Episode 196 SPECIAL: Inspirational: How this MSP built his business

Fresh every Tuesday.

For MSPs around the world, this is Paul Green’s MSP Marketing Podcast.

Don’t be too sad, but it’s the final of our three summer specials this week, and we have an incredible interview to finish with. I want to introduce you to a big thinker who has so many good ideas about how to grow your MSP.

Paul Green’s MSP Marketing Podcast.

Hey, everyone. I’m Scott Riley. I’m the founder of Cloud Nexus. We’re a very niche and bespoke MSP that focuses around Microsoft 365 and Azure Services. We’ve made it our very special little niche.

And what a great niche to be in. Thank you for joining me on the podcast, Scott. It’s taken us so many months to get you on. Your calendar, my calendar. We first met at the Super Ops Super Conference back in earlier this year in London, which was a great event. And you were on stage and I was on stage at separate times, which meant we got to sit and watch each other talk, which was pretty cool. And normally when I get a guest onto the podcast, it’s because there’s a specific subject to talk about. With you, I think you are just one of those MSP owners who is up for trying things, who’s looking at different ways to run the business, to try different things, and I thought it would just be worth getting you on talking about some of the things that you’ve done to build your business, some of the mistakes you’ve made, and just to explore some of the ways that you’re operating right now, because you are operating a little bit different from the average MSP that I speak to.

So first of all, just give us a little bit of background. So what’s your story? How did you get started? Bring us up to date of what you did to get through to 2023.

Oh, sure thing. So I’ll give you the real potted history, because I figured out the other day I’ve been in what we would call IT services or MSP for about 24 years.

Whoa.

So it’s been a while. Yeah, absolutely. And I still look terribly young and fresh. I understand. But it’s a simple thing. I started in very technical roles a long time ago, and what they figured out very quickly was I was actually quite good at chatting to people. And so they started to move me around and put me into positions like pre-sales, and then pre-sales also needed an engineering management role, so I ran pre-sales and engineering. And back in the day, that was for big telco, so we were doing lease lines and DSL when it came along. I used to run Freeserve, if anyone remembers that. The old dial-in internet that we had here in the UK. It was free internet. It was unheard of, with dial-up modems. But I did very technical roles for quite a while and then eventually worked my way up into the management and pre-sales type things, dealing with clients and really getting to see, what did they want out of technology and what were we doing as a business?

And part of that was exciting in that you got to then work on the productization. What could we make that would be really interesting for customers? So I floated around with some of the big MSPs here in the UK, so some of the brands, pretty much all of them have been bought by Daisy by this stage. But people like Phoenix, people like GCI, people like GX Networks. Finaltus was probably one of the most popular brands. It used to be called Pipex. We got David Hasselhoff to advertise for us on television, which I thought was absolutely incredible, so going through all of those for quite a while.

The bigger thing I did most recently before this was I worked for an MSP where we grew their cloud business from zero to a £34 million revenue stream, so call that about 40, $43 million revenue stream from nothing. And we basically borrowed half a million from the board, went out, bought all the equipment, hired some staff, started getting contracts in, train the sales team, teach everyone what this cloud thing was, and compete a bit with Microsoft 365. And we did that for seven years before we eventually sold that business on to a PE firm for about 265 million. So again, call it about $300 million. Pretty significant at that stage. I had a teeny tiny shareholding in that business and I’d been there for seven years. And when we sold, I thought, do you know what? Now’s the time. And it was mostly spurred on by the fact that the main person who owned our business, he was only going to get £99 million out of this deal.

And right towards the end, he got very grumpy and upset because, “It’s only 99 million and I want 100 million.” And would go round to try and encourage people, and I’m using air quotes, encourage people to give back some of their shares so that he could get to that number. Now at that stage, I genuinely just thought, do you know what? If I’m going to work for someone and that someone’s going to be a bit of a birk, it may as well be me, so let’s go do this. And I’d had the idea for Cloud Nexus back in 2012. This was now 2019, and it was just about time. Financially we were stable, the family were good, we were in a good place. It was the right time to start a business. And the big thing that I’d learned is that we shouldn’t be competing with Microsoft 365, is that we should actually be embracing it, and that was where Cloud Nexus was born.

Okay, pause there. As the host of a podcast, you have to remember things you want to go back and talk about while not losing the track of where we’re going. Talk about a bomb of things to delve into there. Okay.

