Get ready to embark on a tactical journey through the thrilling world of Managed Services and Mergers & Acquisitions with our insightful guest, Australia's Ryan 'Fuzzy' Spillane. Brace yourselves as Ryan takes us through his compelling entrepreneurial journey, from his humble beginnings at the age of twelve, to becoming a global M&A guru. Together, we’ll canvass the evolution of managed services over the past quarter-century, and unlock the revolutionary concept of fixed price contracts that he spearheaded in 1999.
We’ll hark back to the 90s, unearthing the complexities of time tracking and billing pre-ticketing systems era. Ryan opens up about his unique experiences of merging three disparate companies into a singular unit, striking the perfect work-life balance, and seamlessly transitioning from an MSP to a consultant. He also gives us a sneak peek into the IT service market in Australia and New Zealand and how it’s become an international benchmark for vendors across the globe.
We'll conclude our adventure diving headfirst into the emerging tech fields of machine learning and AI, and the role of consulting therein. Fuzzy shares his personal experiences regarding preparing for a sale from both a business and personal viewpoint. He opens up about the post-sale challenges he encountered and offers invaluable advice to anyone preparing for a similar transition. You won't want to miss his wealth of wisdom and insights into the intriguing world of MSPs, M&As, and the future of IT consulting.
Get an in-person rundown on what N-able has to offer including products, insights, networking and more.
The N-able Roadshow is visiting more cities than ever before in 2024. Take a look at our first group of locations; we may be in a city near you! -> http://spr.ly/6000RsTOq
'Now that's it: Stories of MSP Success,' dives into the journeys of some of the trailblazers in our industry to find out how they used their passion for technology to help turn Managed Services into the thriving sector it is today.
Every episode is packed with the valuable insights, practical strategies, and inspiring anecdotes that lead our guests to the transformative moment when they knew….. Now, that's it.
This podcast provides educational information about issues that may be relevant to information technology service providers.
Nothing in the podcast should be construed as any recommendation or endorsement by N-able, or as legal or any other advice.
The views expressed by guests are their own and their appearance on the podcast does not imply an endorsement of them or any entity they represent.
Views and opinions expressed by N-able employees are those of the employees and do not necessarily reflect the view of N-able or its officers and directors.
The podcast may also contain forward-looking statements regarding future product plans, functionality, or development efforts that should not be interpreted as a commitment from N-able related to any deliverables or timeframe.
All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.
Get ready to embark on a tactical journey through the thrilling world of Managed Services and Mergers & Acquisitions with our insightful guest, Australia's Ryan 'Fuzzy' Spillane. Brace yourselves as Ryan takes us through his compelling entrepreneurial journey, from his humble beginnings at the age of twelve, to becoming a global M&A guru. Together, we’ll canvass the evolution of managed services over the past quarter-century, and unlock the revolutionary concept of fixed price contracts that he spearheaded in 1999.
We’ll hark back to the 90s, unearthing the complexities of time tracking and billing pre-ticketing systems era. Ryan opens up about his unique experiences of merging three disparate companies into a singular unit, striking the perfect work-life balance, and seamlessly transitioning from an MSP to a consultant. He also gives us a sneak peek into the IT service market in Australia and New Zealand and how it’s become an international benchmark for vendors across the globe.
We'll conclude our adventure diving headfirst into the emerging tech fields of machine learning and AI, and the role of consulting therein. Fuzzy shares his personal experiences regarding preparing for a sale from both a business and personal viewpoint. He opens up about the post-sale challenges he encountered and offers invaluable advice to anyone preparing for a similar transition. You won't want to miss his wealth of wisdom and insights into the intriguing world of MSPs, M&As, and the future of IT consulting.
Get an in-person rundown on what N-able has to offer including products, insights, networking and more.
The N-able Roadshow is visiting more cities than ever before in 2024. Take a look at our first group of locations; we may be in a city near you! -> http://spr.ly/6000RsTOq
'Now that's it: Stories of MSP Success,' dives into the journeys of some of the trailblazers in our industry to find out how they used their passion for technology to help turn Managed Services into the thriving sector it is today.
Every episode is packed with the valuable insights, practical strategies, and inspiring anecdotes that lead our guests to the transformative moment when they knew….. Now, that's it.
This podcast provides educational information about issues that may be relevant to information technology service providers.
Nothing in the podcast should be construed as any recommendation or endorsement by N-able, or as legal or any other advice.
The views expressed by guests are their own and their appearance on the podcast does not imply an endorsement of them or any entity they represent.
Views and opinions expressed by N-able employees are those of the employees and do not necessarily reflect the view of N-able or its officers and directors.
The podcast may also contain forward-looking statements regarding future product plans, functionality, or development efforts that should not be interpreted as a commitment from N-able related to any deliverables or timeframe.
All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.
He said to me why don't we put them together instead of you running two minutes? I was like, well, I had a thought of that. 10 minutes. 15 minutes later it was a done deal. So we actually brought three companies. I was in May 2005, up until 2018. We did 10 for ourselves. When I exited, I'd actually help 31 other companies do some sort of M&A activity.
Speaker 2:Welcome to Now that's it. Stories of MSP success, where we dive into the journeys of some of the trailblazers in our industry to find out how they used their passion for technology to help turn managed services into the thriving sector it is today. I'm Chris Massey this week on. Now that's it. Australia's Ryan Fuzzy Spillane has made a name for himself around the world as the M&A guy, and rightfully so, taking part in 10 himself while running an MSP and helping more than 30 companies through their mergers and acquisitions. But he wasn't always the M&A guy and he wasn't always in IT.
