Terry Hedden (00:00)
I’m excited to introduce today’s podcast guest, Terry Rossi. Terry is an awesome guy, intelligent, experienced, and wise. And I know that you’re going to enjoy learning from him just like I enjoyed speaking with him. He’s got a story of incredible success. And I’m so impressed with how he managed the entire end of his MSP career. He grew quickly at the end, rapidly accelerating his growth and value.
And then went through a very methodical and professional response in terms of selling his MSP that resulted in maximum value. I’m sure you’re to learn from his experience and benefit for years to come.
Terry, you are one of the biggest personalities in my mind in the industry. One of those people that has a voice that has been used for podcasts and radio. You’ve done, I don’t even know how many interviews and I love hearing your story every single time. Thank you so much for joining the Girl on the Limit podcast.
Terry Rossi (01:04)
My pleasure, Terry. It’s really a pleasure to be here. I’ve always been a big fan of Marketopia and the company you’ve built. you know, anything I do for the podcast, for the company, I’m happy to do.
Terry Hedden (01:14)
Awesome. That’s awesome. Okay. Good deal. Well, you know, this story is, ⁓ this, session is going to be all about you and your journey and what, you know, what got you where you’re going? ⁓ and, how can we help listeners that want to grow up and be Terry Rossi when they grow up, you know, how do they, how do they learn from the lessons that you’ve had and, benefit from the experience you’ve had and not maybe get to avoid some of the growing pains that you’ve had to endure. So I just get us off what
You know, what led to you becoming an MSP? Tell me a little bit about your journey.
Terry Rossi (01:47)
Yeah, sure. So first off, let me just say I’m a regular Joe. know, I am ⁓ Michael Gerber’s definition of a technician that had an entrepreneurial seizure. I started the company back in, I think it was 95 with my business partner. We were working in the enterprise space around 2008. I discovered MSPs, know, the managed service provider network and connect wise was actually the first thing I found in the space and I was in love with it. I thought
These enterprise clients, they don’t know what they’re doing. They’re moving from green screens and the client server and, and, you know, networks, they have no idea. So we took, we took the MSP concept and we rolled it into our enterprise clients. They were our first, first customers. And then we built a team out and, ⁓ and started attacking the, the, small to medium sized business. And we were fortunate. You know, we had, ⁓
A really good team from the start. Terry, I know you remember my guys, Brian and Jim. They were my inside and outside sales guy. We started with them and, basically built the company on their back. We were fortunate enough for probably 10 years to have an inside salesperson, a cold call or telemarketer, whatever you want to call them that was dedicated and, ⁓ really churned out calls all day. That’s a rarity. And once we lost that person, he actually retired on us, moved down to Florida with you guys. We went and looked for a partner and that’s how we found Marketopia. that was really good because we were able to get a team of people that worked with us. It’s hard when you’re on your own being a telemarketer or an inside salesperson. You hear no a lot, you don’t have camaraderie, you don’t have a team. Our caller with Marketopia, who, who I know moved up the ranks and became a senior leader at Marketopia eventually, ⁓ was just awesome. And we worked with her for years. That was a big part of our success. So kind of fast forward to probably 2000 around the COVID years. And I started to think that, Hey, something’s going on here in the industry. There’s a lot of rollups. There’s a lot of, ⁓ there’s a lot of interest from private equity. better start getting my act together. So Invested in what I called my outside board of directors and Terry you were one of them somebody’s you know, ⁓ a team of people both legal investment banking people that have done exits before and I started to build this team of outside ⁓ outside board of directors is what I call them and then You know we work to put the company together in a place that was right to sell we used the scaling up methodology as our business operating system so that we you know, we had books that were aligned with the industry we had⁓ you know, really good record keeping. had policies, we had procedures, you know, long-term contracts, long-term employees, all the things that private equity really wants. They want everyone in your company, except for you. They don’t want the founder. Yeah. They want you out, but if you don’t have a team, you’re in trouble. So, ⁓ that, that was kind of the path we set on. was, it was about a three year, a three year journey to get the company marketed and sold. We ended up having two exits, one in the end of 21 for the enterprise side of the business. And we sold that to a private buyer and then one in 22 to a private equity buyer that bought the MSP business.
Terry Hedden (05:07)
Interesting I did not realize that it was split into two like that Is there a reason is just one one didn’t want the enterprise and one didn’t want the SMB What made you split it into two?
Terry Rossi (05:16)
Yeah, we realized long, long ago that it would be a different buyer, right? That would want it. And so we just, it was one company. kept two separate P and L’s. So it was really easy when we peeled off the enterprise side that, you know, all that was left was the MSP and then we brought that to market. So that was, that was a pretty easy transition, you know, and, I talked a little bit about my journey of selling the company recently in one of the masterminds. in, I’m in a group called go abundance, which is a bunch of, you know, guys that want to live life big and, ⁓ and enjoy themselves and make a little money on the side. And I talked about the exit and the exits a stressful thing, believe it not, you know, we, did it. ⁓ I did it. I’ll tell you a little bit about the journey. We use an investment banking company and we started out with like a mailer to 2000 companies that resulted in about 50 interviews with interested companies that resulted in 12 offers that resulted in us accepting one, right? So that’s kind of the funnel going down. Well, you can’t do any of that while you’re sitting in your office. You know, I never worked from home until then. But when you’re doing 40 management meetings, you’re, you’re talking about selling your business, you can’t do that in the office. So you live this kind of dual life for a period of time year, year and a half where you’re, you’re lying to everyone that works with you. For the most part, you’ve let you’ve let a couple people in on the secret because you have to you have to let your controller in.
