The Roadmap to MSP Prosperity + Freedom: Shawn Walsh and Dave Cava of Encore Strategic
Growing any business is a challenge - and Managed Service Providers, like other professional services organizations, have their own special challenges to overcome. In this episode, we talk with 2 Managed Service Provider veterans who successfully grew and exited their companies.
Now, Shawn Walsh and Dave Cava help other MSPs through their company and their new book, THE PUMPKIN PLAN FOR MANAGED SERVICE PROVIDERS: The Roadmap To MSP Prosperity: How The Right Focus Leads To Real Freedom
We talk about:
The importance of having a clear vision for your life and your intentions
The critical need to create a clear vision for your company
The importance of strong operating rhythms
Leaning into to strong business fundamentals
How to take and developing ownership within the company
Understanding your numbers - especially your Profit and Loss
Choosing the right business operating system for your company
Full transcript below
This transcript has been edited for brevity
Scott Levy:
In your book, THE PUMPKIN PLAN FOR MANAGED SERVICE PROVIDERS: The Roadmap To MSP Prosperity: How The Right Focus Leads To Real Freedom, you provide concrete, actionable advice and tools. It’s evident you had been there and had the experience and insights from that experience. Can you share a little about your journey?
Dave Cava:
Neither one of us started out in technology. I'll let Shawn tell his story, but my degrees are in pastoral ministries and education. I got into technology in the nineties, came through the dot-coms, worked with some super smart people determined. I was not as smart as they were and went towards management, and I figured out, you know, I know how to prioritize things and talk to people, and not all these people know that, but I can't learn things as quick as they do.
That led to me working for a consulting company in New York City, right by Ground Zero, and they were starting a small business support group. They asked me to run it. After a few weeks, I figured out if we didn't figure out how to make money, they were just going to get rid of us all. Within four years, that was the biggest part of that business.
I left that company and started my MSP in 2007 with a partner, and sold it in 2019. We built a $10 million MSP in 11 years. I started working with Shawn in the end of 2020. I had some crazy life events happen in between there.
Shawn Walsh:
That's an understatement, but I actually did not start out in technology either. I started out as a police detective. I was a police officer, made it into detectives, and was running the detective division. I decided to go back to school, and found I had an interest and a capacity for it. I wound up changing my degree to business and information technology. I started actually doing law enforcement software, working as a contractor for some software companies that did police records management on my days off. Then all of a sudden, technology crept into my day-to-day job doing computer crime investigation and forensics.
Then I realized that I was definitely making a lot more money on my days off. In between, I started my company, my MSP originally as just a side hustle to keep my skills current. Finally, my wife came to me and said, "I don't care which career you pick, but pick one." Financially, it didn't make sense to stay in police work. I had gotten to where I wanted to be and I had this whole new world in front of me. So we went forward, never looked back, started the company, went full-time with locations in four states. We had a lot of hard lessons along the way. I got an offer that we couldn't say no to at the end of 2017. December 20th, 2017 at 4:34 PM is when I sold my company, if anybody's counting.
Scott Levy:
That's a great story.
Shawn Walsh:
I remember calling up my attorney and saying, "Hey, I need you to register this LLC. I have an idea of what I want to do going forward here." He just laughed at me and said, "You couldn't even make it a month of retirement, could you?" I said, "Nope, there's too many ideas bouncing around this head." So I started Encore and we started out doing direct consulting and peer groups for MSPs and for other professional services companies as well.
Then, Dave, when he sold his company, and after he had taken some time off, he came up to me at one point and said, "Hey, this is what I'm thinking about doing." I said, "Well, that blends in perfectly with what I'm doing. So why don't you just come on as a partner and we get to work together some more?" That's where Encore went. As far as my background out of the business side, I got an information technology degree, a business undergraduate, and then I did an MBA through LSU. I'm just always learning, always reading, always trying to figure out new stuff.
Scott Levy:
It is interesting how many people I’ve talked to MSP space that has a unique journey in. No one has yet said "Well, I started out to create an MSP”
Shawn Walsh:
Let's face it, when we all got into it, everybody came from something else because when most of us were younger, there was no such thing as an MSP or even a small IT department. It was these big computer rooms with people in white coats. So the timing was, we had a lot of opportunity, but we all came in from different backgrounds and different areas, but the common denominator is we all either got fired, got laid off, had a boss we couldn't stand, or something like that that drove us to that entrepreneurial path.
Dave Cava:
You find that the typical is that it's not typical, you know, that everybody really does have a story like that. We joke about it when we speak on the road and we start. We start by saying, "You know, everybody gets in this industry the same way they go to Wharton, they get a Harvard MBA, they say, 'What kind of business should I start? I think I'll start an MSP.'" Everybody kind of chuckles because nobody gets into this business that way, you know. It happens by accident. It happens just by trying to get paid to do tech work because you don't like working for somebody else.
