Thursday, January 08, 2009

Rethinking Tools - Part 6: Some Final Thoughts

This is the final post on re-evaluating what we sell, who we partner with, and which tools we use.

We looked at our Financial tool.

We looked at our Managed Service Delivery tool.

We looked at Miscellaneous products.

We looked at our PSA tool.

We looked at our Relationships.

- - - - -

Changing Tools

If you haven't changed tool sets, it seems like it will be difficult. But the truth is, once you've learned a specific tool set, you've also learned a certain mindset. Once you're rigorous about monitoring, patching, and "using" a service delivery tool, then changing tools is really just a matter of figuring out how to do the same thing with a different piece of software.

Think about upgrading from Office 2003 to 2007. "How do I do . . .?" You're not learning to write a letter. The basics are the same. But setting margins is different.

All these tools are the same way. Yes, there will be some new features. And something might be missing. But 99% of what you did with the old software is also done on the new software.

I know there are people who have half-committed to this or that or the other thing. There are people who haven't committed to any tools after three years on the fence.

Believe me: It's not a big, scary, irreversible decision. Nothing in this world is permanent.

You need to do what's best for your company. I don't know what's best for you, except to say that doing things the same way they were done five years ago is NOT the answer.

This is a Critical Time

If you're 90% sold on ConnectWise -- sign up now.
If you're 90% sold on Autotask -- sign up now.

If you're 90% sold on any of the tools that will help your company make more money, keep more money, and have an advantage in the year ahead, buy them now.

Vlad reports that he's seen a lot of small consulting businesses disappear in the last year. Not just drop their service: go out of business.

Do not
Do Not
DO NOT sit by and let this economy happen to you. Participate. Engage. Think through what you're doing as if it were your first day in business and you have all these options available.

Pricing Options

One of the key factors for our company in this current round of tool set evaluations has been cash flow. We looked very seriously at tools that allow us to pay month-to-month rather than buy into a big package that takes years to pay for and gives us no relief when there's a decrease in demand.

For example . . .

Zenith Infotech charges you for the number of desktops and servers deployed. If you have an extra ten in January, your bill goes up. If you remove ten in February, the bill goes down.

Compare that to Kaseya where you buy a certain number of licenses. If you buy a 250-pack of licenses, you'll make the same payment when you have three licenses deployed as you will when you have 30, 100, 150, 200, 225, and 249.

In the long run, Zenith might cost a little extra. But when you consider months and months and months of paying for Kaseya licenses that you're not using, Zenith is a lot cheaper for a very long time.

Autotask is the same way. Add a technician, your monthly goes up. Remove a technician and your monthly goes down.

Sunk Costs

If there's a more meaningless phrase in business, I don't know it. "Sunk Costs" is a phrase that some people use to refer to the fact you don't want to switch to a new product (or abandon a project) because you've already sunk so much money, time, effort, and energy into the old product (project, etc.).

In reality, economists use the term Sunk Costs to refer to the fact that the money you've spent already is gone and you're not getting it back. There's a logical fallacy in thinking that you should continue to spend money on something just because you've already spent a bunch of money on something.

That tendency is emotional and not logical.

We've all seen it with out clients. It's somehow easier to see this sort of thing with others than with ourselves.

"I paid almost $90,000 to develop that database in Access97. Now you want me to abandon it for this thing called It seems a shame to just throw it away."

Yeah, it's a shame. But zero-based thinking says you should look at where you are today and how many dollars you intend to spend in the next twelve months, and then figure out how you can maximize return on those dollars.

Abandoning old, comfortable tools and procedures is tough. But 90% of all businesses that failed were unable to change with the times. That may not be their only problem, but it's certainly ONE problem then have in common. Quite a while back I wrote about the Fisher Body company and how they survived because, even though they made carriage bodies for horse-drown carriages, they weren't in the horse travel business: They were in the transportation business.

If you were in the business of supporting DOS 6.0, or Windows 98, or SBS 2003, then you're out of business.

If you are in the technology consulting business, then you have a future.

If you use whatever tool worked a few years ago, then you're limited by that tool's ability to meet the future we face.

Remember, in every aspect of your life: The habits and tools that got you here are going to keep you here. If you want to go to a bigger, brighter, future, then you need some zero-based thinking. You need to re-construct yourself and your business from the ground up.

I've said for a couple of years now that "If I had to totally start over today, I'd go with Zenith."

So, when I push the reset button and rebuild my own business from scratch, Zenith is the logical choice.

It's kind of like rebalancing your portfolio on the stock market. Yeah, this stock did fine for the last five years. But if you had to spend money today, would you buy this stock? If the answer is no, then you should get out and use your money more wisely.

At Garth says in Wayne's World: We fear change.

In the end, we're no different from our clients. It's faster to do it the old way. Better the (devil) system I know than the one I don't.

What we had up until a few weeks ago had two advantages:

1) We all knew it. We all understood it.

2) We're not being asked to do anything different.

Here's another little truth you can take to your grave: All growth involves pain. Sorry. I didn't make the universe. I just live here.

More precisely, all growth takes place at the very boundary between what we're comfortable with and what we're not comfortable with.

So, for our company, here's a summary of what changed:

1) We sadly admitted that we're stuck with Quickbooks for the foreseeable future.

2) We're embracing Zenith full force and we won't be investing any more in Kaseya.

3) We've reviewed our Line Card and we're comfortable with the collection of products and services we sell. We change a little every year, but the basic picture is pretty stable.

4) We're moving away from ConnectWise and adopting Autotask as our PSA tool. Arnie thinks we'll come back in less than a year. Let's see.

5) We are embracing the most successful relationships we can moving forward. Some of them have already proven successful; some look like a great bet for the months ahead.

I won't pretend that this process of rebuilding my 14-year-old company from the ground up is easy. But I'm not going to live in the past. My experiences from 1995 and 2000 and 2005 are wonderful in a "Masters degree in life" course. But in the real world of business, we need to be using the best tools available today, at the best price.

Here's a glimpse of what the future holds for us:

- We're no longer marketing to Northern California. We have clients from here to Connecticut. Why should we limit our marketing when distance doesn't matter?

- We're building a 24x7 presence that doesn't require me or Manuel to be 100% involved with every job, every task, every day.

- We're developing a price model for office-less companies so that we can provide the same services (or more) from multiple disconnected points.

- We're rethinking price structures to be a step ahead of where most of our clients are today.

- And we have registered a lot of fun, cool domains so we can split-test our marketing to different clients.

I don't care about yesterday's low fruit. I want the low fruit of tomorrow!

Of course I could be totally wrong and we'll be bankrupt is six weeks.

Shit happens.

If we go under, I'll let you know.



  1. Great blog entry. I'm very impressed with you being so open - I've been dying to hear what other IT SMB's have been doing, but it's a very tight-lipped community.

  2. Well, welcome Chistopher to the vast world of IT SMBs who are NOT tight-lipped.

    Some of them (us) can't shut up.

    Check out

    Listen to more than 25 SMB conference calls, and see dozens of links to people who love to talk about what we do and how we do it.

  3. Thanks for the awesome posts Karl. You rock.

    One thing confuses me, however: I think that it's interesting that you've chosen Zenith and AutoTask. Traditionally, the two have had problems integrating. For one reason or another, they just don't play well together.

    Do you have a secret on this that you aren't sharing, or are you just using the two as completely separate tools?


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