Build an MSP Without a Tier 1 Team: Gain Margin & Retain Clients

Jeff Fantalis (0:06): there's nothing wrong with growing I want to grow, right? And there's lots of ways to grow. You can grow

Jeff Fantalis (0:11): as I would call it naturally, or you can grow it by taking money in, or you can grow it by being bought and doing you know roll-ups and all those kind of things. there's nothing wrong with any of those. It's there is something wrong with taking a business where the clients have a certain expectation of not just technically what you do, but the relationship they want to have and forgetting about the relationship part of it and not doing a good job with that.

Andrew Moore (0:38): welcome to the How to MSP podcast. I am Andrew Moore. I am your host, DuJoure, and I'm meeting with today I'm meeting with Jeff Fantalis He is with BeInventive, and they are an IT solutions provider, and they've got some exciting things that they're doing in their space. Welcome, Jeff. How are you, sir?

Jeff Fantalis (1:02): Doing good. Thanks for having me, Andrew.

Andrew Moore (1:04): Awesome. Jeff, why don't you give everybody on the podcast a quick rundown of what you do with Be Inventive, what your role is. I understand you're co owner, you're also a partner, you're you're in there making things happen on a regular basis. kind of give us a little background on you and and what your what your organization does.

Jeff Fantalis (1:23): Sure, so BMN started twenty six years ago by my business partner, John, and I joined I think it's about eleven and a half years ago, something like that. I had run another technology business and had used the inventive to do some work for us and John and I hit it off from day one and so we decided to partner. I joined the business, and it

Jeff Fantalis (1:45): Just worked out that it made sense for me to be the managing partner, so I handled the business side most of it. John is one of the technical leads at the company, so he's what I call a force multiplier. He helps everyone else on the team be better at what they do and how they do it. We do a lot of different things. I won't go through them all here, but what you know, because of the topic, our main piece of revenue, about two-thirds or a little more of our revenue is MSP work.

Jeff Fantalis (2:13): So we started that really before I joined, we were doing a little bit of it before I think even the term MSP existed. You know, we were doing, we still kind of call it outsourced IT, but we were doing some of that. And I'm gonna say out of luck, I sort of decided that I thought that's where we should focus more. I don't want to give myself too much credit to say that I had a great vision, but we put together a more formal offering around it.

Jeff Fantalis (2:38): Started focusing on that a little more from a marketing standpoint, and that has become you know the main area of our our revenue, and as we grow, it continues to be the basis of what we do. Again, we do a whole bunch of other stuff for people, some of which are for our MSP clients, some of which are for clients that you know we don't do MSP work for.

Andrew Moore (2:57): Awesome. And what part of the country are you in and where do you service your accounts? where where are you physically and then where does P Inventive help support their clients?

Jeff Fantalis (3:06): So I'm in Louisville,

Jeff Fantalis (3:07): Colorado, right outside of Boulder, about a half hour from Denver. About two-thirds of my team are in the Denver metro area area, call it. We don't have technically an office. Everyone works from home. About a third of my team is around the country, so I got a few people in every time zone. Our clients are around the country. More of them are in Colorado because that's where we get introduced more. But some of our largest clients are outside of Colorado. Like our largest client is in Ohio.

Andrew Moore (3:37): cool. Very cool. yeah, it's more and more common with MSPs these days where you wind up taking on work outside of your your specific geography. we got it in go ahead.

Jeff Fantalis (3:45): Yeah, I feel sorry

Jeff Fantalis (3:47): to interrupt. I was gonna say I feel if you're doing your job right as an MSP, you don't need to go on site most of the time, if at all. Like that client in Ohio has been a client, I'm gonna say four years-ish now. We've never had to go on site. We have a great relationship with them. they're super happy with our services, but we've never had to go on site. Now we do have clients we do go on site for because either they like it or something specific about

Jeff Fantalis (4:11): the need that they have. We can put someone on a plane if we have to, but that's a pretty rare thing these days to have to put someone on a plane.

Andrew Moore (4:19): Yeah, no, for sure, especially with the ability to be remote, the way it everything came together after the pandemic.

Andrew Moore (4:26): With remote work and remote tools being more solidified. I I

Jeff Fantalis (4:29): Yeah, yeah.

Andrew Moore (4:30): I was fascinated to to talk to you when we got introduced because at first I wasn't sure exactly what approach that we wanted to take in our discussion today. And one of the things that immediately popped out to me, which is kind of contrarian to a lot of what you're seeing in other in in in just the zeitgeist of the MSP community in the channel is

Andrew Moore (4:55): You guys have built an MSP that is mostly focused around retaining and growing senior talent rather than cost control with implementing tier one solutions in tier two and stratifying your support. And I find that's really interesting because a lot of MSPs are really trying to drive service gross margin by bringing in lower cost talent. And I feel like you're doing you're doing something counter to that. And want to understand.

Andrew Moore (5:24): more about it. Can you dig into that for me today and talk about what your philosophy is and how that's enabled you to grow, just kind of your path up to this point and why you've decided to do this more I don't know like upside down pyramid, I think as I've heard it called before. Like how how do you how do you see this as as being a competitive advantage and giving you the ability to scale?

Jeff Fantalis (5:45): Yeah,

Jeff Fantalis (5:46): I don't know if it started out as again this

Jeff Fantalis (5:50): well thought out strategy. it started out as, you know, we had a handful of people that were all senior. we one of the philosophies we have is clients are hiring us to be experts. And so junior people tend not to be experts. You said that we're mostly senior. I'll I'll correct you slightly. We're totally senior.

Andrew Moore (6:09): Fair. Okay.

Jeff Fantalis (6:11): Our average years of experience is over 20 years for our team. I think our least experienced person is 13 years.