This is what I do. I’m sorry.

That’s okay. Yeah, this is what makes you fun. So first things first, Freeserve. So MSPs outside the UK probably won’t know the name, but here in the UK, I guess it was our British equivalent of AOL, wasn’t it? Because you-

It really was.

… had a gazillion Freeserve CDs going out all the time. And wasn’t Freeserve bought by Dixon’s? Am I right in saying that as well?

Yeah, absolutely. Yeah, yeah, yeah. It was ultimately owned by those guys. Yeah.

And obviously it’s vanished now. It’s absolutely nothing now. But yeah, there was a period of time where you couldn’t open any magazine ever without a Freeserve CD falling out, similar to AOL in the States. That’s the first thing. Second thing, you hired the Hoff? You hired David Hasselhoff? So have you met him? That’s the big question.

No, I missed him. He came to our office and I was up in one of the other offices at the time, but he came and he did a whole photo shoot. He was lovely. He met everybody. But it was weird because we had giant Hoff-sized cardboard cutouts of him in every office after that. And I actually know one of the ladies I work with took one of them home because she loved the Hoff so much. But yeah, we sponsored the release of a single, Get In My Car-

I remember that.

… with him. Yeah, yeah, yeah. Well, you’re welcome, or not. But yeah, so we had these crazy adverts advertising our internet services. As I say, this was right at the start of DSL and getting that out to the majority of the users here and replacing old dial-ups, so it was a while back, but yeah. Wow. Great to have the Hoff on board.

So this is so sad that I know this, but I was a radio presenter I think around about the same time that song came out, or if the timing wasn’t quite right, this is certainly a fact I’ve learned since, which was that… Because obviously David Hasselhoff, our younger listeners and viewers are thinking, who are these two old guys and who the hell are they talking about? So David Hasselhoff was the legend of the eighties. He was Night Rider, Baywatch.

Yeah.

That was pretty much it, I think. And-

That was [inaudible 00:07:23]. Yeah.

But the fact I know about that song Get In Your Car was it was the first time he’d sat in a TransAm like Kit, Kit being the car from Night Rider, for about seven years. It was a bit of a reunion for him doing the video for that. I seem to remember that was a fact that I picked up somewhere.

Yeah, yeah. Well, that would’ve been us because we hired a Kit lookalike for him to jump into as part of the whole campaign.

Do you hear that sound? It’s my mind-blowing. Final thing I wanted to pick up, and this does lead directly back into some business and marketing stuff, which apparently is what we’re talking about. So you took part in a business which went from a half a million pound loan to-

Yes.

… did you say it was…

Well, it was 34 million. Yeah.

34 million. And it sold for?

Well, the entire business sold for 265 million. So cloud wasn’t the only thing that we did. They had a well established network business, a bit of data center business, and some small IT services. But what they didn’t have was any cloud capability at that time.

But you were there from a not massive amount of debt turning into a £38 million a year business, which is insane over a seven-year period.

Yes.

And I think anyone would look at that and say, “Well, that’s impressive,” even if your former boss was just 1 million short of his six-figure sum that he wanted to crow about. And I can understand why he would want to do that. That’s a very different origin story to most MSPs. So most MSPs, they are a tech or have come at it from a service delivery point of view and then have that entrepreneurial seizure and decide, “I want to do this my own way.” Obviously, you’ve come at it from having watched how a business has orientated itself around building value, which is a completely different way of doing it. So you only started Cloud Nexus I think you said 2019, so it’s only four years ago.

Yeah.

How has that changed the way that you have approached building your business?

Oh, it’s everything. Everything I’ve learned in those previous businesses is what we’re pouring into Cloud Nexus. Simple things. I say simple. It sounds simple to me because I’ve been through the experience I suppose, but you are absolutely right. When I moved from what was Phoenix at the time. Again, now Daisy. And I moved across to GCI, now Star, I want to say. Apologies to our American audience for these UK MSPs. But as I moved, I was currently responsible for looking after the cloud platform, the revenue streams, the products and services inside Phoenix for cloud. I was hired to move into this new MSP because they had zero cloud and they wanted to know what should they be doing, what should they be buying, what should they be selling, how to package it up and how to market it.

