Solo to Scalable: James Bartrop's Journey to MSP Success

Sit down with James Bartrop, the founder and managing director of ShadowSafe, a leading cybersecurity and IT services MSP based in Brisbane, Australia. James takes us through his incredible journey from a solo entrepreneur grappling with the early challenges of running his own business to building a scalable and successful MSP.

Discover how James navigated the ups and downs of the MSP world, from working in a national IT firm to striking out on his own, and the pivotal moments that shaped his path. He shares candid insights on overcoming self-doubt, learning to trust and delegate, and the strategic decisions that helped transform ShadowSafe into a powerhouse in the cybersecurity space.

Whether you're an established MSP owner looking for inspiration or an aspiring leader in the IT services industry, this episode offers valuable lessons on resilience, growth, and the importance of community support. Tune in to learn from James's experiences and gain actionable takeaways to apply to your own business journey.

Join us for an engaging conversation that highlights the realities of the MSP industry and celebrates the triumphs that come with perseverance and strategic thinking.

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'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.

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Transcript

Speaker 1: 0:20

One, two, three, four, it was gone. There was no river, it was just water. Everywhere the server sitting in a corner in someone's office is full of mud. Now the businesses I went and visited they had no idea who owed them money. They didn't know who they owed money to and they were just wiped out. My business started very much as a disaster recovery business after seeing what happened, so very much focused on fire, flood, theft type of activities. You wind the clock forward and that pretty easily moves into the cybersecurity world because fundamentally, what you're protecting against from a fire, flood and theft perspective, we're now protecting against from a cybersecurity standpoint.

Speaker 2: 1:00

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. James Bartrop, thank you so much for joining the Now that's it podcast. You're the founder and managing director of Shadowsafe, a cybersecurity and IT services-focused MSP based in Brisbane, australia. So we're shooting this pretty early, james, so hopefully you had a chance to get some brekkie. I have had breakfast. Did I use that right? Brekkie, brekkie, all right, well done. That's going to be maybe my only Australian colloquialism the entire session.

Speaker 1: 1:39

We had some good ones in the blue mail. Oh, we had some good ones.

Speaker 2: 1:43

And there probably won't be time on the podcast, but we always love the American, the Australians imitating the Americans. That's always great. Talk a little bit about how you got started in IT and just what it was like in your early days.

Speaker 1: 1:58

I started my career in 2000. So just finished high school came out and I went. You know what? I've been working with computers my whole life. It just feels like the most natural thing for me to start doing. I started my own business back at that point in time. I ran that company for a couple of years and quickly realized that I didn't know enough about how to run a business, got it to a certain point and felt stuck. So then I worked for a national IT firm in Australia. I worked there for a number of years and then decided that I was ready to head out on my own again.

Speaker 2: 2:34

So when you were working for the big IT firm, what was that like? I mean, this was obviously you went from hey, I had my own business and had to sort of fend for myself to now I'm part of this giant, you know, conglomeration. What was that like working for a big shop?

Speaker 1: 2:51

It was really where I learned how to run a business. Yeah, it set me up for this business that I run today. It was a real foundational moment for me to understand what I wanted, what direction I wanted to go, for me to understand what I wanted, what direction I wanted to go, and I learned from some very mature and skillful managers at that organization that meant that, as a result, I was able to take the business to the next level when I was ready to go again?

Speaker 2: 3:18

Were you happy there? Was it a good balance of work play? Did it get to be a little too stressful? What was it like?

Speaker 1: 3:26

I honestly, I treated it as if it was my own business and, as a result of that, I loved it. I had a really great time. The obvious differences between being an employee and running your own business is reasonably clear is that I had a young family when I decided to head out on my own again. We had three kids, we had three under three at the point where I decided that I was ready to go again and it was a challenging leap.

Speaker 2: 3:53

Yeah, I bet. So you went to school for IT, but even right out of high school you wanted to own something right. You always had an entrepreneurial mindset right, I did. Of building something.

Speaker 1: 4:09

I don't know that. I knew it. At the time I didn't know what it meant to be an entrepreneur, but I knew that I wanted the flexibility and the freedom of running a business.

