The AI Advantage Most MSP CEOs Are Missing w/ Damien Stevens

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, welcome back to the $10 Million MSP Podcast. Today we are gonna be doing something a little bit different from normal. And so that's why we're calling this a bonus episode. So you just, you get some extra bonus Today, but you know normally we're talking with founders who've built MSPs and talking about their journey and that kind of a thing. Today we're doing something a little bit different. There's a lot of conversation about AI and what's going on. Things are moving really fast, and and I wanted to I wanted all of you guys to hear from somebody who's actually doing it inside a business every single day. Damien has spent the last year like completely redoing how we're rethinking how work gets done. Done and, uh, and has had some great results from it. Um, Damon is, is a fellow podcaster in the MSP industry. He's talked to, you know, probably a lot of you have talked to him or heard, uh, his podcast before. And, um, and so really excited to, Damon, to get your thoughts and, um, and for, for everybody listening to, uh, to, to learn something new. I'm, I'm planning on learning a lot new, uh, just through this conversation and, but based on what we talked about before. And so, yeah, Damien, welcome to the show, man.

Thanks for having me. I'm excited, Brian.

Yeah, heck yeah. So, yeah, well, hey, can you maybe just give like a quick intro of yourself? Like, who's this Damien guy?

Sure, sure, sure. Former MSP. So I used to know what it was like to be in your shoes.

Okay.

Founder of Servosity. We serve MSPs, so you don't have to worry about the the effort to work on your backups and to test them. We handle that for you. So kind of a co-managed model for backup, if you will. And I'm also the host of MSP Mindset and just about to wrap up interviewing the 100 fastest growing MSPs in the world. And that, of course, happens to align with a lot of your work there, Brian.

Right, right. Well, yeah, I'm a former guest on the show, which is Or well, you know, I guess not former. I guess the episode's still out there somewhere.

That's right.

Right, so, but yeah, man, great. So, thanks for the intro and yeah, I'm, well, we're both excited for this conversation. I wanna kinda like step back a little bit like and just get real to start because you, you know, you kind of got into this maybe not purely out of curiosity, right? It was more like, hey, I've got, I need to find some leverage somewhere because of what's going on. As much as you wanna share of that story, maybe just kind of take us into that a little bit.

Yeah, so middle of '25, my daughter, she just, had a health crisis. She lost the ability to speak. She lost all kinds of abilities. And, of course, the world stopped. And for a week in the hospital, everything just stops. But past that, it was clear, or it became clear, that it was going to be more of a marathon than a sprint in her health.

Yeah.

And so, taking off a week, I'm very blessed that I have a great business that continues to run. But I needed to be there, and I wanted to be there. to have the business grow across the who knows how long.

Yeah.

And what changed for me is I'm used to getting up early and getting that, the working on the business or thinking around the business, or being able to finish up a few things in the evening after my kids go to bed, or those sort of things. And I've been an entrepreneur a long time, and I needed to spend that time with my family. So I chose to to give up that time that I was so used to.

Mm-hmm.

And it was also just a really busy season of client reviews, you know, kind of technology business reviews, all kinds of things going on. And even though I've got a full-time executive assistant who's wonderful, I just, I need it, you know, after every meeting there's usually some action. Send this email, book this thing, let the team know. You know, there's always these to-dos. I, of course, was chatting with AI and thought I knew a few things and doing this, but I was just kind of dabbling with the, what I would call agentic AI back in mid-'25. And I was, I don't know, I chose and I was forced to, because of the health issue, I just didn't have the time to get to some of those follow-up emails and get to those sort of things. And it became apparent to me because I was like meeting, meeting, meeting, meeting, And then my EA could send a summary or she could do a few of the things, but some of it needed to be exactly the way that I needed to do that. And so I realized I've got to figure out a way. So to me, it's important that while I'm curious and while technology and AI are incredible levers, my journey started with I need to free up time. to make the best use of it and spend more with my family. And that also kind of echoes where my beliefs surround with AI is it should be a good tool that helps us to focus on what we do better at and not replace the things we get joy from doing.

Yeah, love it. Okay. And so I'm interested in, well, there's a lot to to unpack, uh, here. So, um, you know, I think, I think I hear a lot that people, you know, owners are kind of like waiting until, you know, things mature or they have time to figure all this stuff out. Um, you, you didn't have that luxury, right? Like, you, you had to figure some stuff out.

That's right.

Um, what would you kind of say to those folks who are like, yeah, I'm just kind of seeing how things unfold and And waiting on, you know, waiting, basically.

So I'm not one of these fear guys. You know, maybe I could have been better at cybersecurity because I was never like, you need it, but I was never like, the world's gonna end. It might if you don't use better security, but I struggled with that. My point is, it's never too late to start, but I would say this is like, I'm old enough to remember before, I remember I started a business when people were like, I think websites might be a thing. Maybe they're gonna stay around.

Right.

Email sure is a lot more efficient than sending faxes, right? And my point is, if you sat on the sidelines and you never really got into that era, that's gonna be a huge difference. This is happening much faster and a bigger, I think, impact. And so I think, you know, This is different for us as MSPs. And if I can say us, because I work with so many as well, because I think at least not yet, this isn't as simple as pick your vendor. It's not a vendor selection question of which vendor and bet on them. It's so early. How would you know where to bet if you tried to bet on a single horse? And it's not as simple as once I buy a thing, for example, the RMM or the PSA and roll it out, then I have it.

Yeah.

It's just not that. Simple. And so that's kind of the bad news. The good news is if you think it's changing really fast, if you're feeling overwhelmed, if your staff doesn't know where to start, your clients feel that times 10 or 100. So I just don't want this to be the SaaS moment for MSPs.

Mm-hmm.

