Peer groups, success and heightened IT risks in the small business market
President of Smart Dolphins IT Solutions, Dave Monahan, has been in one peer group or another for over 15 years. Participation in these groups has greatly influenced his life — both personally and professionally.
In this episode, Paul and Dave chat with Josh Kotler, a long-time peer in the managed services industry, founder of Western Digitech and COO of CompassMSP. The three chat about the significance of peer groups, success, workplace culture and heightened IT risks in the North American small-to-medium-sized market.
I think the thing that holds most of us back at all levels, but certainly in business, is often ego. We all want to believe that what we’ve created, what were a part of is good. And it can be really hard to invite a scenario where you’re going to find out that it’s not really that good right? Relatively speaking, that’s kind of what a peer group is about… you’ve got some work to do.
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Paul: And welcome to another edition of Island Thrive. My name’s Paul Holmes, and I’m your host today, along with Dave Monahan, the President of Smart Dolphins. Dave, how are you today?
Dave: Very good, very good, thank you.
Paul: Excellent, excellent. We have a very super special guest with us today, Josh Kotler, who is the Chief Operating Officer of Compass MSP along the east coast of the United States of America. And a very successful guy with a very successful business in the IT business and one of the peers, Dave, that you’ve gotten to know really well. And we wanted to do a different bit of a different episode this week to talk a little bit about how learning from our peers can be really valuable, and also just a bit of compare and contrast with what’s happening here on the island with maybe what’s happening in another part of the world. So welcome to the show Josh, thanks for joining us.
Josh: Thank you Paul. Thank you Dave. It’s a pleasure to be anywhere that doesn’t feel like Miami right now. For this moment, I’m just going to transport myself to Victoria.
Paul: Perfect, perfect. You’re welcome virtually anytime.
Josh: I feel a little less Covid just being on this call.
Paul: Yeah, it’s really bad there.
Josh: New epicentre.
Paul: Well, Dave, why don’t you take the lead here, are you tell us what you know about this fabulous gentleman that’s joining with us today. And we’ll see where the conversation goes from there.
Dave: Well we don’t have enough time for all of it. Yeah, well, this is a little difference, I think we introduced the podcast as business conversations with local leaders and business leaders and community leaders, so it’s a little different. But I’ve been in a peer group for almost 10 years, and Josh has been in that group for a nearly that whole time. So I guess I wanted to share with the local leaders some of that perspective… Some of that learning I get from being part of that group. Josh sort of seems Canadian, like he’s really down-to earth, a big city American guy, but he could easily be a local guy, so…
Josh: To be fair Dave, I grew up in Vermont, so that could…
Josh: That’s an hour and a half from the border.
Dave: Also, Josh, you’ve been very successful, and I want to maybe start with that, a bit of your story and then get into some of the keys to that success.
Josh: Sure, so I’ve been in the IT services industry (it’s hard to say this for almost 30 years.) Came down South here to Miami to attend school at the University of Miami. After I graduated, I was looking for a job, found a job in the IT space (really a sales job in the IT space) and never left. Never left. It took my company in which I joined in 1998 to about 6 million a year, which is fairly significant in the MSP space and sold it at the end of 2019 to Compass MSP. So, I spent my whole life in IT services, all in the SMB market, and really the last 30 years have just been a constant exploration to figure out what customers want, how we can deliver it to them most successfully, and how we can make it work as a business. So I did pretty well for a bunch of years, but didn’t have the real success until I got involved with our peer group Dave. And just a great topic for it because it is the single most important thing I ever did in business. And it’s not even close. It’s not even close. We are going to get into a lot of detail about it, but it’s had a huge impact and just because I’m at Compass MSP now, and I have a new set of challenges that I need help with so it’s not going to stop.
I think it’s probably worth talking a little bit about success and what defines it, because I may have done some things with maybe an extra digit or two, but that doesn’t define success. I think for most of us, I think this kind of thing kicks in when you hit 50, you realize that success has more to deal with leading a productive, happy life and having just a collection of great relationships with family and friends and people in your industry. I’ve been successful, yes. There are people that have done a lot more than me that have also been successful in people that had a monetary on monetary scale and maybe done a little less, but it’s all success. Success is just recognizing what it’s important and getting there.