Speaker 2: 4:18

And you've gotten a couple of versions. Right. You had your business out of school and then you're back and you start again. Maybe compare and contrast the two. I mean, what was it like when you were just starting out? Obviously, you don't know how to run a business. Then you work for a large organization and then you start again. What were the things that you learned, even during the large IT shop that you're working at, that you could put in play, that you couldn't back in the early days?

Speaker 1: 4:44

that's a really good question. I think probably belief in myself was the greatest thing that I learned during the time when I was working for the big national it firm. I didn't know what I didn't know when I was running my first business, yeah, and I just felt stuck. Obviously, I had a fair bit of maturing to do as well. As a human. Becoming a father helps you grow up pretty quickly and I think I'm still a kid at heart and I love having fun. And that's one of our values now in our business is that we work in a very stressful environment. People aren't calling us because they're having a great day. Very rarely they're calling us because they have a problem. Right, we're here to help them with that problem. So how do we make it an enjoyable experience From the moment we take that phone call or receive that email? How do we make it more enjoyable than it might have been otherwise?

Speaker 2: 5:42

Yeah, that's great, James. You know you made a comment there about you didn't know what you didn't know, and I hear that a lot from business owners nowadays, especially in the MSP space. We'll talk a little bit about that in a little bit. Let's go back to 2011. So a series of floods hit Queensland. Yes, I read that it was at least 90 towns. Over 200,000 people were evacuated. That had to be pretty awful.

Speaker 1: 6:08

What was that like to be in that area at the time. From a business perspective, it was almost not the focus. Honestly, it was about the people. At that point. We handed food out to people. We got to places where we were boating food into various parts of Brisbane which there's no water there. Normally We've got a great river that flows through the middle of Brisbane and it was gone. There was no river, it was just water everywhere. So the ability to actually serve the people was a really great part of it. But then to come back and deal with the business side, which is the server sitting in a corner in someone's office that is full of mud. Now the businesses that I went and visited, they had no idea who owed them money. To a large degree it was pre the uptake of cloud-based accounting software and they didn't know who owed them money. They didn't know who they owed money to and they were just wiped out wow.

Speaker 2: 7:10

so obviously taking care of the community was first and foremost on your mind, but then, once things started to settle down and again you saw these servers that had mud in them, you also saw, saw an opportunity, didn't you? I did, absolutely. So you're going to talk a little bit about the beginning of your MSP.

Speaker 1: 7:29

My business started very much as a disaster recovery business after seeing what happened, so very much focused on fire, flood, theft type of activities. You wind the clock forward and that pretty easily moves into the cybersecurity world, because fundamentally, what you're protecting against from a fire, flood and theft perspective we're now protecting against from a cybersecurity standpoint. Obviously, you've got the security of a physical asset, like back in the day where there was a server sitting in the corner. How do we protect that? Do we put it behind lock and key? Is there alarm systems, all of those sorts of things. Now, now the world's quite different. As far as I don't think we have any clients that have a server on site anymore. So times have changed, but the principles are the same.

Speaker 2: 8:13

Interesting so you and this was right about the time you were still at the large IT firm, you, you saw the opportunity to start a business. So you come home one night and I'm sure this wasn't just one night conversation but you sit down with your wife, who I got to meet last night. She's a lovely woman and you have a conversation about starting this. How, how did that go? And obviously she was supportive of you. But what? What made you decide Cause that's a pretty big decision, especially with young kids and what was the conversation like? And what put you over the edge to say I need to take this risk now.

Speaker 1: 8:49

I was. I was ready, and I was ready for a while. It wasn't like you say, it wasn't an overnight, quick decision. It was something that my wife and I had been talking about for a long time. I built my, my self-confidence working for that national IT firm, and my wife is my biggest fan. Without my wife, I wouldn't have been able to feel confident enough to go out again on my own. So I think, having that support there, knowing that I can have a crack at it and that I've got her support on my side, that was probably the key element. Like you said, we had three kids under three probably the key element. Like you said, we had three kids under three. For me, that was quite frightening. We had a home loan, so what I went after was how do I pay the home loan? As a bare minimum, what is required there? So that was how I made that choice.

