740 ScalePad's Vision to Transform MSPs

[Uncle Marv]
Hello friends, Uncle Marv here and we are live in Orlando at the Rosen Shingle Creek Resort at IT Nation Connect 2024. And as you saw by the intro, this show is presented to you by Thread, last year's winner of the 2023 Pitch It competition. And because we are streaming live on site, I have to let you know that this is being powered by Rhythms, your internet in a box.

So this is going to be a fantastic event. We are going to be streaming continuously throughout the show and from time to time I'll have a guest on with me. And joining me right now as we get started is Aaron Kennedy.

Do I say officially with ScalePad?

[Aaron Kennedy]
Yeah, you can say that.

[Uncle Marv]
Okay, so Aaron Kennedy with ScalePad, first guest of the conference. Yeah. I know it's officially the pre-day, but how are things going so far?

[Aaron Kennedy]
I'm pretty excited. I rolled in last night and you know, it's the only event that I've been to this year so far.

[Uncle Marv]
It's November, how do you not go?

[Aaron Kennedy]
And then last year I went to probably 30, so it's like a complete change for me. But you know, I just said if there's one event I want to hit, it's this one. I came from the old ConnectWise world, so like my MSP ran on ConnectWise, so just all in that ecosystem.

So it just feels like some of it's a little bit high school reunion-y, you know, like hanging out with people at the bar and stuff last night and you know, hugging people you hadn't seen in two years or whatever. That's always fun.

[Uncle Marv]
Yeah, last night at the bar it got a little crowded there.

[Aaron Kennedy]
Yeah, a little crowded for the MSPs, not quite here yet. Mostly the vendors still here the first couple days getting stuff set up. But you know, it'll get even rowdier.

I always forget how loud that bar can get. But it's great. It's a good time, as long as you can get a drink.

[Uncle Marv]
Okay, I know you're here with ScalePad and we'll talk about that in just a little bit, but I want to go back and talk about your history because even though you said vendor, you actually started on the MSP side like the rest of us.

[Aaron Kennedy]
Yeah, I mean, somewhat of a common journey, but I was doing, I mean, I've done IT outsource stuff since the 90s and definitely at some point realized, hey, this is a business, not just something I like tinkering with. And then, so me and another partner, we had an MSP and we acquired a bunch of other MSPs, kind of put those together. And I really liked the integration side of that.

That's actually where I kind of fell in love with the PSA world and kind of how that stuff works and it all integrates together and actually improves the business. So I tried not to fall in love with the technology too much, but I tried to focus on like, how does the technology solve these business problems for me at the MSP space? So then in late 2016, we sold that business.

And then I worked there for a few years after that to kind of transition that out. Um, I didn't actually have, you know, security is such a big thing here. It's kind of interesting.

Um, I didn't really have to deal with that that much back then. So it's kind of seeing how much the conversation is.

[Uncle Marv]
That was still the wild, wild west back then.

[Aaron Kennedy]
Yeah. I mean, we were starting to get like clients like, Hey, we got crypto or something like that. Like, uh, you know, our, uh, files encrypted or something like that.

Pay us Bitcoin or something enough. So like, you know, we, we kept some Bitcoin just on, on, uh, standby, so to speak, cause you had to do it kind of quick. But I mean, that was our, uh, crypto response.

[Uncle Marv]
So let me ask this and we're going to, we're going to wander a little bit, uh, because selling an MSP back then, uh, is a completely different monster than it is now. Of course, M&A is all the rage right now, but when you were selling from a, from an MSP perspective, how were you presenting yourself as a company? Because I don't back then, I don't know, did you have contracts that you could use to guarantee?

Um, was it a large client base?

[Aaron Kennedy]
Yeah. So we, we did have contracts. Um, they're a lot, probably looser than you would probably want today.

Um, but even still, we, we did have something, but some of our challenge was we would, uh, acquiring other MSPs. And so we're bringing them in. A lot of them didn't have, you know, they couldn't even either find them or they just never had them.

And they were just month to month kind of set up is what they really boiled down to. Or you'd find the contracts are written so poorly. It's like, you might as well not even have a contract.