Paul: It’s interesting, we’ve had that conversation on this podcast before with other guests. There is definitely a generational approach, the baby boomer mentality is sort of drive home success at any cost, and whoever dies with the most toys wins kind of thing, and I think the GenX approach is a little bit more balanced right? And it’s funny because we’ve commented on this before, the baby or sort of thing is, is the mantra is balanced, but the reality is something a little different, so if you can be successful in a financial sense and have that sort of life balance as well, I think you’re think you’re winning on all scores. Is there a lesson like for you, did you have to compromise as you went along in that pursuit of financial success?
Josh: Sure there are a lot of things that you just have to do on all sides of the ledger as far as that goes. There are times when business success is the priority, there are times when family success is the priority and certainly family is something that you never really want to lose touch with, because things can go sideways faster in that realm then they can in the business realm, in my experience, yeah. You have to make certain sacrifices in certain areas every day, so the whole concept of having it all is true maybe in the aggregate, but on a daily basis, we’re all going to get pulled in different directions and we have to make different choices, and I think a key to happiness as we do it is to balance it as best we can and just try to have fun doing it. Even when fun isn’t always fun.
Dave: Fun is what you make it. You made a bold statement about the peer group being so important for you. Maybe let’s dive into that a little bit. For somebody that hasn’t necessarily been in one (or maybe not a good one) what are the elements that you think make it so powerful? Let’s break that down a bit.
Josh: I think the first thing that happens is you have to confront your ego in a good peer group, I think the thing that holds most of us back at all levels, but certainly in business, is often ego. We all want to believe that what we’ve created, what were a part of is good. And it can be really hard to invite a scenario where you’re going to find out that it’s not really that good right? Relatively speaking, that’s kind of what a peer group is about… you’ve got some work to do. When I first joined Trumethods, thankfully, this is a framework where the roughly 10 companies in each group, I walked in and thankfully, there was one company that was objectively worse, and so my ego wasn’t completely crushed. But the other eight companies in the room, they were better companies, than the company I had. And it was difficult, I knew that that reckoning was coming when I agreed to do this, but when it happened, it was still a tough moment. I remember very clearly who was sitting to my right, who was sitting to my left, what the room was like. I remember every detail of that moment when I had to present my company to these more successful people and it was rough. Yeah.
Josh: But then you get past that moment. That’s like a moment. And you get past that moment and you can breathe again, now you can move forward. So, for one bad moment, I’ve had almost 10 good years, and it’s worth it.
Dave: You are taking back down memory lane here. I remember my first meeting as well, and going into that meeting thinking, “I’ve got a pretty good business” and Gary, the guy who runs the meeting, put me in my place, I cannot remember exactly what he said, but it was jaw dropping. “Okay, yeah, I’m here, this why I’m here.” And in fact, now when I go, If I don’t sort of get that, it’s almost like I missed something.
The other piece for this particular group, I’m not sure it’s always the case, but is a common business or common industry, and for us a very specific way of approaching it as an MSP, amanaged service provider. So I’m not sure how much you found that? I was actually in a peer group prior to this that that was missing, and it was really hard to get to the depth that we get to in our group. Does that resonate with you? What’s your experience with that?
Josh: Yeah, I don’t have a lot of experience comparing different systems or peer groups, and based on the conversations I’ve had with folks that are in one group versus another, following a different program, it doesn’t really matter, right at the end of the day. It’s the process of opening up, accepting reality for what it is, and having a good community inside the group to help you work on that reality and make it better. You know one thing, as business owners in a small business context… No one holds us accountable, we hold people accountable ideally, but no one’s really holding us accountable, and it’s that process of being held accountable of telling peers, what you’re going to do, when you’re going to do it, why are you going do it? And then being held accountable by the group is just it’s powerful beyond belief.
I think every business has a peer, and a lot of them…You may have to broaden the definition a little bit, right, if you’re looking for something super specific, you may not find it, but generally speaking, there are peers out there for everyone and could really be in a different industry, I don’t know if there’s a peer chapter that’s active in Victoria, I assume there is. Those are all different businesses, they’re getting together and they are tackling these issues and they are serving as each others board of directors. And that kind of model can work really well. It’s the process of saying, “this is what I’ve got I want more, help me.” That works at every level, by the way, not just for business owners or for executives. It’s advice I would give to a new engineer or a young lawyer or anyone who’s starting their career. The best thing you can do is be aware of your ego, stifle your ego, most of the time, it’s pretty a powerful and a good thing if you are on top of it, because it can drive you and ask people who obviously know more than you do for help. And yet it almost never happens. When was the last time somebody walked into your office and said, “Dave or Paul, I want help with my career, this is who I am today at 24 years old. What do I need to do to have this kind of future? Help me out.” How often does that happen?
