EP301 - Stop Thinking Small – The Mindset Shift That Helped Build a £10 Million Co-Managed MSP with Adam Monks and Ian Luckett

IAN: In this episode of the IT Experts Podcast, we're going to help you understand the mindset shift that helped build a 10 million pound MSP.

INTRO: Welcome to the IT Experts Podcast, the only podcast to help MSPs scale to 1 million, and if already there, get to five and go faster. At the end of the day, isn't it all about building a business that works for you rather than you for it? I hope you enjoy the show.

IAN: So good morning, good afternoon, good evening. Welcome to the IT Experts Podcast. Today we have got a podcast that is going to stretch your thinking no end. We are going to be talking with Adam Monks, who's the group director for technical services at academia. And I was talking to him the other week. We've just had a little bit of a catch up and I said, everybody needs to hear your story, Adam. So without further ado, welcome to the show. Adam, how are you doing today?

ADAM: Yeah, very well, Ian. Thanks for having me.

IAN: No problem at all. No problem at all. I'm looking forward to this one because it's going to be a little bit different. Many of the MSPs, in the spaces we know 95.7% of MSPs don't get past a million. Most of the ones we talk to are sub 5 million. However, when we started talking it soon worked out that you'd built a 10 million help build a 10 million pound MSP, and I wanted to know how. So that is what we are going to talk about today and it's a very interesting journey. So for those smaller MSPs who are listening to this, what I want you to do is I want you to think about some of the behaviours and the structures and the strategy that Adam used and think about how could you boil that down to be relevant into your business, because it absolutely is relevant and because some of the numbers we are going to be talking about are going to be some pretty big numbers. I don't want you to switch off, Adam didn't get where he's today with the build the business where he's today by thinking small and as we say a lot of the time, if you think you're wrong, you think you're right, you're probably right. Okay. So we're going to help you to think a little bit bigger. But before we get into the structure of the show, Adam just explain, tell us a little bit about your journey. Where have you come from, what are you doing? What are you up to now? Just to fill the audience in.

ADAM: Yeah, sure. And feel free to dive in, Ian if I'm rambling for too long.

IAN: That's quite alright. I'll certainly do that. No problem.

ADAM: Good stuff. Yeah, so I suppose my background was MSP right, from sort of day of my career really 20-21 years ago, I got a job in a small startup, MSP on the help desk. First line, second line did that and then I just moved up in that organisation through the years I was there. I was there for about six years. And by the end of that time I was the head of operations for that MSP.

IAN: Nice.

ADAM: So I'd gone through being service desk manager and then I was doing quite a bit on customer success side and looking after some of the accounts. And then I started to manage also the professional services team as well. So I got that kind of breadth of experience through, through that time there. And then one of the gentlemen, I was working with Chris. He'd been the head of IT at Fair Trade and we were delivering services to them. And then he moved over to work for that MSP as well with me. We just worked really well together, saw the world the same way. And he moved his whole life over to Northern Greece near and therefore he decided to leave the MSP to do that and then do some consultancy on his own. And he and I had always talked about maybe, continuing to work together and what that could look like. And he got an opportunity where he was doing some consultancy to bring me over to replace a role at that customer. So from day dot, it was like a co-managed type structure where they had an in-house IT team, but then they had Chris and I Chris was working as the kind of virtual IT director there, and then he brought me in as the sort of head of service delivery, managing the team and sitting in their office, whereas he was obviously based abroad and coming and going as he needed to for various meetings and so forth. And then, because we talked about setting up an MSP we talked to that sort of anchor customer about us doing it as a limited company for them, and they were happy with that. And then we just grew organically from there. So we were able to, start to deliver some of the technical services as well and we're able to employ a really strong technical engineer to come and come with us as our kind of first employee. And then we had an opportunity, a different organisation to place somebody there sort of three days a week to help them as a service delivery manager over there. And then we just through I'm sure it's the same for all MSPs in those early years, just doing the best you possibly can delivering, if you say you're going to do something, do it exceed, don't charge too much in those sort of early days, rebuilding reputation. And then, we had a couple of I suppose quite fortunate scenarios where people who were high up in our founding customer kind of moved to other big organisations and then knew, and found their IT, in a situation that wasn't ideal and then wanted to see what we could do to help there. And then the organic growth just happened from there. So I suppose from that, perhaps a difference in some other MSPs is right from day one we were working with, that first organisation was 300 staff. The second big customer was sort of 500 staff there. So we were always doing that sort of co-managed model from the get go. And then we, because we knew, and obviously knew how to run an MSP and Chris did too, that sort of building the fully outsourced stuff up was fairly straightforward as well. So we were able to do either co-managed for big organisations or fully outsource for smaller organisations as we grew. And I had a good sort of fairly good network of capable engineers and service desk people and things like that. So we're always able to slot somebody new in when enough business came along. So that was the early years. I don't know.

