Now That's IT: Stories of MSP Success

Pivot Points: Dustin Bolander’s Journey from MSP Leadership to Reinventing Cyber Insurance

• N-able • Season 2 • Episode 22

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When Dustin Bolander entered the world of managed services, he never anticipated where his journey would lead. Starting as a helpdesk technician, he worked his way up to co-owning a thriving MSP. But as Dustin shares with host Chris Massey, the transition to becoming an innovator in cyber insurance was anything but straightforward.

In this episode of Now That’s IT: Stories of MSP Success, Dustin takes us through the critical pivot points that shaped his career and ultimately led him to found Beltex—a groundbreaking cyber insurance policy built specifically for MSPs. From navigating the challenges of transforming a break-fix MSP to embracing the intricacies of cyber insurance, Dustin sheds light on what it takes to thrive in an industry that’s constantly evolving.

He reveals hard-learned lessons about managing client relationships, understanding the hidden risks in traditional insurance policies, and the importance of keeping MSPs involved in the claims process. Along the way, Dustin provides candid insights into why he believes MSPs can and should play a critical role in reshaping the cyber insurance landscape.

Whether you’re an MSP executive looking to grow your business or simply interested in the intersection of IT services and insurance, this episode will leave you with actionable ideas on how to innovate, adapt, and stay ahead in a fast-changing marketplace.

Key Takeaways:

  • Dustin’s early experiences in MSP ownership and the path to scaling a break-fix model
  • How the concept for Beltex emerged as a response to the insurance industry’s blind spots
  • Strategies for MSPs to navigate the challenges and benefits of specialized cyber insurance
  • Why staying involved in incident response can lower costs and strengthen client trust

Tune in for an insightful conversation that explores the evolution of an MSP leader into a pioneer of channel-friendly cyber insurance.

Hosted by industry veterans, this podcast delves deep into the findings of the MSP Horizons Report, providing actionable insights to transform your IT business. Each episode features in-depth discussions with experts, thought leaders, and successful MSPs who share their experiences and strategies for navigating the ever-evolving landscape of managed services. Listen & Subscribe Wherever You Get Your Podcasts.

'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.

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All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.

Speaker 1:

One, two, three, four. What a lot of insurance companies do is okay, msp, get out of the way. You screwed up. You know we want you out of the way. We're going to take it from here. The MSP has the backups, they know the client's network, they can usually work faster and this is Dustin with his insurance add-on a little bit cheaper than incident response companies. Why would we not involve those guys? We're going to put you know supervision, there's a lawyer, there's a project manager involved, like there's an easy fix for those guys. And that's. How often do you get to say it's a win, win, win. 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 use their passion for technology to help turn managed services into the thriving sector it is today.

Speaker 2:

Dustin Bullender, welcome to Now that's it podcast. Thanks for bringing me on. You built the channel's first cybersecurity insurance program at Fifth Wall, scaling to over 2,000 plus MSPs in just a few years. And then in 2023, you launched Beltex, the first and only channel-friendly insurance policy that relies on great defenses that MSPs and MSSPs already pride. Thank you so much for joining the pod, dustin. I've been looking forward to this for a while. So glad to finally get you here in Austin.

Speaker 1:

Yeah, we've been talking about it for a little while, so make it happen.

Speaker 2:

So the interesting thing about you is you started out in the MSP world and so you started a small MSP hadn't yet hit a million dollars yet in revenue. What was it like jumping into that world early on, and how did you get your foot in the door?

Speaker 1:

So I started working there on Helpdesk. It was, I think I was like employee number five, much older, founder. So he ended up deciding to retire, moved out to a ranch. So me and two other guys bought him out. So I'm not going to say I started at the very bottom. We had like a dispatcher, but started off it was me and one other guy doing help desk. Then every day we'd run we were both in our really early twenties. We'd run, grab dinner and maybe a beer or two, then go back to the office and knock out projects until like 10 PM Because again, we were young, 20 something.

Speaker 1:

So diving into the ownership side ended up being I always joke like in video games you have this thing called new game plus where you get to start over again but with all your stuff. So I think we're going to get to it in a minute with the second MSP. But basically the first one was a nonstop mistakes. So I can point to very little things there that I can say we did awesome on this. It's mostly like hey, chris, I did this, don't do that. You know this doesn't work. Oh, for the love of God, don't do this part of it. So it was definitely a trial by fire. Neither of the other two guys had owned a business before that either, so what made you want to become an owner at that first MSP?

Speaker 1:

Let's go further back. So growing up we had a family business in Houston. So people say you know what was your first job? It was scrubbing the baseboards at my parents' dog training and boarding place. Legit family business, I think there was eight of us total between cousins and uncles and stuff. So whenever I was 12, my dad was like, hey, our maintenance guy just quit. Congratulations, come in, you're going to be the cleaning guy on that part of it. But then from there was whenever I first moved to Austin, like 2007 or so.

