Building a $9M IT Business: Growth, Acquisitions & Knowing When to Refocus

In this episode of Curve Ahead, host Brian speaks with Jeff Borello, co-founder of Andromeda Technology Solutions, about growing his IT managed service provider from a side hustle to a 37-person, $9 million operation over 30 years. Jeff shares candid insights about the challenges of growth through acquisition, the importance of complementary partnerships, and why sometimes the best growth strategy is returning to your core offering. Whether you're running a service-based business or considering an expansion strategy, Jeff's three decades of experience offers valuable lessons on sustainable growth, customer service excellence, and knowing when to say no to maintain focus

Transcript

0:00

On this episode of Curve Ahead, I'm joined by Jeff Borrello, the co founder of Andromeda Technology Solutions, an IT managed service provider that's been thriving for over 30 years in the Chicagoland area. Jeff shares his incredible story on how three co founders built a business from working nights and weekends into a 37 person, 24 hour operation without ever losing focus on customer service. In this episode we talk about the challenges and hard earned lessons of growing through acquisition and knowing when to pivot back to your core offering. We also covered why focusing on simplicity is critical for sustainable growth, even when customers ask for more than you're built to do. If you're in the thick of building a service based business or wonder when to say no, this episode is packed with insights from someone who's been doing it for decades. Hey Jeff, welcome to the podcast. Do you mind introducing yourself? Thanks for having me, Ryan. So, Jeff Borrello, Andromeda Technology Solutions. We are an IT managed service provider out of the Chicagoland area. What led you to tell me about your background that led you to start Andromeda? So yeah, so we've been at this for over 30 years now. So it's a long, long time back. But myself and my two co founders all worked at the same company right down the street from here where I'm like literally five minutes from where we worked. We all worked really hard there, 70, 80 hours a week sometimes. Great place to work, but they were struggled a lot. So one day one of us walked in and there's a big debate on who it was. And I'm the guy doing the podcast, so I always get to say it was me walked and said, hey, if we're going to work this hard, we should do something for ourselves. And were taking care of the IT network and the computers there at the time. We said, well let's go do that. And we started, you know, this was back in the day when you didn't just take a bunch of money and everybody quit, right? So we did it part time, nights, long nights, weekends, that kind of thing. And slowly, you know, we built it up over the 30 years. There's like 37 people here now. We're almost 9 million in revenue. So and the three co founders are all still here day to day doing our part. So it's, you know, we always talk about there was some luck involved in the beginning, right? Getting that first client kind of go, okay, maybe there's something here. So it's been a fun ride, I'll tell you that. What's it like working with the same three people for more than three decades? It's phenomenal really. We always say it's, you know, we're still here and we haven't killed each other. That's the joke. It's very. First of all, it's rare enough for a company to be in business 30 years, but with the same three co founders, right? Because normally there's just. We've had some battles and some tensions here and there, but because we have three very different personalities, it's really lended itself to just a tremendous partnership. You know, I see a lot of other IT managed service providers where it's one guy in and maybe, you know, maybe as a five person team, but when he leaves, like they can't take a vacation, right. So having those people there to back you up. So even in the early days, you know, we all had roles to fill and it was hard, you know, if you take a vacation, you still have to take some phone calls. But just knowing that there was the right people back there that had your back, it was really a great thing. Do you have complimentary discipline, like complimentary backgrounds, or do you guys kind of have some overlapping there? They're pretty complimentary. So at the company we worked at, two of us were software engineers, we wrote code, myself and one of my other partners. And then the other guy, he was more of a hardware guy. So like for example, when we started, when we first started the company, we'd do some network installations where we'd have to run cable. He knew everything about running cable. And this is back when you had to run coax cable and you had to terminate it yourself was a whole different ballgame. So yeah, and then. But the core piece that really tied us all together was our love for the customer. Right. We were always very customer service focused. The company we came out of was very customer service focused. So we just always had this. And still 30 years later, that is still what drives us is making sure the customers are taken care of, making sure we're helping them. Is there story behind the name or why you chose Andromeda as the name of the business? There is. This is not a very good story. So when I was in high school, took on a few side