How to Build a Best-in-Class $15M MSP in a Small Market w/ Ed Knott

Welcome to the $10 Million MSP Podcast. This podcast is where I dive into the real stories of MSP leaders who have gone beyond $10 million in revenue, how they built their teams, created scalable systems, and turned their businesses into valuable wealth-building assets. I'm Brian Hoppe, strategic coach to MSPs. I work with MSPs generally in the $5 to $50 million range. In each episode, I sit down with leaders who have built MSPs beyond $10 million in revenue to unpack the inflection points that truly matter. From the personal stories behind their journeys to the fundamentals like culture, operational maturity, and driving profitability. This isn't another MSP podcast about tools and tech. On the $10 Million MSP Podcast, you'll get behind-the-scenes conversations with leaders who've built thriving MSPs, their biggest wins, their toughest lessons, and the practical takeaways that you can take back and use right now. If you're an MSP owner who knows that growth starts from within, that mindset, leadership, and strategy align to create both wealth and meaning, then this show is for you.

New episodes are released every other week.

So let's jump in.

All right. Well, we're back again. My guest today is Ed Knott with Applied Connective Technologies. He's the CEO and owner. Ed, welcome to the show.

Hey, Brian.

Thanks for having me on. Glad to be here.

Yeah, absolutely. And I'm excited to dive in. So, so just to start with a question, In your opinion, what do you think the difference is between an MSP owner who kind of stays stuck at like that $5 million mark and one who kind of, who goes beyond that to build a $10 or $15 or $20 million MSP?

I think the key difference, you know, and just looking at kind of our history is, you know, at which point do you put the people around you that allow you to kind of pull yourself out of the weeds and look at some bigger picture things? You know, I wouldn't say that that happened to us at $5 million. I think that started to happen to us probably closer around the $10 million mark. And so, it was just a lot of muscle feel for a lot of years. And a lot of that was me primarily putting my head down, just working hard. And so, at the $10 million mark, I think that's where I really leveraged peer groups a little more, other leadership resources, and really pulled myself a bit out of the weeds, if that answers your question, as far as kind of when that turning point was for us.

Yeah.

Yeah.

So, so I'm hearing, uh, having the right people around you and really like diving into leadership as opposed to kind of being the one who makes everything happen.

Absolutely. Yeah. And I think leadership, um, can be described a lot of different ways and it looks a lot, you know, like a lot of different things. And so I think my leadership style was just something that kind of, uh, I didn't think much about. Um, you know, it was really, um, you know, just lead by my actions. And so I think it really had to transition to really putting people in place that I could leverage, you know, their leadership skill sets that were different than mine to allow us to kind of get over some of those humps as we've grown.

Yeah. Yeah. Yeah. And, and, and it kind of allows you to, um, elevate, right. And focus on what's most important for the business as the, as the owner.

Yeah. You know, it sounds easy. Right. And so we've all sat in those rooms where, you know, work on the business, not, you know, in the business. And so, you know, I heard that for years and it's just like, you know, trying to understand that. Um, it, it's tough, right? As an owner, as a founder, you want your hands in everything. And, you know, even to this day, it, it, you know, where we're at now, it's still a struggle to just kind of, you know, to trust people.

Mm-hmm.

Uh, to stay in their lane and do the things that are necessary and for me to kind of keep my hands out of it. But it's really, mm-hmm, giving them the trust and confidence To, you know, just kind of help us take us to that next level.

Yeah, yeah. Well, and that can be the hardest thing is just like, is letting go.

Absolutely.

And taking your hands off of some things and purposefully not doing some things along the way. For sure.

Right.

Yeah. Okay. Awesome. Well, thanks for that. I want to give you a chance to just kind of, you know, give some context around you, the company, Maybe kind of like the quick version of your journey. How'd you get from, you know, well, from where you were to where you're at today? Maybe like kind of just like the size scale of, you know, of the company in terms of revenue, team, like that kind of a thing.

Yeah, I'll try to make this the quick version. I think our story is a little bit interesting. You know, our headquarters where I'm sitting right now is in Albi, Nebraska. So we're in northeast Nebraska. Nebraska, large geography, sparsely populated. So we're really sitting in a rural area. In rural, you know, the community I'm sitting in that I call home, I've been here about 22 years, it's 1,600 people. And so, you know, to start a tech company in this type of geography was, you know, a challenge, but it also, I think, goes to show that, you know, some of the things that may prohibit people from growth, you know, markets and geography, like a lot of that can be overcome, you know, if you're creative.

Mm-hmm.

But, you know, going back to 22 years ago, this May will be when Applied Connective was founded. I had 2 or 3 years of experience in the financial space after college. I had an opportunity to move back to rural. Rural for me was important. I grew up on a small farm and ranch in north central Nebraska. And so in the late '90s, decided that I was going to kind of chase tech opportunities. I didn't know what that looked like, but I knew there were opportunities there. But ultimately, you know, about that period of time, so 2004, I was looking for a place that I wanted to start a family. And so met a gentleman that was selling phone system. He kind of came from the copy print space and he was getting inquiries related to IT services and help people adopt the internet and businesses adopt the internet and such. And so, he and I founded Applied Connective in 2004. Fast forward to 2015, and that's when Tom decided he was gonna retire and I purchased his interest. So, over that 10-year stretch, we went from 2 guys trying to figure out, he had some business savvy and a little experience there. But really, my focus was growing the IT side of the business. So, you know, when he exited, we were about $1.5 million. So, you know, a little over 10 years ago, fast forward to end of 2025, you know, we closed out the year about $15.5 million. So, a lot of growth, you know, over the last 10 years. And, you know, it's been fun. It's been interesting. But, but yeah, I mean, in a nutshell, that's, that's kind of where we're at. Wow.