Scott Levy:
I talked with someone who they had done several things as well. They had served in the military, they had run a bed and breakfast. They decided to get training and take an entry level job at an MSP…then ended up buying the company from their employer and now has a multimillion-dollar MSP. There are so many rich stories like this, very entrepreneurial. From the standpoint of your business, your three biggest goals right now, or even just your top goals, what's driving you guys to contribute this way now that you've already established yourselves? What's causing you to go back, wade back into the entrepreneurial waters and serve more?
Dave Cava:
You know, I turned down good jobs when I started to get back into the industry, and there are a few reasons why I wanted to go into business with Shawn. Number one, I'm just wired as a builder. I put one block on top of the other, and that's what we did in our MSPs. It's a business of nickels and dimes, right? You're building slow, building slow, building slow. I just love doing that. It was like writing the book, you know, it's the same kind of thing. But the other thing is that the reason we work so well together is we want to make money, but that's not the primary motivation. We both really get off on helping people and seeing them succeed. I was doing that for free for a long time before I started doing it for money. Anytime somebody wanted to talk about a business they were starting or a new career change, let me take you to lunch, let's grab a cup of coffee, let's go have a beer, whatever. It is just a natural outgrowth of who we are, I think.
Shawn Walsh:
Yeah, and to follow up on Dave's point, even with my police background and military background, before that as a firefighter, teaching has always come into play in everything I've done. I've taught college, I've taught high school. I work in a dive shop here at Aruba right now where Dave and I both live part of the year, and I work in a dive shop. I used to be a police scuba diver, so I came to Aruba and I decided I'm going to teach scuba diving. I just enjoy sharing knowledge. I like going deep on a subject and I like seeing people take what I give them and running with it.
Seeing somebody succeed is a huge endorphin rush for me, and I had no stake in it. I wasn't getting a percentage of it. It doesn't matter to me. It might as well have been my own. I just like taking those things that we've learned and especially the lessons that we've learned the hard way and the really painful ones. It's really nice to be able to share that information with somebody and watch them avoid going through that pain first.
Dave Cava:
Yeah, it's like saying to one of your kids, "Listen, I really screwed up by doing this. Don't do that." When it works, it's a wonderful thing to see.
About Encore Strategic
Scott Levy:
So for Encore right now, what's the biggest goal?
Dave Cava:
Last year was all about getting the book done. This year is all about blitzing the world and talking to everybody we can and getting in front of as many people as we can. I really think the end of this year is an inventory with some really solid business goals with metrics attached to them. But it's been so interesting having built a business from scratch. Like I said, we got to $10 million in the last year before he sold. We had 45 employees, you know, and to be back in that startup mode the last couple of years, there's this excitement about it. And there's also this, "Man, I used to have people who do these things for me. I need to figure out how to use this thing I haven't touched in five years."
It's been a challenge, but kind of this challenge that you feel like you're going back to school, you know, or you haven't taken the boat out in 10 years and you're getting it out on the water. It's really exciting to see what's happening right now. We went into this year, super excited with the book coming out and a lot of things just looking up. I'm so blessed to be able to say four months into the year, the excitement hasn't ebbed at all. We're really psyched about what's going on right now.
Shawn Walsh:
Every engagement we have with the book, we've got people lined up to talk to us and it's just a lot of fun. As far as the goals for Encore though, Dave and I sat down and eating our own dog food, we made sure we started the year with a written business plan, a written budget and a written marketing plan. We sat down and I didn't hesitate. I said, "My goal this year is that we're going to double the company." We already have a decent sized team. Right now we have eight people on the team and revenue wise and that size, the goal was to do 100% growth this year. We both know how to do it.
It's interesting to contrast doing it the second time versus the first time, not because you still make mistakes, but you catch yourself a lot faster and you go, "Oh yeah, we shouldn't have done that." It's funny how much faster you can hit the accelerator. I guess it's the difference between maybe learning how to drive a car when you first start driving and maybe being a race car driver and moving from NASCAR to Formula One.
Scott Levy:
That's interesting too, though, because not everybody has that experience. I've worked with a lot of founders that had that first exit. Depending on the size of the exit, sometimes there's a little bit of overconfidence and they try to run things like on autopilot and what you just mentioned there was observing and kind of going through the learning loop and reflecting quickly. I don't know that everybody does that, but I agree when you do, it really does make a difference. So that's an interesting insight.
Shawn Walsh:
Yeah. That's an interesting analogy that you bring up. I have seen some people, they think that they've been through it, so "I'll just hire other people to do it and stay on the outside." Dave and I are very much both hands-on kind of people. I'm having fun being back in the trenches of a startup. I don't want to stay there because I did the first time I stayed in the hands-on mode way too long, which is what we teach people to get out of, but it's fun being back there. It's fun being back there with something that's a little bit different because there are new lessons to be learned.
As you said, we can cycle through that learning loop a good bit faster than we did the first time because back then we didn't know what we didn't know. Now we're very aware of when we don't know something. The other great thing is that we've both built up these fantastic networks that when we don't have the answer, which is still often, we don't know everything, but we sure know where to go get the answer and we know who to ask and we have those resources available, which is really kind of neat.