Dave: Not often enough and actually I’ve got two kids getting to that age of starting careers, and it’s one of those core things, I’m trying to get them to tackle in little bits to start… Right?
Josh: The sooner they do it the better off they will be. It’s true of sports (I played a lot of sports growing up).
Josh: I still try to do a little bit which is pretty embarrassing. But if you can just say, “hey, this is who I am, it’s not who I want to be (as a soccer player or whatever the sport is) help me get better.” Not only will you not be in or this person be in a frame of mind where they really can improve because they’ve taken that first big step of saying, “what I have is not good enough, it’s not as good I can be.” But the level of buy-in and excitement you’re going to get from your managers, your coaches…It’s off the charts. I mean, if someone walked into my office at Compass and had that conversation with me, they would get a disproportionate amount of my help going forward. I would be so excited about the opportunity to work with someone who had separated ego, who had goals, and was being transparent and open, as part of their process to get better, I don’t know, I’d probably be speechless for a little bit and I dedicated a big part of my time to help them succeed. It would be so exciting.
Paul: I think there would be an intimidation factor too, right? I guess you’d have to put all your ego aside and walk in the sort of lay it bare for that person. I think on the flip side of that too it’s lonely at the top too right? And Dave, we’ve had this conversation before. I always said to Dave ultimately he signs the cheques not personally signs the check, but he does, and so far as a company, and so you’re not always going to get the most honest assessment just by virtue of being in that seat. Right? I always give it to him anyway, but I can understand why a lot of people wouldn’t as to
Josh: He has to take some of it with a grain of salt even despite the relationship. Yeah, yeah, that’s… Again, power peers, power of getting outside of your organization or outside of your world, there’s a safety about that, right, you can trust the feedback you’re getting.
Yeah, give back. Earlier point though, when you ask young people, and I’m at the age where I’m starting to use the expression young people, so I… But that’s the hardest thing, that’s what really hold us back, just the fear of, “Oh my God, what will happen if I do that?” The reality is nothing except good stuff, and even if good stuff doesn’t have an… You don’t lose anything for it… Yeah, so it’s just… That’s frustrating, right? That the more people don’t do it.
Dave: I think it is something we can build into the culture of our companies, I think I’ve been in meetings with you in your office visit to do there, and also another good idea for people are in a peer group to take it further, but I see in your culture, you create a place of trust where people can say anything and everything, and sometimes you got clean that up, but sometimes it’s the real core of an issue.
Josh: They know that I know, I mean really know that I’m not an idiot. I truly this that there is nothing special about what I do and how I do it, and where I’m sitting in the orb chart, ultimately I have to make a few decisions, but I believe very strongly that everyone plays a critical role on the team and everyone is entitled to the extent that they’re good at what they do and committed, everyone is entitled to express their beliefs, their perspective, and then we’ll all sort it out. Right.
You never want to step on the enthusiasm of the people you work with. You want to build enthusiasm, and that happens when there’s real trust, when there’s a clear understanding that their ideas as valid as anyone else’s, and yeah, that’s how you get the best out of people, I think.
Paul: There is that accountability piece which is key. Do you feel and Josh, maybe you don’t really know, but one of the things that people will often look to is a business coach for that kind of relationship, unfortunately, within the situation of the business coach, you’re still in that client relationship with that person, you can fire your business coach and similarly they could fire you. Where with peers, you’re both being held to account in the same way, you’re both kind of opening up, everybody has, I guess, tables, table stakes. So do you have thoughts on that? Have you ever tried that yourself or do you know people who’ve had success… I know some people have had a lot of success with that?
Dave: Look I’m pretty sure for the record that Dave is tried to fire me from our peer group. I hear what’s going on Dave in the background. I know what’s going on. I don’t know the answer.
Paul: It’s probably different strokes for different folks, right?
Josh: I think everyone’s got to find ideally a group of people that they can trust with their hopes, their dreams and the feedback that they get. Some people can get that inside their organization. At Smart Dolphins you guys have a great culture, and I’m sure that it’s a safe place for collaboration and then people can take chances and it’s a repercussion free environment when it comes to brainstorm, try and make things better, and that’s how you guys do what you do for your clients, it’s… Some of it’s the technology, but most of it’s the people and how they feel about being there.
