kind of develop some of that trustworthiness, essentially, that you know, who you are as a human being.
Yeah, you got it.
Matt: For me a little easier, Rick, because, you know, your brand is also you, you you are your brand, right? So that’s gonna make it a little bit. I don’t want to say easier, but maybe a little easier to use platforms like Instagram, where it’s generally more of a personal kind of thing. and LinkedIn where it’s much more business because you’re kind of both you are.
Yeah, for me, it’s, it’s interesting, you know, and for me, anybody who’s lacking this will probably echo Gary Vee, you know, and the big personal brand guys too. But as I said, 47% of the traffic that goes to reach out to websites has people searching for me, just Googling me, and if you type in Rick Jordan and Google, I take up the whole front page, and Rick Jordan is a pretty common name, and to the point not to where there’s even a Google panel of me, they just give those to you when there’s enough searches for you on the right side, but we’re trying to get it edited. It’s kind of funny because somehow someone thinks I wrote some books about parrots or macaws. I didn’t, and I’m not 50 years old.
So I had some questions about blue macaws that I was gonna ask you guys I know, from Google said you were an expert.
I know. Right? I’m apparently 58 years old instead of 42, according to Google, but the social links are right, you know, on that panel that’s over there. But yes, I hear what you’re saying from there. But think about this for a second. If you go to LinkedIn, right, you’re not necessarily connected with a company. That’s there. People are still looking for real conversations. So if it’s an MSP that goes out and has a sale, sales call, or any kind of phone call, even if it’s in person, zoom, whatever with a new prospect, immediately go on and connect with that person at LinkedIn. Then the next thing you want to do is send them a direct message because you might not be nervous, you know, to ask for a cell phone number. For me. It’s easy. It’s actually when you’re not nervous about it anybody will just give it to you. I’m talking about celebrities too. That’s how I have good phone numbers. It’s like hey, you know what, when you connect with them like a real human and, you know, not like a fanboy or some freak, and you walk, it’s like I, for an MSP, I genuinely want to help you, I believe that I can help your business, can you give me your cell phone number just so I can follow up with you next week, when I have some put together for you.
Notice how easy that was, how I said it, right, and it makes it part of the natural conversation, but then immediately go and check out some of their content that they’re putting up on LinkedIn, especially if it’s a law firm or a CPA firm, I can almost guarantee you that they’ve been on this boat much longer than MSPs. This is something that’s always boggled my brain a little bit, too, is just the lack of content that a lot of MSPs will put out on any kind of social media and maybe not even content, but engagement. You know, one of the best things to do and this is how I gained so many connections is you go out and you find people that you want to connect with, look at their posts, and then like the post after you read it and send them a DM and say, “hey, you know what, I really enjoyed your latest posts that you had on your profile. That was really cool. Looking forward to more content from you.” Just a message like that, after you like their posts, or do you know what goes on and endource them.
Typically, on LinkedIn, when you endorse somebody, they’re going to endorse you back for something because that’s how LinkedIn works. You can endorse them, and there’s an automated function like, “Hey, can you endorse me for something too?” Then it forms a connection. That way, it’s getting back to it’s the best possible way to do virtual handshakes that exist, and then you can dabble with some of the personal content, because you’re right, if you go and look at my LinkedIn, it’s longer posts. It’s more about the cybersecurity industry and MSPs as a whole. But then there is some sprinkled content that kind of cross pollinates, over from Instagram as well. Because while most will go and look for you elsewhere, not all of them do, but then they can still get little doses of who I am as a human, and they start to know and trust me in that process so that they’re comfortable engaging with me through that direct message through the DMS. Then you just ask them to join something that you’re doing.
This is how MSPs join my virtual events right now on LinkedIn. It’s like, “Hey, I’m putting this on, would this interest you? It’s the first Monday of every month, I’ve got a community call. This next one is, you know, the wrong way to raise prices and pay your employees more during inflation. Does that interest you at all? Cool. Here’s the link, go to the LinkedIn event and just hop on.” Oh, yes, different content, Rich, as you said, but it’s meant to be that way. You know, because it’s a different type of audience. It’s a business audience that exists on LinkedIn, but there’s still people, you still want to pepper in some of that personal stuff.