What I mean is marketing went out and bought the CRM. They didn't talk to us. They didn't ask about governance or security. They just went and bought. a lot of their SaaS apps, finance sometimes, et cetera. And we weren't really involved. And looking back, we could have helped more, but we didn't know how to navigate this new, you know, SaaS era where all the stuff was evaporating from on-prem. And it's not that it all disappeared, maybe in some cases, but we just didn't know what role to play. And I don't want that to be the same for MSPs with AI because they're going to adopt it. They already are, at least in a shadow AI way. And so the question is, how do you play a role? How do you add value and not sit on the sidelines? Because if we know it's going to be adopted, whether you like it or not— in fact, if you ask a lot of CEOs who think it's not being adopted, they just think it isn't. And using it to send emails and doing who knows what, right?

Yep.

I don't want this to be a SaaS moment where we just watched it go by. and they adopted some vendors and we kind of are on the periphery. But where I'm most excited, and I'm really excited, is I've interviewed some of the largest and fastest growing MSPs in— I interviewed all of the largest in the world. And the best, no matter largest or not, the best have moved to I'm going to be your trusted advisor, whether that's a VCIO or a VCSO. We want to be trusted. We want to kind of be the most educated seat at that board table.

Yeah.

And some of us are better than others, but no matter how much we try, the reality is IT is usually seen as a cost optimization, right? The lower, the better, right? Now, I know I got to spend a little more because you convinced me of the risk, And now I've got to spend a little more in cybersecurity. But generally, as long as the lights stay on, I want to lower that number year over year. It's not the business goal to make the IT number go up because we kind of see it.

Right.

So it's hard, no matter what we do, to be kind of strategically aligned. And my take on this is, this is the biggest lever and the biggest opportunity that we've ever had We as MSPs, because we generally are people that want to help and that are trusted and that want to help with the business outcome. And I think for the first time ever, we can actually say, what if we could dramatically increase the time to resolve an incident? What if we could dramatically lower the time you spend processing preparatory work before you actually see a client or bid on a project or whatever that is so that your time to revenue shrinks, we can literally sit down and have conversations around what if I could lower your cost of goods sold? What if I could increase your profit margin? What if I could accelerate lead velocity? So whether it's top line or bottom line, and here's the way I go back to IT, no matter how well it's performed, even if I'm differentiated and I'm You're sticky, you're not going to churn. It's usually, no matter how much we've tried, kind of viewed as a cost center.

Right.

And so my IT budget is kind of as little as I can make it, but not too little. But if you show me how to see more patients faster, bid on more construction jobs, get more bids out, increase lead velocity, lower time to prep, increase the happiness of my team, All sorts of things like that, then all of a sudden my budget, if it's driving something like top line or bottom line, it's almost infinite, right? As fast as I can give you that, I'm going to try to.

Yeah.

So that's what excites me. And now it's possible.

It is. Yeah, I love it. And so I would say, you know, of all the rooms that I'm in and the MSPs that I talk to that are, I'm sure a lot of the same folks that you've talked to in the past or, you know, in our peer group rooms with companies that are $20, $50, $100 million, it doesn't feel like anybody has it figured out just yet.

Right.

Like, here's exactly how we go to market with this thing. Here's how we build the trust. In a lot of ways, they already have the client's trust because it's like, hey, they're the trusted advisor. I think, you know, I think it's, I think it's a really important discussion because it is kind of to what you're speaking about. It's a, it's a thing where we have to, if we don't, if we as the MSPs aren't going in and saying, hey, here's how you should be using AI inside your company, then somebody else is going to, right?

Mm-hmm.

And then they start to become the trusted advisor. And to your point, the opportunity probably dwarfs the opportunity for managed services.

Yes.

Like, yeah, it absolutely dwarfs it because you're getting into the entire business as opposed to, and here's how you make the whole business more efficient, not just how do we do IT better or more efficiently or whatever. So what are some of the things that you're seeing as it relates to that. And yeah, I mean, or yeah, thoughts on that in particular?

Yeah, I mean, starting somewhere is better than starting than not. My point is, we can do the easy things we know how to do, like compliance, or talk about shadow IT and help them figure out a policy around AI. And just, I think it'd be better to say, I don't have it all figured out, but let's go down this road together. And I'll tell you what I do or don't know. I think we're used to coming at this from the, all-knowing. We know so much. And I think you'll probably know more, but it's also changing faster than it ever has, faster than any human could keep up with. So when some of the folks that work at the Frontier model say they don't feel like they can keep up, I think that has to give us a little grace to say, look, let's focus in an area, but we may not be able to keep up with everything. And I think that's where it starts. Honest conversations with you and your team about what that means from a culture perspective, not being overwhelmed to have to keep up with everything, and just that conversation with your client and see where it goes. Hey, how are you leading your team to not feel overwhelmed or fearful of using it at all? And then let's walk down this road together. I have very direct, like I think, I believe you should do based on my journey. So based on my journey, I think you should do what I did because I did it. So I needed to save myself time. I literally had to. And so that's what I teach, 3 steps. We have a free build session every Thursday at 1 Eastern. Anybody's welcome to come and MSPs come and they build. They've never built before.

Okay.

Some of them know a lot of things. Some of them have never seen anything, but we're moving from chatting with AI to actually building things. And the reason is, once you kind of see it, you can't unsee it. But until you do, this is just, it's just kind of almost sounds like hype and you can't really tell what's reality. And so I think—

Yeah.

Getting your hands dirty, then you start to understand this. And so I think it boils down to 3, like all the hype, all the vendors' stuff, all the new models coming out, I think it boils down to 3 things. First, step 1, figure out something you're doing that you would like to not do as much to free yourself time. So for me, I was in meetings, probably 20+ meetings a week. And once I was honest with the average time after that, update the CRM, send a note to the team about what the next steps are, craft that email, attach the things, send it out, By the time I did those things, and sometimes more depending on the meeting, I was probably spending an hour per meeting times 20 meetings a week. So I probably had 20 hours a week invested in the things we do after meetings, the things we all know. And so that's where I started. And just to be clear, I didn't have it do everything. The first thing I had to do was attach it to my meeting note-taker so I didn't have to copy-paste. And then the second thing I had to do was start to update the CRM. And so I can go through what I did, but my point is I ended up building an agent that after every meeting, it updates the CRM, it creates a new deal if it needs to, it creates the contacts, it updates contacts, it sends messages to my team to tell them exactly what's going on. It actually drafts an email because I always want it to be reviewed. I want a human relationship, so I don't mind it saving me time, but I don't want it just blasting out emails. Mm-hmm.