Speaker 1:So the first business I started importing paraffin wax handles from Hong Kong to Australia when I was 12. So yeah, not your all-lemonade, stand down on the corner, or something like that. So that was the first one. I then had that for a little bit. I then had another business when I was 16, during high school, when that she did some accounting certificates through my high school day and then started calling apart computers, doing an upgrade of an old well, holy crap, I actually started with a 286, but we'll ignore that. But then yeah, pentium 75 is the first real computer. The clock took to Pentium 90, added memory, so a bunch of other things, and it was actually quite a fun and interesting and then did something you probably shouldn't do sometimes and that's sort of hobby into the work. It started the first IT company at the end of 1997. So I wasn't even legally old enough to have a business again. So as soon as I hit 18, then I had a company set up and started officially running a two business.
Speaker 2:Now, back in 97 or those late 90s days, managed services wasn't really a thing, right? I mean you were doing more break fix.
Speaker 1:Pretty much all of it was break fixed back in those days. However, there was an interesting one because in 1999, one of my first clients we actually agreed to put in what would be called managed services. So in 1989, we had an insurance brokerage. It was about 35, 40 staff at three offices and we actually put together a managed services offering. There was about 3,300. So not far off about $90, $95 a user a month. And yeah, put that in place in 1999.
Speaker 1:So we joked about it at the time that the first agreement was you break it, we fix it, you pay for it. It was just that simple. But no, we, the odors and the oversight of that particular customer, couldn't handle that. So we needed something real so you could put a very basic one page back together. But yeah, the first ever managed services for us was in 1999. So it was. We only ever had two clients on it at that time, the first one being an insurance brokerage and then another one. Everyone else was break fix, which definitely was what it was back then, and if you made profit and made a bit of profit, it was good Then. Over the last 25 years things have changed a little bit, which I'm sure we'll talk more about.
Speaker 2:Yeah, how'd you come up with that idea for that fixed price contract? I mean, obviously there weren't many other people doing it at the time, so where'd you get that idea? I?
Speaker 1:haven't been asked that question in a bloody little time. It's give it. So, to be honest, I actually think part of it's laziness, to be honest about it. I couldn't have bothered doing tracking or, like we did, track the time. We used some ticket management stuff, but in the old, the late 90s, it was like emails and tasks and just random things. I had a one page day planner and I knew where I was and knew where the first tech was and things like that. So I just basically counted the time within every month or every week. You had to do a bunch of invoicing. So I think a lot of it, to be honest, was probably from laziness. I didn't want to have to do a bunch of billing where one bill each month made life a lot easier.
Speaker 2:We like to call that efficiency, not laziness. You were a super efficient, exactly.
Speaker 1:Which I would now slap myself hard for doing something like that, but we won't talk about that one. But, yes, no, it was, it was, it was efficient. It was about just being able to have more clients, more, ultimately, more billable time at the time. So, and that kind of worked pretty well. And then put in the first ticketing system, which was a very simple ticketing system called Footprints. Many years ago I used to run a report out of that at the end of each month and would tell me how much time we spent for each ticket of each client, and that just used to copy and paste that into into a NYAB or an accounting package that's prevalent down here and that was that used to send out the invoices.
Speaker 2:It's scary and I didn't start my IT career very much later than you it was about the same time. But I remember our first managed services as well, and the PSA was something we built right and that just sounds like just like what you were doing. I mean, there wasn't a great ticket tracking system, and so you were doing a combination of spreadsheet, database, whatever to be able to keep keep track of your time and what you were actually doing. So that's great. That does bring back memories for sure.
Speaker 1:When we actually did the first merge together, they'd actually built a ticketing engine built on Microsoft to exchange public folders.
Speaker 2:Wow, that's going way back.
Speaker 1:Yep, that's right. It's amazing what, what could be done back then.
Speaker 2:Yeah, so you were actually running. You were in two MSPs at the same time. Right, you had two of them. How did that work?
Speaker 1:Well, I was only probably in two of them for a couple of weeks or a couple of months. But yes, a friend contacted me from the industry. We knew each other through the small business server user groups back then, all the good old SPS products, and yeah, he was having some troubles in his business and wanted to catch up and have a meeting. We caught up and then we talked through a few options and one of those options, as I'd come in, take 30% of the business work two days a week in his business. Look, I was quite technical but I was. I was good at adulate finance as well. And then at that point in time, my old IT company. I was working a nine day, four night, so I was actually having a day off every four night.
Speaker 1:I had a bit of like work-life balance back then. We actually went, hilariously, went and grabbed some way for lunch and I still remember it and dropped the mail off and he said to me why don't we put them together? And instead of you running two? And I was like, well, I hadn't thought of that. And it's like, yeah, a couple of 10 minutes, 15 minutes later it was pretty much a yeah. We thought through the ideas. We had to finalize some stuff a bit legally, but yeah, it was, it was a done deal. So we actually brought three companies. That was in May 2005. We had that first conversation in March 2005. But by May we were basically all trading together under one company and we brought a third company in at the time. So we brought three companies in at the one time.
Speaker 2:Yeah, 2005 is the first M&A that you were sort of part of, and obviously the two were. You were working for both of them, or at least helping somebody out. How did how did you get introduced to the third one? What was that all about?
Speaker 1:So Wayne was the founder of Correct Solutions and he actually knew a lady named Mary Ann who did from State Head Business Systems or Nickname Stabs. She was doing accounting systems which corrective done in the past and CRM systems. So it was logical to bring the three together and and start seeing that they're again selling CRM. And we were doing. We were supporting a number of accounting systems for clients anyway, as in the underlying infrastructure, and a lot of times they'd ask oh, can you help fix the problem with the, with the app? So it wasn't that much of a reach compared to what you do nowadays.
