Company: Thrive Networks
Headquartered: Boston, Massachusetts
Geographical markets served: U.S.
YoY Percentage of Revenue Growth: 60 percent
Top Growth indicator (for that time period): Acquisitions (BizCompass, InfoHedge)
CEO/President: Rob Stephenson
MSP Success Magazine sat down with Rob Stephenson, CEO of Thrive Networks in Boston, to talk about what led to the success of MSPs in 2018.
MSM: What metrics do you use to measure your business and why?
RS: Our No. 1 metric is client satisfaction. Every client ticket includes a smile-back survey that gives us a good understanding of how we’re servicing our clients and the job we’re doing for them. Next, we measure the percentage of next-generation managed services that we sell — things like the cloud, cybersecurity, advanced wide area networking, SD-WAN, and network management. We’re really in the process of transforming our business to be more efficient and more responsive to our customers through these services. And then of course, last but not least is our gross margins.
MSM: What was the most important lesson you had to learn that allowed you to kickstart your business growth?
RS: We quickly learned that in order to grow and scale our business, you have to fundamentally change the managed services model. Most MSPs do a lot of break-fix work, selling hardware and maintenance of that equipment. That’s a very difficult model to scale at a high level. Instead, Thrive has moved towards a next-generation managed services path where we build out and manage client infrastructure in our own VMware and Hyper-V Cloud environments, along with Azure, and we then deliver SLA-driven services to our client base. We own the equipment, spec it out, and manage vendor relationships. Everything is uniform, making it much easier and more efficient to scale and provide exemplary service to our customers.
MSM: So, this next-gen managed services model has been the secret to your success?
RS: Yes. Absolutely. We’ve invested a lot in Thrive Cloud. We’ve made multiple million-dollar-plus investments in our Boston, New Jersey, and Dallas data centers with top tier storage, compute, cybersecurity, SD-WAN, DDoS, and other areas. Thrive now has seven data center nodes across the country — the latest two are about to go live in Las Vegas and Chicago during Q2.
MSM: What has been your biggest challenge this past year?
RS: It’s not even close: Our No. 1 challenge is getting our acquired businesses and new employees to truly understand and embrace the next-gen managed services model. It can be hard to teach old dogs new tricks, but once they see how we’re able to scale and grow at a high velocity and how we can improve response times for our clients, they buy into it. The key is training and education.
MSM: How are you able to get people to buy in, and how long does it typically take?
RS: It takes about a year. We do a lot of education, hold group meetings, and bring vendors in. We invest in training and encourage people to get certifications in the platforms we’re investing in. We also structure compensation and bonuses in a way that allows them to see that they can make more money selling monthly recurring cybersecurity subscriptions than servers and routers. Over time, things start to take shape.
MSM: What has been the single biggest change you’ve made in the past year?
RS: We put in a rule that says that every piece of hardware that is sold to a client that doesn’t go into our data center hybrid cloud environment has to be approved with a business case. We understand there are exceptions to our next-gen cloud model. A client may have a custom application that has to be on-site. Or they may have made recent significant investments in their own hardware infrastructure. We get it. But when sales and engineering have to take the time to write a business case for a decision like that, they tend to understand that the shift is moving in the other direction, and they need to groom the client conversations accordingly.
MSM: How has company culture impacted your growth and ultimately your success?
RS: We’ve built a culture around servicing our clients. If you want a raise, take care of your customers. If you want a bonus, take care of your customers. If you want a promotion, take care of your customers. If you forget rule No. 2, go back to rule No 1: Take care of your customers. We also want everyone to get to know each other and have some fun. We do quarterly events like F1 racing, axe throwing, or a nice meal at a restaurant. Every January, we get everyone and their spouses to go down to the casinos in Connecticut to celebrate the year. There’s zero percent unemployment in IT right now, and we understand that people really get to choose where they work and we want that choice to be Thrive.
MSM: What are your growth goals for 2019?
RS: Our ultimate goal is to expand 30 percent through a combination of acquisitions and organic growth. We have eyes on some of the financial services markets internationally in London, Hong Kong, and Singapore, but our major focus will be on getting more density between New York and Boston and expanding into the mid-Atlantic region near Pennsylvania, Maryland, Delaware, and potentially Washington, D.C.
MSM: Who are some partners that have supported you during your company’s growth?
RS: Kaseya, Fortinet, and Microsoft are our biggest partners. We use Kaseya VSA exclusively across our company — particularly in our cybersecurity services around patching and vulnerability assessment management. We’ve also made a million-dollar investment in Fortinet Cloud firewalls, IDS/IPS, SIEM, and SD-WAN across our data centers. In terms of Microsoft, we’re a big Office 365 and Azure shop. Also, Arctic Wolf Networks, Cisco, CloudJumper, Infinidat, and soon to be ServiceNow (Thrive’s new internal and customer portal platform) are key partnerships that have helped us transform the business to next-gen managed services.
MSM: What business thought leaders have influenced you?
RS: I don’t want to sound like a dinosaur, but I’ve always been a Jack Welch guy. I’ve read everything he’s put out. More recently, I’d say Jeff Bezos. I’m amazed at what he’s been able to do with Amazon and how he’s moved into different businesses and built an amazing supply chain. I love his focus on demanding excellent customer satisfaction.
MSM: Can you recommend a book that can help other MSPs or business owners grow their business?
RS: “Extreme Ownership” is written by a pair of ex-Navy Seals, Jocko Willink and Leif Babin. It’s about teaching everyone in your organization to become accountable for everything they do. Every single person, starting with myself, needs to be measured by the tasks that they own. So, for us, when a ticket comes in, you need to follow that ticket all the way through the process and ensure that the client closes that ticket with a smiley face and it’s a good experience. It’s A to Z ownership to ensure the proper outcome.
MSM: Any specific advice or words of wisdom to MSPs looking to grow?
RS: If you’ve been unhappy with the results of your business or if you want to grow, you’ve got to really commit to change. Embrace cybersecurity and the cloud. Really try to find innovative new products under the subscription model and get all your employees to jump in and buy into that vision.
MSM: Great. Thank you. Best of luck in 2019.