Right.

And so all of these separate tasks and copy paste and log into this app and do this, that took up so much time and frankly was the last thing I wanted to do late at night or early in the morning, you know, because I needed to send that email, but it wasn't the value. And so I couldn't even get my EA to do it at quite the level because this had all the meeting context. It held all the things in the way I wanted to say it. And so I worked through that. But my point is, I ended up saving myself about 20 hours a week. That means 1,000 hours in the last year.

Yeah, wow.

And so that was, for me, transformational. Now, version 1 of that, all it did was update the CRM, and it did maybe create a new deal, and then later it created a new deal, and then later I had it send a message to the team, and then eventually I had it sending the email. So I don't wanna make it sound like I'm some prodigy that just pressed an easy button.

Yeah.

There's work in it, but it's the thing that makes it so approachable is you just describe what you want and it sets it up. And if it doesn't work, you tell it what to change, like I didn't want this outcome. So it can be intimidating, but right, we're talking about typing English. We're not talking about programming. And so, so I recommend that the 3 steps are, first of all, save yourself time. So in our free group, I advocate you need to save 2 to 4 hours a week. Like, that's number one. And that way you as a leader are leading by doing. And secondly, we're all too busy to really put time into this. So buy back your own time, which is super valuable. And that way you can invest that into not only learning, But doing, understanding the cultural impacts. And so that's what I did. After that, I went to my team and I said, look at what I did. Isn't this cool? And I saved all this time. And all it sounded like was buzzword bingo. And they were kind of eyes glazed over and thought this would be the latest book I read with the latest maybe trend and maybe that would blow over. And they just didn't understand. Not like sharp people. I just wasn't—

Cool.

effectively communicating the transformation that had occurred. And so the second thing is I said, look, let me go grab the busiest folks on my team. And I asked them for 45 minutes. So I said, I want you to have this set up ahead of time, have the subscription, but bring something that you have to do repetitively that you would like to not do. And I spent time with a few folks on my team, and in 45 minutes we went from, I'd never heard of it, to they built something.

Wow.

That every time they press the button, it saved them time. Now, in 45 minutes, it's every time they're in it, it was something that saved them 5 or 10 minutes. So I don't want to make it sound like it saved, changed their world. But 45-minute one-time investment to save 10 minutes a few times every week is still a really good ROI. And so that the first, first step is save yourself time. Second is share that with your team. And it's not always the most senior, like L3 engineers. It's gonna be people you can't predict. Some are gonna be super passionate about it and do things in the business that I wouldn't have thought to do. At least that's what happened with me. So one of the guys on my team, Jeff, he comes back to me about 60 days later and he says, well, I don't know how to tell you this, but I, I've saved about 6 hours per day of my job.

So wait a minute, wait a minute. So he's— so, so your guy comes to you and he's probably nervous, right? He's like, hey, um, I've automated away, uh, 3 quarters of my day.

Right, right. Yeah. And so we have a great relationship. We have a good culture around we pay you for outcomes, not for hours. But even still, that's what I want to highlight. We've got to lead really well because I could tell he was still nervous.

Yeah.

Like, are you going to pay me less? Do you not need me anymore? Like, there was— he didn't say those words, but you could tell he was a little cautious. And so I think if we lead poorly, we won't give people the leash or the comfort level to experiment, or they won't come to us and they'll want to hide it. And so, fortunately, he felt comfortable enough to share it, maybe a little reticent, but comfortable enough. And of course, I was blown away. And I was like, you've got to show me this, because I had saved 20 hours, which is maybe a couple hours a day. But like, 6 hours a day was revolutionary. And so, and here's the other thing, this was a guy working until like We were just super busy and we all have these guys. You can't get enough of them. The business is booming and you just can't scale fast enough to keep those people. And even if you had more of those high-end people, they don't have your company knowledge when you onboard them.

Right.

And so he was working until like 9 o'clock every night. And so even while he's working until 9 o'clock, he spent some time because he kind of saved himself a little more time and then a little more time and then a little more time. So I do think it is an outlier to do that in 60 days, but it is clearly not impossible. The best part is—

Oh my goodness.

He said, look, I'm not the only guy with the same role. What do you want to do? And of course my answer was like, roll this out to the entire team that shares your role. And so that's when the entire company had this aha moment. I had it earlier and they had it when I gave— what I really love is when I give people the ability to create on their own.

Yeah.

I get out of their way. I give them opportunity. I give them access, maybe inspiration, and I get the heck out of the way and let smarter people than me do things I never would have thought of. And so then the rest of the team was like, wait, hold on, what did you do? So folks on that team, they got to immediately benefit. All of a sudden they're saving 6 hours a day. They're like, what's going on here? The rest of the company is looking at this going, wait, maybe AI isn't just a great way to copy emails.

Yeah.

And maybe there's something to this. And it took me having an aha moment and having that conviction to share it with the team. It took Jeff as the individual having that aha moment and sharing it with the team for us to kind of culturally adopt that this isn't science fiction. It's not just for Fortune 500s or frontier labs. Anybody can do this that has the passion. So I think it's as simple as breaking it down into those 3 steps, right? Step 1, save yourself time, 2 to 4 hours a week. Step 2, share that with folks on your team, the busiest people. That's the counterintuitive part.

Yep, right. Go to the busiest people.

They want the time saved. And then step 3 that you really can't do until you do those steps in order is now we've stepped back as a company and we've said, well, we now have the ability to see opportunities to shape our business strategically in ways that just were simply not possible before.

Absolutely.