Speaker 2:That's great. So 2005, you're, you're merging these companies, you're creating this, this, this brand new MSP, if you will, or service provider, did you have a pretty good pulse on the rest of the market? Fuzzy was how did you, how did you feel that the Australian New Zealand IT service market really compared to the rest of the world?
Speaker 1:It was interesting because we started coming up from September, I think that year we started coming up to the old, a couple of conferences, each set like a September conference every year up in the US, and it was good coming up and and being around other other IT companies and where it was on the Microsoft campus. It was a bit of fun, but it was also we load a lot from it because at the point in time I would have said that we would have been about two years behind the North American market. So we could come up there for a year or two, get an idea, understand the product, understand what's happening up there as such, and be able to get some of those products and some of those solutions and bring them back into country and be ready before, before anyone else wants to or before like yes, other people would be as well, but before the market was ready, ready for it. So we did that for a number of years, came up every every year around September, spent about seven or eight days there, five or ten days, and then, as later, when time went on, it became twice a year and whatnot, but during those years it ended up being where we'd be then, one year behind you, then it was six months behind North America and in certain aspects now it's actually quite the opposite.
Speaker 1:We will actually get access to product from vendors in the Australian and New Zealand market space. A lot will be for other parts of the world. We're big enough to as a sample size and we're noisy enough if something doesn't work. But let's be honest about it, if they screw it up, we're still only a small part of the global economy. We're noisy. We tell you what we like and what we don't like and what we want fixed. So you definitely get lots of feedback on your product and, yes, but as I said, if you stuff it up, then yes, it's still a small enough market that you can still go after Asia, europe and the US without a problem.
Speaker 2:Great. That's why we love you, aussies. You have no filter, you just tell us like it is.
Speaker 1:I think we are filtered. I think we're direct, so I think we're still professionally respectful. But we will happily tell you what we think too. That's great.
Speaker 2:Awesome. So you've got to tell us, or at least tell me, why you won't tell us where did the nickname Fuzzy come from?
Speaker 1:There's probably only, I'd say, 20 people in the world that actually really know where the nickname came from, especially for one of those visits. I'm not going to tell you where it came from.
Speaker 1:I would normally tell you. There's a couple of people that still spawned a secrecy that know, and know that if they did tell anyone, they might end up with concrete shoes at the bottom of the building, the bottom of the ocean somewhere. But yes, it's just, it's, it's hilarious, it's this really small piece that's now, over years, has grown out of mass proportion and it's just, it's just, let it keep going.
Speaker 2:Yeah, I was just going to say. Every publication, every podcast, every story you're in fuzzy is the is how you're referred to. So you know. If someone asked me, if Ryan, I wouldn't know, but yeah the amount of people I've heard over the years.
Speaker 1:It's less common nowadays, but going back probably five or eight years, that would go up to the US for a conference and one person would be talking about this Aussie named Ryan or one be talking about this Aussie named Fuzzy, and then it would take him 20 or 30 minutes to realize the same person, because half the people, at least I'd say two thirds of the people in North America, didn't know me as Ryan. They just knew me as Fuzzy and everyone down here knew me most of us Ryan rather than Fuzzy. And then, as again, as global happens and as everything starts happening, everyone knows everything. So, yeah, everyone kind of knows me as both nowadays. So, yeah, it's quite funny.
Speaker 2:Sounds good. All right, all you listeners. Next time you see Fuzzy at one of these conference events, make sure you buy him a cocktail and then ask him where he got his name, and he'll you'll be sworn to secrecy, but he may or may not tell you, so we'll see If you buy enough the means.
Speaker 1:You won't remember them.
Speaker 2:Remember that I'm not telling you, yeah, I like that, I like that, all right. So you, so you're becoming the M&A guy. So between sort of the years of 2005, 2000,. You know 2022, so the last you know 15, 18 years, lots of M&A happening in the MSP space. What do you think the reason was? What's fueling that that sort of transaction? Look, it depends.
Speaker 1:Look, there's a number of answers to that, to that crystal. It comes down to why you were doing it or why you are doing it, and that can be a little bit different. It's an easy form of not necessarily easy. It's another form of growth. If businesses are struggling or aren't growing at a stretch they want through natural and organic growth, then its acquisition can definitely help with that. So we did it for. So, between 2005 and 2018, we did 10 M&As into correct solutions. Eight of them, I would say, are successful. Two of them were not and we actually de-merged them back out, which I openly talk about. I don't talk about who they are, because one of them is still actually a name in the industry, but, yes, we actually did. We did 10 M&As and then, yes, so through that period, it was a case for us of it was a form of growth. It was we were still growing naturally, and then it was along the way through some of the HGP groups, some of the visits to the US.
Speaker 1:It was talking to people that they were acquiring as a form of growth and heard something interesting a long time back saying that almost that acquisition every 18 months or two years is a kind of helps bolster your growth, as in, you start with organic growth and you still do this and you keep growing. It was like, okay, well, this could kind of work. And it was funny because for years, everyone used to ask where do I find these M&As? Because we were doing quite a few, and it was. It was I didn't find them. Like it was funny. I was just having conversations with people, wasn't doing anything different, doing anything special, I was just talking about it and most people were too scared or too worried about talking about it. It's like, well, no, it's. We're humans. We don't set out to make mistakes deliberately. Yes, the odd one stuffs up and we can talk about those, but likewise, if you do it well and do enough of them, you get pretty good at it.
Speaker 1:So over that up to 2018, we did 10 for ourselves. I actually did three outside of the IC industry and had other, and still have other companies in other industries as well. But, yes, bought a couple of other companies in other industries and then helped a number of other people along that way. So up until when I exited we're, I'd actually helped 31 other companies do some sort of M&A activity, from doing evaluation or looking over someone's books, or they've already done an acquisition and now don't know how to integrate it well, or stuffed it all up and it's like, oh, please give us a hand or come and help.
