Terry Hedden (00:00)
I’m excited to welcome Arlin Sorensen to the Grow Limitless podcast. Arlin is a living legend in our community and one of the best human beings I’ve ever met. He’s gonna share with you what it takes to be successful in the real world, both monetarily as well as what’s inside. He’s also gonna share his excitement and fears related to AI and how you should level up your business and succeed and ultimately achieve your dreams for your business and life. Enjoy.
Arlin, you’re one of the people in the industry that I honestly look up to at a level that is abnormal. I think you are one of the best human beings that I’ve ever met and the fact that you’re in the tech channel is even more wonderful because it feels like an industry with a lot of good people. So if you stand out amongst good people, you must be doing something right. Arlin, thanks for joining us.
Arlin Sorensen (00:59)
Or maybe something wrong, Terry. That’s the other way to stand out.
Terry Hedden (01:02)
Maybe I’ve fallen for some sort of an advertising campaign In all seriousness, Arlin. Thank you for joining us. It’s really good to have you here I think your story is one that needs to be told as many times as we can get it told ⁓ You know the more I know the more I’ve gotten to know you over the years the more I’ve worked with you around you and with others that have worked with you the more inspiring I think your story is and ⁓ You know, I’m just honored that you chose to share it here at the grow limitless podcast
So most people don’t know this, and tell me if I’m wrong Arlin, but is your name not Arlin and are you not from Harlen? So it’s Arlin from Harlen.
Arlin Sorensen (01:39)
That is correct. That’s exactly the status.
Terry Hedden (01:42)
Like you or did they want to just make everything about you funny from the very beginning?
Arlin Sorensen (01:47)
They named me after the pastor that married him, so…
Terry Hedden (01:50)
You’re kidding. No. Okay, so there were two Arlins from Harlem.
Arlin Sorensen (01:53)
Well, he didn’t actually live in Harlan. He lived in another town close, but… But yeah, that’s… ⁓ That is the name and I’ve heard it a hundred thousand times at least in my life.
Terry Hedden (02:05)
That’s awesome, and I think it’s kind of a cool start to your story. ⁓ I guess, Arlin, I won’t start with that. Help me understand your story. Where did you come from? What made you start Sorenson Computer Connection in 1985?
Arlin Sorensen (02:20)
So I grew up on a farm here in southwest Iowa and outside of Harlan, about five miles, little town that I’ve lived around my entire life. Went to graduated high school, went to Iowa State University and studied farm operation. My career path was to come home and be part of the family farming operation. And I did that, graduated in 77 and came home and farm with my dad. And then my brother came home in 80 and we were grown. Our farming operation and in 1982 I bought an Apple II Plus computer to do farm accounting on. $4,000 worth of technology, 64k of RAM, know, a couple floppy drives.
The sales guy said this is more technology and power than you’re ever going to need. And he didn’t quite get that right. But I fell in love with technology at that point and started helping my neighbors. They’d come over and look at the computer, you know, and we’re all excited. So I’d load up a couple of them and we’d go to Omaha, which is about 50 miles away. That was the closest place you could buy a computer in those days. And I’d help them get what they needed and come home.
I’d help them set it up and after a couple years of doing that it was like maybe I should start a little business. This thing might actually take off and become a real industry. And so I did. started a little hobby business in 1985 and ⁓ began to sell ag accounting systems to farmers in the area. so we started to grow. Nancy and I did it ourselves. She’d answer the phone. I was still farming full time and would do the technology in the evenings. ⁓ once I got people set up, then they wanted to learn how to run it better so I started to teach a few classes and ⁓ for the first five years it was Nancy and me and that was it and I was not intending to really grow a business out of it but it continued to increase and in 87 I switched over from the Apple line to the PC compatible lines. Apple was just too difficult to deal with so and the accounting software that I was using got ported over so we flipped to the PC side and you know demand started to grow from there so I hired my first employee in 1990 that was a pivotal moment as I’m sure you remember you know when you’re all of a sudden responsible for feeding somebody else’s family it changes the way you have to run and lead a company but you know my entire marketing model was get people into a class. So I had been teaching classes four nights a week and that was getting to be a little much with the family. So my first hire was an instructor. And so she would teach two nights a week. I taught two nights a week. had a room for 20 people to sit in our class. Usually couples came. So we had 10 couples in a class. was an eight week class. We taught Microsoft Works and farm accounting. And ⁓ if they came to class, they bought a computer. So I knew if I put 10 couples in a class, I’d sell ten computers and while I was teaching the next class, I’d install the computers from the last class. you know, it was a pretty good ⁓ model except that I was doing it all in the evenings when I should have been home with the family. ⁓ But from there, you know, in the early 90s, Microsoft came out with ⁓ NT 3.1 and I hired a couple of network engineers and 1995 we were up to five people and they released Windows 95 which really made technology usable by everybody. And we went from five to thirteen people that year and we had no systems in place it was all in our heads it was chaos it was not not good.
But you know, it got us on the right path and we began to build the systems and put things in place and to grow the company, which was going along really well up until 1999. I bought into the whole story that Y2K was going to be the greatest technology event in the history of mankind. And I hired 13 extra people the last half of 99. So we at that point were up to 36 folks here. Working on the farm in the middle of a cornfield. Y2K came, Y2K went, we had no work at all and ⁓ by the end of Q1 we were bleeding cash really, really bad and so we had to figure out what to do and that’s where our HTG came from.
