1 00:00:02,080 --> 00:00:05,880 Welcome to the Evolved Radio podcast, Todd. Thanks for 2 00:00:05,880 --> 00:00:09,600 having me on the Evolved Radio podcast. So stoked to be here. Cool. 3 00:00:09,920 --> 00:00:13,520 All right, so as we do lately, we're going to be talking 4 00:00:13,600 --> 00:00:17,280 AI, but I think you guys have a slightly different take on this. 5 00:00:17,920 --> 00:00:21,440 If you want maybe give us a quick little background on yourself and 6 00:00:21,440 --> 00:00:25,200 your adventures in the MSP industry. Yeah, for 7 00:00:25,200 --> 00:00:28,990 sure. Background on me kind of of marketer by 8 00:00:28,990 --> 00:00:32,630 trade in my 20s, fell kind of forward into the MSP 9 00:00:32,630 --> 00:00:35,670 world in my late 20s, early 30s, 10 00:00:36,310 --> 00:00:39,670 didn't even know what an MSP was. I just took a job ad and like 11 00:00:39,670 --> 00:00:43,270 showed up and they were like, oh yeah, we're an msp. So I was 12 00:00:44,150 --> 00:00:47,630 all the way from like a tiny 3 person MSP up to like a 75 13 00:00:47,630 --> 00:00:51,430 person MSP. Have kind of done all the different stops along the way. 14 00:00:53,030 --> 00:00:56,310 Most recently was at a big private equity roll up, 15 00:00:56,880 --> 00:01:00,720 rolling up MSPs, you know, really in kind of globally in the English speaking 16 00:01:00,720 --> 00:01:04,160 world. And now as of January, I find myself at 17 00:01:04,560 --> 00:01:07,920 like, I guess what is an AI? First msp, which I'm sure we'll get into, 18 00:01:07,920 --> 00:01:11,280 but recently joined Treeline AI. 19 00:01:13,360 --> 00:01:17,200 I guess that's a good place to start is what is, what does AI 20 00:01:17,200 --> 00:01:20,320 first mean to you at Treeline? I think the, 21 00:01:20,960 --> 00:01:23,760 I think I hear this term around software, 22 00:01:25,080 --> 00:01:28,560 maybe a little less so around operating model. So maybe 23 00:01:28,560 --> 00:01:32,400 clarify sort of how you, you guys understand that. Yeah, I think 24 00:01:32,400 --> 00:01:35,840 it just means that we're being thoughtful and intentional about the way AI 25 00:01:35,840 --> 00:01:38,760 weaves throughout the service layer of the business. 26 00:01:39,800 --> 00:01:43,640 There's like a lot of kind of thought leadership on this going 27 00:01:43,640 --> 00:01:47,240 out right now around what it means to be an AI 28 00:01:47,240 --> 00:01:51,000 company or a software company in the services space. So 29 00:01:51,000 --> 00:01:54,850 like this technology sort of at this inflection point now where we think 30 00:01:54,850 --> 00:01:58,450 it can be an accelerant to the services space, it is 31 00:01:58,450 --> 00:02:02,250 obviously part of that, but fractional accounting, fractional hr, whatever 32 00:02:02,250 --> 00:02:05,050 you could think about all the other services that are out there that'll have a 33 00:02:05,050 --> 00:02:08,890 similar trajectory. So for us it's just really about architecting the 34 00:02:08,890 --> 00:02:12,690 end to end vision of the business with AI 35 00:02:13,410 --> 00:02:16,130 in mind. And so rather than 36 00:02:16,530 --> 00:02:20,210 deploying an AI help desk agent or using 37 00:02:20,370 --> 00:02:24,210 AI to vibe code client portal, it's 38 00:02:24,210 --> 00:02:27,850 sort of like all the pieces of the business should be touching and augmented by 39 00:02:28,090 --> 00:02:31,690 AI in some way. So more 40 00:02:31,690 --> 00:02:35,410 like purpose built kind of end to end rather than sort 41 00:02:35,410 --> 00:02:38,330 of maybe, I guess, sort of inserted into the model. 42 00:02:40,410 --> 00:02:44,090 It's the condition of the build. That's right, yeah. And I think the way that 43 00:02:44,090 --> 00:02:47,850 we've been talking about it is rather than saying like hey, we're bolting on 44 00:02:48,010 --> 00:02:51,250 an AI or software product. Rather 45 00:02:52,130 --> 00:02:55,650 it's the convergence of the software and the service coming together 46 00:02:55,650 --> 00:02:59,370 across the business. And so if you think about any functional part of the 47 00:02:59,370 --> 00:03:02,530 business, whether it's customer facing or behind the scenes, 48 00:03:03,490 --> 00:03:07,090 our goal is to find a way to insert technology into that 49 00:03:07,090 --> 00:03:10,610 service layer in a way that's cohesive across. 50 00:03:10,690 --> 00:03:14,250 Right. So it's not disjointed and you're moving from point solution to point 51 00:03:14,250 --> 00:03:16,610 solution. It's really all encompassing. 52 00:03:17,950 --> 00:03:21,390 Okay, let's talk a bit about sort of the 53 00:03:21,470 --> 00:03:24,030 different models of operating. Right. Because 54 00:03:25,230 --> 00:03:28,990 you've come from a pretty big roll up in the industry. 55 00:03:29,630 --> 00:03:32,030 We've got AI point solutions, 56 00:03:33,310 --> 00:03:36,790 there's the AI roll ups that are now in the 57 00:03:36,790 --> 00:03:40,630 ecosystem as well. There's lots of MSPs building AI tools 58 00:03:40,630 --> 00:03:44,310 in house. There's sort of the SAS apocalypse threat of 59 00:03:44,310 --> 00:03:48,110 people as you mentioned, kind of vibe coding some things. I 60 00:03:48,110 --> 00:03:51,730 think that you thesis is a bit different than this. You kind of want to 61 00:03:51,730 --> 00:03:55,250 do. You want to maybe run through how you perceive some of those other 62 00:03:55,250 --> 00:03:58,810 operating models in the industry and maybe why you guys think that your thesis 63 00:03:58,810 --> 00:04:02,650 is the better mousetrap. Yeah, 64 00:04:02,650 --> 00:04:05,890 I think it might help just to start with like kind of overview on 65 00:04:05,890 --> 00:04:09,530 landscape as a whole up to now which has been, you know, the MSP 66 00:04:09,770 --> 00:04:12,890 industry and the model has been around for 40 years and 67 00:04:14,530 --> 00:04:18,170 you know, obviously the last 10 years have been pretty hot on the M and 68 00:04:18,170 --> 00:04:21,770 A side. Private equity has been a big player in this space. Strong 69 00:04:21,770 --> 00:04:25,450 recurring revenue, good margin, expansion, opportunity. These are 70 00:04:25,450 --> 00:04:28,050 usually not like super optimized businesses. 