Title: Robo's Rise: Jake Levine on Building a $20 Million MSP

Subscribe to email list for future episodes: https://mspowner.aweb.page/p/b75b0b01-5300-477e-b0f1-0de6d899a18d

MSP Owner Podcast website: MSP Owner website

Looking to sell your MSP or partner to take your business to the next level? DataTel actively seeking to acquire quality MSPs to it's capability & client base. If you own an MSP generating more than $1M in revenue annually seeking and wanting a change, contact ben@datatelco.com .

Jake Levine, the CEO of Robo, shares his fascinating journey from a non-technical background to successfully leading a managed services provider generating $20 million in revenue. He discusses his unique approach to acquiring companies, emphasizing the importance of relationship-building and understanding the intricacies of the MSP landscape. Throughout the conversation, Jake highlights the challenges of integrating new businesses, particularly focusing on managing keyman risk and setting proper client expectations after an acquisition. With insights on maintaining operational excellence while growing quickly, he also considers the future of MSPs in an increasingly competitive market. This engaging dialogue showcases not only Jake’s entrepreneurial spirit but also his commitment to reshaping how MSPs deliver value to their clients.

Jake Levine, CEO of Robo, shares his remarkable journey from a non-technical background to leading a successful managed service provider generating $20 million in revenue. He discusses the unconventional path he took, starting from his early career in political campaigns, moving through various sectors including education and finance, and ultimately discovering entrepreneurship through acquisition. Levine highlights the challenges of integrating a new acquisition into an existing business, emphasizing the importance of operational structure and maintaining customer relationships during transitions. He candidly shares the lessons learned from his first acquisition, focusing on keyman risk and the necessity of creating a self-sustaining team to mitigate dependency on the founder. Levine's insights illustrate the dynamic nature of the MSP industry and the evolving expectations from clients, revealing how understanding customer needs and proactive service can differentiate an MSP in a competitive market.

Takeaways:

• Jake Levine's journey to becoming an MSP owner involved raising equity capital through a search fund.
• Robo, under Jake's leadership, has rapidly grown to a $20 million revenue company in three years.
• Key challenges in integrating acquired companies include aligning company cultures and operational systems effectively.
• Jake emphasizes the importance of building replicable SOPs to manage growth and client relationships.
• The transition from a founder-centric model to a structured management approach can be complex and requires time.
• Understanding keyman risk is crucial while acquiring businesses to ensure long-term sustainability.

Ben Tigelaar: 00:00:00

Foreign.

Ben Tigelaar: 00:00:08

Welcome to the MSP Owner Podcast.

Ben Tigelaar: 00:00:11

Today I'm thrilled to welcome Jake Levine, a driven entrepreneur who has carved out a remarkable path in the managed services and IT industry.

Ben Tigelaar: 00:00:20

Jake is the CEO of Robo, an Austin, Texas based msp.

Ben Tigelaar: 00:00:25

He came to ownership in a really interesting way by raising equity capital via a search fund and finding an initial MSP platform to acquire and, and build from there.

Ben Tigelaar: 00:00:37

He didn't have any prior experience in IT or managed services from my understanding.

Ben Tigelaar: 00:00:41

And I'm especially excited to talk with Jake today because of his unique background and the challenges he's faced specifically relating to acquiring new companies and integrating them.

Ben Tigelaar: 00:00:51

Something that I've gone through personally, but also something that I know Jake has done and done pretty well.

Ben Tigelaar: 00:00:57

So Jake, thanks for joining me on MSP Owner.

Ben Tigelaar: 00:01:01

Would you start by telling us high level about where Robo is at today?

Jake Levine: 00:01:07

Yeah, absolutely.

Jake Levine: 00:01:08

Ben, happy to be here and chat with you.

Jake Levine: 00:01:11

Fun to connect even digitally here.

Jake Levine: 00:01:15

So Robo today we're talking in December of 24.

Jake Levine: 00:01:20

Robo is about a $20 million revenue MSP with two offices, one in Austin, Texas and one in just outside of Portland, Oregon and Vancouver, Washington.

Jake Levine: 00:01:35

Not to be confused with Vancouver, Canada.

Jake Levine: 00:01:37

We've got about 59 team members today.

Jake Levine: 00:01:44

I think we've got an offer out for a 60th soon.

Jake Levine: 00:01:47

So we are, you know, we're growing, we're growing pretty quickly.

Jake Levine: 00:01:52

I'm sure we'll get into all the background but we're, we're excited for what's to come.

Jake Levine: 00:01:57

Even though this, this industry is never easy in my opinion.

Ben Tigelaar: 00:02:02

That's awesome.

Ben Tigelaar: 00:02:03

Awesome context.

Ben Tigelaar: 00:02:04

And so your base business is in Austin, Texas, right?

Ben Tigelaar: 00:02:07

The one that you acquired and then you had.

Ben Tigelaar: 00:02:08

You, you've done one acquisition so far?

Jake Levine: 00:02:11

Yep, one, I would say one real acquisition.

Jake Levine: 00:02:14

We did do a small aqua hire, just essentially a one man shop joined our fold.

Jake Levine: 00:02:21

But, but yeah, the base business is Austin, Texas and we added another, you know, team of 25 with the MSP in the Pacific Northwest.

Ben Tigelaar: 00:02:32

That's awesome.

Ben Tigelaar: 00:02:33

Did you know that I recently acquired a company in Portland?

Jake Levine: 00:02:36

I did and I've been meaning for us to talk about this.

Ben Tigelaar: 00:02:39

Nice.

Ben Tigelaar: 00:02:39

Yeah, maybe we can, we can jump into it at a later time or at later in this discussion.

Ben Tigelaar: 00:02:45

But yeah, maybe let's start with your, I guess your background specifically.

Ben Tigelaar: 00:02:52

Just so we have a little bit context for you personally, career wise.

Jake Levine: 00:02:56

Yeah, so I'm, I'm definitely not the, you know, not the traditional MSP sounder.

Jake Levine: 00:03:02

Didn't come up within the industry.

Jake Levine: 00:03:05

Don't have a particular Technical background.

Jake Levine: 00:03:09

As you mentioned, I went to undergrad in Austin, Texas and I came out of school, feels like ages ago thinking that politics was my dream.

Jake Levine: 00:03:22

I was going to, I was, I was a very mission oriented guy and I was going to change the world by working in political campaigns and, you know, supporting folks who I thought were gonna do some good in the world.

Jake Levine: 00:03:35

I had a blast doing that for a few years working at the state level or at the federal level.

Jake Levine: 00:03:41

But ultimately I think I've been sort of plagued, to be honest, Ben, with some career ADD for most of my life.

Jake Levine: 00:03:48

So I, I reached a, a plateau in kind of learning, it felt like there and I thought I got to try something new.

Jake Levine: 00:03:56

So I, I went and worked in a startup in the educational world, which was very different.

Jake Levine: 00:04:02

Though I still think about it as pretty mission oriented.

Jake Levine: 00:04:06

You know, again, a few years in that space, learned a ton, decided I wanted to take, take another left turn.

Jake Levine: 00:04:15

Wanted to learn about finance, wanted to learn about investing in general, but, but specifically about, you know, how cities evolve and change.

Jake Levine: 00:04:25

So think real estate investing.

Jake Levine: 00:04:27

And I, I got hooked up with a, an investment firm in Washington D.C.

Jake Levine: 00:04:33

that did that and I, you know, I didn't know anything.

Jake Levine: 00:04:35

I joined as the office manager and, and tried to learn and work my way up.

Ben Tigelaar: 00:04:39

So what, what was that investment firm?

Jake Levine: 00:04:42

It was called City First Enterprises.

Jake Levine: 00:04:44

So very, again, mission oriented, focused on building housing for, you know, folks who wouldn't otherwise afford IT in Washington D.C.

Jake Levine: 00:04:56

focused on building renewable energy projects in around D.C.

Jake Levine: 00:05:01

we did a little bit of small business investing, you know, think really, really small kind of mom and pop operations that were, we thought really cornerstones of a neighborhood or a community.

Jake Levine: 00:05:15

So that was, you know, a third or fourth like left turn in my career.

Jake Levine: 00:05:20

And then I went back to grad school at the University of Chicago and that's where I really learned about that concept you mentioned, the search fund, the idea of going out and acquiring a company.

Jake Levine: 00:05:34

that and started searching in: 2018

Ben Tigelaar: 00:05:44

So, so you, you went from nonprofit to got it, kind of getting exposure to direct investing a bit and said, hey, this was, this, this is more interesting.

Ben Tigelaar: 00:05:54

Was it mainly financial driven or was it like your skill set aligned with, with what that, with what that was?

Jake Levine: 00:06:03

Well, it wasn't financial driven because that was, that was not a, not a big change in my personal, you know, financial situation.

Jake Levine: 00:06:13

I think it was the intellectual, you know, learning of it.

Jake Levine: 00:06:17

You know, that, that's sort of what I mean by a career add you know, I've always been chasing those.

Jake Levine: 00:06:22

Those chances to learn about new things.

Jake Levine: 00:06:26

And not that I would ever claim to have mastered any of them, but at least to.

Jake Levine: 00:06:33

To get to a point where I.

Jake Levine: 00:06:34

I felt like I knew what I was doing.

Jake Levine: 00:06:36

And, and so, you know, learning the educational world was fun.

Jake Levine: 00:06:41

Learning politics was fun.

Jake Levine: 00:06:43

Learning about real estate was fun.