Rich: You know, something I’m curious about? See, you went from 400 to 12,000. On LinkedIn, I mean, it was that a sort of gradual process where you came across posts and people who seemed relevant, you reached out to them in the manner you were just describing there, or are there techniques for finding and reaching out to people, you know, a little bit more quickly than that you were using to make that jump?
Yeah, I don’t use bots. There could be, there could be ways to do it quicker, but you run the risk of getting banned from those kinds of things. These are teams and I have, I have messages that are like that, you know, so if I at first it very much was me, you know, and then I brought a team on, but it’s exactly what I told you is what’s done, I go out there and I find individuals I want to engage with or I find MSPs, I see, see some content that they’re posting, I like their content, and it’s not just a click and running through the motions, like I will legit take a look at the content and see if I like it, I’m not gonna like something that I don’t like, and that’s important, too, is being transparent in this process. Not to go that way. Because you figure that if somebody’s posting something that resonates with you, your stuff, and your personality is probably going to resonate with them.
So if you want to find those people, you can have easier conversations, it’s lower hanging fruit, or it could be a warmer lead in that process, and then it just takes time. That’s the thing. It’s like, you know, I don’t know if you’ve ever heard the phrase, it’s like, you know, 30 years ago is the best time to plant a tree. The second best time is today. Now, this does take time, I mean, to get this podcast in 50 countries, we’re up to 260 episodes published now going three and a half years. Yeah, I had, jeez, like 11 downloads in the very first episode, you know, compared to the 79,000 that exists today. So it’s just that it takes time to build this momentum. There’s no real way to shortcut that in anything you do in building a business with the exception of putting in more intention and more energy and focus onto that, because wherever you place energy and focus grows.
Matt: I love what you said about staying genuine though people can really see through what’s what when people are being fake or going through motions and, you know, just kind of liking things randomly. Like it’s so obvious when people do that, and I think that’s the key to making actually genuine, valuable connections long term is to stay genuine and true to true to yourself.
For sure, absolutely, and just like I mean, that’s a lot of that’s a good amount of followers for LinkedIn or Instagram, I’ve got a lot of far, guys, I’m still in my DMs personally, you know, when I stand on stage, and I say, “hey, text me at this number,” you know, it’s a platform called Community, which is Gary v’s and Ashton Kutcher’s platform, in order to engage with the community via text messaging, but it’s still on my phone, I’m still the one that’s in the text messages, that’s in the DMS, on LinkedIn, on Instagram, wherever it is, because I want people to know that it’s actually me, you know, there may be some time so where team members can see that and get information back to them, and be transparent about the fact that I have a marketing team, I have a dedicated team to LinkedIn, I have a dedicated team to Instagram, I put a lot of intention and energy and focus into these things, because it’s just how I chose to grow my business. But any MSP can do this and what’s more so is that every MSP should do this, at least at some level. I mean,
Rich: Speak about that a little bit, because I worry that there might be some people listening or watching right now who are thinking, “Well, I don’t have the time, you know, to invest as deeply as Rick is, and I mean, you know, for somebody who wants to begin leveraging the power of social media for business growth purposes, I mean, how much investment how much time, should they expect to have to invest in order to do this at a at a decent level?
If you want to do it, where it’s consistent, and when I say consistent, I mean, a post a day, you know, which you think, “Oh, God, that’s, that’s 30 a month,” you know, there’s a couple of things about every social media platform that’s important, and that has to do with consistency. So whatever you decide to do, if it’s a post a day, I wouldn’t suggest any less than a post every three days, which would be about 10 posts a month. But when you post consistently, the algorithm starts to like you more, because they know that it can count on you to display your content to other people, it’s almost like it’s just waiting for you to continuously feed the machine. When you go off rhythm even like posting too much, or posting too little than what you usually do, then it kind of messes it up a little bit, if it’s 10 posts a month, or 30 posts a month, it really only takes about a day to generate that amount of content if you’re really intentional about it.
I mean, for me, I mean, I’m in a studio right now, right? This was like a content producing machine. It’s once a month that I’ll do podcasts, where I have five or six guests on and I batch them all in one day, which generates six hours worth of content that can generate literally about 50 clips to go into social media. But then I have a copywriter that will take little bits of those things, and actually start to write some articles and things for LinkedIn for me, based upon literally everything that I said, you know, so most of the phrasing and everything is mine originally to begin with.