71 00:04:29,090 --> 00:04:31,970 And up to this point there's been sort of two models out there. One is 72 00:04:31,970 --> 00:04:35,170 like the private equity aggregator roll up that's 73 00:04:35,330 --> 00:04:38,610 rebranding the acquisition. 74 00:04:39,170 --> 00:04:43,010 Everyone's carrying the same logo or kind of going to market as new 75 00:04:43,090 --> 00:04:46,830 company. And the other was like let's just them as a 76 00:04:46,830 --> 00:04:50,590 holding company and kind of leave them as bespoke unique entities in whatever market they're 77 00:04:50,590 --> 00:04:53,790 in. In both cases the models to generate 78 00:04:54,270 --> 00:04:57,950 equity value or yield for the shareholders. And so there's really a focus on 79 00:04:58,350 --> 00:05:01,710 driving margin expansion which shows up as obviously 80 00:05:01,710 --> 00:05:05,550 EBITDA improvement on the bottom line. And 81 00:05:05,950 --> 00:05:09,750 I think the third operating model you hinted at was the AI roll 82 00:05:09,750 --> 00:05:12,560 up which is we're seeing those start to come online now which is kind of 83 00:05:12,560 --> 00:05:15,560 an update to both those models I just mentioned. It's like 84 00:05:16,040 --> 00:05:19,600 basically using AI as a tool or a lever in the private 85 00:05:19,600 --> 00:05:23,120 equity model. To expand margin and produce better 86 00:05:23,120 --> 00:05:26,840 yield. We're different because we are. 87 00:05:27,000 --> 00:05:30,760 There is an acquisitive part of our business. We'll talk about how that 88 00:05:30,760 --> 00:05:34,280 differs from the rollup model. But generally our 89 00:05:34,280 --> 00:05:37,880 thesis is not that we're trying to use AI as a lever expansion. We're trying 90 00:05:37,880 --> 00:05:41,680 to use AI to really update the overall experience for the end 91 00:05:41,680 --> 00:05:45,190 user, improve some of those common pitfalls that 92 00:05:45,190 --> 00:05:49,030 MSPs fall into in terms of poor response 93 00:05:49,030 --> 00:05:52,510 times, unresolved issues, botched onboardings, et 94 00:05:52,510 --> 00:05:55,630 cetera. And then our goal is to grow 95 00:05:55,710 --> 00:05:59,270 organically on top of that. So really our inorganic 96 00:05:59,270 --> 00:06:03,110 strategy or acquisition strategy we view as an entry point into some 97 00:06:03,110 --> 00:06:06,830 of these attractive geographies in the States. We feel like there's still a very much 98 00:06:07,230 --> 00:06:11,030 local dynamic in the way that this service is delivered. And so we 99 00:06:11,030 --> 00:06:14,420 think it's important that we're local where our customers are. But we're not trying to 100 00:06:14,420 --> 00:06:18,140 buy 10 companies in Houston, we're trying to buy one company in 101 00:06:18,140 --> 00:06:20,860 Houston, you know what I mean? And use that as a launching off point, 102 00:06:21,660 --> 00:06:25,300 as really kind of our distribution model for the 103 00:06:25,300 --> 00:06:28,620 service that we're offering now. Is that to say that 104 00:06:29,259 --> 00:06:32,300 you don't necessarily need to acquire all of the business, 105 00:06:33,420 --> 00:06:36,860 in effect, maybe a bit of a land grab strategy instead, like 106 00:06:37,020 --> 00:06:40,600 the core offering that you're trying to build. Being service focused 107 00:06:40,600 --> 00:06:44,440 is so good that you assume that you guys can win the rest 108 00:06:44,440 --> 00:06:48,120 of the business without having to acquire all the separate entities. Is that part of 109 00:06:48,120 --> 00:06:51,640 the thinking there? Yeah, I would say 110 00:06:53,160 --> 00:06:56,520 there's a bunch of different ways we could get this approach, 111 00:06:57,240 --> 00:07:00,560 a partnership like this. For us, it's really just we're trying to think of like, 112 00:07:00,560 --> 00:07:04,240 what are the big attractive markets in the States? How do we find the best 113 00:07:04,240 --> 00:07:07,970 available MSP on the market, still help them build 114 00:07:07,970 --> 00:07:10,690 a moat around their business in terms of like bringing 115 00:07:11,650 --> 00:07:15,170 AI and software into that business in a way that's largely 116 00:07:15,170 --> 00:07:18,850 impossible if not really difficult to do if you're a single operator on your 117 00:07:18,850 --> 00:07:22,650 own. And then and then turning on go to 118 00:07:22,650 --> 00:07:25,530 market engine on top of that, you know, building a commercial team on top of 119 00:07:25,530 --> 00:07:28,290 that, and really expanding in that market and trying to capture 120 00:07:29,250 --> 00:07:33,090 a market share. Really, you know, we have a new offering, 121 00:07:34,290 --> 00:07:37,690 we think it's a better experience for the end user and the customer. And we 122 00:07:37,690 --> 00:07:40,690 think there's some cost advantage, obviously with some of the 123 00:07:41,250 --> 00:07:45,050 advantage and efficiency we get out of the AI side. So how 124 00:07:45,050 --> 00:07:48,770 we get there, there's obviously some flexibility, but 125 00:07:48,770 --> 00:07:51,170 generally that's the concept that we're after 126 00:07:53,170 --> 00:07:56,810 the AI as it sits kind of within the 127 00:07:56,810 --> 00:08:00,650 operation, a lot of organizations, especially the groups that are doing roll 128 00:08:00,650 --> 00:08:04,210 up, they focus a lot on sort of backend efficiencies and the things 129 00:08:04,210 --> 00:08:08,030 that the MSPs don' tend to be great at the administrative bits, 130 00:08:08,110 --> 00:08:11,710 the sales and marketing are areas that the average MSP 131 00:08:11,710 --> 00:08:15,310 isn't as strong in. And that's I think, where a lot of that sort of 132 00:08:15,310 --> 00:08:18,830 industry leverage comes in. I imagine you guys have a 133 00:08:18,830 --> 00:08:22,350 component of that, but