One of my leadership team members said, we need to talk to some people and try to figure out what we’re doing wrong because, this is supposed to be the greatest thing that ever happened. So we called three other dealers around Iowa and said, can we meet in Des Moines and spend a half a day just comparing notes? And they agreed to do that. And we actually spent the whole day together because we talked about a lot more than Y2K. And ⁓ at the end of the meeting, you know, we asked if they’d like to continue to get to and they said sure and that’s where HTG came from. ⁓ The peer groups, it was a pure accident driven by our own need for information. ⁓ So we started to meet and again I had no plan to really grow peer groups. I wanted to create one group and ⁓ so we started to slowly add a few companies into the mix and between 2000 and 2005, we got to 12 members. 12 was my number. I modeled that off of someone that I believe in very heavily in scripture. people would see me at an event and they’d keep saying, we want to be in your peer group. We’re hearing about this peer group thing. And I’d say, no, 12 is the maximum we can handle. After a few meetings, I started to create a watch list and by early 2006 I had 30 people on a waiting list and it was like okay maybe there’s enough here to actually start something and so we started a second group and then a third group and I was attending SMB Nation out in Redmond, Harry Brelsford’s conference each year and he was having me talk about peer groups to the audience and in 2007 I remember Vivian I was I did our presentation talking about the three pair groups we had Came off the stage and I had 66 people asked to be put on a waiting list And it was like now what am I going to do? Because you know I when I had three groups I could do one meeting a month for Four four for each group and it worked out well was you know a lot of travel, but I was was manageable.
We went from three groups to nine groups in 2007, and there was no way I could facilitate them all. So I had the genius idea of asking my leadership team to each facilitate a group or two. And ⁓ that was in the middle of our ⁓ &A spurt. ⁓ We had gotten stuck at $4 million back in the late 90s, and we were stuck within a few hundred thousand of $4 million for five years in a row.
And, you know, the problem was we didn’t have sales. We didn’t have a sales engine. There was a lot of owner led sales and I had some other folks helping, but we really didn’t have a sales engine, didn’t have marketing. And that was kind of what our market would support. was a $4 million company. ⁓ So I did my first acquisition in 2003 and got a VP of sales out of that merger which helped to begin our growth again. And so, ⁓ you know, we were in the middle of this &A growth while this peer group thing was exploding. And ⁓ my leadership team said they would do it, and they did for a couple of years. But ⁓ in 2008, ⁓ the fall, Scott Scroggin, who was our newest leadership team member, drew the short straw and had to come tell me.
They’re not going to do this anymore. They can’t, they can’t run a growing company and facilitate peer groups all over the country. ⁓ and so at that point we transitioned to members that we’re going to facilitate and we did that for a couple of years, but it’s a lot harder to control culture and other things when you don’t actually have people working for you. And so, ⁓ we, we again, pivoted, but you know, today we’re serving, over a thousand people through the peer groups.
And, you know, Australia, New Zealand, and Europe, ⁓ you know, I never would have guessed in a hundred years that it would explode the way it has. But it’s been so much fun to see how that all has worked together. you know, I wish I had a napkin or something with a plan on it, but there really wasn’t anything. This has been a God thing that has just come along and, you know, we just put people together in a room and provide a little framework and ⁓ it’s peers helping peers and there’s nothing more powerful than that.
Terry Hedden (12:31)
Love it. You mentioned, you mentioned, ⁓ 12, you mentioned a couple of things, Arlin, you know, I’ve been a part of the evolve community as a, as a, as a, as a guest, I guess, a sponsor of the event. I was never in it necessarily, but I’ve, I watched from afar and I, I noticed the prayer in the morning. I noticed the, the, the go giver slash servant leadership slash 12. There’s a lot of religious foundation of that. And I was for one, extremely attracted to that. I think that is I believe in ⁓ a ministry, a business is a ministry, and I believe that you ⁓ don’t impose your religion on anybody, but you practice on everybody, and you love them and care for them. And I see that intertwined all over evolve. And I’ve talked to you number of times, and I see it all in your DNA. Where did that come from? How has that passion kind of translated into the business world? How much of your success, I think, do you attribute to that?
Arlin Sorensen (13:30)
I attribute all my success to my faith and God’s blessing. I mean, I am not the sharpest knife in the drawer, Terry. There’s no question about that. There’s a lot of people smarter than me. But, you know, when we were going through the challenges in the late 90s, early 2000s, you know, I made some really stupid decisions as a business owner. And in the 90s, I kind of bought into the whole, you can’t have faith and work mixed together. So, you know, you gotta have separation of church and state. And so, you know, I decided, okay, I want to keep growing. Maybe that’s what’s holding us back. So I decided I’ll check my faith at the door when I walk into work and, you know, I’ll pick it back up when I go home at night and we’ll see how that works. Well, I can tell you it didn’t work very well. In fact, you know, I went in the ditch badly.
You know, financially, relationally, the company was struggling, ⁓ and, you know, God whacked me upside the head and used really my banker and some close friends to say, what are you doing? You know, the bank, I went to the bank to borrow money to ⁓ do an acquisition and, you know, the first thing he said was, after looking at my last three years of tax returns, we usually loan money to people we think will pay us back. And by looking at your tax returns, it doesn’t look very promising.
And you know, it was a crisis of really not really knowing what to do. you know, it drove me to my knees. It drove me back to the reality that you can’t separate faith and work. You’ve got to be transparent and real if you want to be successful in the workplace. And so, you know, I immediately flipped the switch and ⁓ went back to really living life as authentically and transparently apparently as I could, not beating people over the head or trying to shove what I believe down anybody’s throat, but just being honest with people about who I am and what I believe and how it impacts me.
The ideas that I’ve had come to me over the years, a lot of the HTG framework, stuff that God gave me, you know, as I slept or whatever. ⁓ so all the credit goes to my faith in God’s blessing.