Jeff Fantalis (6:19): One of our sayings to our clients is you start with the last person. And I want that to sink in. I don't, I don't remember how I came up with that, but it really hits home, right? Most MSPs, and this is I'm only getting from you know our clients who were former clients of other MSPs, right? But so I'm I'm generalizing. But from my understanding, most MSPs, you start with a tier one person, quite often your problem they can't solve, you have to go through a process of giving them information, knowing they can't help you.

Jeff Fantalis (6:48): You go to another person and another person and it just it's frustrating.

Jeff Fantalis (6:52): With us, you have a primary and secondary resource who handle a good part of your problems and cases. You also have an architect who's assigned to you, who's responsible for your overall architecture and your bigger issue problems about, you know, not just a bug, if you will, or a glitch, but like an overarching thing that we want to solve. and so you deal with the same people and those people are senior and most of the problems you're reporting they've seen, you know, 20, 30, 40 times. They know how to solve it, and they know how to solve it.

Jeff Fantalis (7:20): quickly quite often. That also helps the model of cost, right? How much does it cost a traditional MSP to have that level one person and then a level two person and then a level three person all work on a problem?

Jeff Fantalis (7:35): versus for us, you know, my team gets on it, five minutes later it's solved. who's spending more money? Now sometimes of course we are, but sometimes I'm gonna say they are. I don't know that our model is cheaper, but I would say our model is not more expensive, it appears, because we're a reasonably profitable company, reasonably successful.

Jeff Fantalis (7:57): Having the senior people helps in a bunch of ways. Client satisfaction tends to be higher. We don't lose clients because they're unhappy very often. That helps, right? That helps numbers. We don't have to have a lot of layers of management. Senior people need less management, junior people need a lot of management.

Jeff Fantalis (8:15): So it all goes into it. I can't say I've worked out, you know, I don't have a you know spreadsheet with 15 tabs on why this works and you know compared to the other way. It's just how we sort of developed over time and it is working for us.

Andrew Moore (8:32): How do you keep senior people? So, one of the challenges that I've seen in MSPs that I've either run or been fortunate enough to coach or be a part of, I feel like sometimes senior folks have a tendency to, and when we say senior, let me make sure that I'm clear about this. We're talking about experienced, like, so

Jeff Fantalis (8:54): Yeah.

Andrew Moore (8:54): not necessarily from an age perspective. We've we've I work with some incredibly senior engineers who were in their early 30s.

Andrew Moore (9:00): Who've just had a lot of experience because they they got started early. So what I what I want to know is I've seen a lot of folks in the past that were really good at implementing solutions that they were very accustomed to implementing, like they were just good at those things because that's what they developed a skill around. And as technology progressed, they were implementing old solutions with new technology. How do you keep people fresh? How do you keep the senior engineers like abreast of what's going on?

Andrew Moore (9:29): Is this just by selling new things and being out there working with your clients to learn? Is it they're going to boot camps, you're doing online training and learning with them? Like, how does it work with you guys? Like what what seems to be the secret sauce there or have you cracked it yet?

Jeff Fantalis (9:44): I don't think you can crack anything completely, right? You just keep trying to get better. I think part of it is culture. We have a culture of learning. we do a huddle every morning, in addition to talking about like a particular client or two of what's going on. we share what we've learned. We hire people who wanna learn, who wanna get better, you know, not just technically but in every way.

Jeff Fantalis (10:06): So my people are most of them I would say are in most cases always sort of learning something and extending themselves into new areas. the question I get asked a lot is how do I get senior people to do tech support? because that's part of the job, right? our people do tech support and project work. and I think that's what keeps them going is

Jeff Fantalis (10:31): they you know, I'll put in quotes own clients. And so when you have a relationship with the clients and we work mostly with small and lower mid size businesses, right? So a lot of times we're dealing with the CEO of a company or, you know, the COO or people like that. When you have a when you're a part of those relationships, you feel differently about helping them.

Jeff Fantalis (10:54): We don't have anyone who only does support. I find that if someone only does support, their skills get rusty, kinda like what you were talking about. they're not doing new projects and new things. and they just get bored. we haven't lost anyone we wanted to keep in about, I would say, ten years, except for about a month ago I had a guy retire. So I'll caveat that and say we haven't lost anyone we wanted to keep who was unhappy and left because of that.

Jeff Fantalis (11:21): So

Andrew Moore (11:21): That's that's that's that's

Andrew Moore (11:23): funny 'cause we were just saying we're we're not talking about seniors, but maybe we are.

Jeff Fantalis (11:27): in this case we were.

Jeff Fantalis (11:28): and you know, we were both sorry to see him go, but really happy for him. We felt it was, you know, the right time in his life to to retire. We wanted him to go have some fun. So I was sad to hear it, but happy for him.

Andrew Moore (11:42): Yeah, I I want to unpack something you just said too, is about the project work and having engineers on that, right? So

Andrew Moore (11:52): When people are working on the service desk or their field technicians or whatever, a lot of the times they see the projects group as the next level, the next step for them. and so it it's interesting that you've created this hybrid where you're still able to kind of manage both the projects and the service delivery. Do you ever find that it becomes a challenge to service your clients if you're in the middle of a project, or do you feel like it's a challenge when you guys are?

Andrew Moore (12:21): you've got a bunch of things that are escalating from a client, maybe something that's out of your control, some sort of a security issue, and maybe that puts your projects on back burner. Is is that a challenge for you guys, or have you figured out a way around that? Like what do you what do you do when it comes to balancing those two kind of non-recurring revenues versus recurring revenue things that go on in an MSP?

Jeff Fantalis (12:41): I

Jeff Fantalis (12:42): consider it schedule driven versus interrupt driven, right? Supports interrupt driven, projects are schedule driven.

Jeff Fantalis (12:49): It's always hard to do both, but again, this is where having senior people who, you know, understand their responsibilities, understand how to manage their time is helpful. Is it perfect? No. We're always constantly tweaking, you know, hey, we need some more focus on help desk and but we can't let the projects fail and or stall or you know, so there's always a balance of that.