also I'm 134 00:08:22,350 --> 00:08:26,110 imagining the tool sets being different. Right. I think when 135 00:08:26,190 --> 00:08:29,870 we talked before, you guys are leveraging some industry 136 00:08:30,270 --> 00:08:33,870 standard tools right now, but are looking to eventually 137 00:08:33,870 --> 00:08:37,070 kind of sub those in with inbuilt models. Is that kind of what you guys 138 00:08:37,070 --> 00:08:40,330 are thinking? That's right. So up to this point 139 00:08:40,650 --> 00:08:44,370 we've had our early MSP partners have been design partners for us as 140 00:08:44,370 --> 00:08:47,890 we're thinking about where the opportunities are as we're building the 141 00:08:47,890 --> 00:08:51,730 software and the product. And so really we've been building on 142 00:08:51,730 --> 00:08:54,730 top of existing infrastructure. So existing 143 00:08:54,810 --> 00:08:58,490 psa, existing client 144 00:08:58,490 --> 00:09:02,290 portal, existing, all the existing service layer obviously. And 145 00:09:02,290 --> 00:09:05,920 then as time goes on with kind of each shipment that we 146 00:09:05,920 --> 00:09:09,760 deliver to market, we're replacing not just like some 147 00:09:09,760 --> 00:09:13,360 of the services so like we can augment a lot of those services or shortcut 148 00:09:13,360 --> 00:09:16,880 them for the technicians, but also replacing some of that software. So 149 00:09:17,040 --> 00:09:20,840 an example of that would be right now we're wholly 150 00:09:20,840 --> 00:09:24,640 dependent on the ticketing system to ingest requests still 151 00:09:24,640 --> 00:09:28,080 and kind of ship it up to us, whether that's coming from an email 152 00:09:28,400 --> 00:09:31,900 or a teams chat or a Slack chat, whatever it might be. But 153 00:09:31,900 --> 00:09:35,420 eventually we kind of view it as like the interface will be the treeline 154 00:09:35,420 --> 00:09:38,980 software for both the customer and the technicians. And so that's the point where 155 00:09:39,140 --> 00:09:42,940 the service is delivered. So this 156 00:09:42,940 --> 00:09:46,260 kind of gets to one of I feel is sort of like the 157 00:09:46,660 --> 00:09:49,700 fundamental positions for a lot of the existing 158 00:09:50,100 --> 00:09:53,500 AI software out there is it's either client 159 00:09:53,500 --> 00:09:57,140 focused or technician focused. And 160 00:09:57,540 --> 00:10:01,380 being good at both, I feel is maybe not a core skillset 161 00:10:01,380 --> 00:10:04,750 of a lot of those, those tools just yet. 162 00:10:05,550 --> 00:10:09,310 Any thoughts on sort of like which one leads first? Which one is maybe 163 00:10:09,310 --> 00:10:13,070 primary in that relationship? You know, I think I would like 164 00:10:13,070 --> 00:10:16,670 my thought on the entire concept is 165 00:10:17,710 --> 00:10:21,030 the tools are only as good as like the time and skill that you have 166 00:10:21,030 --> 00:10:24,830 to put into deploying them and using them. And that's true like 167 00:10:24,910 --> 00:10:28,710 everyone's kind of using AI personally now. So like I just finally 168 00:10:28,710 --> 00:10:31,990 got Claude cowork going. I was getting like a Lot of heat for not using 169 00:10:31,990 --> 00:10:33,990 it yet. I was like, all right, I'm going to just sit down and like 170 00:10:33,990 --> 00:10:37,810 kind of figure it out. And until I did that, 171 00:10:37,810 --> 00:10:41,290 like there was all this untapped potential in that tool that just I was not 172 00:10:41,290 --> 00:10:44,530 recognizing. And I think my experience again, having come out of 173 00:10:45,010 --> 00:10:47,990 a large roll up of these businesses, we had over 100 174 00:10:48,190 --> 00:10:51,970 MSPs under our umbrella was, you 175 00:10:51,970 --> 00:10:55,370 know, there was a lot of variability in like how well they were able to 176 00:10:55,370 --> 00:10:59,210 leverage any of those off the shelf kind of point solutions. And there are 177 00:10:59,210 --> 00:11:01,010 really good products out there and I know a lot of the guys that have 178 00:11:01,010 --> 00:11:04,830 made those products and I think there's definitely like a lot of opportunity in that 179 00:11:04,830 --> 00:11:08,550 space still. I think for us the fundamental 180 00:11:08,550 --> 00:11:11,950 difference in what we see is our advantage is that we are the owners of 181 00:11:11,950 --> 00:11:15,190 the software and the service together. Right. So we don't have to try to. 182 00:11:16,070 --> 00:11:19,910 There's no enablement that we have to sell through if we're selling product. There's no 183 00:11:19,910 --> 00:11:23,590 education to the customer. We own all of that. 184 00:11:23,590 --> 00:11:27,430 And really the value that we're generating is like at the nexus of those two 185 00:11:27,430 --> 00:11:30,670 things combined with. So 186 00:11:30,830 --> 00:11:34,110 generally like if it's customer facing or MSP facing, 187 00:11:34,750 --> 00:11:38,430 at the end of the day, I just think it's about how well it's deployed. 188 00:11:39,550 --> 00:11:42,750 Yeah. And one of the conversations that I had with 189 00:11:45,070 --> 00:11:48,750 some of the AI manufacturers, like the software people here 190 00:11:49,230 --> 00:11:51,310 was illuminating and the fact that 191 00:11:52,990 --> 00:11:56,670 they're able to move faster than some of the larger 192 00:11:56,670 --> 00:12:00,030 incumbents. And I think we're, I've kind of called this out as seeing a bit 193 00:12:00,030 --> 00:12:03,530 of a, a bit of a pace problem with 194 00:12:03,850 --> 00:12:07,570 some of the larger software vendors in the msp. And that's creating a lot 195 00:12:07,570 --> 00:12:10,090 of opportunity, sort of white space for opening up 196 00:12:11,210 --> 00:12:14,170 faster software tools to kind of fill the gaps. 197 00:12:14,890 --> 00:12:18,690 And I think that's kind of an interesting approach. It kind of leads with 198 00:12:18,690 --> 00:12:22,450 a lot of innovation within the channel. And then there's 199 00:12:22,450 --> 00:12:26,090 a