From Tech Geek to Business Owner: The MSP Evolution
Summary
In this episode, Jeff Loehr and Joe Rojas welcomed Matt Bullock from Prodatix, where they discussed the shifting landscape of Managed Service Providers (MSPs). They emphasized that MSPs should focus on what they do best and partner with experts in other areas, such as data backup and security, to provide comprehensive solutions to their clients.
The conversation highlights the shift in the MSP market towards outsourcing and project management. Many successful MSPs are now acting as project managers, bringing in various specialized partners to handle different aspects of IT services. This approach allows MSPs to scale their businesses and offer high-quality solutions without spreading themselves too thin.
For MSPs to adjust to the shifting landscape, they need to understand the importance of specialization and partnerships in delivering top-notch IT services while allowing MSPs to focus on what they do best.
Featuring
Matt Bullock, VP Technical Sales of Prodatix
Matt Bullock has been involved in the IT and computer hardware world for 25 years. He specializes in identifying which technologies will create growth, data protection and cost savings. Matt graduated from the University of Arizona with a BA in Economics.
What is the problem you solve, and for whom?
Prodatix provides a comprehensive, all -inclusive data protection program, including training, discounts, marketing materials and 24/7 support to help MSP’s capture the growing data protection and data management opportunities with current and net-new clients.
How do you help MSPs
Providing data management and data protection strategies to take those time-consuming tasks off their plate.
Your Company Website/URL
What you are promoting:
Transcript
Introduction
Joe Rojas: How’s it going with you, man?
Jeff Loehr: Good. So, we just had a weekend after our summit. And I thought things went well. I love it when people come out of the Summit energized and ready to tackle the future.
A lot of people had these little business breakthroughs that are just phenomenal.
Joe Rojas: Man, I thought it was like putting a jet pack on. And the people that were there, were so excited.
Jeff Loehr: That’s cool. So I want to put you on the spot. What is a key takeaway for you from the summit?
Joe’s Takeaway from the SGM Summit
Joe Rojas: I’m going to say one cause I got so much from this summit.
One of the most important things that we can do as an organization is get people together because their answers for each other are so much better than our answers.
So many people sat together from different companies. During the exercises, collaborating, and having conversations, you could feel it in the room. And that was really Awesome for me to see and to hear in the presentations and the panel that we had, like just our clients really sharing their success in a way that is what we would call human-centric.
Jeff Loehr: It’s great to have people coming together and solving these problems together; we all have this expectation that we will be able to do it ourselves or that part of the entrepreneurial experience is actually finding a way to do it yourself.
And the more we work on this, the more clear it is to me that the entrepreneurial experience is really. About bringing together the resources. Finding what the problem is out there, and then creating a solution to that problem, and bringing the resources to solve that problem. It’s interesting to see people really embrace having those conversations.
Jeff’s Takeaway from the SGM Summit
For me, one of the key takeaways was how difficult it is for people to define their values. I think we talk a lot about the need to define your niche.
We talk a lot about value, but it’s just, it’s a hard thing. We had a very good conversation with somebody in the session where they were convinced that this idea of an avatar was really just a marketing ploy and didn’t really see the value of focusing delivery on an avatar and how important it is to really know that avatar and, And when you see it on the other side, that people who are focusing, who are solving problems for their clients, and it’s hard to say, but it’s just not a technical problem that you’re solving, it’s a business problem that you’re solving, and when you can solve a business problem, that you break out of that price trap, it’s what I always tell people.
This one guy who was so worried about the price. And I said to him, If you were a hundred percent convinced that I would pay you a million dollars in five minutes, how much would you be willing to pay?
And he said, I don’t know, a lot. So would you be willing to pay me 900, 000? He said, yeah. I said, would you find the money? To do that. He said, absolutely. Because five minutes later, I’m going to get a million, and I’m sure of it. And I said, great. You don’t know where you get the money, but you know that because I’m going to deliver the value, you would find the money to be able to pay for that.
But the problem is defining the value. The problem is showing somebody that you’re going to deliver a million dollars in five minutes.
Now, your task is not a million dollars in five minutes, but the challenge is the same one of showing people what the value is rather than talking all the time about what you’re going to do.
And that’s the thing. If you’re talking about what you’re going to do, you get nothing. But if you talk about the value, they’re all in.
Shout out to Robert Gillette from MSP Dojo
And I also thought we had a great session with Robert Gillette from MSP Dojo. I learned a really important thing from his session, just in terms of how everybody wants to skip over value and just talk about their solutions. Like one of the things he had us do was just ask questions to understand what our prospect might be interested in buying.
And it’s fascinating that it was so hard for people to ask questions past the point where they said, Oh, I have a solution for that. So somebody might say, Oh, I need backup. And so they go straight into the solution space without. Understanding what the impact of that is, and that leads directly back to value, right?
Because if you’re just always talking about your solution, then you’re not communicating the value. You’re just communicating a solution.