Jeff Fantalis (13:13): We give our people a lot of leeway too. So, there are weeks that they may work twenty-five hours and there may maybe are weeks they work fifty-five hours and they're okay with that.

Jeff Fantalis (13:24): we we you know, my guys work some evenings and weekends and I don't ask them to do that. we're hiring people who know the the job is to make the client happy and things have to be done certain times and if something has to be done on the weekend, they'll be the ones who will bring that up. They'll be like, Hey, we should really do this cut over over the weekend with the client. I don't have to go and say, Hey, you know, I need to ask to do this. it I never have to do that. It's always, that's happening this weekend. Great, I know my guys are

Jeff Fantalis (13:53): Taking care of it.

Andrew Moore (13:55): Yeah, it

Andrew Moore (13:55): sounds like, universally I feel like senior engineers, at least ones that have been well trained, right, and and usually in smaller teams, pretty good at communicating with their clients, right? Because they understand the importance of of that. and I

Jeff Fantalis (14:13): Better.

Andrew Moore (14:13): think communicating goes a long way, right? To to smooth over potential interruptions or issues, right?

Jeff Fantalis (14:21): Yes,

Jeff Fantalis (14:21): communication is key. It's probably the thing we struggle with the most. I think most companies do. When I kind of synthesize down when we have problems, it almost always started with communication. so I think we do a good job of communicating, don't get me wrong, but I think that's the thing that we can still improve on the most and the thing that gets us in trouble the most. You know, you fix a problem but didn't tell the person it's fixed, or you know, you're doing a project and you're going along.

Jeff Fantalis (14:50): great but the client doesn't necessarily know that. So I get a message, hey, what's going on with this project? And you know, it we didn't communicate if the client has to reach out and ask that, right? We're not doing a good enough job of communicating. So there's always some of that going on.

Jeff Fantalis (15:05): There's no getting to 100% with communication. No one's, you know, everyone always could be doing better. There's always also obviously need to be a balance. You don't want to over-communicate where you're spending all your time communicating and not fixing things or been doing project work. So there's always a balance to it. But yeah, communicating, I think, is, you know, one of the most important things that a company like ours needs to do better.

Andrew Moore (15:29): Yeah, I I think that you're you're spot on we would used to

Andrew Moore (15:33): Train our team every year. every year we would teach them, hey, I don't care if you've been here, you know, you you've got senior people, so I don't care if you've been here 10 years, I don't care if you've been here 10 months. Every year you go through the same training, which is how to format a ticket, how to escalate properly, how to communicate with your client, how to communicate with your other team members. Because we felt like if you could get that solid on a daily basis, on a task-driven basis, it made up for a lot of the things that you couldn't account for in your day-to-day.

Andrew Moore (16:03): Work, service interruptions, people getting sick, that sort of thing. But we had a a guy I knew a couple MSPs back, and we adopted the saying he had, which is you can burn down a client's house as long as you tell them when you're gonna do it and how long it's gonna take. And it just really comes back to like, even if it's bad news, as long as you're being proactive in your communication and setting expectations, you can forgive a lot of of things that that may go right or wrong in in that s situation. So I I applaud the idea of

Andrew Moore (16:32): working directly with the team members to make make the communication one of the most important things in a service company. I mean that's what we do. We provide service

Jeff Fantalis (16:38): Yeah.

Andrew Moore (16:38): in some fashion, right? So fair. Fair.

Jeff Fantalis (16:40): If people don't know you did a good job, you didn't do a good job, right? So that that's

Jeff Fantalis (16:45): part of it too. But yeah, we don't do a lot of like what you just said, like a formal regular thing. We do regular discussions like the huddle I mentioned, it comes up all the time. Like, hey, this client, this happened, you know, we didn't communicate in this way. Next time we need to do that better. So we're

Andrew Moore (17:00): Yeah.

Jeff Fantalis (17:01): constantly doing that. We do that also with our people with giving them feedback. It's we don't do the once a year sit down and, you know, gotta

Jeff Fantalis (17:09): three out of five. They get feedback all the time, good and bad. And the bad is not, you know, you're a horrible person. Why did you do this? It's like, hey, this happened. The outcome wasn't optimal. How do we make sure this doesn't happen again? and I think

Andrew Moore (17:23): Yeah. Well it the

Andrew Moore (17:24): the structured the structured intermittent feedback

Andrew Moore (17:28): I think is actually way more important sometimes than the regular annual cadence of training. I think we we always tell our clients when we coach the MSPs is if you want accountability in your team, you can't do it once a year. It has to be every day, every week. You have to build accountability into your processes. And having a standy daily meeting with your team and giving them regular feedback is super important to that. Super important.

Jeff Fantalis (17:53): I agree.

Andrew Moore (17:55): So let's talk a little bit about

Andrew Moore (17:57): How you guys, with the senior model that you've got are a little more, I think, prepared for what I believe is coming with the consulting and AI. I think with a lot of organizations, what we're seeing is a lot of tier one folks, their jobs are gonna maybe be more automated than they used to be. A lot of the task-driven stuff that we used to bring in low-cost talent to try to get knocked out may be assumed by artificial intelligence or automation engines that are a lot smarter than they were even, you know, A.

Andrew Moore (18:26): Months ago. So now you've got this stable of senior folks. This wave is coming where it's all about consulting and outcomes and understanding business to something you said earlier, you know, assignment of clients to a technical resource, which I think is critical to accountability within an MSP. I love that you do that. Talk to me about how you feel like maybe you guys have got a bit of an advantage because you're already structured in a certain way. Much much like a company that was already remote MSP the

Andrew Moore (18:56): Pandemic, how do you feel like you guys might be already positioned to take advantage of this new technology and what's going to happen in the industry?

Jeff Fantalis (19:03): Yeah, it's funny you

Jeff Fantalis (19:04): say that 'cause we were a remote MSP before the pandemic. so that did help us with that. I wish again I could say that I saw that coming, but that wasn't it. and you know, I like that you say that, you know, we're positioned well for this. I I I hope we are, but I can't say that's why. I mean that's not why we did it.