projects writing code. And at the time my older brother had turned me on to Michael Crichton's first book, the Andromeda Strain. I knew it more from the movie, but I'd also read the book. So when I needed to make a company, it was like, oh, it started with an A. So it had that going. It sounded kind of techy, Right. So it originally started as Andromeda Computing Systems, and then over time, we deviated to Andromeda Technology Solutions. But when we started the company, we all sat down, I said, listen, guys, I already have this company. I have a checking account already. It already existed. We want to use that. And nobody could come up with an better. So it stuck great. I mean, sometimes it's. That's all it takes, right? Is, well, I've already got the entity set up. I've got the checking account. It's all above board. You know, let's just use that. And if there's not a better option, it sticks. You know, out of the. Yeah. 100 things we had to do on day one, it was, you know, five less things to do. So, you know, let's go. Love that. So you had mentioned kind of the. The evolution of the name Andromeda and how it's changed over the history of the organization. Tell me the hit. The actual organization has evolved over the last 30 years. Yeah. That's interesting. And that's part of the reason we changed the name. So, you know, when we started out, were doing computers and networks, right? And it was a very different business back then, but over time, at some point, we knew a guy, and we'd always get asked, people say, hey, can you take care of our telephone systems? And it was three of us, right? We'd look around and go, yeah, we. We have experience with that, but nobody wanted to take on more work. And then a guy we knew came along, and he was leaving where he. What he was doing, he said, hey, I used to. I used to sell telephone systems. You guys looking to do this? And I install them. And so we said, sure. So we started doing telephone system. And then over the time, that business grew. So at some point we said, okay, we gotta. We gotta get the computing out of the name. And it became more of a technology evolution. But then over the 30 years, we kind of did. And at some point we. We acquired a company that installed. And that was all they did was business telephone systems for years, right? It was a husband and wife ran it, and they were looking to retire. And then that grew. And then over time, we said, what else could we do? Right? And we started doing physical security with security cameras and burglar alarms, and we bought a company that did that. And then at some point, we had an opportunity to buy a Website development company. And we did that. So at some point we had literally those four different businesses and they were very different businesses. There was some synergies across them and we always thought there'd be a lot more synergies, but it turned out there was probably less of that and it just really pulled our focus away. So now over the last three or four years, we've sold all those off, spun them out, and we're back to being right where we started, an IT company that focuses on it. What's the process like growing through acquisition and then realizing that maybe wasn't the best long term play for the organization and in having to either sell it off or part ways with it? Yeah, we had some struggles with that because obviously we had some, you know, we had some key people. We had, you know, in a couple of those, we had to let some people go, which we hate to do. The very last one we did, we actually sold it to one of our technicians. Right. So our technician took it over and he's off running his own business now, which we thought was great. But yeah, there's a little bit of that. And they were all good businesses. Right. But it was really hard for, you know, we have a five person leadership team to go off for a quarterly planning meeting. It's hard enough to plan for one business, let alone two or three or four. And there just wasn't enough bandwidth to do that. So, yeah. Is it a little bit of like you feel like you went through this whole thing, you acquired it, you spent some money, you built it up. We had put some of the technology in with customers that were still going to be here. So, you know, unwinding that was not fun. In a lot of cases we had to get in front of some really good customers and say, you know, yeah, we brought this company on, we've now taken it on for you, and now it's not right. So were very intentional and very careful about how we did that and made sure wherever the business went, it was with someone that was going to still take care of the customers. Do you think that part of the reason the acquisitions happened is you had mentioned that you are super focused on customer service, that you had these customer requests and you found an avenue to be able to fulfill it, but ultimately may have not been best for like the long term vision and growth of the organization? Yeah, absolutely. I mean, it was, you know, when. Because it's some level, it all is technology. Right. And it all plays together at various pieces. Right. Telephone systems eventually became part of the Network and almost all the security cameras were part of the network. So there was these common, the commonality that seemed like it made sense. And it did for the customer for sure. Right. That was always one of our things. Listen, the less