Joe Rojas: the problem with just communicating a solution is that then you’re trapped in the price
It’s continuing to define that value. You’re getting deeper and deeper and deeper and deeper. It lets you charge whatever you want to charge. 300 a seat? Great. Do you want to charge 500 a seat? Great. But you have to be able to define 500 a seat value.
Jeff Loehr: When you were talking about the idea of value and the solution, I think that the solution is the value.
But here’s the problem, is that if you’re communicating the solution, I, as the buyer, must figure out what the value is. So, to get to that point with a 500 seat means that I have to do the work to understand why that solution adds value. And one thing I know is that the buyer doesn’t have to work.
Joe Rojas: That breaks rule number two of marketing. They’re never going to do the work to figure it out..
Jeff Loehr: So I thought that was really interesting.
And now we have an interview with Matt Bullock, and he’s got a really interesting business, Prodatix, and he’s really focused on solving a problem for MSPs around data and what I really like about the interview with Matt is this value thing just kept coming up as well.
He just uncovered an opportunity and chased that opportunity. And that’s where he’s not only creating value for himself, but also for his MSP partners because he understands how to add value to the MSPs. So he understands how to help MSPs really stand out and deliver value to their customers.
And he kept saying something: It takes an event. Before somebody buys security or takes cybersecurity. And one of the questions that we ask him is, how do we get people to understand the importance of niche and focusing?
And he came back to it takes an event, and I think that somehow we have to help people get there without there being an event because that event is, your business collapses, right? And because we’ve been there, right? That’s happened to both of us. We need to get beyond is we need to find ways to get people building, growing, focusing, and doing the things that they need to do without there being an event.
Joe Rojas: A lot of people go; I don’t have the time for that. I don’t have the time to focus. But here’s the thing. When you don’t focus, you’re going to produce the exact same result that you’re producing right now.
And if that result is not great, you may want to start to focus. And here’s the other thing. Time has no mercy. None whatsoever. It will not stop. It will continue to pass, whether you do the thing or not. So, if you do the thing, you can actually see if it produces the outcome or not. But if you don’t do the thing, I promise I will have zero mercy on you.
Jeff Loehr: On that, let’s move over and have our conversation with Matt.
Introduction to Matt Bullock
Joe Rojas: Matt!
Matt Bullock: Good morning.
Jeff Loehr: Hello there, Matt. You actually met us through Carla, right?
Matt Bullock: Yep.
Jeff Loehr: Yeah. She said wonderful things about you and said, we have to have you come chat with us about all the cool stuff that you’re doing. So we’re excited about that. I’m Jeff. I’m CEO and co-founder of Start Grow Manage, and,
Joe Rojas: I like how he puts the CEO in quotes like he’s pretending…
Jeff Loehr: I didn’t… We’re a partnership, right? It is not a big, strong hierarchy where the CEO wields a big stick around here. But we decided that I answer a lot of those CEO-type inquiries. Joe is the master of all things MSP, co-founder, and basically in charge of both sales and making sure that our customers are extremely happy. Sounds good, Joe?
Joe Rojas: that sounds about right.
Jeff Loehr: And I’m the business guy, so I’ve got like the MBA and business experience, and Joe is the MSP guy who really understands MSPs, and then together we work on fixing MSPs and turning them into businesses.
Matt Bullock: I’m actually the CEO of our company, but years and years ago, I changed my title to VP of Technical Sales because I would get bombarded by sales calls from people saying, Oh, you’re the CEO.
Can I talk to the president, talk to the owner, talk to the CEO? And so I changed it. And actually created a fake owner. We then started to advertise. Someone would call, Hey, is the owner there? His name was Todd Johnson and he never existed.
So I would always tell people, Oh, Hey, Todd Johnson’s not available. I’ll pass a message on to him. Within years ago, you could search for the owner of our company, and then seven or eight of those, like Zoom info and all those places that list information about companies, had Todd Johnson as the owner, and it was classic.
I thought this was perfect. And my call rate went down substantially. No one bothered me. We get mail for Todd Johnson. Anyway, I just revealed something really odd about us, but it’s okay. I love that. We’re trying to find a way to kill him off in an exotic way, like he was attacked by tigers defending children.
Jeff Loehr: Oh my God. There’s so much opportunity. I’m a creative. I’m like, oh man, imagine.
Joe Rojas: You’ve just tasked Jeff with this mission,
Jeff Loehr: I’m finding a cool way to talk about it by the end of the day. How Todd dies.
Matt Bullock: Yeah, it’s got to be exotic, it’s got to be compassionate, but it has to be absolutely heroic.
Jeff Loehr: In the line of data protection duty.
Matt Bullock: Yes, it has to be helping children and old ladies, and it has to be about data, and that’s all I care about.
Jeff Loehr: So why don’t you start off just by doing your introduction of yourself?
Introduction to Matt Bollock
Matt Bullock: Sure. My name is Matt Bollock. I’m the CEO of Prodatix. We’re a data management and data protection company that works almost exclusively with managed service providers to take the backup and data protection piece off their plate. I’ve attended the University of Arizona. Are there any Wildcat fans? I am a father of six and now a grandfather of five.