And interestingly enough, they’re the ones that are most likely don’t make the transition because companies don’t need two controllers or two CFOs. So you’re walking this fine line for a period of year, year and a half. And you really don’t even know if it’s going to happen. It could fall apart in the last minute. ⁓ Talk about lessons. One of the things that was kind of a negative for our company was one of these enterprise customers that we onboarded in the beginning. They were 25 % of our business. So, you know, well over a million billion and half dollars, I believe it was. And the equity buyers don’t like that. So the very last thing that we had to do to sell the company, like literally the last due diligence piece was go meet with that customer and with the new buyer and have the customer say they were going to stay on. So it literally could have fell apart in the last hour of the last day of the deal. So it’s a stressful time, but obviously well worth it.
Terry Hedden (07:36)
Yeah, so obviously it has worth it. You’re living the dreams here. Every time I see you on social media talking about your life, I’m like, man, how cool would it be to have your own bulldozer? You have your like this adult playground you’ve built for yourself, a bunch of businesses that you’re kind of doing more for fun than having to pay the bills. I love that, man. It’s even cool to watch. I guess, you know…
Tell me a little bit about how you scaled your business. You talked about that methodology. What was it again? Scaling methodology. How did that work? And how, did that do to your business in terms of scaling? I’m curious the impact.
Terry Rossi (08:08)
Scaling up, that’s the gazelle. Yeah. So, you know, there’s two big, what they call business operating systems, traction or EOS, and then scaling up, which is a, comes out of the Rockefeller habits and Vern harness and those guys, ⁓ scaling up basically, you know, takes the company puts a leadership team involved and, lets the company look at four basic things, people, cash contracts.
You know, and, I got, can’t remember the other thing, but it gives you a methodology and we used an outside facilitator. Again, I’ve always been a fan of, you know, not being the smartest guy in the room. So I always hired outside coaches, facilitators, things like that to help move the company forward. And honestly, for, for guys listening out there, I think that’s one of the best things that you can do that and build a senior leadership team where you’re not, you’re not the bottleneck in your company, but scaling up allowed us to really keep focused on the numbers.
You know, we sold the company with 22 % EVITA and we got a really nice multiple when we did. And the reason was we got rid of things that weren’t making money and we concentrated on the things that were making money and we could scale, keep standardized, and that allowed us to keep good profits in the company. know, the company was 27 years old when I sold it. So we had went through periods of time where we were scaling, where we were growing, where we were harvesting, and then we sold it.
Terry Hedden (09:38)
Yeah. Scaling, growing, harvesting. When time came to sell, were you on the harvesting mode or were you in the scaling mode? Because I could see someone buying you wanting both of those. How did you balance that, I guess?
Terry Rossi (09:51)
Yeah. Well, I mean, the harvesting mode means you’re, you have profits. You’re able to pull them out. You’re not reinvesting everything in the company. And yeah, they do want that. They want to make sure you have profit. You’re a profitable company, but they also want to make sure you can scale the, they, the SIM, which they call the SIM. I, Terry, you know, I know, you know what this is a confidential info information memorandum we have was like 72 pages. And it talked about, you know, all of the great things that set us apart from, you know, another MSP.
And it was funny during these, these management meetings, you know, we had, we had offers everywhere from ridiculous to through the roof. And, uh, you know, some of the ridiculous guys, they’re, they’re bargain hop, they’re barmen, bargain shopping. And I’m sure that some people sell that way, you know, they just get fed up and they’re tired of it and they sell. We didn’t want that. We wanted a sale that was a good for our clients and our employees. That was the two main criteria. And then reasonable for us, you know, we wanted to make.
We wanted to make money on our investment in time and effort and 30 years that we put into the company.
Terry Hedden (10:52)
Yeah, that’s interesting. I love that. And that’s interesting that you come in with that perspective. I’m not surprised that you’re looking out for your team and your customers. Terry, so you’re telling me that you didn’t go to the highest bidder. You came off that to go with the person who was best.
Terry Rossi (11:08)
It’s interesting you say that we didn’t go with the highest bidder. ⁓ I’d like to say it was my choice because I wanted to take care of my employees, but really it was because they had some funding problems. ⁓ was during COVID, their bank said, we’re not allowing you to use funding for acquisitions only for operational issues. But we absolutely looked at all the offers that way. We had a spreadsheet with all the offers side by side and one of the advantages too of using ⁓ a investment banker or really, really sophisticated business broker is they’re able to lay out all this stuff side by side and all the different implications, taxes, you know, whether you’re going to stay on, whether you’re going to get insurance, you know, what’s going to happen to your employees, all that kind of stuff. And you’re able to look at it and be, ⁓ be logical about it. The other thing they do, which is really important too, is they can be the bad guy.
You know, you’re going to have at least a 12 to 18 month relationship with these people that are buying you. You don’t want to be the asshole during the sale. Pardon my French. You want to be somebody that they want to work with this way. The investment banker can be the hard, the hard guy.
Terry Hedden (12:15)
I love that. And I love the, you know, I think one of the things that’s differentiating your story from the others I’ve heard is this, this board of advisors that you, you’ve got in your organization to help you scale. And then the professional help you got when the, when you’re actually getting serious, it sounds like you, really appreciate the value of, of, of someone who like to your point knows more than you about their particular world. Walk me through those two chapters. So you have that board of advisors that’s helping you scale.
Who’s in that? Is that attorneys, accountants? Walk me through that group.
Terry Rossi (12:46)
Excellent question. So the board of advisors that we had during the course of our business, you were one of them. You we participated in a lot of peer groups where we could learn from other business owners, learn from other vendors in our space. That was kind of the outside world that we had during that. Again, facilitators and coaches that we used. And there were different ones that we used during different periods of the company growth. You you don’t always need the same coach, you know, during periods of growth. Then when the sale came around, We did put together basically two teams, an internal team and an external team. So the external team was first and foremost, an &A lawyer. Second was a, you know, an &A accounting firm. And we actually ended up using ⁓ actually someone, know, Greg Crabtree and his team, were, Greg actually was the financial chapter in the book Scaling Up, the methodology we used.