Speaker 2: 9:37

That's great. Like most MSP owners, founders, you were going at a loan for a while. Yes, what was that like? I mean, you obviously were putting a ton of hours in, I assume, and you were the number that everybody called. So what was that like running the shop by yourself for a while?

Speaker 1: 9:55

Again, I had a huge journey to go on. I struggled to trust people and by trust people I mean people that worked on my business or worked in my business. So it took me a really long time to get to that point where I had confidence to actually hand over some work to someone else. So, like you said, I went it alone for quite a while probably longer than most, I would say. But that's the journey that I had to go on to be ready to make that decision, to start putting starting building a business.

Speaker 1: 10:27

I don't think I was building a business at that point. I was building a job, and it gets to a point where that becomes quite challenging. There's only so many hours in the day, there's only so much time over the weekend, and my family was a critical part of why I started a business. And I got to a point where I was thinking what am I doing here? I'm building something that's consuming all my time, taking me away from my family, sitting there with the phone on the kitchen table right next to me as we're eating dinner. It's buzzing. I'm checking on it. It just wasn't how I wanted to continue. So, to a large degree, I felt forced to make a new decision.

Speaker 2: 11:05

Did you? Obviously you had built up your confidence at the big shop and then you start your business, but you had gone it alone so long and you had all these. You know it was a balance right of work and stress. And did you ever doubt yourself and say maybe I'm doing this, maybe I shouldn't have done this?

Speaker 1: 11:24

Absolutely. And I still sometimes, today, I still go. What am I doing?

Speaker 2: 11:28

Yeah, and so talk about and you told me this that you were one of the biggest roadblocks, right, that you building that trust, you making sure that you could give somebody some of the work, not even half of the work, but some of the work. Talk about what was the point that it got to where you said I either have to bring somebody else in or this isn't going to work.

Speaker 1: 11:51

Yes, what was the point where? I had to make that choice. It was the probably getting sick and saying how do I, how do I deliver the same service that I would normally deliver here? And it wasn't a major sickness, it was a flu that wiped me out for 24 hours where people couldn't get a hold of me because I was horizontal. I always want to be able to provide the best level of support to my clients, so making that decision to put someone on became a bit more straightforward at that point.

Speaker 2: 12:22

You realized you were the weakest link. Absolutely you knew that, but until you saw that you didn't know it.

Speaker 1: 12:27

I'm building a disaster recovery and business continuity business and I don't have it in my own organization.

Speaker 2: 12:33

So that first hire, was that a strategic hire? Was that a I just need to bring a body in to take off some of the workload?

Speaker 1: 12:40

It wasn't a great decision and I think we all start somewhere. It was the first time, so learning how to ask the right questions, what sort of traits and characteristics I was looking for, was all new, so it absolutely set me up as far as what I knew I had to do. But that person only lasted for probably about six months before I realized that they're actually causing harm to my business. They're not adding the value that I was looking for.

Speaker 2: 13:10

And that had to be tough because, again, you had built up this, this level of protection, the shield of I don't want to let somebody in and and ruin this what I had built. You hire somebody, it doesn't work out and you got to go back to the drawing board and try to find somebody else. But you did and you, you had some good hires and some bad hires, like everybody does. Um, what did you figure out in those early days of hires? What was the characteristic that you needed to have at ShadowSafe that would work with you, that was compatible with you, that was going to help for your customers? What were some of those characteristics that you needed to hire from.

Speaker 1: 13:48

I think the first thing I had to realize is that I shouldn't be looking for someone just like me. That was probably a key part, because I don't get along with people like me. I tend to clash with people like me. So the other, probably key element was that I chose to not hire based on skill technical skill. I decided to hire based on their ability to communicate with humans. So those early hires were very geeky sort of employees that sure they could fix a computer, but could they manage a client appropriately to deal with whatever crisis they may have been going through? And the answer was no. They weren't able to do that human interaction piece.