So you start to look at the way we serve our clients and the speed at which we can serve them, the depth at which we can serve them. We have, I'll give you an example. We have a team that went from 5 full-time people to 2, and they get done a couple hours early. So they were stressed out, overworked with 5. We were gonna hire. If you're in that spot where you're growing, you gotta hire. We were gonna add more folks.

Yeah.

And that team has shrunk to 2 people and they leave early.

Wow.

And so we didn't— we gave people the opportunity to move around, right? We didn't say, oh, because we've cut, we didn't like cut people. We gave them opportunities to move around in the organization. The other thing that's been a huge blessing is they have more free time. And yes, sometimes that means a little personal time, but we have a good culture where they're like, how could I reinvest this? How could I help a little bit more? That's why you start with your own free time and you teach that to others, is at least my— because then you can teach them that I actually can make a big impact to the business. My point is the person running the service desk has a certain view and that's different than the person that's actually doing the tickets. That's different than somebody in sales and that's different than somebody in finance. They all have different views of the choke points, the constraints. And so that step 3 is you can look through this lens and go, what could we do that used to be impossible? And so those are really fun conversations that we just couldn't see before.

Yeah.

And this is why I say that you can't delegate. So I worked with some of the largest MSPs in the world, and big or small, I still get, Yeah, I'm handing that to my CTO. And I get it because it's technology. And I'm not saying the CTO shouldn't be involved, but I think that is a little bit like delegating the future of the company to a single individual instead of the entire C-team. And so I think the entire C-suite needs to maybe not be as technical as the CTO, but get your hands dirty, save yourself that time.

Yeah.

The reason a little time investment there allows you to see strategy that you couldn't see. And that's what this comes back to. How do I help my people be more effective, get more done, win more, help our clients more? And if that's not strategy, I don't know what it is. The other piece is so many people want to delegate to the CTO because it sounds like technology, but there's just so much involved in the strategy side. And the CTO is going to see an angle that's different from the CFO, that's different from the CEO or the COO. And when you come together, now you'll be able to see something that you really just haven't seen before. And that's what's gonna unlock the ability to help with the business of your client.

Yeah.

And things like that before, more than you ever could. So I think you gotta start with step 1, save yourself time. If you don't know where to do that, come to our BUILD sessions. They're entirely free and everybody's struggling through it together.

Yeah.

And open about it. And then also what happens is the fear starts to drop a little bit. What I mean by that is when I read all these headlines of such and such saved a million hours and made a bazillion dollars because AI, because AI, like there are these crazy headlines, and I'm sure they're not going to stop. But of course, we all sit here and we wonder, what am I missing out on? What am I not doing?

Yeah.

And I'm not saying it answers all your questions, but by actually grounding yourself in reality, you start to know, okay, maybe I don't know how to do everything, but I have enough of an understanding to go, that seems feasible. Or that's kind of hyperbole, right? I'll give you an example. There's a few people that, one of the memes is the zero person or the one person billion-dollar business. And I'm not saying there won't be one of those because of crazy amounts of leverage, but that's not gonna be an MSP.

Right.

And so I think we're gonna have greater leverage, but I'm not, my point is whether that's true or not, that's not the kind of business I'm trying to build. And I can understand that people that are doing that, maybe it's a content business, maybe it's some other business, but it's not the kind of business that we're generally building. And so I can look past all the crazy headlines and I can see, you know, how do we apply this to our world? Now all of a sudden it becomes far less scary because I understand a little bit. I don't say I understand all of it, but I understand a little, and that informs my team and our strategy.

Quick pause. Let me ask you a question. If you stepped away from your MSP for 90 days, would the business keep getting stronger? Or would it slow down? Your answer tells you a lot about the operational maturity of the business. I created a short MSP maturity assessment to help you identify what's working, what's breaking, and what might be capping your growth. You can take it at brianhoppe.com/assessment, and the link is in the show notes. All right, back to the episode. Yeah, love it, man. Yeah, so there's a lot, uh, there's a lot in there. So I'm, I'm especially Like, well, what I'm especially struck by is that it's, it's not a, it's not, it's not a technology thing, right? This is, we're actually talking about a leadership thing.

That's right.

When it comes down to it. And, and it sounds like you have done a lot of really good leading in that space because while you started doing it yourself, you brought other people into it. And then, and then it kind of gets a life of its own, is what it sounds like. you kind of have your, your 3-step process there. And it sounds like you have good leadership because like, hey, yeah, somebody's coming to you and saying, hey, I've automated myself away. What do we do? Like, so, so, so what I'm curious about is like, what's, you know, I mean, the cultural aspect of it and how, you know, yeah, I mean, how did, how did that look for you guys? And what's the you know, obviously you have to make some decision, right? It's like, um, you know, as you're growing, um, you're gonna hire fewer people, right? But maybe, but maybe there's some fear out there that it's like, well, yeah, we're gonna automate away a lot of stuff and I'm gonna have people sitting around doing nothing. Am I still gonna pay them or am I gonna find something else for them to do? Um, you know, yeah. So, and, and I know, you know, there's stories about that, like IKEA, you know, they They found something else for all these people to do that they automated a lot of their stuff. So yeah, so I'm curious, like, how did that play out for you guys?

Yeah, I think there will be the 100-person business that uses AI and only needs 50, and the bad leader will lay off the 50 and keep a bunch of cash, and it'll be a far more profitable business. The strategic leader will invest and the other 50 people will create capabilities that they never thought possible before. And 6 or 12 or 18 months later, the guy that didn't do that will probably be outcompeted and not be able to keep up anymore. And so I think it's not only nice, it's imperative to actually do that. And so one thing is you will have people that, of course, are short-term focused versus longer-term focused and that are more— astute culturally. And, um, but for us, we have started to look at revenue per employee. It's not our only metric, but it's an important one because now we're driving more revenue per employee.

Mm-hmm.

Then we said, what does that mean? Now we can give you back a little more time. We, you know, MSPs, we all know it's a hard business. You're working a lot. If you're only working 40 hours you're probably an anomaly in a lot of these businesses, right?