There’s also another guy in that, in that book, John Ratliff, who you may or may not know. John had a company called, uh, uh, answer tree, I believe where they did like 20, 20 acquisitions. And John has also mentioned in that book because he got crazy money when he went to sell. I went and took John. went on a CEO exit retreat with him, spent a week down in Florida. I used John as part of my investment banking team.
And then I used a company called STS Advisors. are out of other worldwide, but my group was out of Colorado comprised of two people, an MBA that was really good at numbers in the books and an operator that had been where I was, sold a large technology company. So that was our team that we put together the external team. The internal team, as I mentioned, was a controller, had to have the controller, myself, my business partner, and our main sales guy.
Terry Hedden (14:39)
Interesting. ⁓ Tell me there are sales guys were on that. ⁓
Terry Rossi (14:45)
Yeah, I was kind of devoid from customer relationships for the last five or six years. I would go in and press the flesh on day one and then I kind of stepped back and let my team handle it. So Brian, my main sales guy, had many of the relationships with the customers and he could speak about our offerings and our products and our customers actually way better than I could. So that’s why Brian was brought in.
The other thing is I wanted to take care of Ryan. wanted to make sure that the new company took care of him with options and, and a good position.
Terry Hedden (15:19)
So you gave them some carrots, I guess, say, hey, listen, if you help me get through this, get you something. I’m guessing you gave them financial benefits as well as hopefully, in his case at least, an ⁓ ongoing position with an upside.
Terry Rossi (15:31)
Yeah. Brian got a little bit from me. He got an options ⁓ options from them and a position. yeah, it worked out well. Yeah. The other thing I didn’t talk about Tara real quick, just before I forget was, you know, the process of selling, you know, once you’ve made the decision on who’s going to be your buyer, it’s real important that you handle yourself accordingly. ⁓ you have to dish out information at the time and the place when that’s right. In other words, a great example is you don’t give them your customer list on day one. The deal could fall apart on day two.
You hold that off to the end. give them stuff in dribs and drabs and they’re, you know, you got to remember private equity does 20 of these deals a year. You do one or two in your lifetime, if you’re lucky. So they have a lot of advantage over you and they know all the tricks. You know, they’re looking at your trailing 12 months, the TTM as they call it, your last 12 months of revenue. And they’re, they’re hoping that maybe one month falls off. That’s a really good one. Right. You know, maybe your 12th month was.
30% better, they’re hoping that falls off because that changes the purchase price. They get you out to dinner, they want to talk about the boat you want to buy and what you’re going to do with the money. You’re spending the money in your head before you even have a deal. Then you become emotionally committed and you’ll take any offer they give you. So really important to be careful during the due diligence process. And it’s a lot of work too, it’s a lot of work on your company. They ask for a ton of information that you may or may not have available.
Terry Hedden (16:58)
Yeah, that’s interesting. ⁓
I guess, know, it’s funny hearing you talk to her. you know, I know you pretty well and I consider you like a brilliant guy and it may just be a perception issue or that voice you have that’s so commanding, but it takes it now. You know, I think most entrepreneurs are either too frugal or too proud or too broke to bring in third party experts and they try to go it alone. They look at every solution in their business, whether it’s financial, you know, like their CPA relationship.
They’re, you know, outsource vendors, be it marketing or legal. And they just look at all of them and say, how cheap can I go? How low cost can I go? And knowing a little bit about your story, you’ve kind of done both. You’ve done the frugal option. And it sounds like toward the end there, you were investing real money and real expertise. And not just during the sales process, but even when you got serious about selling, you were starting to invest more and more.
And I say that as like a compliment because it’s like sometimes, I’m as guilty as this as anyone, you have a certain amount of knowledge. You know, you don’t necessarily know what you don’t know. And, and, but you know, you can make do like, can survive with what you have and the, whatever the frugal version can give you. What led you to, to spend money to scale, spend money to make money, like walk me through that emotional decision. And I guess how well it works out for you in each aspect of the business. How much did Greg Kravchik really bring to the table? How much of a difference was it for you as an entrepreneur?
Terry Rossi (18:41)
Yeah, that’s a, that’s a great question. You’re asking me to go back 27 years. I don’t know that I can do that, but I’ve always been, uh, one to invest in the company. You know, the, uh, as I said in the beginning of the podcast, I’m a regular Joe, I’m, know, I never went through college. I barely made it out of high school. I have been an entrepreneur my whole life. You know, I started working when I was 13 years old. I pretty much had one job my whole life. So I know what my limitations are. And I know as you grow a company, when we went from 1 million to 5 million to 10 million, it’s not the same staff that gets you there. You have to grow your expertise both internally, externally, and yourself. You have to always self-learn. You’ve known me for probably 10 years, Terry. You know I’m at a conference. I’m sitting and taking notes. I’m paying attention. And I bring it back to my team. And I invest in our team. Like the scaling up team that we had.
Internally consisted of, you know, service manager, product development person, sales, accounting, et cetera. I wanted all those people to do better in their job. I wanted to invest in their learning and their growth because it only made the company better. The, ⁓ you know, there were times then when we had to invest in sales training, you know, and we did that. There were times when we had to invest in outside financial people like, like CRI, where we were part of their simple numbers program. There were times when we invested with you guys in marketing, you your tool sets, like, I believe you call it the grow machine and you know, the people that you brought to the table, the assets you could bring, you could, you could spin your wheels and do it. Yeah. You can play with AI or Canva or something. Why would I do that when I can just hire an expert that knows what works and doesn’t work and can look across a multitude of companies and know what’s working. I, that was the way I always ran the business.
