Karl’s 15th Annual State of the Nation Address for SMB IT

15 Years!

Last year we focused on the post-pandemic reboot. This year, we look ahead to more than 2024: We look ahead to the rest of the decade. In particular, we’ll focus on the challenges and opportunities in the years ahead.

As always, I bring my personal biases: A positive attitude. A focus on processes, with a strong believe in a holistic systems approach. And, of course, I try to do a bit of analysis.

Topics Include:

• Highlights and low-lights from 2023
• Technology Updates 2023 . . . and what’s next
  • We WILL address more than AI and ChatGPT
• The Economy
• Speculations about 2024 – and beyond
• A strategy for balancing the challenges and opportunities we have in our industry
  • I have some specific thoughts about the affect of private equity and private financing on the SMB IT economic space.

2023 was a lot closer to “normal” than 2022 as the pandemic fades and Covid settles into its place as an ongoing part of our annual health calendar.

PLUS, we’ll have time for questions and answers. So take notes.

Note: Download the ICS file so you don’t miss our big Leap Day Sale: Download Now

Download the Slides – PDF

FULL TRANSCRIPT:

1
00:00:05.070 –> 00:00:10.939
Welcome everybody. I have 90’clock on the West Coast, so we’re gonna go ahead and kick this off.

2
00:00:11.050 –> 00:00:13.949
We will not punish the prompt.

3
00:00:14.050 –> 00:00:20.320
Other people are finishing some less important meetings, and they will be here shortly.

4
00:00:20.390 –> 00:00:36.759
I really appreciate the attendance here. Dozens of people are on already we have almost 150 registered. So I’m always grateful to this community for showing up when I put on an event. And

5
00:00:37.040 –> 00:00:47.749
you know, II always think maybe I’m wrong, but I always sort of tell myself that it’s because I don’t do it that often. So if I did it every week. Attendance might be a little harder to get

6
00:00:48.410 –> 00:00:56.059
pay attention to this quote. We’re gonna come back to this. Most people, miss Opportunity because it is dressed in overalls and looks like work.

7
00:00:56.400 –> 00:01:06.209
That’s a great quote. And it’s one of the reasons why a lot of people just haven’t had the success that they think they should. Anyway, we’ll come back to all that

8
00:01:07.460 –> 00:01:24.840
for the handful of you who are new to me. My name is Karl Palachuk. I have written many books. I just checked manage services in a month has been outperforming itself more in 2023 than at any point in the last 15 years.

9
00:01:24.850 –> 00:01:37.760
It remains by far the bestselling book on managed services, and I don’t know if that’s just the luck of the draw, or if if it’s just a matter of do you stick around long enough? You get to sell some things. But

10
00:01:37.790 –> 00:01:59.049
I am grateful to all of you for making that possible and for buying all of our books and services over the years. So I started writing books for this community in 2,000 and started writing 2,005 released it in 2,000, I mean writing in 4 to released it in 2,005

11
00:01:59.260 –> 00:02:17.450
and I’ve been trying to do a book a year, and so we have over 20 books. Now, the most recent is the It consultancy. Your intention. If you’re a member of my community. You can get that for free everybody else. I appreciate it. If you would check it out on our side or on Amazon.

12
00:02:18.070 –> 00:02:26.649
A note on me. So I run an online community store, a training system.

13
00:02:27.490 –> 00:02:31.009
And I know it sounds like Bs to some people who don’t know me.

14
00:02:31.070 –> 00:02:40.429
But I literally run my business, dedicated 100% to helping it consultants to be as successful as possible.

15
00:02:40.600 –> 00:02:51.800
and to be honest, that has cost me some money, because I do not engage with the vendors that I would not personally do business with

16
00:02:51.990 –> 00:02:54.029
as as an Msp.

17
00:02:54.300 –> 00:02:57.560
And so, you know, I started

18
00:02:57.890 –> 00:03:02.890
with technology. My first computer was a commodore 64 in the 1980 S.

19
00:03:03.290 –> 00:03:14.669
And I started being an It consultant working with it professionally. In 1993. I started my first Msp. Business in 1995.

20
00:03:14.820 –> 00:03:22.080
and so I’ve been lucky to be engaged in the evolution of this community, and

21
00:03:22.190 –> 00:03:30.370
you know I was talking to Harry Browsford the other day about the fact that what’s going on with AI looks an awful lot like what the Internet looked like

22
00:03:30.420 –> 00:03:34.740
about 30 years ago. So we’re gonna talk about that a little bit.

23
00:03:36.290 –> 00:03:40.199
A bit of book or housekeeping, not bookkeeping, housekeeping.

24
00:03:40.750 –> 00:04:02.890
The the chat panel is open. If you want to talk about me behind my back. We don’t have the ability. If you if you dialed in by phone, I either don’t know how or don’t care how to take questions by phone. So we have a QA. Module. I will get to the QA. Module at the end. So queue up those questions as they pop into your head.

25
00:04:03.800 –> 00:04:05.959
This is being recorded.

26
00:04:06.000 –> 00:04:14.339
and it will be posted at the same site, where I hope most of you logged in which is Msp. webinar.com

27
00:04:14.790 –> 00:04:23.679
special announcement you can go to Mspwebinar.com click into the the

28
00:04:23.840 –> 00:04:30.890
post for this event, and you’ll see an Ics file you can download so that you can add to your calendar.

29
00:04:30.900 –> 00:04:34.959
Please come back to store.smallbizthoughts.com! On February 20, ninth

30
00:04:35.030 –> 00:04:45.550
and we’re gonna have a sale for 29 off of everything in the store, literally a one day sale. What are the frogs, for it’s leap year.

31
00:04:45.970 –> 00:04:53.560
February 20 ninth is a leap year. So obviously, people who don’t follow my puns on Facebook should

32
00:04:55.250 –> 00:05:19.210
the recording will also be at mspwebinar.com. Kara does an amazing job at building our sites. And so we post up the recording along with the transcript we are trying everything we can to be as accessible as possible. So we’ll have the recording and the transcript up there. This is the place

33
00:05:19.300 –> 00:05:21.279
where we post

34
00:05:21.470 –> 00:05:31.969
recordings of of webinars and things that matter. I have an end of your checklist, which some of you may want to check out last year’s

35
00:05:32.410 –> 00:05:35.170
state of the nation addresses up there.

36
00:05:35.180 –> 00:05:38.199
And so we have different

37
00:05:38.370 –> 00:05:57.059
topics, and they may be of use to you. All of them are free. They don’t require registration. You just start watching them. I’ve got a sample training. You might wanna download along with the Powerpoint that you are authorized to take, and you know, edit as you see fit and present as your own.

38
00:05:57.160 –> 00:06:01.659
Again, my goal here is to help you be as successful as possible.

39
00:06:02.880 –> 00:06:06.190
Take a screenshot of this. These are our brands.

40
00:06:06.280 –> 00:06:26.750
and the biggies are smallbizthoughts.com and .org, and plus our store and our training at it Service Provider University. But I write blogs and podcasts, and I would appreciate it if you would connect with me over the over the weeks and months and the year between now and our sixteenth annual state of the nation. Address

41
00:06:27.780 –> 00:06:41.710
a quick note on AI transparency. I love this picture. It is. Did it. First of all, it freaks me out. But to me this is kind of a great statement about where we are with AI generated content.

42
00:06:41.800 –> 00:06:56.230
I love AI graphics, even though I end up not using them very much, because there’s always something wrong with them. And as a writer I am arrogant enough to not want to use AI to write my words for me.

43
00:06:56.280 –> 00:07:07.929
and so I don’t use AI tools in generating content or outlining presentations, or any of that kind of stuff. I do use the graphics. We use several license graphic programs.

44
00:07:08.640 –> 00:07:20.550
The reason I think, that this picture is such a great statement of where we are with AI. It’s that when your first impression is, you look at the eyes, you look at the monkeys, they’re super cute, and then you realize

45
00:07:20.850 –> 00:07:45.309
kind of looks like their faces are stitched closed, and you’re trying to figure out what’s going on with that some kind of lab experiment. And then you look at the hands, and you’re like, what in the hell all the hands have the wrong number of fingers that one on the right looks like it might be a foot wide. And who knows what’s going on there stay off the drugs, kids. But

46
00:07:45.360 –> 00:08:05.449
You know, this is what a lot of AI is as well, and a lot of the generative. AI. If you think about you know one, it is still one, and if you want to know what that looks like, so that your brain can draw an analogy. Just ask AI to generate almost any graphic on almost anything.