vendors you have to call as a customer, the better your life is. Right. And they knew we'd take good care of them. So that was absolutely the impetus behind why we did it. It was then when you came to the next, the planning phase and trying to figure out, even just trying to keep the finances straight. Right. All of a sudden you got guys with trucks and ladders and work comp is different over there. So there was a lot of pieces that were different and it just took up a lot of time and added a lot of complexity to the business. That's already pretty complex. Yeah, no, I think that makes sense. And you know, as a younger organization, talking about myself like, you want to be as a service based business, you want to say yes to your customers as much as you can. In the phase where you're starting to grow, like when you're starting to acquire more and more customers, it's okay, can I do this and still stay within the confines and scope of my overall organization without stepping over and making a pivotal mistake in the long run? So I battle that, those challenges on a regular basis, which is kind of like why I asked down that rabbit. Yeah, for sure. You know, yeah. When you're in that startup or early phase, it's, you know, all the business we can get our hands on. Right. Good, bad, ugly, we don't care. We're just taking anything we can get. And then as you get, you know, more mature, more scaled, now all of a sudden it's like, wow, we're trying to deliver, you know, 20 different versions of the same thing and it gets really hard. And then, you know, it's one thing when you're small and it's one person, like, I'm the guy that sold it, I quoted it, I installed it, I have to support it. Right. I know all that now. You start getting more people and more layers and all of a sudden, three people down have no idea what it's like. Well, this is different than the last one. And it gets really chaotic for everybody down the line. And it's just, it's really just not a sustainable way to grow. And in the end, everybody suffers. Right? Our team suffers, the efficiency suffers, and ultimately the clients eventually suffer because you're not delivering the service as good as you could if you were focused on something. So, yeah, let's. Let's go back in time for you. What was like that pivotal moment early on when you realize, this is going to work for us. This is going to be something bigger. It's awesome. When I was on a podcast last week, they asked the exact same. I really think it was that very first business customer that came to. So our very first customer was. We're still not a very great marketing firm. Our first marketing was standing out in front of Best Buy and handing out flyers to Best Buy people that. Walking in. And we picked up, like a home. A home user out of that. But I think that first, you know, we did some. We did some marketing. We sent some mailings to the local chamber, and we got a phone call from that, you know, and then being able to go in there and sell. So my partner and I went in. We were like, this was before the Internet, right. We had trouble finding any information on the. On the company. It was like, well, it looked like a law firm. Do wear ties? Do we not wear ties? Do wear suit? Like, we had no idea what were doing. So getting that first deal closed where you said, okay, maybe we do know what we're doing, right? Because we didn't know squat in the beginning. We didn't have a clue. So I think getting that first one or two where you go, okay, you know, and that. That takes a little bit of luck because you go, you know, six months or a year without doing that, and the whole thing probably ends up just. You go, okay, this isn't going to work, and you lose interest. So it doesn't take much of that. Oh, we got one now. If you get one, we can get two. And if you get two. Right. And then you just get that momentum going and then you get the surge of energy. So I think that was really probably that very first customer. I think that was a really long winded answer to that question. No, I totally get it. Right. Like, finding those. Those early customers and then, like, riding that high of landing them and then starting to deliver for them, but also at the same time trying to keep that flywheel going, to find the next one and then the next one to grow the organization. So, yeah, no, I'm. I'm in that. In that phase right now where it's like, okay, I've got a couple of early customers just trying to acquire more and continue that flywheel and make sure that I continue with the momentum to be able to grow the organization to where I want it to be. Yeah. And you're just sitting in that very first meeting hoping they don't say, well, how many other customers do you have? Right. Because the answer is zero. Yeah. Yeah. And really the best part of that story is that. So that very first customer we signed, so they were a customer for a long time. They got acquired and left us and now they came back. So they are, so there's, they're still here with us, which is just. We love that story. Yeah, that is a great story. I guess it goes back to show that you guys do deliver customer service well, that regardless of who owns the organization, that you're still providing the service in a way that they need it and felt comfortable with coming back to you even after leaving. Yeah. Which is, you know, that's what, you know, you never burn bridges. Right. Some