That's great. So, 10x in 10 years. That's a, that's a great That's a great story, man. So, okay, so about $15 million in revenue and about how many team members?

I just brought on number 68. So we don't outsource. All of our team members are full-time, mostly in office. We're pretty traditional from that sense. You know, COVID forced us, like many others, to just get a little more creative. We do, we're flex, we call it a flexible environment, right? So we do have people that are fully remote and we're hybrid from that standpoint. But I'd say, you know, 80% of our staff our, in one of our office locations, um, which we have 5 locations, uh, throughout the state of Nebraska.

Okay. Gotcha. All right. So, um, yeah, which, and you have a unique story. Um, and what I, what I kind of want to zero in on a little bit is, I mean, so a rural area with 1,600 people, um, in, in building a $15 million, um, practice and best in class, uh, practice. I mean, maybe talk a little bit about what, you know, what you had to do, you think that was a little bit different than somebody kind of growing in a larger geo?

Um, well, travel, right. And so because of the nature of the geography in Nebraska, and the markets we focused on, initially, it was a lot of windshield time, it was a lot of markets that were really— so just to give you a little context, so Lincoln and Omaha, the 2 largest cities in the state of Nebraska, you know, account for probably 2/3 of the population there in the eastern part of the state.

Mm-hmm.

Where I'm at is about 2 hours to the west of those markets. And so, a lot of the markets we were working originally were kind of those forgotten markets, if you will. They were just overlooked. You know, it was difficult for them to get service providers to provide services in those areas. So, that was really our, you know, kind of our bread and butter to start with. And honestly, if I were to look at our customer list, those relationships that were established 20-plus years ago are healthy and well. And so we really capitalize on the markets that, that others weren't focused on at that time. And then, you know, more recently over the last 2 to 3 years have turned, um, towards those markets like Lincoln and Omaha and Grand Island, North Fort Columbus, and some of the other more populated, uh, markets. And so, like I said, you know, that first 10 years To get us from 0 to 1.5 was a heavy focus on those markets. And it always comes back to relationships. We've always had traditionally very, very low churn, and it's something we hang our hat on today. And we invest heavily in the client experience and customer service and our account management team just because we know that to meet our growth goals and ambitions, we can't lose relationships for reasons that we can control, which is most Everything, right?

And so, yeah, yeah, absolutely. So you got to have a robust account management process in place and fantastic service, right?

Yeah, yeah, absolutely. I mean, relationships is one of our core values, and so we hang our hat on core values as well. Um, and so, you know, integrity being one of those things as well, and just, you know, doing the right thing for people, um, you know, and businesses that we work with, and then seeing results and just, uh, healthy relationships. I think that, that even if you look at us internally, like, um, Culture, uh, and just organizational health is a big focus and always has been. Uh, and we really feel like that's kind of a different— well, it's, it's definitely a differentiator. And, and I think that those things kind of bleed into our client base. And really we promote, um, you know, culture and, you know, just healthy organizational things from that standpoint as well, along with the other products and services we deliver.

Yeah, 100%. Okay. Yeah. So, and I'm always, uh, you know, I talk, I talk to Excuse me, a lot of MSPs. And, you know, and there's, you know, there's often excuses for why, why we can't grow or why we can't be best in class. And, you know, and I always kind of point back to advice that I heard, or not advice, but what I heard back when I was not best in class, which is, hey, it's really more about the skill of the management team than it is about any other thing like geography or the team that you have or the vertical that's in place. It's like, hey, you can do this anywhere. Like the size of the market, you know, it has little to do with whether you're able to grow past $10 million in revenue and whether you're able to be best in class. And so, you know, for those that might be like, man, I'm just, you know, I'm in this small geography that's like, You know, well, it's probably not as small as yours, right?

Yeah, I mean, I'd love to learn about another organization that's doing, you know, similar things that we're doing in a market like ours. You know, we often, you know, we've been part of the TAG peer group for quite a while. And when we're on stage, you know, presenting or what have you, but it's often mentioned that, you know, we're one of the few that, you know, still has headquarters in a community that doesn't have You know, stoplights, right? You know, it's, it's just, uh, takes me about 2 and a half minutes to get from my home into my office. Very small, tight-knit community, but definitely rare.

Yeah, yeah, yeah, yeah. So, so all that to say, there's, there's really no excuse, um, you know, for, for, for not being able to grow. Um, I'm curious on that, um, you know, on that note, like, what is it, what is it like for you As far as finding and retaining talent?

Yeah, that's a very good question. So I think our approach now differs a lot from when I was trying to grow, say, 15 years ago. So, you know, my, my, my thought process 15 years ago as we were adding technical talent was, you know, I really had— I didn't have an abundance of technical talent locally. You know, I was a single location at that point. So I relied on headhunters to recruit talent. And that usually worked. I mean, we were able to hire people, but it was for a very short amount of time for one reason or another, they would move on, other opportunities, family. And so we really, I'd say 10 years ago that we really decided that we were going to just kind of change course and find people that were a good fit, that were competent, that aligned culturally from a personality standpoint, those people we wanted to be part of our team and just invest in them. And so it was difficult for me, the guy that's the doer, to really step back and work with people. And, uh, have them observe, shadow, and train people. But, you know, that became our approach, is to put them alongside our people and, and teach them, you know, everything they needed to know. And so even if you were to look at our organization today, it's, it's, it's all walks of backgrounds, um, and all walks of life. It's really, um, it's, it's those that came from, you know, a farm and ranch background like mine that maybe didn't, uh, you know, the future didn't they didn't see themselves in that environment in the future and didn't have the opportunity. And so, um, they're, they're hardworking, you know, they fit in from a cultural personality standpoint, they communicate well, um, you know, they're very competent. And so just investing in those types of folks, whether it was a, you know, first-year teacher, you decided I want to do something different, or, you know, it was, uh, you know, went back to work on the farm for a few years and needed to change directions. It was just a variety of things. And I think when it comes to That, that was more of our strategy, right, to, to find people. And then I think when it comes back to retention, yeah, we really hang our hat on that as well. And it's, um, you know, so if I were to look at the last 5 years, we've had 2 people leave for other opportunities, you know, which, I mean, when you have 68 people, you know, at our, you know, that, that's probably rare. Um, I, I think it's rare. I hope it's rare.