Speaker 1:

I worked at. I did my obligatory time at Dell, because everybody that comes in Austin and tech you got to work at Dell at some point. And I was just one of those things of like I don't like corporate because I'm too much of a, not a self-starter. Just I'm not built for corporate, I'm not a super rules follower, I guess. So it was one of those of like okay, dude, come in, do this, stay in your lane.

Speaker 1:

I worked at a hospital at one point and I was notorious. My boss and I would, we got along. But it was one of those I'd always kind of jump into other stuff and be like oh Dave, I know how to fix this. Oh, dave, I got in and I fixed this and he's like, yeah, but you're not supposed to be doing that. So that was just on the small business side of it. I was like, cool, I can be an owner and nobody can tell me not to do that kind of stuff. I can sort of, you know, navigate the way that I want to. So that was because. Then it's that whole, you know, pick your role, stay in it, which, again, I'm really not good at. So awesome.

Speaker 2:

So you bought in and, if I remember correctly, the business was very, very much a break fix business at the time. What was the transformation like? I mean, you helped sort of lead that to a managed service model. What was that like?

Speaker 1:

Yeah, we were doing pretty well. And then we had a so classic 2000s break fix MSP that I think anybody who was in the industry at that time went through it. So we had a client that got to be talking about lessons of don't do this, don't do that. We had a client that we had two people full time on out of like six employees, so you can see where this is going. They of course went out of business, so immediate, overnight, like 40% of our revenue gone. And then at that point it was the next year, I went to my first IT nation and everybody there was talking about this man and services thing and so me and one of my partners were there and we were just like, okay, this is pretty cool, so people will consistently pay us every month and we don't have to go grind out hours Like this is pretty neat. So then we went in and we bought a PSA, we bought an RMM. You know the typical transformation story.

Speaker 1:

We had probably, I'm going to say, less than 50% of our clients ended up converting to managed. We did a lot of hybrid, I would say at this point in time it really wasn't managed but like here's a base, you know, monthly fee plus block hours, kind of thing. I was like, oh, it's MRR, it's like these days, no, it's not, it's a little bit MRR but it's not managed. But just getting that transition done, the typical scared to death to lose revenue, scared to death to lose clients. So it was probably five, six years before we really got fully managed, or at least you know 95% of the clients. Just again you know, oh, these guys are hourly, they pay. Like why would we push, why would we mess?

Speaker 2:

with that it's. That's not uncommon for MSPs that I talk to is especially back in the early 2000s, when this idea of, well, you're going to pay us to just make sure your stuff stays online, Like yeah, like I'm going to call you when it breaks yeah, that's what they're used to doing.

Speaker 1:

So it's weird. Now too, people are you know customers are confused with like the hourly concept, right, that kind of went just full. You know, 180 degrees over the last 15 years For sure.

Speaker 2:

So you were young when you became a co-owner right, and how did you navigate the dynamics of being a much younger individual than your business partners, and what did you learn while you were working with them?

Speaker 1:

Yeah. So my two business partners were both, I'm going to say, probably 30, at least 30 years older than me. So how did it go? Not, I don't want to say not great, but there was a lot, of, a lot of conflict. Completely, I was young and dumb, like I'm going to say that was more a me problem than a then problem, just because at that point you haven't learned a lot of the painful lessons, hadn't done it before.

Speaker 1:

You know there's a certain level of conservative you need to be in business, that sort of thing versus. You know, just, I think I was 20, 24, 25, just like, let's go, let's go, this is a good idea, I'm going to go do it, kind of thing. So the biggest thing I think I picked up off of that was sort of getting a consensus right Among a team versus nope, I want to do this. I think it's a great idea, even if I'm right, if somebody's right on it. There still has to be a little bit of selling, a little bit of convincing, besides just walking in and saying, nope, we're doing it. So that that empathy, seeing it from other people's point of view whenever it's a drastically different view, right? So dumb, young, 25 year old kid versusyear-old guy who's eyeing retirement in a couple of years. You've got to sell it a little bit more whenever you're trying to do something different, something new on it.

Speaker 2:

So you sold your stake back in 2017. What led to that decision? Same.

Speaker 1:

Thing where it just kind of came to the point of both the guys got to retirement age. There was a big difference in opinion on here's what we want to do, on, you know, family members coming in that kind of stuff, and so at one point we had stagnated a bit because it got to. One of the biggest lessons I learned at the first company was we always joked and called it dust and doesn't scale, because it'd be like, oh yeah, I can say so. I got really good at saying yes to things. I was like, oh yeah, we can do that, we can do that. So I was putting in 60, 70 hours a week. Both of the partners were trying to step back into retirement kind of thing. So it was just at we really plateaued and then had different visions on where we wanted the company to go.

Speaker 1:

Past that I remember we were having a conversation the one day and it was a. We had a. It was like going to be a consulting opportunity that kind of bled into managed services, and so I was sitting there and again, just young and dumb I was very early thirties at that point Like, okay, guys, let's do this, like this will be really cool, we're going to compete against, like PwC and Accenture and stuff. And they both sat there and I will say this out loud at this point, they were absolutely right. But they said no, dude, we're a managed services company Like this, do the managed thing, don't go and chase this.