Jeff Loehr: Holy cow.
Matt Bullock: I think we qualify as a tribe now.
Jeff Loehr: Now we know that you have six kids. And then grandkids and five grandkids, right? But you’ve written books, you ran for office, you’re both with Accelera IT and, Prodatix.
How did Prodatix get started?
Matt Bullock: But it’s either that or getting in trouble on the streets. Prodatix actually started out 12 years ago as an MSP. Accelera IT Solutions was that MSP, a true MSP with on-site support, remote support, VIP Proactive services, and all that good stuff.
About three years ago, we started realizing a very large opportunity for offsite backup disaster recovery. We became a Veeam backup software partner. We’re one of their top partners now, and we set up three different data centers where we have our equipment and we do offsite backup disaster recovery for MSPs.
So that’s why Carla actually reached out because we do a lot of posts on LinkedIn and videos, and just basically trying to help MSPs realize, because we were there for eight years, we know what it’s like to be an MSP, and it’s ugly, and it’s wonderful at the same time.
And my partner and I, Randy, who’s our CTO, is a Veeam architect and a Microsoft certified engineer. So we decided that it’s important to have that. We saw that looking at MSPs as the biggest chunk and the most dangerous, noose, if you will, for MSPs, they weren’t taking care of data backup protection.
It was set it and forget it. No one was testing their backups. No one was scanning for malware and ransomware. No one was having a data champion at their office. And all of a sudden that we got all these MSPs calling us over the past couple of years saying, crap, something happened. One of the terms we use at our company is it takes an event.
All MSPs are calling us now, and Veeam refers MSPs to us as well. It says, please help us out; take this off our plate; even large MSPs say we just need to outsource that part of it because you guys are experts in what you do on the Veeam data protection front, the offset backup; we do replication, we do continuous data protection.
Everything related to cloud hosting. So, we started out as MSP, broke off into our data protection, and we are still in love with MSP. So, playing both sides of it, for lack of a better term.
Jeff Loehr: One of the things we talk a lot about is the need to define a target market and avatar. Traditionally entrepreneurs like to do stuff and then go find a market. But really, the best way to grow a business is to find a market and then figure out how you’re going to come up with a solution, and it sounds like that’s what you did.
Like you were running an MSP, and you said, Oh, Hey, here’s a need! And then you went off and built it.
How Matt went from being an MSP to niching down to data protection with Prodatix
Matt Bullock: So here’s interesting our progression on that. I do most of the initial business development and sales. And we have two sales reps who do the prospecting. So, I started going and talking to larger companies.
As you try and grow your MSP, what do you do? You try to climb up the food chain and go after larger and larger customers; of course, you do with clients. We’re based in Phoenix. I started talking to some really large companies here in Arizona, saying, Hey, let us do your IT services as an MSP.
And a lot of them said, no, we’ve already got a team. We don’t need any MSP services. We got a group. But as I’m walking out the door, I would say, what are you doing for data protection? Are you guys testing your data?
- Do you have a data center?
- Who’s monitoring it, managing it for you?
Every single one of them said, hold on a second. Come here. And suddenly, that just created that opportunity. We said although we still do MSP services, we need to specialize. We need to be the data guys, the data protection guys, to what you’re preaching, which makes complete sense.
And we broke off and started Prodatix.
And it’s interesting, we’ve gone back to all those companies who said no to us as an MSP because they were too large. And now they’ve all said yes. And they are long-term customers of ours doing, again, offsite backup, disaster recovery, cloud services, and vicariously we have gotten in with them that way, and now they’re starting to come back incrementally and saying, Hey, you guys are an MSP. Can you do some pen testing for us? Can you do some cybersecurity? Can you do some onsite support for us? Whatever it may be. So we said, no, got our foot in the door, and now we’re backing up. And that’s a common model that’s worked, and it worked beautifully for us. We took a big risk, obviously, but it turned out well for us.
Jeff Loehr: Someone just told me a story recently about the same sort of thing, Where you go into a client, and then you ask them, and they say, no, I don’t need your service. You say, great, how’s your data protection? Or how are your backups? Or how’s your this? Or, have they done this thing that’s so relevant for that client? And they say, no. and that’s what you can say, here’s a solution, and it’s through that solving of problems that you’re able to attract customers because now they’re really excited about the fact that you can solve problems.
And then it’s easy to upsell them in other services, to cross-sell, to go other places because once you start solving problems for people and you deliver a good job, they’re happy. I’ll bet your MSP sales just took off after you were able to handle that one problem that they all had.
Matt Bullock: It allowed us to build a smaller, but steady extra revenue stream because now a lot of those clients who said no to IT services, but yes to backup, and now we love you for backup. Now, can you help us a little bit with IT? I’ll augment our current in-house IT team.
And now to your point. We have them calling us up or emailing, saying, Hey, can you guys help us? We need to do a VoIP phone refresh. Do you have a guy that can do cabling? We’ve got a whole new office. We need to do cabling, and we have 30 monitors we need to hang in a school district.