Jake Levine: 00:06:46

I think what did change for me when I was at Citi first was that was the.

Jake Levine: 00:06:53

Maybe the first time I started to feel this difference between kind of investing and being on the finance side of the world and really operating something.

Jake Levine: 00:07:02

You know, we were.

Jake Levine: 00:07:03

We were investing and then we were sitting on the sidelines, right?

Jake Levine: 00:07:06

We were.

Jake Levine: 00:07:07

We were hoping a building got built the way it was supposed to or a business survived in the way that it was supposed to.

Jake Levine: 00:07:14

Right.

Jake Levine: 00:07:14

But I started to feel more and more like, hey, I want to.

Jake Levine: 00:07:17

I want to be a part of that.

Jake Levine: 00:07:18

I.

Jake Levine: 00:07:19

I want to be in there with the team trying to grow the culture, trying to, you know, improve the sales operation, you know, whatever it is.

Jake Levine: 00:07:28

And.

Jake Levine: 00:07:28

And that kind of led me down.

Ben Tigelaar: 00:07:30

The search bond path, if I were to.

Ben Tigelaar: 00:07:33

So it felt like in investing was like you were sitting on the sidelines watching a bunch of other people play and you wanted to be on the field.

Jake Levine: 00:07:40

Totally, totally.

Ben Tigelaar: 00:07:42

That completely resonates with me as well, given, you know, I have.

Ben Tigelaar: 00:07:46

I worked, started out my career in private equity and on the investing side, and I just felt just disconnected and removed.

Ben Tigelaar: 00:07:54

And so that I always wanted more, if that makes sense.

Ben Tigelaar: 00:07:59

And I just saw all these people doing things, and it felt like I was just behind a curtain.

Ben Tigelaar: 00:08:05

And once you get into it, you're like, wow, this is more intense.

Ben Tigelaar: 00:08:10

Higher highs, lower lows.

Ben Tigelaar: 00:08:12

But I think aligned with me.

Ben Tigelaar: 00:08:15

So I'm.

Ben Tigelaar: 00:08:15

I'm glad I.

Ben Tigelaar: 00:08:16

I experienced both of those worlds, honestly.

Ben Tigelaar: 00:08:18

Just like.

Ben Tigelaar: 00:08:18

Just like you did.

Jake Levine: 00:08:19

Yeah, completely.

Jake Levine: 00:08:21

Completely.

Ben Tigelaar: 00:08:22

Nice.

Ben Tigelaar: 00:08:23

So you went and got an mba.

Ben Tigelaar: 00:08:26

That's interesting.

Ben Tigelaar: 00:08:27

Just given your background in working in nonprofits and little bit, it sounded like you needed to do that for a career trans.

Ben Tigelaar: 00:08:33

To do a true career transition.

Jake Levine: 00:08:36

Yeah, I think so.

Jake Levine: 00:08:37

I mean, I.

Jake Levine: 00:08:38

I had always prided myself then on, like, being a.

Jake Levine: 00:08:42

Being a gritty guy, being like, selftaught, you know, like, I'm going to find a way in the back door if I can't get in the front door kind of thing.

Jake Levine: 00:08:51

But unquestionably, the NBA helped add some, you know, some.

Jake Levine: 00:08:57

Some credential there, and.

Jake Levine: 00:08:58

And I was feeling like I needed that in some ways.

Jake Levine: 00:09:03

I feel like I snuck in the back door at UChicago.

Jake Levine: 00:09:07

You know, I was shocked they let me in, but, but yeah, it helped me make that move and you know, get folks to, I guess, give me another look when they might have otherwise glossed over the resume.

Jake Levine: 00:09:20

And what was this nonprofit thing?

Jake Levine: 00:09:22

What was this politics thing?

Jake Levine: 00:09:23

Right.

Ben Tigelaar: 00:09:24

100%, especially in a situation like that, then you can now jump into whatever career you want to go into.

Ben Tigelaar: 00:09:31

Right.

Ben Tigelaar: 00:09:32

It really is an unlock in that way, especially for people with non traditional or non, non career path, you know, paths.

Ben Tigelaar: 00:09:40

Yeah, it's really cool.

Ben Tigelaar: 00:09:42

And then, and then when did you discover, for those who don't know about this, Entrepreneurship through acquisition, sometimes coined as eta, is a popular model now that's being taught in MBA schools and has been been around for a long time.

Ben Tigelaar: 00:10:01

And curious, how did you get exposure to that initially?

Ben Tigelaar: 00:10:05

Did you find out before you went to get an mba or did you find out during your program at Booth?

Jake Levine: 00:10:12

Yeah, yeah, we could certainly do a whole conversation on ETA these days, but we probably could.

Ben Tigelaar: 00:10:20

But yeah, let's just keep it light for, for the MSP owners who might be listening.

Jake Levine: 00:10:24

But so I learned about it, as you know, Ben, there is the, the famous Stanford Search Fund primer out there that they put out.

Jake Levine: 00:10:35

It's a research document that talks about this model.

Jake Levine: 00:10:39

And a friend of mine when I was still working in real estate shared the concept with me and he pointed me to that document.

Jake Levine: 00:10:48

And I think my reaction is this was before business school.

Jake Levine: 00:10:53

I had started to contemplate I want to go to business school.

Jake Levine: 00:10:57

I didn't, you know, know that these two things would connect at all, but kind of the idea was germinating already.

Jake Levine: 00:11:05

And, and so when my friends mention this idea, my first reaction was like, that's absolutely crazy.

Jake Levine: 00:11:11

There's no world in which one, investors would support me to do this, and two, there's no world in which business owners would take me seriously.

Jake Levine: 00:11:23

So, or you know, or any searcher for that matter.

Jake Levine: 00:11:28

But I, I, I thought it sounded cool.

Jake Levine: 00:11:31

Right.

Jake Levine: 00:11:32

It sounded like that.

Jake Levine: 00:11:33

That way for me to get in the game, so to speak, and, and, and be accountable for it, you know, be accountable for.

Jake Levine: 00:11:41

Are the ideas rattling around my head about what a good business looks like, what a good culture looks like, are those worth anything?

Jake Levine: 00:11:49

So I ended up applying to UChicago and getting into it honestly, without even knowing that it had a pretty rich ecosystem around bt, as you mentioned.

Jake Levine: 00:12:02

Yeah.

Jake Levine: 00:12:03

Which is kind of hilarious, as Ben knows, because UChicago has a really, really rich ecosystem around it.

Jake Levine: 00:12:10

So, you know, shame on me.

Jake Levine: 00:12:12

For not doing my research.

Jake Levine: 00:12:13

But, but I lucked into that and, and then I dove in deep.

Jake Levine: 00:12:19

You know, I got involved in all the clubs and classes and, and all the other folks who had gone through this similar pathway.

Ben Tigelaar: 00:12:26

Just to clarify, I think this is kind of crazy and will blow people's mind.

Ben Tigelaar: 00:12:30

Right.

Ben Tigelaar: 00:12:31

You know, you've been in this business, what, three years?

Ben Tigelaar: 00:12:33

Just coming up on three years.

Jake Levine: 00:12:35

Yep.

Ben Tigelaar: 00:12:35

And you acquired your business is now doing $20 million of revenue, and you have 60 employees and you're running the company as, as, as one of the primary owners.

Ben Tigelaar: 00:12:50

That's jets.

Ben Tigelaar: 00:12:52

Just incredible, right?

Ben Tigelaar: 00:12:53

Just the sheer fact that you're able to do that with your background, coming out of an MBA school.

Ben Tigelaar: 00:12:59

Right?

Ben Tigelaar: 00:13:00

Yeah, I think, I think it's.

Ben Tigelaar: 00:13:03

You talk to people in the industry, right?

Ben Tigelaar: 00:13:05

They're slogging away trying to grow their MRR, you know, by 3 or $400,000 a year to grow their business, right.

Ben Tigelaar: 00:13:14

To, to make it to the next rung.

Ben Tigelaar: 00:13:16

And you kind of jumped well ahead of, of everyone, right, just because of your, your unique path.

Ben Tigelaar: 00:13:22

I mean, it's a really cool one and you're obviously really, really lucky, and so am I because I kind of did a similar sort of path.

Ben Tigelaar: 00:13:30

But, but just to give people a flavor of, of the, the, the, the hill that you started out already at the close to the top, right?

Jake Levine: 00:13:39

Yeah, yeah.

Ben Tigelaar: 00:13:41

And, and on the top, you face different challenges, right?

Ben Tigelaar: 00:13:43

There's a total, it's a totally different mindset.

Ben Tigelaar: 00:13:46

It's a way of running your business.

Ben Tigelaar: 00:13:48

Maybe I'm curious your thoughts on that, especially as you've grown.

Jake Levine: 00:13:52

Yeah, Yeah.

Jake Levine: 00:13:53

I mean, I, I was gonna say, Ben.

Jake Levine: 00:13:55

I, I.

Jake Levine: 00:13:57

Absolutely.

Jake Levine: 00:13:58

It's a unique situation to start in and, and I'm incredibly like, especially as I've, you know, every year I go to IT Nation and, and a bunch of the other conferences and have built, I think, a bunch of good friendships with other MSP owners who also were founders, unlike myself.

Jake Levine: 00:14:19

And, and I have like, incredible and immense respect for the difficulty of going from nothing to 3 million revenue.

Jake Levine: 00:14:29

Right.

Jake Levine: 00:14:29

Like, that is a, that is its own monster of a beast.

Jake Levine: 00:14:34

Right.

