November 7, 2024 • 41 mins
When Dustin Bolander entered the world of managed services, he never anticipated where his journey would lead. Starting as a helpdesk technician, he worked his way up to co-owning a thriving MSP. But as Dustin shares with host Chris Massey, the transition to becoming an innovator in cyber insurance was anything but straightforward.
In this episode of Now That’s IT: Stories of MSP Success, Dustin takes us through the critical pivot points that shaped his career and ultimately led him to found Beltex—a groundbreaking cyber insurance policy built specifically for MSPs. From navigating the challenges of transforming a break-fix MSP to embracing the intricacies of cyber insurance, Dustin sheds light on what it takes to thrive in an industry that’s constantly evolving.
He reveals hard-learned lessons about managing client relationships, understanding the hidden risks in traditional insurance policies, and the importance of keeping MSPs involved in the claims process. Along the way, Dustin provides candid insights into why he believes MSPs can and should play a critical role in reshaping the cyber insurance landscape.
Whether you’re an MSP executive looking to grow your business or simply interested in the intersection of IT services and insurance, this episode will leave you with actionable ideas on how to innovate, adapt, and stay ahead in a fast-changing marketplace.
Key Takeaways:
- Dustin’s early experiences in MSP ownership and the path to scaling a break-fix model
- How the concept for Beltex emerged as a response to the insurance industry’s blind spots
- Strategies for MSPs to navigate the challenges and benefits of specialized cyber insurance
- Why staying involved in incident response can lower costs and strengthen client trust
Tune in for an insightful conversation that explores the evolution of an MSP leader into a pioneer of channel-friendly cyber insurance.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
One, two, three, four .
What a lot of insurancecompanies do is okay, msp, get
out of the way.
You screwed up.
You know we want you out of theway.
We're going to take it fromhere.
The MSP has the backups, theyknow the client's network, they
can usually work faster and thisis Dustin with his insurance
add-on a little bit cheaper thanincident response companies.
Why would we not involve thoseguys?
(00:22):
We're going to put you knowsupervision, there's a lawyer,
there's a project managerinvolved, like there's an easy
fix for those guys.
And that's.
How often do you get to sayit's a win, win, win.
Welcome to Now that's itstories of MSP success, where we
dive into the journeys of someof the trailblazers in our
industry to find out how theyuse their passion for technology
to help turn managed servicesinto the thriving sector it is
today.
Speaker 2 (00:43):
Dustin Bullender, welcome to Now that's it podcast
.
Thanks for bringing me on.
You built the channel's firstcybersecurity insurance program
at Fifth Wall, scaling to over2,000 plus MSPs in just a few
years.
And then in 2023, you launchedBeltex, the first and only
channel-friendly insurancepolicy that relies on great
defenses that MSPs and MSSPsalready pride.
(01:06):
Thank you so much for joiningthe pod, dustin.
I've been looking forward tothis for a while.
So glad to finally get you herein Austin.
Speaker 1 (01:11):
Yeah, we've been talking about it for a little
while, so make it happen.
Speaker 2 (01:14):
So the interesting thing about you is you started
out in the MSP world and so youstarted a small MSP hadn't yet
hit a million dollars yet inrevenue.
What was it like jumping intothat world early on, and how did
you get your foot in the door?
Speaker 1 (01:28):
So I started working there on Helpdesk.
It was, I think I was likeemployee number five, much older
, founder.
So he ended up deciding toretire, moved out to a ranch.
So me and two other guys boughthim out.
So I'm not going to say Istarted at the very bottom.
We had like a dispatcher, butstarted off it was me and one
other guy doing help desk.
Then every day we'd run we wereboth in our really early
twenties.
We'd run, grab dinner and maybea beer or two, then go back to
(01:51):
the office and knock outprojects until like 10 PM
Because again, we were young, 20something.
So diving into the ownershipside ended up being I always
joke like in video games youhave this thing called new game
plus where you get to start overagain but with all your stuff.
So I think we're going to getto it in a minute with the
second MSP.
But basically the first one wasa nonstop mistakes.
(02:11):
So I can point to very littlethings there that I can say we
did awesome on this.
It's mostly like hey, chris, Idid this, don't do that.
You know this doesn't work.
Oh, for the love of God, don'tdo this part of it.
So it was definitely a trial byfire.
Neither of the other two guyshad owned a business before that
either, so what made you wantto become an owner at that first
MSP?
Let's go further back.
So growing up we had a familybusiness in Houston.
(02:33):
So people say you know what wasyour first job?
It was scrubbing the baseboardsat my parents' dog training and
boarding place.
Legit family business, I thinkthere was eight of us total
between cousins and uncles andstuff.
So whenever I was 12, my dadwas like, hey, our maintenance
guy just quit.
Congratulations, come in,you're going to be the cleaning
guy on that part of it.
But then from there waswhenever I first moved to Austin
, like 2007 or so.
(02:55):
I worked at.
I did my obligatory time atDell, because everybody that
comes in Austin and tech you gotto work at Dell at some point.
And I was just one of thosethings of like I don't like
corporate because I'm too muchof a, not a self-starter.
Just I'm not built forcorporate, I'm not a super rules
follower, I guess.
So it was one of those of likeokay, dude, come in, do this,
stay in your lane.
(03:16):
I worked at a hospital at onepoint and I was notorious.
My boss and I would, we gotalong.
But it was one of those I'dalways kind of jump into other
stuff and be like oh Dave, Iknow how to fix this.
Oh, dave, I got in and I fixedthis and he's like, yeah, but
you're not supposed to be doingthat.
So that was just on the smallbusiness side of it.
I was like, cool, I can be anowner and nobody can tell me not
to do that kind of stuff.
I can sort of, you know,navigate the way that I want to.
So that was because.
(03:40):
Then it's that whole, you know,pick your role, stay in it,
which, again, I'm really notgood at.
So awesome.
Speaker 2 (03:45):
So you bought in and, if I remember correctly, the
business was very, very much abreak fix business at the time.
What was the transformationlike?
I mean, you helped sort of leadthat to a managed service model
.
What was that like?
Speaker 1 (03:58):
Yeah, we were doing pretty well.
And then we had a so classic2000s break fix MSP that I think
anybody who was in the industryat that time went through it.
So we had a client that got tobe talking about lessons of
don't do this, don't do that.
We had a client that we had twopeople full time on out of like
six employees, so you can seewhere this is going.
They of course went out ofbusiness, so immediate,
(04:20):
overnight, like 40% of ourrevenue gone.
And then at that point it wasthe next year, I went to my
first IT nation and everybodythere was talking about this man
and services thing and so meand one of my partners were
there and we were just like,okay, this is pretty cool, so
people will consistently pay usevery month and we don't have to
go grind out hours Like this ispretty neat.
So then we went in and webought a PSA, we bought an RMM.
(04:41):
You know the typicaltransformation story.
We had probably, I'm going tosay, less than 50% of our
clients ended up converting tomanaged.
We did a lot of hybrid, I wouldsay at this point in time it
really wasn't managed but likehere's a base, you know, monthly
fee plus block hours, kind ofthing.
I was like, oh, it's MRR, it'slike these days, no, it's not,
(05:10):
it's a little bit MRR but it'snot managed.
But just getting thattransition done, the typical
scared to death to lose revenue,scared to death to lose clients
.
So it was probably five, sixyears before we really got fully
managed, or at least you know95% of the clients.
Just again you know, oh, theseguys are hourly, they pay.
Like why would we push, whywould we mess?
Speaker 2 (05:24):
with that it's.
That's not uncommon for MSPsthat I talk to is especially
back in the early 2000s, whenthis idea of, well, you're going
to pay us to just make sureyour stuff stays online, Like
yeah, like I'm going to call youwhen it breaks yeah, that's
what they're used to doing.
Speaker 1 (05:39):
So it's weird.
Now too, people are you knowcustomers are confused with like
the hourly concept, right, thatkind of went just full.
You know, 180 degrees over thelast 15 years For sure.
Speaker 2 (05:54):
So you were young when you became a co-owner right
, and how did you navigate thedynamics of being a much younger
individual than your businesspartners, and what did you learn
while you were working withthem?
Speaker 1 (06:01):
Yeah.
So my two business partnerswere both, I'm going to say,
probably 30, at least 30 yearsolder than me.
So how did it go?
Not, I don't want to say notgreat, but there was a lot, of,
a lot of conflict.
Completely, I was young anddumb, like I'm going to say that
was more a me problem than athen problem, just because at
that point you haven't learned alot of the painful lessons,
(06:21):
hadn't done it before.
You know there's a certain levelof conservative you need to be
in business, that sort of thingversus.
You know, just, I think I was20, 24, 25, just like, let's go,
let's go, this is a good idea,I'm going to go do it, kind of
thing.
So the biggest thing I think Ipicked up off of that was sort
of getting a consensus rightAmong a team versus nope, I want
(06:42):
to do this.
I think it's a great idea, evenif I'm right, if somebody's
right on it.
There still has to be a littlebit of selling, a little bit of
convincing, besides just walkingin and saying, nope, we're
doing it.
So that that empathy, seeing itfrom other people's point of
view whenever it's a drasticallydifferent view, right?
So dumb, young, 25 year old kidversusyear-old guy who's eyeing
(07:05):
retirement in a couple of years.
You've got to sell it a littlebit more whenever you're trying
to do something different,something new on it.
Speaker 2 (07:12):
So you sold your stake back in 2017.
What led to that decision?
Same.
Speaker 1 (07:16):
Thing where it just kind of came to the point of
both the guys got to retirementage.
There was a big difference inopinion on here's what we want
to do, on, you know, familymembers coming in that kind of
stuff, and so at one point wehad stagnated a bit because it
got to.
One of the biggest lessons Ilearned at the first company was
we always joked and called itdust and doesn't scale, because
it'd be like, oh yeah, I can sayso.
(07:36):
I got really good at saying yesto things.
I was like, oh yeah, we can dothat, we can do that.
So I was putting in 60, 70hours a week.
Both of the partners weretrying to step back into
retirement kind of thing.
So it was just at we reallyplateaued and then had different
visions on where we wanted thecompany to go.
Past that I remember we werehaving a conversation the one
day and it was a.
We had a.
It was like going to be aconsulting opportunity that kind
(07:58):
of bled into managed services,and so I was sitting there and
again, just young and dumb I wasvery early thirties at that
point Like, okay, guys, let's dothis, like this will be really
cool, we're going to competeagainst, like PwC and Accenture
and stuff.
And they both sat there and Iwill say this out loud at this
point, they were absolutelyright.
But they said no, dude, we're amanaged services company Like
this, do the managed thing,don't go and chase this.
(08:20):
It was like a six figureconsulting opportunity.
It's like why are we chasingthis?
And I was like because we'rethat good and we can do it,
which is true, but not the corebusiness.
So that that, in a nutshell, isa good example of like okay,
we're on different pages.