So we always say yes. And it’s interesting is that now we have built this out, now third revenue stream by having a guy that does hang TVs, I’m being, if generic here, a guy that does cabling, a guy that can do VoIP phone systems. So now they’re coming back to us and saying, you guys took care of us.
You guys got a guy. And so now all these other income streams are coming from an initial, no, we don’t need you to a yes. And then, and now, we get the craziest calls. Can you help us set up an audio-visual? We don’t do that, but we got a guy. There’s a revenue margin. There’s some monthly recurring revenue for us.
Jeff Loehr: That’s another interesting point is just having the guy, even if you end up not doing it, if you’re that point where they go for solutions, and you can say, oh, Joe or Jane or whoever can. Can take this, and you make the referral out, or you bring that other person out. That’s such a powerful way to build your business as well because you create all that goodwill with the people you’re referring business to.
It’s just that sort of process of solving problems and building on it, solving another problem, and going forward, which I think is so important for MSPs to really understand.
Why do MSPs struggle with sales
Joe Rojas: So what we do is we work with MSPs to help them and we’re talking to them all the time. And we’re saying, hey, look. You’ve got to find a problem that you got to solve. And they keep going, no, we solve all the problems. And we tell them, No, you got to find one problem because when you find one presence, what happened to you, you were walking out the door and he’s oh, by the way, do you, what’s happening with data protection? They’re like, what? Are you testing your backups?
And then all of a sudden, boom, right? And then you’re in.
And what most MSPs don’t understand is that they have to have that question. They have to know what is the problem that they solve. And often what MSPs think is that it’s a technical problem. Most of the time it’s a business problem, right?
That, what are you doing about data protection? It’s not, it’s a technical problem, but not really. It’s a business problem. How are you protecting your data? It’s a business problem, because that’s how the person that’s if you had said, are you doing, backup testing to the CEO? He’s I don’t know. I don’t care. But you said, how are you protecting your data? He’s what do you mean?
Jeff Loehr: How do you make sure your business continues to function, if the world comes to an end, right?
Joe Rojas: And that’s really the key. It’s Matt, how do we get them to get it? How do we get them to get that they have to have that question? Because it’s so hard. They fight us tooth and nail, no, we fix every problem.
The only way to get in is to help your client understand that you fixed the one problem that they have, which is why you have to narrow it down in the beginning.
So now that you’ve gone down that road, how do we tell them?
How do MSPs start by solving ONE problem
Matt Bullock: I first started Accelerate IT Solutions 12 years ago. I did that exact same thing. Every MSP starts off that way, unless they split off from a large one. When I first started Accelera, I did everything.
I would change power supplies. I would change tires. I would wrap a burrito, but literally we did everything. What do you want? I will go pick up your dry cleaning. I’m being facetious, but I went down that path as well. And we basically went incremental a couple percent each year because we were not the same guys. Again, I did everything.
So soon, I realized we had to knock off delivering burritos. We got a knockoff changing people’s tires. Again, I’m being facetious. And we got into just a very few, we only had four things we did as an MSP because we figured out that if we can go with those four things, then that would prove our metal.
And then the customer would naturally ask us, Oh, hey, do you guys do this? Then we became the yes company. But instead of doing all those things, we stuck with our core MSP services, which were just four of them, and then back up became a fifth one, which became its own company. But we would stick to our core four, and then we would find trusted partners for all the other stuff that we can.
We never wanted to say no, that’s the big influx point.People don’t mind you being the project manager. They don’t care if you’re not the guy or girl who solves the problem. They just want it solved. So now we come in and go, Hey, we can do these things for you.
I’m making, using an example, do you do audio, visual, and conference room setups? Sure. We do that through our trusted partner, ABC Audio Visual, here in Arizona. Oh, great. We trust them. They did our conference room too. That’s all they need. We’ve built the trust. We’ve built the intellectual capital that they go, you’re the dudes, and you’re not going to screw me over ever because I’ve been paying you for years, and you’ve never done me wrong once.
And you saved me from going out of business because we got hit by ransomware one time or whatever it was. So we built that.
The next big trend in the MSP space
Matt Bullock: So that’s part one, the opposite part of that, a huge trend we’re seeing because you mentioned before you go talk to the CEO and say, Hey, Mr. or Mrs. CEO, you do data protection. I don’t know, talk to the IT guy.
We’re starting to see a convergence of IT department and CFO, not CEO necessarily, but we are talking to as many CFOs now as we do to an IT director or an IT manager because of our new tagline.
But companies are finally starting to realize, unfortunately, that ransomware did this. Unfortunately, it’s often more expensive to recover from the reputation hit. With your customers, your vendors, and your employees from ransomware than it is for the data part of it. Paying a ransom or just going through the process of setting up everything correctly and recovering it.
We talk to CFOs now and say, we’re not here to solve your IT problems. We’re here to minimize the hit to your reputation. The hit to your revenue and the hit to the customers leaving you for somebody else before, during, and after a ransomware attack. All of a sudden, their ears go, what? They get perked up large and go, talk to me about how you’re going to save me money and save me reputation.