Jeff Fantalis (19:22): So one of the things that we're doing right now is we're using some AI for ourselves to help us automate our own internal processes.

Jeff Fantalis (19:30): But we do have a statement that we're making, which is we're not going to use any AI, at least for now, that's client-facing. So you talked about tier one may go away. Sure, I could see us creating an AI where a client punches in their problem and it responds back with, Well, you did you try this? Did you try that? we're not doing that for now, at least. I look at it and go, if I were a client, would you know, yeah, that would be cost effective for me as the MSP, but if I were a client, would I want that? And the answer is hell no, right?

Andrew Moore (19:59): Right.

Jeff Fantalis (19:59): So

Jeff Fantalis (20:00): we're not looking at having any AI interface with the clients at this time until until it's just way better, where it's something that the client would rather interface with the AI, because maybe they get a faster, clearer response, or whatever the whatever the reason might be. but I can't see us doing it until we get there, if we get there. so for now it's still working in that way. Now, going back to what you said.

Jeff Fantalis (20:23): I think we do have more of a consultative approach than a lot of MSPs already, because again we have senior people. and I think that will play well into

Jeff Fantalis (20:33): I'm gonna say my guess of where the future is heading. I think anyone who says they know where the future is heading is a little too full of themselves personally. I have some guesses of some ways it might go, and I think having a more consultative approach may be better in some ways for that. And so hopefully we are positioned well for that. But talk to me in a couple of years and you know, I'll let you know if that worked out or not.

Andrew Moore (20:59): Yeah, I'm it's funny 'cause you I've seen some of the stuff that AI's doing in some more advanced MSPs.

Andrew Moore (21:07): Some of it is automating exactly what you said, just some of the things that that are interfacing with the client. Some of it's not. Some of it's just categorizing the tickets properly so you can get, you know, taken care of faster and with more detail and whatnot, or helping to, you know, provide engineers with automatic links instead of having to go look up stuff for potential resolutions to issues, which I I think is fantastic. I love the augmentation part of it, but the things that people are doing with it is striking to me.

Andrew Moore (21:37): And how fast they're able to do the work that we used to do that would take days or weeks in minutes or hours, such as like generating a review of their ticket infrastructure and getting to the root cause of like maybe why a client's noisy, which would take a senior account manager sometimes a day to dig through tickets and sort things. And so there's just a lot of like really interesting things that I think MSP should be doing to your point that aren't exactly

Andrew Moore (22:06): Removing their ability to provide personalized service to the client, but enhancing

Jeff Fantalis (22:10): Yes.

Andrew Moore (22:11): it by taking away the busy work of the stuff that we used to have to do, whether it's proposal creation or you know, ticket analysis, or just understanding how to better communicate with each other internally by creating you know graphical presentations where we can express our ideas when we're trying to talk about something complicated. I think it's fantastic. I think that MSPs that are learning that internally.

Andrew Moore (22:35): And then taking it to their clients or really putting themselves in a position to to consult and help their clients and and open up new revenue streams for themselves as an MSP. I I don't know if that's how you're kind of doing it, where you're like, let's eat our own dog food and then we can get

Jeff Fantalis (22:47): Yes.

Andrew Moore (22:47): out there and talk to the clients. Is that kind of talking about your approach and and how you're considering what you're doing internally? Is that the road you're going down?

Jeff Fantalis (22:54): Yeah, we offer

Jeff Fantalis (22:55): AI services but a lot of clients are not ready for it yet. and so our biggest client for AI services are ourselves right now. you know, we are spending a lot of time on ourselves to help us improve how we do things.

Jeff Fantalis (23:08): Both for just improvement in terms of how fast we do things, how much time it takes us, higher quality, you know, all those things. but I don't look at it as something where we're boasting to clients that we're doing that. Clients, I just want to see a better result. They don't hire me to run my business better, they hire me to do a good job for them, right? and so we should constantly be doing that, and one of the ways to do that right now is AI.

Andrew Moore (23:34): Yeah. No, I I agree with that a hundred percent. And I I think it's really interesting, one of the things that

Andrew Moore (23:39): you mentioned when it comes to personalization of service, which I think is really important, and there's a debate amongst a lot of MSPs out there right now. and not that I think that there's anything wrong with PE backed big MSPs, like there are some out there that are doing it really well. but what I am kind of hearing in again the zeitgeist and what you talked about with personalization is regional service, personal touch, being able to interact.

Andrew Moore (24:09): With the owners of the small businesses that we're working with. Sometimes that puts companies that are, you know, like you, which are not the big MSPs, but you've got a lot of senior talent, that puts you in a position to be really successful in capturing market share and continue to provide service to clients who have been dissatisfied with lack of personalization of their service due to you know their local MSP being rolled up. Can you talk to me about, as an

Jeff Fantalis (24:34): Yeah.

Andrew Moore (24:34): MSP owner, how that feels? Not that

Andrew Moore (24:38): you maybe one day you do take an investment partner and you do roll up into another PE group. I that that's that I don't think that precludes you from having an opinion today. What do you think gives you an advantage in this situation or how do you see the market and how does that put you guys

Jeff Fantalis (24:50): Yeah.

Andrew Moore (24:51): in a place where you can open up new opportunities?