You know, how do we want to run, how do we want to grow the
company?
So we had a couple of littlethings come up and one day I
went in you know we had gonethrough evaluation to start
(08:41):
figuring out.
I came in.
I was like, hey, look, guysjust buy me out because we're
talking.
You two are more on the samepage, it's a three-way
partnership and I was like, justlike, I'll go Transitioned out
over, I think, six months or so.
Speaker 2 (08:53):
How did that transition go, both
professionally and personally?
Speaker 1 (08:56):
Personally, it was both good and bad, which sounds
like a total cop-out answer,sorry.
It was good on the sense ofthat's probably the most relaxed
I've been in the last 20 years,because it was like okay, I'm
out of it, I don't have theresponsibilities, the burden.
I learned to relax a little bitfor a very short amount of time
(09:17):
, which we'll get into in asecond, and then the bad part of
it, though, is I don't.
I just sold another businessLike I don't know that a
business exit is ever clean.
There's always something.
There's always stress.
I've talked to a couple ofpeople that are like oh yeah,
one of my buddies just sold, andhe's like yeah, we just did.
You know the contracts, acouple of handshakes, he walked
away with a couple of milliondollars, and I was like how did
you?
That never happens.
No, so that's the one like.
(09:42):
I've been through it before, soI kind of knew what to expect.
But that first one, it's likehaving a kid right that there's
all these, you need to know this, this, that and the other.
They need to have some kind oflike business exit course that
You're going to be stressed out,you're not going to know what
to do with yourself.
You know it's going to be roughthat sort of thing.
Speaker 2 (09:57):
So after that exit, you launched Clear Guidance
Partners with the intention ofconsulting, but it didn't quite
go as planned.
Right?
Tell us a little bit aboutthose first few weeks and how
you ended up back in managedservices.
Speaker 1 (10:10):
Yeah.
So we're going to have arecurring theme today, I think,
is that MSPs generally hatelawyers.
So as part of my exit, I had acarve out for working with
lawyers.
We had started dipping our toesin a little bit.
There was a couple other piecestoo where it was like, yeah,
we're not going to touch that,we don't care, go do whatever
you want.
So I had this awesome businessidea.
I was like, all right, chris,I'm going to go in, I'm going to
(10:34):
do $350 an hour, I'm going towork like 20, maybe 30 hours a
week.
It's going to be awesome, I'mgoing to hang out with my family
all the time, I'm going to getrich and it's going to be the
easiest best work ever.
I went 60 days and then had a$25,000 a month managed services
opportunity fall in my lap, andso now I own another managed
(10:54):
services provider.
Speaker 2 (10:57):
So you decided to go deep in that legal sector, which
many MSPs avoid.
What drew you to that industryand what were some of the
hurdles that you had to overcomeearly on?
Speaker 1 (11:05):
So I've kind of made a bad or good habit, depending
on your point of view, onrunning into lawyers.
And then now insurance,everybody's kind of running away
from it and I'm like all right,great, there's opportunity
there.
Then now insurance, everybody'skind of running away from it
and I'm like all right, great,there's opportunity there.
So with regards to the lawyerside of it is there was one MSP
in Austin that had been doinglaw firms.
They got bought by a nationalone, kind of started falling
apart.
And then if you go and you looknationally, even today with
(11:29):
Clear Guidance Partners CGP iswe only have a couple of very
direct there's MSPs that dolawyers, but there's not many.
There's five offhand that Iknow that only are, you know,
vast majority that were like 75%law firms.
So from that perspective I waslike cool, there's a good
opportunity to go in, know theindustry, speak the language you
know, know the applications.
(11:50):
Every industry has garbage lineof business applications and
legal included.
So just learning all that stuffand it's like there's not a lot
of competition there which letsyou do better rates.
You know higher close rate thatkind of stuff.
So, going deep, I also had thefirst MSP.
We were generalists.
We had a couple restaurants.
There's a famous wing chainhere in Austin that we used to
(12:11):
do that I'd always brag about.
We had construction companies,just everything.
It was like, yeah, you need ITand you got a checkbook, yeah,
we'll support you.
Right, the vertical piece of itmakes it a lot easier to charge
higher rates to moreefficiencies and even expand
your services as well.
Speaker 2 (12:25):
Were there things that you did differently?
For law firms, you became thatgo-to lawyer.
You know MSP right In themarket.
Were there things you diddifferently, or how did you
tailor your services to reallybe specific to their needs?
Speaker 1 (12:40):
Yeah, two pieces.
So the first one is that we dideverything is included now.
So old MSP like hey, Chris, yougot that old Sonic wall, I do
ASAs, now I need you to replaceit.
When can we budget in kind ofthing?
Everything is bundled at thispoint.
So flat monthly seat priceincludes even firewalls, all the
security stack.
I was like I don't want to doadd-ons, I don't want to deal
with it.
Excuse me, you know, let's justmake it easy.
(13:02):
Here's this fixed monthly thing.
I'm not going to come blow youup for more budget money every
year.
And then the other part of itthat was super interesting is
there was a company calledMinucci Consulting that we were,
I think, six mutual clients.
We had weekly meetings and soat one point, going back to,
there's an age gap there, so shewas starting to think about
retirement, and so we had in2021, we merged with them.
(13:26):
So they do, they did and doback office services for law
firms.
So we have a division that doesaccounting, billing, HR and all
that stuff for firms as well.
And so, even if we don't, wehave a pretty low penetration on
both sides of the house.
But just going in and being ableto talk about that with lawyers
and understanding.
So now, like our help desk,whenever they get something
(13:47):
weird that's you know industryjargon and stuff like that, or
like here's this weird dynamicthey can go to the legal
operations people and say, hey,can you explain this to me?
They're like, oh, don't do that.
You should do this insteadbecause here's why.
So just understanding of youknow, our sales guy says we can
do everything, but the practiceof law is we legit, know law
firms inside and out?
Speaker 2 (14:05):
Wow, so you joked even on the podcast.
You have this love-haterelationship with lawyers, where
it can be the best and theworst clients.
You share some examples of thisdynamic and what taught you
about managing those types ofrelationships.
Speaker 1 (14:21):
Yeah.
So the best and the worst isthe good law firms are very
rational, in the sense of theysit there and they argue all day
.
So you go in, you breaksomething down and they're like
great, give me the contract,I'll sign it.
That all makes sense.
They pay well, they pay on time.
But on the other side of it youhave and this is where I think
the MSP industry really doesn'tlike lawyers is the worst.
Ones are like hands down theworst clients, because that's
(14:43):
the Chris, reduce my bill or I'mgoing to sue you.
You know everything's yelling,screaming.
I have a no screaming, threestrikes rule.
You know one.
Somebody had a bad day.
I understand, we write it down.
I have a little Excel sheet.
Two is we go and we talk to thepoint of contact.
There Can't happen again.
(15:03):
And the third one is you're notallowed to call us, you have to
work through somebody else.
I've done it twice before andit also extends to inappropriate
behavior.
The first one I'm not going togo into because it's not
appropriate, for I'll tell youlater, for a beer, okay.
But the other one was actuallya partner at a law firm that
just kept screaming at people.
So finally it was, you know,hey dude, not allowed to call us
anymore, and so that's what yougot to watch out for with the
law firms is the bad ones aresuper bad consistently.
(15:24):
So we've gotten pretty good atscreening.
At this point, like I bring upthe three strikes rules and the
sales meetings, just to whereand that's where you react and
if you seem to kind of do thatnumber right, you're like, okay,
maybe let's dig into that alittle bit more.
But so that kind of screeningupfront there's not really a
pattern to.
So we work with probably closeto a hundred firms.
There's not really a pattern tothe types of law, cause that's
(15:45):
the other thing people likenever do plaintiff's law, like
the guys that sue them.
Our best firm and the nicestpeople right now that we have is
a plaintiff's firm, so itdoesn't track.
There might be a little bit ofstuff around it, but the
practice type really doesn't.
It's the people.
How do they talk to you?
How do they react?
If it's like, no, we just wantto do over email, just send me
your best price, I doimmediately.
(16:07):
Thank you for your time.
Speaker 2 (16:09):
So law firms amazing.
I love this joke.
Every time I run one of theseprograms, I like to throw a
slide up there where it's likepick, which you know.
You raise your right hand ifyou'd rather do this, and raise
your left hand if you'd ratherdo this, and I put law firms and
right hand and then anythingelse with the left hand, and the
entire room raises their lefthand, and so you've definitely
found a niche.
(16:30):
That is pretty unique andcongratulations for that.
That's funny, you say that.
Speaker 1 (16:35):
So, going back to I'm going to say like 2015, at the
first MSP, we had talked to thisMicrosoft partner in software
and they were going hard intothe legal industry, wow, and so
that was the same thing.
Microsoft brought in 10 oftheir managed partners, right,
the big, the elite ones and theysaid we want to go hard into
healthcare and law.
You know who wants to do?
And it was every one of them,except that one guy raised their
(16:56):
hand for healthcare.
So yeah, there's a pattern tothat, yeah.
Speaker 2 (17:00):
So in 2020, you took a deep dive into cyber insurance
, which frustrates many MSPstoday.
What was your breaking pointand why did you decide to go get
your license and startconsulting for insurance
companies?
Speaker 1 (17:12):
Yeah, same thing.
It was getting frustrating.
We were getting theseapplications who knows what's
really going on, that sort ofthing.
So again, here's an opportunity.
We started actually on CGP,started doing marketing around
cyber insurance in 2020 becauseit was one of those of like all
right, this is consistentlybecoming a trend, going back to
law firms being law firms.
(17:32):
They were and are stillconsistently a hard business to
insure.
So I think we got hit extrahard, extra early, being a law
firm focused MSP.
So, yeah, I just started diggingsome more, started talking to
some people, and then thelicense side of it was actually
I had somebody that used to workfor me years ago that was
looking for a career change, andso I told them hey, scott, I've
(17:54):
been getting into doing more ofthis.
We're having to do 90% of thework right, to fill these out
and explain everything.
Then the agent turns around andthey get this.
You know 15, 20% commission.
It's like why don't you go getyour license and I'll spin up an
insurance agency also?
So we ended up doing that andthen, as that started to grow, I
just went and got my license,also For a lot of it's a gray
area, but, like for educationfor talking about it.
(18:15):
You know it's like you shouldbe licensed, so I just I started
doing it so much that I didn'twant the gray area anymore.
Speaker 2 (18:22):
Interesting.
So you co-founded Belltex,which offers a unique insurance
policy tailored for MSPs.
How did this idea come aboutand what were some of the
biggest obstacles in turningthat into a reality?
Speaker 1 (18:33):
So Michael Riggs was the CTO at Perch, if you're
familiar.
So he's my operating businesspartner in that and it kind of
came out of spite.
I'm going to say a little bitof you know, you're seeing
there's a lot of a I'm going tosay a solved problem.