And concluding point, they then push us on after they like what we say to their IT director and said, Hey, you guys need to work with this team. So instead of us having to argue and trying to fight our way with ten other MSPs or data protection companies to an IT director who gets bombarded all the time, we circumvent that in a nice way.
CFO goes, I love you guys. Yes, help us. And then they walk us into that department. And it’s you got to work with these guys or else. And we prove our worth. That’s the key to success, I think.
Jeff Loehr: But that’s because you’re solving a business problem. You are the group that protects their reputation, that saves them money that makes this stuff work.
And those are the conversations that the CFO is interested in. If you start to go to a CFO and talk about Veeam versus, I don’t know what, and virtual servers and this, that, and the other. They literally don’t care at all, right?
But when you can solve a business problem for them, then they walk you in.
Like you said, these are the guys. And the beautiful thing about that is then the price is less important, right? You know you can add more value. So now you’re having a conversation about saving money and adding value, rather than, hey, it costs X amount per month, and if they want the value, they’ll pay for it, right?
Matt Bullock: This will sound really bad and cocky, I don’t mean it like that, we never discount.
How to make sure your MSP never relies on discounts
Matt Bullock: Just as a testimonial to what you’re saying, I’ve looked at your website, and you’ve been preaching this. But in the beginning we all are nervous.
I’ll come in $10 less per server than the other guy did. And we all start that way. That was during the burrito and the, changing people’s tires stage in my life. But now you don’t need to because all we have to do when someone says, Hey, you know what, we’ve got another MSP that’s bidding, 20% less than you.
Okay. So can you please make sure before you sign the agreement with them, that you please get at least three to five client success stories where they have saved companies from going out of business? And I did this probably three times just in August so far alone. And every time they call back, do you guys have anything?
You bet. I’ve got three stories, and I can even have them on the phone, or I can have you talk to them via email, and they’ll testify to how we save them from going out of business. These are 10 million companies, 5 million companies, and even an 85 million company we saved from going out of business back in March of this year.
So they go, okay, you guys have done it. You’ve been there during the scariest parts of what we do. You’re worth 20% and then some. And concluding point on that. That’s what we do when we partner with MSPs now. Because, again, we’re still an MSP at heart, even though we do data protection.
That’s why I’m even on your show, we work with MSPs, and we let them use our client success stories. Use us as your backup partner, you will not be disappointed. We’ll let you use our client success stories. We’ll let you use our testimonials to prove that it works. And then you will not have to discount.
You can come in 20% higher than your competitor. And they’ll still go, when can you guys start? It works like 90% of the time. It’s beautiful. You’ve been preaching it, but here’s a testimonial from an outside guy who you just met today.
Jeff Loehr: I love it. And two things that have come up, just hearing you talk.
One of them is if somebody does go with the cut-rate producer, then give them six months or a year. Because then they come back, and they’re like, that didn’t quite work out the way you promised. They didn’t deliver that thing
And that leads to something else: we just completed our big survey of the market, and we’ve found that the people who stuck to their price are getting better prices and they’re more confident in their price and in their business. And I think that if you’re always reducing your price to companies, then it’s hard for them to trust you.
It’s hard for them to know what your value is, right? They can always ask, but if you just say, no, look, this is my value. This is what it takes. You want me, this is what it is. I think that really actually gives customers confidence. Rather than if you’re always cutting off the price, you just don’t know what your value is.
Value Analogy
Matt Bullock: Here’s an analogy; this works for me. When I get in a car accident, or I have some legal issue, I’m not going to hire the company that is the discount. I’m going to hire the company that when I walk into their office, has the mahogany wood and the beautiful granite everywhere.
And you walk into a law firm because they obviously have made money for their clients or else they couldn’t afford this stuff. I know it’s a cheesy way of saying it, but that’s the analogy that I work with. And I know you’ve preached this before as well, MSPs, and I was there again, guilty as charged on everything I’m saying, I’m a reformer.
We all want to say yes to everything. And when we first started out, we said yes to every client, and we took it no matter what, they could beat us over the head, and we go, yes, sir. Yes, ma’am. And we take a half price just to get going. It took us about two years to realize it’s okay to say no.
And actually, if you stay current and you stay on top, and you stay constantly marketing and advertising, even if it’s just you making calls or emails, your reputation gets out in your area. That you guys are a higher-level producer, and when you start saying no, guaranteed to Jeff’s point, they come back and say, hey, I went with that cut-rate guy. But it is a term we always use in our company.
It takes an event something they lost their data. They couldn’t get a computer. It took three or four days to get a call back from a ticket or support or their computer melted down. They didn’t hear anything for three days. They come back and say hey are you still available? I’m like our price is what it used to be. It hasn’t changed. But again, you must be okay with saying no, and in a strange, weird world, that comes back to enhancing your reputation.
MSPs don’t understand their value
Joe Rojas: It’s not strange and weird because it’s really what we want people to get: If you want to drive the best car, you have to pay for the value that you’re getting.If you’re going to go get heart surgery, do you want to go with the cheapest guy? No. You want to go with the guy who’s done it the most, who has the most experience, has the most testimonials, who’s saved the most lives. That’s the same exact way.