Yeah.

And so we can give you as an owner back some time. We can give some of your techs back some time. The quality of life there increases. If our revenue per employee goes up, we can pay better. We can hire more people. We can take more experiments. So what I would— here's the nuance that I think really matters in my experience. Revenue per employee goes up. What that means is we're going to have less people per million in revenue, but it doesn't mean we're going to have less people. What happens is we're going to grow more and faster. And so we might be a $20 million business with 10 people instead of 50 people or whatever that number was. And whatever we start out, maybe we are small, $2 million with 8 or 10 people, and we stayed at 10 and grew into a $10 or $20 million business. But we want to keep our people, especially the ones that are willing to embrace the culture of change, because that isn't easy. I wish I could say it was. 2 things have shocked me about this in my own transformation with my own company. One, The pace of change and how this works was hard for me to lead through. And I say that as somebody that I think is still early in this. I think we're still early. So if you do this now, you're still early. But what I mean by that is, I knew, or I felt like telling my team, you must do this, was the wrong thing. But I also was a little too loose of like, you should do this, you should try this. And then we got to the point where we're like, no, no, you need to try this, at least try it.

Yeah.

And so kind of finding that line. The other thing that shocked me was, and everybody I've interviewed, there's almost no, like everything before, when we went to cloud, the more senior guys adopted it faster usually. When we went to cybersecurity, usually the more senior guys led the way. I don't see that here. Sometimes it's senior guys, sometimes it's the guy that started yesterday. It's really hard to know. And it's not just technical because sometimes we'll have finance do more than people in technical roles or marketing or other roles because you go, wow, this can save— The other thing I want to say is it not only saves you time, but here's what we've learned, the counterintuitive part. It allows you to get rid of the undifferentiated heavy lifting that you don't enjoy about your job and focus on the things that you actually— that actually bring you joy. So whether that's more time with clients and less time doing paperwork or whatever that is for you, and that's actually had a really big impact to the happiness that our team has. And that's what I want more of, right? I want more of that, right? So The easy-to-measure metric is revenue per employee, but the joy per employee has gone up.

Yeah.

And we've had to be very intentional. We've always said this, but we've really tried to be intentional about, I don't care if you started yesterday, you can come up with this great new initiative and build out this thing, and then maybe all of a sudden we're gonna be doing whatever that was that some junior person came up with. It's no longer just the senior people And that's led to people coming up with all these great things because before you kind of had to be technical to do technical things. Like you had to be a software developer to produce software and you had to know about infrastructure to stand up new infrastructure. And now you just have to be the domain expert. And what I mean by that is if you're good at marketing, you can just talk to this and tell it, here's what I want it to automate. If you're good at finance, here's the kind of reports and spreadsheets and forecasts and things I want you to automate. And so I am not good at finance, so I'm not going to be the domain expert that does that.

Yeah.

And that's why each domain expert has a real role to play. And that's the other thing is we didn't want people to feel left behind, that the first couple folks that adopted AI would do all the heavy lifting. We very much leaned into, you have the domain expertise in the role you're in, you have all your life and other expertise that you bring, and you're going to see certain issues or problems or opportunities that others won't. So as much as I would say we led that way, the guy automated the time, Jeff, he came and told me, like, that's all win, all win, all win. But it's still been like, man, I can't tell you who's going to come with the next idea. I just couldn't predict it.

Yeah.

So yeah, it's a real, like, it's a great thing, but it's also a real challenge because we are growing faster than ever. Revenue per employee grows faster than ever. All of a sudden, the idea of like an annual performance review seems antiquated because of the speed at which we're able to move.

Yeah.

And the speed at which they're becoming more valuable in the market. Our comp plan needs to keep up with all of this. And so there's blessings, But there's changes that need to happen because if I do a once-a-year performance review, I'm probably gonna lose key people because they could become worth 50% more, not 5% more in the year.

Yeah, absolutely. Absolutely. Totally makes sense. Yeah, so I'm, you know, I love the revenue per employee and the joy piece of that. And I think, All right, we can— we're— there's a lot of conjecture out there as far as like, okay, well, what's going to happen with all this stuff? But I think, you know, when I think about it for MSPs, definitely that revenue per employee, because like, I mean, I can look at, you know, I talk to new MSPs all the time. Tell me, if you tell me your revenue, top line revenue, approximate revenue mix, number of employees, I can tell you about how profitable you are. Yeah, right. Just, just, you know, top of the head math, right?

That's right.

The best-in-class MSBs do just around $300,000 of, you know, per employee, revenue per employee, a little bit, a little bit less. But I think that number is going to, is going to be pushed up because of what we're talking about. Likely, where there'll be some, you know, some functions that are more automated away like level 1, you know, help desk, because a lot of those things are going to be, you know, relatively easy to automate. And then, and then we have, we have problems with, okay, well, if there's, if there's fewer level 1s, then how do we get level 2s and 3s, which we're still going to need, right? So there's, there's that whole piece of it. And then, you know, and then there's what does that do to the financial model, right? Like, it's a similar financial model, but we're gonna, We're going to probably be spending more on tools and maybe less on people. Our margins should go up as an industry. Our multiple of wages should go up as an industry. And, and again, revenue per employee. And, and it'll probably do pretty good things for valuations of MSPs because it's less dependent on certain people, even, even less so now than a good, you know, a good MSP is.

Yeah.

And so, so I see it also changing the financial model somewhat. You know, I mean, a lot of things fundamentally stay the same, but there are things that are going to change as we, as we move down this path. And so, so I'm curious, you know, well, you, you know, you kind of gave your 3, you know, step 1, 2, 3. I think, you know, I think there's this kind of like, um, in some ways there's like this black box, right? Like, and, and I don't want to get, I don't want to get so far into, into details, um, but it's like, okay, like, hey, for me, I, you know, I, I've got, I've got, I've got ChatGPT I pay for, I've got Claude that I pay for, I use some of this for some things, that for other things. Like, I know you've got build sessions that you're doing, but, you know, I'm curious, like, if somebody's just like, hey, I wanna start, let me, you know, let me try to figure this thing out. Where do they go? What do they do?