Jake Levine: 00:14:34

And, you know, the, the Excel sheet has different numbers on it now for us, but I think the difficulty of both are, you know, like one is, is no, no different than the other or, or no more glamorous.

Jake Levine: 00:14:52

Right.

Jake Levine: 00:14:54

So, you know, the founders that have been involved in Robo, who are founded Robo and the founder of our Vancouver business, are still involved today and constantly remind me of the challenges they had to go through.

Jake Levine: 00:15:07

To get us here.

Jake Levine: 00:15:08

Right.

Jake Levine: 00:15:08

So I, I very much stand on their shoulders.

Jake Levine: 00:15:13

I do think it is just now it's a different type of mountain, right?

Jake Levine: 00:15:17

Like, instead of how do we be scrappy and how do we just win that initial trust to that initial set of customers and get them to believe that we're a real thing.

Jake Levine: 00:15:28

Right.

Jake Levine: 00:15:28

You know, like now it's, hey, how do we build replicable SOPs and structure and systems that, you know, that can allow us to take on another 40 clients, another 80 clients, and again, I don't think either one is better or more glamorous.

Jake Levine: 00:15:50

They're just different challenges.

Jake Levine: 00:15:52

And that's what we talk a lot about internally.

Jake Levine: 00:15:55

Everything the business did before was really hard and really amazing, and now we have to do a bunch of things differently to create our own really hard and really amazing outcome, you know, for the future.

Ben Tigelaar: 00:16:09

Yeah, what got you there isn't going to get you to where you want to go.

Jake Levine: 00:16:13

Absolutely.

Ben Tigelaar: 00:16:17

Hi, I'm Ben Tigelar, the host of MSP Owner podcast and the CEO of Datatel, an IT managed service provider with 35 employees.

Ben Tigelaar: 00:16:26

The mission of this podcast is simple.

Ben Tigelaar: 00:16:29

To have authentic conversations with IT owners about their journey, how it started, the challenges they faced, and where they're going next.

Ben Tigelaar: 00:16:38

Every episode, I personally walk away with a new actionable item to strengthen my own business.

Ben Tigelaar: 00:16:43

But a quick word about my company, Datatel.

Ben Tigelaar: 00:16:47

We are actively acquiring MSPs who align with our service and culture.

Ben Tigelaar: 00:16:52

So if your company is generating between 1 and $10 million of revenue, I want to talk to you.

Ben Tigelaar: 00:16:59

But wait, you're probably thinking, why me and why Datatel?

Ben Tigelaar: 00:17:03

First is I get you.

Ben Tigelaar: 00:17:05

I understand the challenges MSP owners face.

Ben Tigelaar: 00:17:07

Being one myself, feeling overworked, overwhelmed, constantly being on call, struggling to bring in new business.

Ben Tigelaar: 00:17:14

I have the solutions and people in place to address these pain points.

Ben Tigelaar: 00:17:19

Second is culture.

Ben Tigelaar: 00:17:20

We run our business on EOS entrepreneurial operating system, which has been transformative for our employees and clients alike.

Ben Tigelaar: 00:17:28

I believe that building a great company comes down to finding and retaining great people who are in the right seats.

Ben Tigelaar: 00:17:35

Everything else is noise.

Ben Tigelaar: 00:17:37

If any of this resonates, it probably means we're a fit and we should be having a conversation.

Ben Tigelaar: 00:17:42

Until then, let's get back to the show.

Ben Tigelaar: 00:17:48

I'm curious about the finding of your initial platform because I think a lot of owners are also thinking about, hey, I might want to acquire in the future as well.

Ben Tigelaar: 00:17:59

You obviously bought decent sized business.

Ben Tigelaar: 00:18:02

Decent as meaning significantly larger than, you know, 97% of MSPs.

Ben Tigelaar: 00:18:09

So how did you end up finding that company.

Ben Tigelaar: 00:18:12

Initially, we found it through, unfortunately for.

Jake Levine: 00:18:16

Most MSP owners ears, one of those really annoying cold emails.

Jake Levine: 00:18:22

So I feel like it'd be a cooler story if I had some, you know, unique meet cute moments.

Jake Levine: 00:18:31

And I met the owner at a conference and we were, you know, blown away by each other.

Jake Levine: 00:18:35

But really, I.

Jake Levine: 00:18:36

I attribute a lot of this kind of stuff to, you know, the right place at the right time.

Jake Levine: 00:18:42

You know, the owner often tells me that, hey, if it hadn't been for a particular customer who beat him up that morning over some issue, you know, that probably makes the difference between deleting my email and, you know, giving it a second's thought.

Jake Levine: 00:18:58

Right.

Jake Levine: 00:18:59

So we met with an email outreach and she happened to be willing to talk that day.

Jake Levine: 00:19:07

And.

Jake Levine: 00:19:07

And then the relationship built from there and got to know each other and got to talk about, you know, what he was feeling, what he needed, and what we thought we could offer.

Ben Tigelaar: 00:19:18

It's cool, because you've really pointed out, like, us, like, that's just a sales process.

Ben Tigelaar: 00:19:25

Right.

Ben Tigelaar: 00:19:26

What you just identified was he was experiencing pain in that situation and you had the action and foresight to be in front of him.

Ben Tigelaar: 00:19:35

Right.

Ben Tigelaar: 00:19:35

Like, you gave yourself that opportunity, otherwise you wouldn't have gotten it.

Ben Tigelaar: 00:19:39

So it's like this intersection of pain plus providing a path to a better future, which is literally the definition of sales.

Jake Levine: 00:19:47

Yeah, yeah, Absolutely.

Ben Tigelaar: 00:19:49

Cool.

Jake Levine: 00:19:50

Absolutely.

Ben Tigelaar: 00:19:51

Okay, so.

Ben Tigelaar: 00:19:51

So you developed a relationship over time, and you ultimately ended up closing the deal.

Ben Tigelaar: 00:19:58

What did.

Ben Tigelaar: 00:19:59

Was there any challenges in diligence or concerns that you had about the company before you acquired?

Jake Levine: 00:20:05

Yes, absolutely.

Ben Tigelaar: 00:20:07

I mean, that was a trick question.

Ben Tigelaar: 00:20:08

I know there's always some, as you.

Jake Levine: 00:20:10

Know, Ben, there's always challenges.

Jake Levine: 00:20:13

I mean, I think for us, the two.

Jake Levine: 00:20:17

The two biggest challenges were very common ones.

Jake Levine: 00:20:22

Again, you've probably seen and, and other owners out there probably feel, you know, one was taking time away from running the business to, you know, go through the process of selling it.

Jake Levine: 00:20:37

And, you know, I'm sure there's a million people who've conveyed this message to MSP owners, right?

Jake Levine: 00:20:42

But, like, when you're ready to sell, it is a process.

Jake Levine: 00:20:46

You know, there's a lot of information, there's a lot of requests, there's a lot of work to be done.

Jake Levine: 00:20:51

And, and you definitely need to understand that and set aside the time for it.

Jake Levine: 00:20:56

And in a lot of ways, the founder of Robo wasn't ready for that.

Jake Levine: 00:21:02

You know, he was not ready to set aside that time.

Jake Levine: 00:21:05

So it made for a really slow process.

Jake Levine: 00:21:08

I Mean, it took us, took us about a year from, maybe even a little bit more than a year from when I first had him respond to that initial email we talked about to actually closing the deal.

Jake Levine: 00:21:22

Um, the second part that also added some delay was cleanliness of the, the financials, the, the accounting and the business.

Jake Levine: 00:21:33

You know, kind of similar vein.

Jake Levine: 00:21:35

Right.

Jake Levine: 00:21:35

I, I know.

Jake Levine: 00:21:36

Especially when you're growing, right.

Jake Levine: 00:21:38

The first, second, third concerns are usually like, how do I make customers happy?

Jake Levine: 00:21:44

And, and then maybe after that is like, how do I make my team happy and how do I make sure I'm making money?

Jake Levine: 00:21:52

And a clean accounting process is usually all the way at the bottom.

Jake Levine: 00:21:57

But in our case, that was really difficult because, you know, any outside buyer as, you know, wants to, wants to know what they're getting themselves into.

Jake Levine: 00:22:08

So we had to do a lot of cleanup on that before we could get to a place where we, we, you know, we're ready to close on the deal.

Ben Tigelaar: 00:22:17

Cool.

Ben Tigelaar: 00:22:18

And after.

Ben Tigelaar: 00:22:19

One of the things that I've experienced is there's always things that you're not able to diligence or that you find out after close.

Ben Tigelaar: 00:22:28

What were those in your situation and when did they happen?

Ben Tigelaar: 00:22:31

Post close?

Jake Levine: 00:22:34

Yeah.

Jake Levine: 00:22:34

I think in our situation, Ben, thankfully, there were not a lot of.

Jake Levine: 00:22:41

You know, we often talk about the skeletons in the closet.

Jake Levine: 00:22:43

Right.

Jake Levine: 00:22:44

There were not a lot of skeletons in the closet, but I think the things that we believed to be true were even more true.

Jake Levine: 00:22:56

Right.

Jake Levine: 00:22:57

So some of the things that we knew were risks were even bigger risks.

Jake Levine: 00:23:05

There were.

Ben Tigelaar: 00:23:06

Interesting.

Ben Tigelaar: 00:23:07

Can you share any examples of what, what you mean by that?

Jake Levine: 00:23:10

Yeah.

