Vlad Mazek – Vladville Blog

The other day I updated my facebook/twitter, rejoycing about how well we’re doing:

ExchangeDefender – seven months ahead of goals for 2009 & competitors employees sending over resumes.

Jose, a Microsoft PAL from Slovenia asked if this was a sign of success. My response:

Kind of sort of – it puts us in a position where we have to expand much faster than we had planned to and since virtually all issues over the years can be chalked up to growth…. It rocks for the company, it sucks for me.

Jose responded again:

Exactly! That…  Read More’s why I made the comment. If this crisis is teaching something to me and my company is that “growth” doesn’t have to go forever and ever… but increasing profitability should be the goal.
In my case growth is synonym of more employees, therefore high expenses. At the end, before the new employees get in sync with the new job profitability drops; revenue expands together with the level of stress.
We have decided then to limit growth, improve customer satisfaction and increase profitability. At the end we work for better life and more professional development.

Now… this is so totally, humangously, inescapably wrong… That I couldn’t be even more sure of it unless I actually made the same mistake.

Except I did. 🙁 And it hurt cleaning it up, took me nearly the past two years of cleanup which will finally be done this weekend.

What I have learned from my mistake is that there is no such thing as stepping on a brake when it comes to business. The moment you take your eye off going forward and up you have nowhere to go by down.

Now sure – in the short term the profitability does go up – but only so at the cost of acquiring new business. This is why so many companies downsize when going gets tough – it makes them look good in the books. But in the long term it costs them creativity, skill, fierce competitiveness which leads to complacency. Eventually death.

I was lucky enough to start thinking about the way out of our “we’re big enough” problem early enough, to bring around new product lines and to be kicked in the balls, mercilessly and repeatedly, until the things turned around at a great pain to me and many of the people @OWN. Was it worth it? Yes, we’re still around and more profitable than we’ve ever been.

Had we continued to push in the single direction – that of SMB – we’d be either dead or dying at this point like much of our SMB-centric competition. Those guys are out there burning cash and favors for numbers, losing money with each new client.

What I, and my small troop in Central Florida, did for OWN was an enhancement of diversification. We took a very, very small part of OWN revenue-wise and we decided to innovate just for it, completely outside of OWN’s direction. This in turn allowed us to sure up our base without sacrificing the growth and portfolio. It allowed us to expand without the traditional problems that expansion brings along.

It taught us how to build lines of business without building a business around a solution. In IT that happens to be the only way to survive.

…

Having said all that, I would not recommend it. The past two years, regardless of money and accomplishments, have definitely been the toughest I have had.

So why do it? Because thousands of people depend on people @OWN not giving up on them. And if you tell people that you’re not really looking to work for them anymore and instead just want to focus on your own happiness and profitability, why should they continue to do business with you? All companies have it in their best interest to make one another successful – if and when you no longer match up on those goals, you are no longer traveling in the same direction and it’s just a matter of time till you’re gone from that account.

If there is one thing we’ve all learned from the economic downturn is that lack of focus/discipline are fatal when people think twice about what they are doing. In good times the biggest crooks and the smallest charlatans make well off thanks to the infinite supply of idiots with money and incredibly poor judgment. The second people get a moment to take a second look, at times like the ones we are in now, those folks are gone. Everyone from big time vapor brokers to small time trusted advisors – you are either in business or not and in business you only have one goal 🙂

What should you always be doing?

This is probably one of those long flow posts that goes on for pages but I will make it rather quick as I’m just waiting for a quick SM replication job to complete.

Right now, your smaller peers in this business are dying. Their clients are dying. I know because we do business with a ton of people in this market and we know when we drop the ball – the agents stop logging in, the MX records go elsewhere, the web sites have their passwords changed – not so much lately. Folks are just logging in and either cancelling services outright or dropping them.

Things are not getting better out there, at all. Anywhere. They are getting worse, far worse, and accelerating down. We are not likely to see a bounce anytime soon.

OWN, thanks to experience and diverse portfolio, is growing rapidly. Most of our partner growth is through larger partners (acquisitions) and sales focused (anything for money) operations. Their growth is far exceeding the carnage on the lower end of SMB.

So what should you do?