Scott Levy:
I like this idea, when we did some of the prep, you said, "We want to eat our own dog food here," and there's so much good information in the book on how to build up an actual business and take yourself out of the business. It's neat to hear, "Yeah, we're enjoying that process, doing it for ourselves."
Dave Cava:
Yeah, I oversee, Shawn alluded to me telling him what I was interested in doing and I said, "I think I can do recruiting for MSPs because we got really good at it in our MSP. We've learned some things I thought a lot of people hadn't figured out." When I brought that to him, he said, "Oh, you know, I think that'll fit really well with what I'm doing." It really did take a year or two to really figure out how it all fits together because it really is very consultative. I say all that to say this, that I went into that from the beginning saying "We're going to build tremendous processes from the very beginning. We're going to put together a manual." We have a 40-page manual on how we do our recruiting. It's very scientific. We have processes, we have steps.
I just did my first interview with a candidate in two years the other day. So there are some things that we learned the first time around and that the coaching and stuff is really a lot harder to hand off, but there are certain aspects of the business that from day one, we said, "We're going to do this the way it should be done, not the way we would have done it the first time around, which is this dive headfirst into everything and take it all on yourself until you just burn out and can't take it anymore. And then go, 'How do I get out of this?'" We have learned some stuff and there's a lot...the confidence is a two-way street, right? Because you can be overconfident, but when you have had success, it definitely makes you not afraid to try things. I was trying something I hadn't seen somebody try before. I had the confidence to do it because our houses are no longer at stake.
When you think something is a good idea and you've got a good track record, why not try it? It won't always work, but it's part of being older and having had a successful exit is that you can try things, you can pivot, you can have, and you can do it all with a little bit of confidence and a lot less fear, right? Gary Vaynerchuk, I heard him speak one year at a conference and I would boil his whole speech down to this: "If you go into every day of your career grateful and fearless, you are a percentage over 99% of the people in the business world." We try to do that.
What holds Managed Services Providers back from growing their business?
Scott Levy:
With all of the MSPs that you guys coach, and I know you've got a goal of reaching a thousand, and with your experience in the industry, what's the one thing, if you had to pick out one thing that you see hold owners and CEOs back? What would that be?
Business fundamentals
Dave Cava:
Shawn and I had a little different answers on this. I like to talk about the statistic that it's 4% of businesses in America that get over a million dollars in revenue. It's 21% of MSPs. I think it could very easily be 75% of MSPs if MSPs really embrace the fundamentals of the business. There are so few people paying attention to the business side of that business. You know, they're focused on technology, tools, and making clients happy. They're really not wired to look at how does a business become successful.
Shawn Walsh:
And often they're spending the time trying to make the wrong clients happy.
Knowing your numbers
Scott Levy:
So Shawn, you've got a slightly different take?
Shawn Walsh:
Yeah, I mean, if I had to boil it down to one thing, and it falls into what Dave's saying, and I just kind of narrowed it down a little bit more, but it's the numbers. It still shocks me how many people I walk into and they engage us for consulting or they come into a peer group and I ask them, "Okay, what's your profit this year?" Last week I was just, I had to bite my tongue. The person said, "Well, I don't know. I haven't gotten my tax return back." I'm like, "No, it doesn't work that way. You need to know your numbers every single day. You need to be running those reports every month." It amazes me how many people try to run a business without a budget. One thing that I learned along the way is that the most important report that I can run each month is the budget to actual. As long as you have a well-defined budget and sales forecast, if you look at that every month, you're going to know whether you're on track or off track. And if you manage to that, you're going to hit your goals.
There's no better tool that I have found yet that will outperform that report for that thing, because so many people, they go, "Yeah, we did a budget last year and we kind of blew it." I'm like, "Well, what did you do with it after you wrote the budget?" Like, "Well, we looked at it at the end of the year to see how it did." I'm like, "Yeah, no, you've got to be using it all the time, but people just go along and they're not watching the numbers. They don't know the basis for the numbers. They're not sure of the levers to pull." They're kind of winging it. When we bring on a new client and I ask, "What's your profitability?", the other thing that kind of makes the hair stand up on the back of my neck is when they go, "Well, I think it's about..." I'm like, I just cut them off right there. I'm like, "Okay, so you're telling me you don't know what your profitability is, so you're guessing and you need to know those numbers." Everything else gets managed after that.
Scott Levy:
Yeah, both of those perspectives very much resonate with me and this was my experience reading the book, you know, listening to the stories you guys told. You guys felt like you bared all, but as we talk through these, I'm thinking about, I've managed operations for companies at different times and that was the biggest thing we would do in our monthlies and our quarterlies was "Let's look at the budget. Let's look at the profit. Let's look at the numbers and how we're performing before we get into anything else, let's level set here."
CEOs and owners must take ownership as leaders
Scott Levy:
On the management side as well, you told about the amount of work one has to do on oneself to say, "What am I doing? What do I need to do to lead better?" Some of the stories around that really resonated with me because occasionally my family tells me where they think I need to improve and reflect some things that may be seeping into how I'm leading or not leading and doing a poor job of it. Those things really resonated for me in the book.
