Re-inventing Your MSP
Change is a hallmark of the IT industry in general and the channel specifically. Thinking like a startup and reevaluating every time there is a major shift—in people, processes, and technology—is key to running a successful business.
Netzbahn is in its third decade and fifth “startup mode.” When I started my computer services business in 1991, our first client was a local police department, followed by a regional accounting firm with 13 offices. We continued with a mix of public and private sector clients.
A business trend we noted—accounts receivables—triggered our first reevaluation. With private sector clients, a project could get pulled after most of the prep work, and our nonbillable time, had been spent. They were also slower to pay. Public sector clients, on the other hand, do have a slower close rate, but once they sign a contract, they must fulfill it due to Wisconsin’s Prompt Payment law. The contract could also be renegotiated.
So Netzbahn shifted to a public sector practice, focusing on municipalities with a population of 30,000 or below that had law enforcement or a local utility. A benefit of working in this sector is they must follow standards. We sold most of our private sector clients to another solution provider except for a few good legacy ones. We offered municipalities a discount if they prepaid their contracts, which lowered our average receivables from 180 to 14 days.
As 2000 approached and we helped our municipal clients become Y2K compliant, we could foresee a slowdown in projects and reevaluated once again. We shifted to a business consulting model that focused on outcomes rather than technology. Our services comprised an early co-managed model, creating policies and SOPs, writing RFPs, managing vendors, and ensuring the municipalities employed required state and federal security practices by engaging in “pre-audits” for their 911 dispatch centers and public utilities. We brought on staff with specific municipal knowledge, such as retired public safety, infrastructure, and administration professionals.
During COVID, we pivoted again to help our municipal clients move to the cloud. We brought in specialists and managed the vendors to make sure they followed compliance requirements. In addition, we picked up 37 new private sector clients, restarting that practice.
The tipping point, and startup 5.0, came after some very high-profile breaches in our industry. For Netzbahn to continue utilizing “tools” and offering specific services, our insurance would have increased 8x, on top of the additional liability solution providers now faced. We therefore changed our model to focus on contract and cyber insurance compliance and peer consulting for vendors, solution providers, and end users.
It’s a big issue up and down the supply chain. In the channel, for instance, we examine vendors’ liability rights in subscriber agreements and EULAs to ensure it is compliant with what the MSPs put in the terms of their contract to their clients. If MSPs aren’t clear about the terms and conditions of these documents, they could be liable if the user has a breach. If a user isn’t compliant with their cyber insurance requirements, they may not be reimbursed if there’s a breach.
How to Keep a Startup Mentality
Thinking like a startup is not just about adopting a new service model. It’s also about people. Whenever we bring in new staff or offboard people, it changes the flow and the skill set, which requires rebuilding processes. That means all of them; we can’t put a Band-Aid on a process.
It also means you must be willing to sell or transition a line of business. Our services should always be convenient for our clients and difficult for us. If we make it easy for us, but difficult for the client, we’re not good businesspeople. If we cannot provide excellent service to the client, we stop doing it.
With a startup mentality, we’ve also got to be smarter at working harder. We’re in it to have fun and make money, but I’ve never chased money, because if you do everything ethically, morally, and legally correct, the money will always be there. Importantly, if we always strive to be debt free, it gives us the freedom to reinvent.
Norbert Doeberlein, CEO and Founder, Netzbahn
- Company Founded: 1991
- Company Location: Lake Hills, Wisc.
- Number of Employees: 9
- Website: netzbahn.com
- Company Focus: We consult on contract and cyber insurance compliance with vendors, solution providers, and end users.
- Professional Memberships: ASCII Group, CompTIA
- Recommended Book: Building a Second Brain: A Proven Method to Organize Your Digital Life and Unlock Your Creative Potential, Tiago Forte (Atria Books, 2022)
- Favorite Part of My Job: Learning more about myself as I help others.
- Least Favorite Part: People who don’t try.
- What People Would be Surprised to Know About Me: I went to Atlanta to try to recreate Anthony Bourdain’s The Layover with a friend.