Now while I have a team, any individual, even if it’s like a one man band MSP, you can sit down for a half a day, and come up with at least 10 posts for that month. Any photos you have, because some of the best photos that resonate with me on Instagram are photos of me and my kids. It’s relatable, it’s family, and then just write something like I mean, when the shooting happened, this was a pivot on my team’s part, you know, but I had the photos there already. Because I try to capture this stuff all the time, to where it’s like, man, these kids in the school were shot today. The post that I wanted to go up was about my kids being like I’m holding them tighter today. It shows the human side of who you really are, and this is stuff that can go on LinkedIn guys, and that should go on LinkedIn, because it shows you way beyond a cybersecurity professional way beyond an IT management professional, it even shows you as a human being. Because I bet you most of the people we’re trying to serve also have kids, and then that forms a common connection.
So if you put that up there on LinkedIn, it’s like man, tragic news today, today, I’m holding my kids a little tighter. Don’t take life for granted. Don’t take the years you have with your kids for granted because today is the only day that you know that you have promise with them, and that’s why it became a viral post. But it’s my heart. That’s why I became a viral post.
Matt: I think some of these might have some worries about getting personal. What are some of the ways you manage some of the risks about putting maybe too much out there where it might backfire?
I walk and dance this line here and there. If you’re going to get into the realm of politics, that’s something you have to navigate very very carefully. You know, like for example, I’ll go on it was last year, I go on Newsmax and I was talking about the Instagram algorithm actually just like we’re talking today, and it became about teenage body shaming for teenage girls, and because Newsmax typically leans a little bit to the right they started pushing me as Bob Sellars was the anchor started pushing me and telling me “Well, what about big tech, this big tech that the algorithms? Don’t you think they should do everything you know?” I just laughed at him, and I’m like, “Well, what about responsible parenting, Bob.”
Yeah, I think the algorithm has some sort of malfunction. No, actually, it’s probably working the way it’s supposed to because it likes negative emotions, and everybody’s, you know, human nature feeds on negative emotions. If we’re responsible parents and sit at our dinner tables with our kids, and tell them to do these things, you know, so I took it from both sides, politics is the only place that I would tell MSPs to be careful, other than that, expose your life, for real. You might think, like, like privacy, you know, I’m a private person, all those things, but that’s not it, if it’s a conversation you would have with somebody in person, it’s a conversation that’s okay to put online. You know, I’m not talking like with your spouse behind closed doors, that kind of personal talking with a neighbor, you know, that you’re just talking about, like I said, the shootings, you know, hold your kids a little tighter today, man, don’t be afraid to put that stuff out there.
You know, and if we’re talking about social media and personal branding, this is the time to jump in on this. Because going forward, when I talked about this came full circle, right going for when I talked about the right way to sell as an MSP right now is not going in person and sitting down with that individual, because that’s too frickin slow, guys, it’s way too freakin slow. The way that you want to do this is like Brian and Mary Hamilton did it where you bring 75 people in a room and talk to them at the same time, generate 15 leads out of that, of which five of them are going to close. You know, it’s just simple math, when you have your close ratios down, it’s frickin phenomenal, and this is where things are gonna go. So if you want to just putter along as an MSP, if I’m going to be direct on this, I hope you don’t mind that, and if you do, I’m sorry, well, not sorry. But MSPs need to be out front and doing these things and evolving right now. Because this is where the space is going. It’s becoming hotter. The reason I say it’s becoming hotter is because there’s other ways to reach people. Now, the old ways of just going door to door or having one meeting at a time they’re done. They’re absolutely frickin done. I don’t even think that an in -person meeting should be your first meeting anymore.
Especially after these things I started doing years ago, because I was still involved in sales. Doing zoom meetings with people is the very first meeting just to see if it’s even worth your time. You know, but instead of doing zoom meetings, one on one, or what if you have like a one to 20 doing virtual events, if you’re nervous about public speaking, as you call it, the only nervousness is that you actually like to make a freaking sale.
You know, because your brain, your subconscious goes all the way to the end of that thinking, what do you need to do to accomplish this? It’s like, well, what if I go in there, and I talk to 20 people, and five of them actually close? Holy hell, how am I going to handle that work? It’s not really the fear of public speaking that MSPs will have. It’s actually the fear of scalability. So when I say that the space is getting hotter, that’s what MSPs are facing right now because if you’re not larger, if you don’t have the resources, if you don’t have the foundation in place, you’re not going to be able to handle the amount of workload that’s going to come your way. We saw all the scrambling and people making bank right in the MSP space when the pandemic hit with all this remote work, you know, and I saw across all these Reddit threads, I monitor Reddit, I don’t really like Reddit, but I monitor like, “Oh, yeah, making more money than I have in years. This is amazing.”