And I’ve been blessed to be able to hire people that have that same passion so that the team is just amazingly unified in what we’re trying to accomplish. And ⁓ we know we can’t solve everybody’s problems, but we know somebody that can. And we do have prayer and devotion and all those kind of things together to really leverage God’s blessing and power.
Terry Hedden (16:41)
That’s amazing. ⁓ I bet you’ve probably touched a lot of people and brought Christ to a lot of people and given people the courage to bring Christ into their business. Is that a safe bet? Did all those things happen?
Arlin Sorensen (16:55)
Well…I mean certainly I get a lot of questions from people about you know how do you bring faith into the workplace you know we just we just ⁓ brought a new group into Evolve this last week and that was one of the questions that came up is how do you how do you have faith in the workplace without offending people? Well sometimes you’re going to offend people but that’s their choice not yours as long as you’re not you know really trying to just overwhelm them with it.
We all have to decide how we’re going to respond to that. the comment you made about Evolve being kind of a different environment, that’s probably the number one comment I get from people that come to the first time they’re there, is there’s something different about this Evolve peer group thing. Can’t really put my finger on it, but there’s something different about you people.
I know what I can put my finger on, I know exactly what it is, but ⁓ you know, it, you know, it’s our opportunity to be a witness of God’s grace and faithfulness and you know, we’ve been true to that for the last 25 years. This is our 25 year anniversary for the peer groups and you know, we have devotion five days a week when we’re together and ⁓ you know, it has touched people.
You know, HTG came about really because I was in a different peer group in the late 90s. But the rule was we talk about business and business only. there were some folks that were going through some tough personal times and it just didn’t sit right with me to ⁓ let them flounder while the rest of us were talking about our EBITDA number. So that was really a foundational reason for how we tried to structure ⁓ HTG back in the early days and it’s continued to prove to be a powerful thing. You can’t really talk about legacy and life and leadership without really addressing faith. ⁓ So it’s a part of the framework we’ve built and God’s given us.
And hopefully we are impacting lives all over the globe.
Terry Hedden (19:13)
Yeah, it’s funny. I look at my camera here. I see that that statue there is the C12 member of the year. ⁓ And it’s ironic that you talked about sort of that balance and that integration and the importance of having both because they’re so related. for me, ⁓ that’s why I went to C12 originally. And this is going to be ironic to you. went to go to C12 because I wanted to have a place to understand how to integrate the two. think at the end of the day, that’s really what it was about. And, ⁓ and C12 does a good job of that. They have some Harvard based educator build a lot of business curriculum that teaches you a lot of really important things. have a, ⁓ of religious sort of instruction built in there, and then they help you marry the two and help you have that confidence. And I also had a corporate chaplains of America person that kind of was in the company. ⁓ not kind of was literally in the company and played a major role in the growth of Marketopia. But at the end of the day, I left C12, and the reason was because when I needed the help, they didn’t understand the business. And I felt like…
You know, when you’re talking to very wonderful people and successful people, but they’re tree farmers or construction people or I felt like the MSP world was just another world for them, you know? Yeah. And so it’s ironic that I feel like maybe you’re a little more business in, ⁓ in, in evolve than, than, and they were a little more religious perhaps, I don’t know, but I, there’s a lot of benefits of surrounding yourself with people in the same place you are, the same industry you are, even if their religious foundations aren’t necessarily the same, because I know that’s not a requirement at Evolve, it still is that sort of common DNA. And when people need you, you can help them, because you understand their business enough. They probably have people step in and help each other run the business when people are going through dark jobs. I applaud you for that, because as a C12 member, there were things that I loved, man. I loved, loved. I felt like I was…I would come up with some of the best ideas literally in the meeting and I would literally write down notes to myself and leave with 30 lines of ideas and thoughts and needs that I had leaving there. So I can only imagine how powerful that is as Evolve and I applaud you for having the courage to make that, the courage to have Christ be involved, but also to bring people together in the technology industry. As I’ve told a lot of people over the years, it’s filled with an amazing people. The average IT business owner is a great person. I’m sure there’s, you people who are not as much, I’ve been so overwhelmed in this industry. I felt blessed to just know people, to be surrounded by them and the number of people that deserve to win as MSP business owners because they’re doing things the right way, often God’s way, but also ⁓ just with a great heart. You know, they’re trying to make a difference. They’re trying to help people. They’re trying to leverage technology to help their customers and their employees. I think it’s a, so it’s an industry filled with people who deserve to win, but often struggle to win. And so, you know, you and I have taken that from two different angles with evolve. You’re really helping them from a business perspective quite effectively. And then I’ve tried to help them with the area of the of the of the business that they tend to struggle with the most, which is growing the business lead generation and sales. So we’ve kind of come at it from different areas, but with the same ultimate goal of just helping people. So I applaud you for that, Arlin. It’s not easy to do and it’s something you’ve done quite well with a thousand concurrent customers man that’s something man that’s amazing it’s something I haven’t been able to do in a Marketopia to help a thousand people at the same time is definitely a goal of mine and I hope to get there one day.
Arlin Sorensen (23:02)
Well, it takes a village. The thing about God’s principles, Terry, that I love, it doesn’t matter if you know where they came from or what the foundation is. They always work. What God says always works. And so, if you build those principles into what you’re doing.
You don’t have to wonder if it’s going to work or not because what God says is true. so, you know, that’s why I work so hard to stay connected to that because if we follow and live God’s way and follow his principles in our businesses, we’re going to have success. And that’s been the fun part of the last few years. You know, the industry has matured to the point where there’s a lot of gray hairs like me that are exiting. And to watch the exits that people are having and the success best they’re having, blown way past what they ever thought would happen. It’s been amazing to see it happen. And then to watch them as they start their next chapter, want to come and give back. And so we’ve got a bunch of former MSP owners now that are facilitating the groups for us. I Connie needs a little small army of people to facilitate all those groups. But these guys have found success.
