The MSP Finance Team

EP061 – Accidental Beginnings to Vendor Triumph with Luis Giraldo

Why listen to this episode:

Get inspired by Luis Giraldo’s accidental journey from a solo MSP owner to a successful vendor.

Learn how to leverage business intelligence tools like Cognition 360 for MSP growth.

Discover the critical importance of understanding and managing your business numbers.

Listen on Spotify or Apple Podcasts

Connect with Luis on LinkedIn by clicking here –

Connect with Daniel Welling on LinkedIn by clicking here –

Connect with Adam Morris on LinkedIn by clicking here –

Visit The MSP Finance Team website, simply click here –

We created It’s a Numbers Game Podcast to help MSP owners learn and understand how to build and maintain a financially healthy MSP business. In this podcast series, MSP business owners like you will learn the fundamental steps, the tips and tricks, the dos and don’ts to achieve MSP financial growth.

We look forward to catching up with you on the next one. Stay tuned!


Dan: Thanks for joining us today, along with myself, Daniel Welling, Adam Morris, regular co host and, Luis Giraldo. Welcome along.

Luis: Thank you so much for having a gentleman. It’s a pleasure.

Dan: So, We were just debating how we actually introduce you because we could actually wrap quite a bit into this. Former MSP owner like Adam and I, also now a member of the dark side in the vendor community like Adam and I. And, yeah, lots, lots of things to, to talk about today. So perhaps you could, just for our listeners that, that don’t know you perhaps tell us a little bit about your journey.

Luis: Sure thing. I’ll try to keep it brief. I was interestingly this morning, I was adding my, insights blocks to my internal zoom background. if you’re not familiar with insights blocks, it’s sort of one of those personality tests and, one of the things they give you these coloured blocks that have a description and they help you, better communicate how you want to be communicated with.

Luis: by the team. And so my blocks were, give me details, be brief, be bright, be gone, involve me and show me you care. And so these four things, I’ll try to keep them present as I go into this bit of a historical, deep dive without getting too much detail. But yeah, I started, You know, like many MSP owners, I got my start accidentally.

Luis: I used to work for a Mac reseller here in Vancouver. And, after about a year, I was let go for insurrection. Of all things that you could be let go from a job for, insurrection was the one that, that was my demise. But what I noticed right away is that there was clearly a, an opportunity to be helping, some of those residential customers getting machines installed and set up in their houses.

Luis: And, The iMac had just come out, but it was the bigger, thick LCD screen iMac. And it used to be weigh 35, 40 pounds. And so people didn’t want to carry the home and all that stuff. And so I turned, even though I was let go, I turned around and immediately offered them a setup and delivery service. And this basically.

Luis: Turned into a busy stream of incoming bookings, a growing residential IT business, which later transitioned into business IT as some of those residential customers brought me into their businesses and, I was truly Mac focused in the beginning, and then I started offering my white label Mac support services to local shops in town.

Luis: One of those was CDOT Networks at the time, Fully Managed was the name it would take, later on. That was Chris Day’s business. And Chris Day. brought me in, I, they would buy block time for me to go do support for some of their customers. And this was now 2009 back then the MacBook Air just started popping up in boardrooms and, executive offices everywhere.

Luis: And a lot of the Windows folks didn’t know what to do with these devices. And so I’d get brought in to help with those. Eventually in 2011, we merged our businesses together. And, now I became part of the larger fully managed org, deployed a Apple consultancy inside of fully managed. And I was there for about a year and then just wanted to go out again and pursue my own thing.

Luis: a year later I brought on a business partner. Three years after that, I brought on another business partner and that three person business grew to about three million over the course of the following years. And in 2022, we sold the business, for the second time to fully managed, but now fully managed was, owned by Telus, one of our big telcos in Canada.

Luis: So this experience was a little bit different. Now we had a public company due diligence and went through a number of different, You know, challenges and tribulations of the public company due diligence process. So that’s a bit of the MSP story. If you rewind back to 2013, along the way in parallel with the MSP, I had started a documentation platform called MonkeyBox and MonkeyBox was just my attempt at solving the pain of sharing information with my colleague, who I just brought on. And, fast forward 2017, Chris Day had launched ITGlue and had grown it significantly. and so Chris, understanding my knowledge of documentation and my expertise with MSP brought me in as VP of product to ITGlue at that time. but also knew that I would want to keep running the MSP in parallel.

