Home Automation Podcast Episode #92: An Industry Q&A With Michael Oh
In this weeks home automation show of Automation Unplugged, Michael Oh of TSP shares why the MSP service model is the future of the home integration market.
This week's home automation podcast features our host Ron Callis interviewing Michael Oh. Recorded live on Wednesday, December 2nd, 2019 at 12:30 p.m. EST.
About Michael Oh
President and founder of TSP, Michael founded his company in 1992 while still a freshman at MIT. Recognized as an Inc 500 company in 2001, TSP has a staff of 15 employees with an annual revenue of $3 million. In 2011 TSP expanded into the residential market with TSP Smart Spaces, a division focused on smart home tech and audio/video integration. Their client list includes first investors of Facebook, Accel, the Boston Celtics, Bose Corporation and a 71 unit MDu in Reykjavik, Iceland.
Here are some of the topics Ron had the opportunity to discuss with Michael Oh:
- Launching an Apple-focused IT company from his MIT dorm
- Why the MSP service model is the future of the home integration market
- Operating a remote workplace with staff in 3 countries
- Their latest luxury MDU project in Reykjavik, Iceland
Ron: Let me go ahead and jump right into it. I am going to bring you Michael Oh from Tech Superpowers, or I guess, more formally known these days as TSP, which is his MSP business and TSP Smart Spaces. Michael, how are you, sir?
Michael: I'm good. How are you?
Ron: I'm good. I won't rub it in too much, but it's warm and sunny down here in Fort Lauderdale today. How is it up in Boston?
Michael: Well, I'm actually not in Boston. I'm in the UK, which is where I live and reside, but the company's based out of Cambridge, Massachusetts, and they are having a hell of a time with the snowstorm today. I'm very happy to be here in the UK where it's just above freezing, and it's not snowing.
Ron: You just completely threw me for a loop there. That's awesome. We're a remote workplace here at One Firefly. Our team is located all throughout North America. Is that the case for you, or are you the one person that is outside of the core office, or do you guys have different staff in different locations?
Michael: We have staff in different locations. Most of them are based in Boston or the Boston area. We have a guy working out of Virginia, as well. I'm here in the UK, and I go back to Boston once every four to six weeks. Keep tabs on things, but also meet clients and continue the good work that we try to do. As much as flexible working and teleworking makes life so easy, there's nothing like sitting down with a customer face to face. That's my reality, a few air miles, and certainly a lot of carbon offsetting that I have to do from my conscience, but it is a lot about how technology has enabled this sort of new world. When I grew up, my dad didn't have this option. He was a doctor. He drove into work every day. We had to live right next to the hospital. It's a different world.
Ron: I want to introduce our audience. Some of them are probably your audience as well because you have your own podcast. Let's go ahead and plug that. What's the name of your podcast?
Michael: Sure, sure. It's called GrepCast. It's on iTunes, Spotify, Libsyn, all the usual places. We're pretty new to this game. I mean, you guys are very experienced. I think we're up to at about episode 50 something. It's not necessarily our business as much as sort a tech adjacent type of topics. We were covering all kinds of interesting stuff around AI and face recognition and how the world is going to go to pot soon.
Ron: The whole singularity event.
Michael: Yeah, exactly. The big bang to the singularity. We cover it all.
Ron: That's funny. Michael, let's go back in time here. Help our audience understand your background, and then we'll bring it to the forward and talk about your two divisions of the same business. How do you get started with TSP?
Michael: Yeah, it's two divisions of the same business, the smart space, and our IT, an MSP practice managed services. Managed service providers, that's what MSP stands for. It all started -- this is a very different story I'm sure to most integrators. I was in college... well, if you want to go back really far, I grew up in Alabama, but that's a whole other story. As soon as I could move out, I got into college at MIT and my freshman year at MIT. I started this company, Tech Superpowers. At the time in 1992, it's the beginning of the internet. When I was an undergrad at MIT, I saw Mosaic, which was like the first browser. It's what evolved into Netscape and everything else from there. The technology at that time, businesses weren't using computers in the same way that they were today. They were starting to sort of figure out how networks worked and how the internet worked. Me as a kid, I thought to myself, "Well, people are charging $100 an hour to do this stuff. I can charge $35 and make a little money on the side." It started really as a hobby and just helping people with computers, networking. We had an Apple and Mac focus, which actually at the time, nobody knew much about Apple.