Yeah.

But I mean, the culture that we have here is something that we want people to be a part of. And we want to, you know, provide opportunities through our growth. And so that's really been our strategy with retention. Of course, you know, we're not batting 1,000% with some of the people we've hired. We've had some healthy attrition that was just, you know, necessary but difficult. But overall, um, you know, we want to control, uh, we feel that's a controllable for us from a retention standpoint is, you know, just have them embrace the culture and be a part of the culture and align with our culture, and then everything else falls in place. Mm-hmm.

Yeah. Yeah. Well, and I would imagine that in, in your geography, it's, you know, once you've, once you've, you know, trained them and got them where they need to be, it's, it's probably not like, you know, Seattle or Austin or something where you got Microsoft or Google, like recruiting your folks away. Right. So that's perhaps an advantage for being in a smaller community.

That's a good point. I think for this office in Albin, where we, you know, about half of our staff report to, definitely an advantage. You know, we're one of the You know, premier employers in the area, if you will. We have great benefits. It's just kind of a place people are attracted to and want to be. You know, I guess time will tell in some of the other markets that we've opened offices in, but so far so good. You know, we know that the strategy needs to be a little bit different. We know that growth is going to be what's necessary to keep those people around because, you know, they're after opportunities just like everybody else.

Yeah, okay, gotcha.

Awesome.

Okay, so, um, so I'm thinking about, uh, just as far as like your leadership journey, and, um, you know, what, what do you think that, um, you know, the, the leader, um, you're at to the place you're at today as far as leadership goes and, um, the company that you're running, uh, what did you have to learn along the way that you just had no idea about when you were sitting at $1.5 million and bought out the, bought the business?

Good question. I think that humility is a big part of it. Like, I won't stand here and say that I'm the best leader. And it's just something that's, you know, it's not, you know, up until more recently that I'd given more thought or really attention or effort to as far as developing myself. I think over the last 2 or 3 years, that's where I've spent more of that time. I think it was just, you know, I've always kind of been a lead by example person. And so I think that that's, Whether that's work ethic or that's like doing the right thing from an integrity standpoint. I think that, you know, people observe everything that you're doing day in and day out. And, you know, if you're always aligning with those core values and those things that are important to you, people take notice. And so, you know, I think that, you know, I'm not the type that walks in a room and, you know, and even I told you, being on a podcast like this is a bit uncomfortable for me. It's just not something that's natural. And that kind of reflects my leadership style as well. But, you know, just being supportive of people, being understanding, being flexible, showing humility, knowing that, you know, I think that one thing that in our leadership meetings, we're very critical of our strategy. We're critical of everything. But I think it's really important to be positive at all times and just reflect on, you know, if we were to look back over the last 12 months and the things we've accomplished, then all of a sudden, you know, the mood in the room changes and we can all get behind that and be positive. And so, I think that it's a number of different qualities. You know, and one that I preach a lot is humility. You know, we just have to understand that there's always room for improvement. We're not perfect and that's okay.

So. Yeah, yeah. That's a good one along the way. Because I mean, with many business owners, it's like, hey, I built this thing and you definitely have some big egos, you know, a lot of the time, right? And so, um, so yes, certainly a valuable, um, uh, lesson to learn. Um, what maybe like, maybe talk about, because you kind of said earlier, you know, it was kind of like, uh, just a lot of hustle for you for a long time, uh, before you kind of got to the point where you had leaders in place. And so, um, and, and maybe you're, you've been really involved in owner-led sales and transitioning out of that. So maybe talk about like, okay, what, what was, what was some of that transition like for you of the letting go and maybe where you struggled with that and what you learned kind of going through some of those things?

Yeah. As I mentioned, I still struggle with that. I think any passionate founder is always going to struggle with it. Anybody that said that, yeah, I just found the right person, was able to let go, that's not how it works. And so, I think that there becomes a time, especially I've got young children, a wife, a life that I need to have outside of the workplace. And so, I think that You know, getting more, you know, as they've gotten more involved with activities and just, um, things over the last few years, I think that was kind of the, the turning point for me. You know, um, when it was just me and my wife, it was, you know, easy to have an evening and then, um, she might go to sleep and I might be up until 3 in the morning kind of doing the backend work, right, that, that needed to be done.

Yeah.

And so hustle's a big part of our success story and it's just a big part of who I am. That'll probably never change. But, you know, one thing that we also have not done is, you know, the people that I have in leadership positions here, like, they are people that have been with me for quite some time. And I know that that doesn't always work, but I'm, I'm pretty passionate that I'm going to make that work for us. And I think that it's important from a cultural standpoint that you develop people that potentially have the skills necessary to become leaders in your organization. And, and that's a focus for us. And that's a focus for me in 2026. We've, you know, started to EOS and just leadership development is something that is a priority for us in 2026 and just developing new leaders from within.

Yeah, absolutely. Okay. That's awesome. So, I know you mentioned peer groups and that kind of a thing. And you've, I know that's been part of the journey at least lately. And so, in some of our other conversations, you're kind of talking about leaning into financial maturity What are some of the things you've learned about numbers, financial maturity that you maybe just didn't realize before?