Dave: So I just wanted to make the point, we’re not getting any commissions from our peer groups, yeah, anything else to share to round out the peer group topic. I am hoping to hear your perspective on the IT industry as well, we can discuss that next? Any other thoughts?
Josh: I’d recommend it to anyone, right? Construct it however you can construct it but do it. You’re going to learn as much by helping other companies as you will by getting help from everyone else. It’s a two-way street, it’s gets your mind moving and introduces some new ideas and just super enthusiastic about it.
Dave: Yeah, that the teacher often learns as much or more than a student. And sometimes even just sitting in the background and some of the issues that come up, and I’m taking notes, I’m not saying a word, but I’m getting a lot out of it. So quietly thanking myself, I’m not taking the abuse right now but I will take a lesson.
Josh: It’s people like that that usually have the most insightful thoughts because you’re not looking to fill as much space as I don’t know, someone might…
Paul: Like me, yes.
Josh: Let’s see how many words Dave gets in.
Dave: Can I say something? Yeah, so let’s maybe move to the IT industry, we are both in the same industry, and you’ve been here for nearly 30 years, so obviously something’s resonated with you, can you speak to that? What has drawn you here, kept you here from a high level and can we break that down.
Josh: Well, I’ll bet that all of us have kind of responded to the idea that we’re not in a static industry, one thing that’s guaranteed in our industry is change. When you’re building a business, it’s nice to be in an industry that’s high impact. And everything we do is more and more critical every day, for our clients and that means that our clients will value it if it’s done correctly, and they’ll pay for that value. I often thought that I was lucky to be in the IT services industry because it’s really forgiving, it’s a really forgiven industry because we deal or deliver so much value, we can make up for mistakes pretty easily, pretty quickly. Hopefully we don’t make so many mistakes, but it’s a forgiving industry. We’re sort of on a rising tide, it’s been rising for well, since the invention of a wheel or fire, right? It’s been a rising tide. As long as we stay current, we’re not going to find ourselves in a industry that just doesn’t exist anymore. I can’t think of an industry that doesn’t exist. We’re not selling blocks of ice, right, we’re not worried about the refrigerator showing up and wiping us out. So that’s a great place to build a business from: high value, very forgiving, changing a lot, drives a lot of change, change costs and change directs our revenue.
Paul: Isn’t every industry changing rapidly though now because of technology?
Josh: That’s kind of the point isn’t it?
Paul: I work with insurance companies and lawyers, and all kinds of different businesses, and they’re not changing to the same level that our industry is, but the pace of change in all those industries because of technology has just been enormous. And of course, that’s good for us being in the IT industry, and ultimately good for the people that can adapt to the change because they’re going to be more efficient and more productive in taking advantage of all the new technologies and such, but for a lot of people, it’s a struggle, it’s a huge challenge, right?
Dave: You talk about impact and we’re all drinking the Kool-Aid, we all see it day in and day out. We have some challenge maybe it’s just local but in people seeing that value. Again, it’s a busy business owner that is juggling a bunch of things, and so what are the sort of key things that you see in terms of trying to translate this to a business owner that is not tech savvy and is knee deep in a lot of issues, and maybe not connecting the dots. Is there a few high points you hit with people that you’re talking to from prospective client basis?
Josh: Yeah, one of the things I try to do is relate the impact of what we do to a client’s payroll, because really what technology is about is about leveraging people right? To the extent that technology is well designed and implemented supported for say a law firm, they’re going to be able to handle more volume with fewer people. So if I’m talking to a 30-person law firm and what we’re going to do for them is going to cost $6000 a month. If I can show what a 5% efficiency change looks like to their payroll, and then relate that back to our cost it’s a win right away. It’s usually very clear for a non-technical person at that point to say, “okay, this investment is worth it.” And then we can go into some of the other value, other value adds that the solution will bring that we’re not even accounting for it. More secure environment, better work product, not just efficiency, but better work product. It’s generally look, technology makes sense, it makes sense. To the extent that you have people in your organization who can use the technology, they can adapt the way they work and embrace some new tools, it’s a win. It’s just a win. The place where you get to where you start losing some of that is high complexity, so your people aren’t really leveraging the technology because it’s just too complex or sometimes we can do this with our clients on behalf of our clients, we can sort of mis-calculate value around the edges, but to the extent that you’re sticking with core stuff. I mean, the ROI is just immediate and impressive.