different approach I've seen from another one of the 200 00:12:26,170 --> 00:12:30,010 M and A roll up companies where they've basically taken that approach in 201 00:12:30,010 --> 00:12:33,790 house and they said, okay, you know, you know, a lot of great software, 202 00:12:33,790 --> 00:12:37,590 good vendors, we work with these people, but you know, just the dev cycles need 203 00:12:37,590 --> 00:12:41,350 to be faster for us. So we're going to do the development in house. I 204 00:12:41,350 --> 00:12:44,310 feel like what you guys are doing is maybe a bit of an extension of 205 00:12:44,310 --> 00:12:48,149 that, but actually sort of taking it to kind of the nth 206 00:12:48,149 --> 00:12:51,950 degree of we're not just going to build on top of the tools 207 00:12:51,950 --> 00:12:55,710 that we're utilizing, we're eventually kind of replacing 208 00:12:55,710 --> 00:12:59,390 the whole stack. Am I sort of reading that right? And any thoughts 209 00:12:59,390 --> 00:13:02,990 on sort of why that is necessary based on the dev cycles? 210 00:13:03,610 --> 00:13:07,450 Yeah, I would totally agree. And I think the 211 00:13:07,850 --> 00:13:11,490 big ships turn slower kind of analogy or idioms is 212 00:13:11,490 --> 00:13:15,090 totally true. It just takes a long time. You may have more capital to 213 00:13:15,090 --> 00:13:18,930 deploy more resources, but actually the coordination cost on that and 214 00:13:18,930 --> 00:13:22,450 orchestrating that is really difficult at scale and 215 00:13:22,450 --> 00:13:26,170 coupled with AI just in general is a great equalizer. 216 00:13:26,170 --> 00:13:29,890 And so for small businesses you have a total leverage 217 00:13:29,890 --> 00:13:33,450 opportunity where you can do a lot more, a lot, a lot more quickly 218 00:13:33,450 --> 00:13:36,970 with less skill or less resource than you ever could before. Right. 219 00:13:37,210 --> 00:13:40,970 You have endless possibility if you have the right resources 220 00:13:40,970 --> 00:13:43,290 in front of you from the software standpoint. 221 00:13:44,490 --> 00:13:48,290 So totally agree with that sentiment. I think for us, yeah, it 222 00:13:48,290 --> 00:13:52,010 is that. It's basically all the best MSPs I've 223 00:13:52,010 --> 00:13:55,290 ever seen over my 15 year career are the ones that are doing 224 00:13:56,250 --> 00:13:59,700 the custom scripting and custom development 225 00:13:59,860 --> 00:14:03,420 inside their business anyways. They're like, they see a novel 226 00:14:03,420 --> 00:14:06,820 problem for their customer, for their business, and they try to solve it with like 227 00:14:06,820 --> 00:14:10,660 a PowerShell script or something. Right. And I was always like amazed 228 00:14:10,660 --> 00:14:13,700 when I would see that. I'm not a highly technical person, so I'd just be 229 00:14:13,700 --> 00:14:16,940 like, whoa, that's really cool. Like you shortcutted this issue and you just kind of 230 00:14:16,940 --> 00:14:20,700 solved it once and forever. So in a lot of ways it's like, it's 231 00:14:20,700 --> 00:14:24,070 a very similar approach. It's just like how do we find these 232 00:14:25,030 --> 00:14:28,310 opportunities in the business as it exists today, where 233 00:14:29,190 --> 00:14:32,990 the value chain could be improved, the customer 234 00:14:32,990 --> 00:14:36,750 experience could be improved, the technician experience could be improved, their quality of life 235 00:14:36,750 --> 00:14:40,510 could improve. And then how do we bring technology into the fold that can fix 236 00:14:40,510 --> 00:14:44,350 that? I think it's just the type of technology and the depth and breadth of 237 00:14:44,350 --> 00:14:48,070 the way that we're approaching that is really the update. So 238 00:14:48,070 --> 00:14:51,570 rather than saying here's one very specific problem, we're going to 239 00:14:51,570 --> 00:14:55,290 deploy a script to that problem to fix it. It's more 240 00:14:55,290 --> 00:14:59,090 like how do we link all these problems together in the form of linked 241 00:14:59,090 --> 00:15:02,890 solutions that when built up on top of each 242 00:15:02,890 --> 00:15:06,450 other, you really get some sort of compounding effect in the overall customer experience 243 00:15:06,530 --> 00:15:09,330 and obviously the way that we're able to go to market because of that. 244 00:15:10,210 --> 00:15:14,050 So extending on that, then this is an industry where a lot of 245 00:15:14,050 --> 00:15:17,600 the major solutions that are out there now were MSPs 246 00:15:17,600 --> 00:15:20,760 scratching their own itch. Right. They got a front row seat to this for it 247 00:15:20,760 --> 00:15:24,600 glue being developed out of internal software that we used at fully 248 00:15:24,600 --> 00:15:27,480 managed, you know passportal similar. 249 00:15:28,440 --> 00:15:32,280 You know a lot of these, these examples Immibot I guess another like 250 00:15:32,280 --> 00:15:35,920 these great solutions where you know they, they had a problem 251 00:15:35,920 --> 00:15:39,080 internally and just decided to solve that problem on their own. 252 00:15:40,680 --> 00:15:44,280 I guess with the expansion of this now and people are sort of 253 00:15:44,280 --> 00:15:48,080 calling for the AI or the SAS apocalypse where you know, people 254 00:15:48,080 --> 00:15:51,860 are just sor building their own solutions and you guys are a version of this 255 00:15:51,860 --> 00:15:55,620 I think. But more broadly like what's your take on 256 00:15:55,940 --> 00:15:59,460 this impact on the sort of the software industry 257 00:15:59,700 --> 00:16:03,340 in the channel? Do you think that this is actually a legitimate threat or is 258 00:16:03,340 --> 00:16:06,940 it going to be like fine, you can tinker but when you come, you know, 259 00:16:06,940 --> 00:16:10,780 three months from now realize like oh well maybe we actually do need this 260 00:16:10,780 --> 00:16:14,510 piece of software and it's not as practical as maybe people think it is. What's 261 00:16:14,510 --> 00:16:17,950 your