Speaker 1:So I kind of became a bit of a bit known for M&A and and that's kind of what I knew that we're going to exit our MSP, which we'll talk a lot more about later in the podcast. I felt that, okay, I love this, it's something I'm passionate about, so why not? I didn't really want to leave the industry and I was like, well, hey, I can do the best of both. I can still be around the industry helping people in the industry, doing well, that's what I love without having to deal with the end users. So, yeah, what was couldn't get a lot better than that that's a beautiful thing.
Speaker 2:So you obviously the growth side makes a lot of sense. I would say that it's probably not as uncommon. When we talk to our partners that they are, they've either been approached or they've considered some M&A themselves. Have you ever, for those 10 M&A deals that you did over that decade you know, 15 years or so were any of them ever to get into a different market or a different city, a geography, or was it just purely growth back in those days?
Speaker 1:It was gross. We did look at another state. We ended up first. It's funny because at one point we actually had three offices in Sydney, like in the one city we were in, but again it can be quite busy with traffic depending on the time of the day. We actually had three offices in the same city and that's interesting trying to manage the culture because every office does have a slight variation to your core culture. But it's quite interesting because it's no different than when you go into state. So we did look at going into state.
Speaker 1:We did a bunch of due diligence on a partner in another state and didn't end up executing Still friends with them today, still get on really well with them and see quite a bit but it just it wasn't going to suit the target demographic and the target size customer we had started moving to in Sydney of that state that had slightly smaller clients and we didn't want to. At that point in time we were sure enough to realize we didn't want to have to have split marketing, split focus, split everything. So we decided against doing that. So that was actually, in my mind, probably a smart decision. I do know a lot of people that use it for growth into new jared-grade like geographies or new skillsets. If you think about it, even back in 2005, we moved into CRM and accounting systems, which we didn't end up keeping long term, to be honest, but we did actually move into another area through an acquisition and that's where I see people nowadays moving into Power Apps or the Power platforms from Microsoft, or they get involved to an AP or an SAP or something like that a system and that's how they grow as well, by moving into another area. I also the counters of that and I also. I like playing devil's advocate. I love playing both sides of a coin in the door really well.
Speaker 1:There's also an interesting thing that someone said many years ago that I heard and has resonated with me for a long time why go into state unless you have really topped out or achieved everything you can in your current location?
Speaker 1:It's interesting because I see a lot in the US companies and it's a little bit in Australia where keep growing and grow everywhere and go into another location and it can work and it does work. It is very successful for some people and I'm not saying anything against that, to be clear. But on the other hand, unless you really hit the highest market share you can get in your local area. Why go through necessarily the pain for the small room as PCS so some 50 seats why go necessarily through the pain of actually having another location, another culture? Who's going to be in your management team? Go to basically look after that location and try and make sure that location doesn't feel as like it's the poor cousin or the redheaded stepchild or whatnot. You need to make sure that the business values and ethics and culture and value are ubiquitous in all of your offices and that's really hard maintaining that in the branch or sublocations.
Speaker 2:I think that's really good advice. I know that we talked about geography. I know another reason that I've seen MSPs I mean from a growth perspective but just to buy a book of business. Right, they see an MSP that's about ready to exit and they're like look, I just I don't want these customers to be fed to the wolves here. I trust you just buy my book of business here and take my customers and make them your own. I love that advice about don't spread out geography too quickly, because it doesn't matter whether it's through M&A or you decide to open up an office in another location, unless you've got it equally balanced, there is always going to be an office. It's like well, we don't get that because they had quarters, that's it, and it's that culture piece becomes really difficult to spread across the wide area. So that's really really great advice.
Speaker 1:That's a big issue.
Speaker 1:I like that RDA way you said there. We did that a number of times buying a small book of business. It's almost a numbers game nowadays as well. Back when we were doing it, it was quite. It probably was, but there was just not as nowhere near as much of it happening in our market space, but I think it was.
Speaker 1:If you look at what costs to pick up a with a new customer nowadays through marketing, through all the amount of touch points you need to do, it can be actually quite cost effective in buying some of these businesses. Now, it depends on what size you are, depending on what size the actual demographic of client or your target customer profile is. So, yes, you will inherit I'll say it and sorry for those listening you will inherit a pile of shit as well. So you might pick up about 30 or 40% of the clients are already good in your demographic and what you're trying to look for, and then there might be another 30% of the customer base that, yeah, okay, you can. If they take the journey with you and mature up and things like that, they'll be really good. And then there's probably the last 30 or 40% that are just not in your target and there's a fine line. A lot of people will keep them as long as they're not causing pain, as long as they're paying on time or on direct debit or as for those types of things for you guys up there, then people just don't get rid of them.
Speaker 1:But it also takes effort. It takes account management, internal management, to manage those environments. And now with cyber, I think it opens up a potential large risk to the business as well, in that every one of those have generally 365 tenancies. They need to be secured appropriately and if they're not, what's the brand reputation on you as the MSP for not protecting that client, even if you did suggest to them to go and put the licensing in, to put cash in, to basically block down locations and all those? And two factor and if they don't want it and don't agree to it, then they're still going to blame you when something goes wrong anyway. So I think there's a maturity piece around the clientele that you have and the clientele of the any business you're looking at.
Speaker 2:I was just going to say, like the due diligence piece. That's where it's really really critical that you're you're identifying those gotchas, because very quickly those will start to snowball into a bigger disaster.