You wouldn’t go with a cut rate heart surgeon is like. Oh, I got three proposals. I’m going to go with the cheapest guy. Why would you do that to your network? Why would you do that to your business? Because you don’t understand the value.
Jeff Loehr: Because you don’t understand the value. That’s it right there.
Matt Bullock: Yep. And, okay. Conversely, because a lot of MSPs are not trying to be mean, they don’t convey a message value. That’s it.
Joe Rojas: It’s not about being mean; it’s about being real, Matt. You got to tell them the truth right to their face. Tell them more. Come on.
Matt Bullock: To your point, Joe, there’s a very fine line because we work with MSPs now, and they’re everywhere from, they have one client, they just got started. It’s one guy figuratively speaking in his mom’s garage. And we work with MSPs that do 10-20 million a year, and we just do their backup services. So we span the gamut, which gives us a great sample set, if you will. Of course, there are different things in the top company from the small company, but very few smaller MSPs truly have talent and want to be medium-sized.
We’re not going to go from small to large. Let’s walk before we crawl. They don’t correctly articulate a value. To what a customer cares about, we work with hospitals, and we work with restaurants, charter schools, and construction companies. Guaranteed.
The one pager that made Matt’s first sale
Matt Bullock: We have a large construction company here in Arizona. One of our very first clients, our first large client, it was incredible. We popped the cork off the sparkling cider. We were so excited when we got them because they were twice as big as any customer several years ago.
The reason they went with us versus anybody else was that it was the very first customer we ever went to a very first client that we actually put together a one-pager. To explain what we do, the value, and how much money they’ll save if they let us do this versus A, hiring an internal team, or B, going with, I know, a very expensive competitor that also bid the job.
And once they saw that simple one pager, here are the services we offer, here’s the price you’re going to pay, and here’s how much you’re going to save or make. And then we came up with this very interesting term: we said, do not hire us until we show you how IT can be a profit center.
And all of a sudden, that flipped their thinking. They said, this other company’s just charging us to do IT. No, they’re big, and they have a hundred technicians. You guys have three. We’re going to go with you because you’re going to show us how IT can be a profit center. Everyone bid off on that. And I did it in a one pager and that saved the day.
Because most MSPs walk in and go, hey, we can do this. Here’s my experience here. They don’t care.
Put together a one-pager, show why you’re better, show how much money you’re going to save them by paying your higher price, and you’ll walk out with a contract or an SLA in hand. It works.
Who does Prodatix work with
Jeff Loehr: Oh, 100%. I want to learn a little bit more about, your business and how you work with MSPs because it seems like a really interesting offering that you have, we hear over and over that data protection is such an issue. So I’d love to hear more about how you help MSPs on that front.
Matt Bullock: Sure. Having been an MSP, we have seen the biggest hole in an offering for an MSP inside their services stack is data protection, data management.
Now, every MSP will tell you and bless their hearts, I was there too. We back up our customer’s data. That’s good, but are you using the correct tool? Are you testing it weekly? Spinning up all the backups, the virtual machines weekly, and testing are off your NAS box, whatever. No, when you do spin up your backups or spin up your files to test them, are you scanning for ransomware and malware with a great AV tool?
No. Okay. Do you do tabletop exercises with your customers because ransomware and data protection is no longer an IT guy or IT girl’s problem is a company-wide problem? We do that. Probably 50% of our customers we talk to now are asking us can you help us put together a tabletop exercise?
Just a little document of step-by-step of kind of a guide of bringing lunch in. And do a tabletop exercise and have everybody, the janitor there, the secretary, the CEO, everybody sitting around the table saying, we just lost internet because ransomware killed our NIC card. What are we going to do? Our internet just went down. We just lost access to the accounting folder. We have paychecks to print today. What are we going to do? And it scares the you-know-what out of everybody. By practicing it every quarter, they make that happen. So we offer that service as well.
So in a nutshell, what Prodatix does is work with MSPs. They become your data protection and data management trusted partner.
We sell at a reduced rate so that MSPs get margin. And we show them how to make money on the backup licenses, how to make money on the offsite backup and replication. A lot of customers need instantaneous restores. They use replication. We also build our own, and we’re VeeamShop, Veeam-certified backup appliances that compete with Datto.
You can back up to Amazon or Azure, whatever, or our data center. So we provide that backup appliance as well. We also do professional services because of our expertise. Again, Randy, who’s our CTO has been doing this for 25 years. Although I look like I’m 22, I’ve been doing this for 20 years as well. So, we offer that professional services.
How Prodatix works with MSPs as a partner
Matt Bullock: When MSPs contact us, they say, Hey, we’re going to go talk to a new customer. We’re not HIPAA certified, but we want to go talk to a doctor’s office or a hospital.
We bring our expertise, and we talk with the customer either as, The Invisible Man, we’re part of their team, they have no idea who Prodatix is, or we come in as Prodatix, a trusted partner. However, the MSP wants to play it, we bring our client testimonials, our expertise, and examples. We spin up a quick trial for the customer to log in and see how it works.