take? Yeah, you mean in the context of like AI 262 00:16:17,950 --> 00:16:21,790 overall being a threat to that or like tree line? No, like more sort 263 00:16:21,790 --> 00:16:25,230 of like, like the, you know what I've heard from a lot of people is 264 00:16:25,310 --> 00:16:28,510 the constant conversation that is happening at booths, in 265 00:16:29,790 --> 00:16:33,270 shows right now is why do I need you? Why would I not just vibe 266 00:16:33,270 --> 00:16:36,910 code this myself? Right. So like is there a legitimate 267 00:16:36,910 --> 00:16:40,670 threat to the software industry and especially in our industry with 268 00:16:40,670 --> 00:16:44,470 like a bunch of technically capable people who might actually do this 269 00:16:44,470 --> 00:16:48,310 versus like a marketing company may or may not roll their own CRM 270 00:16:48,310 --> 00:16:51,950 type approach? Yeah, I think it's, I mean there's trade 271 00:16:51,950 --> 00:16:55,750 offs so. Well one I've, you know what I, what I'm hearing sort of 272 00:16:55,750 --> 00:16:59,230 in the technology zeitgeist right now is that distribution 273 00:16:59,230 --> 00:17:02,230 sort of the next moat for a lot of this stuff. So it's not just 274 00:17:02,230 --> 00:17:06,030 about like can you build the products, you have to have a good vision, you 275 00:17:06,030 --> 00:17:09,270 have to be able to execute on that. You have to have clean code. There's 276 00:17:09,270 --> 00:17:12,350 a lot of other variables in there but really like at the end of the 277 00:17:12,350 --> 00:17:15,950 day it's like the distribution challenge is going to be 278 00:17:15,950 --> 00:17:19,080 where you're going to win or lose in the future. At least 279 00:17:19,560 --> 00:17:21,560 people that are smarter than I am are saying that. 280 00:17:23,320 --> 00:17:26,600 But I think like more broadly it's just a matter of like trading off 281 00:17:26,600 --> 00:17:30,240 resources. So for, I mean again you've been in the space a long time. 282 00:17:30,240 --> 00:17:33,800 MSPS are small, they're bootstrapped most of the time, 283 00:17:34,120 --> 00:17:37,880 they're capital constrained, they're like talent and 284 00:17:37,880 --> 00:17:41,360 resource constrained. Just from like a skill set standpoint, like we have really talented 285 00:17:41,360 --> 00:17:44,210 technicians and engineers here, but like not always the best, 286 00:17:44,930 --> 00:17:48,770 like software developers. Right. For example. And so it's like every 287 00:17:48,770 --> 00:17:52,330 time that you take their time and attention away from a current customer challenge or 288 00:17:52,330 --> 00:17:55,650 operating the business day to day to go do that other thing, you're making a 289 00:17:55,650 --> 00:17:59,050 trade off there. And some folks I think are going to be able to navigate 290 00:17:59,050 --> 00:18:02,290 that just fine. Maybe other folks will not. At the end of the day, 291 00:18:02,770 --> 00:18:06,130 I really think it's about the focus of the 292 00:18:06,130 --> 00:18:09,570 software industry as a whole. Like can they go really deep on 293 00:18:10,150 --> 00:18:13,550 a point solution? If you're going to be a software company that's distributing through the 294 00:18:13,550 --> 00:18:17,390 channel to the msps, are you going to have really good enablement for them? We 295 00:18:17,390 --> 00:18:20,350 just kind of just hit on this a minute ago so that they can get 296 00:18:20,350 --> 00:18:23,190 the most out of the product that is purchased from you. They're not going to, 297 00:18:23,350 --> 00:18:26,870 you know, shut it down in six months or whatever or 298 00:18:27,190 --> 00:18:30,430 try to go build their own because they think they can do it better. That's 299 00:18:30,430 --> 00:18:34,150 I think the problem trying to solve again for us, why we think we have 300 00:18:34,150 --> 00:18:37,400 a little bit of an advantage here is because we're not developing software to sell 301 00:18:37,400 --> 00:18:40,840 through the channel. We're trying to find MSPs to directly partner with and 302 00:18:40,840 --> 00:18:44,480 distribute to end customers. And so we have a lot more control over the 303 00:18:44,480 --> 00:18:48,040 overall value chain there and how that 304 00:18:48,200 --> 00:18:50,440 software is being distributed along with the service. 305 00:18:51,959 --> 00:18:55,480 But yeah, I wish I had a crystal ball, dude. That's probably the million dollar 306 00:18:55,480 --> 00:18:59,320 question. I just saw the multi billion dollar question. Yeah, indeed. 307 00:18:59,720 --> 00:19:03,400 I was going to say a trillion dollar. I just saw a thing last 308 00:19:03,400 --> 00:19:06,760 month, Julian Beck, he's one of the partners at Sequoia, 309 00:19:07,400 --> 00:19:11,080 dropped this manifesto on X and he was 310 00:19:11,080 --> 00:19:14,840 basically like the next trillion dollar company is going to be a software company 311 00:19:14,840 --> 00:19:18,600 disguised as a service company. And so it's like there's still this 312 00:19:18,760 --> 00:19:22,040 distribution opportunity in the services world. 313 00:19:23,000 --> 00:19:26,000 The technology is great. How do you get it into the hands of end customers 314 00:19:26,000 --> 00:19:29,730 and actually make it useful for them? It's a big lift to do that if 315 00:19:29,730 --> 00:19:33,410 you're going through a middle person, a middle company and having to 316 00:19:33,810 --> 00:19:37,090 educate them and train them and give them all the enablement to do it and 317 00:19:37,090 --> 00:19:40,530 then hope that they're successful. It's a different story if you're able to just sort 318 00:19:40,530 --> 00:19:43,170 of control that delivery end to end. 319 00:19:45,410 --> 00:19:49,090 The other aspect of this I guess is rather than focusing 320 00:19:49,090 --> 00:19:52,770 on the technical end of things, that tends to be where 321 00:19:53,170 --> 00:19:56,930 a technical industry gravitates towards because they're more comfortable with it. 322 00:19:57,490 --> 00:20:01,210 But the general operating maturity 323 00:20:01,210 --> 00:20:04,970 level for MSP organizations could be higher. And I think 324 00:20:04,970 --> 00:20:08,610 maybe this is the opportunity that they probably wish things 325 00:20:08,610 --> 00:20:11,850 could be different and could be better, but resource 326 00:20:12,330 --> 00:20:16,130 constrained, time starved. I just have to get this thing for 327 00:20:16,130 --> 00:20:19,770 this client in order to get through the day. 328 00:20:20,010 --> 00:20:23,690 So not necessarily thinking about the internal operations. 