Speaker 1:I would say from 2018 through 2022. So those four or five years in that, in that kind of mark, was almost what I what I'm calling a FOMO. Everyone was anyone and everyone was doing M&A because they had fear of missing out. Like it's like, oh, everyone else can do it, I can do it. It's like, yeah, you kind of quit and the the big piece and VCs or Vulture Capitalists, that adventure Capitalists I like to call them as those guys coming in. They were doing what I call pretty light due diligence, like the bigger deals over over $5 million and things like that, or 10 million in the US. They were getting appropriate levels of due diligence, but anything sub that and they probably sub three million two million in Australia and probably some three to five million in the US. They were just doing a light due diligence and just acquiring and that clean up the mess integrated pretty hard. I just clean up the mess as they go because the numbers made sense and they still do it now, to be clear. But, yeah, the numbers really made sense to just keep going on a very quick acquisition path and that arbitrage and between buying at a low rate and what the value of your business is means that it covers a lot of sins for them. They've got a lot of time to clean up the mess and the integration of those businesses.
Speaker 1:So I think that's what's changed now, in that there's still deals happening. There's no, I don't. I think it's slowed a little bit from the last two years, but not hugely. It might be 20 or 30% reduction. But I think people are now looking more serious about does an acquisition target or a strategic merge which most are acquisitions you just, you just say they're mergers to keep for the egos and whatnot, which we did as well. But I think most acquisitions you've got a series that consider now is that doesn't actually give you that that amount of target customers you're looking for, or doesn't give you a skilled set, or doesn't give you the revenue growth you want. So those types of pieces. I think that that's critical and I think that's what's really changed, I'd say, in the last 12 to 8 months.
Speaker 2:There's probably a lot of MSPs that have gone through some M&A, but there's probably not a lot of MSPs that have gone through as much M&A as you have and obviously helped with recently. Are there any stories or can you talk about any of the more recent M&A activities that you've been part of, especially from, like a transition perspective? I mean, what's that like if I'm a buyer or I'm a seller, like what does that feel like?
Speaker 1:Yeah, look, I think I know I can talk because after 24 years we sold our MSP and I did a one year period with them. So on the 25th birthday correct I actually exited and that was at the start of last year, so at the start of 2022, so I can talk about the sell side now. But from a lot of people have spoken to and I would say, when you are preparing for sale, it's not just preparing the business, you've got to prepare yourself as well. You've got to have hobbies outside of your business. Most small business owners, their company or their business is another child. They spend more time with that than probably their family at home and then if they sell the business and are no longer there, they have a pretty big shop to the system for the change of their life. They used to have somewhere to go, they had a purpose or whatnot, and then they don't.
Speaker 1:So there's two parts to that. One is if you're doing an acquisition and the owner is staying on, generally about a six month mark is the lowest point for them. They've lost control. They love that. They don't have to deal with the financials. They don't have to deal with whatever the business they didn't like having to deal with anymore. So they really love that bit. But they also then don't. They realize pretty quickly that they don't have the decision-making power that they used to have. And a lot of times it's that about that six month mark and I talk about it with every person that we bought along the way I would say these are the highs and lows, these are the pitfalls and whatnot, and it was described to me from a lot of people that we're required along the way. I hadn't felt it firsthand at that point in time, but I said always at about that six month mark is your lowest point and if you can get through that six month mark, then you'll start coming back out out the other side and it'll actually be good. But you've got to get through that point. And I used to our owners talked to other owners that we'd worked with and were still in the business and the original founder of Correct Wayne. We'd actually have them talk to him about how he felt about it on the way through and that helped them.
Speaker 1:Where now, when I'm helping a company prepare for sale, I actually asked them. I said as much as you want to double down and put a lot of effort in to clean up and do everything that I'm suggesting to you to increase the value of your business. I'm also kind of kicking in the arse and getting you to go and actually find a hobby and do the things that you did when you were younger, or find something new. And I'm saying this kind of productive because I'm forcing you to do it now when you want to double down on prepping your business for sale. But it actually helps because post the transaction you have another love, you have a new hobby, you have something interesting that you want to do and that you can spend time on, and I think that's probably the biggest thing nowadays that helps those people in that transition is going through it.
Speaker 1:I went through it during the sale and whatnot. It's like again, yes, you don't necessarily agree with certain things. It is that six months part. You wonder, did you make the right decision? And all of those. So I went through that as well. Hilariously. I've been telling people about it, but I had to remind myself and tell myself that, yep, this is what it's like.
Speaker 1:But I also had other things that I was doing in life and time with the family and whatnot. I sold the business at a time that both my girls were still in primary school and I got to take them to school every day. It was one of the things that I chose to do is got to take them to school every day when I was here, and it was great, but I still do now, and that's something that I changed. But I knew that while I was running a mid-sized MSP or 59 people that I was putting too much time and effort into the business because that's what I thought what I should be doing, at a detriment, ultimately, of spending time with my girls, whereas now I spend a lot of time with them, but I also now have a better work-life balance. I still work quite hard as those that know me know that I generally fit 48 hours into every 24, and that's what I've done for years and I've known to be quite intense like that but I also now get to spend more time with the family.
Speaker 2:I've also been part of a large M&A deal Same thing it was.
Speaker 2:I think we called it a merger, but it was really an acquisition and new boss, new shirts, and it was really interesting to be part of the management team, the senior leadership team of the company, the MSP that was bought and I've stayed in touch with them for a long, long time.
Speaker 2:But, just like you said, that owner of that original MSP that I was part of you could start to see he'd stayed on actually for two years instead of the normal one, because he really had he wanted his services side of the business to continue to grow and to continue to invest in after a period of time, I mean, he had a real opportunity to go and do his love, which is what you're doing, which is consulting, right, and sharing all that experience you've got with tons and tons of different business owners and MSPs Great sort of insight into that what it feels like when you're the buyer as well as the seller. And so, speaking of one of the companies you bought was 360 Consulting back in 2018, right, and it was part of one of your acquisitions, so why did you keep the name?