47
00:08:05.780 –> 00:08:10.490
Having said that we have some very beautiful AI generated graphics here.

48
00:08:10.770 –> 00:08:20.140
So today’s agenda, we’re gonna have a few announcements kind of a summary of 2023 looking forward to 2024. I have

49
00:08:20.510 –> 00:08:21.820
one

50
00:08:21.850 –> 00:08:31.519
somewhat dire prediction, but in the end I think it’s great news for Smb, it consultants.

51
00:08:31.570 –> 00:08:36.590
And so we’re gonna talk about why, I think the future your future is so bright.

52
00:08:38.330 –> 00:08:49.600
So last year was really to me, I had predicted, and I was right. It’s sort of the the end of the pandemic in the sense that you can never go back.

53
00:08:49.610 –> 00:09:08.210
But we’re we’re solidly moving forward into the next normal. And for me that looked pretty normal. We had an online conference that lasted a couple of days had a great turnout. I can’t even remember what the number was, but it was well over a hundred

54
00:09:08.220 –> 00:09:25.629
we had a great sponsor we did a bunch of live presentations. I got to travel. Not quite the 20 cities I did in 2019. But you know, a lot of cities got to see a few fun countries.

55
00:09:25.660 –> 00:09:34.010
And you know I get to, you know. Go pick some vacation days and do what I like to do

56
00:09:34.140 –> 00:09:38.640
my goal for those of you who don’t know me well enough. My goal for life

57
00:09:39.190 –> 00:09:47.700
is, I want to write and speak and travel. That’s it. That’s what I do. So I’ve designed my business and my life around that

58
00:09:48.010 –> 00:09:54.030
gonna probably travel a little less in 2024 because Emma Marie

59
00:09:54.240 –> 00:10:11.419
joined our family. My daughter gave birth to a beautiful, beautiful daughter. Who I’m gonna be a primary babysitter for in 2024, and I’m happy to do it. So if you’re not connecting me on Facebook any like baby pictures

60
00:10:11.530 –> 00:10:14.100
just connect to Karl Palachuk on Facebook.

61
00:10:15.090 –> 00:10:23.829
So we also put out a lot of stuff love working with James Kernan and Amy Babinchak on the SMB Community Podcast.

62
00:10:23.860 –> 00:10:35.489
love working with Ryan Morris and Dave Sobel on The Killing IT Podcast and of course, I write blogs for both. Smallbizthoughts. Relax focus succeed. And the podcasts.

63
00:10:35.610 –> 00:10:45.290
So I stay busy. I don’t. I don’t sit back and relax very much because in my spare time what I like to do is read and write.

64
00:10:45.380 –> 00:10:49.070
and so when I write, I might as well put it out there and and share it with people.

65
00:10:51.220 –> 00:11:01.260
Quick! Note the other thing I’m involved with in 2021. I started the National Society of It Service Providers. We now have almost 1,000 members, and I’ll tell you how close we are.

66
00:11:01.450 –> 00:11:06.960
If half the people on this call who are not members go and join. During this

67
00:11:07.260 –> 00:11:11.439
event we will be over a thousand members. So

68
00:11:11.670 –> 00:11:16.129
get that QR code, or go to and nsitsp.org/join.

69
00:11:16.160 –> 00:11:29.629
and you know, join us online. We are engaged in many, many things. I’m so grateful. Just today there was a post up about what we’re doing with CISA.

70
00:11:29.630 –> 00:11:48.229
one of our board members, Chris Barber, sits on the small business Committee for CISA, the Federal Cyber Security Information Security Agency and so we are doing exactly what we set out to do. We have built ourselves a seat at the table.

71
00:11:48.940 –> 00:12:11.529
and we are engaged when they’re talking about Smb, it consultants and we’re going to be in a great meeting with the Legislative Committee yesterday. We are working hard to give you a seat at the table, and for 150 bucks a year. Please just do it like no questions asked. This is my favor I’m asking. Please do that, and I would appreciate it

72
00:12:11.810 –> 00:12:28.540
also serve on the committee, and so forth, and so on. This is the closest I get to an actual plug my community is at Smallbizthoughts.org, and it includes a great relationship with it. Service Provider University. Luckily for me, I happen to own both.

73
00:12:29.380 –> 00:12:38.830
so go check that out when you get some spare time, maybe even on a third monitor, while you’re watching this thing. Alright. So

74
00:12:39.340 –> 00:12:46.099
now the content. There we go now everybody should be here who who was on some other call. The excuses are over.

75
00:12:46.380 –> 00:12:50.949
The theme for today is the dawning of a new era for it consultants, and

76
00:12:51.110 –> 00:13:01.859
there’s kind of a couple of different pieces to this. But let me go back and look at 2023, and then we will move forward and say, Okay, here’s what the next few years look like.

77
00:13:01.900 –> 00:13:05.969
And normally, I only look one year in advance.

78
00:13:06.160 –> 00:13:14.520
but we’re at a very interesting point in the evolution of our industry. And so I want to look more than one year in advance. And of course

79
00:13:14.840 –> 00:13:35.299
you know how these crystal balls are. They’re they’re a little bit hazy for 12 months out, but they get super hazy when you look beyond that. So you know, this is kind of the speculation of a possible future. A little bit like Ebenezer Scrooge. Right? The ghost of of it. Service provider future.

80
00:13:36.290 –> 00:13:43.710
So I am gonna talk a little bit about finances. I have one guy who’s been bugging me for 15 years.

81
00:13:44.040 –> 00:14:07.830
So I have to say I’m not a financial advisor. I’m not an economist. I have no idea what I’m talking about, but I have been running businesses for myself and for other people and running multi-million dollar programs for some of the largest companies on the the S. And P. 500 for about 30 years. And I think I have something to contribute there. So there you go. That’s my justification.

82
00:14:08.420 –> 00:14:33.410
So in 2023 we entered the year after a very scary 2022. Some of you may recall again. I don’t normally go back 2 years. But but last year showed this graph. And I’m like, Okay, so that’s where we’ve been. And that’s kind of the general direction from about 15,000 to 10,000 on the Nasdaq.

83
00:14:33.450 –> 00:14:49.220
which is, I think, the only market index you need to pay attention to if you’re in it. and everybody, pretty much everybody except me said, well, that line is just gonna continue when it’s all gonna go to hell, and we’re all gonna die, and the the world, as we know it, is going to come to an end.

84
00:14:49.270 –> 00:15:01.670
And I said, no, I’m actually looking for growth in 2023. So my prediction was up and again go check the recording because it’s over there at mspwebinar.com.

85
00:15:01.740 –> 00:15:13.259
And what happened in 2023 was exactly that it went from 10,000 to 15,000. So almost a 50% increase

86
00:15:14.340 –> 00:15:18.390
today, we’re 10 days into the New year.

87
00:15:18.420 –> 00:15:22.440
Less than that in terms of the number of days. The stock market’s been open.

88
00:15:22.590 –> 00:15:31.019
so a week of the stock market and all the indexes are near all time highs, and I think they will need reach them by the end of January.

89
00:15:31.290 –> 00:15:47.760
So I don’t think this is particularly genius, but I do think that what you can look forward to is that we’re we’re going to not have the kind of deep recession that some people have been talking about for 15 or 18 months now.

90
00:15:47.850 –> 00:16:05.319
this morning on Bloomberg people are talking about. Well, of course, you know that recession is going to happen eventually. Yeah, there’s always going to be a recession eventually. You just don’t know if it’s in one year, or one month, or 5 years, or 10 years, but it will happen so. You know there. There is a way to approach that

91
00:16:07.390 –> 00:16:14.989
a new thing evolved in the stock market in 2023, and that was what they called a magnificent set

92
00:16:15.330 –> 00:16:16.730
only because

93
00:16:16.950 –> 00:16:25.450
these 7 stocks just absolutely outperformed everybody else. And I want you to remember this.

94
00:16:25.460 –> 00:16:30.390
This is a key slide, because what we’re going to talk about later is people who

95
00:16:30.470 –> 00:16:40.609
try to outperform the market by doing things that they should not do and that are not in your best interest, and you need to be careful about how you engage with them.

