Navigating the “Money Pit” of MSP Acquisition: Insights from Xchange

Content by: David Walter from MTS

At the recent Xchange conference, Jason Wright, CEO of Avatar Managed IT Services, shared his rollercoaster journey of acquiring and revitalizing a struggling Managed Service Provider (MSP). With a rich background in founding and growing an MSP before selling it to All Covered, a division of Konica Minolta Business Solutions USA, Wright’s story was both a cautionary tale and a blueprint for success. 

The “Money Pit” Analogy 

Wright likened his experience to the classic Tom Hanks movie “The Money Pit,” where a seemingly promising investment turns into a series of unexpected challenges. Upon purchasing the MSP from a friend, Wright quickly encountered a cascade of problems. Key IT engineers left, followed by a significant number of customers, leaving him with a company in disarray. 

Starting from Scratch 

Realizing he had to rebuild from the ground up, Wright detailed his process for not only stabilizing the company but also achieving a fivefold increase in revenue. His approach included: 

1. Rebranding the Company: Wright emphasized the importance of a strong brand identity to regain trust and attract new clients. 

1. Prospect Engagement: He highlighted the critical value of maintaining constant contact with prospects through emails, social media, and in-person meetings. This consistent engagement ensured that Avatar Managed Services was top-of-mind when prospects were ready to buy. 

1. Event Sponsorship: While Wright claimed not to target specific verticals, he acknowledged the effectiveness of sponsoring events. These events, often focused on particular industries, provided valuable networking opportunities and visibility. 

1. Telemarketing: Utilizing telemarketing for lead generation and gathering contact information was another key strategy in Wright’s arsenal. 

The Secret Sauce: Passion and Commitment 

Wright’s passion for his business and his commitment to not running a “lifestyle business” were evident. He stressed that many MSPs fail because they lack this level of dedication. His drive to continuously improve and grow the business was a significant factor in his success. 

Final Thoughts 

For anyone looking to grow a startup MSP, Wright’s journey offers valuable lessons. His experience underscores the importance of resilience, strategic marketing, and the relentless pursuit of excellence. If you’re seeking advice on navigating the complexities of the MSP industry, reaching out to Jason Wright could be a game-changer. 

In conclusion, Wright’s talk at Xchange was a testament to the power of perseverance and strategic thinking in turning around a struggling business. His story is a reminder that even in the face of daunting challenges, success is achievable with the right mindset and approach