Jeff Fantalis (24:53): So I would

Jeff Fantalis (24:54): say this. I don't think being large has to mean unpersonalized. It's just

Jeff Fantalis (25:01): One of the reasons why a lot of companies want to be larger is to standardize and automate and do all the things that make you less personalized. But it doesn't mean you can't do some of those things and still be personalized. And I'm sure there's some good ones out there that are large that are doing it well. and I'm positive there are some that aren't. and I know there are some that aren't because one of our biggest sources of new MSP clients is other

Jeff Fantalis (25:29): large MSPs who are making their clients not very happy. And so when I get to talk to them, talk about how we do things, it's a you know, it's a breath of fresh air for them and a difference of you know what they see versus how we do things. And so that whole movement has been good for my business. but again that there's nothing wrong with growing I want to grow, right? And there's lots of ways to grow. You can grow

Jeff Fantalis (25:54): as I would call it naturally, or you can grow it by taking money in, or you can grow it by being bought and doing you know roll-ups and all those kind of things. there's nothing wrong with any of those. It's there is something wrong with taking a business where the clients have a certain expectation of not just technically what you do, but the relationship they want to have and forgetting about the relationship part of it and not doing a good job with that.

Jeff Fantalis (26:22): And then also sometimes within that, like anything, as you get bigger and you have big, complicated processes, you can become more and more difficult to work with. You can be less and less responsive. Again, that doesn't mean because you're large that will happen. It means you have to really focus on that if you're large, if you wanna

Jeff Fantalis (26:42): still be good. We're not large, but we're larger than we were a few years ago, and we've had to continue to tweak things to do a good job, take advantage of the fact that we're larger, but not lose anything by being larger. And that's a balance that I think any business needs to do. And some MSPs are doing it well, I'm sure, and thankfully for me, some of them are not.

Andrew Moore (27:08): It's a it's a really great insight because I feel like in the industry there's some hand wringing about well, everybody's getting rolled up but we feel I I see that as these roll ups start to happen they they drop clients off the back end.

Andrew Moore (27:22): Whether it's just by accident or even maybe on purpose, and those clients are now out looking for new opportunities. And to your point, I think people forget that in our industry, we're dealing with small business owners a lot of the times in the SB space, and they like to do business with people that they know and that they're in their community and that they have a relationship with. And the more you remove that and turn that into more of a sales motion rather than a consultative or strategic.

Andrew Moore (27:52): strategic motion where you care about their business, I think that's where you start to turn off some of those business owners and they start to look elsewhere for opportunities to get their service and support because they just feel like they're not being taken care of.

Jeff Fantalis (28:03): Yeah,

Jeff Fantalis (28:04): I haven't found that a lot of people have left because they say it's become unpersonalized, but I do think that's an underlying feeling they have. but a lot of times they're leaving because the I mean, I'll tell you the things. We just took over from three large MSPs in the last couple of months and the things I heard from those clients are

Jeff Fantalis (28:25): I I don't know who I work with. I put it in a case and I don't hear for days or I hear an initial response, but then nothing after that. it takes too long to get things fixed. I get a different person every single time. They don't know my environment at all. You know, so I when you hear the same thing sort of over and over again, and again it's a normal thing of growth that those things can happen, but they don't have to. If you're running a really well-run business, they don't have to.

Andrew Moore (28:54): Yeah, I I think it's great. So how how how do you think that you guys are gonna continue to scale with the senior model?

Andrew Moore (29:02): Are you going to be bringing more senior people in and integrating them into what you're doing? Or are you going to bring in kind of mid-level people and get them up to senior and kind of like grow your own just a little bit, not necessarily like going all the way down to tier one? How do

Jeff Fantalis (29:17): Yeah.

Andrew Moore (29:18): you see that that what do you what do you look for when you hire? How do you continue to grow? And then the follow-on question of that will be: and then how do you keep your margins in line? How do you stay profitable so that you can invest in whether issues like the panel?

Andrew Moore (29:32): pandemic without going to bed at night with with the with your with your hair on fire. How do you do that?

Jeff Fantalis (29:38): So right now we're planning on continuing with the old senior. I can't say that we will definitely do that for sure forever. I could see us at some point maybe dabbling in junior or mid level people in the background a little bit more, to get some tasks done that are not necessarily client facing. If we feel like there's enough of that to, you know, make that worthwhile. but I reserve the right to completely change my mind also.

Andrew Moore (30:05): Yes, you should, sir. You should always. You should always.

Jeff Fantalis (30:07): Yeah.

Jeff Fantalis (30:09): in in terms of profitability, as you get bigger your profitability goes down. you know, large MSPs I've been told usually make fifteen to twenty percent margin. I'd be horrified if I was only making that.

Jeff Fantalis (30:24): But I know as we grow, you know, we might lose a percent or two you know, of margin as, every year or two because there's more overhead. There's just more things going on that, you know, tend to eat away at your margins a little bit. So I'm not gonna say that we're gonna keep our margins where they are because I don't think that's realistic, if we continue to grow.

Jeff Fantalis (30:48): But I do think that we can keep them what is considered high for the industry as we continue to grow.

Andrew Moore (30:56): Yeah, and and

Andrew Moore (30:58): And there are a lot of MSPs out there that would die to get fifteen to twenty percent NOI. it's it's and I think the hardest part, which is what you mentioned, and I thought it was a really great point that you made. So you know I'll give you some credit here for this too. And you you see it in other tech firms that have grown tremendously in the last decade. Having more senior people allows you some level of reduction of middle management. It doesn't eliminate it, but that's really where when you're moving into that ten million dollar and a B.

Andrew Moore (31:27): On space, that's where your profits really start to take a nosedive because now you're gonna have to put somebody in place that may not be billable, right? They're not out there making you money, they're just a they're overhead, right? And you're you have to be able to absorb that and then still stay competitive price-wise in the market. So I I think

Jeff Fantalis (31:45): Let's use that.

Jeff Fantalis (31:46): Let's just say you're

Jeff Fantalis (31:47): a company that has one middle manager and you're X big, whatever size that is, right? How many people, how many senior people can one middle manager manage versus how many junior people, right? And the answer is way more, right? And so the cost of the additional cost of senior people, you know, is somewhat offset by the less costs of management. And then again, I have all those other things I talked about are the reasons why you know they can get things, they get things done to

Jeff Fantalis (32:17): Than junior people too. So that offsets some of the cost. So I'm sure that someone can do a thesis paper on the two if they really wanted to pick a boring topic and look at the two. But yeah, for us it works. and it does help differentiate us, you know, from a sales cycle standpoint. When I'm let's say going one-on-one with you know another firm, and I say that every single one of my people are senior, and you're gonna have, you know, a a a primary and secondary resource.

