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Data Backed Decisions, With Colin Knox of Gradient MSP

• Kaseya

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In this episode, Dan talks with Colin Knox of Gradient MSP about Data-Backed Decisions.

The two explore what dirty data is, the kinds of dirty data in your PSA, and the importance of making data-driven decisions.


Connect with Colin here:
LinkedIn: https://www.linkedin.com/in/realityknox/
Website: https://www.meetgradient.com/

Speaker 1:

Hello, I'm Dan Thomas Shefsky and this is the connecting it podcast.[inaudible] To the connecting it podcast. I'm your host, Dan Thomas Chesky. And joining me today is Colin Knox, CEO of gradient. Collin. Nice to have you today.

Speaker 2:

Hey, thanks for having me super happy to be here.

Speaker 1:

No, this is a, this is going to be really cool. I mean, we're, uh, we're going to talk a little bit about some data, uh, and, and some different things around data today, but I know you've got a pretty awesome background in the channel and the MSP space. So why don't you give us a little bit of your background for some of our listeners that maybe don't know you?

Speaker 2:

Yeah, I've had a, it seems like a, nearly two decade love affair with the MSP market. So I worked at a few MSPs in graduating roles there before I eventually stepped out on my own and started my own MSP. And, um, you know, we were very fortunate there. We grew to about a$4 million MSP in five years. Um, so some rapid scaling at that business and near the tail end of that, uh, founded a company called pass portal. Um, so as I stepped out of the MSP, I, I focused on building a channel vendor to help improve the cyber hygiene of MSPs for a number of years. So grew that up and, uh, ended up exiting much like you guys at ID agent, but to a different main, main player. And, um, did some community work with, with solar winds for awhile before, uh, taking some time off and now jumping back in, uh, with gradient and instead of helping with cyber hygiene where we're on the data side this time. So, yeah, well that's,

Speaker 1:

This is, I want to kind of get into this. I mean, cause I've seen some of the stuff and I know it's around a lot of data, so why should MSPs be making decisions based on data?

Speaker 2:

I think, you know, if you look out there, there's, there's tons of statistics, right? But one that has really hit with me is that the average adult makes 35,000 decisions a day makes between, you know, what, what they're going to wear, you know, which, which vehicle they want to take, what they're going to do and stuff, but a lot of those and not all of them, but a lot of those pertain to what you're doing at work, whether you're in business, whether you're working for business or whatever. And to me, I think anything that you're doing that many times a day, you need to find ways to accelerate, make it more efficient and make it as good as possible. Right. And I think the number one way is, is when we think about decisions we make in our everyday life, we're looking back to say, what if I made this decision before or who do I know that's made a decision like this before? And how did that play out? So you're already playing on past experience, but you may not have with your brain, the quick immediate access to all of those data points and examples and samples and everything. So that's really why and where leveraging data in your organization to be more data-driven can give you that immediate access to history, that experiential review, um, to help inform your decisions quicker and hopefully better. Um, you know, there's again a myriad of stats that, that data-driven organizations outperform non data-driven organizations anywhere between two and 20 X. So if you had an opportunity to just use something, you already have to either double or 200 times like what you're doing in your business today, why would you not give that a shot? So it, just, to me, it seems so relevant and so worthwhile. No, it's

Speaker 1:

I that's an interesting statistic. I didn't know that you said 35,000 decisions a day.

Speaker 2:

Yeah, yeah. It's everything right? Like which microphone are you going to use? Do you want to jump on this call right there? It's 35,000 is the average adult and that's, that's insane to me, but it's the reality is you're making decisions all the time about every little thing. So however you can improve that is going to be worthwhile.