Been there done that like you said the beauty of our industry like you said is great people but they never leave that’s that’s really the beauty is they just go somewhere else and so it’s like a small family almost ⁓ of people but really great folks and ⁓ you know a lot of them are faith-based and ⁓ really leverage that as well
Terry Hedden (24:47)
Yeah. Well, I noticed one thing I’ve noticed working with evolve, you know, it’s a more mature business owner on average. Um, for, for one reason is it costs money and not everyone can afford to get in there. But in your journey of evolve since, you for the last 20 years or what have you, you know, why do most MSPs struggle?
And if you had like five things that you could teach an MSP about the average struggling lifestyle business, struggling to get over the hump, know, has a tough time to make money, tough time work-life balance, tough time, you know, achieving their dreams. What have you seen as common challenges with those and what advice would you give them?
Arlin Sorensen (25:31)
Well, I get the question all the time, you know, because within Evolve, they’re not all the same, right? They’re more mature than the average industry person, but, you know, there’s 20 % of Evolve that really, really blow out the rough. ⁓ And so the one common thread that I’ve come to believe over the years is they have a plan. They are planners. They know what they’re trying to accomplish.
They have a plan to get there. They’re disciplined in that, in following that plan. And planning is more than just a list of things they’re going to try to accomplish. mean, it’s specifics. know, EOS as an operating system is a part of that. But they really know what they’re doing. They’ve got a budget. They actually manage to a budget. You know, it’s just the discipline. That’s the differentiator within the evolve ranks from what I see where people get stuck and it’s the area that you’re trying to help them with more than anything is it’s the mindset around sales, right? A lot of business owners don’t like sales. They think sales is a dirty word. Nothing happens till you sell something. And that’s the part that I think so many MSPs kind of lose sight of.
It’s not like, you know, it’s optional. You’ve got to sell if you want to grow. So it’s a head thing for so many owners. They’ve got to really understand if they don’t change that mindset and really focus on learning to sell and understanding that sales is not hiring some unicorn that’s going to come in and be able to go develop their own leads and create their own marketing material and do all the prospecting, you know, those people, there might be a few of them out there but they’re not there’s not a lot of them ⁓ but once you hire even a good salesperson then you got to manage them ⁓ they aren’t typically self-managing they need to be held accountable and to be measured and all those things and you know so it’s really that’s the foundational problem for growth for most of these companies is
They don’t have a plan for how they’re going to create a sales team and what that looks like and the order that those steps should be taken because it’s not a one typically a one person show. ⁓ And this is the stuff you guys live with all day every day. But you know, if I could change their mindset and have them embrace sales when they’re smaller they have to have owner-led sales so the only way they’re going to get to the place where they’re not the guy is they got to grow.
So many of them make the mistake of just hiring somebody and thinking that magically it’s going to fix everything and you know, 90 days later they’re firing them because they haven’t sold anything and they go hire another one just like them and wonder why it doesn’t work. So that’s a big, big, big blocker for sure.
Terry Hedden (28:40)
Yeah, you know, it’s obviously a passion that I have trying to help people with that, but it’s been hard, Arlin. ⁓ I’ll share with you. You know, it’s hard to help people who have no money that they need to help. So that’s issue number one. Issue number two is I feel like the industry overall almost demonizes salespeople. Yeah and all the people in the industry. It’s really hard to help people in the area that they need the most help in. It’s just like, so hard to win. The people who drink the Kool-Aid and get it and embrace it and don’t give up, their growth rates are 30, 40, 50 % a year. They just the dial as they create capital to do that. then so many, man, it’s like, I don’t know, want to quit before it starts, know, or as soon as things go wrong, they want to quit or, or maybe they, they have a sales process built on word of mouth leads. And when they get a normal marketing lead, they go in kind of expecting to win without having to actually sell anything. it’s become sort of like ⁓
I don’t know, almost like a challenge to me personally, beyond professional. You know, it’s like, okay, doesn’t matter if you build it. If you build it, they will come. But how do you get them to achieve the goal? Because I didn’t start Marketopia to make a dollar. I started Marketopia to make a difference. So at the end of the day, if they’re not achieving their dreams and getting to that top 20 % of evolve, like you mentioned, then I feel like I failed. So it to me has been a personal journey. How do you get through? How do you make a difference? How do you get them to invest the time, energy and resources necessary to balance their business out and build that sales engine that you talked about.
How do you get them to do that? What’s the secret to getting through where they say, I need to dedicate 3 % of revenue to marketing and lead gen no matter what. I need to dedicate 10 % to sales. How do you get people to do that versus maybe over investing in service or undercharging so they don’t have any money to give up or otherwise just not making, having the discipline to invest in what it takes to achieve their goals. What’s the secret, Arlin?
Arlin Sorensen (30:59)
I wish I knew the secret. mean, you know, the problem for many is they came up on the technical side of the business. And so they do look at sales as, you know, not even a necessary evil, just evil period. And so it’s a mindset thing. You know, the only way that I’ve really been able to get people to think differently about it, Terry, is to really focus on what the final outcome is that they need to have to have success. ⁓ You know so many so many MSPs believe that if they just get up and work hard every day someday somebody’s gonna ride them a big fat check and they’re gonna have this pot of gold at the end of the rainbow. That is not what happens.
You know, they have to create value in their company and they aren’t going to get there if they aren’t growing and they can’t grow if they don’t sell. And so, you know, I try to work backward with let’s figure out what your number is that you need to achieve whenever that time is going to come. And for a lot of them, it’s getting closer and closer.