Dave: Yeah, I know you’ve specialized or at least in the past, I’m not sure about Compass now, but specialized in the legal industry. So you brought that up as an example. Is there any specific things that resonate that industry that maybe…
Josh: Well, one real basic example, and we’re still very much focused on the legal industry, if there any law firms on the eastern seaboard that are listening to this, give me a call.
Paul: Do you want to give your website address and your toll free number?
Josh: We will pretty much find anyone on it and we’ll take care of them. A specific example would be well, it’s sort of relevant these days is a strong remote access solution, right? So pre-covid, if I went to a law firm that was really struggling to be 100% productive from a remote location, and I say, “Well, we can install this cloud-based line of business software, we can install maybe RDS platform that’ll allow your users to run their desktops from anywhere, we’re going to it a fairly minimal investment and the ROI is really going be expressed as additional billable hours that you wouldn’t otherwise have gotten in a given period of time, right. So if we’re talking about something that costs, let’s say $10000 a month, let’s make it really expensive. Right, but that’s a 30–lawyer firm. And because I’ve put some great remote access tools in their hands, they’re more likely to help their clients anytime, anywhere, and that yields, let’s say, an extra two billable hours a week, because it’s easy. I have a lot of friends who are lawyers who have work to do on the weekends, but it’s frankly a pain for them to set their systems up, get access to their data, and it’s such a pain that they just say, “you know what, I’ll deal with it on Monday.” But they really love to be able to do a few hours to work on a Saturday or Sunday morning before their kids get up, right? So we make that possible with this $10000 a month investment, and now you have 30 lawyers that are each building an extra eight hours right over the course of a month, that’s 240 hours at an average billable rate in Miami, say $500 an hour. That’s a big, big win for the law firm, and it’s a big win for the employee, and it’s a big win for the client, everyone’s getting what they want, and the technology made that possible. Post-covid, it’s just mandatory. You’re out of business if you can’t do it. So that’s one example, there are plenty inside legal and every industry. There are very few industries that can function at a high level without technology, and they need companies like Smart Dolphins and Compass MSP to look out at the landscape of technology and generally within the industry, help them find the right tools, understand their business and get it all implemented, trained and make it effective, they can’t do it on their own.
Dave: Yeah, I don’t know if you speak to this as you started or at some point, talked about it being a very forgiving industry, and I think to some degree what we’re doing is very intimate, very so critical, so it’s often you can make a rational ROI argument for somebody and they’ll make that investment, sometimes it is the emotional side or the sense of unknowing is actually going to happen.
Josh: It makes sense.
Dave: How do you tackle that? I think that’s probably a common challenge in any business-to-business sale, how do you tackle the trust?
Josh: It’s a great point. It’s probably the source of inaction the vast majority of the time, right? So, if something’s critical, let’s say we’re talking about our car, so we’re doing something our car is critical, right. We have to be able to get from place to place, it changes our day, ruins our day if our car doesn’t work right? And we have a mechanic who’s basically delivered in almost always the car seems to work, and sometimes the air conditioning doesn’t work, it’s expensive, and it’s not perfect. If I then come in and say, “hey, I want to be your mechanic,” it feels like you’re risking a lot. And then, for this example let’s assume we’re all driving in 1985, Mercedes Diesel, (I think we all should be by the way but it’s totally different podcast). It’s not so easy. Now, put someone’s business on the line right, it’s a tough choice. It’s scary because it’s critical, and we’re speaking a language that our clients don’t speak. Yeah, what seems really clear to us is just so dangerous to them, and that is the biggest challenge, that’s why people stick with…
Dave: Status quo.
Josh: Status quo, and frankly, their business suffers because of it. It’s fear.
Paul: Josh on that note, and it’s rare that I have the opportunity to talk to another IT veteran who’s been in the industry a long time and it’s not part of my company. One of the things that I do with Smart Dolphins is security awareness training with our customers, and it’s surprising to me and the broader public as well, locally. It surprises me how little people understand all of the risks that are present every time they use technology. Technology is amazing it’s all the things you talked about improved productivity, it’s incredible, it’s sitting in front of our faces all the time now. When I get started in this industry, we had a customer who used one computer in their office for half a day right? And now everyone has a phone and a computer’s it’s just like just day and night, and so the security landscape and check me here because I want to make sure I’m not being hyperbolic. But from where I sit, I feel like the security risk around IT and just the existential threats that exist for people’s businesses are greater than ever, and that people really need to put focus and emphasis on that. Obviously, we do that with our customers, but that’s a huge part, of that IT decision as well, is making sure that you’re covering all those spaces in…
Josh: I think it’s as you were saying it, I was looking for a parallel that a non-technical person could understand, we could understand.