Speaker 1:

It was like a six figure consulting opportunity. It's like why are we chasing this? And I was like because we're that good and we can do it, which is true, but not the core business. So that that, in a nutshell, is a good example of like okay, we're on different pages. You know, how do we want to run, how do we want to grow the company? So we had a couple of little things come up and one day I went in you know we had gone through evaluation to start figuring out. I came in. I was like, hey, look, guys just buy me out because we're talking. You two are more on the same page, it's a three-way partnership and I was like, just like, I'll go Transitioned out over, I think, six months or so.

Speaker 2:

How did that transition go, both professionally and personally?

Speaker 1:

Personally, it was both good and bad, which sounds like a total cop-out answer, sorry. It was good on the sense of that's probably the most relaxed I've been in the last 20 years, because it was like okay, I'm out of it, I don't have the responsibilities, the burden. I learned to relax a little bit for a very short amount of time, which we'll get into in a second, and then the bad part of it, though, is I don't. I just sold another business Like I don't know that a business exit is ever clean. There's always something. There's always stress.

Speaker 1:

I've talked to a couple of people that are like oh yeah, one of my buddies just sold, and he's like yeah, we just did. You know the contracts, a couple of handshakes, he walked away with a couple of million dollars, and I was like how did you? That never happens. No, so that's the one like. I've been through it before, so I kind of knew what to expect. But that first one, it's like having a kid right that there's all these, you need to know this, this, that and the other. They need to have some kind of like business exit course that You're going to be stressed out, you're not going to know what to do with yourself. You know it's going to be rough that sort of thing.

Speaker 2:

So after that exit, you launched Clear Guidance Partners with the intention of consulting, but it didn't quite go as planned. Right? Tell us a little bit about those first few weeks and how you ended up back in managed services.

Speaker 1:

Yeah. So we're going to have a recurring theme today, I think, is that MSPs generally hate lawyers. So as part of my exit, I had a carve out for working with lawyers. We had started dipping our toes in a little bit. There was a couple other pieces too where it was like, yeah, we're not going to touch that, we don't care, go do whatever you want. So I had this awesome business idea. I was like, all right, chris, I'm going to go in, I'm going to do $350 an hour, I'm going to work like 20, maybe 30 hours a week. It's going to be awesome, I'm going to hang out with my family all the time, I'm going to get rich and it's going to be the easiest best work ever. I went 60 days and then had a $25,000 a month managed services opportunity fall in my lap, and so now I own another managed services provider.

Speaker 2:

So you decided to go deep in that legal sector, which many MSPs avoid. What drew you to that industry and what were some of the hurdles that you had to overcome early on?

Speaker 1:

So I've kind of made a bad or good habit, depending on your point of view, on running into lawyers. And then now insurance, everybody's kind of running away from it and I'm like all right, great, there's opportunity there. Then now insurance, everybody's kind of running away from it and I'm like all right, great, there's opportunity there. So with regards to the lawyer side of it is there was one MSP in Austin that had been doing law firms. They got bought by a national one, kind of started falling apart. And then if you go and you look nationally, even today with Clear Guidance Partners CGP is we only have a couple of very direct there's MSPs that do lawyers, but there's not many. There's five offhand that I know that only are, you know, vast majority that were like 75% law firms.

Speaker 1:

So from that perspective I was like cool, there's a good opportunity to go in, know the industry, speak the language you know, know the applications. Every industry has garbage line of business applications and legal included. So just learning all that stuff and it's like there's not a lot of competition there which lets you do better rates. You know higher close rate that kind of stuff. So, going deep, I also had the first MSP. We were generalists. We had a couple restaurants. There's a famous wing chain here in Austin that we used to do that I'd always brag about. We had construction companies, just everything. It was like, yeah, you need IT and you got a checkbook, yeah, we'll support you. Right, the vertical piece of it makes it a lot easier to charge higher rates to more efficiencies and even expand your services as well.

Speaker 2:

Were there things that you did differently? For law firms, you became that go-to lawyer. You know MSP right In the market. Were there things you did differently, or how did you tailor your services to really be specific to their needs?

Speaker 1:

Yeah, two pieces. So the first one is that we did everything is included now. So old MSP like hey, Chris, you got that old Sonic wall, I do ASAs, now I need you to replace it. When can we budget in kind of thing? Everything is bundled at this point. So flat monthly seat price includes even firewalls, all the security stack. I was like I don't want to do add-ons, I don't want to deal with it. Excuse me, you know, let's just make it easy. Here's this fixed monthly thing. I'm not going to come blow you up for more budget money every year.

Speaker 1:

And then the other part of it that was super interesting is there was a company called Minucci Consulting that we were, I think, six mutual clients. We had weekly meetings and so at one point, going back to, there's an age gap there, so she was starting to think about retirement, and so we had in 2021, we merged with them. So they do, they did and do back office services for law firms. So we have a division that does accounting, billing, HR and all that stuff for firms as well. And so, even if we don't, we have a pretty low penetration on both sides of the house.