Ron: This was before Apple was even cool, wasn't it?
Michael: Right, absolutely. They were a bit player, and it was even before Jobs had come back and the iMac and all that kind of stuff where they started this massive trajectory into the company they are now. The Mac was what I grew up on, and I started helping people out in the Boston area. And it's fun. I mean, it's fun to go back to that journey because it started literally with one guy who worked for M. Steinert & Sons, which is the Steinway dealership in Boston picking up one of my flyers that I put out as the college kid. Literally, every single client in those 26 years, I can draw back to that one thing. It's been a fun ride. You and I talked about this before, and it's like Entrepreneurship 101: 26-year degree. Having a business is such a great experience; it has its highs and lows like nothing else.
Ron: And it is the same business? Tech Superpowers is the business you started 26 years ago?
Michael: It's evolved in a couple of different ways. It used to be an Inc, then an S corp, now it's an LLC. Over the years, it has definitely evolved, and now I run it with other people, I have an advisory board. That's one of the key lessons I learned. I did things on my own for a good 15-20 years, and I screwed up a bunch of stuff because I just thought I knew what I was doing in business and finance and new business and all that kind of stuff. As an entrepreneur, it's really easy to pick up on things that are happening, good things, and sort of say, "Oh, they're going to continue to happen." One of my biggest mistakes was to open a retail store that kind of like competed with the Apple store. Not necessarily compete with them.
Ron: How about this, tried to compete with the Apple store?
Michael: Yeah, yeah, exactly. It was more like there's not an Apple store here, and we were an Apple service provider selling Macs and all this kind of stuff. Of course, it was a disastrous result, and it got me so close to personal bankruptcy. I'm sure entrepreneurs that are listening, other integrators, they've been through the hard times, the good times. There's nothing like learning it with your feet in the fire and just having to deal with it as you go along. It's been a hell of a ride.
"There's nothing harder. And maybe when it turns positive, nothing more rewarding than entrepreneurship."
Ron: There's nothing harder. And maybe when it turns positive, nothing more rewarding than entrepreneurship. I know many around me have heard me say this joke. I say it a bit in jest but, I wouldn't wish entrepreneurship on my worst enemy. It's fantastically challenging.
Michael: Absolutely. Yeah, it is. I think one of the things that I've done over the years is evolved my personal life to make it work. In the sense that I've realized what's the balance between work and life that makes both enjoyable. I really tried to make that work both for myself as well as for the culture within the company. Remote working is something that we try to do more and more of. We're still a service organization, and that's the struggle. We're not Google, creating things with our powerful minds on the internet. You can do it from everywhere. You're still ultimately integrators like us, and people in the IT field are servicing our customers, and the customers value seeing us show up.
Ron: I want to go back just a little bit just because I think it's super interesting to me and I hope some of those watching and listening find this interesting, but you, you entered MIT in '92 and what did you study? What was your degree? I'm assuming it's computer science-related or it related?
Michael: It's Electrical Engineering, which is related, but also Aerospace Engineering was my sort of primary degree, and I got a second degree in Electrical Engineering in Avionics, which is sort of like the electrical version of aerospace. So technically I'm a rocket scientist, I guess.
Ron: You said your brother is a rocket scientist at NASA?
Michael: That's right. My brother works at JPL. He went to MIT four years before me. He did the full, like grad school, Ph.D., and then he now works for NASA at JPL. He was actually on the Mars Rover. The curiosity that landed, he was on that team. He was one of the guys jumping around when they landed. It was now a few years ago, but it was pretty, pretty cool.
"When I was in high school, I did my internship at NASA Langley research center in Virginia, so I spent time in the NASA library and hanging out with some of the NASA scientists doing stuff for a number of years through my youth."
Ron: That is this too cool. That's amazing. When I was in high school, I did my internship at NASA Langley research center in Virginia, so I spent time in the NASA library and hanging out with some of the NASA scientists doing stuff for a number of years through my youth. I'm going to be honest, I wasn't smart enough to get into MIT, so kudos to you. That's pretty amazing.