And so I essentially just brought along that entire knowledge of, well, I know what the products and services are that do sell in this area. I know what the customers are looking for. I know what the staff are that we need to make this go, and I know how to position it because I ran the pre-sales team in that previous business as well. So I know what the questions are, I know what the marketing is, I know what the salespeople need in terms of enablement and collateral. And so all of this stuff was sort of baked into that launch of cloud services. And the very first contract that we picked up was for, I want to say about £365,000 in total. Now, that almost completely paid for our hardware investment in one contract.

And what we then went on to do was to revolutionize the services that we were doing on-premise. So hosted desktop was a really easy one. We built out a hosted desktop platform. We marketed it as bronze, silver, gold. There was a 29 or 49 and a 79 per user per month package. Pretty much there was nothing in the 29 one, everything that was in 79 was a bit too much, so funnily enough, everyone just huddled down to the Goldilocks zone of 49 a user a month, and that sold like absolute hotcakes. So we made a huge revenue stream doing that. We then shifted to doing host exchange mailboxes, still competing with 365 at the time. It was early, and Azure really wasn’t quite there yet.

But the big thing that we did was we took Skype for Business, which was an on-premise deployment of about I’m going to say six to eight physical servers. I might not be remembering it entirely correctly, but we virtualized that process and we said, “Look, we’re not going to put these physical servers on-premise anymore. We’re just going to spin them up on our cloud. We will connect to you with a lease line or some kind of gigabit connectivity and all your phones will be in your office, but all of your phone calls will happen in our data center.” And obviously this is something that everyone gets that now with VoIP and teams of course, but this was when Skype for Business was on-premise. And so again, one of the first big projects we did was about a million-pound contract, and that was to host all of the phone system for University of London. So it was a thousand endpoints or 1200 endpoints I want to say, and it was absolutely fantastic.

We took out all this old legacy equipment out of their office and built it on our cloud platform. And it was beautiful, absolutely beautiful. But again, we were challenging people at that time. The techs were going, “No, no, no, it has to be on-premise latency.” And I’m like, “I don’t think it does. I think it’s going to work just fine. Let’s do this.” So taking that, I’m sorry, coming screaming back to my point, taking that learning, what we also did at GCI was over the time I was there, 17 mergers and acquisitions.

Whoa.

So we acquired 17 other brands whilst I was there, and so ultimately I became part of the executive team that would do some of the P&L assessment to decide whether we were or weren’t buying a business. When we were, we were always looking for what are we going to strip out of it in order to make it more profitable. I’m sorry, but we were PE-backed, and so that’s what we were doing. So we were looking at the people, the property, the products that they were using. Can we shorten the team? Can we close down offices and can we consolidate the platforms, whether it’s Autotask or Kasaya or any of those things, and simplify everything so it’s all on less cost? Because money was all that mattered. It was PE, EBITDA, those were the numbers we heard every single day.

But having been through that process, and one of the most interesting things there was we actually bought a business out of administration, which was a company called Outsourcery, which was very, very big in the UK at the time. Had a fantastic reputation. Was run by one of the stars of Dragon’s Den. Well, he went on to be on Dragon’s Den anyway. We took that out of administration. Part of my personal really good feeling there is that we saved 120 jobs when we did that. It was a huge undertaking within about a six-week window to decide if we were going to do it or not. Did it save 120 jobs? Absolutely. Smashed it in terms of looking after those people and also the customers and the service that came along with it. All of that learning has kind of led me to where I am today with Cloud Nexus, where we are a very small team. We’re five people and we are good at what we’re good at. We’re very good at 365. We’re very good at Azure.

We don’t do managed IT services, or rather we do, but we don’t do them. We outsource them to someone who’s absolutely fantastic at IT services. And so what we’ve chosen to do really is really stay in our lane at what we can hand on heart every time say we are amazing at. And that’s just where we pour all of our energy and our enthusiasm and effort into staying up to date. That one little niche that I’ve identified is absolutely enormous. As I’m sure anyone listening knows, it’s so hard to keep up. This is all we do and we find it hard to keep up some days.

But doing that, it’s made it very clear for us. I’ve learned from the M&A side of things, let’s lay out all of our accounts from minute one. Here’s the line item that we’re selling. Here’s the cost of sale directly associated with that. And so we can quickly see at a glance which services of ours are profitable, which ones are making money, which ones are dwindling, whether that revenue’s climbing month on month or whether it’s in decline. And so we can very quickly and easily decide, should we push more on these? Do we need to retire any of these things? What’s working for the business? And it gives us a real clear trajectory on what to do next. I’ve learned very much to value people.