So then you'd have to like approach that client and kind of get them into some, uh, you know, agreement or something like that. That makes sense. Um, so that was a pretty, um, concerted effort to do all that kind of stuff, um, constantly.

But, um, yeah, but even up to the point of sale, like that was definitely something that we talked about a lot. Um, so we, we got acquired, um, by a company that does this a lot. So they were accustomed to like, show me all your contracts, everything like that.

Like, well, make sure all that's in order. I still think that's the thing for the MSPs kind of struggle with this is getting those customers in contracts and broaching that conversation. I think everybody now knows you're supposed to, um, it's just, you know, how to navigate that conversation is a little bit trickier.

[Uncle Marv]
It is a little strange. I mean, yeah, most know that you should, however, probably half don't or it's, uh, they simply go by a scope, you know, and, uh, you know, yeah, we'll do an agreement for this project or for this year at most. And then of course the big old EBITDA is huge right now.

Did you have to worry about that?

[Aaron Kennedy]
Yeah. I mean, that's definitely a talking point. I mean, you're not thinking about, uh, EBITDA when you're, you know, setting up your RMM system and making sure that, uh, that exchange server doesn't go down at night.

And this is stuff I used to sweat about. Um, but you know, ultimately you can kind of learn like, what is the stuff that's actually going to move the needle and allow us to continue as a company and then acquire other companies and grow and things like that. So, I mean, if we had not sold, that would definitely been something we shifted the business more towards.

I mean, we're, we were approximately 75 in staff around there. Um, so back in 2016, that was one of the bigger ones around. I mean, now you've got these monsters out there now that I just can't even fathom, um, at least from the MSP space.

So it used to be like, Oh yeah, we've got a thousand people and we're an MSP. Like, you're not really an MSP. Like now that's true.

Like now you're actually providing MSP services, but a little bit different back then.

[Uncle Marv]
All right. Uh, and then as part of your transition, after you sold, you, uh, got involved with cognition, cognition 360, uh, which eventually got bought by scale pad. So tell us that transition.

[Aaron Kennedy]
Yeah. So coming out of the MSP space, I wasn't really sure what I wanted to do. Um, I love the space, but some of it is, I couldn't legally start another MSP.

Um, I didn't really even want to, I mean, I was, I used to tell people, uh, or people ask me now like, Hey, do you want to get back in the MSP space? And I'm like, well, I'm kind of getting, if, uh, if I ever feel like I'm getting too much sleep. Yeah.

I might, I might jump back in there. It's a hard business for sure. Um, I loved it.

It's just, it's just, it takes like total commitment to be in it. Um, now there's tools and stuff like that to kind of make, you know, you don't have to stay up nights, sweat a lot, a lot more cloud based than it used to be. So things like that.

Um, but, uh, it's, it was definitely like an interesting transition for me because I still wanted to be in the network and the space. And even like, uh, coming to connect wise events, like I loved this group, but I didn't, I didn't really want to do the exact same thing again. So that was when I actually started doing some consulting for different people.

Cause once you sell everybody, you know, they're looking for that magic bullet.

[Uncle Marv]
Of course.

[Aaron Kennedy]
Oh yeah. We just bought, you know, bright gauge or, you know, whatever people think, uh, you know, the, the magic touches. And it's usually a lot more involved in that.

Like it's your process or your culture or whatever. Um, so I started focusing on that, but I really found myself like people are not managing their business because they don't have, uh, reporting to do that. So we almost kind of became, um, I had some other consultants with me almost kind of became just building reporting.

And then I came across a tool, um, that was kind of very in its infancy stages, uh, called cognition three 60. They actually came out of another MSP and I was like, this is amazing. This is exactly what MSPs need.

Um, but they just didn't have, you know, people just didn't know about it yet. And they didn't have any much presence, especially in the United States. Um, so I got involved with that company.

And then, uh, so actually March 3rd, 2020 specifically, remember that date I became the CEO, right? The year of our COVID. Yeah.

Yeah. So literally like two weeks later, like Tom Hanks gets COVID NBA gets COVID. Like everything's like, all right, we're shutting everything down.

