Headquartered: Grand Rapids, Michigan
Geographic Market: The United States
Top Growth Indicator: Monthly Recurring Revenue (MRR)
YoY% Growth: 38%
President & Founder: Kevin Damghani
In under five years, Kevin Damghani skyrocketed his MSP from $0 MRR to a staggering $350,000/month MRR with clients in 25 states. Focused on co-managed IT, his success has attracted the attention of private equity firms, but Damghani has a plan to grow without investors. With an ambitious growth strategy, ITPartners+ is projected to double their revenue from $5 million to $10 million in 2023, with even bigger plans for the future.
What are the top three metrics you use to measure your business and why?
Growth is important and so is service delivery, so we look at top-line MRR, even though bottom line is a more appropriate measurement; our MRR year-over-year growth; and our average response time from an engineer – not a service manager or a ticket router – perspective. We average about 1.9 minutes response time and like to keep it at under five minutes.
What is a top lesson you had to learn that allowed you to kick-start growth in your business?
The secret sauce was to stop working in the business fast and start working on the business. When we were smaller, that sounded like a pipe dream that could never really happen. I’m living proof it can. When I was involved in the day-to-day, I was wearing a lot of hats. It was stressful and chaotic, and while our revenue was growing year after year, I knew that to sustain that growth, we needed to bring in people to help. Now that we have an executive team running the MSP, I can focus on what I want to do, when I want to do it, as it relates to business growth. I’m not bound by the day-to-day or by the next server that might go down.
I worked myself out of a job every time I got a new job, or as my role kept progressing. I got over the mindset that I could do it better myself, which was empowering and allowed me to teach others how to do that too. I watch them fail gracefully but coach them through those failures to allow them to be better. When you invest that time, the dividend is that your time is free after they’re trained. That allowed us to grow 38% year over year, and by the end of this year, based on our projections, we intend to go from close to $5 million in revenue to over $10 million in revenue.
What would you say was the single “secret to your success” this past year?
Diving into EOS (Entrepreneurial Operating System). Process, documentation, goals and getting all our teams and departments to align and move in the same direction were extremely pivotal. Having everybody chasing after the same goal together collectively is huge. But the question is: How do you get all these different personalities to be excited about that goal or to buy into that goal? That’s an important piece of culture, and so we made a lot of investments last year in culture, EOS and alignment.
Also, we were solicited by private equity firms, so we interviewed 27 of them and then decided to do it on our own. Coming into 2023, our growth strategy is to acquire three companies, five in 2024 and then 10 every year after that. We figured out how to do it without private equity investment, and it’s been exciting!
What was the biggest challenge you had to overcome this past year?
Our #1 guiding principle is to positively impact people. But with making sure our team is aligned with our culture, the hardest thing is to let good people go. Over the last year, the biggest challenge has been to make sure we’re firing fast and promoting faster. Keeping the good people happy and motivated and exiting the people who don’t fit. Often people feel stuck. Sometimes the best thing we can do for us and for them is to let them go, and that’s difficult. But it’s needed, and often it’s more needed for the person you’re letting go than it is for the company itself.
Name a partner or tool that has helped you along the way and explain how it helped you.
Profit Fuel by Kaseya is a process that allows us to see all the technology in our stack and compare with product experts to see where and how much we can save by where the overlaps are from the technology itself. This helps us make sure we’re getting the features and the services we need, but also at the best price, and see if there are any synergies there.
What book would you recommend to MSPs trying to grow their business?
Chief Culture Officer by Dan Behm. He started an enterprise MSP and sold it for north of $150 million. He attributes his success to the secret sauce of culture.
In closing, any specific advice or “words of wisdom” that you would give to other MSPs looking to grow or build a successful exit for their business?
As the MSP space is constantly evolving, I would encourage MSP owners to evaluate what makes them happy. Because a lot of MSP owners really love the tech, and when they look at why they got into the business, often that isn’t HR, legal, employees, etc. Look at when the last time was that you took a vacation and didn’t check your phone or invested uninterrupted time with your family.
If you’re not living the life you want, look into partnerships. Whether it’s the private equity companies or talking to ITPartners+ about how you can exit and have some freedom, or even a partial exit, to be part of something bigger where you don’t have to worry about the nuts and bolts; just exploring and understanding your options will be a powerful experience.