Speaker 1:

But just going in and being able to talk about that with lawyers and understanding. So now, like our help desk, whenever they get something weird that's you know industry jargon and stuff like that, or like here's this weird dynamic they can go to the legal operations people and say, hey, can you explain this to me? They're like, oh, don't do that. You should do this instead because here's why. So just understanding of you know, our sales guy says we can do everything, but the practice of law is we legit, know law firms inside and out?

Speaker 2:

Wow, so you joked even on the podcast. You have this love-hate relationship with lawyers, where it can be the best and the worst clients. You share some examples of this dynamic and what taught you about managing those types of relationships.

Speaker 1:

Yeah. So the best and the worst is the good law firms are very rational, in the sense of they sit there and they argue all day. So you go in, you break something down and they're like great, give me the contract, I'll sign it. That all makes sense. They pay well, they pay on time. But on the other side of it you have and this is where I think the MSP industry really doesn't like lawyers is the worst. Ones are like hands down the worst clients, because that's the Chris, reduce my bill or I'm going to sue you.

Speaker 1:

You know everything's yelling, screaming. I have a no screaming, three strikes rule. You know one. Somebody had a bad day. I understand, we write it down. I have a little Excel sheet.

Speaker 1:

Two is we go and we talk to the point of contact. There Can't happen again. And the third one is you're not allowed to call us, you have to work through somebody else. I've done it twice before and it also extends to inappropriate behavior. The first one I'm not going to go into because it's not appropriate, for I'll tell you later, for a beer, okay. But the other one was actually a partner at a law firm that just kept screaming at people. So finally it was, you know, hey dude, not allowed to call us anymore, and so that's what you got to watch out for with the law firms is the bad ones are super bad consistently. So we've gotten pretty good at screening.

Speaker 1:

At this point, like I bring up the three strikes rules and the sales meetings, just to where and that's where you react and if you seem to kind of do that number right, you're like, okay, maybe let's dig into that a little bit more. But so that kind of screening upfront there's not really a pattern to. So we work with probably close to a hundred firms. There's not really a pattern to the types of law, cause that's the other thing people like never do plaintiff's law, like the guys that sue them. Our best firm and the nicest people right now that we have is a plaintiff's firm, so it doesn't track. There might be a little bit of stuff around it, but the practice type really doesn't. It's the people. How do they talk to you? How do they react? If it's like, no, we just want to do over email, just send me your best price, I do immediately. Thank you for your time.

Speaker 2:

So law firms amazing. I love this joke. Every time I run one of these programs, I like to throw a slide up there where it's like pick, which you know. You raise your right hand if you'd rather do this, and raise your left hand if you'd rather do this, and I put law firms and right hand and then anything else with the left hand, and the entire room raises their left hand, and so you've definitely found a niche. That is pretty unique and congratulations for that. That's funny, you say that.

Speaker 1:

So, going back to I'm going to say like 2015, at the first MSP, we had talked to this Microsoft partner in software and they were going hard into the legal industry, wow, and so that was the same thing. Microsoft brought in 10 of their managed partners, right, the big, the elite ones and they said we want to go hard into healthcare and law. You know who wants to do? And it was every one of them, except that one guy raised their hand for healthcare. So yeah, there's a pattern to that, yeah.

Speaker 2:

So in 2020, you took a deep dive into cyber insurance, which frustrates many MSPs today. What was your breaking point and why did you decide to go get your license and start consulting for insurance companies?

Speaker 1:

Yeah, same thing. It was getting frustrating. We were getting these applications who knows what's really going on, that sort of thing. So again, here's an opportunity. We started actually on CGP, started doing marketing around cyber insurance in 2020 because it was one of those of like all right, this is consistently becoming a trend, going back to law firms being law firms. They were and are still consistently a hard business to insure. So I think we got hit extra hard, extra early, being a law firm focused MSP.

Speaker 1:

So, yeah, I just started digging some more, started talking to some people, and then the license side of it was actually I had somebody that used to work for me years ago that was looking for a career change, and so I told them hey, scott, I've been getting into doing more of this. We're having to do 90% of the work right, to fill these out and explain everything. Then the agent turns around and they get this. You know 15, 20% commission. It's like why don't you go get your license and I'll spin up an insurance agency also? So we ended up doing that and then, as that started to grow, I just went and got my license, also For a lot of it's a gray area, but, like for education for talking about it. You know it's like you should be licensed, so I just I started doing it so much that I didn't want the gray area anymore.

Speaker 2:

Interesting. So you co-founded Belltex, which offers a unique insurance policy tailored for MSPs. How did this idea come about and what were some of the biggest obstacles in turning that into a reality?

Speaker 1:

So Michael Riggs was the CTO at Perch, if you're familiar. So he's my operating business partner in that and it kind of came out of spite. I'm going to say a little bit of you know, you're seeing there's a lot of a I'm going to say a solved problem. If you're an MSP and you say I want to learn about insurance and how to work with it, there's a ton of resources out there to go get it right. Fifth Ball's done a bunch of stuff. You and I have done some stuff. I think you guys have some more stuff coming out soon, like the education's available. You just got to put the initiative in and then the updates as it changes that.