Terry Hedden (20:34)
That I would tell you that that puts you in the top 1 % just that train of thought. And again, I’m just as guilty as anybody, right? And it’s normal for an entrepreneur to go through this journey because at the beginning we’re all in survival mode. It’s not the bounty and there’s not money flowing out of our ears and we’re just blowing it on advisors. the beginning we’re like, hell, is this even a business? Can I make a dollar? Can I afford that tech? I…I’m trying to survive, but it sounds to me like you reached a point where you’re like, all right, you know, I’ve got where I am. Clearly there’s going to be an opportunity for me to get where I dream about going. And that’s an exit. There’s a chapter here where I need to get real and get serious and start bringing in a controller internally and getting these external advisors. I’m curious from the point that that process started from you and you started to bring in real people, real advisors, internal and external to the point of exit.
What did that do to your business when you entered into like a serious time about trusting experts to when you sold? How much do you think you increased your valuation? Would you increase your revenue during that period?
Terry Rossi (21:42)
Yeah. I mean, I would say I could tell you at the beginning, you know, at the beginning, my business partner and I were the revenue generators, right? I was out working with fortune 1000 manufacturers all over the world, making $2,500 a day. And, know, rich was doing the same. That was how the company started. That got us to about a million with, with small staff of consultants and people that we were, were trading dollars for hours for dollars. When I started getting involved in the MSP space, I was angry. mean,
Every customer service issue went right up my backside. I was yelling at people. People were quitting. I was really not a great boss. And I was, again, smart enough to realize I wasn’t a great boss. So I invested in myself there. I also started building the team. And when I hired a service manager, all of those kind of customer service problems got off my back and onto his. And he was way more equipped to deal with it than I was. I would say.
Yeah, I would say a long time ago and my very first hire was my outside sales guy. So I’ve always invested, you know, in the, the M S P side of the space, but we’re a little different. We’re a little different than others. You know, we, I said, I had one job in my life and that was working for an enterprise software company that worked with these fortune 1000 manufacturers. I was known as the red, a dare back then I was the guy that they flew all over the world to put out fires and troubleshoot things.
And when we left to start the company, it was because Wall Street advisors were telling the software company, hey, be a software company. Don’t try to be a services company, build a cottage, the industry around you. So we did. So we started the company with like $150,000 prepaid agreement. So I really never had that suffering that other people do. Now I started another company in February. It’s a little bit different. I’m fortunate enough now. I don’t have to take a salary from it, but you know, we’re watching every dollar. We’re doing everything ourselves. We’re just, you know, we’re coming up at the end of the year. Now we’re saying, well, I guess we got to get an accountant and file some taxes and, know, but by QuickBooks and all that kind of stuff. So I’m feeling it a little different now at 59 years old than I did at, you know, 27 or whenever we started the company.
Terry Hedden (23:51)
It’s a little easier. It’s interesting. think, as I’ve done chapter two, I have five companies going right now, but I think I’m nine or 10 overall. You think it gets easier, but in reality, some things are easier and some things are actually harder because as one business matures, your skill set changes, your perspective on the world and what you do every day changes. Starting over, you’re like, wait a minute, I’m the accountant, the sales guy, the developer manager.
I am everything. Wait a minute, I gotta like, I guess, reform who I am and what I’m gonna do. I mean, I think, Terry, it’s interesting to me. And I think, in my opinion, our industry is filled with really great people that deserve great things. And I feel like, you know, some of them operate from a perspective of scarcity. They never graduate out of the like, survival mode, you know?
They never say, you know what, though I could do this, should I? You know, like I could be the marketing person. I could be the salesperson. I could be the accountant. I could be the CFO. Like I could do all these things. And, and then there are some that say, you know what, I’m becoming the, the, the, the constraint to my business. Either my skillset isn’t strong and people issues, or maybe I’m not a financial whiz, or maybe I’m not the best sales guy. They become sort of the reason their business stagnates and struggles. And it sounds to me like you had some of those feelings and then you said, okay, let me trust this person. Let me bring in this advisor. Let me hire this person. Let me hire this firm. And you sort of built that leadership team that kind of helped you get to the next level. And then when it came to sell, that’s a valuable thing. It’s like, holy cow, Terry, you’re really not that important. You’ve built this great team. I can buy this organization and I’ll pay a premium. Because I don’t have to worry about the whole thing falling on his face if you walk away. Talk to me about that, I guess. Did you have that feeling? Is that something you agree with or no?
Terry Rossi (25:54)
Yeah, I mean, I first let me just say something because you mentioned it a couple of times about being frugal and and you know, watching where you’re spending your money. We had a rule in picks. We had two things that are worth sharing in the early days. We had the death of picks spreadsheet and that was, know, can we hire this guy or is it going to put the company out of business? And you know, we had a we had a three times rule. We needed three times the revenue to cover the guy. If we could do that, then we’d hire him. If we didn’t, then we wouldn’t.
So we were frugal and we had it. We had a mantra that said negotiate everything, you know, we would try to negotiate with every vendor we could, but we weren’t ridiculous about it. You know, we wanted to make sure that, ⁓ that we were getting value and that the company we were working with marketopia, for example, wanted to work with us. You know, we didn’t want to alienate them out of the sales process. So that was one thing. The, ⁓ the point about the team and me kind of distancing myself from the customers.
I think that was a huge part of us getting the larger multiple than most people get. You know, they want a team. They want a company that operates without the founder. They’d like to throw you out day one. You know, if they could, that would be their choice. They can’t, you know, they need you for a little while, but, but they want to, they want to buy a functioning company that does not rely on you. So the guys that are, ⁓ you know, single shingle or even the guys that are small and not investing in team, just have a bunch of worker bees.
I would say if you’re looking to sell, that’s probably a mistake. And I see that, unfortunately, I see companies that are 20, 30 years old that they have nothing to sell because they are the relationship with the customer. They are the guy running the wire. They’re the guy fixing the computer. It just doesn’t make a lot of sense in my opinion, unless you wanna work till you’re dead. I like to run the bulldozer.