Figure out the number and then let’s look at where you’re at today and let’s see how big the gap is and the only way you’re going to fill that gap is to sell stuff. Nothing happens if you don’t sell. And so people begin to put numbers on paper and say, my goodness, you know, that’s the thing that breaks my heart more than anything is when somebody calls me and says, you know, I’ve been doing this. had a call recently, 27 years I’ve been doing this.
It’s fed my family, know, allowed me to educate my kids. We’ve had a good life. I went to market to try to sell the company because I’m, you know, 67 years old and I’m ready to retire. I’m tired and nobody wants to pay me anything for it. And, you know, can you help me? It’s like, wow, there’s not a lot I can do, you know, unless you’re willing to spend a few more years to actually create some value in your organization.
And the only way that’s going to happen is if you learn how to sell or hire the right people to help you sell. ⁓ So when people actually see the numbers and they see the gap and how big it is, then they begin to understand. The problem is a lot of them are waiting till way too long.
They’re at a point where they’re just tired and burned out and want to exit, which they probably should because they’re not helping themselves by sticking around in their state of mind. But it’s a plague in the industry. There’s no question about it. That’s the number one issue that if we could solve that, could solve, we could make a lot of people very, very happy and successful. ⁓ But planning to me is the foundation. Getting them to do it, that’s a whole other story.
A lot of them just want to run a lifestyle business and they don’t think about what happens after the lifestyle. Because the lifestyle goes away when you quit drawing a paycheck ⁓ if you haven’t created value.
Terry Hedden (34:13)
Right. It’s really interesting, Arlin. So, within the Evolve community, do you see different levels of commitment to growth? What do you see as differentiates the companies that are succeeding versus the companies that are not, even within the Evolve community?
Arlin Sorensen (34:31)
Well, here’s the sorry fact about the industry as a whole. Service leadership benchmarks thousands of partners. 18 % of them lost money last quarter. Lost money. Didn’t build value. They lost money. Which gets back to your they’re not charging enough for what they do, or they don’t manage their service team effectively, or there’s a whole host of reasons why it happens.
You know, there’s really no reason in our industry with recurring revenue services as the foundation that anybody should be losing money. ⁓ But there are. ⁓ So, you know, it’s getting them to be disciplined around planning and then executing the plan.
Planning’s not magic, it just gives you a path. you know, with service leadership now with the sleek tool, that helps them identify how they should be moving forward. ⁓ We’re trying to equip them with all the things we can to help them figure out the path. If we can get them on a path and help them execute, which is where the accountability of a peer group really makes a difference.
They don’t want to come every quarter and get beat up because they didn’t do what they said they were going to do. And I have seen lots of times if people will make one change a quarter, if they come and learn one thing and go home and execute it in eight quarters in two years, their company will look completely differently. You don’t have to come home with the whole long list of things to change. You pick the right one thing and go home and fix that every quarter.
Two, three years, you will have a company that’s ready to sell and that will support your future. And I guarantee you that some of the changes are going to be around sales and marketing because that’s where the biggest pain is. But getting it written down, having a plan, putting a system in place like EOS to actually help you execute it, and then just doing the work, it’s not impossible by any stretch. mean, hundreds of companies are being successful.
But they gotta have a plan. That really is the key.
Terry Hedden (36:40)
Yeah. How do you inspire people to do that, Arlin? How do you, let me give you, let me give you something I’ve seen out there, right? So, ⁓ you know, they’re not focused on growing. They’re focused on either optimizing EBITDA in the short term. You know, they all have a long-term dream, but they’re so focused, you know, minded on the short term. ⁓
How do you, and I’m sure you see that. You see that with all of the community where some people are growing and doing what it takes and investing and other people are over invested in the wrong areas and they’re just not doing what it takes to grow. How do you inspire those people? What do you say to them? How do you help them? How do you get through to them?
Arlin Sorensen (37:20)
Well, you know, we spend a lot of time talking about legacy and the reality of what happens. You know, the truth of the matter is that if you don’t have a plan for legacy, if you don’t have a plan for how you’re going to use your time, you’re going to piddle away your money and you’re going to piddle away your time and you’re going to get to the end of your career, which may have been fulfilling on the journey, but the post-career is not going to be fulfilling.
You know, and I’ve had people tell me, you know, I had to go get a job at Walmart as a greeter so I could, you know, feed my wife. That’s not a happy conversation. You know, our spouses have tolerated, you know, 80-hour weeks and skipping holidays and birthdays and anniversaries and all that stuff, no vacations for years thinking that at some point this is going to change and we’re going to be able to live the life that we would like to live. That’s the conversation that can help change people’s minds. I want you to go home and talk to your wife about the fact that, you know, when you’re done, if you don’t make some changes…you’re not going to really be able to do anything other than you know sit at home and you know eat beans and rice. You’ve got to prepare for the future and you can’t depend on the government to do it for you so you’ve got to take care of yourself and prepare. It clicks sometimes but a lot of times people you know think magically somehow it’s just all going to work out and because they’ve worked hard somebody will write them a check.
That is not true ⁓ i see it happen over and over where people go to market and there is no buyer or the buyer will pay them a pittance compared to what they want and I had a and a guy call me recently he’s got a he’s got a business that he went to market and said I need three million dollars for this company his top offer was three hundred thousand and then he had to go home and tell his wife what was going on. And he called me and said, would you be willing to talk to my wife and explain to her kind of where we went wrong and why we were in this situation? And I said, no, that’s really not something that I’m interested in doing. I wish we’d had this conversation five years ago.
It’s a plague in our industry. We work way too hard and make way too little money in most cases.