Guess what happened four months later, they’re back into poverty again, it’s horrible, because I feel so bad for these MSPs. But it wasn’t sustainable, because they couldn’t handle that workload and grab onto it and keep going up, because it kept going in their own pockets. I love backtracking to when I first started this and said that, hey, the very first thing that I did was invest back in my business and hired people to be able to take things off of my plate. So I wasn’t the one that was answering service desk calls. I wasn’t the one that was, you know, always having to handle billing issues, or whatever the thing would be when it came up, because this space is just going to continue to get hotter businesses, there’s no shortage of them, even over the last couple of years, and I’m predicting right now that there’ll be 1/3 Less MSPs. Now, at the 143,000 mark, there will be a third in less than five years because of two reasons, one for consolidation, and two, because the smaller ones will not be able to service their customers the way they should be able to.
It’s because of this stagnation that they have in themselves this indecision, to be able to change with the times, to be able to sell in different ways, to be able to go and mass market to people rather than one on one. Still have the one on one but be one on 20 in person, be one on 75 in person. Imagine what your life could be like, you know, not taking home 80k a year but actually taking home 800k a year.
Matt: It’s a stark difference. If you can talk a little bit about the amount of consolidation that you see out there, because you’re out there buying your other MSPs, you know that it’s coming together, and in order to scale and in order to serve as customers, you gotta be bigger. How can you get what can you say to an MSP, right, that’s out there right now that’s really small, that might be thinking, wow, I can’t really do a lot of the things that they can do. What does that person need to do and what are you seeing out there?
Yeah, thank you for that. There’s two ways to go about it, and I think 11 years ago, when I started reaching out, it was a different world, guys, it was a much different world. Cybersecurity really wasn’t even a thing.
Matt: Britney Spears was still a singer.
She was, yeah, no kidding. You brought up Britney, you know, the way she got the, you know, whatever was her custody or whatever revoked even on like, like, about six months ago or something. She’s a free woman again. Yay, Britney! With the consolidation in the space, this is happening at all levels. I mean, we just saw cars say, you know, put in their offer to buy Datto, you know, which is actually interesting. I was there when Fred was talking in Boca Raton, and he was describing different things, and it, it emulated what’s going across the board, right, because Datto as a whole, he goes, I’m just gonna say it, we bought data, because data was cheap.
At that stage, and these are the things that that I’m thinking, I’m like, Dude, that’s, that’s awesome. That’s a lot of balls. I love who this guy is, right? Because he’s just putting it out there as true things like, I don’t get it, because they’re a public company. That means their financials are out there, you can actually go and look and their profit is like next to nothing. You know, they’re running a single digit EBITA, you know, which is why they were cheap, which is why it was good for us to go in and buy them because now we can add efficiencies. We can scale the company even more, it was like, it was just a good match. But we bought them because they were cheap, and as I look with at the space right now, I’ve talked about MSP owners taking home about 80k a year right, which by the way, is just slightly higher than the SBA is the Small Business Administration’s average, take home pay for any small business owner that exists in the whole United States, I think it’s at like $63,000. Right now, it holds true in the MSP space too, you know, it’s right around that same range, you know, obviously, it’s like 78-79,000 for MSPs. Now, what I’m seeing is very similar to data, and don’t get me wrong, because I think data was a company whose technology is actually pretty great, and I’ll come out there and say we use it, it’s been in use across the board, we’re obviously acquiring MSPs that are using it too.
Now, as a company, they’re good. But you see this with MSPs, also, is that their EBITA is low. Yeah, at least the smaller ones, it’s really, really low, because there’s not a lot that’s being used to reinvest back in the business. The mindset that I see a lot smaller MSPs are just as simple as I want to pay my mortgage, and this is why you guys, this is really what I like, displays my heart wide open here. Because I know that I’ll find my 50-75 MSPs over the next two years, because it’s good, it’s gonna be a good synergy between us. Like there’s a big one that’s coming up here that’s going to close within the next quarter, and I have more to say about that in a little bit. But I’m a public company now. So there’s not a lot that I can disclose publicly until it happens either.