Michael: I was pretty lucky.
Ron: No, luck has nothing to do with it. It's a lot of good genes and hard work for sure. Being service focused is ultimately what you've been driving for the last 26 years, and 20 years in is when you added this residential home technology division. I want to go back to just the MSP business and being service focused. Many in our audience maybe don't know what that even means. So what is an MSP? Who is your typical customer, and what does it mean to have a service focus?
Michael: An MSP, even that is a more recent evolution of your traditional IT services company. It used to be the people that just sort of rollover to your business and come out there once a week, once a month and help you with computer stuff. It's evolved now to an extremely competitive marketplace, and I would sort of say commoditized in the sense that there are all different MSPs out there. In the sense that the tool sets available for people to provide IT services are extremely mature. They've been around for 10, 15, 20 years, all different kinds of systems, ticketing systems, but you know, back-end management and configuration management system. It's a highly evolved and mature kind of marketplace where it's difficult to gain new customers because you imagine something in the business world. And that's really where we sit. Our primary target, clients are between sort of 25 to a hundred users in a business that's very highly dependent on professional services. Maybe some lawyers or architects are billing themselves out at hundreds of dollars an hour, and any downtime that they have on their systems is very costly. So then it's worth it for them to engage a company to make sure that their systems are proactively built so that there's no downtime and there's no sort of issues. And if there are issues, they're dealt with very rapidly, and it's easy for them to justify that expense. It's much more difficult if you're dealing with smaller, like a real estate company or you're dealing with nonprofits. There are certainly MSPs that thrive in those environments, but they're very specialized. They're like an MSP for real estate companies or an MSP for nonprofits. You see this sort of market segmentation that's happened in that world, which actually is very parallel to what's happening in the integrator world now or what will happen sort of I believe so, in the MSP world, you go back to when I started the company 15-20 years ago, people were making tons of money selling Hewitt Packard, Toshiba laptops, Apple Mac systems, 20 or 30 points. It was not an unusual margin for selling computers. Over the past few years, it's dwindled to the degree that selling hardware is practically a lost leader only if you're Apple; you're doing it on the Apple store, that kind of stuff that you make any money off of it. The MSPs have evolved to be a service-oriented business.
"Ultimately, if you can't make margin selling on selling hardware, the only place that you're making margin is either a recurring revenue model where you're providing a service that people are more than happy to pay for because they see value in what they're getting."
Ultimately, if you can't make margin selling on selling hardware, the only place that you're making margin is either a recurring revenue model where you're providing a service that people are more than happy to pay for because they see value in what they're getting. Then the other piece is in projects where you're helping to move them forward, you're doing a strategic project that helps move them, let's say from an exchange server on premises to go into Google or Office 365 and the benefits that come with that, but all of these are highly technical things. Your everyday business owner isn't going to necessarily know what's the value between moving from Exchange to Office 365 so you have to get really into a lot of the technology, how it's relevant to user, how it's relevant to a business, and explaining to them why it's worth paying X number of thousands of dollars to make this sort of fundamental change to the cloud. I guess long story short when we came to the smart home market, we looked at it and said most of the providers and most of the solution that we saw in people's homes, which you go back six or seven years. Even sort of ten years when we were starting to do our research in the market, they're very technology-driven. It's all about A/V speakers, TVs, projectors at that time. Really glitz and glam stuff that's impressive and looks great, touchscreens, and all this kind of stuff. But a lot of the systems didn't work as well as the customers wanted.
Ron: You were telling me just before we got started about the MSP customer that pulled you into the home technology space. Without naming names, can you tell the audience that story?
Michael: Yeah, it's one of our clients in the MSP space of a financial firm. One of the executives in that firm had a very expensive system that had been put in, and it was a Crestron-based system. This is now going back quite a few years. He spent a huge amount of money and continued to spend a lot of money. It wasn't the type of engagement that was joyful for them. In the sense that things would break, they would have to have somebody come in, work on these things, fix the stuff. Another month goes, things would break and wash, rinse, repeat to the degree that the customer just got sick of the service people coming in fixing stuff and ultimately not getting to the bottom of the issues. And this is kind of where my sort of educational training comes. In aerospace, it's all about systems engineering. You're looking at, of course, is the wing strong enough, or is this particular component in the cockpit doing what it's doing? But ultimately, you have to get 300 people from point A to point B safely. The only way to do that is to look at the entire system. So we start to take kind of a different approach, which isn't technology-driven and looks at the experience that the customer wants to have. And that experience is everything from how they experienced the technology, what they're interfacing with, how they're enjoying, what does the house start to do things that are somewhat magical to them? Then the service component, every service engagement, needs to be positive. Something can't be continually going wrong. As soon as you start going down that path, there is no way back.