As I said, we came from PE-backed, EBITDA was all we cared about. Money, money, money. People were just the collateral. They were just the cost of doing business. And so wherever they could cut people out of the organization, lose people and not replace them and just dump that workload onto someone else, they absolutely would, because they had promised things to their investors, they’d promised things to the board. And if they weren’t hitting it with sales targets, well, the margin still had to be there. So the only other way if you’re not bringing the sales in, is to cut costs. Well, the easy thing to cut on costs is people. And so we just consistently kept cutting people out and cutting people out. And it just made me realize that people weren’t valued by that stage. We’d grown to a point where alls we had was the money meant to please and we didn’t care about people anymore. We didn’t really care about customers anymore, if I’m very honest. It was all just about margin. So we would sell things that weren’t best for the client.

So again, right now, I always look at things and say, “Well, Office 365 is a great product and a great service.” At the end of my run there, we would always be selling our private cloud because our private cloud made 80% margin. If we sold some Office 365 licenses, we’d maybe make 10 or 15%. Even though this was the best thing for the client and what they needed to grow and move forward, we would sell this because that was best for us. And I promised myself, when we run this business, we’ll always be really honest. We’ll be very transparent. We will sell what’s right for the customer or we’ll advise what’s right for the customer even if we don’t sell it.

Even if they need to go and speak to someone else, we’ll just go, “Hey, do you know what? You don’t need this. What you actually need is this, and here’s some great people I can plug you into hopefully. And they’re going to go and do a great job.” We don’t try and mark it up and sell it through and pretend it’s us. “Yes. Yeah, we do Power BI, absolutely,” and then hide it off to someone else. We don’t do that. We just kind of go, “Hey, here’s a Power BI bunch. They’re really good. I think you’re going to get on with them really well,” and we introduce them.

So I’ve learned a lot, I think, just around people, around money, and that has kind of poured into everything we do with Cloud Nexus, keeping it really lean, keeping it a really small, friendly environment, really trying to value people as much as possible. And I admit we don’t always get that right, but our big passion is our people come first, then it’s the customers, and then the money comes after that. Because I know if we look after the people, they’ll look after the customers. And if the customers are happy, the money keeps coming in. And that just, again, seems really simple, but it’s just something that I know works for us as a good approach.

Yeah. And you’ve been able to do this because from day one, you’ve been in a leadership position. And to differentiate that from, again, that average MSP journey I was talking about earlier, the average MSP jumps into a doing position, don’t they? They’re right from day one winning the first client, servicing the first client and trying to win the second client, and it’s often they’re playing catch up. They’re adding in staff and resources as they need them. And you can spend five years like that and you wake up five years later, a little chubbier, a little grayer, and yeah, you’ve got a viable business that pays your mortgage and your bills, but it’s almost like the jigsaw puzzle, but you don’t actually know what the picture is. Oh, I’ve just invented a new analogy. I’ve got to use that again. So you’re trying to build a jigsaw puzzle, but you don’t know how many pieces there are and you don’t know what the picture looks like.

Now, you, by the sound of it, because of your experience being involved in building a very much larger business from scratch and seeing huge mistakes like focusing on cash, focusing on the margin, not people, which we all know is not the long-term way to grow a business, you were able to come into this I guess with a more conscious model in your head of how you wanted it to be. How has that affected the growth of the business? Because you were never… Well, hang on, Paul. Don’t put any self-limiting beliefs out there. It was unlikely you were going to grow a multi, multimillion-pound business in just a couple of years. But how has the business grown in the four years that you’ve been running it?

Yeah, so it’s a really great question. And I would also credit some of that work to a couple of interesting books that I read at the outset. So as I started the business, the E-Myth Revisited by Michael Gerber. I’m sure everyone’s read it. If you haven’t read it, go and read it because you’re absolutely missing out. Especially if you’re a one man band MSP, go and bloody read it very quickly. Because in that book, I love it, it makes it really clear that when you start a business and you’re a technical expert at something, you have to plan out the whole organization chart of the business and realize that you need people in sales and marketing and legal and finance and, yes, support and operations and technical. But day one, you occupy every single seat on that org chart. And if you carry on like that, it is very difficult to be sustainable.

