The Two Biggest Challenges for MSPs - Solved!

I'm completing a course I teach on Customer Service for IT Professionals, and refreshing one of my most important slides - Facing your biggest challenges. In early 2025, your largest challenges remain unchanged. Luckily, the solution to both is the same. First the challenges.

#1 challenge for the next ten years: Losing market share to well-funded large-and-growing regional and national MSPs. Whether you like it or not, the era of large MSPs is growing. Many, but not all, are funded by private equity. All of them have the goal of growing as much as they can. By any means necessary.

#2 challenge for the next five years: Artificial Intelligence. As Dave Sobel pointed out in his Business of Tech podcast, we are entering an era where you can ask your favorite AI chat tool to solve simple technology problems (See https://www.businessof.tech/podcast/debunking-the-myth-are-msps-really-bad-at-sales-with-ryan-morris/, timestamp 22:00-24:00 and after). 

Both of these are continuing trends. No one should be surprised. Now let's talk about the reality of these challenges.

Larger MSPs provide worse service. Period.

One of my fundamental beliefs about service is that larger organizations struggle to maintain quality service as they grow. There are many reasons for this. First, most business are not well run, and larger businesses spend a great deal of time focusing on the wrong things. 

Second, layers of management come silos of knowledge and fiefdoms of control. Every additional top-down command separates technicians and other employees from taking price in their work. People always work within a system, so when they build a system focused on something other than high quality service, they end us with a system that puts service lower on the priority list - by default.

Most of these companies are obsessed with KPIs that do not promote quality service or quality workmanship. For example, a metric based on how fast you can close a service request can only have a negative effect on quality of service. It can - and does - result in alienated technicians who hate their jobs, are stressed out, and couldn't care less about actual client-facing service.

These larger companies also tend to be highly focused on ever-increasing profit. Profit is more important than clients. Profit is more important than employees. Profit is more important than service. Profit is more important than doing the job right the first time. The only possible result is lower client satisfaction, lower employees satisfaction, lower quality service, and more rework.

The never-ending search for higher margins also means that these companies charge less and less. Because they cannot compete on service quality, they compete on price. That's bad IF you try to compete with them. You don't have to make that choice. 

Lowering their price means lowering their profits per job, so they have to force their over-worked managers and employees to work harder and accomplish more with fewer resources. Nothing about that equation results in an enjoyable company to do work for or with. Quality continues going downhill and job satisfaction goes with it.

If you could design a company to compete with, it would look like a regional or national MSP. 

Artificial Intelligence is your best friend.

As Dave pointed out on The Business of Tech, we are already seeing ChatGPT and other AI tools solving basic problems. This will happen more and more. Again, this is 100% predictable.

Today, if you want to learn something totally new, you go to YouTube and watch a video. "How do I remove the rear speaker covers on a 2003 Toyota Camry?" Boom. Not one video. Lots of videos. And down the rabbit hole you go.

Very soon, you'll ask your questions of AI. "How do I serve DHCP on a third VLAN with an old HP switch?" A few follow-up questions and you're good to go.

The next step - coming in 2025 - is for dentists and accountants and their office managers to ask the same questions. This gets to the most important truth you need to remember about AI:

AI will not take your job. Someone using AI might take your job.

And the very, very good news is: You already know how to stay ahead of the game. You just have to be willing to do it. If you haven't read The Greatest Secret in the World by Og Mandino, today's a good day to start. (See https://amzn.to/3ExqxBB)

The greatest secret? It only takes a small, consistent effort to be better than everyone else. Why? Because most people will not make the effort. They will not be consistent. They will not do the only thing they have to do to be excellent and separate themselves from the pack. You can.

The solution to both problems is the same. This is very good news.

How do you win in an environment that is dominated by growing MSPs trying to steal your clients and artificial intelligence making tech support easy for everyone? It's a simple two-step process.

1. Be supremely competent

2. Deliver extraordinary service

Competence will always win the day. The greatest challenge medical doctors faced in the last fifty years is the democratization of knowledge. I can Google my symptoms and self diagnose a lot. Most of the arcane knowledge "owned" by physicians is now widely available on the Internet. 

I still have to figure out when and how to use it. But doctors are no longer considered god-like beings with special knowledge. No job is more threatened by AI that doctors. But when *I* need surgery, I don't look for the first available quack with a parchment on the wall. I want the best doctor I can find. I want someone who has "seen it all" and is recognized in their profession.

You must be the same way. Basic problem solving has always been the lowest level of IT consulting. When no one knew how to build a network, those who did thrived. When no one knew how to set up remote services, those who did survived. Slowly, our specialized knowledge became easier and more widely available.

This will never end. This is our industry. This is the life you've chosen.

Soon, much of the "Level One" support you offer will be available to nine-year-olds on their smart phones. Being really good at that will be essentially useless. You need to focus on all the really hard stuff that AI won't figure out for a long time - or maybe ever.

Those who've been in any industry for a while know the advantage of having seen a wide variety of problems and rare issues. At least for the foreseeable future, AI sucks at integrating all that. Be supremely competent and you will always have work.

Let other companies turn over their first tier support to chatbots that are already the alternative to your lowest-level challenges. Focus on things they can't do.

And deliver great service along the way. Remember: Service is Everything You Do. If your entire business is built around giving amazing service, you will find clients who want that and are willing to pay for it. You will also hire the right people, offer the right combination of products and services, execute perfectly, and build a business you want to work in.

Five years from now, almost no one will pay good money for level one tech support. But almost everyone will pay top dollar for supreme service and piece of mind. Your client never asked for technology. They don't care about it. It's not why they went into business. They do care about offering supreme service to their clients. Helping them do that will keep you very profitable and busy for a long time to come.

Supreme competence + supreme service = A Very Successful IT Business!

:-)