(18:57):
If you're an MSP and you say Iwant to learn about insurance
and how to work with it, there'sa ton of resources out there to
go get it right.
Fifth Ball's done a bunch ofstuff.
You and I have done some stuff.
I think you guys have some morestuff coming out soon, like the
education's available.
You just got to put theinitiative in and then the
updates as it changes that.
Now what we're looking at is, asan MSP, we know how to deal
(19:19):
with insurance, we know how tonavigate it, we know how to talk
about it kind of thing.
Why am I dealing with all thesecarriers that are sitting there
of oh Chris, here's your policy.
Thanks for your MSP bringing usin.
Also, have you triedCrowdStrike before?
Right, that kind of thing?
So insurance is overlapping alittle bit, they're competing a
little bit, and then on theclaim side stuff happens.
(19:42):
It's kind of a trope at thispoint, but it's a question of
when, not if, it's going tohappen.
So at that point, what a lot ofinsurance companies do is okay,
msp, get out of the way.
You screwed up.
We want you out of the way,we're going to take it from here
.
The MSP has the backups, theyknow the client's network, they
can usually work faster and thisis Dustin with his insurance
add-on, a little bit cheaperthan incident response companies
.
Why would we not involve thoseguys?
(20:03):
We're going to put supervision.
There's a lawyer, there's aproject manager involved.
But to me and Riggs there'sthis black and white there's an
easy fix for those guys andthat's how often do you get to
say it's a win-win-win right.
The customer policyholder getstheir network back up faster,
(20:24):
the MSP stays involved and getspaid and insurance we reduce our
costs on the claim becausethey're down less amount of time
and, again, the MSPs are alittle cheaper than incident
response companies.
So we actually came up with thisconcept back in I want to say
2021.
And the insurance industry isstill mostly scared to death of
MSPs.
So it took a couple of years ofshopping it around to finally
find a carrier to partner withthat would let us execute on the
vision.
So that was the you know.
(20:45):
Okay, cool, we solved theeducation part of it.
We got MSPs know they know howto deal with it.
Now we need to move on to theactual products that are being
sold, that's great.
Speaker 2 (20:53):
You talked a little bit about the education side of
it, which I know again.
You and I have spent some timeon that and you and others have
done that as well.
What about the misconceptionside?
Right, I feel like MSPsoftentimes have some
misconceptions about cyberinsurance.
Are there any that come to mindabout things that that they
(21:14):
just should know about, thatmaybe they don't.
Speaker 1 (21:16):
Yeah, and I'll say also the insurance industry is
just so standoffish even witheach other.
It's kind of odd.
Sometimes we're again Dustininsurance add-on.
We're not helping ourselves.
A little bit more transparencywould be good on a lot of these
things.
So the biggest one that I stillhear.
This has been forever and Idon't think it's going to change
anytime soon, but it's like youknow claims don't get paid.
(21:37):
Claims don't get paid.
If you go look at the numbers,you know, even go back two years
ago that why would theseinsurers just be taking a bath
if they were not paying claims?
Because that's where they losemoney.
The claims do get paid.
So very rarely do you see themdenied for the security controls
that they're you know.
Oh, you didn't have MFA on,unless it's a substantial amount
, like one of the lawsuits thatwas in the news I think it was
(22:00):
Travelers, maybe you know theychecked yes on the box and
across the entire business.
One guy had one account withMFA on Like in that case, yeah,
you lied through your teeth.
Let's call it what it is You'regoing to get denied.
But on the other hand is I'vehad two claims that I've worked
on to where it's a businessemail compromise and in both
cases that a single user had hadMFA turned off, both those
(22:21):
claims paid out.
So from that perspective, theydo get paid.
The other part, though thatcomes up and we saw this
recently with CrowdStrike wasit's the unique aspects of the
coverage.
So there are a lot of policiesthat don't cover CrowdStrike
because it wasn't a maliciousintent.
Yeah Right, this.
Actually there was a rulingfrom a court yesterday on I'm
(22:42):
going to get the details on thiswrong, sorry.
I literally saw this like lastnight and I was thinking, oh,
I'm going to talk to Chris aboutthis tomorrow.
But it was the.
A restaurant was using likefingerprints for their employees
to clock in and out and I thinkthat data got breached.
No, it wasn't a breach, it wassomething else, but there was no
malicious intent.
So again, the insurance policysaid claim denied because they
(23:03):
were only covering a cyberattack.
Well, there was some kind ofmistake around biometric data
got leaked out or something likethat.
So that sort of thing is whereI think you're seeing a lot more
pain and people just don'trealize.
So that's whenever.
Going back to to the educationpart, where it talks about you
need to have a good policy.
The little $25,000 endorsementisn't enough.
Or this cheap policy which itsays a million dollars on it.
(23:24):
But when is your million dollarpolicy not a million dollar
policy?
It's those sublimits andrestrictions and things like
that where you do see a lot morereal world pain.
That's great.
The outright denied claims is amyth for the most part, but you
didn't actually have coveragefor this event denials that does
happen.
Speaker 2 (23:41):
Dustin, you've been a pioneer in really starting this
education side and now theassistance side around cyber
insurance.
So, coming from the MSP spaceand now being more on the
insurance side, how do you thinkthe MSP community is sort of
responding to what you andothers are doing now around
cyber?
Speaker 1 (24:02):
So the way I've kind of divided it up is and these
are numbers I just totally madeup, so nobody argue with me on
it, please but I always say theindustry MSP industry is kind of
divided into three segments.
There's sub-segments under it,but you have the mature MSPs at
the top that are just reallyoperationally mature.
They can make a plan, they canstick to it.
I don't know that I would callmy MSP in that group some days,
(24:25):
but the guys that are just veryoperationally, they say, okay,
this is a thing, it's a problem,it's an opportunity, we're
going to execute on it.
I think they have a great gripon cyber insurance.
They have a plan, they'reactively building into their
sales and account management,things like that, and then they
also know how to deal withissues as they come up.
So again, top 20, the bottom Idon't know, let's say 40%.
(24:45):
Maybe is the absolutely lovethe word trunk slammer.
So I'm going to say the trunkslammers.
They're just out there, they'redoing whatever they want,
they're getting stuff done, butit's not a consideration.
Whatever floats your boat, kindof thing.
I'm not putting much effort inthere.
Whenever they're ready, they'llcome to the table.
(25:13):
That middle group, though, isthe ones that are still needing
a little bit of guidance, thatstill need to get more involved.
That I call it like theaspirational group.
They want to do the right thing, they want to deal with it.
Maybe they don't have enoughtime, because running an MSP is
a pain in the butt, but you knowthey're still again.
The resources are out there.
They just need to embrace it alittle bit more.
So, and they typically,whenever you see those guys do
(25:34):
that, you know it's increasedrevenue.
On cybersecurity Awesome.
Speaker 2 (25:39):
So you've been on quite a journey, from starting a
small MSP to building aconsulting firm and now
innovating in cyber insurance.
Looking back, what's a lessonyou wish you'd learned earlier
in your career, dustin?
Speaker 1 (25:51):
To say no to more things, in the sense of I've
always been like, you know, ohhey, can I help with this, or
here's this new opportunity,let's go for it.
I've gotten a little bit moredeliberate on what I'm doing
because, again, dustin doesn'tscale right To be able to put
the energy, the focus intothings.
If we went back, you know, two,three years ago, I actually had
(26:12):
my fingers in more stuff than Ido now, which is weird to say
Wow, so just staying a littlebit more focused on there was
actually it was Justin atTechRug, who's an insurance
competitor in the industry, butat one point that he told me he
said, man, if you would actuallyfocus on something for once in
your life, like you can doamazing things, and that really
stuck with me.
That was probably like twoyears ago.
So that's been the biggest partis, you know, going back to, I
(26:33):
said at the first MSP, mybusiness partners were right, we
were a managed servicesprovider.
We were not a consulting shop.
You know, focusing on, you know, have a good market fit.
We do lawyers, we do smallfirms at Clear Guidance, a
hundred people and under.
We go a little bit over thatsometimes if the case is right,
but like we had a 500 personfirm call recently and it was
nope, sorry, we can't help.
Thank you for your time.
(26:54):
So just that having a.
Really.
Maybe it's not even saying no,as I'm talking through it out
loud you can tell this wasn'tpre-planned at all, but just I
guess having that having focuskind of stay in your niche, stay
in that vision.
Speaker 2 (27:07):
So that may piggyback into my next question here and
this one's less around insurance.
But just you know you've spokento tons of MSP owners.
You yourself are a two-time MSPowner.
What's a common mistake you seejust in the industry in general
, and what advice would you giveto MSPs to be able to grow and
adapt, maybe a little better?
Speaker 1 (27:26):
Man, that's a fun one .
So I think the staying focusedpart a little bit is you do see
a lot of the guys where it'slike a project comes in and, ooh
, I'm going to say yes to this.
Yeah, so I will.
This part is going to probablyget a bunch of negative
reactions on it because againstthe grain advice, but I don't
think going outside of what youdo is necessarily bad if you
have a plan.
(27:47):
I'll give you a specificexample.
Is first year at Clear Guidancewas I built an MSP to that size
before I was like I kind of knowwhat to do.
So we took on a bunch ofproject work that long-term we
knew we weren't going to do.
We did a lot of RingCentralsetups and configurations, the
phone system, Like we're not aVoIP company, we're not going to
do one-offs.
But it was one of those of okay, this stuff coming in the door.
(28:08):
I know for the next year I cando this to juice cash flow, to
build us a cash base, to growthe managed services business.
18 months in we ended upterminating the contracts for
all those companies.
We got them to somewhere good.
It didn't just leave themhanging, but that was a very
deliberate right, we're going todo this short term to build up
cash so we can go expand themanaged services business, and
cash so we can go expand themanaged services business, and I
think a lot of MSPs go in.
(28:28):
It's like, oh, we're going todo this, I'm going to start
doing Microsoft Dynamicsconsulting.
Like dude, you don't have aplan.
Speaker 2 (28:34):
Yeah.
Speaker 1 (28:35):
Right, like that's great that you have this, but
especially on the smaller end,that now suddenly what happens
is as the owner, you're involvedin it, right, and you're the
only guy you're.
You're smart enough, you can doanything which I think a lot of
MSP owners, that's absolutelythe case but you don't have
employees that can.
You're not turning into aproduct, you're not figuring out
(28:55):
the numbers, the profitabilitybehind it.
You just went and chased theshiny object without a plan.
Speaker 2 (29:00):
I've heard you say it a couple of times.
You yourself have a verydeliberate ideal client profile,
right.
You know who you're going to goafter with your MSP and you
know where you're going to saythat just doesn't fit right,
might be too small, might be toolarge.
You're going to send themanother direction and say you're
just not our fit.
And I hear a lot of MSPsstruggle with that.
And I think that that conceptof know who it is today and know
(29:23):
where you want it to be right,because that could change two or
three years from now.