Dave Cava:
That was mostly Shawn because it was so tied into his business story, which is like a movie where everybody walked out on everybody, he lost half his company. I've got parallel stuff. I look back on the things I did in my business and some of it was just things I was ignorant about and didn't know. Some of it was stuff that I did know and waited far too long to do anything about because I didn't want the conflict, I didn't want to rock the boat, I didn't want to work on the things I needed to and not the things I liked. Those are just things that most MSPs are held back by the owner. You can confirm this all day and all night, they get as far as they get because of the owner's good qualities and they don't get any further because of the owner's bad qualities. Being able to work on those bad qualities and change them is a tremendous challenge. You can teach people and it's going to help, but ultimately the thing that keeps MSPs from going much further than they get is usually the owner.
Scott Levy:
I think that extends to any business as well.
Shawn Walsh:
If you're a business owner, if you're not willing to look in the mirror every day and go, "What am I doing wrong and what can I improve and where can I be better? Not just as a business owner and a business person, but as a human being and as a leader and as a mentor," you're not going to go very far. If you do those things and you come out in a good place in the end, you're going to be a lot happier and you're going to have a lot more to show for it. And you're going to feel a lot better about it. There was a lot of self-reflection that I learned to do, especially after the first couple of years, because I was struggling.
You talked earlier about fear and, you know, I had had several years in a government job, I had guaranteed benefits, I was vested in the retirement system. I could have stayed there and been comfortable. I had a new house with a new mortgage and a new kid, the third new kid on the way. I went to my wife and I said, "I think I want to give up those benefits to start this business." She just said, "That's what we want to do. We'll figure it out." I had a ton of support from her, but there was a lot of pressure and there was a lot of fear. I went into that like failure is not an option here. I allowed way too much of that fear to control how I managed and how I viewed things. Managing from a standpoint of fear is not effective.
I talk to clients all the time. I'm like, "I get it. I completely understand, but it's not going to be effective. So let's figure out how to change it." Learning how to let go and learning how to hire the right people, trust the right people, makes it a lot easier to let go, give the fear and trust people that you can hand things off to. You've got to be willing to look in the mirror every day and, number one, if your business has issues, start in the mirror in the morning, you'll get a lot further.
Dave Cava:
That's what they tell you in angel investing 101, you're not betting on an idea, you're betting on a person, because the founder will make or break the company.
The importance of clear company vision and a clear strategy
Scott Levy:
When you see CEOs struggling, we talked a little bit in the prep work, what do you see holding back? You guys mentioned not having a vision or a strategy, and/or not communicating that vision to that strategy. What are some things, why do you feel it's important and what can the CEO, the leader, owners of even a small MSP, what can they do to overcome that challenge?
Shawn Walsh:
I'll jump in on that one because that one kind of hits home too. When we were having the struggles with the company, one of the things that I remember very clearly was my wife coming into my office and closing the door and she said, "You know, there's no doubt in my mind you have an incredible vision for this company. And the problem is nobody out there knows what it is." That kind of really hit home with me.
I just assumed everybody's going to get it through osmosis. "I know what I get it. Don't you see it? It's right there." We do a lot of personality profiling and one of the things that was really instrumental in my company changing was learning how to use personality profiling and communications tools and that helped me with my own journey quite a bit. If you know anything about DISC profiling, you know, most leaders tend to be high D and they're over here, and I'm 100% D, natural and adapted. Sharing with others is not my forte, I'm very task oriented. I had to work to change that, but it was amazing when I started having regular meetings and we would start the year with an annual meeting and I would spend an afternoon explaining what the vision was for the next year.
The first time I did that, it was uncomfortable. I was moving out of my comfort zone, but I'll never forget the end of the first quarter, one of my managers coming up to me and saying, "How do we do? You gave us this big speech at the beginning of the year and you set these goals, are we hitting them or not?" I was like, "Wow, you really listened." I made sure that every quarter we gave updates and we checked in along the way. It was amazing how much ownership the team took of those goals and made them their own. That's when I really realized, "I can let go. I can delegate, but they have to understand why." People don't just want to go to work to check a box every day. They want to go there with a purpose. If you share that vision and you've hired the right people for culture fit and core value fit, they're going to embrace that vision with you.
Scott Levy:
You were speaking my language there.
Shawn Walsh:
There's still owners that I work with all the time that they have a really hard time sharing that and articulating what their vision is. Some of them don't even understand there's something back there, but I don't even know that they can articulate it to themselves sometimes.
Really taking steps to get that vision written out, clarified and cast in stone so that you can present it to somebody else and say, "This is where we're heading." Now you can, it's now when you know where you're going, it's much easier to set a path to get there than if you're just wandering around aimlessly, hoping to get to someplace that you're not sure exists.
What were you going to say, Dave? Go ahead.