delays, we try to do our best to exit people out cleanly when they want to go. Sometimes they come back and then there's some cases where the, you know, some people have an ego and they won't come back. But it's, you know, we always try to do what's right for us and for the customer and sometimes it just, it works and sometimes it doesn't. Sorry, just consulting my notes, here's a good question. Has there been a piece of advice or leadership lesson that has stuck with you throughout your career? So were fortunate. I mentioned that the prior place we worked, we had a manager there who was just a phenomenal manager. Matter of fact, we're still in touch with him. He's retired, he lives in Florida. But we, you know, we share our wins with him every now and then, but he really taught us that was a, you know, were software engineers and you know, there's hardware engineers. It was very engineering minded thing, but it was, hey, if you needed to take two hours to run to the doctor, you took two hours to run to the doctor. Right. And he knew he was going to get the hours and the results out of you. So we've really tried to carry that into the, to the organization with our team. It's a little harder as you get bigger. But he really taught us about the right way to treat people, give him some autonomy. But he also was like if you decided one 10 minute segment to screw off in a month, he would somehow show up at your door at that moment. It was just an amazing ability. He had to just sniff out somebody doing something they shouldn't do and then he'd come down on you like a ton of bricks. Right. So it was that flexibility, the autonomy and just, man, did he just teach us just all kinds of lessons just by living under him and having his management tutelage. I guess we just absorbed so much from him and I've taken so much into the future and we tell him that all the time. And it's a great feeling to know that how much we both, we took from him. That's. That's pretty incredible to think that you worked with someone that long ago who was so impactful early on in your career that even after you've stepped out and started to do your own business that you're continuing to share wins with them. That's a pretty incredible story. Well, it's funny. So we just. In October, we celebrated our 30th anniversary. So we had a party and we had the whole company and we literally. I was, I was writing up a little speech the day before and I want. And I sort of told this a similar story about Bill was his name. And I was like, I should have flown Bill up here for this. And I did. You know, I was like, you think of it the night before, it's too late. But it would have a great opportunity to have him come up and just celebrate him. So maybe at the 40th. Yeah. 35, yeah, that's better. Is there anything else that you wanted to cover about Andromeda that we haven't talked about quite yet? If there's some younger companies out there, the lessons, right, it's. There's. There's a lot of. I don't want to call them quick buck artists, right? But there's this whole concept of, you know, drop out of school, get a bunch of money, work for two years, sell the company for a billion dollars. It's like, yeah, those are unicorns. They just. There was a reason they call them unicorns. If you want to start a business and you want to be successful and whatever success means to you, it generally means hard work and it means staying the course, right? And you got to be prepared for some long nights and you got to prepare to wear a lot of hats. And it's not easy and it's not for everybody. I think it's very rewarding. I love it. I still pop out of bed every day ready to go do my thing, right. But you got to love it because it's going to be a grind. There's going to be times when, you know, you got to go dip into your bank account to cover payroll or whatever it may be, right? There's going to be some struggles, and you got to be. You got to have the grit to be able to weather those and be in for the long haul. And you got to love it. If you don't love it's going to chew you up and spit you out for sure. I mean, there's definitely days where you don't necessarily love it, but, like, the. If. If I do some self reflection over the past year, the skills level up that I've had just in one year, the things that I've learned, had to experience, forced me to think about and actually execute on, has been way more than the career that I had in, like, corporate America over 15 years. Yeah. I mean, it's the drinking from the fire hose, right? It's. You got to figure it all out. You got to figure out how to market it, sell it, do it, deliver it. I mean, it's just. And that's part of what I love about it. People always ask me what I like. I love that every day is a different challenge. You know, the world changes, the industry changes, new tools come out. Right. AI shows up, there's a pandemic. Right. All those things that, for me, it's the troubleshooting, figuring out the solution and then seeing the solution work. There's nothing better. And doing it with people you love. Yeah. I think that doing it with people you love is. Makes it much easier to show up every day and show out every day. Day. Right. Like, I had a role early in my career that I worked with a group of four or five people that I always felt like were in the trenches together, we suffered together. Not in a bad way. Like, we all loved what we did in