Ron: o dissect that a little bit further, what was the mistake and or approach by that integrator going back to your origin of entering the home technology business. This MSP customer that had a Crestron system that was breaking, what is your diagnosis now looking in the rearview mirror. What did that integrator or that company do wrong, or what could they have done differently that might have resulted in a different outcome for that customer?
Michael: I think personally, it's very little about what the integrator did back then, and it's more about the solutions that were available at that point and the amount of time it would take for integrators to learn programming. This is way before the same tools that are available now. The visual programming tools that we're used to, at least sort of the more modern systems that are out there, there's a lot of coding involved. People are investing huge amounts of time understanding this stuff, and then ultimately, they're believing a lot of what the manufacturers are saying about the capabilities of it. When you're putting in a quarter of a $1 million system in a house, you don't have the opportunity to set that up as a test environment and see what would go wrong with it. I think particularly in this sort of the leading edge of the integration world when you go back to the 2000s, people were putting in systems that were well beyond not just the capabilities of the integrator, but well beyond the capabilities of the systems of that time to function reliably. For me, it always comes down to this very basic thing, which is, will the smart home ever be dumber than the dumb home? The idea that somebody walks into their house and they can't turn on their lights, and they can't turn on their TV. They can't turn on their HVAC system because a single component has failed, that's something that anyone in a dumb house who hasn't spent any money would never have that situation. You'd have a thermostat that broke or a TV that wouldn't work. Still, you have to have some functionality that works to a certain degree in order for you to say like, "Okay, we can make this person's life not only better with this smart home technology," that's very cool, "but not worse than their neighbor who didn't pay a cent for that technology." Those systems back then ran on single processors. There was very little redundancy and what redundancy was there, was not built for the types of things that happen out in the market. Ultimately, I think a lot of integrators put in systems that they're paying for in the sense that there's a lot of technical debt out there. They're either having to persuade those customers to redo those systems or reinvest in them or maybe they've lost them already because that experience wasn't great, even though integrators are doing great work now with completely different platforms. This is the penalty of being in this world, is how close to the cutting edge do you want to be?
Ron: In 2011, you had that situation occur, and you've since decided to continue to scale up on the integration side. You're running both an MSP business, B2B, and a technology integration business, which is B2C. You decided to double down and grow this business, which your customer had dragged you into it. Was that a good decision looking at where you're at today? Are you happy you did that? And why have you stayed doing that? What's good about it for you and your business?
Michael: Come back to me in about a year, and I'll tell you whether or not it's good!
Ron: I'm asking that because you have a unique perspective. You have this other recurring revenue-based commercial customer where you get to justify, as you've said, the return on investment of hardware and or a service investment in a company like yours every month. Over to this consumer business where a luxury sale of goods and maybe a larger one-time sale, I'm assuming that you're also tying them into service contracts. I'd also love to hear you talk about that.
Michael: I mean, for us, they are two different businesses in terms of what they're serving. B2B versus B2C and that in itself, and I'm sure as you know in your world, it's a very difficult sales and marketing problem because they're salespeople that work in B2B and they're salespeople that work in B2C. And by the way, those are not the same salespeople. There are marketing tactics that work in B2B and marketing tactics that work in B2C. Still, from a lower down level in terms of how the business operates and sort of the fundamentals of what we do, we've tried to keep a lot of consistency between the two sides. Project management, how we design the systems, we're designing something for a B2B customer. And the overlap between these two worlds, by the way, is A/V Integration. Conference rooms, remote technology, tele-working technology, all of that stuff is now huge. We're doing a theater project for Kayak this month, the big travel company, which has a massive planar LED wall, but we're using Savant on the back end, AV over IP. A lot of the same control systems, a lot of the same networking stuff that we'd use in a luxury home. There's a lot of similar engineering, and what we try to do is apply the same operational procedures and kind of project management into both sides. They aren't that different in terms of how we manage the projects. Of course, the result tends to be a little bit more exciting on the smart home side, like walking in and seeing an LG OLED TV on the wall versus like, "Oh, your computers are still running today!" It's a different kind of value proposition for the end-user, but we try to maintain some consistency underneath the hood as much as we can.