IAN: The early days.

ADAM: Got any questions about that period? Or you want to...

IAN: Yeah, just on that side of things, is it easier, do you think, from a mindset point of view to sell to a bigger end client, or a smaller end client? This isn't a loaded or a straightforward question, I think, because it is around the mindset but it is still around the fundamentals, isn't it of does that person know and trust you? And at that level, are they buying you or are they buying your business? Is it they buying the capability of your organisation? How does that conversation differ as you go through the, through this, through the ranks as it would be particularly in that co-managed model?

ADAM: Yeah, I think they're definitely buying you at that stage, because you don't, you're too small to have, a lot of credibility against other MSPs that will be at the stage where they've got their solution partner badges with Microsoft and other kind of key certifications and so forth that you just won't have when you're small. So it's all about you. It's all about the job you do and the way that they trust you. And obviously working with the big organisations, you need to have a proactive and strategic mindset. But also what our customers always liked about us from day and right through the years was getting stuff done as well, especially in big organisations where, in-house teams it'll vary, but obviously the organisations we worked with needed some support where there'd been, things moving slower than, than perhaps they would like.

IAN: Yeah.

ADAM: And so coming in and having the courage and confidence to do big change projects and getting them delivered, that was the thing I think that made our reputation was delivering things, safely, but quickly and getting on with them. And so the customer's seeing like real transformational change from you and therefore, your reputation is then strong and they know they can trust you and they want you to do more then. And then, oh, we've got this thing over here that's an issue. Is this anything you guys know about or can help with? And, we built up kind of over the years, our cybersecurity practise and our, we also built up a data compliance, data protection practise as well, because there was gaps there for organisations.

When it comes to, we went through the years of GDPR coming in and and so forth.

IAN: Yeah.

ADAM: And built up capability around that. And the same with, it's not dissimilar today where technology is changing all the time. So you've got to be keeping relevant, making sure you've got the capability, bringing the right people in at the right time. And doing continuing to do a good job.

IAN: Yeah. And what I'm hearing here, and you said it twice now, just do what you say you are going to do. And that was the one of the comments that one of my senior managers said to me when I was 26 in my first leadership role. He just said, do what you say you're going to do. Go and deliver and demonstrate to them to the clients that's what you are going to do. I always have this bit of an analogy of, when you're selling MSP services that you've got these, I'm going to call them wandering generalities, many of the smaller MSPs, they everyone's buying them, but in your position, the individual as it would be, but in your position, you were positioning yourself as a heavyweight, effectively working with, 100, 500 seats and, end clients as it would be at that level, are they still buying you or are they buying the capabilities of the organisation? Are they looking more at the business or are they still looking at you? How does that change as the thinking gets bigger?

ADAM: Yeah. In the early days, they're a hundred percent buying you because you don't have the all the accreditations and the vendor badges and so forth that only come with size. Because, as we all know, as you go up the solution partner badges and the and the kind of expert level accreditations with Microsoft, you need to have a certain number of certified engineers, right? So you just can't get those badges early on. So it's all about you really and Chris and I, early on, it was about their trust in us to lead because we were leading teams of their in-house people as well in those co-managed arrangements. And that, as I was saying earlier, if they're seeing results and change and positive steps forward and quickly then they've got that trust in you. And then as we got, as we grew then it was, yeah, it was the same as you'd imagine, you need to be credible with as types of sizes of customers that you're working with. And we, it would, it's a frustration, right? We were frustrated in those middle years that when we were maybe 30 staff that, and we were going for full MSP outsource contracts with organisations that were like maybe 200, 300 staff, and then we'd just be too small. They'd say you've only been going five years, you've got 30 staff. And we've just seen another MSP that's been around for 20 years fully badged up with all the vendors, a hundred people. And then, and so you it's frustrating, but you can see that where the customer's coming from on that point. But you just crack on and then, you'll get some customers that actually can see that, what you've done. If your references are really strong from those foundational customers, and you're in a sector as we were, because we were in kind of charity and nonprofit sector where customers really are open and share with each other what they're doing. And because it's not competitive in the way that commercial is. There's more support between charitable organisations. So they're much more happy to have a conversation, be open about who we were, what we did, and that sort of thing. And I think that helped. Then maybe we got a few bigger contracts when we were a bit smaller than we might have done from that regard, in those years.