96
00:16:41.120 –> 00:16:44.150
And video was up 239%.

97
00:16:44.240 –> 00:16:55.430
And you can argue that you should have known about that, or you could have known about that. But most people just went along for the ride, and if you had to pick

98
00:16:55.540 –> 00:17:06.870
7 stocks for 2,024. This is not a bad list to start with. I’m not giving any advice. I’m just saying so let’s look at the scorecard for 2023.

99
00:17:09.609 –> 00:17:10.680
So

100
00:17:11.800 –> 00:17:19.430
I have been a little bit frustrated with the M. And a frenzy in our industry, and I’ll just be super clear

101
00:17:19.609 –> 00:17:24.029
if somebody gives you a bunch of money for your business, take it

102
00:17:24.060 –> 00:17:32.409
and be happy. Cash the checks as quickly as possible. And and be happy that you’re on that side of the equation.

103
00:17:32.540 –> 00:17:42.829
But I also have to say it is a frenzy which means it’s not particularly rational, and the frenzy has cooled a bit in 2023.

104
00:17:42.920 –> 00:17:50.319
So I said it was going to continue, and that’s certainly the case. It is sort of settled into somewhat of a norm

105
00:17:50.590 –> 00:18:04.379
and that means that there are people at the high end, the low end, and the Midland. There are bottom feeders who were not here a couple years ago, and so you just have to be careful and go cautiously.

106
00:18:04.910 –> 00:18:09.219
and I’ll say this again. But this is the first time I’ll tell you.

107
00:18:09.670 –> 00:18:14.760
If you have a 2 or 3 year time span for your business, there’s

108
00:18:14.850 –> 00:18:29.160
that’s one way of looking at your business and the industry. If you have a longer term. If you expect to be around in 5 or 10 years, then you have a different perspective on your business. So keep that in mind as we go through this.

109
00:18:29.630 –> 00:18:34.120
I predicted that education and certification

110
00:18:34.260 –> 00:18:59.429
would continue to be more and more important. I think that was an easy win wasn’t hard to predict of the changes in Cm, Cmc, which are continuing today. Are actually pushing people towards, okay, if we can agree on some kind of a standard and we can train up for that, and we can set that as our standard for measuring success.

111
00:18:59.500 –> 00:19:09.349
Then we have some stability going forward, that’s all a beautiful thing. And I think that that will continue. I also think it’s becoming more and more important

112
00:19:09.390 –> 00:19:16.160
that you and your employees be educated on the managed service business model

113
00:19:16.380 –> 00:19:40.440
and and I think that’s so important. I’m gonna refresh it this year. But over at it. Service Provider University. The one Cl class we have that’s free is a 1 h class on coming up to speed on the business model, because I think every single person in your company needs to understand why manage services is different from break fix, and it’s different from having a storefront or or a fix it shop.

114
00:19:41.110 –> 00:19:46.409
So I think education is absolutely central, and I think that that will certainly continue.

115
00:19:46.450 –> 00:20:00.380
Again, another easy win with legislation and regulation they have become central. You are now, whether you like it or not, fully in charge of privacy laws for yourself and all of your clients.

116
00:20:00.400 –> 00:20:03.789
Your clients, no matter what anybody says

117
00:20:03.900 –> 00:20:11.329
it. When the government comes out of the regulation, your clients turn to you and say, Hey, Karl, will you? Just, you know. Read this for me and implement it.

118
00:20:11.740 –> 00:20:20.939
and no matter how simple you might think it is, it’s not simple to them, it’s not what they do, it’s not what they want to do. They don’t care about it. They literally don’t care

119
00:20:21.150 –> 00:20:29.299
so and I, you know, last year I had predicted that the inflation

120
00:20:29.410 –> 00:20:41.419
would be up to 5%. And we did have inflation. But you know, at the end of the year it settled down below that lot of people were predicting. It would be much higher than that.

121
00:20:41.560 –> 00:20:43.110
So

122
00:20:43.160 –> 00:21:03.660
turns out I said the pandemic would be fading in the economy would go up, and that’s certainly what happened again. There are people who literally every week of 2023 predicted that the recession will start any minute and get the hell out. And those people missed out on a lot of of increases in

123
00:21:03.710 –> 00:21:05.830
both the expanding economy

124
00:21:05.850 –> 00:21:10.370
and the possible gains on the stock market.

125
00:21:11.640 –> 00:21:16.009
and we have to realize we’re not going back. You can never go back right. But

126
00:21:16.070 –> 00:21:20.580
here we are. And I do have to say.

127
00:21:20.620 –> 00:21:33.129
the the thing where I missed was artificial intelligence. Now we’ve been talking about it on the killing it podcast since the beginning, like literally for 3 years we’ve been talking about AI.

128
00:21:33.270 –> 00:21:34.340
But

129
00:21:34.670 –> 00:21:47.990
you know, every once in a while a technology has a killer app. And that is exactly what AI became right. This is the email. Since, literally.

130
00:21:48.010 –> 00:21:55.140
since 1985 email has been the killer app of what would become the Internet

131
00:21:55.250 –> 00:22:02.450
and has become the killer out of the Internet, and the web eventually became a killer. App

132
00:22:02.510 –> 00:22:14.060
AI is the new killer app and Chat Gpt really took over. And you know, Dolly, and some other graphics things.

133
00:22:14.130 –> 00:22:23.119
But today, if you use pretty much any adobe product, go to the edit menu and find the generative fill.

134
00:22:23.160 –> 00:22:25.600
and it does some amazing stuff.

135
00:22:25.920 –> 00:22:41.909
and that’s built into everything. Microsoft is building their co-pilot into everything. And so AI is a lot of it is still vaporware. Do not get me wrong. We are literally the same as where

136
00:22:42.020 –> 00:22:53.560
the Internet was in 89, or I’m sorry, 90, 90, 98 and 99 we had a great Internet bubble. I was

137
00:22:53.800 –> 00:23:00.180
very lucky to be involved in some great businesses at that time.

138
00:23:00.390 –> 00:23:06.970
And helped a lot of companies get connected to the Internet and take advantage of it.

139
00:23:07.020 –> 00:23:21.770
I built one of the first 1,000 sites on on the World wide web won an award for it, right? So I saw that I believed in it. I lived in it. That’s when I first started investing in the stock market.

140
00:23:22.150 –> 00:23:31.330
and I learned a very, very big lesson in the in the 19 nineties because I thought, Wow, here’s this company

141
00:23:31.390 –> 00:23:47.320
called Yahoo, or something like that. And it came out of nowhere. And suddenly they have more money than general motors. This has to be real. This can’t not be real right, which means that money can’t just disappear.

142
00:23:47.380 –> 00:23:48.760
Will

143
00:23:48.860 –> 00:24:01.589
the lesson I learned is, yes, that money can completely disappear. The bubble can burst. And so when you think about what happened in March of 2,000, 2,000, 2,001,

144
00:24:01.820 –> 00:24:13.570
the Internet bubble burst. but the reality is. we picked ourselves up. We dusted ourselves off. And in that transition this is key.

145
00:24:13.930 –> 00:24:22.949
The evolution of technology continued. So while a lot of people were distracted by the Internet and this and that, and the other thing.

146
00:24:22.960 –> 00:24:24.370
Microsoft

147
00:24:24.600 –> 00:24:33.349
implemented Active Directory. And a lot of people said, I will not learn a new technology. And they left the business. Other people said.

148
00:24:33.740 –> 00:24:41.619
what’s this cool thing? I’m going to learn that. And I’m going to take it to the next level. And I have to say the first 5 years of this century

149
00:24:41.700 –> 00:24:49.080
there was a massive push. People got educated, they got certified, they went and taught themselves how to do this stuff.

150
00:24:49.360 –> 00:25:04.460
And that’s what we’re going to see with AI. People are going to choose to go back to school and say, this is a little more difficult than it looks at like on its face. And I need to take a class. And I need to figure out how to do this. And I need to figure out how I’m going to make money on it.

151
00:25:04.640 –> 00:25:17.849
So a lot of what we see today is, in fact, vapor wear a lot of the things that are out there. There’s just a tiny bit of smart code, and they’re calling the whole thing AI, and that’s all. Gonna shake out.

152
00:25:18.600 –> 00:25:29.629
But the good news for you is that going ahead. you’re gonna see the evolution of hardware and software and things that will affect your business.