Speaker 1:

Yeah. And I think, you know, I came from being an MSP CEO, myself, and, you know, going through, you're trying to make decisions and you're looking for data that, you know, is there, but it's just not, not easily accessible without running hundreds and thousands of reports and trying to figure everything out and put it together. Um, because we're always looking to see, are we profitable? Uh, you know, or is there things that are hidden behind the scenes that could make us even more profitable if we just expanded, but we don't know it until we look at the data. So I kind of want to go into another question for you though, is data hygiene. Um, so we've got all this great data, but what if it's not good data? And what if it's bad data? I mean, let's talk about that a little

Speaker 2:

There's, there's a lot of unfortunate consequences that come with, if your data that's informing your decisions, isn't good, right? Like you said, you always want to know who's profitable, what services are working, what's not working, um, so that you can fine tune and optimize everything as you go. But can you imagine, you know, the amount of time that your technicians, even in an MSP are wasting by just searching for a certain component or thing on an it system, which is sitting there as a config in your PSA or in your documentation tool, but it hasn't even been there for the last year or two years, right? Like how much time is being wasted, searching for things that no longer exist on your technical team, or how many times have you had technicians engage on an issue or looking at something which has already been solved or somebody else's working on, right? Like there's all of these intrinsic connections and consequences to it. Whether it's wasted time wasted effort going down to bad debt. I was speaking with an MSP that we were doing some, some work with recently and, uh, you know, a bit of data popped up and it was, you know, a record that really stood out to them. It was a contact that worked at their largest anchor client and he just looked at it and he said, no wonder, they've been automatically with their PSA and integrations and everything, sending their monthly invoices to this contact for the last forever. And they could never figure out why this, why the company wasn't paying their bills. And they had to chase and escalate and do all of this extra work, the contact hadn't worked at that client for a year and a half. Right? So it's, it's all of these things that like, you're not getting paid. You're maybe making investments on things. You know, a classic example is big mistake I made in my MSP, right? Is, is we, we wanted to scale the business even further and have room to grow. And so we looked at doing this new office space and building out this massive place where we could have a network operation center in the bullpen and, and all of this great stuff. And so the way I decided if we could afford to do that build was okay, so I know how much money we have now. And I know my AR verse AP, like I know what that cash flow's looking like right now, but what I don't know is how much money we're going to have in the future. So went, looked at our opportunity pipeline and guessed kind of on what our average close rates were. And everything said, okay, we've got this much money and that'll land by this time, let's go build, you know, what, we'll do our staff and then we'll transact and do everything. Well, my opportunity pipeline was very misinformed by prospects and opportunities that were years old, which I had never cleaned up and nobody had ever cleaned up. In fact, some of those businesses probably weren't even in business anymore. So while we may have hit the true close rate of the actual opportunities, what we didn't hit was anywhere near the amount of money that I thought that we were going to have. So we were underwater by like 200 grand, which in, at that point, what were you a 15 person op that's pretty significant. Right? And so all of a sudden you're eating a whole lot of Crow trying to find ways to make ends meet and stuff to happen, and that could have killed my entire business right now. If we had been more in tune with data management and data hygiene and just cleaning up things that were up to skating and fogging up our view of our business, well then I probably maybe wouldn't have done like the extra massage spa room in the office or the lounge area. And we would have added that later on. Right. But instead I risked our entire business by misinformed information.

Speaker 1:

Yeah, it's crazy. And you know, you sit back and you listen to, I mean, I hear stories all the time. We were just talking to someone not too long ago. And uh, I heard someone say like, Hey, I didn't realize we weren't billing a customer. Uh, they just assumed that they had all their things in their further 365 licenses and things like that. But they started to go through their data and they're like, we're missing like three or four people we're building a month. And it's just, you know, the hygiene of your data is really important.

Speaker 2:

Well, it is like, it's just, again, you go to how efficient and MSP is trying to be right. And needs to be with the way that they run their business model to have technicians that are scrolling through endless list of ticket types that shouldn't even be used and miss categorizations, or, you know, maybe there's numerous, very similar ticket types. So when you're looking at your big dashboard of where your technicians time is going, you don't see this elephant. That's really sitting in the room because it's just all these slivers on the donut chart of very similar things. But together, maybe that's 15 or 20% of your technicians time that should be amalgamated and connected and that's dirty data. It just things not being as they should, whether it's a rhombus, whether it's out of date or stale or just incorrect. Right. So it, there's a lot of things that can, can change and shift if you really just take control of your data and have your PSA, especially as clean as possible,