Speaker 1:

Now what we're looking at is, as an MSP, we know how to deal with insurance, we know how to navigate it, we know how to talk about it kind of thing. Why am I dealing with all these carriers that are sitting there of oh Chris, here's your policy. Thanks for your MSP bringing us in. Also, have you tried CrowdStrike before? Right, that kind of thing? So insurance is overlapping a little bit, they're competing a little bit, and then on the claim side stuff happens. It's kind of a trope at this point, but it's a question of when, not if, it's going to happen. So at that point, what a lot of insurance companies do is okay, msp, get out of the way. You screwed up. We want you out of the way, we're going to take it from here.

Speaker 1:

The MSP has the backups, they know the client's network, they can usually work faster and this is Dustin with his insurance add-on, a little bit cheaper than incident response companies. Why would we not involve those guys? We're going to put supervision. There's a lawyer, there's a project manager involved. But to me and Riggs there's this black and white there's an easy fix for those guys and that's how often do you get to say it's a win-win-win right. The customer policyholder gets their network back up faster, the MSP stays involved and gets paid and insurance we reduce our costs on the claim because they're down less amount of time and, again, the MSPs are a little cheaper than incident response companies.

Speaker 1:

So we actually came up with this concept back in I want to say 2021. And the insurance industry is still mostly scared to death of MSPs. So it took a couple of years of shopping it around to finally find a carrier to partner with that would let us execute on the vision. So that was the you know. Okay, cool, we solved the education part of it. We got MSPs know they know how to deal with it. Now we need to move on to the actual products that are being sold, that's great.

Speaker 2:

You talked a little bit about the education side of it, which I know again. You and I have spent some time on that and you and others have done that as well. What about the misconception side? Right, I feel like MSPs oftentimes have some misconceptions about cyber insurance. Are there any that come to mind about things that that they just should know about, that maybe they don't.

Speaker 1:

Yeah, and I'll say also the insurance industry is just so standoffish even with each other. It's kind of odd. Sometimes we're again Dustin insurance add-on. We're not helping ourselves. A little bit more transparency would be good on a lot of these things.

Speaker 1:

So the biggest one that I still hear. This has been forever and I don't think it's going to change anytime soon, but it's like you know claims don't get paid. Claims don't get paid. If you go look at the numbers, you know, even go back two years ago that why would these insurers just be taking a bath if they were not paying claims? Because that's where they lose money.

Speaker 1:

The claims do get paid. So very rarely do you see them denied for the security controls that they're you know. Oh, you didn't have MFA on, unless it's a substantial amount, like one of the lawsuits that was in the news I think it was Travelers, maybe you know they checked yes on the box and across the entire business. One guy had one account with MFA on Like in that case, yeah, you lied through your teeth. Let's call it what it is You're going to get denied. But on the other hand is I've had two claims that I've worked on to where it's a business email compromise and in both cases that a single user had had MFA turned off, both those claims paid out. So from that perspective, they do get paid.

Speaker 1:

The other part, though that comes up and we saw this recently with CrowdStrike was it's the unique aspects of the coverage. So there are a lot of policies that don't cover CrowdStrike because it wasn't a malicious intent. Yeah Right, this. Actually there was a ruling from a court yesterday on I'm going to get the details on this wrong, sorry. I literally saw this like last night and I was thinking, oh, I'm going to talk to Chris about this tomorrow. But it was the. A restaurant was using like fingerprints for their employees to clock in and out and I think that data got breached. No, it wasn't a breach, it was something else, but there was no malicious intent.

Speaker 1:

So again, the insurance policy said claim denied because they were only covering a cyber attack. Well, there was some kind of mistake around biometric data got leaked out or something like that. So that sort of thing is where I think you're seeing a lot more pain and people just don't realize. So that's whenever. Going back to to the education part, where it talks about you need to have a good policy. The little $25,000 endorsement isn't enough. Or this cheap policy which it says a million dollars on it. But when is your million dollar policy not a million dollar policy? It's those sublimits and restrictions and things like that where you do see a lot more real world pain. That's great. The outright denied claims is a myth for the most part, but you didn't actually have coverage for this event denials that does happen.

Speaker 2:

Dustin, you've been a pioneer in really starting this education side and now the assistance side around cyber insurance. So, coming from the MSP space and now being more on the insurance side, how do you think the MSP community is sort of responding to what you and others are doing now around cyber?

Speaker 1:

So the way I've kind of divided it up is and these are numbers I just totally made up, so nobody argue with me on it, please but I always say the industry MSP industry is kind of divided into three segments. There's sub-segments under it, but you have the mature MSPs at the top that are just really operationally mature. They can make a plan, they can stick to it. I don't know that I would call my MSP in that group some days, but the guys that are just very operationally, they say, okay, this is a thing, it's a problem, it's an opportunity, we're going to execute on it. I think they have a great grip on cyber insurance. They have a plan, they're actively building into their sales and account management, things like that, and then they also know how to deal with issues as they come up.

