Meet the MSP peer group where members share their 'most intimate struggles'

Doug Woodburn
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HTG's first value proposition is 'misery loves company'
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HTG's first value proposition is 'misery loves company'

HTG says it can provide forum for MSPs to swap stories and advice - as well as improving service quality - as it looks to expand membership in the UK and Europe

Self-help therapy may be a concept most closely associated with overcoming phobias and other life challenges, but now it appears to also be taking root in the world of managed services.

UK MSPs are being urged to join HTG, a US-based peer group whose members meet four times a year to "share their most intimate struggles" in business - and in life.

Its COO Brad Schow was in the UK last month to drum up interest in the organisation as it expands on this side of the Atlantic.

HTG currently runs two UK peer groups for MSP owners, and aims to launch another two before the close of 2017.

"Our first value proposition is that misery loves company," Schow told CRN. "People come to our meetings and they think they are the only ones with the problems they have. But then they sit down with eight to 10 of their peers and realise they're all going through the same thing."

Schow said HTG's goal is to help MSP owners pin down what they want to achieve with their business, and help them get there. It also provides them with financial benchmarking.

It's good to talk

The organisation began life in 2000 when a small group of MSPs in Iowa, led by HTG founder Arlin Sorensen, began meeting to share ideas.

In 2009, HTG became more of a formal business, hiring dedicated employees, launching a vendor programme and building the processes that it needed to scale. It also put international expansion on its agenda.

It now has 26 owner peer groups in the US, two in the UK and four in Australia. Each have between nine and 11 members.

"It's our job to get them together and interacting as peers, and to keep them moving and progressing towards where they want to get to," said Schow (pictured), who sold his shares in his own Minnesota-based MSP in 2012 to join HTG full time.

"One of the first things we do is make them create four plans that we as the facilitator, and also the group, hold them accountable to."Brad Schow

These are: a legacy plan; a business plan; a life plan; and a leadership plan.

"We have too many people who come to us and say 'I've spent too much time building this thing, and I'm losing my family - and to us that is failure," Schow said. "So we want to make them think that through. As part of that personal legacy plan we make them build, there is financial analysis of when they think they might want to exit or retire, and how much money they'll need out of the business to meet their goals for retirement."

Benchmarking

The MSPs then meet as a peer group for two days, and members are benchmarked on their financials compared with the rest of the group, and industry at large.

"It's like having a 10-person, informal board of advisers and trusted colleagues that you can share even the most intimate struggles you are having."

"Our goal is to make sure that financially they are in good shape," Schow said. "A lot of these guys found themselves with a business, but don't necessarily have a formal business background or know from a financial standpoint what 'good' looks like. We help them figure that out.

"Then we have an update on how they are doing with their plans, and anything they've done well or not so well in life, or business. We bring in burning issues - stuff they're looking to get a perspective on from the rest of the group. We talk through these things, and as we do that we help each other. It may be that they are struggling to dispatch or escalate a ticket properly because they have a backlog, and we'll then go around the room and get everyone's best practice on what they are doing.

"So really, it's like having a 10-person, informal board of advisers and trusted colleagues that you can share even the most intimate struggles you are having."

HTG's model already has some admirers in the UK MSP community.

David Southern, managing director of Concise Technologies, has been a member for three years.

"Joining HTG, we've realised that were weren't alone and that we had similar problems to other MSP businesses," he said. "And it provided us with an environment of accountability to improve our business through the power of perspective and peer groups.

"In terms of their growth plans, it can only be a good thing. I believe their model works and the more MSPs that are exposed to it the better for both the industry and the clients because ultimately it drives high operational maturity which is a real benefit to the end user."

Paul Tomlinson, managing director of MSP Mirus IT, said his firm is considering getting involved with the peer group based on what he has seen.

"They're really switched on guys," he said. "Not only are they trying to do thought leadership and guide people in the right direction, because it's a peer group environment having MSPs working alongside each other works really well."

Services maturity

Operational maturity is a key focus for HTG, and for this reason it also runs peer groups for the service executives of its MSP members. About a third to a half of MSP owners also want to get their services executives involved, Schow said.

"The business will grow as big as the entrepreneur's energy will take it, until they learn how to properly hand off management of different areas," Schow explained.

"That's why we have service executive peer groups. So instead of running your organisation based on 'I feel like we're taking care of our customers', we put the right measurements in place to show that you are, and so that you can manage against those as you mature."

As an example, Schow said documentation is seen as a big barrier to growth by many MSPs.

"What we see with the more mature companies, it's not necessarily that they have any more documentation, it's that they have just narrowed down their band of the stack they are delivering," he explained.

"They've eliminated the number of possible variables and have narrowed it down to these particular vendors or products, or this particular way to set up Active Directory - and more often than not they are dictating to their client base because they know what it takes to deliver a good product in a profitable way.

"The more mature ones don't necessarily have more documents, they're just more refined in the consistency of their delivery, and we help them progress through the stages that make that up. When you're small, you'll do anything for a dollar, and then as you mature you have to learn to be more discerning and your value proposition becomes much more 'we can deliver an experience for you, and that experience means we're going to limit the amount of product we support and the variability of the set-up'."

The future of managed services

Schow said although the US MSP market was ahead of that of the UK five years ago, the gap has now closed, adding that he feels the future of the MSP market is bright, despite the threat posed by cloud.

"I've been in the business a long time, and there's always a sky-is-falling scenario. In the 1990s it was 'if the hardware market is going to go away, we won't survive'. Then it was 'plug-and-play hardware will make all the work we do obsolete', then 'ASPs are going to make what we do obsolete', and now it's 'cloud is going to make what we do obsolete'.

"Cloud is just a different spot for keeping all this technology, and you can't replace the relationships. Every MSP I know of is built on relationships with small-business people, and that to me isn't going anywhere. In fact, when you outsource some of your technology instead of buying the hardware itself, and put it in the cloud, in many ways there's actually more of a need for what the MSPs provide, because the cloud providers don't want to take responsibility for the overall IT landscape in their client's office; they just want to provide some part of it. The importance of what we do is probably greater today than it ever has been."

HTG's floor level for members is eight to 10 employees and $80,000 revenue. Although members have average revenues of $3.5m, there is no ceiling, and it counts California's largest MSP among its ranks. An annual membership costs $5,000.

Schow stressed that HTG is on the hunt for MSPs in the UK, as well as the rest of Europe, despite not currently having any peer-group facilitators who speak foreign languages.

"We are looking to grow beyond the UK - we have a member in Malta and one in Sweden, and while the focus has been on the UK, we are looking to have an impact across all of Europe," he said.

"We can help you grow your business in a way where your life remains functional.

"We can help you get through those initial challenges and build a functional, scalable business, and help you turn not only yourself, but your entire organisation, into a team that can lead you anywhere you want to go."

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