Terry Hedden (27:41)
I love that, dude. ⁓ To me, the more when I first heard about that and you told me the stories, I’m like, that’s like every 10-year-old’s dream. I want to be a bulldozer operator. I want to be a fireman. I want to push dirt around and dig holes. I’m like, how cool is that as an adult? It’s like, I’m going to bust my hump my entire life and achieve the dream that I had for myself.
When I was 10, like I’m gonna literally do what I want to do and I want to have fun doing it. And I feel like, Terry, you did what it took to get yourself in a position to be able to do what it is you want to do in the golden years of your life. Like you’re not old, you’re still young enough to enjoy it. You’re still, ⁓ I guess, with it enough to have appreciated that journey. And I really appreciate you sharing that journey with the listeners here⁓ all right. So, so I feel like, you know, that’s one of the big chapters is sort of getting these advisors scale in the business, really getting it to the next level, maturing it so it’s more attracted to the buyer. ⁓ you know, talk to me about, I guess, the valuation. I, if you’d had to put a number to what your business was worth before you started to bring in those advisors and, and, and had to like guess what you think your business would have been worth then. And, and then what it ended up selling for, what’s the dollar amount or what’s the, if you don’t feel comfortable sharing, what’s the percentage change in valuation that you think that this chapter in your life where you brought in that expertise, was the ROI on that?
Terry Rossi (29:21)
Yeah. I mean, it wasn’t cheap. Let’s be honest. It’s not cheap to do that. You’re giving away a portion of your sale to, to a bunch of people. but we, we sold it a 14 times multiple. And I think for the time we sold, that was really good. I think it would have been eight or nine without them. If we could have even bought it across the finish line.
Terry Hedden (29:42)
What? You sold it for a what was your multiple?
Terry Rossi (29:45)
14 times multiple. What? Yeah.
Terry Hedden (29:48)
I’ve heard that number at organizations exponentially larger than yours holy smokes man
Terry Rossi (29:55)
Yeah. And we did. mean, I talked about that trailing 12 month thing. We did have a month that fell off. That was a big month. And I think they played to that. So it took the sale price down a little bit, but it was still very nice. You know, very nice, very nice sales. Very proud.
Terry Hedden (30:11)
That’s the biggest multiple I’ve ever heard for what I would call normal MSP. That’s like roll up MSP valuation kind of number.
Terry Rossi (30:18)
Exactly. we weren’t, we weren’t the platform company either. We were the first acquisition, the first add on, uh, after they looked at 45 companies, we were the first one they purchased. They’ve since purchased a couple more, but we were the first ones. Yeah. And again, the other thing we were able to do again, by having this investment bank or be the negotiator, I was able to negotiate things like my domain name is picks.com. got that in 1992, I think when they were free.
And it’s worth about half a million dollars. I negotiated that out, the domain name. I negotiated a three year lease on my building that I own that now they’re leasing for, you know, a hundred grand a year, whatever the number is. So there were all these little extra things that I was able to kind of make part of the deal, including my employment for another couple of years and my healthcare and that kind of stuff that I think, you know, unless you do this every day, you’re not smart enough to think about things like that.
Pix.com was of no value to them. They weren’t going to do anything with it. So they didn’t care to give it to me, but it was worth half a million bucks. I just got it appraised about a month ago. there’s advantages and certainly working with people to know what they’re doing. Like I said, private equity does this 20 times a year. They’re going to be eating your lunch if you’re not prepared. And there’s cheaper ways to do it. There’s books up here. I books on exits up here and there’s things you can go through.
But you really want a team. know, you really want a team and don’t during the course. You asked me about these outside advisors and board of directors. mean, you were certainly part of that, Terry. mean, you were definitely a hundred percent part of that and part of growing our business and Marketopia was too, you know, it was, it was a pleasure to find you guys. And it was right in the beginning. If I remember right, we might’ve been one of your first couple sales. know we were Jeff’s first sale.
Terry Hedden (32:11)
Yeah, definitely early on, You know, we just celebrated our 11th birthday. So ⁓ there’s been a lot of stories told, I guess, stories written, but you’re definitely one that I look back on. like, you know what? If every customer could just be like Terry Rossi, right? ⁓ Because I think, you know, a lot of, you know, a lot of people struggle to, to, let go and to trust, you know, at the end of the day.
When you talk to Marketopia and even just every quarter and year thereafter as we’re deciding where to morph things to, your approach wasn’t, what’s the cheapest thing you can do for me or how cheap can I make this or how little can I do or whatever. It was more like, listen, my goal is to scale. How do I get there? And it sounds to me like the ROI for following that advice is a heck of a lot higher than it would have been had you been a little more, well, solely focused on frugality and getting the least you possibly can to feel good about yourself. ⁓ I think a lot of people in our industry, like that is the problem. They get the cheapest CPA or no CPA. They get the cheapest internal accountant or no internal accountant. They get the cheapest marketing solution, the cheapest salesperson. They want, it’s like a scarcity mindset where it’s just like, how frugal can I be to still survive? Whereas you’re like, you know what, I want to I want something big out of my life. want north of 10 times EBITDA. mean, geez, Terry, that’s phenomenal, dude.
Terry Rossi (33:41)
Yeah, you bring up a really good point too, with the frugality. think it is, you know, it is definitely a mindset thing and it’s not one that I always had this abundance mindset. ⁓ I think, you know, there’s that old saying you are the some of the five people you hang around with. think if you hang around people that are frugal and that are, ⁓ have a scarcity mindset, that’s what you’re going to have. I think it’s important to surround yourself in peer groups and networking organizations, whatever, with people that are forward thinking, they want to give back, they’re charitable, they live a good life, you know, those things pay back dividends. You may not see them originally, you know, right away, but they pay back dividends. Absolutely. do. You know, again, I’ll, I’ll, I’ll talk about our relationship, you and I, you know, just the fact that we’ve been remained in contact for 10 years. I’ve been out of the industry three, four years now already.