Meanwhile, I'd literally just like put all my chips in this basket of this software company that I didn't really know much about other than I know that people need it.

[Uncle Marv]
Right.

[Aaron Kennedy]
But now like, what is this going to mean? Like, how are we going to get the word out? Like you can't even, I can't even shake my neighbor's hand, much less go down to a conference.

Um, so that was kind of an interesting transition, but fortunately for us, you know, you hear is like some companies did well because of COVID some suffered. We were the ones that did well because it was not, um, like people had to now look at the data to figure out what was going on in their business. It couldn't be like, oh yeah, I feel like my texts are working because I walk into my office and I see them work.

Like you couldn't do that anymore. And so, um, it was like, I really, the shift of looking at the data, um, in a more, I'd say like disciplined way, um, became more of a common thing for us.

[Uncle Marv]
So when you say looking at the data, I mean, right now the term is KPIs or technician efficiency or stuff like that. So what exactly gets looked at and how does an owner, you know, translate that?

[Aaron Kennedy]
Yeah. So typically, I mean, it kind of depends on the size of the company and kind of what's going to be important for them. I'll say for the typical MSP, they typically start with the agreement profitability.

Um, and so they're starting to unpack that and that's kind of, I'll say that just kind of a first layer report is what I like to like. That's something you want to kind of check in, make sure your agreements are how they need to be. But that means you have to have all those costs going against all those agreements.

[Uncle Marv]
So that's the agreement for each client. So you're looking at, okay, are we making money on this client with the services that we said we're providing?

[Aaron Kennedy]
Yeah. And so there's a question of, are we making money right now? But then the bigger question, and this is where that tool or tools like it come into play.

It's you can't just look at a dashboard that tells you, hey, are we making money today? Like that would be silly. Um, you need to look at historically, like at least for the life of the contract, are we making money on this client?

And not just taking in the agreement itself, but there's other things like projects and even some of them do like time and material on top of that. So, so that enables you to have those conversations with those clients where you're, hey, we need to raise prices and here's the data to back up why that needs to happen. I mean, I think most clients want you to be profitable at least to some degree, so that you, if you're providing good service, they want you to be profitable enough for, for future service for them.

[Uncle Marv]
They don't, they just don't want you to make a ton of money.

[Aaron Kennedy]
Exactly. Exactly. So it's a little bit of balancing act.

You don't want to be like a 90% profitable and show them that like, Hey, um, but yeah, you don't want to underserve or over serve your clients. And so starting with that was enabled a way to start conversations about other layers of data. Like, well, it's because our texts aren't, uh, you know, either putting in time that's, you know, obviously one that's been around forever, but, uh, or it's like, Hey, we're spending time doing the same thing over and over.

We're just fixing the same thing. When, why don't we put in a different solution that just handles that whole thing?

[Uncle Marv]
Right.

[Aaron Kennedy]
So doing those kinds of things, but I, and I, and I shied away from this forever. Um, cause I kind of came up on the technical side. I mean, I was tinkering with Atari's growing up and like, um, not, not thinking about like, uh, well, what's the financial side of fixing an Atari?

You know what I mean? So it was, um, this, the people that are running the operation side, like they have to understand everything kind of comes from the financial aspect, like the reason, you know, it makes sense when you just say it, but it's like the reason you're in business is to make money. And so once you kind of figure that out, but not like take advantage of people, that's not what I'm saying, but it's more like once everything, uh, if your service department is just ignoring all of that, then ultimately they're not going to be able to hire additional techs that they need.

They're going to be working on an old technology. Um, and they're just not going to grow as a business.

[Uncle Marv]
So part of that, I mean, you mentioned all of that from the historical point and the now, but how far ahead can it help you look in terms of, Hey, if we continue to grow in this manner, can I hire a tech at this point? Can I hire a salesperson at that point? Does the data go that deep?

[Aaron Kennedy]
Yeah. So it'll do. And so more so now, I mean, obviously AI is everywhere and is gimmicky and also real sometimes at the same time, and you're never sure which one's which.