Jake Levine: 00:23:11

So, you know, I would say, as I've gotten to know more MSPs myself, and I'm sure you've seen this, I think a lot of these companies start with what folks in the private equity finance world would call keyman risk.

Jake Levine: 00:23:28

Right.

Jake Levine: 00:23:29

These businesses are very sounder centric.

Jake Levine: 00:23:33

They own the relationships.

Jake Levine: 00:23:35

They, you know, they create the culture.

Jake Levine: 00:23:37

They, you know, they, they create the structure or lack thereof that exists in the business.

Jake Levine: 00:23:43

And some founders, I think, are able to reach that point where they, you know, they, they start to be intentional about kind of de.

Jake Levine: 00:23:53

Risking themselves and not being the only one that answers the phone on the weekend when the VIP customer calls and, you know, not being the only one that quotes projects and, you know, their team starts to do those things.

Jake Levine: 00:24:06

Right.

Jake Levine: 00:24:08

In our case, it was still very much the founder and we knew it, but the more that we got in the business, you know, we really saw how deep that was and, and it, you Know, we realized there was a whole lot more work to do to, to set other people up, to train them, to grow them, to be able to take those things off of our founders plate.

Jake Levine: 00:24:33

So you know, again, as a, as an outsider, right, you, you look at, at that key man risk and sometimes we also call her.

Jake Levine: 00:24:41

It.

Jake Levine: 00:24:42

Call it the, like the lottery risk.

Jake Levine: 00:24:44

Right.

Jake Levine: 00:24:45

If, if somebody goes and wins the lottery tomorrow and they don't want to work anymore, right.

Jake Levine: 00:24:49

Like what happens to the business?

Jake Levine: 00:24:51

And, and there was, there was a lot a lottery risk there.

Ben Tigelaar: 00:24:55

And so did that end up getting reflected in customers churning or having to reorg or like what was the reality of, of that?

Ben Tigelaar: 00:25:04

Because I think every acquisition deals with it.

Ben Tigelaar: 00:25:06

Right.

Ben Tigelaar: 00:25:06

The owner will ultimately one leave or two do something else.

Ben Tigelaar: 00:25:11

Right.

Ben Tigelaar: 00:25:11

Otherwise they wouldn't transact most of the time.

Jake Levine: 00:25:14

Yeah.

Jake Levine: 00:25:15

So I think it, it manifested in some, some challenging customer transitions and, and we did have some customers churn because that thankfully, you know, knock on wood still now, thankfully not a large percentage but, but there were some customers who felt like hey, I'm used to getting the founder on the phone all the time and now you're telling me I shouldn't talk to him all the time.

Jake Levine: 00:25:46

I'm going to go look elsewhere.

Jake Levine: 00:25:47

Right.

Ben Tigelaar: 00:25:48

How, how do we, how do you solve that?

Ben Tigelaar: 00:25:50

Because I'm, honestly, I.

Ben Tigelaar: 00:25:52

We're.

Ben Tigelaar: 00:25:52

We do the same thing, right.

Ben Tigelaar: 00:25:55

Like we had a founder, the, the company that we acquired.

Ben Tigelaar: 00:25:58

You know, he was the, the face for a couple of clients and he'd been their main contact for many, many years.

Ben Tigelaar: 00:26:04

And the clients were even, you know, they, they text him.

Ben Tigelaar: 00:26:08

Issues.

Jake Levine: 00:26:08

Yeah.

Ben Tigelaar: 00:26:09

And so didn't solve that prior to close because we didn't know that existed.

Ben Tigelaar: 00:26:13

And now we have to have conversations about hey, this is how the relationship will need to work going forward if we're going to deliver the service that we want to provide you, which is the best.

Ben Tigelaar: 00:26:23

Right?

Jake Levine: 00:26:24

Yeah.

Ben Tigelaar: 00:26:24

And so how did you have those conversations?

Ben Tigelaar: 00:26:26

Because I want to learn.

Jake Levine: 00:26:28

Yeah, yeah, yeah.

Jake Levine: 00:26:29

I mean and I'll, I'll share what we are trying, but I won't claim that we've solved it.

Jake Levine: 00:26:36

I mean, I think part of what you're talking to Ben is I think such a challenge for all of us, you know, the nature of our work and our service is it's expectation setting.

Jake Levine: 00:26:46

Right.

Jake Levine: 00:26:46

It's how do we, how do we get the customer to understand, you know, this sort of nebulous idea of like what service is let alone what good or acceptable or great services.

Jake Levine: 00:27:01

And one of the things that I've Seen that certainly we had here was, you know, our founder and their desire to grow the business and make people happy.

Jake Levine: 00:27:09

Like set no expectations other than I'll do everything for you.

Jake Levine: 00:27:16

Right.

Jake Levine: 00:27:16

And, and so resetting those expectations, one just takes time.

Jake Levine: 00:27:22

Like, I don't think anybody could mitigate that prior to closing.

Jake Levine: 00:27:27

You know, I think you have to go into it and you just have to be ready to kind of have that fight.

Jake Levine: 00:27:34

What we've been trying to invest a lot in is, is our account management, you know, down management, customer success, people call it different things.

Jake Levine: 00:27:42

Bcio, you know, gets kind of thrown into that, right?

Jake Levine: 00:27:45

I mean, we tried to say, okay, where is it that you spend your time?

Jake Levine: 00:27:53

What types of issues are customers reaching out to you for?

Jake Levine: 00:27:57

When are they reaching out to you?

Jake Levine: 00:28:00

And, and we tried to just kind of like tick down that list with different resources.

Jake Levine: 00:28:05

So if it's, hey, you know, the founder, we really relied on him to give us kind of like general advice about where it fits into our larger business.

Jake Levine: 00:28:16

Like, okay, well I think about that as sort of that VCIO technology roadmaping, right.

Jake Levine: 00:28:22

So we, we invested in an account management team, have tried to get them trained up to be able to play that role.

Jake Levine: 00:28:29

And so they, they joined in all those meetings and we, you know, we created more structure and started doing QBRs to, to try to, you know, bring those conversations kind of on our terms, not whenever the CFO of the customer happened to think about it and wanted to call the founder.

Ben Tigelaar: 00:28:49

Driving, proactive nature, plus setting things up on your terms so that you can have better outcomes for everyone.

Jake Levine: 00:28:56

Yes, absolutely.

Jake Levine: 00:28:58

I think one of the, one of the toughest ones that you alluded to, Ben, is that like that weekend text message, right?

Jake Levine: 00:29:05

I mean there is some degree of just comfort, right, that I think especially the C suite at the customer is going to feel with, you know, the guy they've been dealing with for 20 years.

Jake Levine: 00:29:20

So one, we did build out a 247 service offering, which I'll be honest, has been really polarizing internally and I even feel conflicted about sometimes.

Jake Levine: 00:29:34

It's kind of do I want to give our customers, I don't know, the dessert that they think they need, but often they don't really need.

Jake Levine: 00:29:46

But we built that out as a way of trying to formalize, hey, instead of calling our founder, who has kids, is out and about, has stuff going on, you know, here's the phone number for our after hours line.

Jake Levine: 00:30:01

You can call it or text it, somebody will immediately respond, right?

Jake Levine: 00:30:06

Now, again, that's not been easy.

Jake Levine: 00:30:09

That's been a challenge for sure.

Jake Levine: 00:30:11

So just a couple that was like one by one.

Jake Levine: 00:30:16

Why does the customer reach out to you and how do we, how do we deal with it?

Ben Tigelaar: 00:30:20

It is interesting you say that you're still struggling at 60 employees with the 247 offering.

Ben Tigelaar: 00:30:26

You know, my company is 34, 35 people.

Ben Tigelaar: 00:30:30

We've got a 247 IT offering as well.

Ben Tigelaar: 00:30:32

And it's something that, you know, we have to figure out how to plan for internally.

Ben Tigelaar: 00:30:36

Because a lot of that sat on the founders shoulders.

Ben Tigelaar: 00:30:40

Yeah.

Ben Tigelaar: 00:30:41

For significant amounts of time.

Ben Tigelaar: 00:30:43

Right.

Ben Tigelaar: 00:30:44

And so how does that coverage happen in reality?

Ben Tigelaar: 00:30:47

How do we have backups?

Ben Tigelaar: 00:30:48

That sort of stuff is like, that was one of their pain points and why they wanted to transition to a large organization because.

Jake Levine: 00:30:54

Yep.

Ben Tigelaar: 00:30:55

They're holding this all up on themselves.

Ben Tigelaar: 00:30:57

And that's just, that's crazy.

Ben Tigelaar: 00:30:59

And I was like, that's.

Ben Tigelaar: 00:31:00

That does not seem like a life anyone would want to live.

Ben Tigelaar: 00:31:02

And they had been doing it for five or six years and it was like, we can help solve that.

Ben Tigelaar: 00:31:08

Right?

Jake Levine: 00:31:08

Yeah, yeah, yeah, exactly.

Jake Levine: 00:31:11

And, and, and I do think, you know, I mentioned like the dessert idea and kind of what I mean by that is one of the things we've found is the, the more formalized our 247 offering gets.

Jake Levine: 00:31:24

I'd be curious if you guys have felt this too.

Jake Levine: 00:31:26

Like the less people use it.

Jake Levine: 00:31:29

Right.

Jake Levine: 00:31:29

Because the, the most important thing was having a consistent message to our customer where yes, we acknowledge, you know, we, we see your issue and then say, does this issue need to be dealt with right now?