Speaker 1:

Let's get in. And we were talking about data hygiene. What are some of the different, uh, kinds of dirty data, um, that, uh, that you referenced, you know, as you're talking through this

Speaker 2:

Yeah. Like it's it's could be anything, right? So you could have stale data, which is just it's data, that's old. And at a point in time, it was relevant. But now for you to look at it, you know, things have completely changed. So let's say you were looking at what your hourly rates were from 10 years ago. Well, how many MSPs are that focused on hourly rates today? Very few. Right? So it was good data to know maybe what you were charging back then. What's more important would have been how many hours you were spending on the average client instead of how much you were charging per hour. Right? So there's stale data there that could be misinforming how you look at things and considering financial performance, right? There's, you know, just inaccurate data. People, you know, a client decides to change their domain because they could finally afford the.com of, of their, their business or whatever. And all of a sudden that doesn't, you know, maybe that gets updated in one system, but not another and not in your PSA. And all of a sudden things aren't flowing properly notifications, aren't landing, where they should be landing, right. You've overall just erroneous things where, you know, people move in. And I remember in the MSP as a technician, I was guilty of this. And then I know our technicians in our MSP. We're guilty of it, but a client tells you, or, you know, Hey, we're moving. In fact, we helped them take down, tear down, relocate their ISP, everything else yet, back in the days when we were mailing invoices or mailing invitations to customer appreciation events never landed because we never actually updated their address and the PSA, which didn't update things through the accounting system or to any other marketing engine and stuff. And it's like, it's these little things, right? The technicians get busy doing what they do. Right. They're busy in the business of being a tech. They don't think, oh, Hey, I should probably let you know our main accounting contact. I just terminated their account. Like they got, let go. So, so it's, it, it can be anything from, yeah. Inaccurate just generally error failed out of date, stale, just irrelevant. Right. And it's, it's all of those types of things that can happen and, and it can come from anywhere. And it's a naturally occurring phenomenon. When you look at any kind of system of record systems, right? Like it just accumulates over time, clean data that was clean at one point, eventually 10 become dirty or irrelevant. That's just natural. Right? You've got consolidation plays happening in the MSP market and mergers and acquisitions of what data's good. What, data's bad. You've got integrations now. Like I have no idea what the average amount of integrations into a PSA are these days. You know, when you think about quoting systems and your RMM and your documentation and your CRM and your virtual CIO tools now, and everything else, these are all programmatically automatically creating dirty data because there's redundancies, there's, you know, misconfigured, you know, primary, secondary, who, who, who takes priority in which data is, is going to be king in this. Right? So there's, there's all of these things that can happen over time, which just drives the muddiness. And we're all so busy doing what we do to sit down and look, and I, you know, I've been same thing as, oh, I go to add a new contract for new client. And I start scrolling through which services I want to add to that contract. And I'm like, well, crap. There's like a thousand services I have in my catalog and my PSA, I should clean that up. And then you load that full list and you're like, yeah, there's no way I'm touching this list right now. Forget it. I just, yeah,

Speaker 1:

I, I can remember those days. I mean, I kind of goes back, you know, so here's a question, you know, on this is we talked about hygiene, you know, talked about, you know, making with it. So let's say I'm a brand new MSP starting out, like, what are some, you know, basic tips that we could give someone that's just starting. And then maybe for someone that's established right now, like what are some best practices and some things that they could do

Speaker 2:

When you look at it, like the number one best way to solve for this, whether you're just starting out or whether you're at a point in time forward is to be proactive, right? Managing things at the source so much, like we do everything else in our business, whether it's regular, you know, monthly or quarterly review of contracts, whether it's, you know, annual performance reviews for staff, there's cadence and frequency of us doing certain proactive and just administrative type tasks, always doing quick double checks, right. Just doing scans of your various lists, doing scans of, of the main records in your PSA. And just, just watching that stuff, right. Doing a periodic review of the integrations that you have with your PSA, right. Can you imagine if you stopped using a certain tool and whether you canceled it or turned off the integration or not, and let's face it, most software companies have bugs where integrations will keep sinking data, even if your account's not valid anymore. And all of a sudden you're being overwritten with data that is months old, right. So reviewing what integrations are set up, that's kind of a security best practice too. But you know, doing spot checks, if your data pulling a report, pulling lists, just trying to see, does something seem off, you know, what, what could it be? So that that's one of the biggest things is, is prevention at the source, making sure things are configured properly, but the reality is no matter how proactive you get stuff is going to get muddied and get dirty. And at that point, your, your choices to make, you said, let's lock yourself in a room for a couple of days and start sorting through it and filtering it and cleaning it and saying, yeah, these accounts are no longer valid. You know, these people aren't with those accounts anymore. It's like, you know, we're, we're going through our SOC two again here. And your user access reviews that you have to do, right? Like who has access to these systems who doesn't, who shouldn't anymore. Um, you know, it's doing some of those things just on a regular basis to just tidy up, tidy it up and clean it up. And it's very worthwhile because as much as we talk through the consequences that can happen, there's actually a principle in data science called the one 10, 100 rule, which is the costs of data management. And so the way that that breaks down is it says two to have and maintain a clean record is a dollar for the lifetime of your business. So, Hey, it sounds pretty cheap, right? Like let's pay a dollar, we keep things clean and it's good. If you find a dirty record and you need to clean it, the cost to clean, the average dirty record is$10 over the lifetime of your business. Wow. And that's taking time to identify it and find it and then take a remediate of action. And then any of the cascading actions that have to happen as a result of that. But even as much as that is, you know, when you think about like, if you're a mid-sized MSP and you have 2000 end points that you're managing, if 10% of those were bad, you might think of, do I want to spend, you know,$2,000 cleaning up data or whatever? Well, the risk to it is that that hundred, if it gets the trend, we're talking dollars the whole way through this principle, it costs your business a hundred dollars to have and maintain a dirty record as dirty, right. And that comes into the time that's being spent on things that shouldn't be spent that didn't need to be, whether it's wasted effort, wasted time, Western wasted, investment, bad decisions, the cost of your business right now, would you spend$2,000 to clean up what could be a$20,000 mess on your hands? Absolutely. You would. Right? So there's, there's all of these rules to data science and data management. And when you think about this world, that's getting deeper into artificial intelligence and machine learning and deep learning and everything. Whether it's the chat bots that are being informed. Can you imagine if your chat bot that you recently implemented for your MSP was being fed bad data to make bad recommendations to your clients? Yikes. Right? Like it's insane. So that's why in, in data management data scientists, as, as sexy as that, that term sounds right. Like, oh, you got to play with data. They spend 80% of their life and their time just cleaning data, 80% deal, you spend 20% on the fun stuff. Right. Reading the data, figuring out creating models and, and all of that stuff. But it's so valuable because if that data isn't clean, all these recommendations that are coming out, all these predictive models of what the future would be like is all going to be so misinformed. That's,

Speaker 1:

That's really good insight on, on data. And I've never thought of, you know, I sitting back here going, I can remember the days of my PSA and like trying to bill. And like you said, our service agree, you know, things that we were doing as services. We're not doing any more and you're scrolling through them all. It's like, why haven't we acted on them yet? Why didn't we do something? So I wouldn't be scrolling through this. I would be right where I need to be. And that little bit of time, every single time really adds up.

Speaker 2:

Oh, even, you know, you might think, Hey, we're, we're only making X profit on this solution where we sound like dark web monitoring. Right. Well, but, but are you, or have you just not updated what your cost is in your PSA for that as you've grown your business and hit new volume thresholds that have unlocked different margins and stuff with your channel vendors. Right. So you may say I'm going to abandon this service because it's just not worth it to me, but you're not actually looking at the right bits of information because you're only pulling your report on your dashboard or whatever else that isn't maybe reading from your accounting. That's not paired properly with accurate data somewhere else where your profit could be actually double on one of these services, you're thinking of nixing. And then you choose to focus on one where you're just not seeing that same level of success. So

Speaker 1:

Yeah, it's all, uh, it all brings it really to, to light for us. And so I know, you know, we just saw the announcement on gradient, you know, and, uh, our listeners, you know, you want to talk a little bit about it in kind of, you know, as we go toward the end here, just what, uh, you know, we've talked a lot about data and, uh, you know, I saw your guys' release yesterday. Um, you know, what, uh, what should an MSP that's listening today, you know, kind of take away from this that gradient can help with.