Dave Cava:
You can't have a plan without a goal. You have to know where you're going to have a plan to get there. It's like if you're driving and you say, "I don't know where I'm going, but I know how to get there." Like that doesn't make any sense.
But that's how a lot of MSPs operated for years and years. I don't want to just talk like I'm smacking down everybody else. The first five years plus, I mean, we were just kind of wandering. You want to turn everything into a gap analysis because once you know where you're trying to get to, it's just how do we get there? What do we need to do this year? What do we need to do next year? What do we need to do the year after that? And then, as the realities of how things are going set in, but without that, it's hard to get anywhere by accident.
Scott Levy:
I'd love to know how quickly, once you got that clarity and started to emerge and you started creating those operating rhythms of checking back in with it, how quickly did you start to see changes, whether it's in ownership, people are taking or the results you were getting from a financial perspective, how quickly did that start to manifest?
Dave Cava:
That's a good Shawn question, but I'll tell you, I'll tell you one brief story. I ran some numbers. I have some online peer groups that I've done since late 2020, when I first started working with Shawn. And there's 17 companies that have stayed in those peer groups the whole time. And I figured out that in 2020, when I started doing those peer groups, the average company age was 17 years and they had an average of 1.3 million in revenue. And after 3 years of doing the peer group, 2020 to 2023, that average of 1.3 million had doubled. 17 years to get to 1.3, 3 more to get to 2.6, and I really believe that a lot of that was just having the education and the community to have people say, "Here's where you're off track. Here's an idea," you know, and it doesn't take a lot of extreme intervention. In some cases, it's just everybody has blind spots, right? We all have them and these guys, some of them go decades. Having anyone point out, "Oh, here's something that you need to tweak and it'll change your whole business." And once you get that in your life, it's all different. Things can change pretty quickly. You know, I had four companies in one peer group, like a million dollars the same year, so it's not overnight. But in a year or two, a lot can change.
Shawn Walsh:
Yeah, I would agree with that. And it's figuring out the right pieces, but when all of a sudden you get the pieces right, the chain, it's like flipping a switch. At least it was in my case. And there were three, what I would consider, transformational phases of my company and my growth and the company's growth. Number one was learning about personality profiling and communication styles and emotional intelligence that got me out of being the bad boss and realizing and understanding how I was being interpreted, you know, because again, my wife, who's very intuitive, she came into me and said, "You realize everybody here is scared to death of you, right?" I'm like, "Me? I'm a teddy bear. Who the hell would be scared of me, right?" And then I do this personality profile. I'm like, "Oh my God, this is why everybody thinks I'm an ass," and, you know, and I, and all of a sudden I had this self-awareness and then, you know, I started working on bringing my emotional intelligence up and being aware socially and of myself, you know, that was number one, that was changed my leadership style, changed the culture of the company for the positive and made me better.
The next phase that really kind of put fuel on it was bringing in a business operating system. I went to a Gazelles Verne Harnish workshop, and then I got introduced shortly after to the book Traction, and put those two together because I don't know if most people realize it, but Traction really came from Scaling Up from Verne Harnish. And so when we implemented a business operating system and we had a process for making sure that things were moving forward and holding people accountable, that really did it. And the third phase was understanding how to push leadership down the organization.
And the two books that I recommend to everybody on that is Turn the Ship Around by David Marquet, who was the commander of a nuclear submarine. And his second book, David's second book is Leadership Is Language, which is where we as managers often, we have goals and we have the team, but the way we phrase things and the way we engage people sometimes sabotages our efforts and how to make sure that we're not using language in a way that is detrimental to our goals.
And what that did, that's all about creating leaders at all levels of the organization and the short version is if you implement this properly, instead of people coming to you and saying, "What do you want me to do? How do you want me to fix this?" They come to you and say, "Here's the problem I'm seeing and I intend to." It's called intent-based leadership.
Scott Levy:
Oh, I like that.
Shawn Walsh:
When we got those three, those three things aligned and throughout our organization, everybody understanding their own profile and the profile of all their team members, understanding that we have a system for operating the business and understanding that we are not here to not make mistakes. We are here to achieve excellence and every, and that is everybody's job. We grew 400 percent in 18 months. It was like putting rocket fuel on the company. I mean, those three things just combined created such an effect that not only fostered growth, but created an environment that was fun to come into. I mean, before, I would have a problem and I'd have a knot in my stomach thinking, "Oh crap, I got to go in and I got to solve this problem thinking it's all on my shoulders." But now a problem comes up and I go, "I can't wait to see what the team comes up with to solve this because I realize now I have this whole team of people who are empowered to solve problems and we do great doing it together because we all know how to communicate effectively." And all of a sudden, "Come on, bring the problems on. I defy you to throw something at us. We can't solve because," you know, things were just clicking and it was just, it was a fun thing to be part of.
Dave Cava:
I don't know if you realize it, but it's just a fundamentally different view of people and employees to approach your staff like that. You know, you have to see tremendous potential and value in them to do that versus a lot of business owners just say, "I need this thing to get done. So let me find somebody who knows how to get it done. If they're not getting done, I'll just get someone else who can get it done." And empowerment is really the right word there.