IAN: Okay. When you were deliberately and strategically growing the business, did we use a methodology at the growth of about, like your Dream 50 list, your Dream 30 list, right? Go and find, the dream companies that you want to work for and, get into them, stalk them, find out, build relationships, build networks, whoever it is that you are in there. And I know you said that, as you got more and more, as a business, referral based business, MSP that's not too much of a surprise. Did you strategically go into the bigger businesses or was it the bigger deals that you were looking for? How did you approach your mindset, in terms of how you're going to grow this business? What did that look like?

ADAM: Yeah, early on we weren't too fuss. We went where the opportunity was, whether it was small or big, really. But what we did do strategically is try to go and work with the sort of sector bodies. So in the charity sector, there are a few different organisations that advise the sector and we went to work with them so that we could get promoted through those channels. And some of those became our customers as well, some of those sort of sector bodies. So that was obviously, again, really good referencing networking. You could talk to it about working with us and then recommend our services to other organisations. And then there was always like some cross crossroads moments. I remember a year when both our foundational customers who were still at that point, like 70% of our revenue probably with those two customers, and they were both at that five year renewal 0.0, and we had to go and pitch a competitive pitch for both. I remember standing in the street with Chris and saying it's a big a critical moment whether, there's one renew, the both renewed and neither renew we're in big trouble. And then we're fortunate that both of them renewed for the other for the next three to five. And that was absolutely critical because at that point you have so much riding on those big on those big customers. Now we're in a position where, I don't think any customer is more than maybe five to 7% of our revenue. So as you grow and expand then obviously you get over that hurdle. But there's some, yeah, some of those hairy moments early on.

STUART INTERRUPT: If scaling your MSP is your goal, but you're not sure which road to take, then you'll really want to get hold of the MSP growth guide. It's the shortcut. Most MSPs wish they had much earlier on to work out what the right support is for them. Even better. If you like meeting up in person, why not come to join us at one of our live events? See the system, meet the people, get inspired. Get to kick the tyres and see exactly what we get up to at the Growth Hub. So details are on the show notes below. Go have a look, click and come and join us and we look forward to seeing you another time. But let's get back to the show.

IAN: Thanks, Stuart.

I was just going to say, as you were getting larger, getting up to the, past the 5 million mark sort of thing, what were some of the challenges you had around leadership? Was there a leadership team?

ADAM: Because think, because. Yeah, it's probably worth saying that we got to the point of a hundred staff when I did a deal to become part of academia technology group. So we went through that whole journey from two of us to, to a hundred people. And I think the hardest, bit hardest is probably hardest when you're 25 to 40 people because you're too big to be like absolutely hands on with everything like you would've been used to be doing, to be in the detail of everything. So you've got to start to make that mindset shift. But you are also too small to have like a big enough leadership team where everything's compartmentalised in terms of accountability because once you're at kind of 60 plus staff, you can start to have heads of sort of divisions. And something I wanted to bring in for ages, which we eventually did when we got a really strong fractional finance director when we were about kind of 60 people, was to make sure we could see which areas of the business were more profitable than others. And then I ended up in a structure where I had a senior leadership team that have accountability for their P&L. So we had P&Ls for the kind of MSP side of business, have a p and l for the fractional leadership side of the business, the VITDs P&L for cybersecurity, a P&L for procurement, including the sort of CSP stuff. And then was and accountable people for each of those PNLs who were, senior enough to be running those areas of business for me. But to get to that, you've got to get through that period of when you are 30, 40 people, you can't have that luxury. You're all running about trying to wear multiple hats and do that. And probably the how do you break through that? I think is for me is, has to be a really strong marketing strategy because the organic growth got us to maybe even 50 staff, but then it was like, the numbers are starting to get bigger here and we're employing a lot of people and actually we can't just rely on big customers turning up at the right time. And we did have a fairly flat and dry year in maybe year, six, seven. It was like, okay we're a flat year is, if we get some churn, we could be, we could start to see some shrinkage. And because we need, if you, so we'd done like 33% on average.

IAN: Nice. Yeah.