Luis: So, but I came over as VP of products for ITGlue in 2017 and spent three years at ITGlue, later Kaseya. and so I’ve had this sort of parallel vendor career since about 2013, all the while trying to run an MSP. So it’s been interesting to say the least, in the last couple of years, I’ve shed the MSP and I’m now exclusively on the vendor side and, yeah.

Luis: My cortisol levels have dropped and, I’m a relaxed and new person now.

Dan: Brilliant. and I think, it’s probably, the ideal way to do it, I would say actually to have both the MSP and the vendor experience side by side presu, presumably that’s, helped well from a sales and marketing perspective, from, being really into understanding the, the issue you are.

Dan: Your clients were facing and, and I think, you know, you picked a topic that was, was really a growth one, you know, in that decade of documentation. And, so, how are you finding now, aside from the significantly. Reduce stress, stress level.

Dan: How are you finding just being on the vendor side? Do you, do you have the occasional pang like, like, Adam and I do to go back to the MSP, environment?

Luis: I’d be lying if I said I, I didn’t occasionally think about it, but, I think I just, what’s interesting now about being on the vendor side and specifically Skillpad, which, you know, has had a really interesting evolution and history and, you know, now we have multiple products, we’re really becoming a dynamic company, solving real business issues across a number of different domains, and The process of getting these things, operationalized internally, whether it was an acquisition or a new product launch is really a fascinating process.

Luis: And I love being part of that. Now I sit, in my chief experience officer position, primarily in a customer facing role through a community. some of the events and we’re busy event sponsors. And so we’re at a lot of different events throughout the year, but I think what you were tapping into is interesting because I see my role internally as a big MSP advocate in a way.

Luis: And so a lot of what happens, at large company or larger or growing companies, and I experienced this a bit, during my time at enable as well, is that there is definitely a desire to. to better understand some of the internal workings of the typical MSP and what are some of the real day to day challenges and, speaking in a nuanced language that’s, that relates to the MSPs and the way that they go about their day to day stuff.

Luis: And, so I love kind of being able to provide a bit of that insight, if you will, just having been there, done that kind of thing. So, that, that is a. And it’s a challenge too, because, you know, you can bring in a person that’s an expert at marketing, but are they also an expert at the MSP language or the MSP DNA?

Luis: And so that takes a little bit of time, to really dig into and understand how to express that in, in just the right way and will we always get it right? Probably not, but, it’s definitely a, an interesting challenge to have.

Dan: Indeed. and I guess one of, collaboration, on your website, you’ve got your own community section and you’re, as you say, active at events. And, and certainly for us, we’re. Yeah. We’re, we’re advocates of the community environment and really where. MSPs, vendors, all those interested coming together, sharing ideas, communicating.

Dan: I think we’re lucky that the industry we’re in has that sort of openness and, and, and, and collaboration almost built into the DNA. So, I guess the other thing that strikes me listening to your background is, and obviously with our financial management angle, PR perhaps, perhaps you could talk us through, those early days as a, an installation service, one, one person business, through to working for A-A-A-A-A, a quoted, vendor business.

Dan: and, how has your knowledge of and your, compliance with financial management changed over, over that period?

Luis: my mom was in accounting, and so I was always around her conversations about numbers and, you know, tax returns and, or this, that, and the other. And so I feel like I had an early exposure to this, just from a position of comfort in the conversation. But I would say that’s not necessarily the de facto positioning that most, IT or MSP owners have in their early days.

Luis: You know, we were talking pre show about this idea of the accidental business owner. And I think one of the challenges is, you know, a lot of people come into this business knowing a little bit of tech and enjoying doing technology and wanting to help people with technology. And they become an accidental business owner and then realize sort of as they hire their first, second, third person.

Luis: Now there’s payroll. Now there is tax returns. Now there’s all these other financial management issues. And that’s just the requirements of things that you need to do. And, and as the business grows, you end up obviously starting to pay attention to some more of the metrics. Perhaps it starts with service desk.