Scott Levy:
It's the word you used, that it's a different view. It's a whole different view of people. It really is, really is and I love that view as well and I think you're right. I think we all know the adage, "You need the right people in the right seats," and I agree with that, but I think people can be, when they don't develop that emotional intelligence that you talked about, that self-awareness, it becomes easy to just keep swapping people out, creating a treadmill of people versus going, "Wait a second, maybe I'm not being clear enough with our vision. Maybe I'm not managing and leading right."
And I love that. There's also this idea of what are the steps we take? What's the language we use?
Shawn Walsh:
The nice thing now is knowing this stuff going in and putting it in place. You know, this is where we're able to scale the new company so much faster. And, you know, right now, I mean, we have our level 10 meetings with our team and I can't wait to jump into them because the ideas that come up and the problem solving and the sharing. That's something that we had to build up to and learn how to do before. Now, Dave and I have been down that road and we can impart that knowledge much faster to our team. And the team we have now just embraced it right out of the gate, because they didn't have to go through a bad phase while we learned stuff. So to them, this is a really fun place to work.
I have a new person that we're onboarding and she's going to be doing finance and administration for us. As I'm showing her the software, she's showing me things in it that I didn't even know were there. She's like, "Well, you got to go over here and click this." She goes, "Well, no, actually you can do it this way." And it's a software that she's probably never used before, but she feels comfortable saying to me, "No, let me show you," which before an employee would never do that because of the way we were engaged. But now our team is so highly engaged, they'll challenge me and Dave all the time and we love it.
Scott Levy:
I think it's a must have.
Dave Cava:
There's an onboarding that we do when we take on a recruiting client. The whole reason we started doing that was to get the expectations aligned about the process. But the other thing that we found is that when we share core values with our clients and they believe in what we're doing, the engagement's going to go great. If they don't, it's not going to go right. And we've just started saying no to more people. When there's somebody that we're talking to that is committed in principle, but we don't see it being played out in their company, we're like, "We're going to go through this with you." And we talk about the management mentality versus the mentoring mentality.
One of the most successful MSPs I ever observed had six remote locations. People that ran those remote locations, their title was actually mentor. They knew that the foremost part of their job was to make the people who work for them successful and to bring out their potential. And there's a whole mindset shift that takes place in an MSP when it becomes about the employees and not about the clients, you know, when it becomes about, "I have to keep the clients happy, so you yell at the employees cause they're not keeping the employees happy, the clients happy" versus "I'm going to build up these employees, I'm going to let them work on things they're naturally good at. I'm going to maximize their skills. I'm going to let them be creative in their jobs. I'm going to let them help design the processes that we run this business off of, and they're going to have ownership." Like Shawn had in his company, the clients are going to be happy. You try and make the clients happy and the employees aren't happy, you're not going to have happy clients either. You try to make the employees happy and you do it the right way, a way that doesn't coddle them, but builds them up. And you're going to have happy employees and happy clients, and it's going to be an easy business to grow.
Shawn Walsh:
There was a quote, there was a statement that I heard made that kind of stuck with me and I hope I'm going to get it right, but it was that your client's best experience is never going to be better than your employee's worst experience, following along the lines of Richard Branson, you know, who says your job is not to take care of your clients. Your job is to take care of your employees. And if you do that right, they'll take care of your clients.
Scott Levy:
Yeah, I've seen that play out. We've got a car dealership or a series of car dealerships here in Dallas known as Sewell, it's a Sewell family. I think Sewell Lexus - those dealerships are top performing Lexus dealerships at first, and now they're in other brands. But after I read about them and I'd heard about them, they're just known for outstanding customer service. And they're known for, if you need your car fixed or need work done on it, they'll treat you like a Prince or princess because they know you're more likely to buy.
So early in my career, I got a Toyota. "Let's see how they treat me." Sure enough, it was fantastic. Sure enough, I ended up buying a car there, but as I talked to the people there, cause it is an incredibly wonderful customer service experience as car dealerships go. Every one of them just talked about how well they're treated and people stay there through their careers.
And you had people who were former attorneys who just got tired of that rat race and it just speaks to what a great experience you can create for your customers when you treat your people well. And then the other idea I really liked that you guys put forward is the idea of everybody should be core values aligned. We hear a lot about core values alignment with your employees, but also your customers, your partners, everybody ought to be core values aligned.
Dave Cava:
It's a good predictor of how things are going to go in their relationship.
Shawn Walsh:
When I was interviewing people for the book, one of the people that I interviewed was one of my very first clients who became an incredible mentor for me. When I met him, the company was three people and we had three PCs and it was actually one of my competitors that sent him, told him to call me because he was too small for that. This also be careful about the ones you pass up on, cause as soon as I met him, I knew he had an amazing vision. And before long, we were managing over a hundred endpoints. We were managing offices in New Hampshire, Chicago, and in China.