The smaller ones that I see, I’m still gonna find 50 to 75. I’m not worried about that. But guys, I want the 143,000 to just make more money, they want to have a better quality of life. So when I see an MSP come across the board, I’m like, guys, man, you’re not really worth that much as a business. Because your EBIT is only 8%. You know, you may be taking in a million dollars, but no joke, you’re only taking home $80,000 You’ve got a million in revenue. But why are you only making as an owner $80,000? Well, I’ve got all my people that I gotta pay, I’ve got these other things, and it’s like you’re running inefficient, and even worse, that I see is that most of the pricing is way out of whack.
This is why it’s difficult to to actually encourage MSPs that are under a million dollars, which by the way is like 93% of them. Across the United States. I know I was there, the first five years, I went from zero to 500k in revenue, reach out, you know, the next five years went from 500k to 5 million, and that’s because I had to shift how I looked at these things and shift my perspective and understand that the only way to do this is to actually provide more value, and you know, this was like a little trick into my or a little seed. I guess this is probably going to publish afterwards my LinkedIn training but the only way to raise prices and to charge more is to provide more value. Now, who the hell cares about inflation and everything else, don’t just raise your prices just to raise your prices and don’t go back to your existing clients and say we’re bumping up prices without adding more value to it.
That’s like business suicide, they all look at AT and T and Verizon right now they’re doing that, right. Then there’s T Mobile that says, hey, you know what, screw those other guys, we’re gonna give you our top plan for the same price as the middle tier plan, we’re just going to keep our prices the same and actually take it down for most everybody else. They’re gaining so many more customers that way, and they’re focusing on efficiencies and profitability in consolidation of their physical resources in order to increase their profits. But to do that, they’re generating more cash flow in the near term, by pulling all these other customers over. That’s what MSPs have to do.
I’ve done this time and time again to where I’ve pulled customers from other MSPs in the area in the Chicago area, who are paying less, and now they’re paying twice as much with reach out, because I’m giving them more value, this could be adding two more products to your stack. This could be coming to a channel pro event and looking at one of the vendors and walking in and saying “I’m going to add something to my stack today, because I can add something and then charge more tomorrow, I can make more money, and my clients can have more value and be more predictable, reliable and secure. It’s a win win.”
Small MSPs are going to have a tough time. Because if you look at reach out stack, and we just went through this this morning with our board of directors, they were like, Oh my God, there’s I miscounted I used to say 27 from stage, I don’t know if you remember that at ChannelPro events, I would say “Hey, this is ReachOut stack 27. We have 34, dude. 34 items, you know, with different tools and processes and platforms that are in our cybersecurity stack, and the only way to provide something like that that actually does work and protects all these attack vectors from the hacker is to actually charge more money.
I don’t care what area of the country that you’re in, you can match this to it. Because there’s a training I did on pricing, and there’s different rule sets. But you should be at least at 70 points in gross margin on every single thing that you do. After all of your tools are paid for after your people that go into servicing that client are paid for even what you should pay yourself, and if you’re a lone ranger right now, take what you would pay someone else and calculate that and your cost of goods sold and see if you’re still at 70 points of margin. Most won’t be because there’s no MSP out that should be charging less, less than $1.99 a seat. Now reach out charges $4.99 a seat, and that’s literally for everything, you know, that’s cyber and IT management. But look, we’re providing 34 layers to our clients and stuff doesn’t go wrong, and when it does, I think you know, we’ve had clients get breached, because it’s not a magic wand. But when it does go wrong, the longest amount of time that we’ve ever taken in incident response to get them completely fully operational is two hours. That’s it, and that’s because we charge so muc h and because we charge so much, we can deliver all these different tool sets because we can deliver all these different tool sets. It’s actually a service that works.
Rich: Yeah, well, it’s there, there probably is no bigger, more important issue in the industry right now for MSPs, then the sort of larger issue of the master issue that you’re addressing there, which is just that that consolidation you were talking about is happening. So yeah, you know, there has never been more demand for managed services that is pulling a lot of money into the market. From private equity firms from already established large companies like yours that are looking to acquire and to grow, and what that means for the smaller MSP is like it or not, you’re going to be competing with companies that can do a whole lot more than you are doing right now, and you need to, at a minimum, you need to have a strategy for competing with those companies if you intend to stay independent and small.