ADAM: But it would be a year of 10% and then a year of 60% growth. So it was like, was lumpy like that as well, because it was just purely who was coming along. So I spoke to some, some friends that, work in some big enterprises who are like commercial people and said, look, this is where we are. I don't know what to do. And they talked me through marketing strategies and recommended me a brilliant marketing agency who do sort of strategies and fractional support. And we sat down with them. They reviewed kind of all of our messaging, who we are, how do we talk about ourselves, and then crucially what marketing activities we should be doing on a month by month basis. So we went from doing nothing to, to doing a monthly newsletter, quarterly face-to-face, round tables, webinars, blogs six monthly events we hosted at Microsoft. because we were Microsoft Elevate Partners by that point Elevate is Microsoft's division. It was just for charity then. It's now charity and Education. But we had their support at that point to use their offices to host events and do round tables. And it took about six to nine months of doing all of that to then start to get closing new deals with people that had just been coming over time to those events and things. And then it just, we just had this next kind of stage of rocketing up. And the other piece we did to getting in a an operations director a chap I'd worked with for years and years. And he took us through the Microsoft CSP model as well. So we weren't doing that with our customers. And then we started doing that with all of our customers. And so we get a big new revenue stream coming in from that. We're now actually direct we're a direct CSP, but you can use, when you're smaller, you can use a third party to be an indirect CSP that's open to all MSPs to do that. So that's a kind of new revenue stream as well, which is definitely worth doing. And so yeah we through that marketing strategy went from this kind of organisation where we were living year to year and hoping something came along to making our own destiny doing that. And I can tell you that it absolutely works. You knows there's a reason why Coca-Cola a big company, marketing works.

IAN: Yeah. Yeah.

ADAM: If you do it right and you execute it properly, it will pay dividends for you. That I would strongly advise doing that. But it has to be, you have to be credible and it has to be sector specific as well. There's no good just doing generally saying we can help with your, IT, you need to be in talking to people about them, right? They don't care about it. They care about company.

IAN: And you reckon the events was the most powerful strategy that you were using?

ADAM: The round tables I think above all else have been doing. It all is important because it's all helping to raise your profile.

IAN: Yeah.

ADAM: But the round tables where you just had and 10 to 15 people, and obviously you could look at who's applying to come and make sure you were getting senior enough decision makers in the room and then they'd get, they'd just get like quality FaceTime with you. Probably two, like the third time somebody came to a round table then we'd get a call about, oh yeah. We our, either our contracts up or we are looking to outsource for the first time and we really want to have a conversation now. Can we move to actually looking at some costs and things, so don't expect it to be, you do one round table and suddenly you get a load of leads but stick at it nine to 12 months. And you see the same faces returning then that is a good thing and they're getting ready to do business with you.

IAN: Brilliant. Brilliant. Just one last thing before we wrap up. We here in the Growth Hub, many MSPs are obviously the fully managed offering and some of them do co-managed and some of them don't like co-managed. Is this something that you think an MSP can do both, they can either do co-managed and fully managed together or should they be focusing like you were, because you were just purely, you're not co-managed. Is this a blended thing that you can do? And if so, what's the best way to approach it, because it is two very different business models, isn't it?

ADAM: Yeah, it is. We did always do both from fairly early on, because small organisations had come along and want some help and they wouldn't have any IT people at all. It would in those days, kind the same now, but it was always the office manager, wasn't it, that had the IT contract.

IAN: Yeah, that's right.

ADAM: And you'd, you always got to live or die by the office manager like the relationship good or not there. But yeah, we would do, the thing is we had the experience of the MSP I'd worked for before founding SmartDesc was pure small organisation, full outsource. So we knew how to do that and were able to do that. And then the co-managed stuff we learned through just growing that through those initial consultancy roles. So we were half a consultancy and half an MSP. And so we grew both the co-managed and the full outsource in equal measure as we grew. The margins are less on the co-managed. It's worth noting. Because you are placing people and it needs to be affordable for the customer against them employing their own in-house people. So you're looking at more like 20-25% gross margin on co-managed. Whereas SP full outsource should be 40-45%. But there is that to consider. So you need more scale to then that to be hitting your bottom line, make a difference as you would like it. See, but yeah, no, nothing's stopping. Stopping doing both. And it depends what size organisation you want to play with, because we, I mean we've got some absolutely massive customers now that are taking like 10 people from us on their help desk, because they've got a help desk of 50 people, but 10 of them are our guys. So if you want to do business with organisations like that, it has to be co-managed. They're never going to outsource unless they going to outsource to KPMG or something. They don't, they're not going to outsource to an MSP in the where we play it, if you are more comfortable and you've got a business model that is full outsource, targeted, repeatable automated self-service, then, then you can crack them with that. But we were, having loads and loads of customers, we thought, rightly or wrongly, that was a bit of a headache and we would rather have less customers and bigger ones. So that was the route we went down.