153
00:25:29.780 –> 00:25:35.280
My guess is whether it starts in 2024, or moves in 2025.

154
00:25:35.490 –> 00:25:47.229
You’re gonna start. See? Ai enabled devices that say, Oh, whether you’re connected to the cloud or not, you still got this AI piece that could make your life easier. So

155
00:25:47.310 –> 00:26:06.600
you’re going to be selling these things, and you need to keep an eye out for the ones that are actually useful for your clients, and begin to put those into your list of your catalogue of things that you sell laptops, desktops, devices? Maybe even cell phones.

156
00:26:06.960 –> 00:26:14.200
Right? All of that is quite visible, like there’s there’s no genius in pre predicting any of this.

157
00:26:14.240 –> 00:26:42.770
but how it gets implemented, and how you make money, you’d have to be finely tuned and be aware of what’s going on and try to lead on this, because it’s not. This is one of these few times in history. It’s not going to be super expensive to be in the lead. You don’t have to follow the people who follow always make this second tier level of money. You can lead on this if you are paying attention, tuned in, educated and aware of how this might fit into your business.

158
00:26:44.280 –> 00:26:50.070
So this year, you know my predictions again, I don’t know nothing but

159
00:26:50.070 –> 00:27:16.129
I think this economy still wants to run unemployment as a historic lows. Whether you like it or not. A little inflation is a good thing. Inflation is at historic lows, and the only thing is, if you’ve if you got in the market after the last great recession. Well, even on nothing except 0% interest rates. Well, that’s just not realistic. So long term. What we have now is fairly sustainable. But it’s gonna be a rough ride.

160
00:27:16.130 –> 00:27:21.939
Stock market is gonna go up and down and up and down, and it’s an election year. So

161
00:27:21.960 –> 00:27:37.650
the stock market hates uncertainty right? And so the stock market is going to be unsure of where it wants to go until they know for sure what the future looks like, and that happens in the first week in November. So

162
00:27:37.650 –> 00:27:59.859
but but remember, we are literally. When it comes to AI, we are at the hypiest part of the the Gartner Hype cycle, and that also means that the the disillusionment will settle in in 2024, and there’ll be a little bit of a shakeout but that means realistic. Usable products are gonna come out on the other end

163
00:27:59.920 –> 00:28:19.189
right, and AI will will then sort of shake out, and you will know what you’re talking about with regard to AI. You’ll be able to point to things, and talk to your clients about it in an educated manner, and say, Let us help you be successful with this, and you will be able to engage them at that level.

164
00:28:20.490 –> 00:28:38.770
And I think that one of the things you’re gonna see in 2024 and 2025 is increases in it, spending at all levels, starting literally today and going for the next 24 months at least. It may be the rest of your life, but it’ll at least be the next 24 months.

165
00:28:40.080 –> 00:28:45.990
So this is literally a repeat slide from last year, because this is the slide that always is true.

166
00:28:46.970 –> 00:29:05.160
The best thing you can do. Do, stay focused on your business. Don’t worry about the uncertainty. Don’t worry about the stock market. Don’t worry about the election. Don’t worry about wars in other countries. Don’t worry about anything except your business, and you could pay attention to those things, but just don’t obsess on them, and don’t freak out about.

167
00:29:05.310 –> 00:29:11.370
Take care of your clients, take care of your employees, take care of your culture.

168
00:29:11.650 –> 00:29:27.680
and and I’m going to go into a discussion in just a minute where I want you to just use as your anchor. Take care of your clients, take care of your employees, take care of your culture. If you can stay anchored. With that you will be just fine, no matter what happens.

169
00:29:28.620 –> 00:29:36.280
And this is also the year of the Dragon. So I asked AI to give me a meditating dragon. and that’s the closest it got

170
00:29:40.770 –> 00:29:48.590
alright. So a couple of notes on private equity, and I do have to say I wasn’t gonna mention this, but it’s so. The timing is so perfect. I have to.

171
00:29:49.770 –> 00:29:59.709
I’ve been interviewed by somebody who wanted to do this fairly extended story on me. And and you know what I’ve done. And blah blah blah.

172
00:29:59.810 –> 00:30:07.730
I’ve been working on it like back and forth emails back and forth, proofreading fact checking for 4 months.

173
00:30:08.180 –> 00:30:13.110
And then today I get a note that says, Oh,

174
00:30:13.310 –> 00:30:21.680
You made a statement in this blog post. That was, you know, we we saw, and it drew attention to the fact that

175
00:30:21.690 –> 00:30:26.719
you said something about the the media which we consider ourselves to be.

176
00:30:26.760 –> 00:30:38.220
And so we’re going to delay printing. This. and what I said was that the problems with private equity are something that

177
00:30:38.790 –> 00:30:42.699
the media in our industry can’t talk about

178
00:30:43.430 –> 00:30:52.350
for a very simple reason all the vendors on stage, all those platinum vendors, all most of the gold vendors, a whole bunch of the silver vendors.

179
00:30:52.650 –> 00:31:18.920
They are funded by private equity. So no one is gonna stand on stage and say, there’s a problem with private equity. No one is gonna put in print. The fact that private equity has destroyed a bunch of businesses, or that it is bankrupting businesses right? No one’s gonna give you the other side of private equity in our industry. You can go find. You know what are the evils of private equity. You’ll find a whole bunch of stuff.

180
00:31:20.280 –> 00:31:21.330
But

181
00:31:21.530 –> 00:31:30.930
what you won’t find is anybody talking about this within the media within our industry. S. And B. It consulted.

182
00:31:31.600 –> 00:31:34.849
you will say you will see people saying nice things about it.

183
00:31:35.000 –> 00:31:43.409
You will have interviews where people say, Oh, yeah. We did this thing, and we got funded by private equity. And it’s the greatest thing that’s ever happened. Just great.

184
00:31:43.440 –> 00:31:50.639
You will see that side of the story. But the important thing that you have to remember is

185
00:31:50.700 –> 00:31:55.189
private equity has a very short term perspective.

186
00:31:55.570 –> 00:31:58.259
They have to invest in something.

187
00:31:58.330 –> 00:32:11.429
get as much money as they can, suck it dry and then leave. That’s their business model. Their business model is not to build a long-term successful business plan.

188
00:32:12.010 –> 00:32:26.290
So very frequently what they will do is borrow a bunch of money, and, you know, run up the debts of the companies they buy, and you know, use that to pay. Obviously their investors.

189
00:32:26.460 –> 00:32:27.510
and

190
00:32:27.870 –> 00:32:35.189
the the probability that you’re going to go bankrupt eventually, if you take AI money. I mean, I’m sorry if you take vendor

191
00:32:36.050 –> 00:32:39.060
private equity money is about

192
00:32:39.090 –> 00:32:48.170
much higher than everybody else. More than 27% of all business bankruptcies are companies funded by private equity.

193
00:32:48.720 –> 00:33:02.080
So most of you are not going to be offered that money, but your vendors will. So the basic strategy is, you get a bunch of money, and then you use that to leverage a much higher loan. So you’ve heard about leveraged capital right

194
00:33:02.110 –> 00:33:03.400
so.

195
00:33:04.000 –> 00:33:12.600
And then they cut the number of employees, they stopped the development. Right? So you’ve seen this with vendors as soon as they’re bought

196
00:33:12.660 –> 00:33:19.390
they do a few things. One of them is that they create complex legal agreements

197
00:33:19.550 –> 00:33:22.119
that you can’t even find

198
00:33:22.400 –> 00:33:25.320
right. And so there should be a much

199
00:33:25.500 –> 00:33:39.479
more transparent way for you to see what you have agreed to and what you have not. But eventually what’s going to happen is they’re just going to take out the money in as big a chunks as they possibly can.

200
00:33:39.640 –> 00:33:44.989
Because they’ve only got 3 to 5 years to do it, and then they gotta go do something else.

201
00:33:45.380 –> 00:33:54.729
And I will say not. All private equity behaves this way, and not all private equity has to behave this way.

202
00:33:55.020 –> 00:33:55.950
But

203
00:33:56.140 –> 00:34:12.089
some of the biggies choose to be this way. Now, globally, private equity is about the estimate I’ve heard is 1.2 trillion dollars, the biggest companies, the the Blackstones and Carlysle. So I have 200 to 240

204
00:34:12.139 –> 00:34:13.389
1 billion.