the long term, but, like, being there with those people every day in and day out, made it so much easier to just get what we needed to do. Done. Done. No doubt. Yeah, 100%. So you had mentioned something, and I. I think that it's in a lot of the podcasts that I've hosted that there's been such a disruption over the last couple of years with the commercial availability of AI. How has that impacted you andromeda? So we're pretty. We use it, but not a lot. Someday someone's gonna come out and get mad at me for this. But I think the AI hype is so far in front of the AI reality. It's an amazing tool, don't get me wrong. But we, you know, we help use it a lot for generating content, for a lot of writing stuff, but it also, you Know, there's a lot of times now if I'm having a problem with some software or something I can't figure out, I start with ChatGPT before I go to Google now. And a lot of times it gives you a great answer. Not always. So I absolutely think it's going to be a completely disruptive technology. I just saw a demo earlier today about an AI, a chatbot that basically they feed it everything from your website so it knows who you are and it's amazing. Just conversational and spitting out stuff about us like a human would. It was, it was pretty amazing. So do I. It's going to be revolutionary and I think every business in the world needs to be at least looking at. It's got to be on your radar, you at least got to be aware of it and you've got to start getting it built into your planning somewhere. Right. Because I do think it's going to be that disruptive. But it's, I think it's still pretty early and I think there's some bad versions of it out there. So I think you got to be careful. I think there's two questions or one statement and one question with regards to what you had just mentioned. I agree AI is kind of, it's here to stay but right now your output is solely dependent on your input. So knowing how to get what you need out of the system is the biggest complexity proponent right now that I'm seeing using any sort of platform like I, I use quite a few of them just for different applications. I mean ChatGPT is great. I love the ability to continue GPT to train the model, especially on my business. I've like, I've gotten really into the new one is rag on being able to train it. Basically what you're talking about a chatbot training it on your website, your content. I do that a lot with Chat GPT and do that quite a bit with Claude when I'm doing any sort of writing. And in perplexity when I need to do like a Google search type thing, I go there before I go to Google or ChatGPT. But you had mentioned that businesses now start, need to start considering using it. When do you think that every business needs to be on that train or not or they're going to be left behind? Man, that's a good question. I mean it's the speed at which this has come out. I mean it went from not hearing this thing to like usability. So man, it's hard to imagine even like a year from now what It'll be doing. So. Yeah, I think if they're not, I struggle a little bit with the, you know, you at least got to be looking at it and thinking about it. You really probably today, if it's not, if you don't, if you're not have it in some aspect of your business. Right. If that's marketing, say you're way behind. Probably. Right. But I think it's, you know, probably every company, you probably should put a steering committee together, a team that, you know, every month they should be sitting down and saying, you know, what should we be looking at next? And what do we need to. What tools should we be looking at? It's a, it is not a small undertaking. I think you're exactly right. It's like any tool. Garbage in, garbage out. The better you learn how to use the tool, the better it will give you output. So I think there's absolutely. Even at the base level of just learning that piece is a good start. But yeah, I think a year from now, two years from now, probably, it's probably unrecognizable. Right? Yeah. And I think that, I mean, my wife works for a huge multinational retailer and her company's biggest concern is like, data privacy. And I think that is going to, in the next year that will be solved some way, shape or form with a lot of these commercial models where you can wall off your data to prevent the model from using that to continue to train. Yeah, that's one of the things. So we, so obviously we're an IT shop, right. So a lot of our customers come along and we're a Microsoft shop. So they come around say, hey, we want to fire up five copilot licenses. So we've been very cautious with people because, you know, we tell people, listen, unless you have your data structured and your security set up right, you know, you give this to the receptionist and she has start asking for people's salaries and if they're out there, it'll find it. Right. So we've been trying to really get our clients to really understand that this is not a tool to be deployed lightly and you need to get your infrastructure set up. Right. And that's not easy either. Right. Because there's, you know, 20, 30, 40 years of data out there that no one's organized, no one's looked at. You know, Donnie in the shop's not going to find it. But, but the AI will. It's again, I think you talk about, again, the data privacy and just the wall and Things off. It's, it's all going to be. Need to get figured out for sure.