Paul: I’ll tell you mine after. You tell me yours and you tell me if it’s over the top.
Josh: I’m a typical American. I eat an American diet.
Paul: American cheese?
Josh: Of course. Yeah, so imagine what a nutritionist, like a real nutritionist thinks when he or she sees what I’m eating. That person is probably sitting there thinking, “this guy is killing himself. He’s ingesting poison. He’s really doing tremendous damage and he doesn’t even know it.” Right, I think there’s something there. When we think about the way certain customers or companies work with technology, there’s just a lack of knowledge.
Paul: That’s a great analogy. And the frustration when you’re because sometimes I felt it in my vCIO role at Smart Dolphins. I felt like banging my head against a wall, because there’s something as simple as a good password policy, This is something you should have done five years ago, but there’s still somebody in a back office that doesn’t want to do it.
Josh: They are just sitting in the back office shoveling back the French fries. I’ve got this salad, it’s delicious what is he doing?
Paul: My analogy is a little more hyperbolic. As a child who grew up in the 80s, the nuclear threat. We were all just waiting to be blown up by the Russians at any time. And there was the atomic clock, and it was like always 11:55 or 11:59. They called it the doomsday clock or the atomic clock. And I feel like we’re at like 11:59 and seconds are ticking away. And in many ways, even though individually we can really help people and really help companies to avoid doomsday (if you will) I feel like there’s a sloth of people out there that are just have not prepared and are not doing anything, and that this is just…
Josh: They don’t know.
Paul: Something terrible is going to scoop up and take their whole company down with them right. Am I being over the top?
Josh: We see it every day. I’m working with a law firm now right now. They’re not clients, which is the good news, they’re probably never going to be clients because I don’t think they’re going to exist. They lost all their data, they screwed up the Bitcoin on their ability to pay the ransom, which in their case, they should have done it right away, and they haven’t talked to their clients about it yet. It’s not going to end well. It’s going to end. But it’s not going to end well. And that’s a firm that thought it was doing the right things, had someone in charge, it seemed like they knew what they were doing, and I don’t think they understand as we speak, I don’t think they understand that it’s over.
Paul: Well, that’s more on the terrifying note.
Dave: I think the diet analogy actually is not quite right, because I think humans are not great at assessing risk and certainly that’s the diet risk. This comes from the Black Swan there’s a book on it but this is more in that category of a black swan risk where everyday you’re typically fine except the one day you’re not, so this company dying is really experiencing that black swan opposed to something that’s a pain in the butt a couple times a year. It’s not a problem until it’s a problem, and then it’s such a big problem, it’s your only problem in your last problem, right.
Josh: The thing is that Black Swan has shown up a lot more frequently.
Dave: But that’s from our perspective.
Josh: The only thing we can do is educate it, right. So that’s why I think case studies are really powerful, I think having a couple of clients that have been burned, willing to talk to another business owner to say, “hey, look this happened to me, this is real.” If you can find a business owner, you might have to blur their face and alter their voice, like we see on 60 Minutes (and 60 minutes, by the way, is an American TV show).
Paul: Yes we get it.
Josh: What is the metric equivalent of 60 minutes?
Paul: We have a show called W5. You’ve never heard of that’s sort of the Canadian version of 60 minutes.
Josh: Yeah, that would be a powerful, powerful way to present it.
Paul: That doesn’t happen, and I think you’ve hit the nail on the head, right? Every once in a while you see a newspaper story (I’m dating myself) but you know you see a story online that makes mainstream news about some big hack or Ransomware or whatever, and it just kind of goes away, but these things are happening every single day, all around us. And that mindset of a lot of leaders is we “well, it’s not going to happen to us.”
Josh: Or they think it won’t happen today or tomorrow so “I’ll have time to deal with it. I’m just not going to get it to that. But I’ll do it next month because next month will be good.” It’s happening enough. Geez how many clients do you have? This happens to law firms a lot, but have fallen victim to the wire transfer scam. It’s a technology failing, right, that exploit. In the end, it relies on for the final step on human error. It gets to that point via technology or a gap in the technology solution, and I don’t know what the number is, but it’s happened to my client base over the last 10 years, at least 50 times.
