An Interview with Erick Simpson
Erick Simpson is one of the true architects of what we now know as the Managed Service Provider channel. Eric co-founded, developed and sold one of the first pureplay MSPs in the industry. And then, he co-founded MSP University and authored four books.
Over the last three decades, Erick has served as an enterprise CEO, VAR, MSP vendor, educator, advisor, speaker, and consultant. Today, he provides business consulting services to MSPs and IT professionals around the world.
Watch my Interview With Erick
Why You Should Run a Modern MSP Rather Than Have a Job
If you’re a one-man-band, there are only so many hours in the day. That makes it hard to grow your business, especially if you operate on the break/fix model. The managed services model allows for recurring revenue. However, so many people still have a job, not a business.
Erick says that working in that way is good for younger people to understand the industry and the support that clients need. They build up confidence, but they’re still afraid to step out on their own. Because a job means guaranteed income, and they don’t have the belief in themselves.
“So, it can be hard to overcome that, because we’re naturally risk-averse. But if you expand your network and find supportive communities, you start to see that the MSP way of running a business can be lucrative and better supports your clients.”
The Biggest Industry Change Erick Has Seen
In the years that Erick has been working in the industry, he says the biggest change he’s seen is the end customers being more open to the managed services approach to their IT support.
However, moving from break/fix to MSP model wasn’t straightforward. “You had to explain to your existing clients that you’d be working in a new way and they had to pay upfront. And you really had to demonstrate the value that this would bring to them.
“Outsourced IT had a negative connotation at first, but now it’s widely accepted. We’re even seeing an increase in co-managed services – MSPs are successfully selling this to medium sized businesses now.”
How the Pandemic Changed the Way Internal IT Departments View Modern MSPs
Before 2020, internal IT departments viewed MSPs and outsourced IT professionals as competition – a threat to their role. “The pandemic accelerated the understanding and adoption of three things: cloud migration, cybersecurity and hybrid/remote working.
“It was a perfect storm – employees had to work at home, so they needed cloud computing and a secure system with access to the network. MSPs were perfectly placed to help with that because they’re more experienced.”
Erick added that another benefit is that MSPs can be a lot firmer when it comes to clients who don’t take cybersecurity seriously. “It puts them at risk, you and all your other clients. You have to get rid of them and be clear about why.”
How Modern MSPs can Communicate the Importance of Cyber Protection
Erick admits in can be a difficult conversation to have with clients, especially when they think you already provide cyber protection to them, or someone else does. In that case, Erick says, prompt them to explain exactly what it is they currently have in place. Because in all likelihood, it’s nowhere near adequate for their needs.
“Ask them if their supplier’s services are in line with their cyber insurance policy – that will instil a bit of fear into them. Then, offer to do a cybersecurity assessment to make sure they’re protected – pitch it as no obligation, from an objective third party.
“And for those who assume you’re already protecting them, then explain that cybersecurity threats are constantly evolving and becoming more sophisticated. In the same way that car maintenance has evolved with new cars, the role of the modern MSP when it comes to cyber protection has evolved too.”
Why You Should Identify Your ABC Clients
Erick explains that you can put your modern MSP clients into one of three buckets – A, B or C. The C clients will usually bring in the smallest revenue. “You might be trying to move them up a grade, but be honest. Would your business actually be more profitable without them?
“They’re occupying a space that could be given to a higher-paying clients who want managed services support rather than break/fix. The As and Bs will always pay you more. And they’ll probably be less hassle. C clients are often the ones who make things difficult for your engineers. So, getting rid of them will make your team happy, too.”
What Motivates Erick in the Modern MSP World
Erick says that after years of learning and being a leader, what he enjoys most these days is meeting interesting and passionate people. “I like working with folks that want to make things happen. I like seeing business growth, I like I like speaking to audiences.
“I like the energy of interacting with like-minded folks and helping them grow. I encourage them to be more confident about their worth and the value that they provide for their clients. So they’re empowered to charge accordingly without feeling guilty.”
How to Connect With Erick Simpson
- Erick’s website
- Follow Erick on Twitter
- Like Erick’s page on Facebook
- Connect with Erik on LinkedIn
How to Connect With Me
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Mentioned in This Episode
- Podcast: Vera Tucci on CoMITs and Imposter Syndrome
- Erick Simpson’s blog: It’s Time to Fire Some Customers
- Book: Alan Weiss: Million Dollar Consulting
- Erick’s inspiration: Amy Luby, founder of Modern MSP
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Richard Tubb is one of the best-known experts within the global IT Managed Service Provider (MSP) community. He launched and sold his own MSP business before creating a leading MSP media and consultancy practice. Richard helps IT business owner’s take back control by freeing up their time and building a business that can run without them. He’s the author of the book “The IT Business Owner’s Survival Guide” and writer of the award-winning blog www.tubblog.co.uk
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