Speaker 2: 14:28

Yeah, james, that's so powerful. I see a lot of business owners that hire from the resume. They look at that resume and go, yep, this is perfect, this is what I'm going to get before they even talk to the person. Right, and what you just nailed is what you just talked about, is you know? Hey, this is I needed somebody that, even if they didn't have that level of skill set, I could train them on it. I couldn't train them on the intangible stuff, and that was what you needed to find ahead of time and it was quite challenging to hire on someone's values.

Speaker 1: 15:02

I just I needed someone to do a job and to I was running at 120% capacity and trying to train someone at the same time. So there was a whole bunch of time where they were sitting there not actually producing any work because I was too busy being busy, not able to actually focus on training them and giving them the ability to work without me.

Speaker 2: 15:25

You're building a family early on, right when you're building a business and I see a lot of businesses as well that they don't realize that until it's too late. Right like like I've got to hire the people that I would want to hang out with because you're spending all your time at work, and so they, they have to be good people. They don't have to be just like you and I'm. I realize that as well.

Speaker 1: 15:45

But you made a really good point there as well, that I want to enjoy being around these people. I don't need to go and have a beer with them at the pub that's not the same thing but I do need to be able to sit side by side with them solving a problem, be in the same room with them for long periods of time, so that interaction between myself and them was a key part of it as well.

Speaker 2: 16:09

You want to build that level of trust to where, if they see something that may not be going the right way and maybe it's an idea of yours, James, like they feel comfortable enough saying James, I don't think this is right. This is why, but that takes some time to be able to do that.

Speaker 2: 16:25

That's great, all right, I love this section because you built your MSP at this point You've got a handful of employees. Most of your business was referral business at the time, right, I think that's not unlike. Most MSPs have a lot of referral business. Can you talk about just sort of what your? You know what's changed from those early days of I'll take any business any, any type of a company that wants IT support, to today, james.

Speaker 1: 16:56

That's a really good question. Like all people who start a business, where the money comes from didn't matter so much. We were putting in big screen TVs. We were putting in, you know, three by three video walls. We were actually holding, you know, three by three, video walls. We were actually holding the hammer drill drilling into the concrete vessel block to mount big, heavy TVs. That's not, that's not what we should be doing. So transferring from a business that provides anything to anyone to actually niching down and providing a group of products and services was a major step forward for us. I didn't realize how much time and money we were losing by doing that other type of work that was a one-off project style work that really didn't feed into what I was looking to build, which was a recurring revenue stream.

Speaker 2: 17:47

Yeah, there's, uh, there's two points of of of sort of transformation that I see with MSPs, number one saying that sort of out of our scope, which we should be focused on focusing on this type of business. You guys did that early on. The other thing that you did is you looked at your client base and you said not all of these are a good fit. And there was one industry that I think might've been a little dumb luck, might've been some foresight, but there's one industry that you came back home at one night and said this is killing me, We've got to move away from this. You can talk a little bit about that, absolutely.

Speaker 1: 18:23

So it was probably around the end of 2018. Again, it was that pivotal time where I was like what do I want next year? New Year's about to roll around and I have that feeling in sort of November and December every year. Is next year going to be different? What do I need to change in order for it to be different?

Speaker 1: 18:43

So I look at my business for the last 12 months and I say what did I enjoy and what didn't I enjoy? What I didn't enjoy doing was working with cafes and restaurants. Like you said, dumb luck is probably where that fits. I decided that I would politely hand over those clients to an organization that was happy to deal with that type of business and, honestly, it was the best thing that I had done. There was a number of reasons why that was the best thing. Number one I found that I wasn't able to make that a profitable type of a client. We were constantly chasing them for money because they were struggling themselves, and then, of course, when you wind the clock forward, it turned out to be a really fantastic decision.

Speaker 2: 19:29

Yeah, covid hits and those industries really struggled and we were talking a little bit before the podcast I actually knew some customers that were giving their services away to that vertical just because it was sort of the right thing to do. But that's hard to survive as a business if you continue to do that. So I think the other thing you told me is, of course, your dream as an it business owner is to someday build out your footprint and and your team so that you can support folks sort of 24 by seven. But as a small business that was hard to do. You really had to have sort of business hours and off business hours and the the restaurant industry. They needed you always off hours, right, that's right.