Wow. Just, just the fact that we remain in contact and you know, I love your wife and I watch your family grow. It’s a, it’s a testament to the business relationship that we built that turned into a personal relationship. I know, I know if I’m down in St. Peter or wherever you live in there, I can call on you. was hoping to be in Pinellas Park today and do this in person.
Terry Hedden (34:56)
Yeah, man, Terry, you’re way more than invited. You are openly welcome to stay as long as you want. You can stay in my home if you want, my office, some work out here. Heck, I have an RV. If you want to camp out in the RV, you’re welcome to take it down to the beach and do that. I value, you know, it’s interesting. You know, after I sold, you know, I had a period of time where I’m like, no, what? You know, like, you have the rush of the sale, you have the deposit in your bank account. The payment of the taxes on that, sort of the settling of the whole situation. And in my case, I had a year long kind of a period where I needed to stay for a year. So I stayed 366 days and then resigned.
To me, there was a time in my life where I wanted to make a difference. I knew that. At the time, I was doing a lot of public speaking. Then that fateful day in Atlanta where that local MSP there said, man, could you help me out? That was like the kick in the pants I needed to say, you know what? Sometimes helping people is more than words helping people is more than getting up on stage and sharing your story. You want to actually like get dirty, get your hands dirty a little bit, roll up your sleeves and try to do that. That gave birth to Marketopia. And I think one of the most valuable things that came out of that for me is the opportunity to help people achieve their dreams at a very real level. And it’s not the most lucrative business I’ve ever had by any means, but it is the one where I say, you know what, if I look at the employees where I’ve made a difference, ⁓ there’s no comparison between every other company I’ve started in this one. If I look at the number of customers, you know, as an MSD, you give customers peace of mind and that’s extremely valuable, but it’s hard to quantify preventing something bad from happening. Like what’s the value of like your customer never getting hacked or whatever. And it’s difficult to put your finger on it. Whereas, ⁓ you know,
Working with people like you, it’s like, know what? can’t think of a better retirement than to find other like-minded people that want to make a difference in whatever way they can to give back. we have a customer who bought a condo on the beach here. And when he did that, I’m like, man, that is, how awesome would it be if you could get a lot of great people that have all somehow have a common tie, whether it’s Marketopia or just friends of Terry Rossi.
And then we can grow old together drinking fine bourbons and watching the sunset and just maybe spend our day helping people get where we are. Maybe that wouldn’t get there without that little something that you’re able to offer, Terry. And I think you’re doing that. You’re doing that here, but you’re also doing the other aspects of your life. ⁓ I guess, tell me about that.
Terry Rossi (37:57)
Yeah, let me tell you, let me tell you two quick stories. The first one is this group that I’m in go abundance. Again, it’s about a thousand men, high net worth, I think to the buy in and you got to be worth a million bucks, you know, to start. So there are guys that have made, made something out of life. Interesting enough, most of them from real estate, not from exiting a business, but there are several that have exited businesses.
We just had a retreat the last three days ago, a regional retreat where we had 90 guys in a room. And one of the exercises exercises we did was we took a paper and we divided into four quadrants. And I only actually remember two of the quadrants right now, but one was familiarity. And these are the things that are basically holding you back. Right. And I think MSP suffer a lot in that quadrant, right? They’re used to running a wire. They’re used to fixing a computer. So they stay in that realm. They don’t want to learn about marketing. They don’t want to learn about sales.
They don’t perfect that thing. And then the bottom right quadrant was what would you do? How would you play big? If you know, really you could do it with, with no, no obstacles. And what I wrote down was I would like to start another business that made a real impact on the trajectory of the world. Cause I think the world’s in trouble right now. You know, I think we’re, we’re, you know, look at the events of this week. Today is September 11th or yesterday was September 11th. mean, even going back to the tragedy in New York City. We’re on a path and it’s not that great. And I think it’s easy for guys. I don’t think you even have to be successful. You just have to put some effort into it. To make an impact on the world and change the world. So that, that was one thing that happened just this week ago, this week and part of that group, do something called a one sheet and a one sheet is basically the top of the sheet is your financial situation, your inflows, your outflows, your net worth.
What you’re giving charity wise, all that kind of stuff. And then the bottom is a bunch of ⁓ groups of things, know, ⁓ bucket list things you want to do, health things you want to do this quarter, family relationship things you want to do, things with your court, with your tribe, et cetera. And, you know, one of the things that I thought about that I wanted to do was mentor to entrepreneurs, younger entrepreneurs, one mentor session. can’t, you know, I can’t, I’d like to say I’d mentor them forever, but I can’t do that for free.
But sit down, have a lunch with them, and impart some of this 30 years of wisdom that I’ve had. And again, I’m not the sharpest tack in the box, but I have 30 years of experience and I did pretty well for myself. And I think there’s value in that to pass that on to these younger guys. Try to change their mindset a little bit.
Terry Hedden (40:29)
Yeah. Yeah, no, can, I’ve heard you do it. I’ve seen, I’ve been in part of conversations where, you know, I don’t know if you even appreciate the difference you make sometimes, you know, even me, I’ll be honest with you. I’ve learned from you and have a lot of respect for just the wisdom that you have. You’ve been through things and even your perspective on things to me is something that people can learn from and maybe make their life a little bit better because of it.
That means a lot. Thank you, Terry. Yeah, no problem. Terry, you know, so if I’m an MSP and I’m, I want to get where Terry Rossi is right now, right? That’s my dream. I want to, I want to literally drive a bulldozer, invest in restaurants, start little startups just for fun, but, but be financially secure and my family not have to worry about a thing. What advice would you give me? Give me some nuggets of wisdom that maybe we haven’t talked about so far.