Speaker 1:I love the name. Let's be honest about it. 360 Consulting could be used for absolutely anything. But look at it. It's not the only name I've got. Let's be honest about it. Every single business we bought along the way we didn't necessarily take the underlying company. We took the business name and we would register a business of everything we did. So not all of them, I'd say. There's probably the last three or four that we did. So I still have the business names of multiple IT companies that I could relaunch at any point in time Not that I'm looking at doing that anytime soon, but yes, no, Look, I love the 360 name and we actually took the underlying company. So 360 Consulting now has been going around, has been in business, since 2002. So I'd say we're nearly 21 years.
Speaker 1:I need to look at the date. I don't remember it as well as the correct solutions one, but yeah, it was August, september, I think it was Septemberish, I think from memory. So yeah, we're about to be a 21 year old consulting company. Now I'll openly talk that the first 15 of those years was as an MSP. So we had had the experience in the industry as well, let alone what we did with correct solutions, and then we pivoted the business to being an industry consultant. So yeah, for me it was just the perfect name. But it could be used for anything, not just what I do now. I was like no, this name's too good, I'm not letting it go. And even during the sale of correct solutions it was like no, we kept all of these names and all these IP because it had nothing to do with what correct was. So I had already kind of mentally planned for using it again in the future.
Speaker 2:That's great. I love the name too and it's you got a cool, cool brand and logo and everything like that, so great job with that. You personally pivoted right Like you were IT business owner, everything like that and so, as part of this you taking over you know you getting bought out and taking over 360 consulting what was the pivot like to consulting and what were, like the pros and cons of you going the consulting set?
Speaker 1:Yeah, let's be honest a good MSP can't forget to consult and a great MSP will always make sure they're consulting the clients, solving business pain points, working out what they can supply to a client and get a greater share of the clients while it's a client spent. So that was across. We started in managed services or started in breakfix, product procurement software, bpos, then to 365, we then did telephony, we did, then did data links and all those types of things that are in private cloud, public cloud. It was more just to try and take as many, as much spend as you could out of a bind so you didn't need to have as many clients to have a good turnover. So the consulting piece and that's what I think a lot of, even a lot of MSPs still forget that nowadays is that consulting piece to the clients. They, they grow too busy and we're guilty of that. But we also brought in our very kind of fractional CIO and I manage as service products. That helped differentiate us a little bit and spent more time with the clients.
Speaker 1:But I think that transition into 360 from correct was yeah, it was, it was a little bit bumpy. I'd say it's a little bit looks. From the outside it looked pretty good, but from the inside it was like, okay, well, just who actually would want to engage me? It's like everyone you talk to is like, no, go and do this, everyone will do it. And it's like it's like you have a bit of self doubt. It's like, oh, hang on, what plans do I put out there? Because everything I do is pretty much around reoccurring revenue that the managed service providers are used to billing in reoccurring revenue a lot of what they're biased in reoccurring. So I actually built all of my plans and consulting around that same same model, instead of just billing you by the day it's by an hour every week, or it's for every month, or it's a half day every week, or it's a day every week or whatnot and then they have an associated monthly figures. I figured with it. So for me, it was just doing that transition and it was quite it's quite interesting.
Speaker 1:Actually, I finished in the 14th of February 22,. That was the 25th anniversary, so it's Valentine's Day. We drove the correctness of Valentine's business, but, yes, that was the last day and I was actually going to launch the 360 consulting the next morning. So I was going to, I did a sign off on LinkedIn and Facebook and thank you for everything, for all the clients and staff and everyone we've dealt with over the last 25 years. I was going to take a break and I had in my head that I was actually going to and I wanted to actually write up that I was going to, basically at eight o'clock the next morning, saying I've had enough of a holiday now and I'm going to launch 360.
Speaker 1:Unfortunately, my father passed away three days before I finished. So instead of writing the next piece about 360, I was writing a eulogy instead. So I actually had a little bit of consulting, had to clean up his estate. My uncle passed away about six weeks later, so I had both of those that I was looking after, but their estates, et cetera. But, yes, ended up doing a five and a half week or five week trip to Europe basically Ireland, with my father's from England, scotland, wales, took my whole family up there. We actually took half of my father's ashes up there to bury on some family land up there.
Speaker 1:But, yeah, when I came back it was like, okay, so that was mid August. I started actually really launching. I'd spoken to a few people. A few people called me while I was away, not knowing I was away, and wanted to know what I was doing. I've had several offers. I've had offers to run several larger 200 seat, 300 seat MSPs. I'll take senior roles in those types of environments, which I haven't. But yes, it was. It was quite funny.
Speaker 1:After coming back it was like okay, time to do something now. I wanted to work 24 seven. I heard this in the US quite some time ago I want to work 24 seven and everyone's going to be scratching their heads as I say that and as they listen to it, but it was 24 hours a week, seven months of the year. So ergo, I basically wanted to work about three days a week, so within 14 weeks of coming back.
Speaker 1:So came back mid August, so call it, by the end of October last year I was already at five days a week. I'm sitting at about five and a half days. I'm waiting for a few deals to finalize and then I'm going to take a little, not a step back, but I'm going to reduce a little bit. A lot of people are joking around me saying I work more now than when I actually own the MSP. So it's quite funny. I'm going to take a relax a little bit, or not really relax, but slow down a little bit. It's just hard when you're used to pushing the accelerator as hard as you were from, as how you do from a young age, I'll have it stay hard. I can't use, I'm not used to the idea of not going really fast and doing things. It's an interesting transition.