And I’m very much an advocate for strong mental health, taking as much time as you can as a business owner so that you can take holidays, you can have weekends, you can have enjoyable time. And really trying to remove yourself from working in the business to working on the business. I know we talk about that a lot, but it’s been my entire mantra, my current mantra, and it has been for a couple of years now: make myself useless in my own business. Because if I can do that, the first part of it was, well, if I want to make a saleable business and I’ve bought businesses like this, if it’s owner operated and owner managed and that owner’s in the day-to-day and he’s got the relationships with all the clients, when you buy that business, it falls apart. I know that because I’ve seen it done twice where we’d spent £13 million on a business and it just completely crumbled because the owner wasn’t there anymore.

So making myself useless was a strategy to say, if I do that, then actually I might have a saleable business. And who knows, maybe it will be worth a few hundreds of millions. Who knows? It won’t. But the other side of that was, if I can truly make myself useless and the business runs and it does a great job and the people are happy and it pays me some money and I’m not doing anything day to day, why would I sell it? Because I’ve got something I love. I’ve got a team I love, and actually maybe I’ve got some other interests that I can run on the side or in parallel. Who knows? But making myself useless was a huge part of my decision-making process as part of starting this business. Now, I’ve been speaking to some MSP owners in the last couple of weeks, and some of them have been in business for 10 years, 15 years, 20 years, and they’re still on their own.

It’s getting really bright and sunny in here, so I hope that’s okay for the video because the sun’s just come right around that corner there. But to your point, the people who are starting from a tech perspective, they do need to get a handle on where can I outsource? Where can I partner? Where can I delegate? Because otherwise you don’t get to have a holiday and you don’t get to have time away. You’d spend time with your family, but you’ve got your eye on the phone or on your emails. And I remember being at a conference recently with a good friend of mine now, Tim Kidney over at Funky Mouse, and we sat through the conference and you could see he was on the phone, tap, tap, tap, tap on the phone or just respond to another email. And I hadn’t looked at my phone once and we had this great conversation about making yourself useless.

And I’m proud to say I’ve been working with Tim recently to try and see how can we make him more useless in his own business. And the next conference I came to, he was so much more chill. And I think that’s something that owner-operated player managers, small MSPs, have really got to get to grips with it in that management team. How can you make yourself useless? It’s my big challenge at the moment.

Yeah, yeah, it’s a great challenge. And The E-Myth Revisited is an amazing book. It’s a book I read very early in my business journey. The modern equivalent is Built to Sell by John Warrillow, which is more or less the same book, but with a focus right on the get go of, “One day I’m going to sell this business,” which I think we should all have that approach. Although as you say, Scott, quite rightly, if the business is paying you not to be there, why would you want to sell a business like that? I guess because you wanted your hundred million and you wanted your yacht, obviously.

Yeah, I’ve got to go and buy the Lambo or something.

Exactly. Yeah, exactly. These are just things. I know that it’s nice to have a 700-foot floating thing, but it’s still just a thing. Okay. Two more subjects I want to ask you about before we wrap up.

Yeah.

The first of them is that question of outsourcing. Now, I got into MSPs for the first time in 2016 and I’d just sold a healthcare marketing agency. I had a five-year noncompete, so I couldn’t work with all the sectors I’d spent literally 10 years building up a reputation in. And it was so frustrating because I had to start from scratch. So I’ve discovered IT support people, enjoyed it immensely, discovered what managed services were. And then one day someone said to me, “Oh, I’m thinking outsourcing to…” And I’m sure they said, “To Continuum,” and I said, “Oh, what’s this Continuum thing?” And they said, “Oh, it’s all these people sat in, I guess, America and the Philippines or wherever the Continuum operations used to be based, and they handle your help desk for you and they do all the proactive server updates and stuff for you.” And the more they talked about this, and bearing in mind this is 2016, so this is before outsourcing really matured.

And I remember saying to this MSP in the UK, I said, “Are you nuts? We’ve just had a conversation about how difficult it is to hire and keep staff, how much you hate your staff, how lazy you think they are. And then you are telling me that there’s a company out there that will do all of this for you.” And of course where we got stuck was the owner, his belief of the quality he needed to deliver to his clients was higher than what he believed Continuum could deliver. Now, I appreciate Continuum is now is ConnectWise, isn’t it? So it’s still there, but different. And that was not me passing a judgment on the quality. The point I was making here is, yes, there was a quality gap.