Jake Levine: 00:31:47

If so, you know, here's how we do it.

Jake Levine: 00:31:49

And there may or may not be an extra charge depending on whatever the other services are with us.

Jake Levine: 00:31:56

Or can we do this on Monday morning?

Jake Levine: 00:31:58

Right.

Jake Levine: 00:31:59

And like immediately that for us has narrowed down, you know, 2/3 of the requests.

Jake Levine: 00:32:06

Right.

Jake Levine: 00:32:07

Because most people we found actually just okay, I just want to know, like, you're out there.

Jake Levine: 00:32:13

But yeah, now that you say it really doesn't need to be taken care of until Monday morning.

Ben Tigelaar: 00:32:18

So basically you've created kind of when you triage, you're saying, hey, yeah, is this actually a real issue?

Ben Tigelaar: 00:32:25

If it is, then let me know.

Ben Tigelaar: 00:32:27

If it's not, let's kick this till Monday, basically.

Ben Tigelaar: 00:32:30

And it's gotten rid of 2/3 of the requests, essentially.

Jake Levine: 00:32:33

Yeah.

Jake Levine: 00:32:34

And, and even with a lot of these texts directly to the founder, you know, a lot of times it's just, oh, it was the CFO who maybe they're catching up on work on a Saturday morning.

Jake Levine: 00:32:47

And, and they thought to ask the question.

Jake Levine: 00:32:51

Right.

Jake Levine: 00:32:52

But they didn't really need that issue solved in that moment.

Jake Levine: 00:32:55

You know.

Jake Levine: 00:32:56

Um, and so it, it was only out of the desire to kind of over perform and over deliver that our founder would have to do a lot of work at that moment.

Jake Levine: 00:33:06

But it could be put off till normal business hours.

Ben Tigelaar: 00:33:10

Yeah, totally.

Ben Tigelaar: 00:33:11

I think the way that my team has approached it is actually a lot of our client.

Ben Tigelaar: 00:33:15

I think there's different levels of 24.

Ben Tigelaar: 00:33:17

7.

Ben Tigelaar: 00:33:18

Right.

Ben Tigelaar: 00:33:19

In terms of expectation.

Ben Tigelaar: 00:33:20

If you're a law office.

Ben Tigelaar: 00:33:22

Right.

Ben Tigelaar: 00:33:22

And you're open during business hours, you're not going to have a lot of 24.

Ben Tigelaar: 00:33:25

Seven needs.

Ben Tigelaar: 00:33:26

Right.

Ben Tigelaar: 00:33:27

Maybe the executive who has an issue at 8pm getting into their teams or something.

Ben Tigelaar: 00:33:31

Right?

Jake Levine: 00:33:32

Yeah.

Ben Tigelaar: 00:33:32

But a lot of our clients actually are 24.

Ben Tigelaar: 00:33:35

7 operations.

Ben Tigelaar: 00:33:36

So we've got manufacturing, we've got energy, biofuel.

Ben Tigelaar: 00:33:40

So these are, these are things where they actually have 24.

Ben Tigelaar: 00:33:43

Seven round the clock operations where they're producing.

Ben Tigelaar: 00:33:47

And that's one of the reasons why they picked us is because an on call situation is less, less ideal.

Ben Tigelaar: 00:33:54

Right.

Ben Tigelaar: 00:33:54

And having true 24.

Ben Tigelaar: 00:33:56

7 coverage was one of the reasons why we were chosen.

Ben Tigelaar: 00:33:58

It.

Ben Tigelaar: 00:33:58

So it creates this especially during Monday through Friday.

Ben Tigelaar: 00:34:03

Right.

Ben Tigelaar: 00:34:03

And maybe there's a little bit of off hours on, on the weekend.

Ben Tigelaar: 00:34:05

So I think it's the composition of customers determines how you can structure this.

Ben Tigelaar: 00:34:12

And we're trying to wrangle with that too to make sure that we're not overextending our team but also making sure we're meeting our clients expectations.

Ben Tigelaar: 00:34:21

And then if, if not, we've got to figure out hey, how to sell into that end market more so that it scales.

Ben Tigelaar: 00:34:28

Right.

Ben Tigelaar: 00:34:29

Find those same exact needs and pain points because then we can offer an even better service to those clients as well.

Ben Tigelaar: 00:34:34

So.

Ben Tigelaar: 00:34:35

Or adjust expectations potentially, but not something we're interested in doing.

Jake Levine: 00:34:40

That's very well said.

Jake Levine: 00:34:41

And I, I'm, I'm thinking mainly about our, our customers who don't have a true 24.

Jake Levine: 00:34:47

7 operation.

Jake Levine: 00:34:49

They may have execs who think they work 24.

Jake Levine: 00:34:52

7 but, but yeah, different.

Ben Tigelaar: 00:34:54

And then it goes back to hey, do you think like would you be messaging your employee this at this time and expect a response at 8pm and some say yes and some say no.

Ben Tigelaar: 00:35:06

Right.

Ben Tigelaar: 00:35:07

It's kind of like what's the value that you're and the expectation that you're setting.

Ben Tigelaar: 00:35:12

Cool.

Ben Tigelaar: 00:35:12

So enough operations we got, we could talk years, years about that.

Ben Tigelaar: 00:35:16

So.

Ben Tigelaar: 00:35:17

So you operated for a number for, for a Certain amount of time period.

Ben Tigelaar: 00:35:23

And then you ended up finding a, a new potential acquisition.

Ben Tigelaar: 00:35:27

Where did this come from?

Ben Tigelaar: 00:35:29

What was the story around that, that add on and, and how big was it relative to your base business?

Jake Levine: 00:35:36

Probably just over half the size of our base business.

Jake Levine: 00:35:40

ny that we acquired was maybe: 2020

Jake Levine: 00:35:55

So, you know, of a size, had crossed a couple of those thresholds.

Jake Levine: 00:36:02

Really nice and, and well run business, really great culture, which we loved.

Jake Levine: 00:36:10

It actually came about kind of by happenstance.

Jake Levine: 00:36:15

I, I, I wouldn't, I wouldn't say that this was the, it was not the traditional searcher outreach campaign.

Jake Levine: 00:36:23

Right.

Jake Levine: 00:36:23

I, I wasn't ready for it, to be honest, Ben.

Jake Levine: 00:36:25

I mean, I, I got to know the owner of this business when I was doing diligence on Robo initially, and I got to know him simply by way of an introduction from an investor.

Jake Levine: 00:36:40

He said, oh, I literally, the investor said, hey, I think my neighbor might run a business like this.

Jake Levine: 00:36:49

And I said, oh, well, you know, if you see him around the neighborhood, like, I'd love to talk to him because, wow, I don't know the industry and I need to talk to smart people who do.

Jake Levine: 00:37:00

And, and sure enough, you know, a week later, they were at, I kid you not, like a neighborhood barbecue.

Jake Levine: 00:37:08

And, and he just goes, hey man, I've got, I've got him next to me.

Jake Levine: 00:37:12

You want to just talk to him right now?

Jake Levine: 00:37:14

And I said, yeah, sure.

Jake Levine: 00:37:17

And so he puts me on the phone with them, it's, you know, a Saturday, and were trying to close the Austin deal.

Jake Levine: 00:37:24

And, and I just start to ask him, you know, probably really dumb questions about how running an MSP looks.

Ben Tigelaar: 00:37:31

He's like, you're buying an msp, you don't know what you're doing.

Jake Levine: 00:37:34

Exactly.

Jake Levine: 00:37:35

He said, he said, why would anyone let you do this?

Jake Levine: 00:37:38

So we, we through that quickly, hit it off, you know, just on a personal level.

Jake Levine: 00:37:46

Hey, I, you know, however that works, right?

Jake Levine: 00:37:49

You see something in someone, you, you feel like we'll be friends.

Jake Levine: 00:37:54

And, and that conversation continued.

Jake Levine: 00:37:58

Really.

Jake Levine: 00:37:58

I mean, he was generous, you know, incredibly generous with his time and said, look, call me whenever, whenever you have more stupid questions, I'll, I'll be happy to answer them.

Jake Levine: 00:38:07

And so after we acquired Austin, I had a lot of stupid questions and, and, and then it got to a point where, well, we're actually now exchanging ideas.

Jake Levine: 00:38:18

I'm learning a little bit as I go here, and one of the Things that came up, I forget exactly why, but he, he started to tell me about a personality test that he loves.

Jake Levine: 00:38:33

I'm sure you've seen a bunch of them, Ben.

Jake Levine: 00:38:35

Like, you know, there's a lot of them out there, but he is a real follower.

Jake Levine: 00:38:39

Follower of one.

Jake Levine: 00:38:39

And, and I said, oh, that's interesting.

Jake Levine: 00:38:43

Maybe we could use something like that here in Austin.

Jake Levine: 00:38:46

And he said, oh, well, why don't I just come down and like show you how it works?

Jake Levine: 00:38:51

And I said, okay, yeah, sure.

Jake Levine: 00:38:54

You know, why not?

Jake Levine: 00:38:55

This, this could be fun to expose, you know, my team, I at the time just barely growing management team to another msp, you know, just swap some ideas.

Jake Levine: 00:39:07

So he came down with his kind of second in command at the time.

Jake Levine: 00:39:11

And we spent a few days together not only talking about this personality assessment, but also just talking about how service works, how we do projects, sales, you know, etc.

Jake Levine: 00:39:24

And I think by the end of it, there was just this really nice, organic, like, God, we really like each other.