Speaker 2:What a roller coaster. You know, you sell your MSP, you leave your, you have this whole plan of attack and family, family that's. That had to be really, really difficult. But wow, to be able to be away for a couple of weeks or whatever. And then you know, have everybody coming after you and you knew what the plan was, you knew what the future was, and even then you weren't sure if that was going to pan out. And it certainly has fuzzy. So I'm really happy for you there. So that's great.
Speaker 1:No, thank you. It was good. I enjoyed doing a bunch of public speaking at industry events and whatnot, and that's probably how this podcast pay-of-out was doing some presentations and openly talking about things. I don't see why so many people are necessarily cagey about or trying to hold back on what they do. It's like for years, even after the first seven or eight weeks, we would basically openly share about 80% of what we did on stage, or anyone that asked and anyone that we knew would probably share 98, 99% of it.
Speaker 1:Because even if I gave you our playbook, your personality is different and you would do it differently and you'd want to change the steps to suit you. So even if I gave you everything, you'd do it differently regardless. So that's why I've never felt the need to hold information back or call an IP or any of those things. It's all about helping people and kind of what drives me now is to help increase the maturity and benefit the industry In Australia and New Zealand and ultimately globally. It's a great industry to be in. It's served me well. It looks after a lot of people. We're critical in so many businesses that people don't realize what we actually do and how important it is. So yeah, you can see, I'm a little bit passionate about trying to help people, but I'll try to improve the industry.
Speaker 2:Speaking of your public speaking, you built quite a personal brand. You speak at industry events. Like you said, you're doing podcasts.
Speaker 1:I think this too, chris, it's quite funny. I think it's funny and hilarious and a joke, but you're right.
Speaker 2:Oh, how intentional is that fuzzy and why is that important?
Speaker 1:Look, I would actually say it's probably quite accidental. I've actually got my first influencer contract and it's like what the hell? But it's just really strange. It's like, yeah, I'm doing podcasts and webinars with people and the funny part about it, none of it's on my own brand. None of it, like 360, doesn't have a YouTube channel. I don't have a YouTube channel, I don't do Twitter, I don't do InstaFan, I don't do any of those types of things. It's five minutes on Facebook at a personal level and it's a little bit on LinkedIn and that's about it. But you're not the only one that keeps telling me I've got this perfect personal brand and at some point I probably should do something with it.
Speaker 2:Anyway. So what's the future look like for the Australian New Zealand market? Obviously that's, your home is in Australia. What are you keeping your eye on? What's the future look like?
Speaker 1:Look, it depends on the size of the segment of MSPs. To be honest, I'd say the smallest, sub-20 seed MSPs. I've said for a while, like security, still it's the paramount. Everyone needs to do it. They should have been doing it for a while but they're probably playing catch up in that area. In the 25 to 75 or sub 100 MSPs, security is a given ISO 27000. In that 100 to 250 seed MSPs, iso requirements are now given. If you don't have your ISO requirements or ISO tick off, then you're probably not getting some of the bigger deals. You can't get any government work. You can't get any large enterprise work or any customer that then works with a government department requires you to be ISO. So that's happening.
Speaker 1:I think the obviously there's a bit in general AI and we won't go too much under that because I think most of what we deal with nowadays is actually machine learning and everyone just calls it AI because it's a nicer name where reality 98% is probably machine learning and there's probably a little bit of AI in there. So I won't get on that one. I think that's where can you add value? Where's the consulting piece? I had someone on a panel probably three or four weeks ago. They have now probably 600 clients and they've got probably 140, 150 staff. They're focused on the SMB segments. But I would almost say that scares the crap out of me nowadays with the liability around cyber. If all of those clients aren't actually following your security, essential security requirements, which most of them probably aren't then what's the reputation or liability on your MSP or on your business when something goes wrong, as we saw earlier on at the start of the podcast, the customers going to blame you regardless. They're never going to blame themselves. They got to go and go to another provider. The chances are, say, 75 to 80% chance you got to lose a customer that ever gets breached because they got to go elsewhere and blame you for not doing it and then follow the next provider's advice. It happens. It's just what happens. If I ever did it again, I'd actually want less customers but probably a little bit bigger where you can go deeper with them, where you can spend more time consulting, where you can go in and start looking at that and building the intellectual property around some middleware between two of their apps. How do you take something out of a legacy app and put it into a cloud like integrate it with a cloud CRM or a cloud system where you need to have data in both. But how do you actually have that data interface where it's not just one way through CSVs? How can it be dynamically updating both directions? That's all those things.
Speaker 1:I think that's where the value has always been, where the higher margin For providers would be is in that consultative piece, and it's hard when most people have almost MSPs, have more clients and what they, what they really need or should have, and that's all to do with. They want to set the matter of revenue and think that that's that's the best way of getting the revenue and the margin and really profitability is more important than that. It is around around. Revenue is, I've said for years, everyone knows the revenue is about the profits. Saturday except, I just added an extra one to that and that's cashflowers King, because really it's what's in your bank account that really matters and doing that high level consulting work, even if it's only a couple of people within your business, the amount of projects that they can lead into your clients. That a lot of times I've seen MSPs at 4550 staff and they can't have any more than about 25 to 30 clients because of how deep their relationships and how much they're helping those clients in not just the system, but how to get the most out of their management systems.
Speaker 1:All of those things power apps, power BI, all of those things no code, low code, like how can you build something that works For someone, that can be used, and build a bit of intellectual property for yourself, because that actually increases the valuation of your business as well. Now, the only thing I would say to that, though, is, anytime you build these things, build a hell of a lot of internal documentation around it. What assumptions you made, why you did something to this bit like commenting on code. Make sure you comment on stuff so then, when you come back to a year later, or two years later, or if the person that developed it's no longer there, you've got half a chance to actually fix something, or or take it better and prove it and keep developing it. Then, when you, when you come back and look at something you did two years ago and you got no idea why you made that, it's not different. It's not different.