The point I was trying to make, inexperienced Paul at that point, making that point, but I would make the same point today, is if there’s someone out there that will take all of this away from you to allow you to focus on the most important things, which is customer service, stepping back and making sure the customers are happy because it’s better to step back and make sure the customer’s happy than to sit there and reset a password for them yourself and then go out and get more customers, and make sure those customers are buying more things from you so that everyone’s happy. That to me sounds like a much more E-Myth way of running the business. And it sounds like that was a decision that you made from day one. Was that a hard decision or was it as simple as we’ve made it sound there, like a no-brainer?

No, it was a hundred percent a simple decision. Day one, we do not want to do end user support. Having run help desks and having tiers of engineers, I know how hard it is to maintain a good quality first line service desk and then second line and escalation. I also know the challenges of the rotating staff that come in. They’ll get in the role, they’ll get some experience under their belt at first line, and then immediately they can go up the road and get another 10,000 a year at a different IT provider. And so it’s really challenging to keep people in those roles, keep them entertained and keep them interested, especially when they get to second and third line. It’s such a challenge. I wanted to bring them into a business where we could focus on 365 and Azure and I didn’t want them to get distracted by day-to-day, printers not printing, words not wording, whatever it is.

And so Continuum was on my hit list. It was pre-acquisition, so I went to look at them. My criteria was very interesting because I wanted a UK-based help desk. That was important to me because our target clients were in the UK and I didn’t want offshore. Offshore was something that had a bit of a negative connotation to it with all the banking that had been off-shored and all the customer service that had been off-shored. And we’d seen some of that experience be absolutely fantastic and some of it be dreadful. And it was a concern to me enough that I said, “I actually want something that’s in this country.” And so there were only a handful of providers who could do that for us. Uptime, the people that we ultimately chose, being one of them. And the big draw with them was they were in the UK, they were MSP-focused, and they ran, I think it’s six till six or seven till seven UK hours.

Outside of those hours, they had a whole other team working in New Zealand doing the exact opposite set of hours from seven till seven. And I thought, okay, so either you’re talking to someone in the UK or you’re talking to a Kiwi and who doesn’t like to talk to a bloody Kiwi? That’s just brilliant. So that was immediately a great benefit. That service comes with a PSA system, an RMM system. It comes with IT Glue, three things we didn’t have because we just started out, and I really didn’t want to pay what would’ve been $8-10,000 of onboarding fees to work with ConnectWise. I didn’t have it, if I’m really honest. So having a partner relationship like that where we could bring in all those tools was just a no-brainer straight away.

Where we’re lucky, I suppose, is we were starting greenfield. So as we then went out to those clients and said, “Hey, this is the service desk, this is how it works,” every one of those clients knows that it’s an outsourced service desk. And we’ve been transparent and we’ve told them, and the reason that we’ve told them is that we’ve said, “This is the stuff that we’re absolutely amazing at. This is what they’re amazing at. They run a service desk, they’re absolutely fantastic at running first, second, third line. They answer all the calls within 60 seconds. They’ve got these SLAs, they’ve got ISO accreditations, all of this stuff, and you get that through us.” And only one person ever said, “Well, can’t we just buy it off them?” I’m like, “Well, no, you can’t because they only sell to people like us. So you could probably find another person like us to buy it from,” but the value that we add is the time spent with the client on the stuff that’s important.

What are you trying to get out of technology? What are you doing with your business? Where are you going? What support do you think you’ll need? How can we just advise and guide? Or we’re buying a new office or we’re buying it another company. Okay, great. Well, here are some things you need to think about. That’s the valuable stuff that we can add versus resetting a password, fixing a printer, installing software, deploying a new laptop. All that stuff gets handled by the support desk. And I’m not saying that’s not valuable. What I’m saying is that is day-to-day operations. That doesn’t necessarily turn the dial on a client relationship.

It can make or break one if the service is absolutely awful, but the team that we picked, when we took a reference calls with their existing clients, they’re absolutely amazing. They do service desk better than we could ever hope to do service desk, and that makes them a perfect partner. Now, I’ve had this conversation with MSPs where they just go, “We can’t outsource service desk because it’s the first point of contact for our clients. It’s the most important part of the way that they experience us. It’s this, it’s this.” Okay, I can understand that, but I’d also challenge it, because when they’re phoning service desk, it’s because something’s gone wrong. They need it fixed as quickly as possible, and as lovely and friendly as Johnny is on the first line service desk, they just need their problem fixed so they can get on with their day.