Um, but yeah, so you're doing some like forecasting and it lets you see like if you're doing, if you take on 10 more new clients, are you going to be able to support those clients? And so how does that impact your existing SLAs? Um, like if you, if you say, Hey, every ticket that comes in, we have to respond within 10 minutes.

Well, if you're able to meet that now, and I add a hundred new clients to you, you're not going to be able to meet that tomorrow. So how do you figure that out? But using historical data, you can predict that stuff.

[Uncle Marv]
Okay. Yeah. All right.

So that company, let's see, March, 2020, the year of our COVID. And when did ScalePad take notice?

[Aaron Kennedy]
Yeah. So started talking with them probably 2022 around then, um, we ultimately sold to them early 2023. Um, I, I, uh, you know, like I say, I was not like an expert in the SaaS side of the business.

I was just very much like, this is a, I was passionate about, this is something that MSPs need. Like they're just asking for how do I get into the data? And it was too difficult for them to really do.

And it's not that technically they couldn't do it, but it was just more so like, um, you know, if they're spending time digging through and creating SQL queries on their own data, they're not serving their clients. So it's the same pitch that they have, like, let us focus on your it and you focus on your business. We had the, let us focus on your data and you focus on your business.

Um, but it is enabling that a level of customer success was something that we wanted to do. And, um, then that was kind of the vision for what ScalePad is going to be. Um, so ScalePad, I mean, a lot of people know, they kind of started as warranty master as kind of their original thing.

Everybody knows that name. And then they kind of rebranded and went through some different things like that. Well, that's, that product is now called Lifecycle Manager.

Um, but they went through kind of a buyer's journey in 2023 of like acquiring all these other products. And it might seem like kind of random, but there was, there was a method to the madness for sure of getting these products that basically enable the MSPs customers to be successful. Um, and so we're redoing kind of how that works on the back end, making sure that, uh, those products integrate together.

And there's a lot of good data in there that can really benefit an MSP of areas they should focus on and not, because that was the thing that I always was, uh, worried about on an MSP level. Um, like you could get called at any time for literally anything. I mean, I got called one time at two in the morning by an angry attorney that is, is, uh, legal docs for printing in blue ink instead of black.

And like, he's just chewing me out. And I'm just like, you're always kind of, you're almost feel like you're kind of waiting to just be scolded either by your techs or, you know, something. And so just knowing where to look and kind of where to turn and what's going to make things successful.

Um, that's kind of the focus that I wanted to bring. And that's what ScalePad is.

[Uncle Marv]
All right. So full disclosure for everybody. Uh, I actually am a part of ScalePad.

I did have the original warranty master and I signed up for Lifecycle Insights, which is now part of ScalePad. So I'm looking at the Lifecycle Manager versus Lifecycle Insights, um, and then, uh, Cognition 360, uh, Backup Radar is that in there? And I think I'm missing one.

[Aaron Kennedy]
You got ControlMap?

[Uncle Marv]
ControlMap.

[Aaron Kennedy]
And then our newest, uh, addition is Quoter, which was out there before. So that would be like sending quotes and, you know, automating that, uh, procurement processes and revenue.

[Uncle Marv]
All right.

[Aaron Kennedy]
Yeah.

[Uncle Marv]
So yeah, they, they all are bundled in there. It seems like, uh, do you know if there's any plans to kind of start to mesh things together there?

[Aaron Kennedy]
Okay. Yeah. So we've been talking about that a lot and being a data-driven guy, we have kind of like an underlying layer of data that you're getting from all of these different sources that can then like, for example, if, uh, ControlMap does like compliance as a service.

So it teaches you how to sell compliance to your customers. But if something happens on the compliance standpoint, um, you want that to show up in your Lifecycle Manager or your Lifecycle Insights to, so that you make sure next time you're doing your QBR is that you're talking about that with that client. Um, so having all those data points in together, and then you add on, uh, we'll just call it AI kind of components of that to make predictions about areas you can look is really cool stuff.

[Uncle Marv]
Nice. Nice. All right.

Well, that all sounds great. Uh, glad to get a few minutes with you. Yeah.