Speaker 1:

So again, top 20, the bottom I don't know, let's say 40%. Maybe is the absolutely love the word trunk slammer. So I'm going to say the trunk slammers. They're just out there, they're doing whatever they want, they're getting stuff done, but it's not a consideration. Whatever floats your boat, kind of thing. I'm not putting much effort in there. Whenever they're ready, they'll come to the table. That middle group, though, is the ones that are still needing a little bit of guidance, that still need to get more involved. That I call it like the aspirational group. They want to do the right thing, they want to deal with it. Maybe they don't have enough time, because running an MSP is a pain in the butt, but you know they're still again. The resources are out there. They just need to embrace it a little bit more. So, and they typically, whenever you see those guys do that, you know it's increased revenue. On cybersecurity Awesome.

Speaker 2:

So you've been on quite a journey, from starting a small MSP to building a consulting firm and now innovating in cyber insurance. Looking back, what's a lesson you wish you'd learned earlier in your career, dustin?

Speaker 1:

To say no to more things, in the sense of I've always been like, you know, oh hey, can I help with this, or here's this new opportunity, let's go for it. I've gotten a little bit more deliberate on what I'm doing because, again, dustin doesn't scale right To be able to put the energy, the focus into things. If we went back, you know, two, three years ago, I actually had my fingers in more stuff than I do now, which is weird to say Wow, so just staying a little bit more focused on there was actually it was Justin at TechRug, who's an insurance competitor in the industry, but at one point that he told me he said, man, if you would actually focus on something for once in your life, like you can do amazing things, and that really stuck with me. That was probably like two years ago. So that's been the biggest part is, you know, going back to, I said at the first MSP, my business partners were right, we were a managed services provider.

Speaker 1:

We were not a consulting shop. You know, focusing on, you know, have a good market fit. We do lawyers, we do small firms at Clear Guidance, a hundred people and under. We go a little bit over that sometimes if the case is right, but like we had a 500 person firm call recently and it was nope, sorry, we can't help. Thank you for your time. So just that having a. Really. Maybe it's not even saying no, as I'm talking through it out loud you can tell this wasn't pre-planned at all, but just I guess having that having focus kind of stay in your niche, stay in that vision.

Speaker 2:

So that may piggyback into my next question here and this one's less around insurance. But just you know you've spoken to tons of MSP owners. You yourself are a two-time MSP owner. What's a common mistake you see just in the industry in general, and what advice would you give to MSPs to be able to grow and adapt, maybe a little better?

Speaker 1:

Man, that's a fun one. So I think the staying focused part a little bit is you do see a lot of the guys where it's like a project comes in and, ooh, I'm going to say yes to this. Yeah, so I will. This part is going to probably get a bunch of negative reactions on it because against the grain advice, but I don't think going outside of what you do is necessarily bad if you have a plan. I'll give you a specific example.

Speaker 1:

Is first year at Clear Guidance was I built an MSP to that size before I was like I kind of know what to do. So we took on a bunch of project work that long-term we knew we weren't going to do. We did a lot of RingCentral setups and configurations, the phone system, Like we're not a VoIP company, we're not going to do one-offs. But it was one of those of okay, this stuff coming in the door. I know for the next year I can do this to juice cash flow, to build us a cash base, to grow the managed services business.

Speaker 1:

18 months in we ended up terminating the contracts for all those companies. We got them to somewhere good. It didn't just leave them hanging, but that was a very deliberate right, we're going to do this short term to build up cash so we can go expand the managed services business, and cash so we can go expand the managed services business, and I think a lot of MSPs go in. It's like, oh, we're going to do this, I'm going to start doing Microsoft Dynamics consulting. Like dude, you don't have a plan.

Speaker 2:

Yeah.

Speaker 1:

Right, like that's great that you have this, but especially on the smaller end, that now suddenly what happens is as the owner, you're involved in it, right, and you're the only guy you're. You're smart enough, you can do anything which I think a lot of MSP owners, that's absolutely the case but you don't have employees that can. You're not turning into a product, you're not figuring out the numbers, the profitability behind it. You just went and chased the shiny object without a plan.

Speaker 2:

I've heard you say it a couple of times. You yourself have a very deliberate ideal client profile, right. You know who you're going to go after with your MSP and you know where you're going to say that just doesn't fit right, might be too small, might be too large. You're going to send them another direction and say you're just not our fit. And I hear a lot of MSPs struggle with that. And I think that that concept of know who it is today and know where you want it to be right, because that could change two or three years from now.

Speaker 2:

And so you've heard forever we've been telling the MSP industry has been telling MSPs forever to say standardized, standardized, standardized, make the same widget and sell it to everybody. But the reality is and you just hit on it, there's a but right, there's an exception, right, and we used to call it the non-standard right. You got to 80%. It was kind of the same, but 20% could be a little bit different to be able to get that next type of customer in the door that turns into your new ICP potentially. Yeah, yeah.