Ron: What is your opinion around specifically, and I'm just keying in on this concept of service as it relates to the residential integrator. Still, it's certainly a conversation that's happening more and more. Some companies have been born on this side of the industry that is trying to drive this initiative. You have companies like One Vision there in Boston and several others that are are driving this conversation. What is your opinion, is this the trend on the residential side? Is this going to continue to grow? And if so, why?
Michael: I mean, it is going to continue to grow, and it has to grow because ultimately, the way I see it is, smart homes are computers in homes, right? There is certainly the DIY level, and that's a huge portion of the market, where you've got people putting in their systems, they're going to Home Depot, they're ordering on Amazon, and they're putting together their own stuff. As much as people have predicted that the integrators will be put out of business by that world, what I've seen, time and time again, is scale is the problem. If you buy Phillips Hue for a 10,000 square foot home, the interface gets completely unmanageable. Luckily, we integrators step in. Ultimately, the integrator has to compete against solutions which are perceived as being something that you can maintain yourself. I would argue that there are two types of customers in the integration world, one customer tends to be somebody that has a business that runs on computers and understands that they don't have to be a technology guru or somebody that is fanatical about it. Still, they understand the basic tenant, which is smart homes at this scale are essentially multiple computers running. If you want those computers to be functional, to be maintained, to be proactively looked at, and then to be updated as new functions and bug fixes and all that kind of stuff comes out, then you absolutely have to have somebody that's doing that for you. If you don't have a customer that has that mindset from day one, that has the understanding, it's always going to be very difficult to persuade them that they have to spend money on a service component. But as people have said, there are lots of recurring revenue models, even in the home alarm systems. It's really about that up-front, figuring out what that value is, expressing it to the customer. One of our keys is that we always put three years of service in the project proposal, to begin with. So somebody who is spending six figures on home technology, that three years of a service might be five figures and it's certainly going to add something to the total project. But you bring that discussion upfront, and you're also putting it relative to the amount of money they're spending on their system and saying, you want this system to be secure. You want it to have the latest functionality. You want us to be an ongoing partner for you. That's when you want to have that discussion because they're so favorably inclined towards you, not at the end when you've finished everything, you've just gone through the snag list and all the bugs, and you fix and, "Oh, here's the service contract." Like that's is never going to work. It sometimes does, but it's much less likely to work.
Ron: I agree. I'm fascinated by Michael, in that you're in the UK. Are you in London or where are you at?
Michael: Outside of London in a place called Canterbury.
Ron: All right, so you're in Canterbury, and your team is in Boston. On your website and I know from talking to you just before going live here, you're doing a number of projects in Reykjavik, Iceland. How are you managing a multi-unit project in Reykjavik with the nature of technology and this decentralized team to some extent? I find that fascinating.
Michael: For us, Iceland came from partially from that sort of origin customer. When he was saying to us, we needed to do better than his current system, and he was talking about an apartment that he was building in Reykjavik, Iceland. So that sort of started the Icelandic journey, which we did at that point, and we manage that fully from Boston. But in that process, we met an amazing guy, this guy named Christian or Chrissy as we call him in Iceland. And he's an electrician and those that are listening that are integrators will know that sort of magic unicorn of an electrician who's a licensed electrician, also knows how to punch down low voltage stuff and also has the brain that can program a Lutron and Savant system, which over the years, obviously he's gained that knowledge. We met him and through the connections in Iceland, both through this contact, as well as through working with him, we came upon this project, which is called Austurhöfn, which means Eastern Harbor. And so this project is kind of like the highest end of the luxury space in Reykjavik, which on American terms, Miami, Boston, New York is sort of middle of the range. But one of the things that they've tried to emphasize in this project is everything comes smart home ready. They're trying to differentiate themselves from the rest of the market. And it just so happened that as they were going through the designs of this project the last year or two that we came upon Lutron and their Ra2 system, which is a different class of lighting control in the sense that it's repeatable. It's reliable, and it's functional. It also doesn't require a lot of maintenance and a lot of programming. For those that are not familiar with it, it's in-app, and so we're doing 71 apartments there. We're using the Ra2 Select platform. There's a great product that's available in the EU, which isn't available in the US, which is an inline dimmer. So if you have a bunch of LED and ceiling lamps, you can put this dimmer. You slide it in behind the first lamp on the wire, and it's all wireless through Lutron's wireless technology, and you can program it on an iPhone.