Jake Levine: 00:39:30

We really, we feel like it'd be cool to keep working together kind of thing.

Jake Levine: 00:39:36

It was still only maybe seven, eight months into owning Robo.

Ben Tigelaar: 00:39:41

And that is quick.

Jake Levine: 00:39:42

That is.

Jake Levine: 00:39:43

Yeah.

Jake Levine: 00:39:43

And so as, as you can imagine, Ben, you know, you don't, you don't really undertake an acquisition that early, right, because you just, you still don't know where the bathroom is to some extent.

Ben Tigelaar: 00:39:56

So how much time would you put at that, the ideal time to acquire after you've made your last acquisition at least one of that size.

Ben Tigelaar: 00:40:04

So a time frame that you're like, probably need to follow this.

Jake Levine: 00:40:08

I think it depends on where you're at operationally, you know, unfortunately, I mean, I think where, where we were at operationally, we were not ready to do that acquisition.

Jake Levine: 00:40:20

You know, like, by all traditional approaches, we should not have done that acquisition.

Jake Levine: 00:40:27

And it took us probably a solid year to really get through integration.

Jake Levine: 00:40:36

I know.

Jake Levine: 00:40:37

And I'm sure you talk with others in the space who are bigger than both of us and they've done a ton of acquisitions and they've got down to a science like we integrate in three months time.

Jake Levine: 00:40:49

Right?

Jake Levine: 00:40:50

I mean, that we're not there yet.

Jake Levine: 00:40:52

Um, I, I think as you go, you get better and better and you can do things like that.

Jake Levine: 00:40:57

But you know, for us, I mean, I think you need to expect a, a pretty long Runway for your first one, that's for sure.

Ben Tigelaar: 00:41:07

Yeah, I told my, I told my team two months.

Jake Levine: 00:41:11

Nice.

Jake Levine: 00:41:12

Set the, set the bar high, right?

Jake Levine: 00:41:15

Yeah, yeah.

Ben Tigelaar: 00:41:16

I was like, let's See what we can do in two months.

Ben Tigelaar: 00:41:19

Yeah.

Jake Levine: 00:41:22

How has that worked out?

Jake Levine: 00:41:23

Have you met that?

Jake Levine: 00:41:24

Two months.

Ben Tigelaar: 00:41:26

So we, I think it comes down to what, what are you integrating?

Ben Tigelaar: 00:41:30

Right.

Ben Tigelaar: 00:41:30

It's people, tools, processes, and then clients.

Ben Tigelaar: 00:41:34

Right.

Ben Tigelaar: 00:41:35

And so amongst those, we were.

Ben Tigelaar: 00:41:38

The way I think about it is when we're acquiring someone new, we're looking at their tools, people, processes, and we're saying, what's better?

Ben Tigelaar: 00:41:47

Is it ours or theirs?

Ben Tigelaar: 00:41:48

And if it's theirs, we're keeping theirs.

Ben Tigelaar: 00:41:50

Right.

Ben Tigelaar: 00:41:50

And then we're, we're going through and, and just doing what's best for the overall business.

Ben Tigelaar: 00:41:55

And that's one of the, that's one of the areas where we ended up taking substantially.

Ben Tigelaar: 00:42:01

They were much more mature than us.

Ben Tigelaar: 00:42:03

They had a lot better processes, like front to back.

Ben Tigelaar: 00:42:07

So it was like, all right, we're just adopting 9, you know, 85 or 90%.

Ben Tigelaar: 00:42:12

Right.

Ben Tigelaar: 00:42:13

From, from, from their perspective.

Ben Tigelaar: 00:42:15

And then we were changing things like billing and client communication and some, you know, the way in which ticket flows into the system.

Ben Tigelaar: 00:42:23

So we ended up adopting a lot of their stuff.

Ben Tigelaar: 00:42:26

So it was more like the clients didn't see any change and neither internally did the.

Ben Tigelaar: 00:42:30

Did the employees.

Jake Levine: 00:42:31

Right.

Ben Tigelaar: 00:42:31

Because they were following the same processes.

Ben Tigelaar: 00:42:33

So I expected it to be able to be faster than a, hey, we're buying a company, we're completely changing everything and we have to communicate that to clients.

Ben Tigelaar: 00:42:42

And that's just a different uplift, in my opinion.

Ben Tigelaar: 00:42:45

But I guess we'll see the next time I do it and we'll, we'll trade notes then.

Jake Levine: 00:42:50

Yeah.

Jake Levine: 00:42:51

Yeah.

Jake Levine: 00:42:51

For what it's worth, I think we followed that same approach this time.

Jake Levine: 00:42:56

I mean, my, my board told me, you know, first rule here, especially with the, the company we acquired, they were running really well.

Jake Levine: 00:43:07

Do no harm, right?

Jake Levine: 00:43:08

Don't.

Jake Levine: 00:43:09

Don't harm their operation.

Jake Levine: 00:43:11

Because we had a similar thing, you know, in a lot of ways they were better than us.

Jake Levine: 00:43:15

Now, there were certain things we were better at that I wanted to make sure we kind of upgraded them to.

Jake Levine: 00:43:21

But, but yeah, we, we were very intentionally slow and like, okay, if this is going to up, you know, upset the Apple cart here, we're gonna, we're gonna not do that as quickly.

Ben Tigelaar: 00:43:32

What's the name of the second acquired company?

Jake Levine: 00:43:35

Computers Made Easy.

Ben Tigelaar: 00:43:37

Computers Made Easy.

Ben Tigelaar: 00:43:38

And are you still operating under Computers Made Easy or did you do a brand change and when did you do that?

Jake Levine: 00:43:43

Yeah, so you will still see that Computers Made Easy website.

Jake Levine: 00:43:47

It does say Powered by Robo in small underneath.

Jake Levine: 00:43:51

But, but the idea was Brand was going to be the last thing we did.

Jake Levine: 00:43:59

I personally didn't feel like the Robo brand.

Jake Levine: 00:44:02

I mean, especially in a new geography, there's no, you know, credibility or weight to that brand.

Jake Levine: 00:44:08

Right.

Jake Levine: 00:44:09

So I didn't want to, I didn't want to lose the credibility and SEO and, you know, investment that had been made in that area for computers made easy simply to unify those brands.

Jake Levine: 00:44:23

So we said, look, we'll.

Jake Levine: 00:44:25

We're doing a lot in Austin to kind of beef up the Robo website and digital presence in general.

Jake Levine: 00:44:34

And until that's done, we didn't want to mess with branding up there.

Ben Tigelaar: 00:44:38

Did that cause any con.

Ben Tigelaar: 00:44:40

Did that cause any conflict from a communication perspective from internally, like how you manage it?

Ben Tigelaar: 00:44:47

Were you on different systems or did you end up moving all the systems right away?

Jake Levine: 00:44:51

Yeah, we.

Jake Levine: 00:44:52

So we moved all the systems pretty quickly.

Jake Levine: 00:44:55

And what we did was we notified customers in Vancouver and said, hey, you know, this has happened.

Jake Levine: 00:45:05

It's a good thing.

Jake Levine: 00:45:06

Right.

Jake Levine: 00:45:06

All the typical kind of acquisition language that one would say.

Jake Levine: 00:45:11

And we added in, you know, over time you will start to see the Robo brand more, you know, don't be alarmed kind of thing.

Jake Levine: 00:45:22

We, we are operating together essentially.

Jake Levine: 00:45:25

So we, we just told clients to kind of expect a little bit of two brands and maybe, you know, websites still exist, but maybe in the ticketing system they'll catch a robo logo here and there.

Jake Levine: 00:45:38

Right.

Jake Levine: 00:45:39

And no one has had issues with that thus far.

Jake Levine: 00:45:43

So not, not going with.

Ben Tigelaar: 00:45:45

Cool.

Ben Tigelaar: 00:45:45

Yeah, we, we did a hard switch of our brand upon acquisition.

Ben Tigelaar: 00:45:49

So it was immediate.

Ben Tigelaar: 00:45:52

It was within the first week or two, website ticket flow, you know, emails, you know, within seven, eight, nine days after close.

Ben Tigelaar: 00:46:05

And we did that because of the, the, I guess just the first of all, the company didn't have any really local SEO presence or brand.

Ben Tigelaar: 00:46:17

All of their clients were national in scope.

Ben Tigelaar: 00:46:19

Right.

Ben Tigelaar: 00:46:19

They came to them because they were technical experts, not because they were locationally driven.

Ben Tigelaar: 00:46:24

So they had no SEO.

Ben Tigelaar: 00:46:25

Their website was, you know, it wasn't really a valuable asset because there was no traffic going to it.

Jake Levine: 00:46:31

Yeah.

Ben Tigelaar: 00:46:31

And then, and then, you know, just for ease of purpose, it was like, okay, like, let's just, let's just do this so that the communication is consistent.

Ben Tigelaar: 00:46:40

The team is staying the same.

Ben Tigelaar: 00:46:42

We're joining this team and we're all together.

Ben Tigelaar: 00:46:45

So we did.

Ben Tigelaar: 00:46:46

Took kind of a different approach, but for my, the next one I also think about, it'll be dependent on the situation.

Ben Tigelaar: 00:46:53

So you could go separate brand for a while, especially if it's a company that has a really strong SEO presence, which, you know, that would be a challenge in and of itself and I'd be very curious.

Ben Tigelaar: 00:47:04

I would be reaching out to people who had done it before to see how, how have they done it to, to, to retain the value but also create a consistent brand because yeah, that's really what matters over the long run.