Terry Rossi (41:25)
Yeah. I mean, I would think the very first one in my opinion is learn how to sell. I think your business doesn’t go anywhere unless you bring revenue in the door. So learn how to sell or build a team that learns that knows how to sell. And if you’re going to do that, learn how to manage them, make sure they’re, they’re on their activities and they’re, they’re getting things done. The second thing is make sure you deliver what you sell. Right. And this is common sense stuff, but I see people not doing it all the time. It’s way harder to get a new client in the door and keep them. I’m sorry. It’s way, it costs you a lot more money to get a new client in the door than it does to keep one. Right. So keep them happy. They’re hard to get. they’re, you know, again, I’m out of the industry a little bit now, but I still follow my peers. They’re harder to get every day. Right. It’s not a green field like it used to be. Now it’s a replacement and a replacement offer is always hard because they’re always comparing you against the previous guy. And they think, well, I don’t want to, I don’t want to make another bad decision and hire you know, Terry’s company. that would be the second thing, you know, invest, invest in yourself, invest in your team, learn how to sell, make sure you deliver what you sell. And, and the other thing I would say is try to stay focused, right? I talked about in the beginning of the podcast that we got rid of things that weren’t making us any money. You know, if you were doing an occasional wiring job and you’re not making any money, find a wiring partner and stop doing wiring jobs. You know, that’s just an example, but you know, don’t try to build your own BDR on Linux if you can go buy one from Datto or whoever, you know, ⁓ just be smart about it. Don’t, don’t, don’t think you need to own all the marbles in the, in the box. You don’t, you just need to control them.
Terry Hedden (43:04)
Yeah, I agree with that. I agree with that. Very cool. ⁓ Terry, you know, ⁓ what’s next for you, You know, what, I guess, what do you, what’s your next five years look like? mean, are you, are you going to be heads down on this new business and build it up and sell it for millions or is this a hobby? You know, walk me through what’s next for Terry Rossi.
Terry Rossi (43:27)
Yeah. So after the sale, I did a bunch of investing. invested in, Terry mentioned a bunch of restaurants and wedding venues, golf courses. So I’m a, I’m a, I’m a partner in a, in a bunch of, I’m a limited partner, a general partner in a bunch of things, but I don’t have any operational duties there. So that’s just kind of money out there trying to make money. I also live on a farm as Terry mentioned, you know, I live on a 50 acre farm. So I have tractors and bulldozer and excavators and things I can play with in the pond.
I have bees. I just harvested over a hundred pounds of honey last week. So I have that. I’m not trying to make money from that. I just kind of enjoy the, the, ⁓ the whole concept of that. And then this business we started up, it’s called sales automation.com. It’s based on a really good platform that, ⁓ that combines CRM with AI and automation. And I’m doing a lot in AI and automation, ⁓ not just for lead generation, but for everything.
I, for example, I built a little app the other day that I’m like you, Terry, I five different businesses and I get, I get a receipt, I get a receipt in and all of sudden the receipt goes in the shoe box and that’s really the end of it. Well, now I take a picture of it with my phone. goes through an AI engine. It tells me the IRS categories I can, I can store it under and it stores it in a Google sheet so that I can just give it to my accountant. So I’m having a lot of fun doing things like that. And again, I’m part of these, a bunch of these micro tribes where we’re sharing knowledge in different topics. ⁓exploring that kind of stuff. The business, think, I think we can grow it. It’s a hundred percent recurring revenue. It’s one thing I learned from the MSP business and I carried forward to sales automation.com is that I don’t want any receivables. I charged a credit card on the first of the month. That’s it. There’s no receivables. And that’s something I don’t miss. Let me tell you what. Yeah. So that’s a beautiful thing. I love that. And I think it could go somewhere. I think we’re making real changes for people’s businesses.
You know, we’re helping them, ⁓ get more leads, get more, fill the hole in the bucket. You know, it’s not just getting the leads too. It’s making sure that salespeople are doing what they’re supposed to do to, to close the leads. So we’re helping them with that. And, I’m enjoying myself. I got a new granddaughter. got two grandsons and I got an RV too. I bought an RV, ⁓ Terry and, ⁓ hope to travel the world. Then I had a brand new granddaughter. So, you know, it’s parked in the backyard, so to speak.
Terry Hedden (45:48)
Well, no, I’m putting in connections here at Marketopia so you could just set up your command base here whenever you want. There you go. Yeah, and I cannot promise that I won’t come into the RV and join you for a cup of coffee or drink after work. go. I got to hate you. Yeah, there you go. Love it. Love it. Terry, what’s your legacy? Oh, great question. know, fast forward, maybe 10 or 15, 20, maybe 50 years when you’re sun setting your life and getting to the permanent rocking chair position.
Terry Rossi (46:00)
Yeah, for a golf cart too.
Terry Hedden (46:16)
What do you want your legacy to be? What’s your legacy?
Terry Rossi (46:19)
Yeah, I wish I had my briefcase here. So we actually just went through all this last weekend, but I remember the very first thing I wrote that I was a imperfect man, but I tried my best to love everyone that loved me and that, ⁓ and, to be a good man, you know, I think that’s, that would be the best thing I could leave from my kids and my wife. ⁓ I would like to be remembered as somebody that gave back that, that helped people. ⁓Yeah, I don’t know. I don’t care about generational wealth, to be honest with you. My kids are 31 and 41. So they’ve made their own life and they’ve built their own, their own wealth. So I would love to give them that. But if I can’t, that’s okay too. There, I know they’re going to be okay because I raised good kids. My wife raised good kids. Really. I was, I was the guy out working all the time. But yeah, I hope that I hope that’s my legacy. How about you? What do you think your legacy is going to be?