Rich: If you want to get bigger, then you need a plan for how to get bigger and how you’re going to do that and do that relatively rapidly, because I don’t know what the timeline looks like. But there are going to be probably fewer MSPs out there, you know, two to three years down the road. So this is coming at everybody in our audience, whether they like it or not, whether they’re ready for it or not, and they need to have a strategy for how they’re going to do that. Because it will get harder and harder to compete the old school way over time.
You got it rich, and I want to leave everybody on a high note too, because I mean, what we’re saying is just, you know, the straight truth, but there are ways to do this. You know, one of the ways is to maybe join up with someone like ReachOut and we’re the only public one you know that exists. Private equity, by the way, is not going to buy you. If you’re doing under $5 million in revenue. They just won’t because you need to have at least a million dollars in EBITA a million dollars in profit in order for private equity to actually even consider you.
So if you’re smaller than that, the only one that you’re attractive to is somebody like me from an acquisition perspective, you know, but if you’re somebody that doesn’t let and you want to go for it, there’s ways to do this, and the best tip that I have for any MSP, or really any business period, no joke, any business period, is to add some kind of new offering, or some kind of feature or value to your services, to your products, at least four times a year. That’s once a quarter. So as you’re going to channel pro events, and you see these vendors that are around there, scope out, someone that you could add a service that you could add to your staff, to your service to your product that you’re offering this quarter, and then you do the same thing next quarter. At ReachOut, we evaluate maybe 10 or 12 a year. And that’s how we got up to 34. So we’ve been at this, it was just like we were talking about personal brand, right, and going from all the you know, 400 followers to whatever it is on LinkedIn right now, or Instagram and all it, it takes time.
Today is the day to start that because if you can add four services a year, in three years, you’re gonna have 12 services you didn’t offer before, and you’ll at least have that and you think you can accelerate that pace. That’s cool. But you can’t just try something out and then just skip it right three months later. This also means that you have to commit to it, and I think some vendors are getting on board with this to where they’re allowing no minimums in our very small minimum at this point. Even if they have contracts, who cares? I mean, I started this 10 years ago, when everybody all the vendors in the MSP space required long term contracts, you know, three years worth and all this stuff. But if I didn’t care, I think this is what I spoke on at the last channel, bro event, right? It’s like, who cares?
Commit first. Commit first and then take massive action. So if you see something, they’re like, Oh, you got to sign a three year contract and you’re like, “Oh, my God, I know this is gonna provide so much value, I want to do this this quarter,” you have to sign up for a 300 licenses, minimum, whatever it is, but you only have 50 people you’re servicing right now as a as a small MSP. Who cares? That just means that over the next quarter, during your ramp up period, you just have to sell 250. That’s all. Think about when that’s done and how much more money you’re going to be making and how many more clients you have when you see those 250. All because you made the decision now today in the moment to actually commit first and then take the massive action.
Rich: Any MSP, any channel out there who has that kind of confidence, you know, in themselves and in their ability to keep growing the business.
That’s all I’ve got. Guys, you have questions.
Matt: Now that’s probably a good place to wrap up. So, Rick, you know, let’s go ahead and sign off for our audience here. I’m sure I’m sure you’ve turned some heads. I’m sure you’ve gotten some attention with some of the things that you’ve said there.
People love me or hate me, man.
Matt: Well, for those in either camp who want to reach out to you and connect with you, and either yell at you or do business with you, where can they go?
You can for real text me at 312-535-8520 You know that or you can come follow me connect with me on LinkedIn, that’s probably the best platform for MSPs. If you want to see some more fun content, like there was today that would be Instagram, but text me LinkedIn, Instagram, easy place to start all those is whoisrickjordan.com
Matt: Awesome, and for those who want to check out the channel for weekly podcasts, or the channel for network itself, so the websites channelpro network.com Go there each and every day. If you want to subscribe to the channel for weekly podcasts, like I said earlier on where everywhere podcasts are we’re also on YouTube, if you’d like to watch. It’s a great show. It’s got lots of good information to help keep you on top of what’s going on. We have some of the most awesome interviews of any of any show out there, including, you know, great awesome guests like Mr. Rick Jordan here, so come and check us out.
Awesome guys. Thanks for being on all in to have a blessed day.