And, uh, as we get ready for IT Nation Connect. So I'm excited. Thank you for sitting down and, uh, uh, oh, I should probably ask you this.

Is she around? How's my girl Brooke doing?

[Aaron Kennedy]
She's, she's doing great. Brooke, uh, Brooke and I are from the same state, Georgia. So, uh, we know how to talk to each other.

Uh, you know, so ScalePad is mostly a Canadian company, right? So it's interesting for, for two Southerners to kind of get involved with them. Uh, but, but we love it.

It's great.

[Uncle Marv]
Okay. Great. All right.

Well, folks, uh, we're going to say goodbye. Somebody's phone's going off. Again, we are live here in Orlando at IT Nation Connect.

And, um, even though I'm ending this interview, I'm going to keep the stream going and we're going to be bringing up, uh, another cam here. So you're going to be able to see, uh, people wandering by and, uh, how things are going. So that's going to do it, folks.

Thank you for watching. I'll be back here with another interview in just a couple of minutes until then. Holla.

Hello friends. Uncle Marv here with another episode of the IT Business Podcast. And we are broadcasting live from Orlando at IT Nation Connect at the Rosen-Shingle Creek Resort and here on a lovely day.

And our show today is presented by Thread, winners of last year's Pitch It competition. Uh, that competition is going on later today. I will be there to present my set of steak knives for the third place winner.

And we are able to stream because we are powered by Rhythms, the internet in a box. So I've got an Uncle Marv Wi-Fi here at the hotel. So that is allowing us to stream live.

And with me, I've got another guest from ScalePad. And, uh, let me see if I get this correct. Ryan Sigouin.

Nailed it. Over to you. All right.

So, uh, how are things? Really good.

[Ryan Sigouin]
Yeah, really good.

[Uncle Marv]
Uh, so I had, uh, a buddy of yours on earlier. We were talking about ScalePad. Okay.

And, uh, my good friend, Brooke. Yeah. Who, uh, joined you guys recently is, uh.

Yeah, she's I've had her on the show many times. How is she? She's awesome.

[Ryan Sigouin]
Yeah. She's running around like, like always. I always feel bad for her.

She's always in the air or always traveling, but she seems to enjoy it. So I'm glad someone else gets to do it.

[Uncle Marv]
All right. Uh, so you are the chief revenue officer, right? So everybody gets to ask you all these money type questions, growth type questions.

Where is ScalePad going? Yeah. I mean, if you look back at the history, is that me or you?

I think that's someone else. Somebody else. That's what it's like here live on Meteor Row, folks.

Um, uh, so ScalePad, we'll just go ahead and ask these, these tough questions here. Uh, seems like 2023 was the year of acquisition. Yeah, absolutely.

Um, uh, let's see life cycle insights. Yeah. Uh, Backup Radar.

Yeah. Cognition 360. Got it.

Am I missing? I'm Yeah, it was. I mean, I guess the first question is, and I don't know if you can even answer this because there's people higher up that do that, but, uh, was there a method to the madness?

[Ryan Sigouin]
Yeah. So originally when I was brought into the organization, it was actually to run the integrations. So just before all the acquisitions were announced, I was starting to work with the team.

So like my history was mostly in the MSP space growing through acquisitions. So I think over the course of like five, seven years, I think I was involved in about 13 integrations in the MSP space. And so when Chris and Joel and the team over at ScalePad, we're looking at building the business through an acquisition strategy and knowing that integration was going to be a big part of it.

That's where I came into the fold. So my original role coming into ScalePad was a VP of integration. And then that slowly just continuously morphed as they got pulled deeper and deeper into the business.

But yeah, it was, it was a, it was an interesting kind of two year period to get those businesses running. I think we're really proud about the level of integration that's happened at this point. So operationally, fully integrated and then really heavily working on the product integration pieces right now.

But the idea was to really build up the opportunity for us to get our platform off the ground. So that was the purpose of all the acquisitions.

[Uncle Marv]
Okay. So I use two of the products that was originally with Warranty Master, which got bought by ScalePad and is now technically Lifecycle Manager. You got it.

