Transcript
That was a game changer. 25 years ago, Jim opened a small computer store in Ottawa. Fast forward to today, Silicon Valley Solutions is a thriving MSP, serving clients across Ontario and Quebec. Your profit margin will automatically improve if your efficiency improves. In this episode, Jim breaks down how consolidating his tools transformed his daily operations and how doubling, even tripling, capacity without adding staff became the new goal. So Jim, tell us a little bit about your journey to get to this point. I know you've been a partner for a long time, but let's take it all the way back to the beginning. Oh well, we're going back 25 years. March 1st, 2001, we did exactly what I said I wouldn't do, was open our own business. But we were the standard IT shop, computer store. Realistically, even though we're 25 years old, I would say our MSP journey really didn't start at all until 2011. And in 2018, when we became Datto Partners and then Kaseya Partners, is where it really exploded in a good way. And what we're doing now, I wouldn't have dreamed of in 2001. So 2018, Jim, you said you got involved with Datto. Why did that happen? Were you looking for a new product? I wouldn't say we were looking for it, but I think we were looking for a relationship with a vendor without realizing we were looking for it. We started realizing, okay, there's something different from what we had before. So when we went to our first Datto meeting in Montreal, we listened and we heard a message that we hadn't heard before. And that message was, we're here for you. And that for us, I mean, I know Datto is Kaseya now, but that message still has translated over. So all of a sudden, it changed the way we now looked at vendors because everybody's got a product that's better, faster, stronger, cheaper. That to me is great. What's your support? If we don't have the relationship with the vendor's staff, we don't usually go too far. Yes, there could be a perfect software out there, I don't know if it exists, but that perfect software better have damn good representative that we deal with or we're not even going to look for it because every software is a fail. Every software is going to have an issue. And at some point, I don't want to hear from my staff. We're having a problem, but we can't get anybody to help us. That doesn't happen with Kaseya. It has never happened with me. Have there been issues? Of course there is. Have we ever had an issue we could not resolve? None. I love it. Okay, so product-wise, let's dive into some of your product stack here. When K1 came out, that was a game changer across the board. Everybody talked about the one pane of glass. We heard it everywhere. Kaseya did it. That one pane of glass, for me as the owner of the company, I don't need to log into every software all the time, but I can quickly open and switch back and forth the powered services tab. Everything we do, it has made it simplified. It's saved time. Or we'd hear a conversation, I can't get into this, or I can't get into that, and somebody would have to reset the 2FA or resetting the passwords. We have one to deal with now, and to me, it's golden. And to me, the more number of logins, the more times you have to supply these things, I don't care what the tool is, it decreases efficiency. And to me, it increases your risk. So now we've got that, again, back to the one pane of glass. It's not that it's so much that it's one pane, but it's very simple for me to train the new staff. And it is the one which has made our efficiency just starting the day get up to it. So you mentioned onboarding. So when you're bringing on a new employee or maybe even a new client, you know, how has that process changed being under one pane of glass? Well, there's a lot more to it now with automation that we've implemented, which has made it even easier. But we've automated all the products that we have. So for us, onboarding means from start to finish, you've got our entire stack of what you're covered with. We have the proof of it. We've recorded the compliancy part of it that we can't say, oh, sorry, we forgot to install EDR. So all those things from onboarding in the one pane of glass, our contract lists every software they have. And we actually have an automated system that we roll out that it crosses the board of every single thing they have right down to the final software installed. And we get notification that the entire onboarding process of the software, that is now complete. So now we move into the CSM, the customer success manager part of it, where we're reaching out to them. We found a few flaws that we made assumption that when we told one person in the company, how they would fill out a ticket, that they would tell everybody else. We no longer make that assumption. So we make certain that everybody knows how to do it. And even to the point of onboarding a new user at that client, that's one of the steps that we reach a live person, not an email, not a text message, nothing like that. But we have a conversation so that they can say that, well, no one ever told us. It's our way. Of course, we've taken all the things together to put it in. And that's our onboarding is, we're pretty proud of the way that we're doing it. And it's an ever evolving process. Jim, you mentioned working on the business and not in the business. I love that. Can you kind of dive into that point? I no longer work in the business. I kind of regret that in a way, because I enjoyed the technical side of it. And I think that's what's really hard for many MSPs. Most of them were the tech, were the sales guy, were the marketing, whatever the case may be. So recognizing that someone can do it better than you might be hard. I've got no problem with that. I've got a team that I know every single one of them does what they do better than me. I'm able to look at my business from what I call 30,000 feet. Before I was in the muck, in the mud, the day-to-day trying to get through it and making so many