How to Exponentially Scale the Value of Managed Service Providers Business

Tim Conkle, Founder and CEO of The 20 MSP, opens the discussion by sharing his extensive journey in the IT industry, stretching back to 1992. He transparently recounts the early struggles of his company, Roland Technology, mirroring the challenges many Managed Service Provider businesses face in achieving substantial growth. Conkle identifies lead generation as his initial "Achilles heel," acknowledging that despite his strong sales abilities, consistently getting in front of potential clients proved difficult. His breakthrough came after years of refining a single, effective "oil well"—Google pay-per-click—which dramatically accelerated his company's expansion and highlighted the critical role of reliable demand generation for any aspiring MSP. This personal experience underscores the foundational importance of a robust marketing engine to initiate and sustain business development.

As Conkle began teaching other MSPs his successful lead generation strategies, he uncovered two further, equally critical challenges that many in the industry faced: the ability to close deals and the capacity for operational scale effectively. He cites examples of MSPs generating numerous appointments but failing to convert them into sales, or those who rapidly grew their revenue but saw no corresponding increase in profit because their internal operations could not keep pace with demand. This realization led him to conceptualize the "three-legged stool" of MSP success: lead generation, sales execution, and operational scale. Conkle argues that while technical knowledge and tools are abundant in the IT sector, successful businesses must first master these fundamental building blocks.

This more profound understanding of business fundamentals inspired Conkle to found The 20 MSP, based on a whiteboard idea 13 years ago. The name reflects his "better together" philosophy, drawing from the 80-20 rule, where the "20 percenters"—the high-performing individuals and companies—achieve far greater results when they collaborate. Conkle passionately articulates that a fragmented industry allows external entities to "mine the gold" that MSPs often overlook within their businesses. These high performers can strengthen the entire Managed Service Provider ecosystem by uniting and fostering a collective approach that prioritizes shared success over isolated competition, ultimately unlocking immense untapped value.

The discussion transitions into the profound evolution of the IT channel, moving from the antiquated "break-fix" model that dominated decades ago to the modern Managed Services approach. Conkle critically examines the inherent conflict of interest in the break-fix model, where a service provider profits when a client's systems fail—a direct contradiction to the client's desire for uninterrupted operations. He highlights how The 20 MSP pioneered a "true flat-rate" model, where labor is not an add-on, and the only way the MSP profits more is by ensuring the client's systems run perfectly, establishing accurate goal alignment. This innovative pricing strategy fundamentally redefines the relationship, shifting focus from reactive problem-solving to proactive prevention and optimized performance, thereby creating significantly more value for the Managed Service Provider and their customers.

Conkle further elaborates on The 20 MSP's distinctive "reverse-franchise" model, explaining how it enables small IT companies—often just five to ten people—to deliver services on par with a 500-person enterprise. This involves standardizing everything from tools and contracts to service delivery methods across a vast network of MSPs. This standardization allows members to access shared resources like a 24/7/365 US-based live answer help desk, specialized project teams, and a national footprint, which would be financially prohibitive for individual small businesses. The efficiency gained by having a unified system means quicker integration of new companies. The 20 MSP successfully integrated 37 companies in just 27 months, each within 60 days, showcasing the immense power of MSP standardization.

The conversation then focuses on The 20 MSP's ideal client profile, typically businesses with 50 to 1,000 employees or those with multiple locations. Conkle debunks the myth that larger networks are inherently more complex than smaller ones, asserting that fundamental IT infrastructure remains largely consistent, with only the scale and number of applications changing. This insight allows for a standardized service delivery model that benefits many clients. He passionately stresses that effective marketing is what truly differentiates The 20 MSP. He emphasizes that while technical competence is common, consistent and significant marketing and brand building investment is crucial for MSPs to be known, attract larger clients, and sustain long-term, organic growth in the highly competitive IT channel evolution.

Tim Conkle introduces a revolutionary approach to sales, advocating for a "frictionless" process that prioritizes education over traditional, often intimidating, IT audits. He argues that prospects already know their systems have issues, rendering detailed audits redundant and potentially risky. Instead, his methodology focuses on helping clients make informed business decisions about their IT, guiding them to understand the inherent conflict in break-fix models versus the goal alignment of true managed services. This teaching-first approach builds trust and positions the Managed Service Provider as a strategic partner, not just a vendor, streamlining the sales cycle and leading to more effective conversions by addressing the client's core business needs rather than overwhelming them with technical jargon.

Conkle then delves into the challenging yet essential process of cultural transformation required for MSPs to scale, particularly the need for owners and teams to "unlearn" old habits and embrace new, standardized toolsets. He vividly illustrates this challenge with the analogy of a shovel versus a trencher, emphasizing that clinging to familiar but inefficient tools prevents growth, even if one is proficient. He introduces a metaphorical "mirror" as the only tool needed to diagnose a company's problems, asserting that the owner's mindset and willingness to change are the most critical factors determining growth. This highlights the crucial role of the entrepreneurial mindset MSP in driving organizational evolution.

Finally, Conkle emphasizes the foundational role of trust and a compelling, shared dream in visionary leadership. He differentiates between merely "working for a dollar"—which he calls "modern day slavery"—and building proper financial leverage and freedom through the MSP model. His ultimate dream for The 20 MSP is to create exponential value and economic autonomy for its members, demonstrating how the collective approach significantly increases business valuation (e.g., a 20x multiple for initial partners). By fostering an environment where leaders are transparent and partners share in the prosperity, Conkle inspires owners to transcend individual ego and embrace unity, revealing that being "together" fundamentally creates far more wealth and opportunity than remaining "separate" in the Managed Service Provider industry.