MSP 501 Fast Growth Case Study: How Managed Service Providers Reach the Top

Ask any MSP what drove their fastest, biggest growth areas during the last 18 months and there’s a 99.9% chance they’ll say security and all things related. It created a tide on which all ships rose. Everyone’s a winner. Everyone got an award. Great. But then what? How do you take a company to a higher peak that that’s always one step above the steadily rising tide?

The MSPs that earned a spot on the Fast Growth list of Chanel Futures MSP 501 ranking did just that. They took smart, creative, bold steps to drive more growth from what security sales already brought. They did it through strategic operations; smart hiring; reassigning key players to new roles; buying the right company; creating lucrative services; and adjusting their business models to address sudden market shifts.

A Chance to Learn from MSP 501 Winners

Throughout the year, we’ll be writing case studies on many of the 52 MSPs that made the Fast Growth list, highlighting the unique decisions and strategic moves they made, and the challenges they overcame, to get to the top. We’ll start the conversation with a simple question: What factors do you attribute to your fast growth in 2022, the year covered by the MSP 501 survey. The ranking was based on growth rate for total revenue. We also broke the main Fast Growth list into two sub-groups, based on whether they grew through M&A or organically.

Xterra’s David Park

David Park, CEO of Xterra Solutions in San Francisco and No. 444 on the MSP 501, is a good person to start with. He attributes an unusual move – moving his top engineer into the top sales role, among other initiatives – that helped his company become the 42^nd fastest grower on this year’s list.

Looking to add maturity to his sales team, especially is it sought to sell more services and solutions aimed at the area’s growing remote workforce, Park moved Aaron Burris, Xterra’s principal network architect to a full-time sales role. Burris, a company partner, had mixed sales with his engineering role, but Park thought it was the right time for him to fully focus on sales.

“Everyone has a component of sales in their everyday life. Developing that is an art,” Park said, borrowing a theme from Daniel Pink’s “To Sell Is Human.” “Aaron kind of engineered his way into being a good salesperson.”

Burris dove into understanding different sales metrics, developed story-brand lines, evaluated marketing tools, and learned about SEO and website design, which he applied to a revamped site.

“He worked to understand the narrative of how Xterra is different from everyone else and then weaving that into sales presentation and material,” Park said. “He put a lot of effort into that, and it’s really paid off. He’s grown into a fantastic salesperson.”

Targeted Marketing and Web Site Contributed to Growth

From that work, Xterra developed new marketing messages around themes such as: “Your data needs to be protected wherever you are.” “Relying on just an office firewall is outdated.” “Protection is required at all data touchpoints.” Xterra incorporated those themes into the new website redesign, which “really paid off,” Park said. By changing it from a general “marketing-to-everyone approach” to one more closely aligned with Xterra’s current service offerings, it provided more quality, targeted leads for the sales team.

“With the web design, we really looked at who we wanted to market to,” Park said, adding that the previous site attracted too many people outside Xterra’s key markets. “The people contacting us now are far more in need of our particular services and appreciate the services that we provide. That’s really helped.”

In other growth drivers, Xterra began requiring MFA for all clients. The company increased monthly billing rates by 10% for all new clients to adjust for higher wages and the extra labor needed to support hybrid and remote seats. A very tight budgeting process led to higher profits. Park credits the guidance and insight he’s gained from ConnectWise’s IT Nation Evolve peer group in helping Xterra achieve better wage growth, technology adoption and bottom line.

Those are all elements that Burris helps drive in his current role. There’s also another factor that plays into Burris’s success in sales.

“The fact that he’s an engineer is actually a benefit because he can go in as a kind of a pre-sales engineer and really understand clients’ environments,” Park said. “From a prospect perspective, it’s really great to have an owner that understands this product, understands the client environment and can match their needs to our service offerings. He can tell them right away if we’re not a great fit, or how we could be a good fit and here’s what we need to do.”

Valuable Contributions from All Employees

Another initiative Park launched that helped drive sales and new solutions is the Innovation Challenge. Xterra gives all employees a set amount of time each quarter to work on pet projects, with more time if needed following approval from their managers, that will benefit the company. Xterra just held its Innovation Challenge Week, where employees fly into headquarters to learn about new processes, leadership strategies and innovation. They then share their innovations and the progress they’ve made on them. The challenge is “paying huge dividends,” Park said, in projects related to AI, automation, customer-facing marketplaces, process and cultural improvements, and new products that management would not have previously looked at.

“The fact that every employee is now challenged to figure out how to innovate for Xterra has really unlocked the brainpower of the entire team,” he said. “It has really motivated everyone to think differently, which is what we’re looking for.”