Sure. Well, let's go back to humility. I've been part of Evolve for a year, and honestly, I sit in a room with a lot of people who have had a lot of success, founders, organizations that are PE-backed or you know, been acquired. So, you know, the room looks a lot different. There's a lot of terminology that's thrown around that I don't know what they're talking about, right? I don't know the acronyms. And so it's still like drinking from a fire hose a little bit because I told you we've been with— in Evolve for about a year. But the reasons I joined Evolve were because of, you know, SLI and OML and better understanding how we take our business to a more mature place because, you know, those things were I was always, when it came to financials, in all honesty, it was a lot of times looking at the bottom line and just not knowing, you know, where the low-hanging fruit is to move the needle a little bit when it comes to, you know, gross service margin, uh, you know, and overall EBITDA and, you know, what was contributing to the bottom line. And so, um, Mm-hmm. that was the goal. And that's, you know, where we're at from a financial maturity standpoint is trying to understand those numbers better. We have 3 divisions and really, you know, getting people more involved in the understanding of, um, you know, at the end of the day, what, What leads to more profitability with the division and what things can we control? You know, how hot are we running from a personnel standpoint? And like I said, other organizations may have started to take a harder look at this before we had in our journey, but definitely that's where our focus is now. And I think that's what's going to take us from, you know, 15.5 last year to over 17 this year and hopefully, you know, over 20 next year. You know, some small levers. And a better understanding.

Yeah, for sure. And so, kind of, I'm picking up, it's like, hey, really understanding not just what the bottom line is because you can kind of constrain your spending as much as you want and all that kind of stuff and reach a number, but understanding the why you get to that number is a whole other piece of it, right? So, you mentioned like, understanding your service margins. And then like, and I imagine that can kind of flows down to, okay, well, what can we actually spend on SG&A and other areas like that? What's, I mean, what are some of the, or did you find anything in your numbers that you were like, oh my gosh, why didn't I realize this before?

Nothing alarming. And this would surprise many. So, you know, picture yourself as a $14 million MSP when you're joining Evolve and never really having taken the time to really understand those things, but then having it revealed and, and you're aligned with best in class in all those categories. Is it a fluke or, you know, and, and so, um, a little bit of it. Yeah. I think, you know, it was just always the right type of muscle feel, um, the right type of effort in the right places and, you know, good intuition. Uh, you know, I, I don't know what else to contribute it to. Um, You know, for the, for the deeper understanding of those numbers, I think, you know, our initial exposure to TAG was really, you know, that was about 10 years ago. That was really when it came to just, uh, strategy, right? From, from break-fix to MSP. And, you know, a lot of that, that's not going to work for us, you know, trying to just break down those walls and barriers and observing how it's working for others. And so I think just exposure to peer groups, even without a deep understanding of the financials and certain things that lead to maturity, Um, that exposure just generally, uh, helped us with, you know, good intuition and, you know, mixing some other things in the recipe that just put us in a good spot. And so we're really happy about where we're at now. And, uh, we're really excited with this type of understanding and knowledge and resources to, to kick it up another level.

Yeah. Love it, man. I love it. So, okay. And, and so you just mentioned like, hey, we're, you know, we're going to grow What, uh, 10% this year, um, or something like, you know, 15.5% to 17%, uh, roughly 10%. So what, you know, I'm curious as to, you know, because, because so you did like 10x in 10 years, um, how have you seen the sales piece of things, um, change over that period of time? Because it's like, hey, you know, growing, growing 20% when you're $3 million is, is a far cry from growing 20% when you're 15, right? So, so what have you— what, how has that evolution been for you guys?

Yeah, it's, um, you know, let's take a step back like 5 years ago. I think that's when we started making heavy investments in client experience and really, uh, account management. We felt that that was a priority for us with growth and being owner-led, um, relationship-based. You reach a point where you start to feel like a little loss of control because you had your hands everywhere with every relationship. And so, um, we knew that that was potentially going to lead to churn. And so we made a heavy investment there. Getting back to your question directly on sales, you know, really a lot of our growth, um, has been, or it's, it's organic referral-based growth. And so, uh, it's doing the right things for customers and having it lead to additional opportunity, leveraging existing relationships for referrals. Uh, that's, that was a heavy amount of it up until the last, I'd say, 2 and a half going on 3 years. And so 2 and a half, 3 years ago, we did invest in an individual to lead outside sales. That's been a transition. And really, we're just kind of to a point now here in the last 6 months where we've kind of handed over the reins and we've added some additional outside sales resources. We've restructured, you know, working on implementation of HubSpot for a while now and just really making, you know, more of a mature and strategic investment in sales. And so, um, as far as dividends, um, a lot of our growth has continued to be referral-based, which is great. And so we feel that along with, you know, the opportunities that are coming from, uh, the client experience side of the house and the investment on the outside front, um, is going to allow us to easily attain our goals, um, for 2026. And to be exact, it's 12.5% to get us from 15.5% to a little over 17%. And so that's, that's our growth goal for this year. We feel it's very attainable. Last year, our growth goal was 20%, which was, yeah, it's not what we hit. It wasn't an attainable goal, but we really based it off of a lot of success leading up to 2025. And I know, you know, looking at the SLI data, 2025, and especially the first part of it was pretty rough on everybody, but we're feeling right, feeling really good about 2026.

Okay. Well, there you go. Yeah. Yeah. And the data was, it did show like Yeah, I mean, growth was slower, it was slower to rebound after the election year than everybody thought it would be and all of that. And at the same time, you know, still MSPs, you know, were able to grow and all of that, but definitely not as much as we had hoped. So, at this point, have you been able to kind of take your hands off the wheel as far as like principal lead selling, or are you still kind of, are you still pretty involved?