Paul: There was a very high profile incident here on the Island, thankfully not one of our clients, but they wired a bunch of money I think it was for a mortgage or something, some substantial sum of money.
Josh: A closing.
Paul: Yeah, exactly. And that’s what lawyers deal with, and it was a classic thing of the finance person was away and the urgent message came in and the scam artist just plays up all the variables to their advantage.
Josh: The successful ones have been living in your system long enough to know that the finance manager is not there, to know that the managing partner is at the airport getting ready to get on a flight, they know this stuff. These guys that are perpetrating these crimes have org charts on their wall. They know exactly what they’re doing.
Paul: Well you’re telling them on Facebook when you post your vacation photo.
Josh: Generally they are inside your email. They’re watching that, they’ve watched all the back and forth for the real estate transaction, they know about the wire, they know about the amounts, they know everything so that when they shoot their message in, it all makes sense. It all lines up. It’s 100% a technology problem, fix it with some human process, but it’s a technology problem and that happens so frequently, the black swan thing just doesn’t work anymore. It did work but it happens all the time. Yeah, so electronic fraud, that includes credit card fraud and a variety of things, but electronic fraud, which by definition has a technology sort of basis to it is equal to 20% of global GDP.
Dave: Well, wow, that’s incredible.
Josh: Another way to look at that is that it’s equal to an amount greater than the entire US economy. Just flat out stealing going on at different levels. We all pay for that.
Dave: Yeah, for sure.
Paul: Is there a lighter note still Dave?
Dave: I like to inject a crystal ball segment into the podcast here. In particular, in your case, I’d love to hear your perspective on the future. Specifically, the technology for sure, but maybe generally business, we are in a very interesting time and perhaps in recession, and then we have maybe the perspective of many years of an accelerating technology, so not a very precise question, but what do you see as the key things when you look forward in your business and in the economy and…
Josh: Well, and I don’t know if I have any special insight here, but my view is that technology, (and this is what we’ve all seen, right, over the last 20 to 30 years) is technology, is occupying a bigger and bigger space in our economy, in our world. So we know that what we do is going to become a bigger and bigger deal as we move forward broadly, what we do, meaning, we support SMBs in their quest to leverage technology effectively to be the best companies they can be, so that’s going stay in place. I think AI is driving more and more of what we do. We’re seeing some shifts in the foundation as a bit more technologies and solutions move to SaaS-based solutions in the cloud, security is a bigger and bigger deal…It just makes sense, right? The more of our world is sort of encapsulated by technology the more attempts that will be made to break into that.
So I think that the news is good for solutions providers like us because the world’s getting more complex, the ability of our target market to keep up with is they can’t do that on their own, they need us. I do think we have to find a way to price in risk, appropriately.
But in terms of demand, we’re going to be needed, we just have to keep moving as technology moves, sort of under our feet, we need to keep up. I’m not particularly bullish about the North American economy over the next year or two years, but we’ve been on a great run for a long time, we have to pay the price for a couple of years and we go on another run, it’s not like business is going to stop and our societies are going to collapse (and by the way, if they do collapse, this will be a hell of a podcast to go back to…the dumbest thing anyone every said on a podcast). It’s crazy times right now. What’s it look like in Victoria?
Paul: We’ve been very fortunate in part because we live in an island, but also with the border being closed, the province is on the decline right now for Covid-19 cases. So we watch with trepidation as our friends and family and the other side of the border are dealing with hot spots.
Josh: But can a guy like me from Miami, come to the island?
Dave: Not right now, I personally would but nobody else will let you in. Try again next month.
Josh: I think you’ve been so much smarter about this, but I know that Trudeau has his own issues, but you benefit from superior leadership and…
Paul: There’s a lot of cultural differences as well, and that’s probably…Social scientists and epidemiologists will be digging through this for the next decade or two trying to figure out what happened and what went wrong.
Josh: You guys paid attention, you listened to the scientists, you have a cultural bias towards cooperating with the government and following common sense guidelines, and none of those things are true in Florida, and much of the United States.
I think this is a real opportunity for Canada economically, because you’re going to be coming out of this gate a lot, literally healthier than the United States with businesses that are staffed, with commerce that’s occurring, this is a chance for Canada and make some gains versus the United States so congratulations.