He was my number one client revenue wise for many, many years. But more importantly, I got a great mentor out of it and I told him, I asked him when I was interviewing him, I said, "Dave, there were so many times when we were going through growing pains or I lost focus and you would call up and say, 'Hey, we need to meet.' And you'd pull me into your office and say, 'You're screwing up. You need to fix this, or I'm going to be gone in 90 days.' And you always gave me the opportunity to fix things. And you always taught me a lesson in the process."
I said, "So many other clients along the way just fired us or would never give us that opportunity or they just disappear. Why did you take the time to help me fix it? Cause that wasn't your job was to fix my company." And he answered without hesitation, he goes, "That is simple. We share values. We run our companies the same way we raise our families the same way." He said, "You know, I can teach you to fix something in your business, cause I know business well enough. I can't teach you to be aligned with my values."
I was like, "Wow, that's a great story. That's powerful stuff right there." You know, really powerful stuff. And you know, that's one of the things that we push with clients now is that you not only have to look at the core value alignment of your team with you and the company, but you got to look at all your clients and say, "Are we really aligned?" You know, it doesn't have to be a hundred percent one to one, but you certainly can have clients that will challenge your core values or ask you to violate them and expect you to continue to do business with them.
Scott Levy:
I really like that. And I liked the idea of, if you are core values aligned, you can even be doing business with your competitors in a way that they become less your competitors. You're talking about getting a referral. Yeah, I love that idea. It was very go-giver ish. It makes me think of Bob Berg's book that I know you guys also recommended. Two books that every employee got when they hired, when they came to our team was the Go Giver and Patrick Lencioni's Getting Naked.
Shawn Walsh:
I think that's why Dave and I decided immediately that we wanted to do business together going forward because we both had a go giver mentality. One of the things that Dave and I did for many years was to run the we were facilitators for ConnectWise's regional groups. We actually did the first group. So we were the Northeast ConnectWise user group. We were the first ones. We were the test case. Dave and I were facilitators along with M.J. Shore and Brett Chaffee.
You know, one day somebody came up to me at that meeting and they said, "Oh my God, what are you doing?" I said, "What do you mean?" They said, "You're up here on stage. You're sharing all your best practices and all your secrets. And these people are all your competitors in this room, they're all from the Northeast area." I said, "I'm not competing with you guys. I said, there's so much business out there for all of us. And the other thing is you don't have the secret ingredient." "Like what's that?" I said, "Me. I'm telling you my strategies. You can't just copy somebody else's strategy. You're going to put your own spin on it, make it your own for it to really work effectively."
So I mean, if you want to copy my strategy, you might get something out of it, but it's not going to take it to the next level. I firmly believe that we get more from sitting in this room, sharing with one another and helping each other than we do by thinking that we're going to keep something back because you're my competitor.
In the office park where I had my office, it was an office condo, so we own the building. Well, we were Paradigm Computer Consulting and there was Parent Computer Consulting and we were four doors apart. So we constantly got each other's packages and things like that. But the owner of that company and myself were both on the board of directors for the condo association. We worked together for 10 years on the board. And people would come in and say, "Oh my God, your competitor is right next door. That must be terrible." I said, "Are you kidding? In 10 years, I've taken one of his clients. He's taken one of mine. We both tried to give them back."
We worked together. We did more knocking on each other's door going, "Hey, I'm hitting the wall with something. Have you ever run across this or has one of your guys seen this before?" And I mean, we're four doors apart and we never competed head-to-head in the same market. There's so much work out there for everybody. Your competitors are not who you think they are.
Dave Cava:
You have a lot more friends when you see everybody as a friend. We were in financial services IT in New York City, which is very cutthroat. And when we got the first real serious offer to sell our business, we'd gotten a few over the years that never, we weren't ready at the end. We got a great offer from a company that we didn't like at all. There was no core values alignment.
And over the years we had gone to all our major competitors in financial services IT and said, "Hey, let's grab some coffee. Let's have some lunch, you know, talk shop." And there was one company that took us up on it. All the rest of them were like, "You think we're talking to you? You're going to try and steal our salespeople," you know, whatever it was. And one company said, "Sure."
So when we got that big offer from the company we didn't like, we went to that one company and said, "You know, we've got this offer where we are in a position where we think we're ready to sell the business, but we want to see our clients taken care of well, and we want to see our employees taken care of well. And we can't think of a better fit. You're the only ones we trust that will do a good job." And that cup of coffee that they took us up on led to us selling our business to that company. You can get so much more from just being cool about things. No one's your enemy until they show you they are.
Scott Levy:
That is like feels like it came straight out of one of the Go Giver books, right? I mean, just, I love that story, and maybe because it took me, I think in my career, it took me a long time to think that way. I don't know if it's a sports background or what, but it just took a long time. It was all, "Let's go, let's go, let's push. Let's let others push us to be better." But that quickly spins negative. And you miss opportunities, right? You're not thinking abundantly. It's amazing the opportunities that come up when you change that mindset.