We restore some of their data for them, all while the MSP is on the phone as well. And then, finally, we do what’s called Data Managed Services. Somebody must be the data champion for the company, the end user. MSPs then turn over that day-to-day management for us where we spin up the backups, we test them, we scan them.
Everything needs to be done, provide a log report or a report to the MSP to go, Hey, just so you know, as of August 19, these are the clean backups for all your customers in case they get hit with something. And they present that to their customer. They look like they’re incredible because they have this document showing that they are protecting their data, and when something bad happens, they know they can restore it back to yesterday or an hour ago.
So it is a complete, cohesive partner program that allows MSPs to take advantage of our expertise, come out as themselves or us as a partner, and have all the marketing materials. We have a hundred different marketing PDF files. We put their logo on there. Put their phone number. They can use our marketing materials and our testimonials and everything to send out to customers.
If you can send out a PDF file just as an intro or an email that has a customer testimonial and a client success story, and you’re just a brand new MSP, you instantly have gone up the reputation chain by working with us. So, it’s a whole partner program. Having been an MSP, we understand it.
It’s priced correctly. You increase your margin, and your revenue, and most importantly, you’re going to look like a rock star when they get hit with something bad. So that’s it in a five-minute nutshell.
Jeff Loehr: I love that. And I love that you have the marketing materials. It’s funny. That’s a really important point because that’s such, a need, in terms of if you’re starting a small firm, you can’t market without content. This has been the truth since the beginning of time. And creating that content is hard. So, to be able to come in and have a testimonial, to have some content, to have a way in.
and I think as well, you’re bringing a lot of knowledge in IP, which is another thing that we talk about is when you get good at something, you bring that IP in. So, it’s a great way for, MSPs to be able to use your IP and your knowledge and not have to develop it all themselves.
I like that you talked about it in the beginning, saying yes to things and doing things that might not be your expertise. You find the right people to do it rather than figure it out all by yourself. Because that’s all part of making sure that you deliver an amazing customer experience you have the best people doing the best possible work, and, they make money out of it.
Matt Bullock: And they know that they have the experts delivering that data protection. It sounds like a great program. I love it. And what’s interesting is that we’re finding a lot of midsize and larger MSPs are the ones using our services the most. And I attribute that to, and again, I started out as an MSP, just me, a tool belt, a power supply, and a screwdriver.
I was that dude all those years ago. And again, it took us a couple of years to realize I couldn’t do it all.
The Shift in the MSP Market – Partnerships
Matt Bullock: The day I started partnering with trusted partners, I mentioned before, that’s when our growth took off. So that I could still say yes in the correct way, but I had the guy or the girl that could do it.
And so the MSPs that have worked with us are finding their growth is 20, 30, 40 percent increase in revenue margin on the backup part, which is a huge part of protecting any customer than the ones who say, I’m going to go it alone.
I see a change in the MSP market as far as the business model. And again, this is just my small sample set. Back in the day, we all had screwdrivers, tool belts, and power supplies. As I said, we drove around in our van, and we did everything ourselves. I see MSPs becoming managers of vendors and not so much managers of work.
And MSPs that we work with, probably half of them don’t really do all that stuff anymore. They manage us as their backup partner. They bring up a VoIP partner for the phone. They outsource to a help desk or a call center somewhere, whether in the US or elsewhere, they bring in all these trusted partners, a cyber security company, and pen testing, and they basically act as a project manager.
And those are the ones who are really excelling. I’m sure there are pros and cons to both sides. Those are the ones we see really excelling because they come to us right away and say, we don’t even want to waste our time. Because backup is becoming so difficult and so complicated, you guys just do it, show us what our price is, we can market up and make our nice margin, and they move on to the next guy.
And then we work with them and their customers, they contact us when they need something, and we provide reports to them. It’s a beautiful ecosystem, but only for those partners who decided, I can’t do it all myself, those are the ones who are growing exponentially. So there’s another testimonial for what you guys have been preaching to.
Its okay for MSPs not to do it all themselves
Jeff Loehr: Hold on. I want to give everybody permission. It’s okay. Don’t know it all and do it all yourself. I had somebody give me that permission. I was like, it’s okay. You have permission. You bring in the expert. That’s actually the way the business works well, I think.
Joe Rojas: And everything from boots on the ground to help desk and every other piece can be outsourced. It doesn’t matter, you can really be like the GC.
Matt Bullock: That’s a great example.
Jeff Loehr: I hadn’t thought of it that way, but it does sound like, the way the market is going, and it actually makes sense because as complexity grows, you want to have the experts working on their individual complexity.
Joe Rojas: And that’s why a GC is effective. The other thing that you want to do is as the MSP is become a specialist. Like some GCs, they only work on colonial homes, and those guys can charge whatever the heck they want. Because they only work on colonial homes, they can come in and say, okay, I’m 10 million dollars, and the other guy says, I can do it for 300,000 and then you go, okay, here’s why I’m 10 million. This is what’s going to happen. This is what you’re going to see. If you want to preserve this home and its state, this is why it’s going to cost you this much money, and the people that are willing to preserve and get that work, they’re going to do it.