mistakes, realizing that someone could do it better than me was game changing. Seeing them do something and come to me was fantastic. Hearing a client that calls, emails, or even pops in to visit that doesn't want to talk to me, that wants to talk with them, you could get your feelings hurt, but I'm not, I'm so proud. So when we're talking about the business, you have obviously a lot of our products. Can you talk about how some of those products that you use of ours help your business flow better? That's a question with a lot of answers, a lot of detail. I've got time. The products, everything works well together. The main tool that I use more than anything else is Autotask. But I count on Connect Booster, which we love. So the tools that the guys use from the RMM, right down through the EDR, the SOC team, which again, we love those guys. When I see they're calling the phone, I'm worried about what it is, but then I'm so happy they're looking out. The Sassler, it's going across the board. So the K365 and the User 365 with Kaseya has been a total, total game changer. Again, going back to consolidating the one pane of glass, that was important. But consolidating the tools that we use from those one panes of glass is just as important. In the end, I don't care what tool is being used to stop the attack or to make sure the BC part of the BCDR, the business continuity is being dealt with, the disaster recovery part we've covered, the compliancy part and the threat attacks that are constantly happening out there are being averted, diverted, stopped, whatever you want to call it. And in the end, if something gets through, how do we roll it back? How do we protect the clients? Those things are what allows me to sleep at night. So you mentioned the layered approach, you know, like if we're going to use an example, the onion, and you don't care which layer protects as long as it's protecting. Can you give an actual example of a client that was maybe using one of our products and give us a story or a little bit of background info on what happened? We had one client that was actually, we stopped, I believe it was four ransomware attacks before we were able to completely lock down how these were occurring. And yeah, that was probably the scariest time I've ever had because now we're saying, okay, these products say they're good. Let's see how good they are. They were. What industry? Engineering. Okay. They were flat out targets across the board. They were big company, big dollars. Downtime was critical. They couldn't be down long, but of course they didn't want to do the ransomware either. But we were able to stop it before it went too far, did a backup recovery of what had been done and we had them back up and running. And I don't want to say about an hour, two hours, something like that. It was pretty quick. It was pretty quick. Yeah. And if they had been down for one, two, three days, what are we talking about? What kind of revenue would they be losing if they were down for a couple of days? We showed them the calculator. Yeah. And they said, we don't want to do it because it's too scary. Said, okay, good. Let's have a chat about some extra security we want to talk about. So it led into that. It was golden. Are we talking thousands of dollars? Thousands. Hundreds of thousands of dollars. In the high tens, if not hundreds of thousands of dollars, for sure. Just missing a contract deadline could be hundreds, if not more, thousands of dollars. So we had that one. And then by the same token, if I can, we often get calls when non-clients get some sort of breach to do the investigation with the authorities of what we do our part. We never end up doing the full part about what we did. And we've just seen too many. The largest one we ran into was $137,000. And they had no protection in place. They thought they had it. So for us, it's not just the tools we have. It's seeing what other businesses in the industries that are in our area don't have. It's not just what we deal with. It's what we see others not dealing with that is damn scary. How many of your partners are on the managed SOC compared to not? Would you say 50-50? All of them. All of them are on a managed SOC? All of them. And do they understand the power of what this tool does? I will say probably not as good as they should because, again, although we're getting better, we're not quite perfect yet. But we're working on that and making them understand that. A lot of my job is to make them understand why they're a target. You've seen the poster we create. We can't call him Uncle Sam in Canada. We call him Uncle Jim. He's got the Canadian flag. To make them understand why they're a target, I've used that. I've stopped people in their tracks when they see that. When we make them understand they're a target, we make them understand in what way they're targets. And there's not a question. That's the one they like hearing. I'm not going to call you at two in the morning and say, are you doing something? I'll call it the rule of common sense. Two o'clock in the morning, you're probably not over in whatever country trying to access your email. And if you are, sorry, you're going to be locked out until the morning until we have a chat. And nobody has ever said that was, no, we don't want that. Leave us wide open. So we're talking, we talked about managed stock. What are some of the other tools that you use in our security stack that you basically have with every one of your partners? Every single Casio product we have, which I don't think at this point there's any we don't, but we have them all and across the board, all clients have it. The backup, when the 365 and the two bundles came out, all of a sudden it became easier for us let's back up all of our clients, not just the emails and the documents, all that let's back up the entire systems. I constantly have this battle against our competitors that are out there selling disaster recovery. And I make them understand, God forbid you have a fire. Yes, it's