Ben Tigelaar: 00:47:14

Right?

Jake Levine: 00:47:15

Yeah.

Jake Levine: 00:47:16

One, so we were thinking about the exact same criteria and I think we just fell on different sort of sides of the coin on that because yeah, I was, I was talking with digital marketing firms about, hey, can you like, you know, port over their SEO?

Jake Levine: 00:47:34

You know, I mean, the digital marketing folks, I don't know if you know that world, Ben.

Jake Levine: 00:47:38

Like it's, it's physics to me.

Jake Levine: 00:47:41

I don't get it, but I'm just.

Ben Tigelaar: 00:47:42

Getting, I'm getting into it and I understand the core and the basics, but I haven't needed to really deal with it.

Ben Tigelaar: 00:47:49

You know, it's just upside for me.

Ben Tigelaar: 00:47:50

It hasn't been something I've had to manage, honestly.

Jake Levine: 00:47:53

Yeah, it's, it's not my cup of tea.

Jake Levine: 00:47:56

And, and so I would ask them, can we just like move it to Robo?

Jake Levine: 00:48:01

Right.

Ben Tigelaar: 00:48:02

Seems logical.

Jake Levine: 00:48:03

Yeah.

Jake Levine: 00:48:04

And, and I got multiple people who told me no, you are basically, you're, you're sort of sol in terms of, you know, like your Google reviews that you've amassed in, you know, in Vancouver, your, your, you know, domain credibility that makes you pop up higher on, on, on Google search results.

Jake Levine: 00:48:28

You, you can't just shift that to a new brand.

Jake Levine: 00:48:32

The best you can do is try to build the other brand and do some kind of cross pollination so that maybe your other brand rises.

Jake Levine: 00:48:42

But there's no easy way to like forklift it over.

Ben Tigelaar: 00:48:45

So how, how are platforms handling that though?

Ben Tigelaar: 00:48:48

Because that's kind of a, that's like a loss of value, right?

Jake Levine: 00:48:51

Yeah, Yeah, I, I, I mean, I don't know the answer to that.

Jake Levine: 00:48:55

In short, I, I know, you know, we probably talk with some of the same folks like some of the other MSPs that are doing a lot of acquisitions.

Jake Levine: 00:49:02

I know there's, there's sort of two camps out there, right?

Jake Levine: 00:49:05

People who, who fully rebrand, integrate everything and then, and folks who make the intentional decision not to.

Jake Levine: 00:49:12

And I think the, you know, the, the play for the folks who rebrand everything is they've now reached a size where, you know, or, or maybe their customer base makeup like you guys have is just not as reliant on that.

Jake Levine: 00:49:28

But I know the, I know the folks who don't rebrand have told me the same thing.

Jake Levine: 00:49:34

Like, yeah, we, that the Google reviews page was valuable and we didn't want to lose it because if we changed that name, we would have.

Ben Tigelaar: 00:49:43

Yeah.

Ben Tigelaar: 00:49:44

I mean the cool thing is that you don't really have to worry about that for companies that are, you know, under, under a million and a half.

Ben Tigelaar: 00:49:49

Under a million.

Ben Tigelaar: 00:49:50

Because they don't have any real.

Jake Levine: 00:49:52

Yeah.

Ben Tigelaar: 00:49:52

By necessity, by definition, they have no SEO value.

Ben Tigelaar: 00:49:56

Probably.

Ben Tigelaar: 00:49:57

Right.

Ben Tigelaar: 00:49:57

It was like.

Ben Tigelaar: 00:49:58

But we're talking about companies that are in the two and a half to, you know, six million dollar range, probably have some sort of SEO presence and value in it that you have to figure out.

Ben Tigelaar: 00:50:08

So I hadn't really thought about that.

Ben Tigelaar: 00:50:10

So.

Ben Tigelaar: 00:50:10

Yeah, you brought that up.

Jake Levine: 00:50:12

Very annoying thing to have to learn about.

Ben Tigelaar: 00:50:15

Super annoying.

Ben Tigelaar: 00:50:16

Because, you know, you want to have it all be accretive and more valuable, but like, at some point you have some things that are like, wow, this is, this is not, this is not going to work very well, is it?

Ben Tigelaar: 00:50:25

At this one aspect, but hopefully the rest washes out and you're better for it.

Jake Levine: 00:50:29

Yeah.

Ben Tigelaar: 00:50:29

What else do you think we should chat about as it relates to your operations, what you've done, your story?

Ben Tigelaar: 00:50:36

Is there anything that you specifically are, are thinking, man, we need to talk about this because this is a big deal.

Jake Levine: 00:50:42

I don't know that there's anything I feel like we have to cover.

Jake Levine: 00:50:45

I, I'm curious if I could kind of ask a question to you, Ben.

Jake Levine: 00:50:50

Um, sure.

Jake Levine: 00:50:52

I think a lot about, in our industry, you know, how do we differentiate ourselves?

Jake Levine: 00:50:58

Right.

Jake Levine: 00:50:59

I'm, I'm of the mindset that it is becoming a more competitive industry.

Jake Levine: 00:51:06

I don't think that's a profound thing to say.

Jake Levine: 00:51:09

You know, it, it sure feels like in Austin and in, in the Portland Metro that there's, there's a lot more customers that come to us who have experience with some prior msp.

Jake Levine: 00:51:22

Whereas, you know, five years ago there were a lot more customers who had never had an outsourced IT provider.

Jake Levine: 00:51:30

Now again, maybe that's just our local markets, maybe it's just our set of customers, but that's what we kind of feel like.

Jake Levine: 00:51:37

And that makes me think about, okay, well, how do we, how do we stick out?

Jake Levine: 00:51:41

Right.

Jake Levine: 00:51:41

How do we do something different at our core?

Jake Levine: 00:51:46

I think a lot of us do a lot of the same things, you.

Ben Tigelaar: 00:51:49

Know, I mean, no, we're special, of course.

Jake Levine: 00:51:54

And it is, it is 100 your service, which is totally different.

Jake Levine: 00:51:58

Right.

Jake Levine: 00:51:59

The smile on your face Totally different.

Ben Tigelaar: 00:52:02

So I've got a few, I've got a few thoughts on that.

Ben Tigelaar: 00:52:04

So I think, I think it reminds me of when I first moved to Austin, and this was 10 years ago, and people kept saying, oh my gosh, Austin is changing.

Ben Tigelaar: 00:52:17

There's too many people moving to town.

Ben Tigelaar: 00:52:19

The growth is too much.

Ben Tigelaar: 00:52:20

Right.

Ben Tigelaar: 00:52:21

And this was 10 years ago.

Ben Tigelaar: 00:52:22

And, and every single year the same story kept playing out.

Ben Tigelaar: 00:52:27

And, you know, people would continue to say the same things.

Ben Tigelaar: 00:52:31

Oh, it's too, it's growing too fast.

Ben Tigelaar: 00:52:33

Things that Austin has changed so much.

Ben Tigelaar: 00:52:36

And the reality is, I don't think it was just like a constant.

Ben Tigelaar: 00:52:39

I don't think it really did change that much.

Ben Tigelaar: 00:52:41

Just people had this narrative around it and, and, but, but obviously there's been a shift in, like, understanding of the managed services space from a client perspective.

Ben Tigelaar: 00:52:51

That's good and bad because you've now got clients who understand the MSP model.

Ben Tigelaar: 00:52:56

They understand the value of proactive services.

Ben Tigelaar: 00:53:00

They understand the recurring nature of the relationship and why it's better than a break fix.

Ben Tigelaar: 00:53:05

So you don't have to have those conversations now.

Ben Tigelaar: 00:53:07

It's just as.

Ben Tigelaar: 00:53:08

Now it's just as simple as why are you better than the person that I'm considering?

Ben Tigelaar: 00:53:11

Right.

Ben Tigelaar: 00:53:11

And so in some ways those are.

Ben Tigelaar: 00:53:14

Might be easier on, you know, easier communications of value than working on a break fix client who's never had a relationship and is used to Joe, you know, taking his computer out of the back of the trunk.

Ben Tigelaar: 00:53:26

Right.

Ben Tigelaar: 00:53:27

To go and fix something.

Ben Tigelaar: 00:53:29

So I don't, I think it ends up just being a wash.

Ben Tigelaar: 00:53:32

I just feel like there's just so much opportunity out there that it's, it's kind of a.

Ben Tigelaar: 00:53:39

This competition thing.

Ben Tigelaar: 00:53:40

I, it just, if there's competition, it just means that there's opportunity out there.

Ben Tigelaar: 00:53:44

And the question really goes back onto yourself.

Ben Tigelaar: 00:53:48

Do you think you're.

Ben Tigelaar: 00:53:50

Can you be better than 90% of the people out there and if so, you'll do just fine?

Ben Tigelaar: 00:53:57

Yeah, that's at least, that's at least my personal opinion.

Jake Levine: 00:54:00

Yeah, I, I like that take.

Jake Levine: 00:54:02

Spoken like a, an entrepreneur and a, and a confident business owner.

Jake Levine: 00:54:08

I like it.

Jake Levine: 00:54:10

I, I don't disagree with you, but I, but it, it does.

Jake Levine: 00:54:15

I, I think for me, you know, like, what I challenge myself to think about is what, what is the next type of service or what's the next, you know, way that we can show proactive value and, and I'm curious, you know, what you guys think about in that realm, but something that I'll just say, like rattles around my head and, and I don't have a solution.