205
00:34:13.590 –> 00:34:17.539
The smaller ones are 1 billion. 2 billion. 3 billion. Well.

206
00:34:18.030 –> 00:34:30.229
what you’re going to see in the next 5 years is that’s going to increase to everything. That’s 1, 2, 3 billion is going to be 2030, 40 billion. And everything that’s 200 billion is going to be 2 trillion.

207
00:34:30.690 –> 00:34:33.899
and so it will grow and grow and grow.

208
00:34:33.940 –> 00:34:44.800
What’s not in this equation? Is you your employees, your clients, your culture, the quality of your services. They don’t care about the quality of your services.

209
00:34:44.900 –> 00:35:07.359
but a big venture, capital company buy something. They are in it for the long term, and they need it to be profitable. But a big private equity company buy something. They’re in it for the short term, and they don’t actually care about the profit. They only care about how much money they can extract, and that is literally the term that is used extracting money.

210
00:35:07.710 –> 00:35:08.760
So

211
00:35:09.550 –> 00:35:13.379
remember totally to remember the magnificent 7.

212
00:35:14.880 –> 00:35:20.820
If you take the total value of the magnificent 7, it is many trillions of dollars.

213
00:35:20.860 –> 00:35:24.080
and they are not interested in the short term.

214
00:35:24.380 –> 00:35:50.779
My point is, you can be successful. Having a long term vision in it. You do not have to abuse the companies you buy. You do not have to extract excess value. You can have a long term vision and build something of quality, build products and services of quality. You can choose to do that. And you know

215
00:35:51.150 –> 00:36:08.580
again, timing is everything. A few days ago an iphone fell 16,000 feet and was is fully operational. Didn’t even crack the screen from what I hear, and you know, you all know you can drop an iphone for 2 feet. It’ll crack the screen. So

216
00:36:08.650 –> 00:36:16.079
the quality of these products is built in, you know, to a degree that is just almost unimaginable.

217
00:36:16.190 –> 00:36:45.100
Now, that’s probably not the average iphone. But you know it did happen, and I hope that they put it in an advertisement. But you know the. The. The point is, you can build quality services. You can build quality products. And you need to stay focused on that. And so when I think about how you go through the next 5 years, keep your head down, focus on your employees, focus on your clients, focus on your culture, focus on your products and services, and you will be just fine.

218
00:36:45.160 –> 00:36:55.369
but you also have to have a long-term sustainable business model. Right? So in the Channel. I do believe that

219
00:36:55.640 –> 00:37:02.319
private equity is going to go to the next level. They will be buying and creating larger and larger Msps.

220
00:37:02.450 –> 00:37:15.389
At some point it will be unsustainable, and they know that they literally know that. and when it becomes unsustainable, they will try to to hobble them all together into one massive Msp.

221
00:37:15.610 –> 00:37:21.679
And this is exactly what Clayton Christensen was talking about with disruption.

222
00:37:21.860 –> 00:37:26.900
When a market is ready for disruption. It means you have a few players who are so big

223
00:37:27.090 –> 00:37:35.280
that all somebody has to do is come in and provide some really good services at a little sliver at the bottom and get a foothold.

224
00:37:35.460 –> 00:37:44.740
and then they expand and expand and expand. And so monster companies, huge ventures have to collapse at some point.

225
00:37:44.840 –> 00:37:50.290
And unfortunately, you’re going to witness that among your vendors.

226
00:37:51.480 –> 00:37:58.169
and I’m not exaggerating when I say that maybe in 2024, but definitely by 2025,

227
00:37:58.560 –> 00:38:03.760
some of you will be left without one or more of your most important vendors.

228
00:38:03.850 –> 00:38:18.909
They will go bankrupt, they will be gobbled up by the competition, they will cease to exist. and there will be even more confusion about what you are legally obligated to, and where your paperwork is because they have 0 transparency on that.

229
00:38:19.530 –> 00:38:21.420
So

230
00:38:21.670 –> 00:38:36.150
the the market domination is always gonna go that way. And this is where nobody wants to talk about this. This is the part where there’s there will be no stages within our industry where somebody stands up and openly has this conversation.

231
00:38:36.370 –> 00:38:45.730
because every single thing in that event is being paid for ultimately by the venture capital funding the largest vendors in the room.

232
00:38:46.030 –> 00:38:50.280
And that’s just the way the world is. So again.

233
00:38:50.490 –> 00:38:56.589
focus on your business. Keep your head down, pay attention to your knitting. Be very careful.

234
00:38:56.680 –> 00:39:06.829
and when you think about the vendors that you want to partner with. You need to think about what are your criteria? How transportable is your data

235
00:39:07.190 –> 00:39:14.690
transportable is, the most important information that you have on your clients and your business

236
00:39:14.880 –> 00:39:24.050
associated with that vendor. and that needs to be one of the criteria that you talk to vendors about when you choose vendors going forward.

237
00:39:24.590 –> 00:39:27.930
how transportable is my data.

238
00:39:28.810 –> 00:39:29.890
And

239
00:39:30.010 –> 00:39:43.479
again, it’s one of these things, basically, nobody’s talking about it in our industry. But they will because they have to. because when a vendor goes out and takes a bunch of Msp’s with them.

240
00:39:43.610 –> 00:39:55.439
our industry could potentially take a step backward from true managed services and prevent and maintenance to being just brake. Fix until we get our feet back on the ground.

241
00:39:55.560 –> 00:40:09.669
Don’t let this happen to your business. and I know that sounds dire. But that’s the tip of the iceberg, because when venture, I mean when private equity gets to the point where it is trillions of dollars.

242
00:40:09.830 –> 00:40:13.650
It will put the global economy at risk.

243
00:40:13.860 –> 00:40:20.560
And you know, every 20 or 25 years we have something that gets massively carried away

244
00:40:20.630 –> 00:40:32.720
like the home loan crisis in the 80 s. Or you know the what happened in 2,007 to 2,009, with banking and and interest rates. The banking and the housing collapsed.

245
00:40:32.750 –> 00:40:34.970
and it took the entire world with it.

246
00:40:35.180 –> 00:40:43.789
and it takes, you know, 3 to 4 years for that to echo its way through the entire system and for the economy to get back on its speed again.

247
00:40:43.850 –> 00:40:48.889
My guess is this is the next global economic crisis.

248
00:40:48.900 –> 00:40:56.140
And there’s kind of a race now between Europe and the United States to try to figure out. Is it possible

249
00:40:56.380 –> 00:41:16.449
to regulate these folks? Because, you know, if you got, let’s say, in the neighborhood of a billion dollars, you can buy an unlimited number of attorneys at $1,000 an hour to obfuscate absolutely everything you do in 6 or 7 layers of ownership. And no one is responsible for anything.

250
00:41:17.290 –> 00:41:23.609
So you’re going to see this play out again. Keep your head down, focus, focus, focus.

251
00:41:23.640 –> 00:41:25.510
And as

252
00:41:25.910 –> 00:41:29.210
Michael Gerber says, you are an economy of one.

253
00:41:30.210 –> 00:41:34.029
If you don’t lose any of your clients you’ll be in great shape.

254
00:41:34.040 –> 00:41:42.569
If you maintain all of your clients systems, you’ll be in great shape if you get your clients back in business when they’ve been hit by ransomware. You’ll be in great shape

255
00:41:42.680 –> 00:41:53.200
if you keep your employees employed and happy and educated, and feeling like they’re moving ahead in their industry, their chosen profession. You’re going to be okay.

256
00:41:53.680 –> 00:42:09.720
So you know you, you can do one thing that the large companies cannot. If a big Msp. Comes into your area. Guess what they cannot do. They cannot provide the kind of white glow service that pretty much everybody on this call brags about

257
00:42:09.780 –> 00:42:20.700
when I take on a new coaching client. Invariably, they tell me we have a white glove service. We have the best service in town. Nobody has better technicians than we do. Nobody gets better service than we do

258
00:42:20.900 –> 00:42:24.829
every single it consultant I talked to believes that.

259
00:42:25.100 –> 00:42:32.759
Well, I would say at the small end of the market, that’s probably true for 90% of them. Because we actually

260
00:42:32.900 –> 00:42:52.390
and right, when you’ve only got 12 people, or you’ve only got 50 endpoints, you can have a perfect disaster recovery system that just works. It might not be back up in business in 30 s, but it will definitely be up within a day or 2 right? We can do that because it’s a manageable piece.