I'm mostly taking it, you know, it's not autonomous, you know, it's not driving itself. But, um, for the most part, yes, you know, um, there's still a lot of the relationship referral-based stuff that comes to my desk and given some knowledge I have or relationship I have that, you know, we'll continue to leverage that. And that happens with a few of our other leadership folks that are kind of moving out of a little bit of what I'd call owner-led sales just because of their role with me, you know, for so much, uh, for so long. But, you know, we're on track. Um, And I feel like it's in a good place. You know that I'm not a sales guy by nature, never have been, but it's still one of those things— opportunities and winning and that competitive nature— like, that's a big part of me, and that's a big part of what draws me into the sales process, especially from a competitive standpoint when it comes to, you know, specific marketplaces and where we just, you know, feel like we're the best option, and we just want to make sure that That our prospects know that.

Yeah. Yeah. Um, well, and I want to, I want to drive into like, so the referral-based business, and I've heard this a lot in several different conversations where it's like, hey, yeah, we've, we've committed to great service and having, uh, you know, having great people. And that's resulted in, um, you know, a lot of, a lot of our growth coming from referrals. And then I talked to a lot of MSPs who were like, yeah, all of, all of my growth came from referrals and now we're stuck at $3 million and we haven't gone beyond that. Um, what do you, I mean, if you had to guess, like, what do you think is the difference between someone like you and someone who's like, yeah, or my referral-based business is just not cutting it?

Well, I think a lot of things contributed to slower growth in 2025. Um, some things we couldn't control. Uh, but I think, you know, even leading up to that, I think we realized for us, you know, the goal we set is likely not attainable the way that we've been Attaining our goals in the past, and so it was a realization that referral is probably only going to get us so far. And so it was also that some other things we were seeing going on with disruption in certain markets from PE investment acquisitions that was creating opportunity that we felt like we just weren't well positioned for, like or we could have been positioned better. And so it was kind of just you know let's go at this. You know, more full force rather than you know looking to pick up crumbs, if you will, from some of that activity and disruption that was going on with P investment acquisition in some of the larger markets. And it was you know just a realization that we're not going to get there on referrals alone as far as accomplishing our goals. Two slides I back brought back from SLI I thought that were most important was one the trends right to just let people know that you know 11% for our industry that's what we're looking at in 2026. Showing the election year, some of those cycles, like that stuff was important just for us to say, okay, you know, we're not the only ones impacted by this. But, you know, the key one was, it was a churn slide. And so, you know, showing best in class and then wanting us to be at 1% or less, like that's where we want to be. And that's, you know, overall, I still come back to client experience, account management. If we can keep that churn at, our goal is 2% or less. You know, I really think it needs to be 1%. If we can do that right, Uh, the referral-based things are going to continue to work for us. Our investments in outside sales is going to take some time, um, but it's going to get us to, uh, not only attaining this year's goals, but next as well.

Gotcha. Yeah. Yeah. So, so yeah. And I think the industry average, at least in dollars, is somewhere in the 5% range over the last year. Yeah. 5, somewhere between 5 and 6. And so, um, so you guys, I mean, so you've historically been able to keep that in the 1 to 2% range.

Yep. Yeah. And I'd say, you know, there's 1% we, we, we can control. If we're at 2%, there's probably 1% that's controllable. There's 1% that's not, because we have lost a number of, you know, some business, the stuff that, um, you know, acquisitions, uh, businesses, you know, ending or, you know, going out of business that are a little out of sight.

Right.

But if we can control it, like, I'm just, um, adamant that, that these relationships should be healthy enough that, uh, That they shouldn't go anywhere.

Yeah. Well, and it sounds like you're— I mean, the relational aspect of the business has helped, you know, I mean, has helped and actually caused most of the growth that you've experienced so far. So like, maybe you can kind of talk through, okay, like, what does that look like? Like, what did you transform in your client experience, your account management process? What does that look like? What was that transformation like for you guys?

I'm not sure it was a transformation. I think it was taking what it looked like 10 to 15 years ago and trying to put in place strategy to make sure it looks the same with a group of 5 or 6 individuals now responsible for that. And so, I think it's really finding a lot of people that are like the owner or the founder from a personality standpoint, from how they engage to how they take care of people. And I think that's what we have when I look at our, what we call our relationship management team. Is it's a lot of folks that, you know, they're easy to relate to. They do the right things all the time. Their best interest is in the best interest of the client. And so I think that, you know, that's— I don't know if you want to call that strategy, but it was just, you know, finding the right people to handle those relationships and handle them the right way. And just knowing that it's important. And, you know, the one thing that I brought to Evolve and wanted some feedback on is What's the capacity of an account manager? How do we determine that? And so at the end of the day, I would err on the side of more resources to make sure that that's shored up and taken care of rather than trying to do it with less. And so that's kind of our approach is invest there, make sure it's not going out the backside while we're also investing in the front side. Yeah.

Yeah. So that's interesting. Well, I'm curious as to what, you know, I have some ideas, but I'm curious as to your, like, what did you figure out as far as like, hey, what, like how much MRR should an account manager be able to support and do a really good job with and that kind of a thing? What do you kind of come up with there?

Sure, the feedback's all over the place. And I think the answer is it depends. And I think that that's the answer to so many things in our industry is it depends. And so, you know, it depends on the MSP and, you know, what verticals are you in? You know, what's the average size, you know, MRR of of your client base. And so again, it just depends. And so the answers from certain, you know, groups that maybe really had a tight-knit TCP with a specific vertical they were working, you know, maybe it's $250K a month in MRR that they're handling.

Mm-hmm.

You look at somebody else that's more similar to us, that's a little more diverse as far as their TCP and their verticals, then, you know, maybe it's $175K in MRR. It's, you know, 35 accounts instead of, 15. And so, you know, I think our number's probably around that 35 accounts, you know, $175K in MRR. I think we're more, that's where we're at. And so I think I've learned, but I think what I also learned is like everybody's different and there's, it depends, right? So.