Ron: Why is that not available in the US?
Michael: Well, Ra2 Select as a platform is available in the US, but I don't know if it's regulations around what could get certified or things like that, but it's all switch based. People are using Maestro's, which is on the wall.
Ron: I want to say maybe National Electric Code requires a switch on the wall for a load in the ceiling.
Michael: Yeah. There's something like that. Yeah. So you can't have the load in there. But for the EU, it's very common to do these sort of inline dimmers. I was going back to that Crestron system I was telling you about years ago, where there are so much programming and engineering needed. The technology has evolved to such a level now that a developer can essentially look at the cost of that, and this is an analysis we did with them at the very beginning of this project, for essentially $10,000 a unit. They can put in something that says we're smart home ready, lighting control, HVAC. We're using savant thermostats for that and putting in a Savant host into every unit, even though there are only thermostats there and Lutron lighting control. That's a building block upon which we can add A/V and other things without too many costs. Everything's evolved to the level that a developer can look at that, it's not insignificant money certainly, but if you compare it to the cost of the Wolf appliances or the marble countertops or the custom cabinetry from Italy, I mean that they're using as all these differentiators between all these luxury apartments that are fighting amongst each other. That cost isn't that big and it's gotten to the point now that you can sit around with a developer and say, "Yeah, you know what, it's going to cost you X number of hundreds of thousands of dollars, but it's also going to allow you to get that return on investment and it's going to give you that extra marketing edge that nobody else has in the market." In this case, in Reykjavik.
Ron: Michael, believe it or not, we've been talking for all 40 minutes. It feels like only been a couple of minutes, which is the sign of a fun interview. Quick question. A lot of those that listen to this show are oftentimes business owners, business operators, and I always enjoy asking my guests that are the entrepreneurial guests. What are maybe a couple of pieces of advice you've learned a number of things over your 26 years of running your business? What are some things that come top of mind for you that maybe those that aren't quite where you're at? What are some things they could do or be mindful of that might help them overall improve their business?
"When I stop learning, and I assume, I know everything, it is when I make the biggest mistakes. I've tried to learn more and more about selling about business, about running a business."
Michael: Well, a couple of things come to mind. One is not very industry-specific and one that is. One of the things that I've learned in the last X number of years, five, ten years is that when I stop learning, and I assume, I know everything, it is when I make the biggest mistakes. I've tried to learn more and more about selling about business, about running a business. Entrepreneurs have this problem of having to be in everything. This means you gotta read books about everything, about finance, about managing your business, about sales, all that kind of stuff. A couple of great books, one is Traction, which I'm sure quite a few entrepreneurs have heard of, but it's a great book and set up books now where it talks about very specific tactical things you can do to manage your business better. I enjoy that one. And there's another one which is fun for sales called Never Split the Difference by a guy named Chris Voss, which is an ex FBI negotiator. He talks about good ways of getting what you want in a way that everybody comes out happy. It's quite a good read. The other piece of advice that I'll give, which is a little bit more industry-specific in talking about this service side of the business, which I think is this ongoing challenge in the integrator industry is, and I don't have like a magic formula because I mean obviously, we came from this, IT/service-led business, but if you want to look ahead by 10 years in the integration business, then get to know somebody in an MSP who runs an MSP, somebody who's either a business owner, a VP of sales or a maybe you know, a COO, director of operations. You'll see the types of tools that are available to do it. And of course, like you may not necessarily understand the minute technical details, but you'll see the level of maturity that these tools are out there to manage systems which are arguably much more complex than the smart home systems that we have to deal with. This is where the industry is going to go if you can gain any insight from spending time with somebody who runs an MSP, how they price things out, how they express value to their customers, how they operationalize things very differently than integrators.
