As a co-host of Shark Tank, Daymond John, the founder of FUBU clothing company, evaluates new business pitches from entrepreneurs each week on the TV show, and he has some advice for IT service providers. Instead of looking for additional investors, John says they should spend more time developing an OPM strategy. That means not only spending other people’s money, but also leveraging other people’s marketing and manpower — and, arguably most importantly, learning from other people’s mistakes. Most businesses, says John, do not need an infusion of outside capital to get up an running.
Speaking at an SAP Global Partner Summit conference this week, John says the most important thing business executives need to remember is to sell themselves rather than the product. People can buy a product from any number of sources. John says they need to have confidence in you as a person to fulfill the delivery of that product in a way that creates a better experience.
How to build your business more effectively
John notes that the first step to accomplishing that goal is to be able to define what it is you do in five words or less. That’s all the time most customers are going to give you before making a decision about whether to allocate any more time to listen to the rest of the pitch, says John.
The author of business books such as “The Power of Broke” says the next most important thing is to invest time in networking. A combination of social media and personal contacts is crucial to getting the word out. John says that as part of that exercise business executives need to develop mentors, especially among individuals that have expertise in an area they don’t. The best way to develop those relationships to offer your expertise as a trade in kind, says John.
John also says disruption is generally a good thing because it creates opportunities for change that can be exploited. John says business leaders need to actively seek out those opportunities.
Working smarter, not harder
At a time when most managed service providers are operating on razor-thin margins, the OPM strategy outlined by John is a smart option. There is a ton of free market research available from organizations such as CompTIA that MSPs should be exploiting to drive marketing campaigns. Every major distributor also makes available technical staff that can be employed on a contract basis, which reduces the number of full-time employees an organization needs to hire.
Every vendor in the industry is developing sales enablement tools for partners as well. Many of those vendors will even go so far as to help partners build their business plans. In fact, in the age of the cloud the number of capital investments that an MSP needs to make to deliver a managed service has been sharply reduced.
Competition across the entire MSP category is fierce, so MSPs need to take stock of what’s core to their ability to differentiate themselves instead of spending money on undifferentiated services. If it’s not a differentiated service, chances are there’s an opportunity to apply a little creative OPM thinking to reduce or eliminate that cost.