Comments on: Would You Disclose Your Financial Results to MSP Peers?

By: Joe Panettieri

Joe Panettieri — Mon, 23 Mar 2009 07:10:06 +0000

Rich: I don’t know how many mergers have come out of those private HTG meetings. But I will offer this speculation: I think peer group meetings are one prime area to find potential companies for M&A activity.

The other prime area involves platform vendor conferences. If you get a few hundred MSPs together and they’re all running the same PSA software or the same remote monitoring tools, I bet a few of those MSPs will quickly size up the room for potential M&A partners or at least strategic partners.

By: Rich Forsen

Rich Forsen — Mon, 23 Mar 2009 03:08:08 +0000

It would be interesting to talk about how successful partnerships have led to mergers and acquisitions. I have to believe that the key to any partnership is management of expectations and egos. The nice thing about the peer groups is that these two concerns are mitigated. You’re there with people who are successful, you think you’re successful, so it becomes a community of like individuals.

I’m curious, Arlin, how many actual mergers have come out of HTG groups? Including any that you’ve done of course, but also any that you know of? What do you see as the trend in this arena? Joe, your thoughts?

By: Joe Panettieri

Joe Panettieri — Fri, 20 Mar 2009 00:14:51 +0000

Arlin: Thanks for pulling back the curtain a bit more without disclosing any attendee secrets

Kidding aside, happy to see that you took the time to offer our readers some deeper info.
-jp

By: Arlin Sorensen

Arlin Sorensen — Fri, 20 Mar 2009 00:11:37 +0000

Joe

Being the founder of HTG I have heard those concerns dozens of times before. It is counter intuitive to share openly with others. But as people do so, they quickly become believers and understand the power of peer interaction and sharing. And they find out that the more they give, the more they recieve many times over. It can launch their growth in ways they would take years to figure out on their own.

The reality is that it still comes down to execution. You could give the information to 100 partners and very few would ever put it into practice left on their own. That is why the general IT conferences are not as popular any more. We all have bookcases and notebooks full of content and ideas that have never been put into practice. The reality is that peer groups work because they drive execution. They require accountability to the rest of the group and that really is the magic, not the information that is shared. The info just gives a place to start – without execution it is of little impact or value.

So peers are the secret sauce that some partners are finding in the channel. It may happen through a program like TPG or HTG, but it may be as simple as a couple partners just meeting and working things together. The key is that there is far more to be gained by finding accountability that drives execution than potential damage by what is shared. Yes you need to be prudent in who and how and what you share, particularly in your local market, but we are seeing more and more peer collaboration even between competitors in the HTG family. Why – because it really works and there is far more to be gained than the risk they take.

Community is a power tool to take companies to the next level.

By: Joe Panettieri

Joe Panettieri — Mon, 16 Mar 2009 16:50:51 +0000

David:

You’ve got some great points. And there are some examples I can share:

1. Video Discussions: This may sound crazy, but we speak with “peer” bloggers who do video cooking shows on local cable — and then publish the content on YouTube and media sites. We have nothing in common when it comes to content, but we have plenty in common when it comes to video software, hardware, best practices for production, etc.

2. Geography discussions: While an MSP in one region may not compete with an MSP in another region, I think that’s an increasingly rare situation with IT media companies. We compete with companies on multiple continents. And M&A activity is difficult to predict. So, just because a media company is located on the other side of the world, I don’t necessarily feel safe sharing company info with them.

3. Verticals: That’s another tricky situation. For MSPs, it can be difficult/time consuming/expensive to leap from one vertical to another. As a result, a health care MSP may feel comfortable sharing info with a financial services MSP in a different region.

But in IT media, the barrier to entry is pretty low. IT media companies increasingly marry a technology (for example: Wireless) with a vertical (say, government IT). One result is an IT media site called http://www.MuniWireless.com, short for municipal wireless. We’re not in any vertical markets right now (health care, financial services, etc.) but I never say never when it comes to IT media launches. In 2008, we launched three full-blown media sites — in different markets — pretty quickly.

Still, all the points above apply to our own media company. For MSPs, I can understand why experts in one region/vertical would want to compare notes with experts from another region/vertical during a Transformation Strategies roundtable or the like.

By: David Schafran

David Schafran — Mon, 16 Mar 2009 15:26:24 +0000

Joe,
In regard to your resistance to sit down with peer media companies and openly discuss your business strategy and financial details I’m curious about how you are looking at it. Would you feel differently if:
1)Instead of a random group of firms the group members were static, giving you the opportunity create close connections over time

2)You felt comfortable that because of geography and / vertical markets, there were no competitive issues with any other firm in the group

3)The members of the group had the same or similar business models and were facing the same challenges

These are the criteria in mind as we build our MSP Roundtable groups. We constantly hear the same question “What are other MSPs doing?”, that is why we created this offering.

That said, it is not for everyone. As Dave and John mentioned above, you get out of it what you put into it (this can be applied to pretty much everything in life), so being ready to “open the kimono” and talk honestly about what is happening in your business is necessary for the entire group to get real value. For those who cannot make this leap then the experience will have limited value.

David S. Schafran
Transformation Strategies, Inc.
http://www.TransStrat.com

By: John Kilgore

John Kilgore — Mon, 16 Mar 2009 13:18:12 +0000

We actually do sit down with a peer group here quarterly to go over some of those in-depth results of our business (financials and ALL). It helps quite a bit; most recently we had our group interview all our management staff to get a better and bigger picture of what ‘really’ goes on inside our company. They published their reports to executive management and it truly opened our eyes on a few things that we could improve upon, both internally and externally. Like Dave says, what you put in you defintely get back in returns.

Why would we share such secret things as financials and sales strategies? We’ve found a group that is geographically diverse and not within arms length of our sales side of the house.

I’d highly suggest this strategy to existing MSP’s that haven’t had the benefit of a MSP Coach to help build their business – it’s valuable to make sure you’re not working in a vacuum.

By: Dave Sobel

Dave Sobel — Mon, 16 Mar 2009 12:35:52 +0000

It’s a matter of philosophy. If you’re trying to learn from peers, you have to be as open as possible. And, you need to measure success. At the end of the day, the true measurement is profitability.

Gotta give to get!

Dave