261
00:42:52.430 –> 00:42:59.849
If you have 10,000 servers all over the world, and you don’t even know where most of them are. You literally cannot provide that kind of service.

262
00:42:59.900 –> 00:43:20.229
So we have the ability to provide a quality of service that’s not possible with larger companies, so the larger your competition gets the better off you are. Somebody put up a note the other day on Reddit about, you know. Oh, are we charging too much because I had a client come to me and said, Hey, seems like we’re paying you a lot of money.

263
00:43:20.880 –> 00:43:29.540
The first thing that popped into my head is, I’m gonna think I should write a blog post about the fact that there is no such thing as charging too much.

264
00:43:32.630 –> 00:43:35.589
It is not possible for you to charge too much.

265
00:43:36.130 –> 00:43:40.939
If you provide the right service, you will be able to charge the right price.

266
00:43:41.680 –> 00:43:46.940
You know we you’ve seen it. There’s so many restaurants, you know. Do you want to eat at at

267
00:43:47.050 –> 00:43:59.069
a fast food restaurant and pay $10 for a meal you want to eat at one of the high end steak houses and pay $300 for a meal. They both stay in business in the same city

268
00:43:59.200 –> 00:44:00.660
by the dozens.

269
00:44:01.070 –> 00:44:05.859
Why is that possible? Because there’s a price point for everybody and everything.

270
00:44:06.610 –> 00:44:17.629
and if the clients want to go to a cheap service and fall on their face and lose all their data and lose a bunch of business and lose a bunch of money. Well.

271
00:44:17.930 –> 00:44:24.770
that’s fine. That’s a lesson learned for them. With luck they’ll come back and pay you the appropriate price.

272
00:44:25.070 –> 00:44:35.790
But just remember, it requires you to focus on your business and build a great business. Build the kind of business you want to work in, and you’ll be just fine.

273
00:44:37.380 –> 00:44:41.780
Alright! This is a deep breath. This is just my opportunity to take a sip of coffee.

274
00:44:45.150 –> 00:44:48.100
So what is this new era that I’m talking about?

275
00:44:48.970 –> 00:44:56.050
Well, you’re gonna have to work, and I know you guys work your tails off. So I’m not saying you’re lazy. But

276
00:44:56.460 –> 00:45:05.960
what I want you to do is to begin thinking about your business differently. Think about manage services as a system.

277
00:45:06.220 –> 00:45:08.070
And this is, I put the

278
00:45:08.170 –> 00:45:19.470
site here from this is one of my favorite books. My dad had this as a when I was a kid, and I’ve always owned a copy of this book. It’s called How to Keep your Bolts, Megan alive.

279
00:45:19.640 –> 00:45:23.430
But when you look at the engine.

280
00:45:23.640 –> 00:45:30.200
you know that’s a system, and if so, if the engine’s not running the way it’s supposed to. Well.

281
00:45:30.550 –> 00:45:35.660
there’s something in there that’s not quite right. and you can’t just

282
00:45:36.510 –> 00:45:50.470
fix up one thing if you put on oversized headers. Well, now, you need oversized pistons, and now you need a high performance, cam shift and right and the power trade and da da da, one thing after another.

283
00:45:50.530 –> 00:45:54.359
you have to improve the whole system. So when you think about your business.

284
00:45:55.590 –> 00:46:02.100
think about it in those terms. How can you implement continuous incremental improvement in your business?

285
00:46:02.470 –> 00:46:19.790
And part of that is. you need to make sure that every single person on your team is empowered to help you. You have to let them do their job. You have to hire good people. You have to give them your process so they can implement your brand, your process of doing things.

286
00:46:19.900 –> 00:46:43.709
but then let them run. Let them do what they do well, and let them give you advice to fix the system and constantly make improvements. This is a little easier in it than in other companies, because we are constantly in an environment where everything is changing all the time. So we’re constantly changing. Anyway, we might as well fix it and fix it and fix it.

287
00:46:44.030 –> 00:47:05.640
I think there’s a natural tendency to cut corners, and you know, underpay employees. And you know that sort of thing, and all of those things are bad in the long run. So think about what are the basics? How can I empower people? And you know, how can I make sure that my clients are engaged in this process.

288
00:47:05.920 –> 00:47:15.140
because you know the the ultimate question of you know, when a client comes to you and says, I think we’re paying you too much money. Well, that’s your fault for not

289
00:47:15.270 –> 00:47:22.370
having equalized the expectations between you and your client. Right? When I go into Starbucks

290
00:47:22.390 –> 00:47:30.610
I don’t expect to order a a small latte and have them just give me something. I gotta go through this long, complicated process

291
00:47:30.700 –> 00:47:43.209
and and use their system. If I don’t like that, then I go somewhere else and buy my coffee. That’s just the way the world works. Right? So you gotta set your expectations. And then people have to perform to that

292
00:47:43.250 –> 00:48:02.890
you also need to make sure that your employees are fulfilled, that they do see some future in your company. It is okay to say we’re gonna educate the heck out of you, and we’re gonna make you better than anybody out there, because when they look around a lot of times, what you see is the other Msps. Out there, especially the bigger ones.

293
00:48:03.120 –> 00:48:04.969
treat their employees like crap.

294
00:48:05.050 –> 00:48:19.139
They underpay them, they overwork them. They’re completely stressed out, you know, but it’s funny. The great discussion about Msps is on Facebook, where everybody acts like we’re a big community.

295
00:48:19.430 –> 00:48:37.360
the Downside that the dark underbelly of this discussion is on Reddit, where everybody is an employee of a big company, and they all hate their jobs. Right be the company that your employees love, be the company that your clients love. You absolutely have the power to do this.

296
00:48:37.890 –> 00:48:45.219
And when you think about that engine where one little component affects every other component.

297
00:48:45.360 –> 00:48:51.629
remember the old analogy. You know, quality time, money pick 2. It’s no longer pick 2.

298
00:48:52.020 –> 00:49:05.459
It is okay. There’s 100 components. Pick 97, right? Because every single thing you do will affect everything else in your business. So you gotta figure out how you’re gonna help to improve that all the way

299
00:49:05.500 –> 00:49:15.779
one of the things you do avoid siloed knowledge. And this is advice you’ve heard from really big companies. But we do it a lot unintentionally in small business.

300
00:49:15.800 –> 00:49:22.509
right? I share my financials with my employees because they need to know what’s going on

301
00:49:22.750 –> 00:49:40.060
right. And I’m not a millionaire. Trust me. But you know my business needs to operate in a way where people know what the hell’s going on, and that way, when shit is going in the wrong direction, I can ask my employees for help, and they will give it to me. Right? They will say, Oh, you know II can be kind about that.

302
00:49:40.120 –> 00:49:45.220
and we just had a thing last week where somebody said, Hey, can I move my payment

303
00:49:45.310 –> 00:50:03.209
for the community cause? This payment date doesn’t work for me. And we said, yes, because you know it. It is literally the the same as the vile story. Right? You know the the king for forgives the debt of a servant. Then that servant find somebody who owes him money and beats him up and sends him to jail.

304
00:50:03.760 –> 00:50:06.710
You have to be as forgiving as you want to be forgiven

305
00:50:06.750 –> 00:50:35.489
right? You have to be as honest and as truthful and as ethical as you want other people to treat you so. That means you gotta be open with your knowledge, and you have to be also rigorous like. I don’t let my employees, you know, just slack off and do half assed work. If you’re gonna do that, you should work for my competition. Right? So. But but we make a culture that works for us, and your culture may not be the same as my culture. It’s probably not.

306
00:50:35.530 –> 00:50:41.890
But you have to remember that it’s the big, big picture that counts.

307
00:50:42.060 –> 00:50:56.040
And it’s really important that there’s a great lesson from manufacturing. You cannot improve a product after it’s built. Nobody rolls a car off the line and says, Oh, man, you know this could use a slightly larger trunk.

308
00:50:56.280 –> 00:51:01.950
Okay, very good. Let’s do that next year because you can’t do it after you’ve produced the product.

309
00:51:02.010 –> 00:51:06.190
Same thing is true in managed services. Once the ticket is closed.