IAN: That makes, a lot of sense. That makes a lot of sense. Very interesting story a brilliant show. Thank you very much, Adam. But just before we shoot off what's going on right now? What was the latest part of the story?

ADAM: Yeah, so October, 2024, so almost coming up to the second year of that, we did a deal with academia technology group who were a mix of a value added resell of our and doing a chunk of services, particularly around device management into the education sector. Big organisation, UK owned, privately owned. They were doing about 150 million revenue and they wanted to accelerate what they were doing with services and also where they're particularly strong in Apple services and hardware. They were doing some Microsoft, but we had a kind of bigger Microsoft capability to bring to bear. And that was what was attractive for me. A) the, the sectors were well aligned and B) we could put our structure into theirs and still keep control of what we were doing for them. And so we've just been we've finished all the integration work a couple of months ago, so the teams are all fully integrated, including from leadership right down to down to everyone working on the ground. All the tool sets are integrated as well. So we're literally just one big happy company now. So we're about 275 staff between us. And I'm on the board as the group director for the technical services. So I've taken over what they were doing with services. So it's been interesting to learn about the world of Apple and Jamf and technologies like that. As well as what we're doing on the Microsoft side and yeah and working with, the biggest universities in the country. And also we're looking to we're doing a marketing piece right now, actually using that same same agency to look at, getting into other markets as well, commercial pub. And so forth. And they've got, 40 strong sales team academia. So it's yeah it's all now a great opportunity. Really good opportunity. Do some good in in all sectors.

IAN: Making a big impact.

ADAM: Yeah. Different, it's a very different world to 10 years ago, that's for sure.

IAN: Yeah. Yeah.

ADAM: I was at the point where I've been doing SmartDesc for 12 years and actually my co-founder left in sort of 2022. So I was sort of CEO and only remaining founder going from 22 to 24. And there is, again, scale doesn't go away. Even at the size we were, it was still frustrating that we were seen as small to some of the contracts we were trying to get. So I was like, okay, next stage of growth. I think we need to be merging here with someone to get bigger and more credible again as that next stage of the journey to go beyond. So we did that deal with academia and now it's good. It's great. It's really interesting work to be working at that sort of even bigger scale overnight and hopefully continue to grow that with them.

IAN: Brilliant stuff. Look, thanks very much for your time today. Very inspiring story about the whole co-managed world, thinking bigger and all of that great stuff. And how can people get in contact with you if they want to learn a little bit more or connect?

ADAM: Yeah. Great. I'm on LinkedIn, Adam Monks. You'll see me at at Smart Desk. That might change to academia soon. We're just going through all the job title changes and things like that. But yeah, I don't, there's millions of Adam Monks is on there. I think I'll come up towards the top of your Google search just ping me reach out. I'll be absolutely delighted to have a conversation with anybody that would like to. So I look forward to that.

IAN: Brilliant's stuff. And we'll put those links in the show notes as well. Good luck in your continued journey in the big wide world and what's going on out there. It sounds very interesting and until and again, yeah, as I say, thanks very much for the the prep and time recording the show today. We will look forward to catching up with you all soon.

ADAM: Thank you very much.

IAN: Take care now.

NEXT WEEK TEASER: Okay in Next week's show. You need to listen up. We're going to be talking about why your biggest client could actually be one of your biggest problems you've ever had. If you've ever lost a client, a large whale client, it can put a shock through the business. We hear this every single week in the MSP Growth hub, and we want to make sure that you do not end up in the same situation. It's horrible, it's stressful, it's just yes, horrible. So check out next week's show where we're going to help you work out how to mitigate some risks so that your biggest client doesn't become your biggest problem. We look forward to seeing you next week.

OUTRO: Wait, wait, wait, wait, wait. Just before you go. And if you're curious about how this episode links with the ability to scale your MSP to a million, or, or if you're already there, accelerate to five, then we want to invite you to come and take the MSP Mastery quiz. And in just three minutes, you're going to get a 360 degree scan of your business, where you can identify the one or two tactics that can help you find more time, engage and align your people, and help generate more leads in your MSP. It's really simple, just click on the link in the show notes. And if you have enjoyed this episode, we'd love to get some feedback from you by means of a rating review on Spotify or iTunes or your podcast platform of choice. We really appreciate every single one of them. Now you can go and enjoy the rest of your day, and we look forward to catching up and connecting with you soon. All the best now.