Dave Cava:
You know, I think that the sports metaphor is a good one because you can have two people compete against each other and really, really want to win. You see this all the time. And my son got me into MMA. You see this all the time in the MMA world where these guys are killing each other and afterwards it's nothing but respect and admiration and affection. It's not all the fights but it's a lot of them. I don't want to kick everybody's ass, you know? I don't see the two as in conflict. I want to play my best friend in ping pong. There's nobody I want to beat more than my best friend.
Shawn Walsh:
Yeah, good competitors make us all better.
Scott Levy:
Agreed.
Shawn Walsh:
And that's the thing, you know, same thing in sports. If you have a team that you can just go out and crush, what the hell are you learning? You're not getting better, you know? The other thing too, is like right now, especially so many people want to buy MSPs and I see so many of my clients say, "I want to buy companies. I want to expand through acquisition." When I grew my company, we did, we expanded through acquisition. We did six acquisitions. Every single one of them came out of my network. I never dealt with a business broker. I never had a prospectus. It was all just through networking. I bought people who were in my peer group.
Just people, one of them came from somebody who I called up for help and they said, "Hey, can you help me?" And after we were done talking, the end result was I wanted to buy the company. It was just being out there and helping people returned opportunities back to me tenfold. I mean, is there somebody out there who used the information against me or took a client from us? But it was so minimal in the grand scheme and like I say, half the time they were taking a client I was happy to have them take.
But there were so many more things that I got in the opportunities of the acquisitions or partnering with people or having strategic relationships with companies. I mean it made the negative part was so minuscule compared to the benefits of it.
Dave Cava:
I love capitalism. I love business, you know, and I love the mentality that goes along with it when it's being done in a healthy way. The whole idea behind healthy capitalism is who wants pie because we can keep making pies, you know? I don't need to fight you over that piece of pie. Let's go bake some pies. That's the story of America. It's a rich, wealthy country with a high standard of living because we know how to make pie.
Shawn Walsh:
I mean, the mentality is people have to stop thinking that business is a zero sum game. It is absolutely not, if done correctly.
Scott Levy:
Completely agree. So one of the big ideas I got out of this, and you know, maybe it's projecting, but you guys have also said it and it's also in the book, is just the importance of having a vision. I think people think of it as something ethereal that you can't sit down and do, but it's this idea of like, what do you want the business to look like when you're done with it? And maybe that's, maybe you're retiring from it. Maybe you're selling it, whatever the case may be. But that that's a core thesis you guys have, right? Know what you want your outcome to be and what do you want the business to look like so you can get that outcome? Am I saying that accurately? Do you think?
Shawn Walsh:
I think so. Yeah, absolutely. You know, throughout the growth of the company, every company goes through ebbs and flows and you go through periods of plateaus and then you get out of it. And whenever I had a clear vision of what came next, we made it to it. And then we'd plateau until I had the next vision of what it looked like. And I always remember that when the vision was clear, things moved a lot faster and they grew faster. And when things got fuzzy and I wasn't sure, things would stagnate and plateau. So I'm a firm believer that it's not just something out there in the ether that is a target. It is a milestone that you're aiming for, and that you're going to achieve much clearer when you can see the marker.
The importance of your own vision, values and purpose and how they help
Scott Levy:
How do you define entrepreneurial success?
Dave Cava:
We talk a lot in the book about how it's possible to, to win a business and lose it life and, and ultimately you want to win a business so you can win it life, right? So we say entrepreneurial, entrepreneurial success is prospering to the point where you have control over your time and are in a position to help others, you know, a position to give back.
And cause really ultimately what you want is to make a great life for the people around you. To be able to control your own, your own, uh, life, you know, to have freedom and to, and to, and to be able to give back so that you have fulfillment and you have purpose, you know, that, that we want to get people all the way to the end, not just to a nice fat bank account.
Cause we know there's people who have nice fat bank accounts who are miserable. Your business should facilitate your dreams, not destroy them.
Scott Levy:
I love that.
Dave Cava:
You don't want to lose yourself in the process.
Scott Levy:
And you've mapped out how to do it. Not, not make this all about the business owner, but actually lift everybody up as you go in the pumpkin plan for MSPs.
So, uh, it's one of my favorite things about the book. You, you've got it all in there. Well, annotated no less with all your, with all the different books and things that, that you guys pulled from.
Shawn Walsh:
We had some good help. There's a lot of big shoulders we're standing on. Yeah.
Scott Levy:
Well, well done.
Dave Cava:
I used to teach high school Sunday school many, many years ago.
And one of the things I would tell the kids is 99 percent of the time, the thing that's the right thing to do is the also the thing that's going to make you happiest in the long run, right? Maybe not that day, maybe not the next day, but if you keep doing what's right, in the end, you're going to have a much better life.
It's going to make you happy. And the same thing is true in business. Like, why don't you fight with your competitors? Because in the long run, it's really not going to leave you better off most of the time. I worked for a .com one time that eventually went bankrupt, that spent money to get a billboard truck to drive around their competitor and taunt them.
Where did it get them? Eventually it got them bankrupt. That's not how you want to go at life.