And so you've heard foreverwe've been telling the MSP
industry has been telling MSPsforever to say standardized,
standardized, standardized, makethe same widget and sell it to
everybody.
But the reality is and you justhit on it, there's a but right,
(29:45):
there's an exception, right,and we used to call it the
non-standard right.
You got to 80%.
It was kind of the same, but20% could be a little bit
different to be able to get thatnext type of customer in the
door that turns into your newICP potentially.
Yeah, yeah.
Speaker 1 (30:00):
I think that's yeah, and have it today.
That's a good example.
It's like have it today,standard, but here's where we're
going, kind of thing.
I think a lot of guys don't.
It's a here's where we're going, but there's not really a today
.
And then I don't think there'sany shame in saying we're going
to take this today, but we don'twant it to be around in two
years.
Right, this will not be a goodfit customer in two years.
Yeah.
Speaker 2 (30:19):
Yeah, and firing is such a harsh word.
But there's clients that nolonger fit into your MSP model
anymore and you've got to sayhey, it's time for you to go
somewhere else right, I'm theopposite of.
Speaker 1 (30:33):
my team has gotten me like, at least once a month
I'll just be like you know, oneof our executive meetings I'm
like we need to fire that client.
They're like, no, we don't,dustin stop.
We just actually had our secondlargest firm that we terminated
because of not bad behavior.
But they brought in some newexecutives and it just got
completely chaotic.
They couldn't get it back ontrack and I was like, sorry,
guys, that we're just not a goodfit for you anymore.
Speaker 2 (30:55):
Understanding the profitability of each customer
is the important thing, right,if you can look at it and go,
these guys are a little bit of apain, but they're paying us
pretty well, so it's worth it.
That's one thing, versus we'relosing money on this because
they just constantly are callingus Right.
Just like you said with thelawyers, I started to get PTSD
from back in my service deliverydays when I remember people
(31:15):
yelling at my service desk textjust for to yell Yep.
Speaker 1 (31:19):
Yeah, that's it.
Yeah, the profitability itstarts trending downwards.
And then it's the you know from.
You just said, like you seethat customer name pop up on the
phone.
Yeah, oh crap.
Yeah, that's the.
Okay, it's time to make achange.
Yeah, there's only so much youcan salvage on that.
Speaker 2 (31:33):
So what's next for Belltex, and are there any new
initiatives that or areas you'dlike to explore in the coming
years?
Speaker 1 (31:49):
So one thing and you can make fun of me, everybody on
the podcast, on the LinkedIncan make fun of me for this is
we are actively the MSP industryhas said that they want these
standalone warranties so tryingto find some good options for
that.
I don't think that that marketexists today, but that
opportunity, the appeal of it, Ithink it can be done.
So that's one of the piecesthat we're working on.
Other than that is no, we'rejust really trying to scale up
from the insurance standpoint.
I want to say we have about 40MSP partners today that are
(32:11):
active on the.
You have to kind of go througha thing to get approved for the
incident response side of it.
But no, just looking to scalethat and get the word out a
little bit more on that side ofit is the immediate.
We'd love to move into actualinsurance for the MSPs
themselves at some point.
Our policy right now is for thecustomers.
There is, I mentioned, techrugearlier.
(32:33):
I think is probably the marketleader on that side, but you
know, not everybody's a good fitfor it kind of thing.
It's rough getting, even beingan insurance guy, with an MSP
going to get it's.
I'm starting our renewal rightnow and it's like, yeah, I don't
want to deal with this becauseit's such a pain in the butt.
Speaker 2 (32:42):
So All right, I'm going to allow you to
prognosticate a little bit here.
So the MSP industry isconstantly evolving.
What do you think the next fiveto 10 years is going to look
like for MSPs?
Speaker 1 (32:54):
So one thing that I've noticed that started coming
up already is again insuranceand the MS.
Let's say MSSPs are kind ofstarting to converge a little
bit.
So you're seeing some insurancecompanies there's a company
called Accrisher out ofPittsburgh that's bought up a
bunch of MSPs.
So hey, now they can go in andsay, guess what, chris, not only
(33:14):
can I do your cyber insurance,your professional liability
insurance, but we can also keepyou secure at the same time.
That's a really compellingmessage, the biggest thing.
I mean you've been in the MSPindustry a while too.
We talk about the trustedadvisor part of it.
Right, everybody wants to bethe trusted advisor.
Most MSPs still aren't there,sorry, whenever they go, and
it's the okay, let me talk to myinsurance agent, let me talk to
(33:36):
your lawyer.
That kind of thing Like there'sstill the MSP is almost always
a step below, even if you are in.
You know I'm going to say onour MSP, half of our clients
were probably not in that fulltrusted advisor slot.
It's just a really hard thingto do.
I'm not knocking the MSPs, butlawyer versus MSP there's a big
delta there in the perception ofit.
Insurance gets you into thatseat a lot of cases.
(33:58):
So now you're competing against, say, an Accresure.
They're coming in saying I cando this, that and the other
You're coming in saying, hey, wedo great cybersecurity and IT
services.
You're already starting off ona back foot, right, because that
trusted advisor side of it.
So I think you're going to seea lot more hybrid side of that.
I'm getting one or two calls aweek from MSP owners saying, hey
, I want to set up my own agency, that sort of thing.
(34:20):
And then again on the otherside of it we're seeing these
carriers come in selling MSSPservices.
There's one that it's actually areally cool concept If you look
up.
It's called Alpha Secure,e-l-p-h-a.
Like an elephant.
They give you a policy, theygive you EDR, they give you
backups, vpn, mfa, I forget what, but it's really.
It's like a legit turnkey.
I'm not going to go into ifit's a good idea, how well it
(34:42):
works, kind of thing, but like,conceptually that's a cool idea,
right?
So I think you're going to seea lot more of that.
We're even seeing the MSPsgetting into the non-core IT
services because that's becomesuch a commodity, sort of.
I didn't intend this to be abrag about me, but it's like
sort of like what we did yeahRight, offering those other
services as well, the TSP thing,right, the technology services
provider.
You're going to have a littlebit of a vulvar die on that.
(35:04):
We got all the private equitystuff coming in.
So if you want to grow, if youjust want to stay as like a five
person MSP, that market's nevergoing to go away.
There's enough businesses outthere that say I want to talk to
Chris, I want to be able tocall the owner up and work with
them, that's fine.
But if you want to grow to 30,50, 100 person MSP, 10 million a
year kind of thing is, I thinkthat core service model is going
to die.
Cybersecurity is almostbecoming a commodity also.
(35:26):
So having that add on whichagain seeing a lot of interest
on the insurance side, yep.
But I talked to a guy the otherday that they did a SaaS
platform that's very vertical,specific, and they just launched
it as a standalone product thisyear and he was like, and
they're not a small business.
He was like it's already 20% ofmy revenue.
It's like, okay, that's prettycool.
I love those deep, verticalplays.
Speaker 2 (35:45):
So that's great.
That's why we have you speak toour partners a lot, as well as
just to give them that, hey,this is what your option, your
package, could look like.
Yeah, you can continue toevolve, for sure, because you're
going to have to.
So you mentioned you're acontrol freak, juggling multiple
businesses I don't want to sayway too many, because it's
probably my wife would say waytoo many.
So how do you manage your timeand really stay balanced amidst
(36:09):
the chaos?
Speaker 1 (36:10):
Poorly is the short answer.
This is not going to be one ofthose things of like everybody
should take advice from me, kindof thing.
But I'm neurotic about mycalendar has been.
One of them is everything getsslotted in and we've even
extended the family thing atthis point that my wife sends me
stuff and it's like nope,you're not working this
afternoon, kind of thing.
But I've also everything's beenkind of adjacent, which has
(36:33):
been nice right.
So it's going from MSPs toinsurance kind of deals.
So there's still enough overlapto where it's not like I'm off
manufacturing widgets sort ofthing.
So the conversations like what Ineed to keep up to date on what
I need to understand ends upfalling.
Generally it's useful acrossall the businesses, sort of
thing.
And then the other one was I'vegotten a lot better.
Even going back two years agowas one of those things of okay,
(36:56):
we're going to start doing this, I can do.
It is day one, I'm figuring out.
Okay, chris can do this, likeI'm going to help, kind of thing
.
I think that's been the biggest.
Going back to Dustin doesn'tscale is I've gotten in I was
saying earlier right, a lot ofMSP business owners.
We get into it just becausewe're smart enough to figure
stuff out, like theoretically,could probably give me enough
time and Google and like I canprobably, you know, at least
(37:19):
produce a half-baked version ofwhatever you tell me to, but
that's not a good, scalable wayto do it.
And then that's where yousuddenly find yourself with a
you know, ooh, I have a milliondollar business that I literally
can't get away from.
I have a job, so that's beenone of the bigger parts.
Now has been okay, where do we?
You know Belltex, we brought inanother agent.
She does our compliance andsome other stuff pretty much day
one, because could I figure outhow to go do 50 state filings
(37:42):
for, you know insurance?
Yeah, but that's not.
She loves paperwork, so great.
Yeah, but that's not.
She loves paperwork, so great.
We got a good fit on that sideof it Very good.
Speaker 2 (37:50):
So if you could go back and talk to your younger
self, what would you tell ayoung Dustin early on in his
career, all right.
Speaker 1 (37:57):
So this is going to crack you up.
I used to be a lot moreconservative on business.
I've had the.
I think the opposite, mostpeople tend to get more
conservative as they get older.
I was like on the consultingthing, you know I've been
talking about doing that foryears and was just like no, that
must be things good.
But that was, you know, what Ireally wanted to do, kind of
thing.
So taking more risks.
I got three kids now so it'slike I don't have as much If I
(38:25):
knew what I knew, you know,whenever I was 24, kind of thing
.
I think everybody says that butgo take the risks, kind of deal.
Worst case it doesn't work out,it's just money, it's just time
You're not getting hurt, you'renot dying, kind of thing.
Whenever you're younger in age.
But also even on career thing,where it's like these guys that
are let's use Reddit as anexample you go on the MSP Reddit
.
There is weekly one or twothings Should I start an MSP?
(38:46):
And everybody's like no, youshouldn't, it's a bad idea,
whatever.
Or like you need six monthssavings.
That drives me nuts.
Every time I talk to people onthat I'm like hell yeah, just go
for it Like it's worst case.
You're back in the corporateworld after a year because it
didn't work out.
Like that's cool, you had anadventure, you learned it kind
of thing.
You know, as long as there'snot, maybe don't dump your life
savings into it, right, don't gostart an insurance carrier with
(39:08):
your kid's college fund kind ofdeal.
But if it's a, hey, I'm goingto go try this MSP thing for six
months.
I'm going to go again.
I've had a lot of guys that callme.
I'm like, yeah, go start aninsurance agency.
Worst case you shut down iswhen did you know?
Now, that's it.
I got over my insuranceimposter syndrome, I can tell
(39:32):
you.