And then I use Lifecycle Insights, which got purchased by ScalePad. And right now, I guess there's a little bit of integration. I'll be honest, I haven't dug much into that.

Um, but in terms of integrating, I don't, and you're not doing that directly now, but I assume at some point all of these products will talk to each other.

[Ryan Sigouin]
Yeah. So the, the vision that we have for the way that we want to move forward is that we feel that there's way too much integrations being written between applications in the MSP space. So you think about bringing a piece of software into the MSP space, 50% of your development effort is really about writing integrations.

And so it's kind of a waste of time for our team to have to write integrations for every single one of our products to everything else that exists out in the market. So what the team's working on right now is a consolidated data platform for all of our applications to write into. So we write an integration to, let's say ConnectWise, since we're at IT Nation.

We write one integration to ConnectWise that works cross-platform across all of our products. So you come in, you set up your ScalePad account, you set up that integration once, and all of the information flows between all of our applications consistently. Okay.

So that's the big piece that we're working on right now from a development standpoint. And we're hoping that that solves a lot of the integration-related issues that we constantly see in the space. Right.

And so now it's not about us writing integrations into our own products and writing integrations into everybody else's products. It's us writing a consistent data source for all of our products and writing that integration once. And so it's a much longer path for us to get there.

And I think we're kind of appreciating everybody being patient over the last year as we've been going through that process. But a lot of really great progress has been made on it.

[Uncle Marv]
Yeah. Every time I've talked to somebody with ScalePad and I've asked, what's coming, what's coming? I mean, it's like big things are coming, but we can't say it just yet.

[Ryan Sigouin]
Well, Chris did a webinar kind of style, a partner event about three months ago and laid out a pretty good foundation for everything. So if you go back and listen to that, you'll see his entire vision of how this platform, how that gives a really strong foundation for all these technologies that we know that are coming, but we're not sure how they're going to play out within the MSP space and how we look at in the future where people write their integrations so that we don't have the entire industry writing the same integration for every single piece of software.

[Uncle Marv]
Okay. Now as Chief Revenue Officer, I want to ask you this because it seems as though the roles are different from company to company.

[Ryan Sigouin]
Sure.

[Uncle Marv]
So what does it mean? Some CROs you never see because they're just the accounting people in the back. Others are out in front pushing sales and stuff.

What exactly are you doing with ScalePad?

[Ryan Sigouin]
In ScalePad, CRO is basically all of the operations side of the business. So the sales team reports to me, the marketing team, revenue operations, and the success work all filter under CRO. So we don't look at it from the idea of how we go out and sell as much as we possibly can.

It's retention, the way that we handle the customer, how we go out to market, how we message in our go-to-market strategy, all of those components are integrated. And so my responsibility is to try and tie all those pieces together so that it feels cohesive. And as we start to move forward with a little bit more of a platform play, and you start to see how the integration works between the applications and how they start to play together, it's really important for us to tie that together.

So it's not just about sales, it's about product-led growth and marketing-led growth, and then obviously retention and expansion. Cross-sell is a big component of having a multi-product company.

[Uncle Marv]
All right. So when I asked Brooke for sponsorship stuff, that eventually gets onto your plate for approval, right?

[Ryan Sigouin]
I guess so, yeah. Indirectly, Brooke's budget, yeah, would run through me. Okay, great.

[Uncle Marv]
All right. So, fantastic. It was great to sit and chat with you and get some time here on pre-day.

Yeah. And what do you think of Meteor Row here? This is kind of a new thing.

It's good. It's interesting. You guys are bouncing from table to table.

[Ryan Sigouin]
From table to table? No, it's good. I mean, it's a good opportunity for everybody to have good conversations and get some of the stuff that we don't get to talk about, like the new kind of detailed stuff that don't get kind of brought up in regular conversations.

So it's nice to, you know, the one-on-one conversations, you get to expand those a little bit more.

[Uncle Marv]
Sounds good. All right. Well, thank you for hanging out.

And we'll see you over the next couple of days. Ryan Sigouin from ScalePad and The Money Man. That's it, folks.

We'll see you in a bit. Awesome. Cool.

Thank you very much.