Ron: What would be resources on that front? That's super interesting. Are there trade associations or conferences? Books that you're aware of around this?
Michael: Luckily, the MSP market, because it's everybody, has a company that takes care of their IT, or they do it internally, but every business out there has a solution, and a lot of them involve MSP. All of the natural business networking stuff that you'd go to, it can be from the chamber of commerce or the young entrepreneurs or any of those types of places, there's going to be somebody that's in this networking computer MSP world and just hunting for that term. If you run into somebody that's doing it, ask them if they run an MSP, or they know somebody who does. We're a dime a dozen, it's a highly competitive market, but that's what's going to happen in the integrator market.
Ron: Why do you say that so confidently? Explain yourself. "The integration market is going to go the direction of MSPs."
Michael: Well, first off, the trend is towards software towards configurability. It's not about hardware any more, not about prominent speakers, not about big expensive TVs. Even though we're perfectly successful in selling a lot of that stuff. We had a meeting with a client that said, "Okay, we're unplugging from the cable. We don't really like this idea of video matrices of distributed video." I mean, distributed audio is being replaced by Sonos. Everything's being driven into software configuration, all that kind of stuff. So this world, and I'm sure there are some integrators out there listening or watching that'll be like, "Yeah, this is the world where all my hardware sales are going slowly down, two or 3% every year." But you have to be putting something back up on top of that. And that's all about services, software configuration, and being able to express to your end clients how those types of things are valuable. And that's something that the MSPs have been very, very good. We sell kind of the boring stuff, which is like keeping your stuff, running, moving stuff to Google, moving stuff to Office 365. But there are some extremely profitable MSPs out there. We're still trying to work our way up the ladder, but it's the kind of thing where you can see that people that were ahead of the game ten years ago, they understood that there was a sea change coming. Hardware margins were not really what was going to drive the business anymore. They found ways to create new markets for themselves, and it's a lot of time in front of the customers understanding what they want, what they need, how they want it delivered. I'm sure there's a lot of integrators that are out there that have that opportunity in their marketplace to start those conversations where other people haven't.
Ron: Yeah. Love it. Awesome. Michael, where can our audience go to learn more about you and, or to subscribe to your podcast?
Michael: So our podcast is Grepcast. My website is tsp.me for the MSP side, and tsp.space for the home automation and AV integration space. I'm also on Twitter @hobbesoh, and the company's on Instagram @tspllc. And of course, LinkedIn, all the usual places. On Instagram, we have a little bit of our work on it. I'm sure some of your people may be like, "Okay, well, when you're a $10 or $15 million integrator, I'm sure that some of these lessons may not be so applicable." I'll say that to sort of say, look we're pretty small. And we have the opportunity to choose our clients. And I know some of the large integrators to a certain degree don't, while it seems like you should be able to, well you have architects that are feeding you business, your builders that are feeding you business. You have to take everything regardless of whether or not the customer is aligned with this service-led idea. As we grow, we may run into a lot of these same challenges. Still, I think that's one of the things about being the new upstart is to be able to say, you know what, we can choose the right clients and you know, hopefully, find the ones that really understand where we're coming from in terms of delivering service on top of the technology.
Ron: Love it. Michael. Thank you, sir, for being my guest on show 92 of Automation Unplugged!
Industry innovator and podcast host, owner of TSP, Michael Oh, brings a unique perspective to our industry through his experience with having an MSP and service-led business focus.
Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.
Resources and links from the interview:
- Michael Oh's podcast, Grepcast
- One Vision in Boston being another MSP advocate
- Lutron Ra2
- Book Recommendations: Traction: How Any Startup Can Achieve Explosive Customer Growth by Gabriel Weinberg, and Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss
- Fun Read: The MSP landscape: the importance of MSPs is increasing as IT systems get more complex
If you’d like to stay in contact with Michael, follow him on social media @hobbesoh on Twitter and the company Twitter @techsuperpowers, company Instagram @tspllc, and LinkedIn as TSP LLC. Don't forget to also listen to Michael's podcast, Grepcast!
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