And it’s just the same way as an MSP.
I like what you said that you’re finding that the larger MSPs are working with you. Why? Because they’re using the technology.
Matt Bullock: And so it’s interesting, that’s our biggest focus right now is going after small MSPs because they don’t have Veeam expertise, and I’ve been in this business over 20 years, we’ve done almost every major backup, five years ago we went with Veeam, so it’s worked for us, it saves some of our customers from going out of business.
It works great. But for MSPs who are interested in that product, we will help you by taking that off your plate. If you want to be trained, we’re happy to train. Do you want to be a Veeam geek? Let’s do it. So Veeam is the largest for a reason right now. MSPs from 1 person up to 50 people can take advantage of it.
And again, I bring up the point that the larger MSPs are using us. Because they understand the process of you got to outsource to grow. Small MSPs that finally say, and this sounds really mean because I’ve been there, finally say, I can’t do it. Then they contact us and say, Hey, can you guys get us up and running on Veeam?
Can you train us how to do it? Can you manage it for us? And we’ll just make the margin. Suddenly you see their income because we watch the growth, how much data they’re storing on our data center, how many licenses they’re buying through us. All of a sudden, they do this. Their backup program, their backup offer, and their backup revenue go up 30, 40, up to 100 percent a year.
The moment even a single guy says, I don’t have time to learn it all. Make sure my clients don’t lose their data. Make me look good.
Joe Rojas: I’m going to be a little bit meaner than you.
Matt Bullock: Okay. Cause you can.
Joe Rojas: The problem is that they think, Oh, I don’t trust anybody. Cause nobody can do it as good as I can. And that’s where they’re stuck.
I’m looking at you out there watching (or reading) this podcast going, Oh no, these guys don’t understand how good I, no, you’re not that good. You’re good at something. And you need to go be good at that. And then you need to let the experts that are experts in areas come and help you because you will grow.
The whole reason why you started this business is so that you could have a life. It’s so that you could spend more time with your family. It’s so that you could be free. But you turned your client into your old boss.
Stop it. Let it go, man.
Let all the specialists that are out there, whether it’s Seam, Sock, Backup, or Pen Test, let them help you. That’s the only way to grow at a good rate. Now, a lot of MSPs get, and I’ll say this in a loving way, lucky, and they get some referrals or get some bigger accounts and great. And we love that’s free money, so to speak, but the ones that get you incremental year over year.
Matt Bullock: Annual recurring revenue growth in your accounts and in your revenue within your accounts is the ones who outsource areas that they probably deep down inside of in the dark recesses of their brain say, that’s really cool. I got stuck in that. That technology is so cool. Ergo, I need to be an expert in it.
And then I finally realized that technology is super cool. I don’t care about it. I just want someone to make sure it always runs so I can sell it. to my customer. That’s all I really care about. Once I got out of that realm, there’s a difference between cool and highest and best use.
Joe Rojas: Here’s the thing about what you said, Matt, that’s really special. When we first started this, we started it because we were tech geeks. At some point, Matt, you made a transition between being a tech geek and being a business owner. And when you made that transition to being a business owner, you let go of caring about how the technology works. And you started caring about how do I solve the client’s problem so that I can employ more people, feed more people, take more time off, and enjoy my life. And have six kids and have five grandkids.
Jeff Loehr: And spend time with them. So I want to clarify, you do work with small MSPs, right?
Matt Bullock: Our smallest MSP is one person. And our largest MSP has 85 employees.
Jeff Loehr: Love it. And the best way to get started with you?
How to work with Matt Bullock
Matt Bullock: Reach out through email, through a call to myself. We set you up always with a proof of concept. We never ever talk, billing you until you give a thumbs up. We give you all your pricing right away. there’s complete transparency, but we want to show you how it works.
We set you up with a free account. Backup replication, Microsoft 365 backup, and Salesforce backup. Try it out with your own data, with the sample, with a customer’s data, and kick the tires for two weeks. We’ll show you how to restore, show you how to plan for it. And then show you what we do to take that off your plate.
And then, only then, when you wake up the next morning, you go, this is awesome. Then do business with us. I think you’ll like it that way. Cause you know what, we’re geeks. We’re not high-pressure salespeople. We love what we do, but we only do one thing, and we think we do it really well.
Jeff Loehr: I love it. Matt, it’s been a real pleasure. I love how you built your businesses, and that journey to specialization is such an important one, right? It’s either you make that journey, or you suffer, right?
And so it’s really cool to see how you’ve, progressed through that journey. And, thanks for taking the time. Any parting words for any MSPs out there?
Parting words from Matt
Matt Bullock: Your data equals your reputation. As an MSP, it’s your responsibility to protect both and then cash the checks.
Thanks, Jeff. Thanks, Joe. Appreciate it, guys.
Joe Rojas: All right, folks. Remember that you are loved. See y’all soon.