So one of the things that I noticed about you and your organization is that you run a 24: 22:19

17. Can you tell me some of the key elements in creating a successful 24.7team without like burning everybody out? Yeah, you outsource the 24 7. So yeah, right now the. So we run our internal team from 7am till 6pm at our service desk. Anything after that right now is outsourced. At some point we'll get a critical mass of customers where, where it makes sense to bring in a house. We're just not there yet. All right, well, I have to wind out of sales on that question. Well, no, I mean I, that's kind of the direction that I thought it was going to go. So what are, I guess when creating an outsourced team, what are some of the key elements to look for there? Yeah, so in our, I mean it's really Easy to find 24 by 7 outsourced if you are willing to do some things offshore, which we don't have a problem with, but some of our customers do. So we have some customers that are under some regulations that's just not feasible. So finding a US based 247 that is priced to not break the bank now that's a little tough. Right? So find. And again, finding the right team, that was a mess with us. That, that's been a little challenging. So it's, you know, we've vetted a few, we've tried a few, we've switched around a little bit. So you know, we tend to be very partnership oriented. So when we find a vendor, if they work, we'll stick with them for a long time. So it's finding that right match for what we need I think is the biggest challenge. I've worked with quite a few organizations that we have done kind of around like follow the sun approach. Right. So whatever team is on is during their working time and they pass it on to the next team. Right. So I understand from that perspective and I also understand trying to find support that doesn't cost an arm and a leg. Especially with like there's a lot of countries now that you can find people who are really great at delivering deliverables that are very specific to a type of deliverable which kind of goes against the autonomy piece that were talking about earlier. So you have to kind of balance to provide them their direction, provide them like the SOPs to allow them to perform their tasks, be successful in their roles without, like, having to spend all of your time managing those individuals or teams. Yeah, for sure. And again, in it, we. Because, you know, it's. They're not cookie cutter problems a lot of times. Right. It's. You got to be able to get in, you got to troubleshoot, you got to have access to things. And it's. It's a. It's a. It's a challenging problem in our world, for sure. And, you know, the problem is unless you have a lot of clients, like most of the stuff, even places that run 23 shifts at a manufacturing plant, usually there's not a lot of activity at night. Right. So you. So you. You know, it's very expensive to have a team on staff or something for something that happens once every other week. Right. So it's. It's just a weird balancing model to try to find something that works across the board for everybody and is scalable. So, Jeff, I appreciate your time today. So at the end of each one of my podcasts, I give my guests 90 seconds to plug anything that they're passionate about. So in your case, that could be Andromeda, that could be finding a mentor, that could be finding a good group of friends to start a business with. But without further ado, the next 90 seconds are yours. Yeah. You know, I think for the right mentality, if you're up for the challenge and you're willing to put in the time and the work, being a business owner, there's. There's nothing like it. Is it. Is it stressful? Is there some weight that gets put on your shoulders? Are you the guy walking around carrying all the worries and. Right. We have a business loan here, and what's the collateral? Our houses. Right. I don't think. Sometimes I don't think people appreciate, you know, what goes into that and the risk that can carry with that, when you show up home, you got to tell your wife that. Yeah, I got to sign some paperwork that the bank, you know, could take the house. But I think it's a very rewarding thing. I think it's an awesome endeavor for me. Love. You know, our core purpose at the company, which a lot of that comes from me, is just helping people succeed. Right. So if there's somebody out there that you're. You're wondering about something, whether it's it or starting a business or, you know, what it's like to live in the Chicagoland area, I'm available to talk. I'd love to help people. I'd love to. Love to do that. So, Brian, I really appreciate you having me on. Thanks, Jeff. I appreciate your time today.