Yeah, yeah, yeah.

Besides, obviously, join the build sessions, right? Yeah, yeah.

I would say there's 2 answers, right? Join our build session if you'd like, because you're A couple of things. One, we have had people volunteer brand new, and we'll just walk you through what you want to— you can show up and say, I want to build this. I've never— I've got it installed. And, you know, we'll let you screen share, walk through it. We have people that have built amazing things in there, and we have people that have never built anything at all and everywhere in between. And that's the kind of community we want to keep.

Yeah.

And so that's where you can go, but you can see all these others building things, and it's going to give you other ideas. that you perhaps haven't thought of. And then the number one problem the group ran into is in order for this to be valuable, it has to do something with a business system. In other words, I need it to access my RMM or my PSA or my IT Glue or my SharePoint or whatever it is. And so—

Yeah.

The number one problem is they were trying to connect. It doesn't matter which AI you use. And usually you were like, oh, there's this thing called an MCP server and let me try to connect it. And what happened is even if it was a major vendor and a big brand name, like I'll give you an example, we use HubSpot.

Mm-hmm.

And over a year ago, I started trying to use their kind of MCP. Back then it was read-only and I wanted to create contacts and deals and it was like, no, And then later they came out with one that allowed you to do some write, but I could create contacts but not deals. And I was like, well, this is useless for my— like, I want this to all be done. I don't want to leave some of the paperwork for me. And so I struggled with that, even though I've got a software development team and all kinds of other things who understands APIs and all kinds of other stuff. We spent so much time trying to get connected to the business tools.

Yeah.

And then in this group, we had people that showed up, and it doesn't matter the vendor. You just can pick vendor A, B, C, whatever that we're using. And even if they have an MCP server or some other connector, it often doesn't do what we want. We want to know which ticket did we spend the most time on? Where did we lose the most money from our tickets last month?

Yeah.

And the problem is most of them weren't built when you have 10,000 tickets last month. they weren't really able to cope with how do I actually comb through all of that data?

Right.

And so what ended up coming out of the group is we built what's called an open source repo, and it's called MSP Skills. And today there are 60 connectors, and it's continued to grow. It's entirely free. It's entirely open source. And so if you're, getting started, you pick your tool and you can go to it. And it doesn't matter if it's Claude or ChatGPT or whichever one. It just says, look, here's the instructions for the one you're using and point your— The cool thing is when you're using an agent, not just chatting, you can point your agent at it and say, set it up for me. And it will. And so now you can connect to your PSA or your RMM, your financial tooling, your, you know, documentation system, whatever the things you're trying to connect to, because that's usually how business value is created. Like, I got it in this system and that system and this system, and I need it to do these things. And look, we can all start off with like, go pull from the knowledge base for every ticket that comes in and summarize it and give it to my techs. And that way they have a starting point that's better than searching or zero.

Yeah.

But then with read-write access, you can you can quickly evolve to like, go ahead and draft the response and have us review it. So whatever it is you're trying to solve, you can do that. And by getting your hands dirty, you'll understand what that's like. So I'm not saying we have all the answers, but that is usually one of the top constraints. It's like, great, I can tell it to search the web or do stuff, but it needs, for it to be really valuable, it needs to know what your ticket is, what your clients want.

Yeah.

What your standards are, what your SOPs look like. And by giving it all of those things, which you can do, now you can ground it in your vision, your values, your methodology, your SOP. And as buzzwordy as agents and agentic AI is, what I think—

And MCPs. MCPs.

We love acronyms in technology, right? However you get connected to these tools, the point is there's all these tools out there that write code, that write software.

Okay.

And you can do that and you might want to, but I think the opportunity that MSPs have in front of them for themselves and then for their clients, so if you go learn it for yourself and then you apply it, is actually more of connecting to multiple business systems and then basically automate things so that workflows are done. So if you have an SOP, you can probably have this done that way, connect to this system, that system, and this system. And that brings me, I wanna step back out of the tech for a second and something you said earlier, you talked about like automation and less, and there will be less per revenue, but that should allow us to grow more, right?

Mm-hmm.

So the whole Jevons paradox is like, we'll need more Right, people, because we're going to grow more and serve more. And the thing about it, though, is we're going to go help our clients in ways we never have. That's going to create more opportunities, more revenue, more people to do this.

Yeah.

And so what's interesting about the way it exists today is it's not just, for example, how are you going to get from L1 to L2? Are we not going to need the L1s? And I think that's actually the wrong take. I think the thing is, an L1 using AI is going to be capable like an L2.

Mm-hmm.

What we're going to look for is good judgment. We're going to look for the ability to learn. And those kind of people are going to be in short supply. And so I think that there will be, in some ways, easier to get into, if you have the right soft skills, if you will, than it has been before. Because the reality is all these models we're using, they know all the things about how to patch whatever version of Windows. I don't really need to know that anymore.

Yeah.

Which app works in compatibility with that. The things we used to store in our heads are not really things we need to store anymore. And so the nuance that I think most people are missing is, If it's what I would call mechanical, you can automate it. If it's judgment, you need people. And what I mean by that is, if you have a really well-documented SOP, it's kind of mechanical. Go get to this system, paste it from that system, type into this system, do this. Like, if this is the way we patch, or if this is the way we update stuff, or this is the way we generate a QBR, like, that's kind of mechanical. work. And the agentic models are good enough to execute. You could literally give it your SAP, connect it to these tools, and watch it just do the work. We're going to need people though on the other side, like L1s, because unless your business model, unless you choose to have a business model where you serve people without talking to them all of a sudden, people are going to feel more alone. They're going to have more questions. They're going to want to talk to a human. They're going, I don't know what their judgment is. So even if that human's using leverage via AI to do things that, you know, even the L1 still has a role if they can speak with people. So I think the skill set may shift to somebody that is better at communication, to talking to clients, open to learning, you know, instead of like maybe we were looking for an L1 that was, it was okay if they're introverted, but they're really good at this cert and that cert because they're pretty technical. And now we're hiring, I would say I don't care so much about that technology. It's now all in a model, right? It's like before Google, we had to know everything. And then after Google, the answers were findable. And now we have all that turned into something that we can kind of mechanize. And that's the nuance I want. I just want to say we're not going to automate everything. We're going to automate the undifferentiated work. And then where there's judgment or taste, certainly where there's high stakes, we're not just going to automate that, right? I don't know anybody that would automate your entire compliance program or following up with clients and having meetings with them.

