The Doyle Report: Menace or Mensch: The IT Industry’s Controversial “Man in the Van”

Since late summer, there has been a roiling debate inside the IT channel over sole proprietors and the role they play in the industry. Some believe these individuals are responsible for eroding service margins and customer satisfaction levels throughout the channel. Others insist that sole proprietors are important members of the partner ecosystem that cater to overlooked customers while providing additional lift to vendors and distributors alike.

So which side is right? Both are actually. Consider the point of view of those who decry the “man in the van.”

At any moment, you can go onto Craig’s List and find offers from what are derisively called “Pizza Techs,” “Trunk Slammers,” or “Johnny Ponytails.” These individuals offer IT services at unbelievably low prices to businesses and consumers alike. Virus removal for $40? There are plenty of offers for that, which infuriate longstanding VARs and MSPs who must justify higher service rates to their customers and clean up messes that unskilled or unscrupulous service practitioners leave behind.

Frustrations over the damage done to the market by some one-man operations, many of which operate from the back of a service van or truck, have simmered for years. This summer, they spilled into the open. During a panel discussion at ChannelCon 2015 in Chicago, Vince Tinnirello, founder and CEO of Denver-based Anchor Network Solutions, singled out the “man in a van” IT service provider as a cause of margin erosion and customer dissatisfaction in the industry. Fly-by-night operators and opportunists were giving professional VARs and MSPs a bad name, he said, and undermining the value that dedicated, customer service-oriented organizations provided.

No question his message resonated with many of the VARs and MSPs in the audience. But not all.

Unbeknownst to Tinnirello, there were several “man in the van” IT service professionals in the room at the time. This includes Marvin Bee, founder and owner of MB Systems, a Ft. Lauderdale, Fla., IT services company founded in 1997. Bee is a one-man operation by choice. But he wasn’t always. At one time, he employed several service technicians. Ultimately he found he could provide superior service to a limited number of customers himself.

“As managed services and remote support hit the scene, I found that I could do more with less and downsized,” he says. “I became the network consultant and ‘trusted advisor’ for my clients. I use managed services in my business as a tool, not as my only business model.”

While he takes umbrage with some of what Tinnirello said about sole proprietors, he actually agrees with him on a lot of levels, especially when it comes to business ethics, customer satisfaction and service margins. Before I get to specifics, here’s some background on the size and scope of the small IT services market, courtesy of the 2015 CompTIA State of the Channel Study. According to CompTIA, there are approximately 125,000 channel organizations with employees in North America. But that isn’t the complete size of the market, according to the study:

“An even broader interpretation may include the large pool of self-employed, sole-proprietors. These could be individuals providing IT consulting services, web design, mobile app development, or technical support services. Some individuals engage in these lines of business on the side, further complicating the sizing process. The self-employed segment adds another 208,463 individuals (or about 334,000 in total), resulting in an even broader interpretation of what could be considered the IT channel.”

Channel business consultant and Penton Technology IdeaXchange Xpert Stuart Crawford says sole proprietors are challenged today on many fronts. “There are just too many competing factors such as larger firms, the cloud, the erosion of the small business market and their lack of marketing and sales focus.”

That said, he does recognize that there are thousands upon thousands of sole proprietors that are flourishing. They do so by finding unexploited vertical market or geographic niches. They also flourish by networking in their communities through their local Chamber of Commerce groups and other associations. That’s precisely what Bee tries to do, for example. He targets small law firms and other small customers in South Florida.

As I mentioned, Bee once employed a team of technicians. He also positioned his company to make it appear as big as possible to potential customers. Then the 2008 recession hit. Bee could no longer employ as many people nor aggressively market his company. After he cut back, he focused on a few clients and relied on word-of-mouth referrals to grow his business. Since then he has “stayed in his lane” and added roughly one big customer per year.

Although he has been tempted by certain deals, he has refused business that was unsuited to him. For example, he once turned down an offer to take over the IT operations of a two-campus charter school with more than 1,000 students in his area. While he thought he could handle the technical aspects of the job, he doubted that he had the bandwidth to manage the IT staff employed by the school. He’s also declined requests for 24-hour support despite the premiums he could charge for it.

He has never been happier or more “successful” as a result.

“I live my life with the hope that I will have no regrets. And I’m very grateful for the decisions I have made professionally,” he says.

Another sole proprietor working to improve the image of “the man in the van” is Erik Dreyer-Goldman, the founder and owner of Ask Erik Computer Services of Seal Beach, Calif. For nine years, Dreyer-Goldman ran a computer store in the costal town. Year after year, he opened the doors to his shop every day of the week. Then he cut back to six days per week. Try as he might, he couldn’t make the economics work. So in March 2015, Dreyer-Goldman closed the store, de-emphasized product sales and focused on IT services.

Today Dreyer-Goldman  in provides security advice to clients and helps with Office 365 migrations. Although his sales are smaller, his profits and job satisfaction are way up. Like Bee, Dreyer-Goldman is very concerned about service margins and customer satisfaction. He deplores the prices he sees offered on Craig’s List and other venues, and gets upset whenever someone promises his customers the same level of service for 25 percent of the cost he charges. His determination to make sole proprietorship as respectable as any other form of business led him to join and serve on the board of directors of The Association of Computer Repair Business Owners (ACRBO), which devotes a great deal of energy on sharing best practices on pricing and customer service. The dedication to professionalism, he says, resonates with his professional customers which include lawyers, CPAs, Realtors and more.

“I’m not a sole proprietor driving down margins for all. I’m a sole proprietor charging a fair price that is way above what some techs offer. And I’m valued for what I do,” he says.

Unlike fly-by-night providers, Dreyer-Goldman says he has full general liability insurance as well as Errors and Omissions Insurance. As a California company, he is also licensed through the state’s Bureau of Appliance and Electronic Repair (BEAR).

While sole proprietors may not have the status or clout of larger MSPs, Dreyer-Goldman and others believe they have earned their rightful place in the market just the same. Judge us not by the size of our headcount, but rather by the quality of service we provide and the competition we offer, several have said to me.

Does that sound fair to you? Send me your thoughts.

If you want more on this topic, check out a podcast discussion hosted by IT solution provider Jeff Halash, the owner and chief technician of TechNut LLC. of Canton, Mich. It features Bee and several MSPs discussing the good and the bad that sole proprietors do.