Luis: But then you really start to transition into understanding your numbers really cold, understanding what are some of the levers that help the business my early days, as a one person shop doing consulting, one of the software vendors that I aligned with, which you guys might be familiar with actually was, Cognito.

Luis: They do accounting software called Moneyworks. And this software, was the software that I was using. And like most it. resellers, VARs back in the day, you know, anything that we were using, we’d also try to resell. And so I was reselling MoneyWorks, but then as a result, I understood enough about accounting, setting up an accounting platform that I started doing consulting for the deployment of MoneyWorks, for small business customers, which ironically I found to be equally lost in the process of financial management as I was once.

Luis: And so it was interesting to work with small business customers, Who are just trying to do the thing they like and trying to figure out all this finance stuff along the way, but I’ll tell you immutable audit trails became an issue of contention with a lot of those small business owners. They just wanted to change stuff in their accounting platform, but when they couldn’t, it was an interesting learning opportunity to be like, well, you got to track these things in and out.

Luis: You want a sales order to a PO, to an invoice, to all the other bits and pieces need to connect, to the system. From front to back. Otherwise you can’t go back and do any kind of forensic investigation or accounting of any issue in the future. And when you get audited and the chances are that you will at some point, you need to be able to go and easily find these things.

Luis: So in a matter of speaking, you know, accounting is a good mindset of documentation, now that I think about it, but, now transitioning to the big scale patch story. in many ways, I’m. You know, a couple of degrees removed from the deep financial management discussions, but of course, a lot of, what the executive team manages the business by is the numbers.

Luis: And so one has to be familiar with exactly how you, how do you earn a dollar and, and what are some of the inputs and levers to that earning of a dollar so that we can do the best to maximize the opportunity.

Dan: And presumably in a larger organization, you’re going to be involved inyour own budget or your own division department. is that perhaps an area of difference where you’re not necessarily intimate with the whole financial position, just your part of it.

Luis: Yeah, that, that happens naturally. It’s sort of, as you make this transition into a big org, the individual organizational budgets and such, and the, that’s very much the case with, our community and events team, you know, there’s a specific budget for sponsoring events and attending and activation and travel.

Luis: And so We have a pretty good understanding, from an ROI perspective, you know, we go through the exercise and Eric Torres, who is our VP of channel does a really great job of this and really understanding what the ROI of any particular event is. and so we look at this pretty holistically factoring and of course, all the costs and expenses, some of the costs, you know, salaries and things like this are.

Luis: Up there in a different budget at a higher level financial, level. But from our perspective, we kind of look at specifically the inputs and outputs of events, as an example.

Dan: And, in particular, I guess, cognition 360, one of the, one of the recent acquisitions, that, that, that tool, that intelligence, I guess, relies on there, there being a good tool. Quality of data and information sort of going in into the machine and just interestingly there, you mentioned about salaries of your, your sales marketing teams, you know, not being directly related to the events and I was immediately thinking about labour loaded, calculations there because, yeah, surely if you are attending an event, there is a people cost of that and therefore should be Yeah.

Dan: Absolutely. Part of that ROI calculation. so, so yeah, so what’s, perhaps a sort of a typical MSP that works with you? would they, would they normally be a Cognition360 client first and then be acquiring the others? Or do you tend to have, have you sort of collected?

Dan: Client basis I guess over time is acquisitions have happened

Luis: Not necessarily. I interesting. I find that cognition 3 60 is perhaps better suited for some slightly more mature M. S. P. s. And, we have found that you’re, you know, the average M. S. P. According to J. McBain is 7 people. The average 7 person M. S. P. It’s a tool that lacks middle management in many cases, and therefore has difficulty affecting the change that some of the tools like Cognition360 might be recommending they do as a result of some of the metrics.

Luis: And so we find that slightly larger MSPs with a well established middle management layer are better candidates for a tool like Cognition360 specifically. Some of our other tools, are perhaps not as, Demanding from a, entry requirements perspective. But with Cognition, definitely there’s not only the input side of it, but ironically, when we onboard Cognition 360 partners, we find we spend a lot of time.