Speaker 2: 20:16

So that was a taxing on you and your family 100%. And that almost reminded me of early on when you were going it alone, yes, and you had the phone with you all the time. It's hard. Your kids are a little bit older at this point in time, but still, if you're missing, you know concerts and different, different school activities because of these off hours calls. That's just yeah and and and. So that was almost a decision. Obviously you you made the decision as the owner of the company. But you again came home and you talked to your wife and you had a family discussion about yeah, this is going to be I'm going to lose some of this revenue, but I think it's the right decision. Yes, and she was supportive of it 100%.

Speaker 1: 20:58

So, whilst my wife doesn't work in the business directly. She's 100% my strategic partner. It's the late night sitting on the couch together talking about what are we doing, because this is something that we're doing together. Like I said, even though she's not working in the business. It's a hundred percent her business as well.

Speaker 2: 21:16

You talk a little bit about just that activity. We talked a little bit a couple of weeks ago about looking at your customers and saying these are profitable customers and these are not profitable customers. How difficult is that for you to walk away from revenue period and then for you to even have a conversation with these folks to say sorry, it isn't working out anymore. We've got to send you a different direction. Talk about that exercise, that process.

Speaker 1: 21:42

I still don't enjoy doing that today. My nature is that I want to please everyone, which, as an entrepreneur, is quite a challenging thing when you've got to make a decision to remove a group of clients. I think whenever I've made a big decision like that, where revenue is being removed from the business, it just comes again. I don't know how to label it Attraction. I'm not sure what words you would use there, but whenever we lose revenue by removing a group of clients, our profitability goes up and extra work comes in the door. Every time we don't fail, there's something to do with making a hard decision. That makes you very nervous. That brings that additional energy that's required to build again.

Speaker 2: 22:28

Yeah, you said it right there. I mean losing revenue but increasing profitability is almost a wash right. I mean, you know you hate to see the top line number go down, but in the end, if you're bringing more into the business because you've shed some of those unprofitable customers number one, you have happier employees, right. Number two, you're you're able to spend more time on customers that are profitable. So, yeah, I have happier employees, right. Number two, you're able to spend more time on customers that are profitable. So, yeah, I think that's really really good. So, regardless of whether it was dumb luck, what did you sort of learn from that whole exercise, that whole process of shedding some of these customers and sort of starting anew with a different direction? What did you learn? What was sort of going on in your brain about how you wanted to take ShadowSafe to go forward?

Speaker 1: 23:18

I think what I learned was for me I know how I operate and I operate by having a plan and a strategy around how to execute on that plan. That's where I feel most comfortable. Yeah, it's going to sound a little bit cold, but it becomes a clinical decision at that point. And now we're reviewing our clients every six months and saying who do we enjoy dealing with? Like we talked about fun being one of our key values.

Speaker 1: 23:44

If I ever see one of my team say I don't want to answer that call or they're nervous about taking that call, I ask them why. We're here to have a good time. We're not here to be a doormat for our clients. So there's a couple of different ways we make that decision. Do we enjoy dealing with that client and or are they a profitable business? I mean, we work with clients still today that aren't profitable, but we love dealing with them and we love what their cause is. So there is still that group that don't fit the mold as far as being off-boarded, but then there's the group that do, because what I learned, and particularly from the Blue Mountains event, was that if they don't value IT, then why are we here? That was a key takeaway that I got from the event that we had in Australia was if they don't value IT, then how do we provide a service that they enjoy and that they feel comfortable with, if they've got to look at the bill every month and go what, what are we doing?

Speaker 2: 24:41

right, what are we? Paying for that's right yeah then for me, I want to provide value yeah, one of the things I really love about you, james, is you're, you're, you're a constant improver. You're always trying to make things better, whether it be take some time away, like you did, come to the blue mountains, attend one of our business transformation events, or look internally and make some decisions. Where's that come from? Is that? Is that just your background? Is that the way you've always been? I think?

Speaker 1: 25:08

that is how I've always been. It has its pros and cons. Something that I've had to realize as I've gotten older is that the destination keeps moving further away. There is no destination really. It's a constant, ongoing improvement. It's something that I love, but I had to realize that I'm never going to arrive, and that's okay.