About two months ago I got acall from a carrier that is in
Lloyd's of London which is ininsurance.
I had them call me.
It was a legit cold call.
They said we've beenresearching online.
We needed somebody.
Can you guys come to Europe andhelp us build an MSP insurance
program?
So that was a cool becausegoing up to that I was like,
okay, people keep inviting me onstuff, like they're kind of
listening, but you know how muchdo I really know.
(39:54):
But coming from that side of it, that was a neat validation
that like, okay, we might youknow me and Mike Riggs might
actually be onto something.
Speaker 2 (40:00):
That's great, dustin.
It has been a really a pleasureto have you here.
You're an asset to the MSPindustry with what you're
sharing around cyber insurance.
I'm glad to have gotten to knowyou and thank you so much for
being here.
Appreciate it.
One, two, three, four .
What a lot of insurancecompanies do is okay, msp, get
out of the way.
You screwed up.
You know we want you out of theway.
We're going to take it fromhere.
The MSP has the backups, theyknow the client's network, they
can usually work faster and thisis Dustin with his insurance
add-on a little bit cheaper thanincident response companies.
Why would we not involve thoseguys?
(00:22):
We're going to put you knowsupervision, there's a lawyer,
there's a project managerinvolved, like there's an easy
fix for those guys.
And that's.
How often do you get to sayit's a win, win, win.
Welcome to Now that's itstories of MSP success, where we
dive into the journeys of someof the trailblazers in our
industry to find out how theyuse their passion for technology
to help turn managed servicesinto the thriving sector it is
today.
Speaker 2 (00:43):
Dustin Bullender, welcome to Now that's it podcast
.
Thanks for bringing me on.
You built the channel's firstcybersecurity insurance program
at Fifth Wall, scaling to over2,000 plus MSPs in just a few
years.
And then in 2023, you launchedBeltex, the first and only
channel-friendly insurancepolicy that relies on great
defenses that MSPs and MSSPsalready pride.
(01:06):
Thank you so much for joiningthe pod, dustin.
I've been looking forward tothis for a while.
So glad to finally get you herein Austin.
Speaker 1 (01:11):
Yeah, we've been talking about it for a little
while, so make it happen.
Speaker 2 (01:14):
So the interesting thing about you is you started
out in the MSP world and so youstarted a small MSP hadn't yet
hit a million dollars yet inrevenue.
What was it like jumping intothat world early on, and how did
you get your foot in the door?
Speaker 1 (01:28):
So I started working there on Helpdesk.
It was, I think I was likeemployee number five, much older
, founder.
So he ended up deciding toretire, moved out to a ranch.
So me and two other guys boughthim out.
So I'm not going to say Istarted at the very bottom.
We had like a dispatcher, butstarted off it was me and one
other guy doing help desk.
Then every day we'd run we wereboth in our really early
twenties.
We'd run, grab dinner and maybea beer or two, then go back to
(01:51):
the office and knock outprojects until like 10 PM
Because again, we were young, 20something.
So diving into the ownershipside ended up being I always
joke like in video games youhave this thing called new game
plus where you get to start overagain but with all your stuff.
So I think we're going to getto it in a minute with the
second MSP.
But basically the first one wasa nonstop mistakes.
(02:11):
So I can point to very littlethings there that I can say we
did awesome on this.
It's mostly like hey, chris, Idid this, don't do that.
You know this doesn't work.
Oh, for the love of God, don'tdo this part of it.
So it was definitely a trial byfire.
Neither of the other two guyshad owned a business before that
either, so what made you wantto become an owner at that first
MSP?
Let's go further back.
So growing up we had a familybusiness in Houston.
(02:33):
So people say you know what wasyour first job?
It was scrubbing the baseboardsat my parents' dog training and
boarding place.
Legit family business, I thinkthere was eight of us total
between cousins and uncles andstuff.
So whenever I was 12, my dadwas like, hey, our maintenance
guy just quit.
Congratulations, come in,you're going to be the cleaning
guy on that part of it.
But then from there waswhenever I first moved to Austin
, like 2007 or so.
(02:55):
I worked at.
I did my obligatory time atDell, because everybody that
comes in Austin and tech you gotto work at Dell at some point.
And I was just one of thosethings of like I don't like
corporate because I'm too muchof a, not a self-starter.
Just I'm not built forcorporate, I'm not a super rules
follower, I guess.
So it was one of those of likeokay, dude, come in, do this,
stay in your lane.
(03:16):
I worked at a hospital at onepoint and I was notorious.
My boss and I would, we gotalong.
But it was one of those I'dalways kind of jump into other
stuff and be like oh Dave, Iknow how to fix this.
Oh, dave, I got in and I fixedthis and he's like, yeah, but
you're not supposed to be doingthat.
So that was just on the smallbusiness side of it.
I was like, cool, I can be anowner and nobody can tell me not
to do that kind of stuff.
I can sort of, you know,navigate the way that I want to.
So that was because.
(03:40):
Then it's that whole, you know,pick your role, stay in it,
which, again, I'm really notgood at.
So awesome.
Speaker 2 (03:45):
So you bought in and, if I remember correctly, the
business was very, very much abreak fix business at the time.
What was the transformationlike?
I mean, you helped sort of leadthat to a managed service model
.
What was that like?
Speaker 1 (03:58):
Yeah, we were doing pretty well.
And then we had a so classic2000s break fix MSP that I think
anybody who was in the industryat that time went through it.
So we had a client that got tobe talking about lessons of
don't do this, don't do that.
We had a client that we had twopeople full time on out of like
six employees, so you can seewhere this is going.
They of course went out ofbusiness, so immediate,
(04:20):
overnight, like 40% of ourrevenue gone.
And then at that point it wasthe next year, I went to my
first IT nation and everybodythere was talking about this man
and services thing and so meand one of my partners were
there and we were just like,okay, this is pretty cool, so
people will consistently pay usevery month and we don't have to
go grind out hours Like this ispretty neat.
So then we went in and webought a PSA, we bought an RMM.
(04:41):
You know the typicaltransformation story.
We had probably, I'm going tosay, less than 50% of our
clients ended up converting tomanaged.
We did a lot of hybrid, I wouldsay at this point in time it
really wasn't managed but likehere's a base, you know, monthly
fee plus block hours, kind ofthing.
I was like, oh, it's MRR, it'slike these days, no, it's not,
(05:10):
it's a little bit MRR but it'snot managed.
But just getting thattransition done, the typical
scared to death to lose revenue,scared to death to lose clients
.
So it was probably five, sixyears before we really got fully
managed, or at least you know95% of the clients.
Just again you know, oh, theseguys are hourly, they pay.
Like why would we push, whywould we mess?
Speaker 2 (05:24):
with that it's.
That's not uncommon for MSPsthat I talk to is especially
back in the early 2000s, whenthis idea of, well, you're going
to pay us to just make sureyour stuff stays online, Like
yeah, like I'm going to call youwhen it breaks yeah, that's
what they're used to doing.
Speaker 1 (05:39):
So it's weird.
Now too, people are you knowcustomers are confused with like
the hourly concept, right, thatkind of went just full.
You know, 180 degrees over thelast 15 years For sure.
Speaker 2 (05:54):
So you were young when you became a co-owner right
, and how did you navigate thedynamics of being a much younger
individual than your businesspartners, and what did you learn
while you were working withthem?
Speaker 1 (06:01):
Yeah.
So my two business partnerswere both, I'm going to say,
probably 30, at least 30 yearsolder than me.
So how did it go?
Not, I don't want to say notgreat, but there was a lot, of,
a lot of conflict.
Completely, I was young anddumb, like I'm going to say that
was more a me problem than athen problem, just because at
that point you haven't learned alot of the painful lessons,
(06:21):
hadn't done it before.
You know there's a certain levelof conservative you need to be
in business, that sort of thingversus.
You know, just, I think I was20, 24, 25, just like, let's go,
let's go, this is a good idea,I'm going to go do it, kind of
thing.
So the biggest thing I think Ipicked up off of that was sort
of getting a consensus rightAmong a team versus nope, I want
(06:42):
to do this.
I think it's a great idea, evenif I'm right, if somebody's
right on it.
There still has to be a littlebit of selling, a little bit of
convincing, besides just walkingin and saying, nope, we're
doing it.
So that that empathy, seeing itfrom other people's point of
view whenever it's a drasticallydifferent view, right?
So dumb, young, 25 year old kidversusyear-old guy who's eyeing
(07:05):
retirement in a couple of years.
You've got to sell it a littlebit more whenever you're trying
to do something different,something new on it.
Speaker 2 (07:12):
So you sold your stake back in 2017.
What led to that decision?
Same.
Speaker 1 (07:16):
Thing where it just kind of came to the point of
both the guys got to retirementage.
There was a big difference inopinion on here's what we want
to do, on, you know, familymembers coming in that kind of
stuff, and so at one point wehad stagnated a bit because it
got to.
One of the biggest lessons Ilearned at the first company was
we always joked and called itdust and doesn't scale, because
it'd be like, oh yeah, I can sayso.
(07:36):
I got really good at saying yesto things.
I was like, oh yeah, we can dothat, we can do that.
So I was putting in 60, 70hours a week.
Both of the partners weretrying to step back into
retirement kind of thing.
So it was just at we reallyplateaued and then had different
visions on where we wanted thecompany to go.
Past that I remember we werehaving a conversation the one
day and it was a.
We had a.
It was like going to be aconsulting opportunity that kind
(07:58):
of bled into managed services,and so I was sitting there and
again, just young and dumb I wasvery early thirties at that
point Like, okay, guys, let's dothis, like this will be really
cool, we're going to competeagainst, like PwC and Accenture
and stuff.
And they both sat there and Iwill say this out loud at this
point, they were absolutelyright.
But they said no, dude, we're amanaged services company Like
this, do the managed thing,don't go and chase this.
(08:20):
It was like a six figureconsulting opportunity.
It's like why are we chasingthis?
And I was like because we'rethat good and we can do it,
which is true, but not the corebusiness.
So that that, in a nutshell, isa good example of like okay,
we're on different pages.
You know, how do we want to run, how do we want to grow the
company?
So we had a couple of littlethings come up and one day I
went in you know we had gonethrough evaluation to start
(08:41):
figuring out.
I came in.
I was like, hey, look, guysjust buy me out because we're
talking.
You two are more on the samepage, it's a three-way
partnership and I was like, justlike, I'll go Transitioned out
over, I think, six months or so.
Speaker 2 (08:53):
How did that transition go, both
professionally and personally?
Speaker 1 (08:56):
Personally, it was both good and bad, which sounds
like a total cop-out answer,sorry.
It was good on the sense ofthat's probably the most relaxed
I've been in the last 20 years,because it was like okay, I'm
out of it, I don't have theresponsibilities, the burden.
I learned to relax a little bitfor a very short amount of time
(09:17):
, which we'll get into in asecond, and then the bad part of
it, though, is I don't.