Yeah. Yeah, absolutely. Yeah. And that's why I was curious. I mean, I've heard up to like in one of the groups that I lead, you know, a lot of people are like, yeah, it's right around $300K that one of our account managers can support. And, and you're right that it's different, you know, I mean, if, well, okay, well, if you have, you know, if your average is $20K a month, or, you know, for an account, then it's different than if they're trying to manage, you know, 50 accounts that are at, well, whatever the, whatever the number is there, you know, a lower amount. So, and then, and then as far as, I mean, is it, do they follow, your folks follow a like consistent structure process for managing the accounts? Or is it like, hey, just take care of the client, make sure and call them often, make sure they get what they need? You know, like what's kind of, what's kind of the process here?

Sure. Well, one, you know, I said that, you know, 5 years ago, this became a priority for us. And now it's probably a bit embarrassing to probably let you know where we're at now. We feel like we're in a good spot. You know, the intent has always been to be in front of the customer as often as possible. And that's tough, right? And so I think, you know, we've made tweaks and changes along the way. And I think we're at a point now where that's happening. And so along with EOS and scorecards and, you know, identifying what's a priority and making sure we're measuring it, like all those things came later in the process and later in the investment in our account management strategy. And so, yeah, I feel like we're on the right track. You know, some of the things that have been obstacles for us were, You know, kind of on the top end as far as like engineering solutions and getting quotes out for our pro services team and just rethinking, you know, what the account manager's role is in that and making sure that they're not a critical piece of that and making sure that we've got engineers and the right people getting everything prepared to deliver. And also just on the other end of side of things when it comes to escalations and client satisfaction and having resources there that can just support the account management team, that's something we're putting in place now. Listen, a coordinator that can kind of help prepare for a strategic business review. I don't know if anybody calls them quarterly anymore, but I think we need to go back to that, right? I think it needs to be quarterly. It needs to be frequent. And I think a lot of us, we use SBR language as an excuse, like we'll get to it whenever we can. And so we started calling it different things. And so we feel like the original intent of a QBR should be a QBR, like just should be that frequent.

Yeah. Yeah. And that's kind of a, you know, a high OML activity, right? Is every client gets a QBR every quarter. And that has to do with, you know, account makeup. And if you have everybody in your TCP and they're, you know, and they're all strategic thinking executives that are your clients, then, and you're doing your QBRs right, they should be excited to meet with you every quarter and you should be able to execute those every quarter.

Right.

The folks that I've worked with that do the best, I mean, you know, yes, they have a team. And yes, like that team, like their main metric is, or one of their main metrics is QBR attainment. And they measure that every single quarter. Like, hey, we got to, you know, we got to 96% across our entire client base this year or this quarter. And, you know, and along with other things like you know, revenue retention and some other things like that. But if you're running a structured process, you have the right clients, their OML matches your OML, then, you know, that's something you should be able to do, right?

Yeah, we feel that as well. And so let me be clear, we're not there yet, but we're on track. And so I'm happy with the progress that team's making. You know, we are looking at scorecards weekly at this point. You know, how many QBRs were done this week? How many are scheduled for next? You know, and really You know, starting to look at more leading indicators, you know, across the board, you know, as far as our scorecards, um, things that are going to produce the results. And in this case, minimize churn, uh, produce additional revenue, um, overall just client satisfaction. And CSAT's one of our, our rocks. And so, um, you know, our focus to turn towards leading indicators is, is also helping us move the needle.

Yeah, awesome, man. Um, yeah, so, and then kind of a little bit back to the, the sales piece, and I know you've You know, you mentioned you've added, uh, some sales folks and, um, and you're doing some marketing kind of stuff and all of that. Um, what, I mean, what do you think is, is going to kind of enable the, the, the new revenue growth for you? That's like essentially, I mean, getting, you know, I mean, taking your— taking yourself from $15 to $20 million in revenue.

Um, new markets. So, you know, we're putting effort into new markets. We've used kind of a third-party, uh, appointment setting program. We're going into 2 years in that, and that's, you know, supplemental. I think we'll continue to do that. Really, you know, building out HubSpot and, you know, working with ZoomInfo and creating our own leads is where we want to be, you know, a year from now, and just leveraging that much heavier and trying to do more internalizing from that standpoint. I'm not sure if that answers your question or if it's more like products and services, like where we're at now, and if, how, you know, what changes are we going to make? to move the needle. I think that we've all sat in the room, how do we monetize AI? I guess where we're at is we're probably not going to invest 2 or 3 FTE to be the guys that don't have a plan to produce revenue with that type of investment. And so, we're going to continue to sit back a little bit and see where those breakthroughs happen. I think a lot of the initial breakthroughs we're seeing are really Things that are going to bolt on to the tool sets we're using, whether that's the PSA, the RMM tool. It's going to be things that are kind of baked in, and I think that there will be a time when you differentiate yourself with talent you have that can help you know businesses implement and integrate you know AI and different RPA tool sets. We're not there, and I don't want to even get into those weeds because I'm not an expert there, and we'll never claim to be. And so. So not major shifts as far as strategy from like a products services standpoint, at least in the next 6 to 12 months. But I know that things are changing rapidly and we've got, you know, we're watching, right? And so we'll shift as we need to.

Yeah, yeah, absolutely. Yeah. Well, so, and on that note, like as you're having conversations in the industry and, you know, and talking to peers and all of that. What do you see as kind of some of the biggest things? I mean, you mentioned AI and all that kind of a thing, but like that are coming down the pipe for MSPs next, maybe in the next 3 to 5 years.