329 00:20:23,690 --> 00:20:27,130 This is much to my dismay of 330 00:20:27,210 --> 00:20:31,030 people not having the time to focus on improving the operations of their business 331 00:20:31,030 --> 00:20:34,550 because quite frankly, like this is how you create margin 332 00:20:34,630 --> 00:20:38,350 is. It's great to win business, but in order to 333 00:20:38,350 --> 00:20:42,110 keep it and actually make money, the operations have to be efficient. So 334 00:20:42,110 --> 00:20:45,350 maybe this is an opportunity where AI can help augment 335 00:20:45,749 --> 00:20:49,590 a lot of the other technical capacities and give people the time 336 00:20:49,590 --> 00:20:53,190 that they need to focus more on operational improvement. Do you think that that 337 00:20:53,190 --> 00:20:55,430 is something that people should focus more on? 338 00:20:56,840 --> 00:21:00,000 Absolutely. It's, you know, I'll just say like I have a lot of empathy for 339 00:21:00,000 --> 00:21:03,200 anyone in that seat right now. It's really hard. I've been there when it's five 340 00:21:03,200 --> 00:21:07,040 people, I've been there when it's 70 plus people and 341 00:21:07,040 --> 00:21:10,840 the challenge is always there. It just sort of like looks different depending on 342 00:21:10,840 --> 00:21:14,560 like where you're at. Right. So everybody wants to make their business better. 343 00:21:14,560 --> 00:21:17,560 And I think honestly, like, you know, one of the reasons I was so attracted 344 00:21:17,560 --> 00:21:20,880 to Treeline was like, I've been around this space for so long. I mean it's 345 00:21:20,880 --> 00:21:23,950 just, it's, it's frustrating to sit on the sidelines and go like, man, like we 346 00:21:23,950 --> 00:21:27,510 all want to make our businesses better in some way, but it's just, it's just 347 00:21:27,510 --> 00:21:31,150 really hard to do like there's all these like kind of leaks and 348 00:21:31,150 --> 00:21:33,710 waste along the way as you're delivering these services. 349 00:21:35,870 --> 00:21:39,310 So yes, I think everyone should be focused there. 350 00:21:39,470 --> 00:21:43,110 I do think like, you know, the, the 351 00:21:43,110 --> 00:21:46,710 barrier entry on doing this on your own is lower. Like people 352 00:21:46,710 --> 00:21:50,360 can, you know, just by way of like automating some of their other 353 00:21:50,600 --> 00:21:54,400 routine tasks will get time back to put into the business and new 354 00:21:54,400 --> 00:21:57,160 and novel ways that help them improve the overall operation. 355 00:21:58,680 --> 00:22:02,200 So the technology is absolutely going to help there, you know, for, 356 00:22:03,239 --> 00:22:06,520 for us. When I think about just like the overall operational 357 00:22:06,520 --> 00:22:10,240 maturity, really what I think about is like what's the customer experience at the end 358 00:22:10,240 --> 00:22:13,750 of the day? And like, you know, I'll go back to my own personal experience 359 00:22:13,830 --> 00:22:17,470 and maybe there's like, you know, A plus MSPs out there that didn't have 360 00:22:17,470 --> 00:22:21,150 this challenge, but it was, you know, routinely we'd hear, you 361 00:22:21,150 --> 00:22:24,950 know, why didn't you get back to me on time? Or, you know, 362 00:22:24,950 --> 00:22:28,230 this ticket had to go to three different people to get solved or you solved 363 00:22:28,230 --> 00:22:31,510 it and then it got reopened a couple times. 364 00:22:31,830 --> 00:22:35,670 Or the worst one was like we had a new customer's employee start 365 00:22:35,670 --> 00:22:39,470 and we like missed some piece of software that we were supposed to turn 366 00:22:39,470 --> 00:22:42,670 on access for or something. Right. And so there's just 367 00:22:42,750 --> 00:22:46,510 obviously naturally going to be a ton of human error there. And the technicians 368 00:22:46,670 --> 00:22:50,350 are spread thin and they're really trying to please a bunch of different 369 00:22:50,350 --> 00:22:53,990 customers at the end of the day. So anything we can do to assist them 370 00:22:53,990 --> 00:22:57,710 and make their job easier I think is 371 00:22:57,710 --> 00:23:00,190 a win across the board. Not to mention 372 00:23:01,630 --> 00:23:04,430 those guys and gals work really hard and they probably go home and take a 373 00:23:04,430 --> 00:23:07,400 lot of that stress with them. So it's like, how do we just improve their 374 00:23:07,400 --> 00:23:11,000 quality of life? Because, you know, I've had hundreds of 375 00:23:11,080 --> 00:23:14,840 technicians work under me over the years and you know, they're all really good people 376 00:23:15,480 --> 00:23:18,960 and I just, you know, they want to do the best thing for the customer 377 00:23:18,960 --> 00:23:22,760 in like 99% of cases. Right. And they're always, 378 00:23:22,760 --> 00:23:25,400 they're not always capable of it. Like they don't have the time or the attention 379 00:23:25,400 --> 00:23:28,960 or the resources to do it. So I think it's just a win win honestly, 380 00:23:28,960 --> 00:23:32,480 like the, the employee's life gets better, the business obviously improves 381 00:23:32,480 --> 00:23:36,280 overall and the end customer is not having these, you 382 00:23:36,280 --> 00:23:40,040 know, errors or you know, drops in their quality 383 00:23:40,040 --> 00:23:43,520 of service because of all the things we just talked about. 