Jeff Fantalis (32:46): assigned to you that's going to know your stuff really well and these are going to be senior really good people. What are you getting with the other one? And you know typically if they understand what they're getting with the other one, the sale's over. We won.

Andrew Moore (32:58): I I will tell you that you might not have intended to, but in my opinion, you have unlocked

Andrew Moore (33:06): What I believe is the secret sauce to running a really good technical service delivery team when it comes to managing multiple clients. So you've got this portfolio of accounts, and what winds up happening is those accounts all just get dumped into the service desk, right? So they're just constantly like taking tickets and doing stuff. And maybe you've got an account manager who's just kind of managing a relationship or selling stuff or whatever. And you miss the accountability of having somebody technical.

Andrew Moore (33:35): That's responsible for that client that does day-to-day interaction with them. And so what we always coach our MSPs on is if you're building the service desk, what I recommend is, yeah, you could have five people in your service desk, and maybe you've got 30 clients, you know, tier two and above people on your service desk, assign them 10 or 15 of those accounts and say these are your accounts, right? Like you're responsible for what goes on their work with the account manager of me. If there's an escalation, that's your escalation, like they become vested in that.

Andrew Moore (34:05): And they understand the account and the client feels that connection. And it helps on so many levels because it creates accountability, it creates service connection with the client, it allows for smooth transition between service and account management. So I applaud it. I think what you're doing is fantastic, making sure that they've got a primary and a secondary. I love that.

Jeff Fantalis (34:26): Well

Jeff Fantalis (34:26): I'll say thank you. I again I wish I sort of came into this business with the idea of that's what I wanted to do. We added the primary, secondary, I don't know, maybe a year or two ago, because we saw the problem, right? all the things that you were talking about are the benefits. Well, we saw the other side of that not having that. And we're like, well, how do we solve that? And so we came up with that. And that's how we do most things. You know, I can't say that I go out there and like study all these MSPs and what they're doing and how they do it and say, I'm gonna pick

Jeff Fantalis (34:55): This from that. It's most of the time it's as we grow, we get some pain. We look at it, we say, how do we solve that pain? and so hopefully we pick smart ideas for it. And sometimes maybe they're innovative, sometimes they're stupid and they didn't work out, you know, and you know, you the stupid ones you figure out the next way to fix it, and hopefully the next one is innovative and good.

Andrew Moore (35:19): It's funny because I I'll talk to some of my coaching clients today and they'll say, Z this sounds pretty good. Like, did you guys do this? And I was like, no, no. We we totally screwed that up. And that's why I know not to do it the other way. Like, let's do it this way, right? Like I think if you don't if you're not humble enough to admit that you've screwed up some stuff but you've, you know, learned from it, you're you're not I don't think you're doing it the right way, honestly. Like not everybody's perfect and you don't know everything.

Jeff Fantalis (35:46): Well, certainly

Jeff Fantalis (35:49): that's true, but I one thing that we haven't touched on, there's smart like processes or smart ideas, you know, like if you want to call a whole senior smart, let's say let's put that in that category, but but execution is a whole other category, right? And you can take two MSPs that have the exact same philosophies and one will run well and one won't run.

Jeff Fantalis (36:11): And so I've always said like I started out as a developer. and I'll never forget a lesson I learned. the company I I w worked for brought in a development model of how to develop. and

Jeff Fantalis (36:26): I looked at it and said, okay, I can see why this might be better than the way we're doing it, but they didn't follow it. And so they didn't get the value of it. They did they checked the check boxes for corporate to say they were doing it, but they didn't execute that plan well, so they didn't get the value. And so I learned something as a twenty-four-year-old or whatever I was about that, which is, you know, there are lots of different execution models, you know, that you can use.

Jeff Fantalis (36:54): But more important, assuming all the models are all pretty good, more important than a specific model is do you buy into it and do you execute it well? you know, there's a lot of people running their businesses now on EOS as an example. I know about EOS, it seems perfectly good.

Jeff Fantalis (37:11): But if you bring an EOS and you don't execute well, it doesn't matter. If you execute well, then sure it's gonna help you hit the points along the way that you wanna hit. But if you just say you run an EOS and you don't figure out how to run it well,

Jeff Fantalis (37:26): that doesn't matter. So if you want to run scaling up instead of EOS and scaling up you can execute better, then run scaling up. I'm not saying

Andrew Moore (37:34): Right.

Jeff Fantalis (37:35): scaling up's better or worse than EOS, but what are you gonna execute well on? You know, if don't execute well the model is almost insignificant.

Andrew Moore (37:43): I I agree with you a hundred percent. I the difference in when I work with clients and by the time usually I'm six months in with a client

Andrew Moore (37:50): on the on the coaching side they're starting to execute on the EOS stuff a lot more effectively. There are some that were just doing it great from the start. Some didn't didn't have anything. So we'll always kind of say let's let's let's start with some EOS. We don't we're not EOS implementers, but we understand how it should work. And the ones that are showing real progress in the growth as a company to your point really started to buy into the process and they're like we're gonna have this level 10 meeting every week come hell or high water and we're gonna make sure that our rocks have milestones

Andrew Moore (38:20): With actual due dates and deliverables. So we're working off of you know static information and not gut feelings. And I mean, it makes a huge difference if you actually take the time to go through and execute the process and hold each other accountable. You can really make some significant strides in a business if you do it that way. But if you're in there just checking the box because you want an hour and a half to, you know, chit-chat with some of your senior leaders every week, like it to your point, I don't think that you're going to be executed.

Andrew Moore (38:49): executing and you're gonna be deluding yourself into thinking that you're doing the right things because you keep having this meeting every week. Like it you have to do it all. It has to be top down, all the way down, for sure.