310
00:51:06.520 –> 00:51:23.690
the product is done right? So you need to be constantly improving for the next ticket and the next ticket in the next ticket the next month you’re gonna do something better in your service the next year you’re gonna do something better in your service. What will that be? And how will you get from here to there?

311
00:51:25.470 –> 00:51:29.839
So when you look forward the next, say, 5 years.

312
00:51:30.370 –> 00:51:35.700
I think what you’re gonna see is larger competitors. and that’s good for you.

313
00:51:35.830 –> 00:51:40.789
I think you’re gonna see vendors who clearly no longer care about the relationships

314
00:51:40.990 –> 00:51:57.050
many of them got where they are because they started counting widgets. And the only thing that matters is endpoints and human beings don’t count. That’s how they got where they are. That’s how they got bonus. That’s how they got moved up to the next level, and the people who were good people working for those vendors

315
00:51:57.780 –> 00:52:05.510
are now motivated by the next payment and the next payment and the next payment. And they cannot care about that relationship.

316
00:52:05.690 –> 00:52:10.129
Your competition is going to be the same way. The larger they get.

317
00:52:10.490 –> 00:52:17.790
So I think it’ll be great. And in in the small business thoughts technology community.

318
00:52:17.820 –> 00:52:21.089
we’re going to have a breakout on

319
00:52:21.100 –> 00:52:24.969
marketing against large Msps.

320
00:52:25.230 –> 00:52:28.009
Because the end of the day

321
00:52:28.290 –> 00:52:32.690
my life, my business is dedicated to serving

322
00:52:32.750 –> 00:52:40.659
small It Service providers, meaning, you know, 50, and under 100 or under, but mostly 50 and annual.

323
00:52:41.270 –> 00:52:51.520
I’m not here to serve people who have a 12 State operation. I’ll ha! I’ll happily take your money. Don’t get me wrong, and I think you can benefit from what I have to offer. But

324
00:52:51.690 –> 00:52:54.080
I served Small and Msps.

325
00:52:54.240 –> 00:53:03.440
so we’re going to put together some ideas about how you can market against the large Msps who come into your territory, who

326
00:53:03.450 –> 00:53:14.659
A. Don’t care, and B. Are going to make a lot of the mistakes that big companies make. They are literally not capable of delivering the kind of service you can.

327
00:53:14.710 –> 00:53:25.410
So you need to lead with your service, lead with your culture lead with what you do best. I also think you need to be very careful going forward in the next 5 years.

328
00:53:26.040 –> 00:53:31.949
Talk to your vendors, make sure that they have transparency in the legal agreements that you sign.

329
00:53:32.550 –> 00:53:40.489
Make sure that that to the extent possible your data is portable to another vendor of the similar kind of service.

330
00:53:40.540 –> 00:53:46.079
Focus, focus focus on your clients, your employees and your culture.

331
00:53:47.260 –> 00:53:53.369
So when you take a big step back. you think about. Okay. I want to see the forest and not just the trees.

332
00:53:53.490 –> 00:54:07.299
You need a great business plan. You need a great business mission statement, and it wouldn’t hurt if you had a great personal mission statement as well. And you need to build a team based on the culture that you want.

333
00:54:07.480 –> 00:54:10.950
Would you go work for your company. Would you have you as a boss.

334
00:54:11.020 –> 00:54:18.819
would you? Would you want to be treated the way your your employees are treated? And that’s a pretty good guide to how you should behave.

335
00:54:18.980 –> 00:54:30.229
And the best news of all is that there’s gonna be a 25% turnover in this industry in the next 5 years, because there’s always a 25% turnover in 5 years.

336
00:54:31.240 –> 00:54:35.180
The same thing that happened at the turn of the century when

337
00:54:35.590 –> 00:54:51.489
you know, there’s a big, big economic Kerfuffle technologies kept just kept moving along. Active Directory came in windows. 2,000 server, 2,000 right? And then it moved up from there and then in the in the last great recession

338
00:54:51.580 –> 00:55:04.869
a lot of people went into that saying, I will never go to the cloud. Half of them resigned and or took other jobs, or just quit because they didn’t want to learn a new technology. And then, when the recession was over. Guess what?

339
00:55:05.290 –> 00:55:14.409
2008 server was everywhere. 2011 server was everywhere, and we were in the cloud. and people didn’t question it anymore.

340
00:55:14.700 –> 00:55:18.800
And the same thing is going to happen with AI. 2 years from now

341
00:55:19.000 –> 00:55:34.320
half the people well, the quarter the people will have left either retired or just. They don’t want to learn new technology, and those who stay will all have integrated AI at a higher level and have really great operations making a whole bunch of money.

342
00:55:34.800 –> 00:55:52.860
So if you go to this QR. Code, you’ll be able to get the downloads and the the copy of the slides, if you care about it at all. And with that I will take questions. Please put them into the QA. Because I’m not going to go read through all of the the chat until this is all over.

343
00:55:52.940 –> 00:55:56.890
so. But if so, if you put something in the chat, and you want me to talk about it. Put it in the Q. And A.

344
00:55:57.170 –> 00:56:13.890
Keith, some of the biggest legislative changes we see on the horizon are our employee based overtime compensation, minimum wage. Well, this provides us concern as employers as outsourced labor. Do you find that this is an area of growth for Msps

345
00:56:14.820 –> 00:56:16.489
is the

346
00:56:17.090 –> 00:56:26.979
Let’s see. Registered changes. Oh, on overtime, and sort of yeah, it’s all I mean. I think everything’s an opportunity. That’s just my bias. But you know.

347
00:56:27.330 –> 00:56:38.439
when when wages go up, you have to decide whether or not you have the right size, you know employees for your company, and whether you’re paying a fair amount.

348
00:56:38.650 –> 00:56:54.990
People are willing to work for slightly less if they believe that they have job security, but they are treated with respect, but they are educated that their boss gives them a certain amount of autonomy. Right? Daniel, pink autonomy, mastery, and purpose.

349
00:56:55.100 –> 00:57:04.420
Give your people the education and the skills that they need and give them the empowerment to say, Look, here’s our process. Here’s our business plan. Here’s where we want to go.

350
00:57:05.090 –> 00:57:28.309
Please go execute to the best of your ability. Those employees will stay with you, and they will be strong and powerful, and stick with you when the competition is going up and down and up and down, and what we’ve seen the last few years you’ve seen it. People will go take 3 different jobs. They’re all remote. They are not actually working on any of them. They’re being overpaid for all of them.

351
00:57:28.360 –> 00:57:33.140
That era with luck has come to an end, or at least it’s fading a little bit.

352
00:57:33.180 –> 00:57:36.260
There’ll be a bit of a shakedown on that front.

353
00:57:36.370 –> 00:57:46.660
But remember, large companies always abuse their employees unless they have a long-term business plan.

354
00:57:47.040 –> 00:57:58.360
so to the extent that private equity money is flushing through our industry, your competition will be improperly motivated for a long-term plan.

355
00:57:58.660 –> 00:58:04.689

10. What should Msp. Be doing with Microsoft co-pilot today? Well, I would say.

356
00:58:04.970 –> 00:58:09.440
go to third tier and sign up for Amy’s class and find out.

357
00:58:10.850 –> 00:58:29.470
Seems like it’s early and not ready for primetime to some extent. That’s true. I mean, it’s it’s it’s a bit early, only because we haven’t figured out all things we can do with it right? And as it shows up, it’s also not as obvious for most people as it will become

358
00:58:29.470 –> 00:58:50.089
right. You’re you’re soon going to not have any options, but to have co-pilot in your life. Right? It’s like many other things. So what you should be doing today is educating yourself. What is it? How does it work? Where does it show up? What is the best thing that I can do? And this is where, having a vertical helps

359
00:58:50.090 –> 00:59:00.360
if you serve. Financial advisors! Great! What can co-pilot do for me on that front? If you serve attorneys? What can co-pilot do for me on that front?