Yeah.

Sure, the technology exists today to have them join a Zoom meeting and actually speak as an AI. Who wants to talk to an AI on the other side of that? You want to talk to a real human.

Right.

You want somebody you can hold accountable. And so I have just started to write about this in something I'm working on called Compounding Teams. And it's really exploring how do we work with agents? Because I think the future that we're living now, and that is coming, is they're now coworkers. And how do we work with them? And I think it's interesting. I have more questions than answers because it is, right? But yeah, we're working with them and we're trying to see them a little bit like an eager intern that we're trying to onboard.

Love it. Yeah, yeah, no, that's great, man. I love it. And I appreciate you kind of bringing it back to that because at the end of the day, it's we've got to, as business owners, we have to be thinking about, okay, how do— how can I use this to, um, you know, to, to essentially like delegate things to that aren't, aren't my highest and best use?

Exactly.

Right, as a, as a leader. And, um, and, and, you know, we should always be doing that, generally speaking. Like, hey, what if it's not in my zone of genius, then I shouldn't be doing it.

Exactly.

Um, and And to your point as well, like, I can see, like, for me, I've done a lot on, you know, as far as like just automating some of my daily workflows and preparing for meetings and stuff. I mean, I meet with 25 MSP owners one-on-one every month, multiple times every month, right? And so like, and actually like my highest and best use is talking with people, right? So like, obviously, you know, there's no AI me that's going to, you know, have Good to have those conversations and all your hard lessons. And yeah, you know, I mean, but, but, uh, but all that to say, it's like, if I can, and I have been able to automate away a lot of things that were kind of annoyances, and that has allowed me to be more present and more grounded and, um, and, and to do some thinking outside of the box and, and produce things that are of value to my clients. And, you know, so, so also to your point, it's like, oh yeah, like actually freeing up that bandwidth, it allows you to be more creative and to do new things. And that's, I think that's gonna be a big piece of the leverage that we end up seeing out of AI.

So that comes back to leadership, right? Because freeing up more time to watch Netflix, not very helpful. Freeing, the other thing is like, it's easy for me to free up time and certainly We've chosen to reinvest some of that time into learning and getting better at AI. It is a skillset. But what I've gotta lead is say, it's okay to not know everything, 'cause we're not going to. We're in a different era.

Yeah.

And so I also don't wanna free up time and then create this cycle of you have to produce, because we're able to produce so much more. It doesn't mean that I need you to produce 10 times more or you're not worth it. And so I wanna make sure that we don't create this vacuum that creates this endless cycle of like, I have to do that because like you said, you're now able to create value. One of the key things I heard you say is be more present, right? Those are the kind of—

Yeah.

That's where the value is. And the same thing with MSPs, like when we sit down, we can be better prepared 'cause it could do more of the legwork, but we need to be present. You know, if we're sitting here thinking about all the hundreds of shiny object things that we could adopt, then, you know, we're not in the moment.

Yeah, yeah, I love it, man. Yeah. And, and, um, you know, so, okay, yeah, I have, I have this thing, like, and this is maybe, this is just an aside, we need to, we need to wrap up shortly. But, um, I, I had this thing where I was like, and I don't know if when I was running my MSP, I don't know if we ever fully got there, right, where there's like You know, you have all of the, you know, let's say you have 2,500 endpoints that you're managing. And, and you have your PSA, your RMM, your documentation system, your security tools. How many, how many times was I actually confident that all of those things were correct and showed all of the things that we were supporting? Like, literally zero.

Yeah.

And I have this, This is what goes through my head is like, oh, I could have an agent that its job is to go check, you know, for each of these systems for each client, figure out what's real and what's supposed to be there and what's not there, and either tell somebody or go and fix it. And so that everything is actually working where it's supposed to be and working how it's supposed to be.

Yeah.

I don't know. This is just an idea that I'm like, I bet AI could fix that.

What's funny is we all know that. We all know like 0% was the time when you were sure every backup was tested, all the security updates were there, all the patches are there. We just, the answer's right, zero. And so I've talked with a number of folks, that's exactly what they're doing. They're like, I'm just sleeping better. There's a guy in the group that said, we have a full-time dispatcher, but even they can't keep their hands in every ticket and everything that's going on. So every night it looks through everything that people, what they were doing, why they did it, all the replies, all the sentiment, and it surfaces to the whole team. Who's kind of the most at risk? Who's the most unhappy right now? And then they said, look, we just could have— that was that level 3. What can I do now that was formerly impossible? And that's when you're starting to ask that question. And they started to answer that. They go, oh, well, we can always know every morning who's kind of the most in a precarious position or upset or whatever. And they're able to reach out and right that relationship. Because if you wait on us, it might be several weeks or a month before we come back around, see all the information, pick up the phone and call them.

Yeah. Right, right. Yeah. So, so obviously tons of stuff that we could do here. I think, I think what's probably important is, is just to, is just to get started. Right. And, and so, so, so yeah, well, anything else before we kind of wrap up? I want to give you a chance to kind of, you know, hey, where can people find this stuff? You know, jump in for free if they want to. But anything else that we didn't hit that you, that that we definitely need to make sure to hit?