Jeff Fantalis (38:59): Yep. I agree.

Andrew Moore (39:02): So

Andrew Moore (39:03): Last question I want to ask before we get into the the big stuff. you know, things are are evolving, you know, things are changing in the industry on a regular basis. How do you try to make decisions when stuff looks unclear? Right? Just kind of the last thing. So we just talked about are are you running, you know, scaled up or EOS or are you in like a like a local entrepreneur's group, or do you have a great group of senior people? Do you guys get together quarterly and talk or monthly? Like how do you guys, how do you, Jeff, make decisions and how

Andrew Moore (39:32): How do you work with your senior team to make sure that you guys are moving in the right direction in an unsure and ever-evolving technology world?

Jeff Fantalis (39:40): So no,

Jeff Fantalis (39:40): we don't run EOS because I know I wouldn't do it well. So I again going back to that, I I don't. I do have a lot of

Andrew Moore (39:45): I love that. Honest answer.

Jeff Fantalis (39:48): I do have a lot of people, other business leaders that I talk with. Sometimes I'm advising them, sometimes they're advising me. Gives me ideas what to do. I have my leadership team you know you know, it'd be inventive. but really in the end a lot of it is just sitting back and looking at a problem.

Jeff Fantalis (40:06): Trying to understand why it's happening and trying to come up with the best way to solve it. there's nothing too inventive about that, if you will. It's just dealing with that as best as we can. And sometimes we we think we have the answers and sometimes when we think we do, we we do, and sometimes we don't, and just keep chugging away and trying to make smart decisions.

Andrew Moore (40:30): Awesome. Awesome. Well let's talk let's I'm gonna dive into the the five questions that we've got here and I'll caveat some of them as we go through them. So talk to me a little bit about you know the best book that you've read in business or how you get you know information that keeps you on on the front line of what's happening and and how to get smarter about what you do day

Jeff Fantalis (40:50): So when I talk about like authors, I have to start with, otherwise it wouldn't exist in my life, is my wife. She's she's an author. She doesn't write business

Andrew Moore (40:57): cool.

Jeff Fantalis (40:59): books though, but she's my favorite author, you know, because she has to be. but I'm not a big reader. I don't learn well.

Jeff Fantalis (41:11): from others. So I talked about a lot of other business leaders I communicate with.

Jeff Fantalis (41:16): I I steal from people all the time. But I it tends not to be this big seminal moment where someone says something and it changes the way I look at the world. I think I'm too stubborn to change that quickly. It's little things from different people that I pick up and say, that's something I could add to how I do something. It's a little nudge in a direction of something that I knew I should do something a certain way and I don't. But then you hear it from two or three other people and it's sort of you sort of go.

Jeff Fantalis (41:46): I don't like doing that, but I need to, right? Because it just becomes clear from talking to people. So I don't have a book recommendation. for my my recommendation is interface with other people who run businesses similar to yours. Not necessarily like me, like an MSP, it's other business services companies or things like that. and learn from them and be open to listening and learning and improving you know who you are and what you do.

Andrew Moore (42:14): Love that. Love that. all right, you don't have to say the word. You can refer to it, but do you have a favorite curse word? Like if something happens, you're just like, that comes out of your mouth. Is there one?

Jeff Fantalis (42:23): Well, I think I

Jeff Fantalis (42:24): think the word fuck is so broad in how you can use it, you know, it's probably

Andrew Moore (42:29): Yep.

Jeff Fantalis (42:30): the one that comes out of my mouth the most. I'm not a big cursor, but

Andrew Moore (42:33): Use it like pepper.

Jeff Fantalis (42:34): I'm not I'm not not either. So yeah, it's probably the one I use the most.

Andrew Moore (42:39): it it can be sprinkled in everywhere and and these days it's probably not as offensive as people it was twenty-five years ago, but I agree. I love that word.

Jeff Fantalis (42:45): Yeah. it's it's a verb,

Jeff Fantalis (42:47): it's a noun, it's an adver you it it covers all the bases. Yeah.

Andrew Moore (42:51): Everything.

Andrew Moore (42:52): it's a good one. Do you have a favorite band or artist of the musical artist that like if you got stuck on a desert island, you could only listen to their music, what would it be? Is there one, maybe two? What do you like?

Jeff Fantalis (43:04): No, I'm pretty broad on that. Again, I don't think I have one. I I when I think about my favorite bands, some of it comes back to college where I was most into music at the time. So I love the police, I love you two, bands like that that were big for me back then that are still on my playlist. as my kids say, I'm a de dad rock guy, you know, eighties dad rock music, so there's a whole bunch of bands in there. I do

Jeff Fantalis (43:32): some of the newer stuff too, but I tend to go back to the stuff I grew up on.

Andrew Moore (43:37): It's good. We I j I had a friend of mine over this weekend and we busted out some Sting albums. Like I'm a fan of s you know, I love the police, but I like its Sting solo work too. But then we were we had a really long

Jeff Fantalis (43:46): Me too.

Andrew Moore (43:47): conversation about Stuart Copeland and what a great drummer he was for the police and I I love that. I think it's it's awesome. Good stuff.

Jeff Fantalis (43:54): Yeah, I saw Peter Gabriel

Jeff Fantalis (43:55): and Sting in concert together and that was a great concert. My probably

Andrew Moore (43:58): That's awesome. That's awesome.

Jeff Fantalis (44:01): my best concert though was Peter Gabriel at Red Rocks. That was just an amazing concert.

Andrew Moore (44:05): What

Andrew Moore (44:06): did was that recent or did you see him on like one of his big like what tour do you remember? Nice.

Jeff Fantalis (44:10): I think it was ten years ago if I had to guess, maybe twelve,

Jeff Fantalis (44:13): somewhere in that range that range. I remember he started to sing Red Rain and it started to drizzle as he sang. It was just

Andrew Moore (44:19): Yes.