Luis: Unscrewing ConnectWise Manage, or fixing some of the maybe bad behaviours from days past or just missing, information or missing data that was never accounted for because it was just never an input into the organic growth of the MSP. And so this is, there’s no hard and fast rule, but you know, Cognition 360 kind of forces you to look at things a certain way, if those are the types of reports and data and metrics and insights that you’re interested in.

Adam: Can I just ask, for those that are listening today, they’re not familiar with cognition 360. could you just give us an overview of actually what it is and what it does

Luis: Yeah, definitely. Well, Cognition 360 is a BI based, business intelligence tool, Microsoft BI based business intelligence tool, that taps into ConnectWise Manage. Today, specifically, we’re working on Autotask and Halo PSA integrations as well, but it looks at, unique data like technician efficiency, contract efficiency, or agreement efficiency, client profitability.

Luis: And it does this through, a bunch of reports over 170 different out of the box reports. And, in a matter of speaking, Cognition360 is the reporting that you wish your PSA had, is kind of one of the ways that we position this in the market. Because interestingly enough. You know, the, some of the PSAs, they give you a lot of tool and reporting flexibility, but none of this deep insight out of the box necessarily.

Luis: And so what we find is, Over time, there’s a lot of academic recommendations from the industry about metrics that you should be looking at in your business. But, when you’re small, as it turns out, a lot of these metrics tend to be fairly vanity metrics, as we call them, you know, Boiler room type of service desk metrics is how many tickets are open?

Luis: You know, what’s our time to resolution? how many bounces did the ticket have? but some of these things are not necessarily providing a basis for decision making in the business or the things that need change or active management to try and improve. And so Cognition 360 really focuses on some of that business level decision making that’s required from some of the data.

Luis: A

Adam: and going back to what you were saying earlier about The MSP perhaps needing to be a little bit more, a little bit more mature in order to properly exploit the product. is it true that this is only as good as the data that goes into the PSA and the accuracy of the data and the completeness of that data and effectively without that kind of discipline.

Adam: You’re probably not there yet in terms of being able to use that tool.

Luis: hundred percent. And you know, the expression garbage in garbage out comes to mind because I think this is true, not just of financial and reporting metrics, but if anything, you know, even, the information that’s in your tickets, the, whether you’re properly categorizing and adding types to them or not, like a lot of these things are going to play a role, down the road when you do start caring about metrics.

Luis: And, so I think there’s an interesting hindsight that, that people always thought, Oh, I wish we had started tracking this two years ago, three years ago, we might have some insightful yeah, definitely the quality of the data going in is always going to play a

Adam: and can an MSP do this at the same time? So, so do they need to get all their ducks in a row first? Or can they buy the product and because they’ve now bought the product, they’re incentivized to kind of work on the data completeness piece as well. does it work? Can it work that way as well?

Luis: It’s a question of inputs and outputs really, you know, and I mentioned the middle management layer, I think. Smaller MSPs just tend to be overzealous, or overestimate the things they can accomplish in any particular timeframe. And it’s a real challenge because, you know, the, I’m not saying the intentions are not good.

Luis: Of course they always are. It’s like, I want to improve my business. A lot of what it and MSP providers are going through is really a business transformation in the end. And so it, whether it’s adopting behaviours or changing habits or, all those things tend to have this long arch and sometimes it’s a year long process.

Luis: Sometimes it’s a 2 year long I would say that it’s absolutely. A difficult thing to do if you’re not prepared for that long arch of a process and commitment to it, it’s kind of like adopting a marketing and sales strategy. You know, a lot of people expect results after a month or two, but don’t realize that they have to stay consistent with it for a good year, a couple of years.

Luis: And I think the financial management is equally the same one. If you’re not from the ilk of caring about the numbers as much as You need to care, then this takes some time to, to work those habits into the day to day process. And I think, like I mentioned, the middle management layer is super important because you might be observing these things as a CEO or owner of your MSP, but also you might be the tier three or tier four technician in your business that’s trying to deal with all the fires.

Luis: And so you need to be able to delegate some of these things. things, for execution, whether it’s improving the service desk response levels or, Hey, we need to have a look at the client profitability of these 10 accounts that seem to be dropping over the last few months. And so those things, are difficult for one single person to do on their own, of course.

