What are the 3 top problems of the MSP

In May of 2019, at the Kaseya Connect IT conference in Las Vegas, there was an excellent Influencers Panel.  Jim Lippie did a fantastic job with three great panelists:

The Influencers Panel – The most influential people in IT Services, discuss the evolution of the market. Featuring @garypica @trumethods, @pdippell @serviceleadership, and @joepanettieri @channele2e,  moderated by @jlippie.

My notes were a bit rough, and perhaps I will get feedback from the panel, moderator or attendees.  The information shared was incredible and should be viewed by MSPs and vendors.

My summary is as follows:

Question #1: What are the 3 top problems of the MSP?

  • JP: 1. long term plan (lack of) 2. execution 3. talent
  • GP: 1. general lack of command 2. talent 3. process
  • PD: 1. skill of executive & management 2. Leads/demand gen 3. process

Question #2: Name one statistic that has the most significant impact on the MSP

Easy answer, “EBITDA multiplier.”

  • JP: What is your exit number – create your plan backward from that (reverse engineer your life from that)
  • GP: Value percentage – reactive % | cost per seat is lower | # of people / #seats supported
  • PD: What is your exit number – work from there. “Sooner or later we all exit” – Arlin Sorenson

Question #3: If you were CEO of an MSP today – what would be the focus of your offering?

  • PD: Vertical Market specialize – work with a “C” level with IT.
  • GP: vCIO focus
  • JP: security – short answer – Micro verticalize focus – ex: Healthcare to veterinarian / Finance to hedge Funds

Question #4: MSP v MSSP – should there be a difference?

  • JP: security is like a pool with a shallow and a deep end. MSPs should start in the shallow end and prepare to go deep
  • GP: high-value target – decide what is in your offering – better make sure it is in order – all customers think they are safe
  • PD: move to MSSP is too expensive – do not have a high and low-security offering option. One offering for everyone.  Increase per seat price that includes security.

Question #5: If you had $20k to invest in a single venture in 2019, what would it be?

  • PD: raise prices 2/3 audience is underpriced
    • 1/4 make +18% margin 1/4 lose money 1/4 in between
    • Top performers are priced higher and growing faster and have more money
  • GP: raise prices: $150/average seat price – every dollar of tool cost has to drive value
  • JP: get a financial advisor analyst – what is net worth and create an exit strategy & join a peer group

Question #6: Name one MSP that you think is incredible and why

  • JP: Dave Cava
  • GP: Apex – just exited & iventure in Jacksonville
  • PD: Cant say NDA – top performers are usually great places to work

Question #7: Thoughts on M&A movement

  • JP: careful of the hype – is the money real?
  • GP: you don’t know what the market will be like when you exit – focus on building a great shop
  • PD: record number of deals happening – don’t panic – concentrate on your company – there is a lot of “hot air”.

Related blogs:

What do MSPs look for in a partner? Continued…

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