360
00:59:00.660 –> 00:59:22.720
You have to first learn these skills, and then I highly encourage you to be educating your clients whether you go to bigger brains and help them take classes on these things, or you train your your own clients I love. I always put a certain amount of training 1 h per quarter into my managed service business

361
00:59:22.720 –> 00:59:50.649
so that I could show up at a client’s office and show them here’s the latest and greatest of Microsoft. And sometimes they didn’t even need the latest and greatest. They need their super old like, oh, how do we share calendars? Okay, great. We’re gonna go through that. And we’re gonna show people how to make that happen. And then, you know, they’re gonna come back to us for more and more and more. So II think again, it’s a perfect example. This is a massive opportunity for you, with all of your clients. And

362
00:59:50.710 –> 01:00:07.610
spending an hour a quarter. No, no clients ever gonna take advantage of all of that, or very few but offering it up makes you look like you’re willing to be there, and if you do it at least once a year, that’s an extra hour you spend in your office where you’re not charging them anything, and you’re giving them something of value.

363
01:00:08.620 –> 01:00:16.999
Tristan. do you see? Average? It wages overall shrinking somewhat in the next year, since they grew so quickly in the last couple of years.

364
01:00:17.060 –> 01:00:28.709
I have to say I don’t. What I see is that there will be some shrinkage in some areas. But remember, when you hear about these massive layoffs? A 1,000 here, 10,000 there.

365
01:00:29.980 –> 01:00:44.880
Some of these are just people moving from one business to another, like where I live. In Sacramento we have apple, we have. HP, we have intel, we have nec, we have all of these high tech companies sort of an overflow from the Bay Area.

366
01:00:44.890 –> 01:00:57.209
They lay people off and hire people 1,000 at a time. So a lot of this, the stuff that you see about in the news. A. It’s not your business, but it’s it’s other companies. But

367
01:00:57.280 –> 01:00:59.080
overall

368
01:00:59.400 –> 01:01:18.949
inflation. Like I said earlier, a little inflation is good. A little inflation means wages. Step up a little bit. A little inflation means that. You get to help your employees. With a little extra money. I don’t think it’ll be insane. But remember, we’ve had periods of insanity.

369
01:01:18.950 –> 01:01:33.699
In the early 2 thousands. II remember people coming to me in like 2,004, and they say Microsoft says, if I have one certification for windows 3, I should get a 75,000.

370
01:01:33.720 –> 01:01:57.589
Good luck you go you. You will find somebody who’s willing to pay that have a nice day. So there’s always been those periods, and it comes and flows, it ends and flows. So II again. I wouldn’t worry too much about it. I would have the conversation with your employees again. Just the the openness of what do you need in order to stay because we have some.

371
01:01:57.600 –> 01:02:18.020
We have a long-term plan. We got to figure out what what our business plan is and how we’re going to get through this. We need you on the team. What is that going to take right? Have that conversation, and make sure that they do feel like they’re part of your team. It’s it’s amazing how much the non money side of things. When people get enough when they feel like they got a fair wage.

372
01:02:18.060 –> 01:02:28.390
they will really stick with you if you give them education and and autonomy, and some sense of purpose in the business.

373
01:02:28.480 –> 01:02:39.610
The other thing kind of a bit of a side note is because things are always changing in it. There’s always something new. Learn. You can always take somebody and say, okay, we got this new thing, you know.

374
01:02:39.940 –> 01:02:45.679
Tristan, I need you to be in charge of learning this. You’re going to be our expert, and you’re going to teach the rest of us how it works.

375
01:02:46.000 –> 01:03:00.069
Employees love that right who doesn’t want to become the master or something the subject matter expert in some thing right? And you have the ability to do that, even if you just have one employee, it still works.

376
01:03:01.980 –> 01:03:25.930
Amy says, economy, purpose, pay, and benefits. Benefits are a big win for small it firms. Yup, yeah, I mean, if you if you can get benefits, we always did healthcare. Some people don’t like to pay for healthcare. I loved it because just the ability, especially if you have 20 year olds the ability, because it’s so cheap. But the ability to pay for healthcare was huge when we had a dozen technicians.

377
01:03:26.330 –> 01:03:34.380
Let’s see. And I’m a single person just starting. Msp, I’m thinking I want to make a vision statement and all that with an idea that

378
01:03:34.430 –> 01:03:57.569
I’m going to grow at some point. So lot of this applied to a very small starting. Msp, absolutely 100%. The beautiful thing about a vision statement is, your your values probably won’t change. So work on your values first and then think about your mission and your vision. Those things can change whenever you decide to change something, major in your business.

379
01:03:57.610 –> 01:03:59.060
Believe it or not.

380
01:03:59.070 –> 01:04:10.650
I have a book. The it consultants. Year of intention starts out with forms on laying out your mission and your vision and your values, and then applying that to, okay.

381
01:04:10.850 –> 01:04:27.800
how do we implement that? In? What are we gonna do by the end of the year and the end of next year. It’s it’s literally I don’t even remember what it is. $29. But so not that I want to sell you that book, but I think you should buy it.

382
01:04:27.980 –> 01:04:41.890
Also, I would recommend my favorite book, which is, relax, focus, succeed. also. Just so you guys know. If you go to the QR. Code and you get the downloads, there’s a slide that I

383
01:04:42.470 –> 01:04:53.539
didn’t put in the main presentation, but it’s got the links that I mentioned, and some blog posts about private equity and other things. So if you want those links, that’s a good place to get them

384
01:04:53.980 –> 01:04:58.710
all right. Any other questions.

385
01:05:03.250 –> 01:05:11.589
I appreciate all the chat again. I’m going to read all that when this is done, and I have time to drink the rest of my coffee, so

386
01:05:11.880 –> 01:05:17.649
no other questions. I’ll stick around if you have them. I’m sorry that I had to rush through this, but

387
01:05:17.670 –> 01:05:20.999
it was a long ways to go, and we only had 60 min.

388
01:05:29.720 –> 01:05:33.020
Alright Yaboos!

389
01:05:33.590 –> 01:05:44.659
Hi! I started to read your book, managed services in a month. I’m in the process acquire an Msp. Business. I have a background working for investment companies. Would you suggest, in terms of sources

390
01:05:44.680 –> 01:05:47.020
to be honest?

391
01:05:47.540 –> 01:05:59.820
if you go to Amazon, and you put in manage services. You’re gonna see books by Eric Simpson. You’re gonna see books by me. You might find a Bob Copacist book Nigel Moore’s book.

392
01:06:00.510 –> 01:06:09.960
books are the cheapest, best investment out there. I if you go to audible. I had put most of my books on audible

393
01:06:10.080 –> 01:06:33.000
and to be honest, if you want to, Biggie, I’ll just say smallbizthoughts.org my community includes every book I’ve ever written, as well as dozens of classes and hundreds of hours of audio and video training and thousands of pages of checklists. It is literally, in my opinion. Of course I’m supervised, but

394
01:06:33.110 –> 01:06:50.369
it is the greatest resource out there for starting a manual service business, you know, because, no matter what you want, you say, oh, we need a policy for this or that. Okay, well, guess what? I probably have a draft. And you may want to edit it and make it your own. But it’s a great place to start. So

395
01:06:51.460 –> 01:06:55.469
thank you for all the thank yous, everybody. I appreciate that

396
01:06:56.150 –> 01:07:10.230
especially to those who came to be from half way around the world, whether that’s Joaquin in Germany or or Andrew in Vietnam. I appreciate it, and I’m grateful to be to connect it with such an awesome community.

397
01:07:11.880 –> 01:07:16.609
And if you disagree with me, send me an email. karlp at smallbizthoughts.com.

398
01:07:18.200 –> 01:07:28.009
All right. If there are no more questions. I’ll go ahead and put this to sleep. I will get the recording up as quickly as I can.

399
01:07:28.040 –> 01:07:54.320
And we’ll send an email when it’s up. Just so, you know. But thank you all for being here. Thank you for what you do, and thank you for making this community so strong and so vibrant. It is truly an honor to be connected with so many amazing people. And you know one of the things that we discovered with the National Society of it. Service Providers is, Hey? We need leadership. And people came out of the woodwork. And there’s so much

400
01:07:54.330 –> 01:07:57.010
amazing talent. It is actually

401
01:07:57.250 –> 01:08:06.520
just shocking to think of how much talent was out there just waiting to be tapped. And so II know that you guys are awesome, and that

402
01:08:06.620 –> 01:08:11.939
you’re going to be super successful through all of this. You just gotta focus on your business.

403
01:08:12.280 –> 01:08:18.809
Alright. Thank you all. And stay tuned. I will see you next year for the next.

404
01:08:18.970 –> 01:08:23.120
state of the nation address for SMB IT. Thank you all.