Dan: and that last point I guess in my mind sort of stitches together the connected nature of the Products that you’ve bought and integrated into the business. so, without, without, I guess, a TAM, a VCIO conducting regular client interactions, they’re not going to be able to affect that change in the profitability and have the conversations with the client to, to, well, have the conversations internally to confirm, you know, is this something.

Dan: We could do differently or is it the client and, and how do we make that, that, that relationship more profitable. So was that sort of part of the sort of was there a sort of strategic, not to say that there wouldn’t have been a strategic intent, but is that sort of how it sort of found out from the original sort of warranty checking tool and, and sort of out and, I can see how the journey would have worked if that was the intent.

Luis: Yeah, these things have kind of come together over the years. and certainly one of the approaches, has been, Hey, there’s all these seemingly underserved domains or areas in the market because a lot of the bigger vendors have kind of over rotated on the whole RMM and PSA category of things.

Luis: And, you know, few are the chances that you get to, to become a new category per se in any particular industry. You know, the past, the historical thing we did with IT Glue back then was super interesting because I think really the growth of IT Glue was attributed to the fact that really nobody was talking about documentation at that level and it truly became sort of a category creator, so to speak.

Luis: But even then it still took years to educate the market on the importance of documentation. And the early part of ITGlue’s growth, there was still a lot of optionality for documentation in the technology stack of any given MSP. And I think I mentioned that simply for the parallel of like, we are in an interesting time of the, Certain, some parts of our tool stack of the portfolio of products that we have are maybe perhaps seen as optional to some MSPs as part of their growth.

Luis: but then on the flip side, as MSPs have grown and matured, we’ve realized that as they have deployed the necessary process in their business to adopt our tools in the most efficient way possible, They start to lose that optional nature to them. They become a critical business process, and part of their efficiency.

Luis: And so we have partners that would tell us, we can’t imagine not having backup radar in our tech stack, for example, like our productivity would immediately drop tenfold if we did, because we’d be back to checking tickets, or email notifications manually, as an example. And so I think a lot of these things sort of take a long arch of a hold inside of the business and financial management is certainly one of those things.

Luis: a lot of MSPs, I think when they’re small, they, you know, thumb in the wind type of thing. they can manage their financials by feelings. And, but that obviously becomes more and more difficult to do. And especially as M& A comes into the picture and you need to understand all the numbers front to back.

Luis: There’s kind of no room to do that by. By taste, you gotta understand what’s happening inside the business.

Adam: Well, I think we’d probably agree with that, wouldn’t we Dan?

Dan: Absolutely. The sort of hustle, muscle and feel sort of stage. I really liked the phrase you mentioned over, over rotated. one of the phrases I use is over trading in the smaller MSP where. they, because you’ve got perhaps a smaller group of more enthusiastic and capable people, they can cover a lot more roles and relationship with the client and that they’ll remember that they need to check that back up every fourth Monday because it always goes wrong because of that thing that happens and, but you lose that visibility as you get bigger and something that was an informal process when you’re a client.

Dan: A 10 person business, there’s an overhead to it when you’re a 20 person business, a 50 person business, because it just won’t happen. And you’re going to end up with a, with a negative outcome. So, so yeah, I sort of see the, the thinking there. And, and it’s very true. And the same for financial management.

Dan: At the low end of our maturity model, we’ve got, you know, checking the bank balance as the key measure of, how am I doing? I’ve got money in the account, so I’m all right. I’ve got more money than I’ve ever had in the account, so I’m, I must be really good. But, but no, not, not necessarily.

Dan: So, So, yeah, no, very interesting. Very interesting. So what’s, what’s the future hold, are you con continuing on the, acquisitive, model or, is this a period of consolidation? stitching the products together in a more, more integrated fashion.

Luis: All of the above, Dan, I think all those things are interesting. Only time will tell. I think right now we’re, in the process internally, facing specifically, obviously operationalizing for acquisitions from the last year, which included Quoter, our Quoting Contract Management Tool, Cognition 360, Lifecycle Insights, Control Map.