Terry Hedden (47:13)
You know, I don’t think of that different from what you just said. think, you know, there are pros and cons to me. they’re, my hope is at the end of the day, when people look back at my life, they focus on the positives and the impact that I made. And, and hopefully I touched people in such a way that it helped them in their personal life and in their business life. And, and I made a difference. And at the end of the day, if you can accomplish that in your business life and then create great kids. I’ve got three young men, one, you know, two, one turns 17 next week and one’s 19. And I hope they have a positive impact on the world and make a difference in their own right based on what I’ve instilled in them. So that’s what I hope as well, you know, and at the end of the day, you know, hopefully the world’s a better place because I was in it.
Terry Rossi (48:05)
Yeah, I’m sure that I’m, sure your kids are going to be great. And I know the world’s a better place because you’re in it. And, and, know, you don’t talk about this lease. I haven’t heard you talk about a lot, but you employ a lot of people and a lot of people that need employment, you know, they’re not, they’re not rocket scientists. And I don’t mean that in any way derogatory. There are people that need a, need a career and need a job. And you give them a path for that. That’s something really admirable too.
Terry Hedden (48:29)
Yeah. You know, it’s something that the IT business doesn’t really afford the opportunity to do very much. Yeah, that’s true. So I think in your, in this next chapter of your life, you can, you’ll be able to make an impact on those that need it the most too. ⁓ So yeah, I definitely, at the end of the day, you know, to me, a company is a mission field and your sphere of influence is a mission field. And if you can, you know, make it a better place and help people, you know, you’re doing God’s work and ⁓ hopefully the world benefits from it. So that’s awesome.
Terry Rossi (49:04)
Great. Hey, Terry, I know you’re to wrap this up in a minute, but can you just give the listeners and myself you kind of your view on the state of the industry right now? Twenty twenty five.
Terry Hedden (49:14)
2025, I ⁓ think we are ⁓ at a wide junction in the industry. think we’ve said that a couple of times, whether it’s break fixed, managed services or cloud or no cloud. But I think AI is a hundred times more significant than those two were combined. I think for those that embrace AI and there is no better industry outside of the utilities, the power generation industry to capitalize on AI more than MSPs because I see every business in the world needing help when it comes to agents, automation, robotics, basically leveraging technology to become competitive price wise with other people to offer a good quality service, you’re going to have to embrace AI and MSPs are uniquely positioned to benefit from that. I literally can’t think of a better industry to be in right now and manage services. But that’s only for those that are brave enough and disciplined enough to follow that path. If you put your head in the sand and say, well, I didn’t really embrace cloud and I’m still here, I don’t think you exist. And matter of fact, I think you’re living you’re living in a rough life in five years, whereas I think a really great MSP, you’re playing with your tractor, but I think an MSP is going to manage thousands of Tesla robots. I see millions of agents, digital agents working and MSPs helping businesses navigate that and then managing robots. think the future of our industry is extremely bright. ⁓ and I think there’s a lot of money to be made, man. You know, I remember when I got into managed services, there was this freaking hellish application called Microsoft exchange that led to more heartburn and gray hair and lost hair than anything. And then cloud made that better. But I look at AI and I’m like, man, if you can get an agent that you build for $300 a month and you sell it for $600 a month and it gets better and better every day and it doesn’t ever need to be changed. And you’re just going to literally have a residual income stream for life for $300 adjusted for inflation, I think you can probably create a pretty killer residual income stream that people are willing to pay for. Yeah, for sure. Yeah, that’s what I think.
Terry Rossi (51:44)
Just for the listeners, I’ve been out, I think I said three years, but it’s two years that I’ve been out now. And prior to that and your peer groups, I forget what your peer groups are called.
Terry Hedden (51:54)
The Grow community,
Terry Rossi (51:55)
Yeah. Terry was going, why don’t you guys become AI consultants two years ago? And you didn’t have any takers, right? Nobody was even interested in talking about it. You were ahead of your time. You were thinking about it then.
Terry Hedden (52:08)
Yeah. Yeah, it’s not hard to see. I think one of the benefits that you and I have is that we’re in it, but not in it. You know, we’re able to kind of look back a little bit because, know, and I get it as an MSP. Another thing is just the last thing you want. It’s like, I can’t even handle what I’m doing right now. I’m poking holes, you know, filling holes in my fingers, trying to keep the boat from sinking. I’m trying to survive. I’m trying to make payroll. I’m trying to grow.
Now you’re saying there’s this world changing thing over here that if I don’t, if I do it, it’s, wonderful. And if I don’t, it’s the end of the world. You know, it’s a, it’s a stressful thought. know, I get it. But at the same time, it’s like, you and I are just have this ability to step back and now and go, geez guys, there’s going to be billions of robots out there. Who’s going to take care of them? Like, who is that? Is that Verizon? I don’t think so. Is it, you know, Florida power and light? I don’t think so.
Who else is it if it’s not an MSP? So we have an advantage other people do, but I hope that there’s a lot of people out there. Arlen Sorensen is one. There’s a lot of people out there that are trying to get people motivated to do it, but at the end of the day, it takes courage. It takes discipline. It takes advanced thought. It takes a willingness to trust other people and trust the advisors that you did that resulted in the exponential growth to your personal wealth and those around you.
I just hope that one of my goals with the Grow Limitless podcast is for people like you to have a voice and you’re like, you know what, listen, follow, help avoid the problems that I had to deal with and benefit from the good decisions that I made. hopefully everyone that listens to it is just a little bit better off for it.
Terry Rossi (53:55)
Awesome. Great stuff, Terry. I’m so glad you keep doing what you’re doing.
Terry Hedden (53:59)
Thank you, buddy. I appreciate you. Thank you so much for your help. And I meant that open invitation, buddy. I’d love to see you come on down and host you at the house or at the office or both, buddy. I appreciate you. We’ll do the same to yours.
Terry Rossi (54:09)
Give my best to your family. Thank you.