Jeff Fantalis (44:21): just so perfect. It was just a great concert. And you know, I hadn't been to Red Rocks much at that time. And you

Andrew Moore (44:26): Yeah.

Jeff Fantalis (44:26): know, going to Red Rocks is an experience by itself. It doesn't matter who's playing.

Andrew Moore (44:30): I walked that that I walked Red Rocks, I rocked the Amphitheater once just on a tour, and I've never been able to see a band there because I'm I live in Texas, but it's on my bucket list. I wanna go see, you know, Dave Matthews or one of those iconic, you know, jam band artists there where I wanna go. I almost went to go see Brandy Carlisle there a couple of years ago when she was playing. So it's on my list and Red Rocks is a really cool place for sure.

Jeff Fantalis (44:51): But I'd love to see either of

Jeff Fantalis (44:53): those two you just mentioned at Red Rocks also. So yeah.

Andrew Moore (44:56): I I get to see

Andrew Moore (44:57): Brandy next week.

Andrew Moore (44:59): I've never seen her live before not.

Andrew Moore (45:00): very, very excited to see her. So should be a good

Jeff Fantalis (45:03): Yes.

Andrew Moore (45:03): show. what is the you can protect the innocent by changing their names? Like worst sales call, meeting that you've had, like, you know, personnel meeting. Like what what's one of those things that you like talk to people when you're having a drink and you're like, all right, hold on to your seats. I got a story for you. Like what what's one of those meetings that's happened that you just can't believe and you gotta tell people about?

Jeff Fantalis (45:26): Maybe I've, suppressed them. I can't think of any horrible ones.

Jeff Fantalis (45:32): Anytime we lose a client, it hurts me to my core. and so I think it was a little over a year ago, we had a client, decent-sized client. we were dealing with a person sort of one level down from the C-suite was our main contact. So we were working with her and everything through her. And you know, we have regular calls. How are we doing? She's everything's great, you're doing a great job. And then all of a sudden, I don't know, maybe a year in, she gets on a call.

Jeff Fantalis (46:02): I see her face and I go, And she let us go on the call and I found out that some of the sweet C suite were not happy with us and we had no idea

Jeff Fantalis (46:12): I still don't really know exactly why. I have some guesses that have l little to do with us, but every time I think of that, like even right now I'm getting this twisting in my gut over it. So that's the one that comes to mind because it's somewhat more recent, even a little over a year ago. But anytime we have the conversation where we lose a client because they're unhappy, it doesn't happen a lot, but it it hurts me for weeks.

Andrew Moore (46:40): I I totally understand what you're saying. We started to implement and coach my my clients, so a lot of them will use you know, client satisfaction score stuff with their tickets and they'll use, you know, smile back or something or and

Andrew Moore (46:55): One of the things that we we learned was we had really, really happy end users. And if we screwed up, you know, the printer for the CEO or something once, or if we didn't do right on a project, or they got an invoice that they had a question about, sometimes they wouldn't bring it up and then they'd just shop us and we would have a hundred percent CSAT score over like months and years with all these tickets, and everybody would call us and say, Hey, love you, and all this stuff, and then we'd get notice. And

Jeff Fantalis (47:21): Right.

Andrew Moore (47:22): we'd sit down and be like, What happened? They're like, Hey, remember that thing you did a year and a half ago where you screwed up the CEO?

Andrew Moore (47:25): This printer, like, yeah, like he's had it out for you ever since. So laddering within the account, like having conversations regularly with him, or using Net Promoter, where you're at least on a once-a-year basis reaching out to the C-suite and being like, Are you happy with us? was a game changer for us because before then we were just relying on the fact that the people that called us every day were happy. And to your point, there's decision makers that are actually kind of more important sometimes, unfortunately.

Jeff Fantalis (47:52): Yeah, we found

Jeff Fantalis (47:52): that out. We changed some things in terms of how we reach out because of that particular case.

Andrew Moore (47:56): Yeah.

Jeff Fantalis (47:57): But of course, sometimes those same people are the worst at giving feedback. you'll send them a survey and they don't respond, those sorts of things. So you do what you can, but yeah, that's your example is not far off from what we experience. So

Andrew Moore (48:12): Yeah.

Jeff Fantalis (48:12): again, I have some theories in this particular case that I haven't had confirmed, but again, you can tell it still bugs me and it's over your

Andrew Moore (48:18): Yeah,

Andrew Moore (48:19): I I can I can up to this point in the conversation, you were not talking with your hands. I was seeing you

Jeff Fantalis (48:27): Yeah.

Andrew Moore (48:28): move around a little bit, so yeah, I can tell.

Jeff Fantalis (48:32): Yeah.

Andrew Moore (48:33): All right, last question, is there somebody that you know in the channel, in the industry, MSP owner, is there anybody like that you know you find fascinating or that you might know that we should talk to, that we should re out reach out to to see if they would be a good guest to have on podcast?

Jeff Fantalis (48:49): I really should have thought of this before because I don't think I have an answer for you.

Andrew Moore (48:53): That's okay.

Jeff Fantalis (48:54): but if you give me some time I'll try to think of something and get back to you after. I do have relationships with a handful of MSPs out there, but I'd have to think about who would be the right kind of person for this.

Andrew Moore (49:07): Understood. And and for the guests out there, I screwed up and did not give Jeff our pre-show rundown until about three hours before the show. So for him to not be prepared with answers to our questions and doing this on the fly is on us. That was my bad.

Andrew Moore (49:21): Well, listen, I really appreciated you being on with me today and taking time out of your busy day to talk about your MSP. I'm excited to share what you learn with our audience and I wish you the best. I hope that you see continued growth and want you to stay in touch with us and let us know how things go.

Jeff Fantalis (49:36): Thank you for

Jeff Fantalis (49:37): your time. I thought this was great and I appreciate it.

Andrew Moore (49:40): Thanks,

Andrew Moore (49:40): sir.