384 00:23:43,760 --> 00:23:47,560 So. Yeah, I couldn't agree more. I think it's, it's great, it's a 385 00:23:47,560 --> 00:23:50,720 great thing that it's coming now and helping all the businesses. 386 00:23:52,320 --> 00:23:56,080 So you guys are looking for some, some companies 387 00:23:56,080 --> 00:23:59,360 to partner with. I don't know, maybe that's, that's sort of like a, 388 00:24:00,500 --> 00:24:04,300 a veiled way to say acquire, I suppose. Is that 389 00:24:04,300 --> 00:24:08,100 fair? Yeah, I mean, yeah, you could definitely. I think that'd be a 390 00:24:08,100 --> 00:24:11,900 fair thing to say for us. You know, the way that we're thinking 391 00:24:11,900 --> 00:24:15,620 about it in the traditional private equity model, again, 90 392 00:24:15,620 --> 00:24:19,180 plus percent of the time, the founders are staying on for six 393 00:24:19,180 --> 00:24:22,940 months, maybe a year. They've got some sort of predefined earn out that 394 00:24:22,940 --> 00:24:26,740 they're working towards and they're helping with like a peaceful transition 395 00:24:26,740 --> 00:24:30,480 of power, if you will, to the new private equity regime 396 00:24:30,480 --> 00:24:34,320 that's, that's coming in. For us. It's different. We're partnering with 397 00:24:34,880 --> 00:24:38,560 operators that want to be around for four or five years that are interested in 398 00:24:38,560 --> 00:24:41,920 Technology that maybe like are having trouble 399 00:24:42,880 --> 00:24:46,560 bringing that technology into their business on their own. Which is a common 400 00:24:46,560 --> 00:24:49,760 story that we're hearing right now as we're talking to folks. Like everyone's curious about 401 00:24:49,760 --> 00:24:53,240 it, everyone's trying to navigate it. It's a topic in the 402 00:24:53,240 --> 00:24:56,980 exhibition halls, the topic of the peer group rooms, but no one's 403 00:24:56,980 --> 00:25:00,260 really cracked the code yet. And so really what we're saying is like, that's great. 404 00:25:00,420 --> 00:25:04,140 We need experienced MSP people and 405 00:25:04,140 --> 00:25:07,300 we need them in these very strategic markets for us 406 00:25:08,180 --> 00:25:11,540 so that we can come and help you with the software and the AI technology 407 00:25:11,620 --> 00:25:15,420 and deploy into your business. And going back to our conversation one 408 00:25:15,420 --> 00:25:18,820 minute ago, help improve your employee's 409 00:25:18,980 --> 00:25:22,500 quality of life, help improve that customer and user experience, 410 00:25:22,740 --> 00:25:26,520 help make your business better overall. And then if we are capable of 411 00:25:26,520 --> 00:25:30,320 doing that, which we think that we are, everybody sort of wins in 412 00:25:30,320 --> 00:25:33,960 the long run. So I mean, if you're trying to 413 00:25:34,200 --> 00:25:37,920 retire tomorrow, treelane's not the right business for you. If you feel 414 00:25:37,920 --> 00:25:41,640 like you've got some track in front of you still and like you want to 415 00:25:41,640 --> 00:25:44,920 like see what this next wave of technology does to our industry, 416 00:25:45,640 --> 00:25:49,080 disruptive or otherwise, like we're a great partner, like we definitely want to be 417 00:25:49,320 --> 00:25:52,040 helping the industry get better across the board. 418 00:25:53,450 --> 00:25:56,690 That kind of answers the question I was going to lend to, but I'll maybe 419 00:25:56,690 --> 00:26:00,250 tease this a little further that there are 420 00:26:00,330 --> 00:26:04,170 like most MSPs I think are becoming a bit 421 00:26:04,170 --> 00:26:07,570 numb to the number of people that want to purchase them. You know, like they 422 00:26:07,570 --> 00:26:10,890 get two or three calls a week of hey, you know, we'd love to acquire 423 00:26:10,890 --> 00:26:14,570 your business. And a lot of M and A activity has been 424 00:26:14,650 --> 00:26:18,170 feverish over the last certainly five years and even 10 years. 425 00:26:19,290 --> 00:26:23,050 And I'd be curious, like that is the big one is, you know, what do 426 00:26:23,050 --> 00:26:26,870 you want from the next five to 10 years of your life? I 427 00:26:26,870 --> 00:26:30,510 think is a, is a good framing of this as well as, you 428 00:26:30,510 --> 00:26:34,310 know, helping people with the AI enablement of their business. 429 00:26:34,870 --> 00:26:38,710 I'm curious maybe a bit more on sort of the mechanics of acquisition though, right? 430 00:26:38,710 --> 00:26:41,830 Like a traditional M and A, you know, there's 431 00:26:42,230 --> 00:26:45,990 certain percentages, there's an earn out, maybe you stay on, 432 00:26:46,150 --> 00:26:49,590 reinvest your, your shares. There's different models around these 433 00:26:49,590 --> 00:26:51,910 acquisition strategies that are, that are out there 434 00:26:53,260 --> 00:26:57,020 and some of them, you know, this is not, certainly 435 00:26:57,020 --> 00:27:00,740 not naming names, but there are certain organizations and PE companies that 436 00:27:00,740 --> 00:27:04,500 are very profit driven. I think they're more 437 00:27:04,500 --> 00:27:07,580 on the margins than some of the bigger folks that you And I 438 00:27:08,300 --> 00:27:11,900 know, but I certainly have heard some of these horror stories where a person 439 00:27:11,900 --> 00:27:15,420 gets acquired and it just becomes a pressure cooker for growth 440 00:27:15,500 --> 00:27:19,070 and that like a lot of people just kind of working out of 441 00:27:19,070 --> 00:27:22,910 spreadsheets and that can be a bit, a bit daunting as like, 442 00:27:22,910 --> 00:27:26,110 well, this is not exactly what I signed up for. Right. As people try to 443 00:27:26,110 --> 00:27:29,630 work through this, I'm curious, kind of your guys thoughts and ideas 444 00:27:29,630 --> 00:27:33,190 around. Not that you have to expose kind of what your model for acquisition is, 445 00:27:33,190 --> 00:27:36,870 but you mentioned being more service focused than 446 00:27:36,870 --> 00:27:40,550 profit driven and that feels like a bit more of a core thesis for you 447 00:27:40,550 --> 00:27:43,910 guys. You want us to talk a bit more about that then? Yeah, absolutely. 