Jake Levine: 00:54:40

Maybe it's a dumb idea.

Jake Levine: 00:54:42

Maybe, you know, your, your viewers and listeners will say no, that's a terrible idea, don't do that.

Jake Levine: 00:54:48

But I keep thinking about how do we get deeper into like the, the line of business application layer within our customer environments?

Jake Levine: 00:55:00

Again, maybe shame on us, we don't do this a lot.

Jake Levine: 00:55:05

You know, I think we think about our service as largely perimeter based.

Jake Levine: 00:55:11

Right?

Jake Levine: 00:55:11

I mean it's, it's network, it's security.

Jake Levine: 00:55:14

Yes, we're going to get involved in, in your server and whether that's physical or, or cloud, but we're not going to be the administer of your administrator for your salesforce instance, right?

Jake Levine: 00:55:30

Maybe we'll, we'll reset a password, we'll make sure you can connect to it via the Internet, but we're not going to do more than that.

Jake Levine: 00:55:39

And, and I keep thinking is there a world in which we actually can't do more than that?

Jake Levine: 00:55:44

Is there a way that, you know, as our customers feel, you know, tech stack drift of their own?

Jake Levine: 00:55:53

Right.

Jake Levine: 00:55:53

Like I mean, I don't know how you guys, well, I'm sure you guys had your ticketing system, but in any given company these days, right, you might have all your communications tools.

Jake Levine: 00:56:04

You then have random departments that use like Monday.com and somebody else uses handwritten, you know, sticky notes here to, to come up with what they're doing that day, right?

Jake Levine: 00:56:16

Can we, can we get in deeper and can we basically help some of those pain points?

Jake Levine: 00:56:20

That's what my long winded, you know, theory is like is, is that going to be a new frontier for MSPs to be in the weeds?

Jake Levine: 00:56:30

Business advisors in that way.

Ben Tigelaar: 00:56:33

So I think there's always going to be this to me comes down to focus and you can see this embodied in some MSPs that are focused in a particular niche or industry.

Ben Tigelaar: 00:56:48

Right?

Ben Tigelaar: 00:56:49

So like I know an MSP owner who focuses exclusively on legal services.

Ben Tigelaar: 00:56:54

He provides managed services on the IT side exclusively to lawyers and law firms.

Ben Tigelaar: 00:57:02

And then in addition to that he started to do accounting and HR and he's added other functions and he is only selling to lawyers.

Ben Tigelaar: 00:57:11

And then guess where he finds his clients.

Ben Tigelaar: 00:57:13

Right?

Ben Tigelaar: 00:57:14

He goes to law firm conferences, right.

Ben Tigelaar: 00:57:18

He goes to association events.

Ben Tigelaar: 00:57:20

So like he's got a niche and he's saying, oh, I'm going to pick this industry and then go deeper and then understand those business line of units really well.

Ben Tigelaar: 00:57:29

And that is really good from a marketing perspective and it's good from an Operations perspective, I think that's valuable.

Ben Tigelaar: 00:57:34

I think there's, that's.

Ben Tigelaar: 00:57:36

I think those guys are going to grow faster than your generalists.

Ben Tigelaar: 00:57:40

Right.

Ben Tigelaar: 00:57:41

I think that you can also think about focus from a location perspective too.

Ben Tigelaar: 00:57:47

What are the reasons why your clients pick you?

Ben Tigelaar: 00:57:49

Well, some, A lot of people choose their service provider because they're local and then they can have the touch, right, that can have a local technician come to them.

Ben Tigelaar: 00:57:58

That is a differentiator.

Ben Tigelaar: 00:58:00

And that is what you're selling.

Ben Tigelaar: 00:58:01

You're selling that, hey, I'm One of the 10 viable local options, right.

Ben Tigelaar: 00:58:05

And so I think about it as, as like focus points and where are we going to focus?

Ben Tigelaar: 00:58:10

One of the focus points that we are going to be growing significantly in is the co Managed space.

Ben Tigelaar: 00:58:17

So we are growing like gangbusters in that particular focus and niche.

Ben Tigelaar: 00:58:22

And, and because they have different needs than our fully managed clients.

Ben Tigelaar: 00:58:27

Right.

Ben Tigelaar: 00:58:28

But those.

Ben Tigelaar: 00:58:28

We're seeing tremendous amount of activity and huge upside and massive opportunity to scale our business.

Ben Tigelaar: 00:58:35

And so I'm thinking about it as like, that's one of the other focuses, right?

Ben Tigelaar: 00:58:40

Co managed is going to be a niche and a focus because once I get one client, I can now hire people that fit within that niche or end market.

Ben Tigelaar: 00:58:48

Right.

Ben Tigelaar: 00:58:49

Same with local.

Ben Tigelaar: 00:58:50

Right.

Ben Tigelaar: 00:58:50

I get more local clients so I can hire more local technicians.

Ben Tigelaar: 00:58:53

You know, I focus on an industry, I can have more specialized folks.

Ben Tigelaar: 00:58:56

So I think it comes down to focus.

Ben Tigelaar: 00:58:58

And honestly, that's something that we're.

Ben Tigelaar: 00:59:01

We're figuring out right now.

Ben Tigelaar: 00:59:02

Because we're smaller than you, right?

Ben Tigelaar: 00:59:04

Like we're, we're roughly eight.

Ben Tigelaar: 00:59:07

Eight, eight, you know, eight to eight and a half million of revenue, 35 people.

Ben Tigelaar: 00:59:11

So it's, you know, we, that is our next two years is we have to figure out our own niche.

Ben Tigelaar: 00:59:17

So.

Jake Levine: 00:59:17

Yeah, yeah, well, if it helps, we haven't done either, so.

Ben Tigelaar: 00:59:23

Well, that.

Ben Tigelaar: 00:59:24

Actually, that doesn't, that doesn't.

Ben Tigelaar: 00:59:26

I mean, it means that there's just massive upside, right?

Ben Tigelaar: 00:59:29

Because if we can figure out one or two of these niches that we're really good at.

Ben Tigelaar: 00:59:32

Yeah, that's, that's an unlock.

Ben Tigelaar: 00:59:35

That's really all we need.

Ben Tigelaar: 00:59:37

That's what I tell my team is like, we don't have to be everything to everyone.

Ben Tigelaar: 00:59:41

We only have to figure out two of these 10 things that we're attempting to do.

Ben Tigelaar: 00:59:45

And if we do that, we'll easily double the business and provide opportunities for everyone internally.

Jake Levine: 00:59:52

Mm, I agree.

Jake Levine: 00:59:54

I agree.

Ben Tigelaar: 00:59:56

Nice.

Ben Tigelaar: 00:59:57

Well, what's, what's on the agenda for, for long term?

Ben Tigelaar: 01:00:00

For, For Your business, where you're at, where you're going.

Ben Tigelaar: 01:00:04

Like what is, what is the next five years look like for you?

Ben Tigelaar: 01:00:06

Is this a ten year hold forever?

Ben Tigelaar: 01:00:08

Is this a, hey, at some point going to transition and find another capital partner to go to the next, next phase?

Jake Levine: 01:00:15

Yeah, I think it will have to be as, as you know, Ben, and probably folks who are listening know, you know, the, the investors do want to see a return at some point in time.

Jake Levine: 01:00:29

So we've been involved in this business for three years and I expect when there's no like shot clock in, in the office or in my head, but I think probably in the next three to five years our investors will want a return.

Jake Levine: 01:00:46

So we'll probably look to, you know, who, who can join us in this ride or who can we join in this ride?

Jake Levine: 01:00:55

I mean I, I think that'll become a big question too, right?

Jake Levine: 01:00:58

Is, is it just another investment partner and we keep doing it, you know, and growing it as big as we can.

Jake Levine: 01:01:06

I think there's a lot of Runway to keep growing it for sure.

Jake Levine: 01:01:10

I mean I think we can at least 3 to 4x in size and still, you know, feel, feel good about growth out there.

Jake Levine: 01:01:22

Or is this a situation where, you know, some of these also ever growing kind of strategic players in our industry become the destination for us.

Jake Levine: 01:01:33

Right.

Jake Levine: 01:01:34

And that, that obviously looks really different if, if we do that, but I don't think I would rule that out.

Jake Levine: 01:01:43

I think whatever ultimately is going to be a good outcome for the team, for our customers, for the investors.

Jake Levine: 01:01:50

Like I'm, I'm willing to look at them.

Jake Levine: 01:01:52

So we'll see.

Ben Tigelaar: 01:01:54

That's awesome.

Ben Tigelaar: 01:01:55

Sounds like you're open, open opportunities and you're gonna chug along.

Ben Tigelaar: 01:01:59

It's awesome.

Jake Levine: 01:02:00

Yeah, yeah, absolutely.

Ben Tigelaar: 01:02:02

Well, thanks for taking the time to, to deep dive with me.

Ben Tigelaar: 01:02:05

It was really interesting conversation.

Ben Tigelaar: 01:02:07

I love, I love your background.

Ben Tigelaar: 01:02:09

It, it makes me think about things that I went through as well because we had kind of a similar path and love digging in.

Ben Tigelaar: 01:02:17

Thanks for your time, Jake.

Jake Levine: 01:02:18

Absolutely.

Jake Levine: 01:02:18

Ben, appreciate you having me.

Jake Levine: 01:02:20

And we gotta get together in Austin here soon.

Ben Tigelaar: 01:02:22

Definitely.

Ben Tigelaar: 01:02:23

I'll buy your beer.