Speaker 2: 25:32

Yeah, that's perfections. It's incredibly impossible to achieve right, but the fact that you're constantly pushing for it just shows the type of person that you are, james, and obviously the reason why your MSP has been so successful. So let's talk a little bit about sort of current state of mind. You mentioned it a couple of times. We had a great week in the Blue Mountains. We got to talk about operations and efficiency and driving to the bottom line. We also talked about growth. What's sort of the current state of mind of the business and where are you hoping to take Shadow, shadow Safe?

Speaker 1: 26:07

The current state is that we still have a number of ad hoc clients. So again we're in that revenue shedding mode again where we need to look to the future and that is that everyone's on a managed service agreement. We've got some legacy clients we've had for a very long time that are very happy with our service but are very hard to convince to make a change. So when I get back to Australia I've already booked quite a number of meetings that I need to have when I get back that will go in one of two directions They'll either leave because then they don't want what we want to provide moving forward, or they'll come up to speed with what we now call a minimum requirement.

Speaker 2: 26:50

That's good. You're also bringing some new talent on right. You hired a new sort of leader on the service side, which you've got to get up to speed, so I mean that's got to be a really exciting time. Absolutely shadow safe is is bringing folks in that again can help you spread the you know your message and obviously drive more efficiency and improvement yeah, this year I decided by our financial year end, which is in the end of June, that I want to be off the tools 100%.

Speaker 1: 27:19

It's turned from being a passion of mine to something that I feel like I have to do now and I want to get that passion back again. I want to be able to make a choice as to whether or not I work on a computer. So what did I have to do to get to that point? I needed to start putting some senior people in place that can manage the team for me. I'm still the senior escalation point in my organization and that needs to change if I want to scale and grow my business.

Speaker 2: 27:47

I'm excited to see some of these hires and how you guys improve and you and I have talked. I can't wait to talk to some of these new, new folks and share my experiences and my stories from the mistakes that I made. I always love doing this sort of things. Talk a little bit about that. So the the time in the Blue Mountains was great because you obviously heard some, some things that other MSPs were doing, but what about the interaction with the other folks in the room every?

Speaker 1: 28:14

Every time I go to an event like this, I make a new friend, someone that is that buddy that I can call and say how did you deal with this? The value I got out of that event was phenomenal, life-changing kind of an event. The list that I wrote of things that I had to change in my business after being in business for 12 years I thought, oh, my word, there's so much to do. Yeah, and it excites me, yeah.

Speaker 2: 28:39

That's great. What would you tell younger James? So you're, you know you're. You're many years down the line. You've. You've made your mistakes, You've had some wins, You've had some. Tell younger James, I would say trust earlier.

Speaker 1: 28:54

They're not going to do it like you do it, but that's okay. Give them the chance to fail. Give them a chance to learn so that they can be a better version of themselves. That's great.

Speaker 2: 29:03

James. And then here's the million dollar question that I always like to ask. This is the Now that's it podcast, and one of the things we always ask our guests is when did you know that was it James?

Speaker 1: 29:16

When did I know that was it. I think the Blue Mountains was the moment that I decided I'm ready to go again. The group of people that I met there were so encouraging you and the way that you delivered the content there was fantastic. Meeting Brian was amazing. So for me, that was the moment where I said I'm ready to go again. I'm going to take this to the next level. I'm going to trust in the process. I'm going to trust in what I've built.

Speaker 2: 29:44

So far, let's go Awesome. Well, thank you for that. That's why I love doing what we do is hearing those sorts of stories, having people come up to you after these sessions going. Thank you for just sharing your stories and I know your story today will help others realize I always got to be looking forward and saying how can I put more time into the business? So, James, I wanted to thank you so much for joining us today. It is always a pleasure. I've gotten to really know you and I look forward to staying in touch with you and I can't wait to come back to Australia and visit the beautiful country.

Speaker 1: 30:16

Amazing.

Speaker 2: 30:17

Thank you so much. Thank you, Chris.