I have been encouraged by a lot of my friends not to write this post because at times my honesty plays a significant detriment to my message / agenda. So I sat on it for a little while. Here is the thing: after 13 years in business I know how to make money and how to build a business. I don’t know how to sleep through the night or talk to business partners if they have to second guess just how honest and up front I am about what’s going on. Frankly, I know a lot of fake people in the channel that havel double, even multiple personalities depending on who they are talking to.
So here is the truth, the whole truth and the complete frustration behind some of the topics that are often brought up to me.
Big Mouth
If you talk a lot, expect to be punched in the mouth.
This is just the nature of the beast. People often ask how much of it I get; I always hear about how certain people find me scary. My Inbox begs to differ. I am brought up every issue that is or isn’t my fault, near and far.
For example, in 2010 I’ve been faulted for marriages collapsing, losing houses, investments, entire businesses going under because of one issue or another that we were even remotely related to.
Are the conferences/sponsorships worth it?
Unequivocally, no. Absolutely no. Hell F no! If you are looking to launch a product or a service in the IT channel, conference sponsorship is probably the last thing you should do with your marketing money. No, absolutely no, questions about that.
However, conferences are about a lot more than closing sales. They are about getting realtime feedback, about modeling your marketing through the eyes of your clients, about establishing long term partnerships and about old fashioned face-to-face business. It’s an investment, and when you invest in something you cannot anticipate a return in realtime.
That said, in 2010 we’ve seen the highest repeat rate of any year. According to my marketing reports, 18% of the leads we got in 2010 at conferences were from new accounts.
Then there is a vendor tax. Even if you don’t anticipate to make your ROI in 12 months on a conference sponsorship, if you don’t attend certain events the channel starts looking elsewhere. Presence is important while some presence is mandatory. Microsoft WPC for example.
“So you’re going to kill Autotask and ConnectWise?”
There is this negative vibe in the channel that anything remotely similar to an established leader is immediately it’s killer. Even when you share hundreds or thousands or partners. This is not how business is done and this is not how partnerships work.
Let me put it to you in one simple fact: multiple Shockey Monkey competitors were presented with it’s feature sheet and potential over 9 months ahead of it’s delivery. Only one of them approached us about a purchase ($3 million) that was far below the market value. If this was such a hardcore competitive product and a threat or a killer you never would have seen it live.
Direction of what we’re doing also couldn’t be further away from the way from where our partners are going either. We’re not out to dominate the IT vertical.
Shockey Monkey
Man this pissed off a lot of people. I mean, livid. Despite years in development, it seems to have caught a lot of people by surprise. They didn’t read my blog or watch the videos or hear the pitch – but boy were they upset. It sounded a little like this:
“How dare you introduce another product when you already have all these bugs in the software I’m already paying you for?!?!?!”
It’s called capitalism. We saw a huge opportunity in the portal space and we saw nothing on the market capable of delivering it for free and still making money off it.
At the same time, our entire messaging and support platform needed to be based off of something in order to provide backend services to our huge MSP client base. We couldn’t have based our solution around the other providers in the space because none of them provide for the purchase handling, PCI compliance and other nasty stuff we get to deal with as a worldwide service provider.
And here is the best part – the part of handling tickets, companies and contacts is actually the easy part. Billing? Reporting? Integrations? That’s where the costs explode and that’s not something we needed to be really sophisticated about.
So let’s review: There was nothing on the market that was capable of supporting our business model. We built it. Then we gave it away for free. Now that it’s free and that all our partners can have it no questions asked and no $ required – ever – we’re able to execute our actual business plan: Delivering better support and more integrated services that serve the client end-to-end.
While to some of you this may appear like we’re looking to compete with other companies, we are simply executing our game plan. The one that becomes even more profitable with everything we’re doing.
So no, we didn’t take people off ExchangeDefender to build Shockey Monkey as a competitor for anything else. We built it to support our business model.
As for our competitors – they remain our partners and we’re continuing to write software for their platforms.
Nobody, and I mean nobody, invests millions in dollars just to pick a fight. So please, drop it. This is my final comment on it.
Did you just say you’re not going to sponsor conferences in 2011?
No, but we will be at far fewer dates than we did in 2010, that’s for sure. We already announced what we’re doing in 2011. Managed Messaging. ExchangeDefender Essentials. CloudBlock. ShockeyMonkey. ExchangeDefender Storage. We announced it, we presented it.
Now watch us execute it.
What I will do, however, is put the money we would have spent on the road into more staffing and training. As you’ve seen by LooksCloudy.com, we’re going to deliver a community powered resource to give you an edge. As you’ve seen through Shockey Monkey, we’re going to lower the cost of entry into the MSP space. As you’ve heard about ExchangeDefender Managed Messaging, we’re going to make you remarkably competitive with professional services firms. And as you’ve noticed about CloudBlock, we’re going to give you an edge on pricing.
You’re also going to see a lot of personnel changes: More support, more account reps, better documentation and more calls.
As I’ll announce tomorrow, I will be working with ExchangeDefender 500 directly in Q1.
We’ll be on the road next year. We just won’t be everywhere. The priority is on you, not on us.
Surprises about 2010?
Lot’s of people speculated about massive consolidation in 2010.
It didn’t happen.
Most of MSPs are still a bit too small and many are struggling, loaded with large long term contracts, commitments, leases or just plain and simple debt and overpaid staff. This seemed to be the trend of 2010 that very few were keen to discuss – the MSP business model has started to show the pricing pressure points and $50/workstation, $300/server is just not growing many MSPs fast while the cost of getting new business is growing.
What I’m really amazed at is how poorly Microsoft BPOS transition (read: Microsoft’s transition away from partners) has gone. Microsoft had to pretty much rename the product as they realized midway through the game that their partners were not behind them or that the clients didn’t want partners to begin with. Lot’s of “we wanted to decrease our costs, not move them elsewhere” came up and it’s going to be far worse in 2011. Listen, Microsoft decided they are a consumer company – and the business doesn’t want to pay a software company anymore – and a networking company, and a MSP company, and a hardware company and a telco company and _____ for 80% of what comes with an iPad for free.
The key word here is free. In 2010, it disrupted a lot of business models and will ultimately take down even more than just newspapers and overpriced geeks.
So we’re trying to transition to managed ser…
Sorry, you’ve missed the boat. By a few years. At this point all you’ll find is bargain hunters, painful migrations and people too set in their ways to accept a proposition that sees you growing over 10 employees.
Anything else?
Even though we’ve faced a ton of adversity as a channel in 2010 (and it will get worse, quickly, if you don’t adapt) the business remains positive and opportunities are out there. No, not for spyware removal or antivirus license sales. Or for building first networks, helping people pick the first server / right server / last server ever. There are many areas where the expertise and business management are compensated very well and we’ve seen many people grow in double or triple digits this year.
Finally….
Believe it or not, I’m a good guy.
There are few CEOs willing to write about what is going through their mind and doing so honestly at times is difficult. If you find my conclusions or opinions tasteless or unappealing, you don’t have to read this blog or do business with us.
I, however, wake up every single day trying to make OWN a better company for it’s partners. I don’t wake up grumpy, kick puppies on the way to work or bite heads off pigeons for lunch. I look at this company a year and three years down the road – and I try to make it go from here to there.
The big question isn’t really what motivates me because I’ve been fortunate enough to travel around the world and work with partners in all time zones that have broadband. You know why I go? I want to know what you’re doing. That’s what keeps me going. Because at the end of the day, we’re one of the few channel-only companies left, and we work for you.
I wish you a happy and prosperous new year and I thank you for reading Vladville.
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