I think the core is like, don't delegate this strategy, right? So as a leader, if you're delegating, to me that smacks of like a long time ago when people said, no, I have my admin type stuff, right? If you remember that era.

Yeah, yeah, yeah. Oh, I don't type.

Yeah, you remember you had people that, I don't type. And you're like, well, that probably didn't serve you in the era we're in now.

Over the long term. Yeah.

And so I feel like it's a similar thing if you're delegating. So don't do that. Get your hands dirty, just get started. Nobody knows it all, right? So get out of that. That's the other part of leadership that I think is a muscle that I need to exercise is I need to go and get my hands dirty. And sometimes that means fall down and make mistakes. And I can model that so that the rest of the team knows I don't need to know all of it and they can show up without all the answers.

Yeah.

And so I think that leading and getting started part is important, breaking it down, saving yourself. That's the other thing is I just don't have time. I just don't have time. I just don't have time. And so I'm like, great, do this, save yourself 2 to 4 hours a week. I've got somebody that I worked with that spent about 10 hours total, never seen it, spent about 10 hours over maybe a month. They didn't have a lot of time. They spent a little whenever they could. What they built saves them 2 hours a week. So yes, you might have to spend a few hours, but I mean, who wouldn't spend 10 hours to have 2 hours every week forever back in your calendar, right? That's 100 hours or so a year. That's a great ROI. And then you have the unlock, and then you can apply that for your team and others because we're all so busy. So the thing is, I think it's either we're too busy—

Yeah.

So I've taken that excuse away. This is how you figure that out and free yourself up.

Yep.

And then the other one is, I don't know where to start. So there's lots of places. One of them is our Build Sessions. They're at compoundingteams.com. And you can join a Build Session. We have a community you can talk with. And right there is the beginner's guide. I've never heard of it, how to set up. We always recommend you start with something called Claude Code, which throws you right in the deep end. where you're gonna be totally confused, but you can do any— the Fortune 500s use this to run entire parts of their companies. So there is kind of no limit once you understand some of those fundamentals. And so we've got a step-by-step guide. This is how you do that. And so we've taken that away. You can immediately start building. You don't have to talk to us. You can just go do stuff. If you want to, Get inspiration or have questions, you're getting stuck, come to a BUILD session, ask somebody else. It doesn't have to be in ours. We just put together a community because we realized we had a bunch of leaders that wanted to lead by doing and not just saying. And so that's what I think is fun about this time is none of us know what we're doing. We're all figuring it out together.

Yeah.

And there's a few of us that are willing to come together and admit that.

Right.

Help each other. And we've got people that are really far down the line, really advanced, and they're helping out the guy that just started and, you know, just got it installed and showed up on the meeting. And that's what's exciting. And it's just never been more true that there's a big opportunity to change your business and to help your clients in a deeper way if you'll lean into this. I also think that means that you will help in different ways than others, right? So it also goes back to the— we can now also escape a little bit of the commoditization because we're all kind of keeping the lights on. And so ignoring this will, I don't think, will serve you because you're going to delay figuring out, like, you're going to help more in this area. And last week we had a guy, he said he would share what he's doing with marketing system. And I thought, well, this will be This will be interesting. I was blown away. This is an MSP. We're all bad at getting leads generally. I don't know why it seems to be an MSP DNA. We're not good at marketing.

Correct.

We're the same DNA. I'm just not good at it. Yes. And so my point in that is he showed up and showed us that he has built this whole marketing system and it's It's sending out cold emails, it's producing blog posts, it's producing social media across 3 or 4 different social media channels. It's doing like SEO, AEO. And so he was like, I was spending tens and tens of thousands of dollars a year at agencies and really not getting results. And what struck me though is he's like, I'm just a— what he said is, I'm just a router jock. I'm just a tech guy.

Yeah. He's an owner.

But my point is, what's funny is he would never say he's a marketing guy, but then he's built this pretty elaborate marketing system. And yes, we're using AI, and yes, there's buzzwords, but what's cool about it is at the end of the day, he just built systems. He put together processes and built systems that allow him to do this. And I think he said 6 weeks in, something like that, less than 2 months, He's already driving really strong leads.

Love it.

More than he ever had.

Amazing. Yeah.

Get started and one of you will be deep in, like he wasn't before and now he's got like this fantastic, I told him, I said, you realize people would pay for this? Not only other MSPs, but your clients would pay for this. You know, 'cause it like updated Google My Business and it, you know, all these things. And I'm like, and he was kind of shocked. He was like, really? And I'm like, Absolutely. So just get started. You never know where you'll end up.

I love it. Yeah. Yeah. Well, and, and, and this whole thing actually, I mean, if you're doing it internally, it's the segue into doing it for your clients and, you know, you gotta be able to do it yourself as well too. So awesome, man. Well, um, this has been great. I really appreciate you coming, sharing all this stuff. Um, I think you, you said Compounding Teams is where, where folks can go to just like to jump in and get started if they want. I've joined in there and, you know, I haven't gotten to dive in as much as I'd like just yet, but I'll be around there as well. And yeah, anything— well, and I guess people want to get in touch with you, they could go there. I assume your LinkedIn is a good place to find you as well.

Yeah, find me on LinkedIn, right? Damien Stephens on LinkedIn, host of MSP Mindset. You won't see—

go find MSP Mindset. Yep.

You won't find too many people saying those things. So it should be pretty easy to track down.

Love it. Love it. Awesome. Well, Damien, thanks again. And, um, yeah, and we'll see you, um, next time on the $10 Million MSP Podcast. I love it.

Thanks for having me, Brian.

Absolutely. Thanks. Thanks for listening to this episode of the $10 Million MSP Podcast. If this conversation got you thinking about growth, profitability, or what might be holding your MSP back, I invite you to take my MSP maturity assessment. It's a short assessment designed to help you identify what's working, what's breaking, and where the biggest opportunities in your MSP may be. You can take it at brianhoppe.com/assessment. And again, that link is in the show notes. I'll see you next time.