Paul: We definitely do want America to do well and come out well. We’re so interconnected, and I hardly know anybody that doesn’t have some family or some connections, so we’re of course, we’re hoping for the best for our Americans neighbours.
Josh: Hypothetically, what does it take for a family of four to pick up and move to Canada?
Paul: We’ll chat about that one next..I’ve got a realtor for you…
Dave: Actually I heard that somebody drove from the East Coast somewhere, all the way to Seattle, they rented a boat, they hopped in the boat and they illegally landed on a little island nearby that’s got a population of 3000 people and tried to just kind blend into the town there and they know have customs people that sit in the grocery store waiting for, I guess this to potential thing to happen.
Dave: So, don’t do that.
Josh: I won’t do that. I will work for the embassy.
Dave: This might not be relevant but I’ll ask it anyway, are there lessons you can offer in a more challenging covid environment. If we happen to get a second wave, we get into a place where you are now, what does business look like beyond the obvious, (people are remote and that type of thing) but… Anything come to mind that you may offer if we end up somewhere similar?
Josh: I think that this has been a challenge for four months… Five months. It will continue to be a challenge. We’re going to have to move fast as business executives and business owners, maybe faster than we’re comfortable with in terms of cutting costs, depending on how things go, really making sure that we’re close with our customers, having conversations with the customers were most afraid of losing. The ones we’re the most nervous about those are the ones we have to find the stomach, the nerve to go talk to. We might get some bad news, but we’re better off getting that bad news now and dealing with it over short period of time, being surprised by it. We’re going to have to be super nimble because we have a very uncertain future that could break in a couple of different directions. Never lose track of the market and how you create value for your customers and re-assess that value proposition, honestly, in the face of this environment. On the plus side, look, this is going to end, it’s going to end with a vaccine, and I think it’s going to end with a vaccine in the next six months…
Dave: Oh well, bold statement. You heard it here.
Josh: I really do. There’s enough underway right now.
Paul: There’s a few clinical trials now, there’s another one in Canada actually started I read the news this morning.
Josh: Very positive stuff. We seem to know scientifically what’s working, now we just have to get through all the regulatory production delays. We do need, at a minimum, I think we need three or four billion doses, so that will be a nice contract for somebody, someone’s going to need some IT support around that.
Dave: Just so reference, we’re recording this on July 14th. This will probably come out in early August.
Josh: That would be great if there was a vaccine announced by then, but something’s going to happen. So really the key is about conserving cash, collect everything you can collect, consider discounts for tough receivables at this point, better to have something than nothing, say on top of that process. Make sure your team understands that there’s a heavy load to be lifted here and everyone’s got to chip in, it’s a chance to build your culture around a real challenge and make sure that you’re really delivering everything you’ve got, don’t leave any capacity on the table now and you got a…
Dave: I’m a half full kind of guy. And so I think looking at this (as hard as it is) to look at as an opportunity to strengthen our companies and to get innovative to. I’m using the reference of embrace the speed wobble at Smart Dolphins and really trying to come through the other side stronger. Some companies won’t survive, those that do will be stronger and better for this in a lot of ways.
Josh: If we have the right view, it can be a great thing for our companies, right. It’s a great time to really reset the culture though.
Dave: Yeah, for sure.
Josh: People want leadership, not just political leadership in the United States, but at work, they want leadership. It’s a test for you guys to keep delivering.
Paul: So get on that peer group, if you’re listening.
Josh: Get on that peer group. Do the hard stuff first. Have that conversation with that employee whose performance you think may have slipped. We’re sort of in a very freeing time, there’s not much to lose here right now. You might as well go for it.
Paul: Well, Josh, thank you so much for joining us today. We’re going to put a ribbon on it, I don’t think there’s a whole lot of silver linings here for Miami for 14th, but we do wish you very well, and of course, health and happiness and success. Especially health right now. Chief Operating Officer from Compass MSP. A little bit of a different episode today. For those of you who are tuning in, maybe this is the only episode you’ve heard, we normally bring on local business and community leaders, but we thought we do something a little bit different today, get an outside perspective, but you enjoyed it less now, and if you haven’t already checked us out, we are now on Apple Podcast, so get it up a podcast and hit subscribe, and you can get every new episode fresh to your phone as they come out. Thanks again Josh.