I just sold another businessLike I don't know that a
business exit is ever clean.
There's always something.
There's always stress.
I've talked to a couple ofpeople that are like oh yeah,
one of my buddies just sold, andhe's like yeah, we just did.
You know the contracts, acouple of handshakes, he walked
away with a couple of milliondollars, and I was like how did
you?
That never happens.
No, so that's the one like.
(09:42):
I've been through it before, soI kind of knew what to expect.
But that first one, it's likehaving a kid right that there's
all these, you need to know this, this, that and the other.
They need to have some kind oflike business exit course that
You're going to be stressed out,you're not going to know what
to do with yourself.
You know it's going to be roughthat sort of thing.
Speaker 2 (09:57):
So after that exit, you launched Clear Guidance
Partners with the intention ofconsulting, but it didn't quite
go as planned.
Right?
Tell us a little bit aboutthose first few weeks and how
you ended up back in managedservices.
Speaker 1 (10:10):
Yeah.
So we're going to have arecurring theme today, I think,
is that MSPs generally hatelawyers.
So as part of my exit, I had acarve out for working with
lawyers.
We had started dipping our toesin a little bit.
There was a couple other piecestoo where it was like, yeah,
we're not going to touch that,we don't care, go do whatever
you want.
So I had this awesome businessidea.
I was like, all right, chris,I'm going to go in, I'm going to
(10:34):
do $350 an hour, I'm going towork like 20, maybe 30 hours a
week.
It's going to be awesome, I'mgoing to hang out with my family
all the time, I'm going to getrich and it's going to be the
easiest best work ever.
I went 60 days and then had a$25,000 a month managed services
opportunity fall in my lap, andso now I own another managed
(10:54):
services provider.
Speaker 2 (10:57):
So you decided to go deep in that legal sector, which
many MSPs avoid.
What drew you to that industryand what were some of the
hurdles that you had to overcomeearly on?
Speaker 1 (11:05):
So I've kind of made a bad or good habit, depending
on your point of view, onrunning into lawyers.
And then now insurance,everybody's kind of running away
from it and I'm like all right,great, there's opportunity
there.
Then now insurance, everybody'skind of running away from it
and I'm like all right, great,there's opportunity there.
So with regards to the lawyerside of it is there was one MSP
in Austin that had been doinglaw firms.
They got bought by a nationalone, kind of started falling
apart.
And then if you go and you looknationally, even today with
(11:29):
Clear Guidance Partners CGP iswe only have a couple of very
direct there's MSPs that dolawyers, but there's not many.
There's five offhand that Iknow that only are, you know,
vast majority that were like 75%law firms.
So from that perspective I waslike cool, there's a good
opportunity to go in, know theindustry, speak the language you
know, know the applications.
(11:50):
Every industry has garbage lineof business applications and
legal included.
So just learning all that stuffand it's like there's not a lot
of competition there which letsyou do better rates.
You know higher close rate thatkind of stuff.
So, going deep, I also had thefirst MSP.
We were generalists.
We had a couple restaurants.
There's a famous wing chainhere in Austin that we used to
(12:11):
do that I'd always brag about.
We had construction companies,just everything.
It was like, yeah, you need ITand you got a checkbook, yeah,
we'll support you.
Right, the vertical piece of itmakes it a lot easier to charge
higher rates to moreefficiencies and even expand
your services as well.
Speaker 2 (12:25):
Were there things that you did differently?
For law firms, you became thatgo-to lawyer.
You know MSP right In themarket.
Were there things you diddifferently, or how did you
tailor your services to reallybe specific to their needs?
Speaker 1 (12:40):
Yeah, two pieces.
So the first one is that we dideverything is included now.
So old MSP like hey, Chris, yougot that old Sonic wall, I do
ASAs, now I need you to replaceit.
When can we budget in kind ofthing?
Everything is bundled at thispoint.
So flat monthly seat priceincludes even firewalls, all the
security stack.
I was like I don't want to doadd-ons, I don't want to deal
with it.
Excuse me, you know, let's justmake it easy.
(13:02):
Here's this fixed monthly thing.
I'm not going to come blow youup for more budget money every
year.
And then the other part of itthat was super interesting is
there was a company calledMinucci Consulting that we were,
I think, six mutual clients.
We had weekly meetings and soat one point, going back to,
there's an age gap there, so shewas starting to think about
retirement, and so we had in2021, we merged with them.
(13:26):
So they do, they did and doback office services for law
firms.
So we have a division that doesaccounting, billing, HR and all
that stuff for firms as well.
And so, even if we don't, wehave a pretty low penetration on
both sides of the house.
But just going in and being ableto talk about that with lawyers
and understanding.
So now, like our help desk,whenever they get something
(13:47):
weird that's you know industryjargon and stuff like that, or
like here's this weird dynamicthey can go to the legal
operations people and say, hey,can you explain this to me?
They're like, oh, don't do that.
You should do this insteadbecause here's why.
So just understanding of youknow, our sales guy says we can
do everything, but the practiceof law is we legit, know law
firms inside and out?
Speaker 2 (14:05):
Wow, so you joked even on the podcast.
You have this love-haterelationship with lawyers, where
it can be the best and theworst clients.
You share some examples of thisdynamic and what taught you
about managing those types ofrelationships.
Speaker 1 (14:21):
Yeah.
So the best and the worst isthe good law firms are very
rational, in the sense of theysit there and they argue all day
.
So you go in, you breaksomething down and they're like
great, give me the contract,I'll sign it.
That all makes sense.
They pay well, they pay on time.
But on the other side of it youhave and this is where I think
the MSP industry really doesn'tlike lawyers is the worst.
Ones are like hands down theworst clients, because that's
(14:43):
the Chris, reduce my bill or I'mgoing to sue you.
You know everything's yelling,screaming.
I have a no screaming, threestrikes rule.
You know one.
Somebody had a bad day.
I understand, we write it down.
I have a little Excel sheet.
Two is we go and we talk to thepoint of contact.
There Can't happen again.
(15:03):
And the third one is you're notallowed to call us, you have to
work through somebody else.
I've done it twice before andit also extends to inappropriate
behavior.
The first one I'm not going togo into because it's not
appropriate, for I'll tell youlater, for a beer, okay.
But the other one was actuallya partner at a law firm that
just kept screaming at people.
So finally it was, you know,hey dude, not allowed to call us
anymore, and so that's what yougot to watch out for with the
law firms is the bad ones aresuper bad consistently.
(15:24):
So we've gotten pretty good atscreening.
At this point, like I bring upthe three strikes rules and the
sales meetings, just to whereand that's where you react and
if you seem to kind of do thatnumber right, you're like, okay,
maybe let's dig into that alittle bit more.
But so that kind of screeningupfront there's not really a
pattern to.
So we work with probably closeto a hundred firms.
There's not really a pattern tothe types of law, cause that's
(15:45):
the other thing people likenever do plaintiff's law, like
the guys that sue them.
Our best firm and the nicestpeople right now that we have is
a plaintiff's firm, so itdoesn't track.
There might be a little bit ofstuff around it, but the
practice type really doesn't.
It's the people.
How do they talk to you?
How do they react?
If it's like, no, we just wantto do over email, just send me
your best price, I doimmediately.
(16:07):
Thank you for your time.
Speaker 2 (16:09):
So law firms amazing.
I love this joke.
Every time I run one of theseprograms, I like to throw a
slide up there where it's likepick, which you know.
You raise your right hand ifyou'd rather do this, and raise
your left hand if you'd ratherdo this, and I put law firms and
right hand and then anythingelse with the left hand, and the
entire room raises their lefthand, and so you've definitely
found a niche.
(16:30):
That is pretty unique andcongratulations for that.
That's funny, you say that.
Speaker 1 (16:35):
So, going back to I'm going to say like 2015, at the
first MSP, we had talked to thisMicrosoft partner in software
and they were going hard intothe legal industry, wow, and so
that was the same thing.
Microsoft brought in 10 oftheir managed partners, right,
the big, the elite ones and theysaid we want to go hard into
healthcare and law.
You know who wants to do?
And it was every one of them,except that one guy raised their
(16:56):
hand for healthcare.
So yeah, there's a pattern tothat, yeah.
Speaker 2 (17:00):
So in 2020, you took a deep dive into cyber insurance
, which frustrates many MSPstoday.
What was your breaking pointand why did you decide to go get
your license and startconsulting for insurance
companies?
Speaker 1 (17:12):
Yeah, same thing.
It was getting frustrating.
We were getting theseapplications who knows what's
really going on, that sort ofthing.
So again, here's an opportunity.
We started actually on CGP,started doing marketing around
cyber insurance in 2020 becauseit was one of those of like all
right, this is consistentlybecoming a trend, going back to
law firms being law firms.
(17:32):
They were and are stillconsistently a hard business to
insure.
So I think we got hit extrahard, extra early, being a law
firm focused MSP.
So, yeah, I just started diggingsome more, started talking to
some people, and then thelicense side of it was actually
I had somebody that used to workfor me years ago that was
looking for a career change, andso I told them hey, scott, I've
(17:54):
been getting into doing more ofthis.
We're having to do 90% of thework right, to fill these out
and explain everything.
Then the agent turns around andthey get this.
You know 15, 20% commission.
It's like why don't you go getyour license and I'll spin up an
insurance agency also?
So we ended up doing that andthen, as that started to grow, I
just went and got my license,also For a lot of it's a gray
area, but, like for educationfor talking about it.
(18:15):
You know it's like you shouldbe licensed, so I just I started
doing it so much that I didn'twant the gray area anymore.
Speaker 2 (18:22):
Interesting.
So you co-founded Belltex,which offers a unique insurance
policy tailored for MSPs.
How did this idea come aboutand what were some of the
biggest obstacles in turningthat into a reality?
Speaker 1 (18:33):
So Michael Riggs was the CTO at Perch, if you're
familiar.
So he's my operating businesspartner in that and it kind of
came out of spite.
I'm going to say a little bitof you know, you're seeing
there's a lot of a I'm going tosay a solved problem.
(18:57):
If you're an MSP and you say Iwant to learn about insurance
and how to work with it, there'sa ton of resources out there to
go get it right.
Fifth Ball's done a bunch ofstuff.
You and I have done some stuff.
I think you guys have some morestuff coming out soon, like the
education's available.
You just got to put theinitiative in and then the
updates as it changes that.
Now what we're looking at is, asan MSP, we know how to deal
(19:19):
with insurance, we know how tonavigate it, we know how to talk
about it kind of thing.
Why am I dealing with all thesecarriers that are sitting there
of oh Chris, here's your policy.
Thanks for your MSP bringing usin.
Also, have you triedCrowdStrike before?
Right, that kind of thing?
So insurance is overlapping alittle bit, they're competing a
little bit, and then on theclaim side stuff happens.
(19:42):
It's kind of a trope at thispoint, but it's a question of
when, not if, it's going tohappen.