448 00:27:44,980 --> 00:27:48,620 Well, this is coming out in April, is that right? We're going to release 449 00:27:48,620 --> 00:27:52,340 in April. Yeah. So first off, we're not 450 00:27:52,340 --> 00:27:55,860 private equity, so we're venture capital backed. We've partnered with Andreessen 451 00:27:55,860 --> 00:27:59,540 Horowitz. They sort of bet on us to win this, 452 00:27:59,540 --> 00:28:03,340 this AI and the MSP world race. And 453 00:28:03,340 --> 00:28:06,580 because of the venture capital backing, it's just a totally different 454 00:28:06,820 --> 00:28:09,860 model. So like we have a longer time horizon where 455 00:28:10,260 --> 00:28:13,910 obviously like trying to in the short term 456 00:28:13,990 --> 00:28:17,830 improve the overall customer experience. It helps us acquire more 457 00:28:17,830 --> 00:28:21,510 customers, acquire more revenue and grow the company both near and 458 00:28:21,510 --> 00:28:25,350 long term. Whereas in the private equity world, you're absolutely right, it's 459 00:28:25,350 --> 00:28:29,070 100% equity value driven. And so the way they 460 00:28:29,070 --> 00:28:32,750 generate EV is there's a standard playbook. You have so many 461 00:28:32,750 --> 00:28:36,550 levers you pull, you're going to raise prices, you're going to pool 462 00:28:36,550 --> 00:28:40,390 vendor costs, which now you're squeezing your vendors who are no longer incentivized to 463 00:28:40,390 --> 00:28:44,100 go to market with you and generate business for you. You're going 464 00:28:44,100 --> 00:28:47,660 to, you know, there's all these cost 465 00:28:47,660 --> 00:28:50,340 cutting just down P and L, human capital or otherwise. 466 00:28:51,300 --> 00:28:54,860 And so there's, there's, it's a very standard playbook and it's not unique to the 467 00:28:54,860 --> 00:28:58,700 MSP world that they'll run, they'll usually run that in kind of a one 468 00:28:58,700 --> 00:29:02,500 to four year window. Some are holding longer 469 00:29:02,500 --> 00:29:05,900 than that obviously and they're going to have to figure out the 470 00:29:05,900 --> 00:29:09,500 organic growth strategy on top of all this because you kind of pull those 471 00:29:09,500 --> 00:29:13,180 levers once or once every few years. That's the only opportunity 472 00:29:13,180 --> 00:29:16,980 you really get. You can't raise people's prices 10% every year. They 473 00:29:16,980 --> 00:29:20,540 would, they would quit, they would not be your customers anymore. So just 474 00:29:20,620 --> 00:29:24,380 like right out of the gate, the juxtaposition between that and what we're doing, 475 00:29:24,380 --> 00:29:28,220 where we're like literally just going and saying like, okay, the service is good. 476 00:29:28,620 --> 00:29:31,620 How do we make it great? How do we make it like the best service 477 00:29:31,620 --> 00:29:35,420 possible for the customers? How do we find the best people in this business and 478 00:29:35,420 --> 00:29:38,970 elevate them into higher value activities where they're being 479 00:29:39,050 --> 00:29:42,890 more strategic or consultative with the customers they currently have? How do 480 00:29:42,890 --> 00:29:46,530 we then take that and tell that story and go acquire new customers in these 481 00:29:46,530 --> 00:29:50,290 new attractive markets to us? And yes, we want the business to be 482 00:29:50,290 --> 00:29:54,010 profitable near and long term, but the 483 00:29:54,010 --> 00:29:57,290 primary focus for us is like, how do we just build the best 484 00:29:57,690 --> 00:30:01,210 msp, if you will, in the market right now, 485 00:30:01,210 --> 00:30:04,740 built on technology and AI and so that we can 486 00:30:04,740 --> 00:30:08,100 acquire more business and over time and gain more market share and then 487 00:30:08,100 --> 00:30:11,380 ultimately the end goal is the profitability will come. Right. 488 00:30:12,500 --> 00:30:16,180 So I hope that paints a clear enough picture and there's nothing wrong 489 00:30:16,180 --> 00:30:19,420 with the former model. Obviously I came out of that world. I was there for 490 00:30:19,420 --> 00:30:23,180 almost a decade. But you're absolutely right. 491 00:30:23,180 --> 00:30:26,900 If people are getting inundated and their inboxes are saturated with 492 00:30:27,460 --> 00:30:31,180 every family office in America and every big private equity firm in the world now 493 00:30:31,180 --> 00:30:34,930 has a Ms. Arm to their 494 00:30:34,930 --> 00:30:38,530 business, I couldn't be more clear. This is 495 00:30:38,530 --> 00:30:41,970 completely the opposite and even the opposite of some of the 496 00:30:42,210 --> 00:30:46,050 AI roll ups that we have talked about where really just using the technology 497 00:30:46,210 --> 00:30:49,730 to produce that same result we talked about and that is not our 498 00:30:49,730 --> 00:30:53,450 goal. Yeah, right. Okay, cool. Well, this 499 00:30:53,450 --> 00:30:57,290 has been cool. Appreciate your time, Jeff. If people want to hear 500 00:30:57,290 --> 00:31:01,130 a bit more about what you guys are doing and maybe are curious to, to 501 00:31:01,370 --> 00:31:04,930 have a conversation with you, where should they find you? LinkedIn and otherwise I can 502 00:31:04,930 --> 00:31:08,250 link to those in the show notes. Yeah, that'd be great. Yeah. I'm on LinkedIn, 503 00:31:08,730 --> 00:31:12,250 Jeff, at Treeline AI if you want to shoot me an email or follow the 504 00:31:12,250 --> 00:31:15,930 company treeline on LinkedIn as well. Would 505 00:31:15,930 --> 00:31:18,810 love to connect with anybody that's curious about this kind of stuff or 506 00:31:20,010 --> 00:31:23,130 has. You know, my complaint inbox is open as well, so you can 507 00:31:23,530 --> 00:31:26,610 direct complaint mail to me too. But yeah, Todd has been great, man. Thanks for 508 00:31:26,610 --> 00:31:30,310 having me today. I really appreciate it. It. Have a good one. All right, thanks, 509 00:31:30,310 --> 00:31:30,790 Todd.