Speaker 2:

Yeah, absolutely. I think, I think it's that you can be better. You can make better decisions that can really secure your better tomorrow, right? At, at gradient we're, we're very firm on our beliefs that we believe that MSPs deserve and should be making decisions based on facts. We're very firm on our beliefs that MSPs deserve to have equal access to data and insights about their business to allow them to take control of their own destinies. So we're on a path to create this, you know, end goal for us of data equality in our space, a place where we can help MSP succeed and make better decisions off the back of cleaner data. And off of data, that's been built by the backs of their peers and those who have gone before them so that we can inform better decisions, not just based off of how you're performing in your business, but how MSPs globally and more broadly are performing. So if you're interested in cleaning up your PSA, if you're interested in making better decisions off the back of better data, then check us out at me, gradient.com. It's, it's a free solution, completely free to MSPs for data hygiene, uh, with your PSA. And, uh, yeah, we're happy to just help start cleaning up the industry by cleaning up the PSA's.

Speaker 1:

That's really cool. And I really, you know, like you said, you know, data is not always the sexy word that everyone goes to butt in or wants to, because they're always thinking every time you hear data, you hear think of time. And I think the number one thing I hear from MSPs is I don't have time. Um, but this sounds like a really great solution. That's going to help me get some time back and actually probably helped me make money because I'm going to realize some of the things that, uh, we could, we could be so much more efficient like you were talking about earlier. So yeah, it sounds really exciting. I hope everyone goes onto the site and, uh, and takes a look. Um, I always go over this final thoughts, things you want to leave our listeners. I mean, this has been, you know, some really cool information around data, but, uh, what would you leave with all our listeners today?

Speaker 2:

You know, I think it's, it's, we've hit a juncture in, in our industry where we've automated almost as much as we can automate. We've offered almost as much as we can offer our clients. And so we're now needing to lean on the ways that we can grow our business and impact our business and even understand our business. And with that, um, you know, gradients mission right now is to save MSPs$1 billion in dirty data costs to their businesses. Um, and that's what we're looking to contribute to the industry. We're sitting at the forefront of a hundred billion dollars in opportunity over the next four years is what markets and markets estimated near the end of last year is that four years from now a hundred billion dollars in opportunity, which is another third it's, it's essentially a 33% growth of our entire industry, right? Are you positioned and in the place to make the right decisions possible to capture as much of that a hundred billion dollars as you can? Or do you want to give that up to all of your, your peers and competitors? Right. So take some time, get control of your data, understand your data, and learn how to leverage it for you so that you can get as much of that as possible.

Speaker 1:

Great advice. And Collin, you're always a wealth of knowledge, and I appreciate you being on, I mean, look and congratulations. Um, I saw saw the launch yesterday and lots of exciting buzz. Uh, you know, we're really looking forward to, to seeing how this continues to grow and how MSPs are, you know, working better with cleaner data. So, uh, I love your mission, love your, your story on, uh, you know, helping bring back the efficiency and, and get money back in the pockets of the MSPs as well.

Speaker 2:

Awesome. Hey, I really, really appreciate you guys having me on today. No,

Speaker 1:

And that, that everyone, that's our episode today with Colin. So if you enjoyed this episode, you know, go into the iTunes store, find the connecting it podcasts rate is five stars. If you would, uh, you know, we appreciate that. And again, this is a channel podcast and we're bringing everybody in from all different aspects of the MSP channel to help and help you grow your managed service providers. So appreciate you listening to the connecting it podcast. And until next time have a great day.