Terry Hedden (39:56)
Yeah, it’s quite unfortunate. It’s almost like, I don’t know if it’s escalating commitment to a failed course of action, Harlan, sometimes, but I can tell you that that’s what I wake up every day. How do I make a difference and help people achieve the success that I achieved and address what I see as their number one problem in business? How do you get through? How do you motivate? How do you keep them disciplined? And I don’t know, you’ve just done a great job of that your entire career, Harlan, so I applaud what you’ve done.
Admire you that you’ve been able to help so many people do so many different things, both as an MSP helping your customers and then from a HTG slash evolves perspective helping so many MSPs, It’s pretty awesome to watch and one day I hope I can make a tenth of the difference that you’ve made. ⁓ So that’s awesome, man. ⁓ I just admire you, man. I think it’s really cool what you’ve done.
Talk to me about, you were, none of us are gonna be around for 50 years, but we’re all, we’re gonna be here for a while, and there’s a lot of MSPs that aren’t selling right now and that are. Either the ones consolidating existing MSPs, starting new ones. Talk to me about the journey over the next five years. What do you see? What do you see happening in the market? How can MSPs be successful? How can they capitalize on the opportunities that are there and help mitigate the risks that are also there?
Arlin Sorensen (41:22)
Yeah, I believe, Terry, the next five years we’ll see more change than we’ve seen in the last 25 years. ⁓ And it’s going to happen fast. you know, consolidation of the industry is going to, I think, create more separation between companies than we’ve had ever, you know, because of the investments that people are going to need to make if they’re going to really capitalize on AI and RPA. ⁓ That is going to change the world.
Some good, some not so good, but it’s going to change the world. And what I see happening today for so many is that they stick their head in the sand and say, I’m going to wait until everything’s figured out and it’s in a box and it’s packaged and it’s going to be easy. I don’t see that being the way this works. I think the people that today are making the investment and learning the technologies are going to be the winners. ⁓ A lot of those are going to be larger companies. know, they don’t have time for sales and market or money for sales and marketing. They sure don’t have money to be sending people off to training around AI. At least that’s what they believe.
We have to learn this technology. the beauty from my perspective is there’s gonna be more opportunity for us with the changes to make money than we’ve ever had before. Because, you know, let’s be honest, managed services, people are paying us to make technology work for them.
When in fact, you when you buy something at the store, you kind of expect it to work without having to pay somebody to make it work. ⁓ The beauty of AI is going to be there’s going to be a direct correlation between the technology that gets deployed and the impact it has on the customer.
There’ll be some internal, you know, cost savings and effectiveness for an MSP, but that’s not where the money’s going to be. The money is going to be, I go out and help my customer understand their business and the processes they have and how technology can help them be more successful. There’ll be a direct ROI number that you can calculate that shows the impact.
And I believe that the opportunity for MSPs that really make, do the work, have a plan, and get the right people on staff, because it’s going to take some different skill sets. There’s no question about that are going to really, really win. And I think the separation is going to become pretty great. And the middle is going to kind of fall out. You know, it’s business process automation and analysis, data governance and securing that data. You know, there’s just all these new areas that are going to come together.
All of them require massive skill upgrades, but all of them that are going to come with a hefty price tag that customers are going to pay because they’ll be able to see the return. ⁓ And so it’ll be so much easier to sell from my perspective than many services are where you’re paying me to make your computer turn on in the morning. It’s going to be really powerful and we can go in and say, hey, let’s look at your business processes, identify where we can use AI to help, not necessarily take people out of the business, but refocus them on areas that they’re more productive and let technology do some of the grunt work for us.
Terry Hedden (45:02)
Yeah. I, know, I, I, I, a thousand percent agree with you. can tell you that at the last 90 days of 60 days, I’ve literally been heads down trying to ensure that every person that trusts Marketopia with their future is embracing AI prepared for AI can capitalize on AI. We’re building our systems to generate leads for it, systems to close sales for it. and then we’re coaching them on how to build that practice without hiring anybody and without spending any money. Without spending more than they get, let’s put it that way, profitability wise.
And I see the convergence of HR and IT. I think the future MSP takes care of cybersecurity. I see the technology working better and better each year. Cloud computing, SAS has really helped a lot with bugs and problems. Now it’s more about human support than it is about technology support. And then what I see is AI is going to bring in two completely different opportunities for an MSP that are both technical, but they’re more HR related. And that’s the opportunity to help manage the the the agentic AI the agents the the digital employees yep and then the robotic employees I see the two different opportunities coming over the next five years and it represents.
If you look at what IT’s worth to a business, it’s more about peace of mind, and that has a certain value. But when you can go into a business and say, listen, we’re going to be able to automate 40 % of the work being done in your business through robotics, through agents, through agentic AI, all of a sudden now that money can be spent toward helping those businesses grow and help identify opportunities. And the MSP is poised to be the person to actually help them implement it, secure it, manage it, build on it ⁓ and it just feels like a once in a life it’s to me it’s bigger than cloud computing yeah cyber security I feel like it’s almost like you know, convergence of human capital merging into managed services and saying, listen, MSPs, the world needs you. Small businesses need you. If you don’t embrace this, if you don’t go into it, you know, not only will your business be struggling mightily in five years when your customers have less humans, but also you’re doing a disservice to your customers. If you’re not the one bringing it to them, the trusted advisor that they’ve depended on for their technology innovation for years.
If you’re not the one bringing it to them, you’re hurting your customers. You know, not only you hurt your employees, but you’re hurting your customers too. Do you share that perspective or?
Arlin Sorensen (47:40)
Absolutely, and you’re risking losing those customers because somebody else is going to have those conversations I mean one of the beauties from my perspective, you know It’s so much easier to sell things into places. We already have relationships and we’re taking care of so we’ve already got a customer base that we can sell this technology to we just have to learn it and Understand how to deliver it in a way that they can understand the impact.
