Analytics/Analysis

I’ll start this analysis the same way I’ll end it: GO HOME AND TAKE TWO PEOPLE WITH YOU! It’s that time of year - the start of the 7-month festival season in Austin.

Context

Before I get to my specific event analysis, let me start at the macro-level. Overall, the Austin March festivals and events are strong.

Harry Brelsford, a veteran in the cannabis industry since 2014, discusses the Texas Administrative Code, Chapter 300, which regulates hemp products. He supports the new regulations, including licensing, testing standards, packaging, labeling, and enforcement procedures, which he believes will improve safety and transparency. Brelsford highlights the need for tracking and traceability from seed to sale, similar to systems in states like Washington. He criticizes the proposed $20,000 annual licensing fee per location as punitive, particularly for small operators, and encourages public input on the regulations.

Scott Scroggin, Director of Strategic Initiatives at ConnectWise, discussed the current M&A landscape for MSPs, highlighting high valuations and strong M&A activity despite some uncertainty due to AI and hyper-automation. He noted the scarcity of high-quality partners and the increasing role of private equity. Scroggin emphasized the importance of smaller MSPs leveraging AI for business consultancy to enhance their valuation. He introduced the Evolve Essentials program for MSPs with $7 million in revenue, providing an 18-month curriculum and benchmarking tools. The IT Nation Grow program focuses on business transition, aiming to help MSPs navigate transactions and secure positive outcomes.

What if? What if automobile manufactures had both direct sales (e.g. Tesla) and a channel (e.g. CarMax)?  Such a strategy would cause tension to say the least. 

Yet this is already occurring in our beloved Small and Medium Business (SMB) - Managed Service Provider (MSP) ecosystem. I don’t know if the SMB MSP community sponsors all went to the same weekend seminar at a third tier airport hotel in a function room but I’m hearing the strategy articulated more than ever. 

Harry Brelsford and Jamar discussed their experiences at the M&A Lectures in Orlando, highlighting the importance of selecting which speeches to attend. They met Paul Daigle, who introduced his business advisory board specializing in MSPs. Daigle's company offers a business evaluation service for less than $500 and a tool that assesses an MSP's value to a strategic buyer in 15 seconds. They also provide a free 100 million dollar MSP scaling roadmap and collaborate with vendors to offer discounted evaluations. Daigle emphasized the importance of benchmarking and best practices for MSP growth.

George Sierchio from Cogent Growth Partners discussed the current market environment for MSPs, emphasizing that the 2025 market has returned to normal after the 2024 presidential election cycle. He highlighted the importance of staying updated with technology, particularly security and AI, for business viability. Sierchio advised MSP owners on the strategic timing of buying or selling, stressing the need for a good fit and opportunity. He recommended merging with similar-sized companies as a cost-effective strategy for growth, cautioning against bottom-feeder acquisitions. He also emphasized the importance of professional advice and proper preparation for M&A transactions.