Luis: And all of these. tools play a very interesting role, I think, in the growth and evolution of an MSP. You know, I just saw this interesting post the other day on probably Instagram or something like that, and it was the checklist, the CEO checklist. And it was just this image on like all the different areas that a CEO of a business needs to focus on. And if you think about it, and they included things like, you know, vision and strategy, leadership and culture, financial management, of course, corporate governance, risk management, operational efficiency. There’s like nine other categories, but you know, cut with the customer focus, brand reputation, innovation, and tech you’d like, even like deciding on your own technology roadmap internally, sustainability and ESR, MNA continuity and succession.

Luis: Like imagine your poor little seven person MSP owner, you know, trying to bring all these things into focus. it’s nearly impossible. And so this is why these things take so long to evolve inside of the business. And, it’s old. Scalepads tool stack has an interesting role to play in many of these areas, whether it’s financial management with cognition, whether it’s, you know, a new revenue opportunity in the compliance as a service model with, control map, but even then also managing or starting your own compliance journey and managing your own internal compliance for the sake of your security.

Luis: And, you know, alignment with standards for staying in this industry, whether you start, you know, a new process for your VCIOs and account managers or cams to quote your customers, there’s a number of these areas where I think as the MSPs grow and evolve, they start to see the importance of these.

Luis: again, on the spectrum of a small shop, a lot of the things that really matter. Are just being able to get onto a customer’s computer and being able to create a ticket and accept it. And so this is why I meant, you know, the over rotation on RMM and PSA of the early stage of MSPs is because that’s kind of the only thing that matters when you’re that small.

Luis: but you best start paying attention to some of these areas before you’re kind of caught by surprise. And then just behind the eight ball sort of suddenly. You just can’t manage all these things, or you have to now pay attention to your accounting practices or your financial management and your service desk is not set up for success without you.

Luis: And so it’s a kind of a two way street, no doubt.

Dan: It’s normally around this time in the episode that we would offer you a shameless plug, but I kind of feel like you’ve just done it actually a very eloquent description of how all of the different products fit together and suit different stages of MSP development. Adam, any final thoughts from you?

Adam: no, trying to think of something pithy to say, we’ve covered a lot on this journey, haven’t we into maturity and how to, and how they’re just some things you’ve got to take on board to scale. I think there’s a theme that’s come through loud and clear, today on this. and, yeah, I think I see it every time, whenever we talk to MSPs out there.

Adam: there is just this need, for growing MSPs to keep, adjusting how they think and re evaluating the tool sets they need in order to scale. And I think that’s the theme that’s come through this one for me. Okay.

Luis: Definitely.

Dan: Very good. And, if any of our listeners, want to carry on the conversation with you,h ow best to get in touch? I

Luis: definitely an email would be easy. Luis. Giraldo at scalepad. com. Feel free to post that in your show notes. If you do such a thing, or I’m also on LinkedIn, my LinkedIn handle is LuisGiraldo, or if you search for Scalepad and click on the people tab, you’ll find me there too. Feel free to connect and love connecting on LinkedIn.

Luis: I think it’s a fantastic platform to keep on top of, you know, what MSPs are doing and working on. And, that’s it. Definitely my number one engagement platform these days.

Dan: think Xenia’s brilliant. It really is. It’s a shame. well, it’s a shame. I didn’t really embrace it in the very early days. And I think that’s one of the things that,it couldn’t live without it now. And, I feel obliged to be paying for it, even though I think Microsoft are doing okay, aren’t they?

Dan: They don’t really need my subscription to keep the platform going. But yes, been a real pleasure chatting to you today. And yeah, really appreciate your time. And yeah, look forward to carrying on the conversation at some point in the future. Thank you very much.

Luis: Likewise, Daniel and Adam, I appreciate you inviting me to come and hang out for a few minutes and, you know, continue doing well with your podcast. It’s a numbers game is certainly, I believe in the, in my heart of hearts, that is exactly what it is. It’s always a numbers game and whether you’re trying to make your service desk better or improve your financial acumen, you Num knowing your number’s cold is the expression I use regularly,

Dan: Brilliant. That’s a great phrase. And we may quote you on that. And we may borrow it.

Luis: by all means.

Dan: Thank you very much.

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