Sure. I think that, you know, the exposure to Evolve has just kind of opened my eyes a little bit more. We knew it was happening. We just didn't fully understand, you know, where it was coming from. And I'm speaking specifically to private equity investment and just the acquisition environment. To me, it's been very, it's presented lots of opportunities. Like I said, it's been highly disruptive when those types of things happen. And we've tried to position ourselves well to be in the market, to be an option just from like a marketing investment standpoint that because what it leads to is employee churn and client churn and we want to pick up talent and we want to pick up customers. So, maybe pose your question again because I got off track a little bit there.

Yeah, no, I was just kind of thinking about, okay, what do you see as coming down, like the big things that are happening in the next 3 to 5 years in the industry? Sure.

So, I think that's something that is going to continue to happen. You saw the SLI data as far as valuations and multiples, right? There's going to be a lot of people looking to exit. There's going to be a lot of transactions that happen. That's not going to go away. I think that we're going to continue to see that type of activity the next few years. So for us, it's like understanding who our competitors are. You know, is some type of transaction going to maybe happen in that area that will present opportunity for us? We're also looking at acquisition opportunities. That's not, you know, it's part of our strategy. We want to be prepared in the situation that that opportunity comes available. But yeah, I think that, you know, that type of activity is gonna continue. And I know some of the messaging that came from Evolve is that, you know, the smaller MSPs, you know, the 5s, the 10s, the 15s, maybe even the 20s, you know, with the investments that the private equity-based platforms are gonna make in AI and automation, it's gonna, you know, push us towards irrelevance. I don't buy into that. I think there's a lot more to it. And I definitely don't see that that's gonna be something that's a barrier or an obstacle for us in the next 3 years, but I'm not gonna predict what that looks like in the next 5 years because I don't think any of us can predict the impact AI and automation is going to make.

Yeah, yeah. Well, and I think you're right. And I think things are moving so incredibly fast that it's like, well, who knows? And what are going to be the biggest things that happen that actually transform the industry? Totally makes sense. Okay, so as you look back and thinking about your journey, what do you think the biggest mistake or, you know, yeah, let's just go with what do you think the biggest mistake is that you've made as a leader along your journey?

Humility again, right? Hundreds of mistakes. I think it's Course correction is important, you know, and when you know you've made a bad call or you've gone a bad direction, I think that you got to be humble, you got to take ownership, and you've got to, you know, get with your team, own it, and switch gears. I think, you know, there's not any one single thing. We did get out of our lane a little bit a few years ago, decided we wanted to be an internet service provider. When I say a few years ago, it was probably 10. And so, I don't feel it was a mistake. I think it was a learning experience. There's a lot of those things, I think, over our history where we got out of our lane, we learned a lot and got us back on track and what our primary focus is. And I don't know, no significant ones, but we've always had bumps.

Yeah.

I think we all have bumps. And I think that the most important thing is to realize when it doesn't feel right, it's probably not right. And we need to step back, take a look. Was this the right decision? Is it aligned with our core values? Is it aligned with where we want to be in the next few years? And if it's not well aligned, to be able to just be humble and say, hey, that was a bad move. Let's get back to work and keep the focus where it needs to be and head in this direction instead.

Yeah, I love it, man. Yeah. And there's, you know, you just mentioned again, the culture, or kind of core values, culture piece, and that kind of a thing. How, you know, for you, did you find that the culture in your company kind of evolved on its own? Or do you feel like you've kind of designed it?

Um, a little bit of both. I think that if we were to step back 15 years ago, well, let's go back 10 years because I think that's where I was able to have more of an impact. Right. 10 years ago, that's when I'm the only founder left. I'm the sole owner. And so I can kind of do things the way I want to and I can lead meetings the way I want to. I can engage with people the way I want to. I can make decisions regarding personnel. I can have conversations. I can, you know, that the trust, all that starts to develop with trust and just taking care of people. I think that that's when I had the full reins to really own those relationships, you know, with my leadership team. You know, I'm still involved with vetting people, you know, that we, that we want to hire potentially in the next few months, right? I want to understand, are they a personality fit? Do they fit our culture? And if they don't, then we're probably looking on to the next resume quickly. And I feel like, you know, I still Not that it has to be me because I've got a lot of other leaders that are aligned. But the other part of your question, was there a catalyst? And yes, I think I was introduced to somebody in this community that's very passionate about philanthropy, much like I am, very passionate about taking care of people, doing the right thing. You know, brought her on to help with marketing, you know, say 6, 7 years ago. And so, she's had a big influence on our culture. Um, one thing when it comes to like social media platforms, you know, we're, we're not selling products and services on, on those platforms. We're selling our culture. And, you know, when business owners or potential prospects that may want to be an employee of Flight Connective someday, like, they're drawn to that. And so, um, that was a catalyst and continues to be a catalyst. You know, even though, um, she handles marketing, you know, she's in our, our core EOS leadership meetings because culture, uh, is— it's that important to us. And when you look at our accountability chart it's got its own place at the top, right? And I think it needs to, you know, and so if you look at most org charts and accountability charts, you're not going to see, you know, creative cultural position that sits right below the integrator, but I think you should have one. And so, you know, organizational health and culture is a differentiator for us, and I think it needs to be top of mind for everyone.

Yeah, absolutely. And that's an ongoing theme. One of the, like, one of the things that most successful MSP owners or CEOs talk about. It's like, hey, what's enabled us to get here is the culture that we have. And we talk about it and we guard it, you know, because it's so meaningful to the people that work here. And, you know, and the ones that— what I find is the ones who design it on purpose, as opposed to kind of let it happen, those are the companies that tend to be more successful in the long term.

Yep. 110%.

I love that. Love that.

Awesome.