Speaker 1:

I think that's yeah, and have it today. That's a good example. It's like have it today, standard, but here's where we're going, kind of thing. I think a lot of guys don't. It's a here's where we're going, but there's not really a today. And then I don't think there's any shame in saying we're going to take this today, but we don't want it to be around in two years. Right, this will not be a good fit customer in two years. Yeah.

Speaker 2:

Yeah, and firing is such a harsh word. But there's clients that no longer fit into your MSP model anymore and you've got to say hey, it's time for you to go somewhere else right, I'm the opposite of.

Speaker 1:

my team has gotten me like, at least once a month I'll just be like you know, one of our executive meetings I'm like we need to fire that client. They're like, no, we don't, dustin stop. We just actually had our second largest firm that we terminated because of not bad behavior. But they brought in some new executives and it just got completely chaotic. They couldn't get it back on track and I was like, sorry, guys, that we're just not a good fit for you anymore.

Speaker 2:

Understanding the profitability of each customer is the important thing, right, if you can look at it and go, these guys are a little bit of a pain, but they're paying us pretty well, so it's worth it. That's one thing, versus we're losing money on this because they just constantly are calling us Right. Just like you said with the lawyers, I started to get PTSD from back in my service delivery days when I remember people yelling at my service desk text just for to yell Yep.

Speaker 1:

Yeah, that's it. Yeah, the profitability it starts trending downwards. And then it's the you know from. You just said, like you see that customer name pop up on the phone. Yeah, oh crap. Yeah, that's the. Okay, it's time to make a change. Yeah, there's only so much you can salvage on that.

Speaker 2:

So what's next for Belltex, and are there any new initiatives that or areas you'd like to explore in the coming years?

Speaker 1:

So one thing and you can make fun of me, everybody on the podcast, on the LinkedIn can make fun of me for this is we are actively the MSP industry has said that they want these standalone warranties so trying to find some good options for that. I don't think that that market exists today, but that opportunity, the appeal of it, I think it can be done. So that's one of the pieces that we're working on. Other than that is no, we're just really trying to scale up from the insurance standpoint. I want to say we have about 40 MSP partners today that are active on the. You have to kind of go through a thing to get approved for the incident response side of it. But no, just looking to scale that and get the word out a little bit more on that side of it is the immediate.

Speaker 1:

We'd love to move into actual insurance for the MSPs themselves at some point. Our policy right now is for the customers. There is, I mentioned, techrug earlier. I think is probably the market leader on that side, but you know, not everybody's a good fit for it kind of thing. It's rough getting, even being an insurance guy, with an MSP going to get it's. I'm starting our renewal right now and it's like, yeah, I don't want to deal with this because it's such a pain in the butt.

Speaker 2:

So All right, I'm going to allow you to prognosticate a little bit here. So the MSP industry is constantly evolving. What do you think the next five to 10 years is going to look like for MSPs?

Speaker 1:

So one thing that I've noticed that started coming up already is again insurance and the MS. Let's say MSSPs are kind of starting to converge a little bit. So you're seeing some insurance companies there's a company called Accrisher out of Pittsburgh that's bought up a bunch of MSPs. So hey, now they can go in and say, guess what, chris, not only can I do your cyber insurance, your professional liability insurance, but we can also keep you secure at the same time. That's a really compelling message, the biggest thing. I mean you've been in the MSP industry a while too. We talk about the trusted advisor part of it. Right, everybody wants to be the trusted advisor. Most MSPs still aren't there, sorry, whenever they go, and it's the okay, let me talk to my insurance agent, let me talk to your lawyer. That kind of thing Like there's still the MSP is almost always a step below, even if you are in. You know I'm going to say on our MSP, half of our clients were probably not in that full trusted advisor slot. It's just a really hard thing to do. I'm not knocking the MSPs, but lawyer versus MSP there's a big delta there in the perception of it. Insurance gets you into that seat a lot of cases. So now you're competing against, say, an Accresure. They're coming in saying I can do this, that and the other You're coming in saying, hey, we do great cybersecurity and IT services. You're already starting off on a back foot, right, because that trusted advisor side of it. So I think you're going to see a lot more hybrid side of that. I'm getting one or two calls a week from MSP owners saying, hey, I want to set up my own agency, that sort of thing. And then again on the other side of it we're seeing these carriers come in selling MSSP services.

Speaker 1:

There's one that it's actually a really cool concept If you look up. It's called Alpha Secure, e-l-p-h-a. Like an elephant. They give you a policy, they give you EDR, they give you backups, vpn, mfa, I forget what, but it's really. It's like a legit turnkey. I'm not going to go into if it's a good idea, how well it works, kind of thing, but like, conceptually that's a cool idea, right? So I think you're going to see a lot more of that.

Speaker 1:

We're even seeing the MSPs getting into the non-core IT services because that's become such a commodity, sort of. I didn't intend this to be a brag about me, but it's like sort of like what we did yeah Right, offering those other services as well, the TSP thing, right, the technology services provider. You're going to have a little bit of a vulvar die on that. We got all the private equity stuff coming in. So if you want to grow, if you just want to stay as like a five person MSP, that market's never going to go away.