The real relationships are built with the management team and supporting the business, not supporting the technology. And so I think that’s a good way to look at it if you are wondering whether outsourcing service desk is good for you. Also, we did the maths. We figured out what size of a team we would need to hire to look after a certain number of endpoints every month. And if we scaled to those endpoints, how much would that cost using our outsource service? It was the same cost. It was the same cost, except now I don’t have a headache of another 10 staff to deal with.

It’s a complete no-brainer, isn’t it? Okay.

Yeah.

Your final question, Scott. You’ve been so generous with your time, but I’m afraid I have to prove that Scott Riley is fallible-

Yes.

… because I want to talk about marketing. And in fact, when you and I met and shook hands for the very first time, and I’d seen you on stage, and one of the first things you admitted to me that you’d spent a not inconsiderable amount of money on marketing and got absolutely zero return. So tell us what you did that didn’t work, and then tell us what you’re doing now that hopefully is working better for you.

Yeah, absolutely. Absolutely. So yeah, let me tell you what didn’t work. So I think the figure we touted was about £40,000 and I’ve been doing the maths and we’re not far off that. So let’s call that $50,000, just to help our US chums. $50,000. Not a single lead. Not one. Okay. Let’s tell you some things that didn’t work. So I worked with a Facebook Ads expert who was recommended. They work with MSPs all the time, and they craft Facebook ads and they guarantee leads. It sounded amazing. We started working with them. We ran for four months. Now, I appreciate you might say to me, “Scott, you didn’t give it long enough.” Oh, I will take that feedback. However, the adverts that we were getting were things like… Ooh, I’m looking at one now. “We made a list of 23 Android apps that could be spying on your kids. Find out if your family is at risk. Click here to download.” Okay.

“More than 300 Android apps have been identified and they’re used by hackers putting dangerous new malware on your phone. Find out if your phone is affected.” And I was like, this is some real clickbaity crap. I would not click on this stuff, but this was the quality of stuff that they were putting out. Now, we spent, let’s do it in dollars. We spent $8,100 with that agency just for them to do the consultancy and build the ads, run the ads. We then spent another $4,000 on Facebook ad spend. So in total, we spent $12,000 and got absolutely zero leads. My feedback, I wrote to them and I just said, “Look, I just need to check in.

These adverts are really clickbaity.” I won’t swear, but I did swear in the email. “I don’t feel this is representative of our brand or our culture, so these need to stop. Happy to AB test.” And my whole thing was, I want to see us as offering value. Not, “Hey, we’ve got all the secrets. If only you click this button and download our PDF, then we’ll share them with you.” That wasn’t us, so I didn’t want those clickbaity schemes, but they just couldn’t get it. That was how they worked. $12,300 down the drain. Next, we partnered up with people who wrote blogs for us on our website, lovely people, MSP-focused. We spent $2,000 having them write blogs because we thought it would help with our SEO and ranking and all that kind of stuff. It really didn’t. They wrote some wonderful blogs, but once again, they were super generic and they did not represent our brand. This is not in any way trying to put any scathing remarks on Paul or MSP Marketing Edge. That’s not what this is about.

It wasn’t us. We didn’t do it.

It wasn’t you. Let’s be really clear it. It was not Marketing Edge, but it was something that we wanted to do, we wanted to scale, and we wanted to get quality content on the website, but it wasn’t us and it didn’t sound like us. And I think because of that, it didn’t work. And this was all leading that lesson of, this just doesn’t sound like us. $2,000 gone. We worked with a LinkedIn lead generation expert, someone who’s in the MSP community, very well-known in the MSP community, very well-connected, and their idea was they’ll go on LinkedIn and they’ll connect with people. They’ll look for people who may be looking for our type of services, and they would recommend us in. We spent $4,000 for no leads. We sponsored an eSports event for $2,200, which was an absolute shambles, and we barely even got to see anybody. We hired a PR firm. That seems like a really sensible thing to do. We spent $15,000.

Wow.

We did appear in Forbes online magazine. I managed to get four lines commenting on Windows 11 updates. That wasn’t a great use of time. So yeah, so I think I’ve already blown past $50,000 just talking about those things. I don’t want to harp on too much, but here’s my takeaway. We were desperate for leads, and many people had what looked like a great promise. It looked like the quick answer. It looked like they could turn things around if we threw enough money at it, and it was the throwing enough money at it that seemed really convincing. This guy’s charging $8,000 for his consultancy, and we can put Facebook Ads on top, but just to get his knowledge, it’s $8,000. Wow, this guy must be amazing. He works with MSPs all the time. He’s got a proven track record of lead generation. This must be the answer. We’re dumb if we don’t take $8,000 and immediately throw it at him.