So at that point, what a lot ofinsurance companies do is okay,
msp, get out of the way.
You screwed up.
We want you out of the way,we're going to take it from here
.
The MSP has the backups, theyknow the client's network, they
can usually work faster and thisis Dustin with his insurance
add-on, a little bit cheaperthan incident response companies
.
Why would we not involve thoseguys?
(20:03):
We're going to put supervision.
There's a lawyer, there's aproject manager involved.
But to me and Riggs there'sthis black and white there's an
easy fix for those guys andthat's how often do you get to
say it's a win-win-win right.
The customer policyholder getstheir network back up faster,
(20:24):
the MSP stays involved and getspaid and insurance we reduce our
costs on the claim becausethey're down less amount of time
and, again, the MSPs are alittle cheaper than incident
response companies.
So we actually came up with thisconcept back in I want to say
2021.
And the insurance industry isstill mostly scared to death of
MSPs.
So it took a couple of years ofshopping it around to finally
find a carrier to partner withthat would let us execute on the
vision.
So that was the you know.
(20:45):
Okay, cool, we solved theeducation part of it.
We got MSPs know they know howto deal with it.
Now we need to move on to theactual products that are being
sold, that's great.
Speaker 2 (20:53):
You talked a little bit about the education side of
it, which I know again.
You and I have spent some timeon that and you and others have
done that as well.
What about the misconceptionside?
Right, I feel like MSPsoftentimes have some
misconceptions about cyberinsurance.
Are there any that come to mindabout things that that they
(21:14):
just should know about, thatmaybe they don't.
Speaker 1 (21:16):
Yeah, and I'll say also the insurance industry is
just so standoffish even witheach other.
It's kind of odd.
Sometimes we're again Dustininsurance add-on.
We're not helping ourselves.
A little bit more transparencywould be good on a lot of these
things.
So the biggest one that I stillhear.
This has been forever and Idon't think it's going to change
anytime soon, but it's like youknow claims don't get paid.
(21:37):
Claims don't get paid.
If you go look at the numbers,you know, even go back two years
ago that why would theseinsurers just be taking a bath
if they were not paying claims?
Because that's where they losemoney.
The claims do get paid.
So very rarely do you see themdenied for the security controls
that they're you know.
Oh, you didn't have MFA on,unless it's a substantial amount
, like one of the lawsuits thatwas in the news I think it was
(22:00):
Travelers, maybe you know theychecked yes on the box and
across the entire business.
One guy had one account withMFA on Like in that case, yeah,
you lied through your teeth.
Let's call it what it is You'regoing to get denied.
But on the other hand is I'vehad two claims that I've worked
on to where it's a businessemail compromise and in both
cases that a single user had hadMFA turned off, both those
(22:21):
claims paid out.
So from that perspective, theydo get paid.
The other part, though thatcomes up and we saw this
recently with CrowdStrike wasit's the unique aspects of the
coverage.
So there are a lot of policiesthat don't cover CrowdStrike
because it wasn't a maliciousintent.
Yeah Right, this.
Actually there was a rulingfrom a court yesterday on I'm
(22:42):
going to get the details on thiswrong, sorry.
I literally saw this like lastnight and I was thinking, oh,
I'm going to talk to Chris aboutthis tomorrow.
But it was the.
A restaurant was using likefingerprints for their employees
to clock in and out and I thinkthat data got breached.
No, it wasn't a breach, it wassomething else, but there was no
malicious intent.
So again, the insurance policysaid claim denied because they
(23:03):
were only covering a cyberattack.
Well, there was some kind ofmistake around biometric data
got leaked out or something likethat.
So that sort of thing is whereI think you're seeing a lot more
pain and people just don'trealize.
So that's whenever.
Going back to to the educationpart, where it talks about you
need to have a good policy.
The little $25,000 endorsementisn't enough.
Or this cheap policy which itsays a million dollars on it.
(23:24):
But when is your million dollarpolicy not a million dollar
policy?
It's those sublimits andrestrictions and things like
that where you do see a lot morereal world pain.
That's great.
The outright denied claims is amyth for the most part, but you
didn't actually have coveragefor this event denials that does
happen.
Speaker 2 (23:41):
Dustin, you've been a pioneer in really starting this
education side and now theassistance side around cyber
insurance.
So, coming from the MSP spaceand now being more on the
insurance side, how do you thinkthe MSP community is sort of
responding to what you andothers are doing now around
cyber?
Speaker 1 (24:02):
So the way I've kind of divided it up is and these
are numbers I just totally madeup, so nobody argue with me on
it, please but I always say theindustry MSP industry is kind of
divided into three segments.
There's sub-segments under it,but you have the mature MSPs at
the top that are just reallyoperationally mature.
They can make a plan, they canstick to it.
I don't know that I would callmy MSP in that group some days,
(24:25):
but the guys that are just veryoperationally, they say, okay,
this is a thing, it's a problem,it's an opportunity, we're
going to execute on it.
I think they have a great gripon cyber insurance.
They have a plan, they'reactively building into their
sales and account management,things like that, and then they
also know how to deal withissues as they come up.
So again, top 20, the bottom Idon't know, let's say 40%.
(24:45):
Maybe is the absolutely lovethe word trunk slammer.
So I'm going to say the trunkslammers.
They're just out there, they'redoing whatever they want,
they're getting stuff done, butit's not a consideration.
Whatever floats your boat, kindof thing.
I'm not putting much effort inthere.
Whenever they're ready, they'llcome to the table.
(25:13):
That middle group, though, isthe ones that are still needing
a little bit of guidance, thatstill need to get more involved.
That I call it like theaspirational group.
They want to do the right thing, they want to deal with it.
Maybe they don't have enoughtime, because running an MSP is
a pain in the butt, but you knowthey're still again.
The resources are out there.
They just need to embrace it alittle bit more.
So, and they typically,whenever you see those guys do
(25:34):
that, you know it's increasedrevenue.
On cybersecurity Awesome.
Speaker 2 (25:39):
So you've been on quite a journey, from starting a
small MSP to building aconsulting firm and now
innovating in cyber insurance.
Looking back, what's a lessonyou wish you'd learned earlier
in your career, dustin?
Speaker 1 (25:51):
To say no to more things, in the sense of I've
always been like, you know, ohhey, can I help with this, or
here's this new opportunity,let's go for it.
I've gotten a little bit moredeliberate on what I'm doing
because, again, dustin doesn'tscale right To be able to put
the energy, the focus intothings.
If we went back, you know, two,three years ago, I actually had
(26:12):
my fingers in more stuff than Ido now, which is weird to say
Wow, so just staying a littlebit more focused on there was
actually it was Justin atTechRug, who's an insurance
competitor in the industry, butat one point that he told me he
said, man, if you would actuallyfocus on something for once in
your life, like you can doamazing things, and that really
stuck with me.
That was probably like twoyears ago.
So that's been the biggest partis, you know, going back to, I
(26:33):
said at the first MSP, mybusiness partners were right, we
were a managed servicesprovider.
We were not a consulting shop.
You know, focusing on, you know, have a good market fit.
We do lawyers, we do smallfirms at Clear Guidance, a
hundred people and under.
We go a little bit over thatsometimes if the case is right,
but like we had a 500 personfirm call recently and it was
nope, sorry, we can't help.
Thank you for your time.
(26:54):
So just that having a.
Really.
Maybe it's not even saying no,as I'm talking through it out
loud you can tell this wasn'tpre-planned at all, but just I
guess having that having focuskind of stay in your niche, stay
in that vision.
Speaker 2 (27:07):
So that may piggyback into my next question here and
this one's less around insurance.
But just you know you've spokento tons of MSP owners.
You yourself are a two-time MSPowner.
What's a common mistake you seejust in the industry in general
, and what advice would you giveto MSPs to be able to grow and
adapt, maybe a little better?
Speaker 1 (27:26):
Man, that's a fun one .
So I think the staying focusedpart a little bit is you do see
a lot of the guys where it'slike a project comes in and, ooh
, I'm going to say yes to this.
Yeah, so I will.
This part is going to probablyget a bunch of negative
reactions on it because againstthe grain advice, but I don't
think going outside of what youdo is necessarily bad if you
have a plan.
(27:47):
I'll give you a specificexample.
Is first year at Clear Guidancewas I built an MSP to that size
before I was like I kind of knowwhat to do.
So we took on a bunch ofproject work that long-term we
knew we weren't going to do.
We did a lot of RingCentralsetups and configurations, the
phone system, Like we're not aVoIP company, we're not going to
do one-offs.
But it was one of those of okay, this stuff coming in the door.
(28:08):
I know for the next year I cando this to juice cash flow, to
build us a cash base, to growthe managed services business.
18 months in we ended upterminating the contracts for
all those companies.
We got them to somewhere good.
It didn't just leave themhanging, but that was a very
deliberate right, we're going todo this short term to build up
cash so we can go expand themanaged services business, and
cash so we can go expand themanaged services business, and I
think a lot of MSPs go in.
(28:28):
It's like, oh, we're going todo this, I'm going to start
doing Microsoft Dynamicsconsulting.
Like dude, you don't have aplan.
Speaker 2 (28:34):
Yeah.
Speaker 1 (28:35):
Right, like that's great that you have this, but
especially on the smaller end,that now suddenly what happens
is as the owner, you're involvedin it, right, and you're the
only guy you're.
You're smart enough, you can doanything which I think a lot of
MSP owners, that's absolutelythe case but you don't have
employees that can.
You're not turning into aproduct, you're not figuring out
(28:55):
the numbers, the profitabilitybehind it.
You just went and chased theshiny object without a plan.
Speaker 2 (29:00):
I've heard you say it a couple of times.
You yourself have a verydeliberate ideal client profile,
right.
You know who you're going to goafter with your MSP and you
know where you're going to saythat just doesn't fit right,
might be too small, might be toolarge.
You're going to send themanother direction and say you're
just not our fit.
And I hear a lot of MSPsstruggle with that.
And I think that that conceptof know who it is today and know
(29:23):
where you want it to be right,because that could change two or
three years from now.
And so you've heard foreverwe've been telling the MSP
industry has been telling MSPsforever to say standardized,
standardized, standardized, makethe same widget and sell it to
everybody.
But the reality is and you justhit on it, there's a but right,
(29:45):
there's an exception, right,and we used to call it the
non-standard right.
You got to 80%.
It was kind of the same, but20% could be a little bit
different to be able to get thatnext type of customer in the
door that turns into your newICP potentially.
Yeah, yeah.
Speaker 1 (30:00):
I think that's yeah, and have it today.
That's a good example.
It's like have it today,standard, but here's where we're
going, kind of thing.
I think a lot of guys don't.
It's a here's where we're going, but there's not really a today
.
And then I don't think there'sany shame in saying we're going
to take this today, but we don'twant it to be around in two
years.
Right, this will not be a goodfit customer in two years.