Speaker 1:

There's enough businesses out there that say I want to talk to Chris, I want to be able to call the owner up and work with them, that's fine. But if you want to grow to 30, 50, 100 person MSP, 10 million a year kind of thing is, I think that core service model is going to die. Cybersecurity is almost becoming a commodity also. So having that add on which again seeing a lot of interest on the insurance side, yep. But I talked to a guy the other day that they did a SaaS platform that's very vertical, specific, and they just launched it as a standalone product this year and he was like, and they're not a small business. He was like it's already 20% of my revenue. It's like, okay, that's pretty cool. I love those deep, vertical plays.

Speaker 2:

So that's great. That's why we have you speak to our partners a lot, as well as just to give them that, hey, this is what your option, your package, could look like. Yeah, you can continue to evolve, for sure, because you're going to have to. So you mentioned you're a control freak, juggling multiple businesses I don't want to say way too many, because it's probably my wife would say way too many. So how do you manage your time and really stay balanced amidst the chaos?

Speaker 1:

Poorly is the short answer. This is not going to be one of those things of like everybody should take advice from me, kind of thing. But I'm neurotic about my calendar has been. One of them is everything gets slotted in and we've even extended the family thing at this point that my wife sends me stuff and it's like nope, you're not working this afternoon, kind of thing. But I've also everything's been kind of adjacent, which has been nice right. So it's going from MSPs to insurance kind of deals. So there's still enough overlap to where it's not like I'm off manufacturing widgets sort of thing.

Speaker 1:

So the conversations like what I need to keep up to date on what I need to understand ends up falling. Generally it's useful across all the businesses, sort of thing. And then the other one was I've gotten a lot better. Even going back two years ago was one of those things of okay, we're going to start doing this, I can do. It is day one, I'm figuring out. Okay, chris can do this, like I'm going to help, kind of thing. I think that's been the biggest.

Speaker 1:

Going back to Dustin doesn't scale is I've gotten in I was saying earlier right, a lot of MSP business owners. We get into it just because we're smart enough to figure stuff out, like theoretically, could probably give me enough time and Google and like I can probably, you know, at least produce a half-baked version of whatever you tell me to, but that's not a good, scalable way to do it. And then that's where you suddenly find yourself with a you know, ooh, I have a million dollar business that I literally can't get away from. I have a job, so that's been one of the bigger parts. Now has been okay, where do we? You know Belltex, we brought in another agent. She does our compliance and some other stuff pretty much day one, because could I figure out how to go do 50 state filings for, you know insurance? Yeah, but that's not. She loves paperwork, so great. Yeah, but that's not. She loves paperwork, so great. We got a good fit on that side of it Very good.

Speaker 2:

So if you could go back and talk to your younger self, what would you tell a young Dustin early on in his career, all right.

Speaker 1:

So this is going to crack you up. I used to be a lot more conservative on business. I've had the. I think the opposite, most people tend to get more conservative as they get older. I was like on the consulting thing, you know I've been talking about doing that for years and was just like no, that must be things good. But that was, you know, what I really wanted to do, kind of thing. So taking more risks. I got three kids now so it's like I don't have as much If I knew what I knew, you know, whenever I was 24, kind of thing.

Speaker 1:

I think everybody says that but go take the risks, kind of deal. Worst case it doesn't work out, it's just money, it's just time You're not getting hurt, you're not dying, kind of thing. Whenever you're younger in age. But also even on career thing, where it's like these guys that are let's use Reddit as an example you go on the MSP Reddit. There is weekly one or two things Should I start an MSP? And everybody's like no, you shouldn't, it's a bad idea, whatever. Or like you need six months savings. That drives me nuts. Every time I talk to people on that I'm like hell yeah, just go for it Like it's worst case. You're back in the corporate world after a year because it didn't work out. Like that's cool, you had an adventure, you learned it kind of thing. You know, as long as there's not, maybe don't dump your life savings into it, right, don't go start an insurance carrier with your kid's college fund kind of deal. But if it's a, hey, I'm going to go try this MSP thing for six months. I'm going to go again.

Speaker 1:

I've had a lot of guys that call me. I'm like, yeah, go start an insurance agency. Worst case you shut down is when did you know? Now, that's it. I got over my insurance imposter syndrome, I can tell you. About two months ago I got a call from a carrier that is in Lloyd's of London which is in insurance. I had them call me. It was a legit cold call. They said we've been researching online. We needed somebody. Can you guys come to Europe and help us build an MSP insurance program? So that was a cool because going up to that I was like, okay, people keep inviting me on stuff, like they're kind of listening, but you know how much do I really know. But coming from that side of it, that was a neat validation that like, okay, we might you know me and Mike Riggs might actually be onto something.

Speaker 2:

That's great, dustin. It has been a really a pleasure to have you here. You're an asset to the MSP industry with what you're sharing around cyber insurance. I'm glad to have gotten to know you and thank you so much for being here. Appreciate it.