important. We need to get all your data back. But what if it's not a fire? What if it's just something as simple as somebody spilled the cup of coffee across the keyboard and fried the motherboard or the laptop? Yeah, we have your data, but now we need to reload, get all your software licensing back. Oh, do you have all your programs? And again, it's not just Microsoft and Windows that they have or Office. They have a lot of line of business software. So having that true disaster recovery backup that is bare metal, that's now your business continuity. So I find a lot of our competitors are not preaching about the business continuity. I focus on that with my current clients as well as new prospects because we're not just there to prevent a disaster or to recover from a disaster. Is a disaster spilling a cup of coffee? Probably not. It could be for the guy that needs that computer though. So 25 years, your business has completely changed from what it used to be to what it is now. I wanna hear how your business looks now compared to back then. Okay, so we used to measure success in our company by one metric. I would go into our accounting software and say, what's our gross for this month? What was last month? Ooh, we're up, we're doing well. Oh, we're down, we better work harder. Don't know what that meant. Work harder, sell another laptop. Maybe that worked, I don't know. Those were the metrics we did. I don't look at those numbers anymore. Yes, it's important, but it's so far down the scale. I wanna look at what is our all NC price? Our average price that we do per endpoint. We are constantly growing that not by raising the prices, by adding features, tools, methods of protection, not just protection, but things that actually improve the efficiency of our clients, which in turn allows us to charge more for it. We want that to grow. If our rates don't grow, nevermind the economy, but in the world right now, we have everything going on. If our rates aren't growing, how are you gonna add more services? So we have to add more. The average MRR, yeah, that's important. You wanna grow your company size, but we look at internally for operations, our reactive hours per endpoint. So what kind of efficiency are we building inside our company? If you're growing, you double the size of your company and you're doubling the size of your tickets, that sounds like it would make sense. But as you grow, you should be able to improve efficiency and we are. So our reactive hours of the work of our staff and our help desk having to do for the number of endpoints to do is actually lowering. That tells me our efficiency is growing. We're looking at all the numbers, profit margin being so important as well. Your profit margin will automatically improve if your efficiency improves. Your efficiency will improve if you have the funds to allow you to put the resources in the correct area. We're at the point right now where we can double our coverage with no more staff. And I questioned him on that. I said, explain that to me. We went through the numbers. We are now such a lower point of reactive hours per month that my staff has had time to do more automation. So even without any new automation with coming up, which is, that's not going to happen, with no more growth, no more changes, we can double right now. Our feeling is, as we continue to automate, we potentially could triple. And while the goal is not to grow and grow and grow and never grow our staff, that's not it at all. But that profit margin, that percentage, that should continue to grow. Our profit margin has doubled in the last three years. And honestly, if I look back prior to three years, which I don't think I want to because I don't want to feel that bad, it's probably higher. But right now, if we double the size we have now, we are going to more than double our profit margin. And as I look through the numbers, it's almost mind-boggling the potential growth rate because of the AI tools and the automation we are implementing. We're going to be able to potentially reach a point of looking at tripling our profit margin, which having a staff that is willing to invest in the tools that we have to make them not only better, but make them more catered to the needs that we have, has lowered our count. So our RHEM, so our Reactive Hours for Endpoint Monthly, has dropped by just about 70% over a year ago. So dropping 70% of your Reactive Hours time on helpdesk, my guys don't sit around drinking coffee, although we do, we're Canadian, saying it's Tim Hortons. But what did they start investing their time in? How can we make things better? How can we improve it? Automating more tickets on their own. Simple things like automating the disk space on machines. So instead of waiting for clients to call that the computers are slow, we're reaching out more proactively, fixing issues before they're pointed out to us, which in turn just keeps cycling. We're not just there to stop attacks. We should be there to improve efficiency. We don't want the clients to be hit. We don't want them to be down. But if we can help them be more efficient, and we will use, through the use of the tools we have, that is what's going to separate us from our quote-unquote competition, that I don't even think of as competition anymore. They do things their way, we do on ours. And I think we're doing it the right way. Jim, it has been great having you here. I know we talked a lot. I love getting your insights, not just over a coffee like they normally are. Really appreciate the partnership and can't wait to continue this relationship. Well, I appreciate even having the chance to talk. Everything goes back to me about building the relationships and the relationship we have with Kaseya. What I trust is the relationship that we've built and the relationships we continue to build. And however Kaseya is doing it, but I think from the top down, you guys have never let us down. Starting with you and everybody else, Kaseya, I can't thank you enough.