Karl, Erick and I have an answer, it’s in a show coming to you this weekend – but it won’t be free – I figure the view into the future is worth $2.

But did I write all this simply to sell you a product (that I don’t even have yet) or to get you to think about the next step?

What I would like to know is when would be a good time to extend focus and offer cheaper services in a VAR-only model and grow the market share / client list at the expense of pushing a maintenance agreements and high margin projects for everything sold? It is clear from looking at the deathpool that the IT shops that are now long gone are only gone because their largest accounts disappeared before they could be replaced. If we are to be stuck in the downturn for the next 18-24 months, should the “full service” managed providers rethink their messaging to capture a larger client base that will deliver $ in projects and references. Let’s face it, “predictable revenues” are only “predictable” so long as your client base stays in business. If you can count your clients on your hands, you are only predicting the going concern for the survival of your business.

I’ve blogged extensively what we are doing, but I would love to hear what are you doing because folks are getting scared, I can hear it in their voices every day.

Michael Jordan was inducted into the Basketball Hall of Fame today. Here is one of the quotes from his trainer:

“Michael would go for 40 or 50 points one night, and the next morning he was right back at it in practice,” Grover said. “He just couldn’t take a day off. His mental toughness was unbelievable, but the reason was that he was so physically ready every day. He used to have a saying, ‘I practice so hard because that makes the games easy for me.’ ”

It certainly draws a very clear line of separation between people who are really damn good and people that just put up with barely enough to get by.

Gotta love this economy though, it is certainly making the separation easy – through a process of removing people that aren’t serious / competent / dedicated.

There are days when I feel things I learn about business totally devalue my college education. Filing this under “they didn’t teach me about this in school” is the  experience of adjusting to the circumstances and accepting that sometimes… well, things just don’t go your way but you can either let it get to you or really enjoy yourself.

The other day I was shipping some stuff, using a process that is not very familiar to me. I asked the lady if I needed to fill out additional paperwork or provide a payment or what the next step was going to be. Here is the conversation, for your amusement:

Vlad: So do I pay you or something?

Clerk: Oh no child! You put your credit card number here so they’ll do what they do and you’ll see it…

Vlad: So they do what they do and I’ll see it when I see it and I’ll know what it was, right?

Clerk: You got it!

Even mob conversations are more specific.

But hey, made me laugh!

Today was an exciting day – I finally took the wraps off what we’ve built and how we’re changing this game when it comes to professional services.

In my casually slimy way, I went around the room asking what attendees (and presumably our common customers) would consider to be a “good integration” project. What would make them more successful?

When you look at the vendor/PSA/rmm integration points you’re welcome with a sea of bullshit data points that are incomprehensible to even the most savvy full-of-crap marketer explaining where the customers money is going.

So after taking a few hints as to what our customers were expecting… I flashed my agenda for integration. As in, why would we bother entertaining an idea of integrating with a product?

Talk about not BSing people on the agenda, eh? I AM here to make you money. If you aren’t here to do the same for me, the door is that way, see ya.

Then I actually showcased our “integration” and I’m not talking about the voice control for Autotask we produced as an attention stunt.

I’m talking about entrepreneurs and business owners understanding their real cost centers and understanding the boundaries of their control and profitability that is realized when each party addresses it’s own turf in a way that benefits the customer the most. Let’s not forget who we’re doing all of this for (Customer. After they are happy and they pay the bill, the Vlad’s Ferrari Collection Fund.)

Attendees will get the integration documents tomorrow. If you’re savvy enough and actually look at our portal, you can actually get it going right now 🙂

What I want to know is – if you work with us, what is a good integration point? This is critical to the Shockey Monkey solution, it is critical to our partners on Autotask and Connectwise, and to everyone else in this ecosystem that is currently profiting on services.

I’m all ears – vlad@vladville.com

Aside…

Still very pleasantly surprised by the level of professionalism and handling by Autotask. They have been very kind to us, very helpful and today I got to meet a bunch of folks within the company which is always awesome.

Eventwise, again, perfect. Rented an entire restaurant, free bar and southern food, fried pickles and pulled pork sandwiches.

The night ends with Karl and Erick and a 4 hour dinner.