I just think there’s so much opportunity there and ⁓ we just need to really all be focused on learning and applying and going out there and having the conversations. Not waiting till we’re comfortable, not waiting till we got this nice neat package in a box, it’s all figured out. That’s not gonna happen. The people that figure it out are gonna be the ones that win. And the time to get doing that is now.
Terry Hedden (48:37)
Absolutely, absolutely. I’m preparing a workshop for all of our customers here this month or this month actually later this month on how to do that. What’s your step-by-step plan? How do we do it in 90 days? How do we do it without hiring people? How do we do it ⁓ without hurting anybody? But…you know, do it nonetheless and do it quickly because I, the one thing I’ve seen about AI that has been mind blowing to me is how fast it is. And I talked to, there’s a very person I respect quite a bit in this industry that’s working on this, how to get, how to help MSPs. That’s what I’m focused on. How do I help MSPs with this transition? They’re trying to help it as well. ⁓ and, and I can tell you their R and D is nowhere near fast enough. It’s almost like AI is passing them by there.
They’re always going to be three months from launch because they can’t innovate fast enough. So it’s a challenge. It’s a challenge. get that part. But I feel like the MSP is, if anything, we’ve dealt with change. know, cloud computing. I remember when that was the end of the world. How are we going to survive? It’s going to end the world. It didn’t. created way more opportunities. I think AI is the same thing for an MSP, at least for the next probably 10 years. Past that, who the heck knows? I mean, we may all be at board and buying islands and Bora Bora and sink that drink in my ties all day but I don’t see that I see AI be adding more complexity more opportunity for people in technology I think it’s the greatest opportunity for revenue for profit a matter of fact the ROI that I built for my little workshop is an 800k positive EBITDA over the next 24 months implement this program based on my analysis I think you can generate 800,000 in profit and no one what I know about the industry.
That’s more than most MSPs make by a long shot, and it’s something they can do quite easily by just embracing this opportunity.
Arlin Sorensen (50:35)
Well, part of the mindset, Terry, that people have to get attached in their brain is that 800,000 is not 800,000 in the market, right? It’s eight or 10 times that in the marketplace. So that translates into $7.5 to $10 million of…really value that they’re creating. So, and you can’t create that kind of value in our current model, you know, at that speed, right? It would take you five years to create that kind of impact. So, the opportunity is through the roof. There’s no question about it. But it does require us to be willing to change and do things differently. And it all starts up here with our mindset.
Terry Hedden (51:22)
Right. You know, for me, Arlin, what my and I’m curious on your opinion about this strategy, but Marketopia strategy is to start with the revenue. How do we, cause making investments is scary, especially when you don’t have a lot of money to start with. So my plan is to align lead generation and salesmanship with preparation. In other words, while they’re getting themselves ramped up, we’re getting marketing and lead gen ramped up. So as soon as, know, in that first 90 days, to be honest with you, it’s day 61, they’re launching the revenue side, getting the leads to get the sales, to make the money to pay for the investments. Because I feel like MSPs don’t have, you know, half a million dollars to invest in this opportunity. They need to create that half a million in terms of revenue to invest in that. Do you like that approach? mean, do you recommend people align sales and marketing while they’re doing their investments on service or do you recommend having service buttoned up perfectly, perfectly before you launch that sales and marketing activity?
Arlin Sorensen (52:22)
No, perfection doesn’t happen. And it’s not going to happen in this industry because it’s changing way too fast right now. I mean, you can be perfect today and be way behind tomorrow. you know, I think the key is…I’d be looking at my customer base today and looking for those verticals or those industries where the application of AI is going to be easier and quicker. Because that’s one of the beauties, I think, that we’ve got in front of us. We already are serving a set of clients.
None of them really have got anything with AI going on, at least not at a serious level. So they’re all, they’re not just prospects, they’re hot leads. know, they’re opportunity for us to get out there and find them. And, you know, as we do that, we’re going to build some skill sets and some verticals probably that we’ll be able to capitalize on outside of our base. ⁓ you know, selling to a current customer is way easier than going out and finding a new one from my experience. And so if we are really out there talking to our customers and building the service delivery alongside the lead gen and the prep, you know.
The year’s been a little funny with this tariff stuff and people are kind of slow making decisions. So I think the sooner you start having the conversations, the better. Because I don’t see a lot of them are going to jump right on it day ⁓ one. we got to plant seeds, we got to spend the time, work the relationships, and on the back end be building ⁓ value that we can deliver to the customer that will make an impact.
Terry Hedden (54:08)
Right. I love that. And I think it’s interesting. I didn’t realize you were as passionate about AI as you really are. That’s amazing. ⁓
You know, so how do you, how do you, what’s your plan? How do you get MSPs to buy in? How do you get them to believe? How do you get them to make investments in this? How do you, I guess, how do you make sure that the legacy that you live at the end of the day is you’re getting close to the end of your career. Hopefully you’re going to be around for 50 more years, but my guess is your wife has different plans for you. ⁓ How are you going to make sure that the, that the industry doesn’t do this right before you exit? How do you make sure that they embrace that AI? What’s your approach? How are you doing it through Evolve? How are you doing it through the community?
Arlin Sorensen (54:52)
Well, you know, interestingly, ⁓ I spoke to several groups last quarter about AI and about the change and the transition. you know, my comment was pretty stern. It was, if you don’t get on this train, I would suggest you get off this train because it’s not going to be pretty.
And a lot of you have got some value in your business today that if I’m not willing to make the changes and if I don’t want to make another curve jump, I’d be looking for a buyer. And I’ve had several reach out and say, you know what? We kind of thought about what you said. And I don’t want to make another jump. I don’t want to go from selling hardware to being an MSP to being in a cloud to being a cyber guy.