We weren’t dumb. We completely misjudged that situation, and we ended up with a load of things that didn’t represent us or our brand. We did exactly the same thing with the blogs. We did exactly the same thing with the lead gen, and we did the same thing with the PR. A lot of that stuff just wasn’t us. Do we really care about Windows patching updates and making comments? I think we ended up writing an article for someone on how to mirror your screen to a second screen. Okay. None of that stuff was the right audience. It wasn’t representative of our brand, and it was far too much money.

So I would wholeheartedly encourage you, on the one hand I’m saying, “Hey, go and partner and outsource with people who can do your service desk if they align with your values and if they align with your company and they’re going to treat your customers the way you want them to be treated. If you’re going to outsource marketing, you have to work with people who know you, know your business, and will represent your brand really well.” Now, ultimately, and this is a benefit because we’re in the UK, and I’m really sorry for US and other people all around the world, but we have a wonderful apprenticeship scheme here in the UK, so we hired a digital marketing apprentice. What that basically means is that we get the first year of someone at absolutely hardly any salary whatsoever. It costs us buttons, and they are fully trained by the government on a series of funded courses.

We hired a young girl called Kaylee, who turned out to be the best thing that we ever did. In the first year, her salary was £13,000. Let’s go again. Call it $15,000. So reasonable. Significantly less than even one of those marketing tactics that we tried, but now we had a hundred percent full-time focus, someone that we could, I was going to say indoctrinate, but that’s not what I mean. Someone that we could really bring into the brand and bring the brand to life and live our culture and our values, and then find the best way to represent those online for us. And so, yes, we bought a fancy Apple Mac. Yes, we bought cameras and lighting and all kinds of stuff like that. We’ve probably spent about $20,000, including that first-year salary. The returns have been phenomenal.

We’ve made YouTube videos, LinkedIn videos. We are constantly on LinkedIn or you will see us on socials all the time. I always walk up to people at events that I’ve never met before and they go, “Oh my God, I’ve heard your podcast. I’ve seen your videos. I watched that stupid thing you did with Darth Vader the other day.” That’s the power that it’s having because we’re just staying top of mind and really being present, and that is a powerful thing. It’s a slow burn, but it does pay off. I can point to one video that we made. It was a six-minute video. It’s the most boring video we’ve ever made, but it was about how much does Teams Voice cost, really. That one video has brought in over £90,000 worth of consultancy, and that’s just one. We’ve made hundreds. We’ve launched our own training course now, which is our little masterclass program. There’s 120 videos in there that we’ve made, and all of this stuff has been thanks to us having someone in our business who can genuinely, really align with us and do a fantastic job.

Amazing. I could continue talking to you for hours, Scott, but sadly, we’ve run out of time. I know. On a podcast, even there, you run out of time. So tell us why you are here. What do you do to help other MSPs? Because I know you are the kind of guy that loves to help other people. What can you do to help MSPs and how can we get in touch with you?

Yeah, absolutely. We do a huge amount of work with MSPs as an organization, but me personally, I love to just help and provide advice and guidance wherever I can. So if anyone’s interested, if anything I’ve said so far today has resonated or you’d just like to chat and laugh about some more of my mistakes, I’m always happy for that. You can find me on LinkedIn. You can email me, scott@cloudnexus.co.uk. I’m very easy to find, I would say, on LinkedIn, but I just love to share any of the pain and hassle and challenges that we’ve been through. If it helps one person not make that mistake, I’m always happy to share and provide guidance.

Coming up next week.

Hi, I’m Merit Khan and the ABCs about me, I’m an author, business owner and a consultant and comedian, and we’re going to be talking about the Open For Business Framework. Three pieces of the puzzle that every business owner and MSP needs to know to be successful in business for the long term.

Right. We’re back to our usual format next week, and on top of that interview with Merit Kahn, we’ll be discussing why it’s so dangerous to let your salespeople use their own personal LinkedIn accounts when they are pursuing new leads. Join me next Tuesday and have a very profitable week in your MSP.

Made in the UK.

For MSPs around the world.

Paul Green’s-

MSP Marketing Podcast.