Yeah.
Speaker 2 (30:19):
Yeah, and firing is such a harsh word.
But there's clients that nolonger fit into your MSP model
anymore and you've got to sayhey, it's time for you to go
somewhere else right, I'm theopposite of.
Speaker 1 (30:33):
my team has gotten me like, at least once a month
I'll just be like you know, oneof our executive meetings I'm
like we need to fire that client.
They're like, no, we don't,dustin stop.
We just actually had our secondlargest firm that we terminated
because of not bad behavior.
But they brought in some newexecutives and it just got
completely chaotic.
They couldn't get it back ontrack and I was like, sorry,
guys, that we're just not a goodfit for you anymore.
Speaker 2 (30:55):
Understanding the profitability of each customer
is the important thing, right,if you can look at it and go,
these guys are a little bit of apain, but they're paying us
pretty well, so it's worth it.
That's one thing, versus we'relosing money on this because
they just constantly are callingus Right.
Just like you said with thelawyers, I started to get PTSD
from back in my service deliverydays when I remember people
(31:15):
yelling at my service desk textjust for to yell Yep.
Speaker 1 (31:19):
Yeah, that's it.
Yeah, the profitability itstarts trending downwards.
And then it's the you know from.
You just said, like you seethat customer name pop up on the
phone.
Yeah, oh crap.
Yeah, that's the.
Okay, it's time to make achange.
Yeah, there's only so much youcan salvage on that.
Speaker 2 (31:33):
So what's next for Belltex, and are there any new
initiatives that or areas you'dlike to explore in the coming
years?
Speaker 1 (31:49):
So one thing and you can make fun of me, everybody on
the podcast, on the LinkedIncan make fun of me for this is
we are actively the MSP industryhas said that they want these
standalone warranties so tryingto find some good options for
that.
I don't think that that marketexists today, but that
opportunity, the appeal of it, Ithink it can be done.
So that's one of the piecesthat we're working on.
Other than that is no, we'rejust really trying to scale up
from the insurance standpoint.
I want to say we have about 40MSP partners today that are
(32:11):
active on the.
You have to kind of go througha thing to get approved for the
incident response side of it.
But no, just looking to scalethat and get the word out a
little bit more on that side ofit is the immediate.
We'd love to move into actualinsurance for the MSPs
themselves at some point.
Our policy right now is for thecustomers.
There is, I mentioned, techrugearlier.
(32:33):
I think is probably the marketleader on that side, but you
know, not everybody's a good fitfor it kind of thing.
It's rough getting, even beingan insurance guy, with an MSP
going to get it's.
I'm starting our renewal rightnow and it's like, yeah, I don't
want to deal with this becauseit's such a pain in the butt.
Speaker 2 (32:42):
So All right, I'm going to allow you to
prognosticate a little bit here.
So the MSP industry isconstantly evolving.
What do you think the next fiveto 10 years is going to look
like for MSPs?
Speaker 1 (32:54):
So one thing that I've noticed that started coming
up already is again insuranceand the MS.
Let's say MSSPs are kind ofstarting to converge a little
bit.
So you're seeing some insurancecompanies there's a company
called Accrisher out ofPittsburgh that's bought up a
bunch of MSPs.
So hey, now they can go in andsay, guess what, chris, not only
(33:14):
can I do your cyber insurance,your professional liability
insurance, but we can also keepyou secure at the same time.
That's a really compellingmessage, the biggest thing.
I mean you've been in the MSPindustry a while too.
We talk about the trustedadvisor part of it.
Right, everybody wants to bethe trusted advisor.
Most MSPs still aren't there,sorry, whenever they go, and
it's the okay, let me talk to myinsurance agent, let me talk to
(33:36):
your lawyer.
That kind of thing Like there'sstill the MSP is almost always
a step below, even if you are in.
You know I'm going to say onour MSP, half of our clients
were probably not in that fulltrusted advisor slot.
It's just a really hard thingto do.
I'm not knocking the MSPs, butlawyer versus MSP there's a big
delta there in the perception ofit.
Insurance gets you into thatseat a lot of cases.
(33:58):
So now you're competing against, say, an Accresure.
They're coming in saying I cando this, that and the other
You're coming in saying, hey, wedo great cybersecurity and IT
services.
You're already starting off ona back foot, right, because that
trusted advisor side of it.
So I think you're going to seea lot more hybrid side of that.
I'm getting one or two calls aweek from MSP owners saying, hey
, I want to set up my own agency, that sort of thing.
(34:20):
And then again on the otherside of it we're seeing these
carriers come in selling MSSPservices.
There's one that it's actually areally cool concept If you look
up.
It's called Alpha Secure,e-l-p-h-a.
Like an elephant.
They give you a policy, theygive you EDR, they give you
backups, vpn, mfa, I forget what, but it's really.
It's like a legit turnkey.
I'm not going to go into ifit's a good idea, how well it
(34:42):
works, kind of thing, but like,conceptually that's a cool idea,
right?
So I think you're going to seea lot more of that.
We're even seeing the MSPsgetting into the non-core IT
services because that's becomesuch a commodity, sort of.
I didn't intend this to be abrag about me, but it's like
sort of like what we did yeahRight, offering those other
services as well, the TSP thing,right, the technology services
provider.
You're going to have a littlebit of a vulvar die on that.
(35:04):
We got all the private equitystuff coming in.
So if you want to grow, if youjust want to stay as like a five
person MSP, that market's nevergoing to go away.
There's enough businesses outthere that say I want to talk to
Chris, I want to be able tocall the owner up and work with
them, that's fine.
But if you want to grow to 30,50, 100 person MSP, 10 million a
year kind of thing is, I thinkthat core service model is going
to die.
Cybersecurity is almostbecoming a commodity also.
(35:26):
So having that add on whichagain seeing a lot of interest
on the insurance side, yep.
But I talked to a guy the otherday that they did a SaaS
platform that's very vertical,specific, and they just launched
it as a standalone product thisyear and he was like, and
they're not a small business.
He was like it's already 20% ofmy revenue.
It's like, okay, that's prettycool.
I love those deep, verticalplays.
Speaker 2 (35:45):
So that's great.
That's why we have you speak toour partners a lot, as well as
just to give them that, hey,this is what your option, your
package, could look like.
Yeah, you can continue toevolve, for sure, because you're
going to have to.
So you mentioned you're acontrol freak, juggling multiple
businesses I don't want to sayway too many, because it's
probably my wife would say waytoo many.
So how do you manage your timeand really stay balanced amidst
(36:09):
the chaos?
Speaker 1 (36:10):
Poorly is the short answer.
This is not going to be one ofthose things of like everybody
should take advice from me, kindof thing.
But I'm neurotic about mycalendar has been.
One of them is everything getsslotted in and we've even
extended the family thing atthis point that my wife sends me
stuff and it's like nope,you're not working this
afternoon, kind of thing.
But I've also everything's beenkind of adjacent, which has
(36:33):
been nice right.
So it's going from MSPs toinsurance kind of deals.
So there's still enough overlapto where it's not like I'm off
manufacturing widgets sort ofthing.
So the conversations like what Ineed to keep up to date on what
I need to understand ends upfalling.
Generally it's useful acrossall the businesses, sort of
thing.
And then the other one was I'vegotten a lot better.
Even going back two years agowas one of those things of okay,
(36:56):
we're going to start doing this, I can do.
It is day one, I'm figuring out.
Okay, chris can do this, likeI'm going to help, kind of thing
.
I think that's been the biggest.
Going back to Dustin doesn'tscale is I've gotten in I was
saying earlier right, a lot ofMSP business owners.
We get into it just becausewe're smart enough to figure
stuff out, like theoretically,could probably give me enough
time and Google and like I canprobably, you know, at least
(37:19):
produce a half-baked version ofwhatever you tell me to, but
that's not a good, scalable wayto do it.
And then that's where yousuddenly find yourself with a
you know, ooh, I have a milliondollar business that I literally
can't get away from.
I have a job, so that's beenone of the bigger parts.
Now has been okay, where do we?
You know Belltex, we brought inanother agent.
She does our compliance andsome other stuff pretty much day
one, because could I figure outhow to go do 50 state filings
(37:42):
for, you know insurance?
Yeah, but that's not.
She loves paperwork, so great.
Yeah, but that's not.
She loves paperwork, so great.
We got a good fit on that sideof it Very good.
Speaker 2 (37:50):
So if you could go back and talk to your younger
self, what would you tell ayoung Dustin early on in his
career, all right.
Speaker 1 (37:57):
So this is going to crack you up.
I used to be a lot moreconservative on business.
I've had the.
I think the opposite, mostpeople tend to get more
conservative as they get older.
I was like on the consultingthing, you know I've been
talking about doing that foryears and was just like no, that
must be things good.
But that was, you know, what Ireally wanted to do, kind of
thing.
So taking more risks.
I got three kids now so it'slike I don't have as much If I
(38:25):
knew what I knew, you know,whenever I was 24, kind of thing
.
I think everybody says that butgo take the risks, kind of deal.
Worst case it doesn't work out,it's just money, it's just time
You're not getting hurt, you'renot dying, kind of thing.
Whenever you're younger in age.
But also even on career thing,where it's like these guys that
are let's use Reddit as anexample you go on the MSP Reddit
.
There is weekly one or twothings Should I start an MSP?
(38:46):
And everybody's like no, youshouldn't, it's a bad idea,
whatever.
Or like you need six monthssavings.
That drives me nuts.
Every time I talk to people onthat I'm like hell yeah, just go
for it Like it's worst case.
You're back in the corporateworld after a year because it
didn't work out.
Like that's cool, you had anadventure, you learned it kind
of thing.
You know, as long as there'snot, maybe don't dump your life
savings into it, right, don't gostart an insurance carrier with
(39:08):
your kid's college fund kind ofdeal.
But if it's a, hey, I'm goingto go try this MSP thing for six
months.
I'm going to go again.
I've had a lot of guys that callme.
I'm like, yeah, go start aninsurance agency.
Worst case you shut down iswhen did you know?
Now, that's it.
I got over my insuranceimposter syndrome, I can tell
(39:32):
you.
About two months ago I got acall from a carrier that is in
Lloyd's of London which is ininsurance.
I had them call me.
It was a legit cold call.
They said we've beenresearching online.
We needed somebody.
Can you guys come to Europe andhelp us build an MSP insurance
program?
So that was a cool becausegoing up to that I was like,
okay, people keep inviting me onstuff, like they're kind of
listening, but you know how muchdo I really know.
(39:54):
But coming from that side of it, that was a neat validation
that like, okay, we might youknow me and Mike Riggs might
actually be onto something.
Speaker 2 (40:00):
That's great, dustin.
It has been a really a pleasureto have you here.
You're an asset to the MSPindustry with what you're
sharing around cyber insurance.
I'm glad to have gotten to knowyou and thank you so much for
being here.
Appreciate it.
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