Well, yeah. So just as we kind of wrap up, one of the things I like to do is a little lightning round of questions. So I've got, you got a few questions here. So, you know, just kind of what first thing that comes to mind.

So first one is, what is a belief that you've changed your mind about maybe in the last few It hasn't been the last few years, but I think when it comes to obstacles and barriers, you know, I think that my mindset's changed a little bit because I was one of those that, that's not going to work for us. We can't do it that way. And so what I've taken from peer groups specifically is there's always something that I bring back and there's always something that works for us, even though I didn't think it would. And so I think that You know, the key thing is like being positive, you know, being creative. And so I think if you're positive, creative, we're in this tech field because we're problem solvers, right? So if you can take your problem solving ability, be positive about things and be creative, there's there's solutions to any obstacles that are kind of in your way. And so where I'm at right now is you know, and I'm competitive and confident. And so I want to continue. I could have moved this business. The HQ could have been Omaha ten years ago. That's never going to happen. The HQ is always going to be Albion. It's always going to be this community that I'm passionate about, and and and I'm you know going to overcome any obstacles that prevent us to reach our goals. And so, you know, I think that mindset shifted, and I think that my team is aligned as well. Like you can just see them breathing fire, right? I mean, they just they want to get after it. They're hungry, and and I think that that attitude and culture, you know, kind of a sales-focused growth attitude as well. That's tough, right? And so trying to present. Growth is an opportunity, you know, is a big part of our messaging and making sure that everybody's bought into that. Sorry, that was a long-winded answer.

No, I love it. I love it. That's awesome. What's something that you've been curious about lately?

I think we're all curious about AI. I'm curious and concerned I probably don't spend enough time in it. Yeah, I mean, I was on one of our account management team meetings this morning and there were, ideas presented through some of the agents available in Excel. And it's like, I'm curious, like, that's really interesting and cool. And we need, you know, I read an article recently that really says that we should be, you know, especially in our industry, I think we need to be spending 30, 45 minutes, maybe an hour a day, like just immersing ourselves in different tools to get a better understanding.

Yeah.

Because I truly like, I don't feel comfortable terribly around the topic. And like I said, I'm not gonna claim to be an expert, so I'm curious about it. And so now I need to be a little more rigid and force myself to take that curiosity and force myself into using it more and just getting more exposure with it.

Yeah, love it. What's something that you can't live without in your daily routine?

Exercise and moving. You know, I come from a farm ranch background, being outside. That's still something like the outdoors is my passion. I like to hunt and fish and be outside. And so, you know, I've got to get up and move in the morning. You know, I dread when the alarm goes off at 5:15, but if I don't have that in my routine, uh, you know, when I show up at work, it's just a different day. It's not, it's not right. It doesn't feel right. I don't accomplish as much. My attitude's different. So I got to get up and move.

Yep. Same here, man. Same here. That, that, that 5 AM alarm, right? Um, okay. And what's your go-to way to unwind?

Outdoors and hunting. I like adventure. Um, I like coming back to my Evolve group. I've only known them a year and, you know, tell them about my, my moose hunt in the Yukon, right? And share some moose, share some moose jerky with them in Orlando last fall. That's, that's the way I unwind. And being with my kids, like I look forward to every day getting home, being active with them. Let's go throw a ball around. Let's go sit by a tree and see if a deer will walk by. Just getting outside.

Fun. I love it. And then what is a book or an idea or a piece of advice that has shaped you the most?

I don't listen to a lot of podcasts. I listened to one of yours. I kind of knew this question was coming. But, and so one thing I feel a little intimidated, not intimidated. I'm not a reader. You know, I love to hear about other people's experiences with books and how it's changed them for this, that, or the other. There just hasn't been a lot of those catalysts in my life where it, where I read it in a book. One book that was placed on my desk, you know, 7 years ago was Traction. And Placed on my desk 7 years ago. I didn't open it until 2 years ago, 3 years ago. Just because that—

It took you 5 years.

So, because that's just, that's just not me. But, you know, that was kind of my first exposure to EOS. And I think that the timing was right. It was necessary for us. The other one was, it's a book called The Advantage. I think it was like Patrick, Patrick, you probably—

Lencioni.

Yep.

So listen to that audiobook. It was recommended. And I think the one thing that hit me there was organizational health and culture. Like, yes, I'm going to double down on that again because I think you really spoke to it. It's not strategy, it's not new ideas, it's not all this that typically makes a big difference with growth and success. It's really just organizational health.

Yeah. And I think it's one of those, I was like, I think I have it right here next to me. But one of the quotes from it, I remember it's something like organizational health is actually the last great competitive advantage.

I completely agree.

Um, you know, because everybody else, everybody has the same access to tools and, and all of that kind of stuff. But if you have a fantastic organization that with a leadership team that's aligned, uh, rowing in the same direction, um, and a fantastic culture, we're in a place where people love to come and work. It's like, well, you know, yeah, that, that's what it's all about. Um, and that's what's actually going to get you Yeah.

And as an owner or founder, like, who doesn't want to come to work every day to do what you love, but to do it in a place that, um, you know, has a culture and is healthy like that? Um, yeah.

Yeah, absolutely. Well, man, thank you so much for, for doing this. Um, you did a great job. See, there was nothing to worry about. Um, and, uh, and, and yeah, I really appreciate the time and, um, thanks for joining us.

Appreciate it, Brian. Look forward to catching you at the next event that we run into each other.

Absolutely. Thanks, man.

Thanks for listening to the $10 Million MSP Podcast. I'd like to encourage you to take just one insight that you heard today and put it into practice because small shifts create big momentum. If you enjoyed the episode, make sure to rate and subscribe on your favorite platform so you never miss a conversation. Thanks again for tuning in, and I'll see you in the next episode. Bye.