I don’t need another jump. I’m going to exit. I think that’s where we’re at. People need to, this is probably the, well it is the biggest thing that’s impacted our industry in its history. ⁓
Cloud took forever, it’s still taking forever. Cyber happened quicker because it had to, but AI is going to happen much faster yet. And people need to start working on it and we’re not going to feel comfortable. mean, it’s just too much change, too fast for us to sit there and wait till we’re comfortable.
We’re gonna have to work again with customers we’ve got relationships with. It’s gonna be some trial and error. There’s gonna be some, we’re gonna stub our toes some and we’re gonna hit some home runs. But if we don’t get started, somebody else will walk in there and we will no longer be the increment. We’ll be the guy on the outside trying to fight our way back in.
Because there’s not a lot of greenfield opportunities out there in the marketplace anymore. So we need to take care of the customers we’ve got and then use that to help us go out and get others.
We gotta get after this and you know, Connectwise is working hard to equip our tool set to help that. But at the end of the day, it is all gonna come down to the owners deciding I’m willing to change my mind and make those ⁓ transitions and ⁓ learn and grow. Those that choose it, I think will rocket ship grow.
Terry Hedden (57:16)
I totally agree. I totally agree. And one of the things that I’ve been cautioning people about is there’s a lot of AI that’s going direct to the business and direct to the consumer. They’re bypassing the channel. And one thing I’ve witnessed is first, Microsoft is really pro-channel. There’s a lot of money they’re investing, a lot of time and energy investing in trying to make sure that Co-Pilot Pro is the de facto standard for all Microsoft-centric businesses, which are obviously a lot of them.
But I don’t know that they have the patience this time. I don’t know that they can afford to have the patience this time. If the channel doesn’t embrace and support, I don’t see how Microsoft can sit and wait patiently like they did with cloud, or they risk open AI and the other platformsjust making Microsoft irrelevant. My gut instinct tells me that we’ve got to embrace it or the channel, the fundamental channel ecosystem is going to break down. You know what I mean?
Arlin Sorensen (58:16)
I do. You fire 9,000 people, you got a little extra money to work with. But no, I agree with you. And I think it’s going to come down to data governance. People don’t understand if they’re working with ChatGPT or Gemini or these others, their data is just flowing out to the world, right? Copilot will allow you to have some governance and some control. And so I think, I don’t think the message has been very clear about that, because people are using ChatGPT just like it’s their best friend and it definitely won’t be if employees put the wrong stuff out there and it becomes public. I think there’s some things that Microsoft has in its pocket that it can use but ⁓ yeah, it’s going fast, Terry, and we gotta figure it out.
Terry Hedden (59:09)
Well, Arlin, you know, I’ve got to, I’m 50, I’m approaching my 50th birthday. You’re a couple years ahead of me. 20. Between the two of us. 20. 20. years. I don’t believe that, Arlin. I don’t believe that.
Arlin Sorensen (59:21)
Yeah, well it’s true.
Terry Hedden (59:22)
I, my, my intention is to do my part, you know, and, and I, my focus is on the front end. feel like if, if the, if I can generate and I think I can generate an infinite number of AI leads for MSPs, I am confident that I can implement more than they could possibly handle right now because the opportunity is so great. If you and the rest of the ecosystem can focus on making sure they can actually do something successful,
Successfully add value so that they get paid to do it again and again and again I think the future is very bright and I’m gonna do my part and and You know, I know you’re gonna do yours ⁓ Arlin, you know, I want to close off by talking a little bit about legacy You’ve made a difference
You know it, I know it, everyone knows it. You’re one of those people that has left their mark on the industry. I know you got a lifetime achievement award. You’re probably gonna get 20 more before you, or shortly after you hang ⁓ up your saddle and start riding off into the sunset. What do you want your legacy to be? Where do you think it is now? What do you have left to achieve?
Arlin Sorensen (1:00:33)
You know, my legacy is in people, right? And helping people have success, but really, you know, my focus now is really on helping people find significance.
One of the biggest surprises I’ve had is, you know, I started these peer groups called Success to Significance. it’s for people that have exited their companies, have had a great career. And what I find is that, you know, within about 30 to 60 days, they begin to become miserable and unhappy and by a year they’re lost, they’re floundering in the wilderness and not sure what to do. I want to really, I want to help people not fall into that trap by planning, it’s again, it’s a planning thing. It’s preparation. So much of success and significance is related to just getting ready for the realities.
It’s not a surprise that we’re all gonna exit our companies. That just happens. We’re gonna retire or we’re gonna die or something. We’re not gonna take it with us. So we need to start thinking about that ahead of time and communicating with our families and our spouses.
We get people, these guys that have sold, they come, we do have them bring their spouses. So that’s one thing I learned right away. Nobody talks about this stuff at home, and they need to be talking about it all the time.
But if we get people thinking together and really, again, encouraging each other to prepare, a plan will help them not go through this valley that they go through after a very successful run before they get their feet on the ground again. I want to get people going and just take off and…and be investing in people and making a difference in folks based on the things they’ve learned and experienced. mean, you ultimately I people to come and have a face-to-face conversation with themselves in the mirror. ⁓
Terry Hedden (1:02:57)
Thank you.
Arlin Sorensen (1:02:57)
Because eternity is a very long time, right? And a lot of people have been so busy and just kind of pushed it off to the side. And I want that to be a part of my legacy is challenging people, but challenging them about what matters. And significance is not about money. It’s about people.
And that’s the legacy that I want to leave behind is that, you know, I’ve built into people, I’ve helped people, and I want to just walk alongside people and help them find their path to happiness and joy and impact ⁓ into the future.