Speaker 1:A perfect example is where, as we, as we used to price product out in the MSP, the first product to be priced out, probably eight, ten years ago was just a spreadsheet with a bunch of formulas and this up in the other and you look, you open them to three, five, ten years later it's like what the hell was I thinking here? What is this through? And you just chasing around formulas trying to figure out what you did. So then we actually did this, probably eight, nine years ago. We started tonight all the pricing spreadsheet to be built and I did this for myself. I actually put an extra tab down the bottom.
Speaker 1:There was all the assumptions and all of the comments and the reasons why we did it. They were used to put comments into certain cells about why you were doing certain things, and it was funny at the time. You're wondering why you do it and it's like, then you realize, and then you come back to something like that two years later. It's like, oh, this is one of these ones. Ok, that assumption was no longer right, but at least I documented why I did it all. No, these three items are valid, but let me tweak those now. Let me adjust the formula, adjust the margin percentage or the amount of effort going into something. It's so much quicker to to reprice a product or copy that and price something else. So sorry, a bit of a segue there.
Speaker 2:That's great. So what's the future for you, fuzzy? What are you up to? It's?
Speaker 1:funny just thinking back now when you ask that part of 360 was to. It's a basically do enough consulting to to pay you to go to some of the industry events again and pay for the flights and the combination and access and things like that and have a bit of money. So it's kind of hopefully where 360 was going and what was for and I was surpassed that. But yeah, look, there's plenty of other industry events I'd love to still go to. It's interesting. I'm going to a lot of like certain vendors and whatnot. I get called into speak and etc. That happens. But there's other other things I'd love to do. Is the other where a vendor takes a bunch of partners away and this is I've not done one yet. I did have to invite a couple of months ago but just the timing didn't work but going on some of the vendor and partner events not events, sorry, getaways or whatnot where you can just talk with people around a dinner table or whatnot and they can learn a lot from the experience you've got. So I'd love to do some of those types of things where maybe a short 30 minute or a one hour presentation and Q&A, but then it's just plenty of time just going through experiences or whatnot and talking to people about your experiences with the industry and the M&A and whatnot. So I'd like to probably do a bit of that. I'd love to jump on a few not for profit boards. I sat on a not for profit board for some time, for five or six years ago. That was about 10 years ago. I'd love to get back and probably give back a little bit in those areas.
Speaker 1:But, as I said, even at probably halfway through the bottom, I want to try and better the industry. I want to help people that are either not going as well and help them turn around. I want to help the bigger guys be more efficient and, again, as something we used to sell in our MSP, we want to help the small guys take it up against the big guys, and that's no different than what I'm doing Again now at 360 and that, yeah, you can get plenty of M&A advice from the top tier accounting firms and the top big firms in the US that they're going to charge you half a million dollars to pay the plate where I charge a girl in the scheme of things, because I'm doing a lot of passion. I do a very professional, just to be clear on that in case anyone wonders. But yes, I'm not. I'm not doing it though. I'm doing it because I'm enjoying what I'm doing. I get paid well as well, to be clear. But I just want to. I want to help the small guys that don't have the experience.
Speaker 1:How can they have their first acquisition be a success? Rather than, most people learn badly from their first one about how not to do things, and often acquisitions two or three you learn. Okay, you learn which mistakes. You don't make those mistakes, but you make other mistakes, and even after 10 for ourselves and 30 plus for others in the correct days, and now probably another, probably 10 or 12 already in 360, every single time you learn something new, and I've got massive lists of things to look for red flags and things to look for a due diligence or little quirks that people say or little random comments. Someone says it's like, hang on, we need to dig into that or delve into that, because that could be a problem in the future. So I just want to be able to help people make whatever they're doing successful.
Speaker 2:That's great. I also wrote down grow into top social media influencers. So don't forget about that one. All right, so we'll be. We'll be chairing for you, for sure.
Speaker 1:I mean, I just got to fit that into the 48 hours. Codder doesn't. It doesn't work when you try to slow down, but it's a bit of the same token. You're right. Yes, Look, I love starting some good content out there. I love starting some, some interesting questions on my LinkedIn that make people post some ideas and make them think outside of the box. It's what I like, what I enjoy doing.
Speaker 2:Right. So here's the million dollar question when did you know? Now that's it. When would that? I'm the I'm the M&A guy, but that's it.
Speaker 1:I made it. I don't know if I have. It's when a lot of people just come to you, when everyone, when I've got vendors, partners, other IT companies introducing me to people saying, oh, you need to speak to Faza, you need to speak to Ryan about, about prepping your business sale or you're looking to buy someone, or something like that. It's yeah, it's like. It's funny. My website looks like rubbish. It's a postcard website that lists a couple of things of what I do.
Speaker 1:I've had a had on my list to actually build it out. I got most of the way there, but a developer disappeared on me. But in hindsight it's probably good. It's interesting. I don't have a lot of time in that I spend all my time helping people and at the same token, I get multiple referrals every week and sometimes people take six or 12 months before they're ready. I give everyone an hour for free. It's what I do for regardless, and some people just get enough information out of that hour that they come back a couple of years later or they don't need me or whatnot, and that's fine. As said, if it's helping other people and helping improve the maturity of the industry, then I'll for it.
Speaker 2:Buzzy, thank you so much for talking to us today. You were a fantastic first guest from Down Under, so thanks for being here and I wish you absolutely the best of luck.
Speaker 1:You're the best person. Thank you for having me. It's been a great conversation.