Peter Melby is the CEO of New Charter Technologies, a platform of more than 25 high-performing MSPs across North America. Melby grew his own MSP business that he started in 2001, Greystone Technology, to a $20 million company, which he sold to New Charter in 2020. A portfolio company of private equity firm Oval Partners, New Charter focuses on delivering local, personalized service backed by a nationwide team. In 2024, New Charter ranked No. 547 on the 2024 Inc. 5000, its annual list of the fastest-growing private companies in America.
In this conversation with TMT and MSP Success founder Robin Robins, Melby shares how he went from college dropout to extremely successful MSP business owner. He details critical steps for scaling an MSP business, the painful lessons he learned about managing people, and the four pillars he used to create a healthy culture.
Note: This interview below has been edited for clarity and length. For the full conversation, watch the video above.
Robin Robins: Tell me a little bit of your history in the MSP space. Did you have a background in business or a mentor when you started Greystone?
Peter Melby: Actually, I dropped out of college. At this stage, it would be easy to have revisionist history and say, “Wow, I was a visionary.” I was not. I was a kid in college who didn’t like doing homework and was more excited about computers. And then I saw people interested in paying me to fix their computers or show them how to how to operate things, and that became something that was just more interesting to me.
Ssometimes we make good decisions, but sometimes we have to make our decisions good. In this case it was the latter, where I woke up one day and said, “Oh, I shouldn’t have done this.” But I really had no other option but to work my way out of it.
Robins: How long did it take you to break the $1 million mark?
Melby: Probably year 7 or 8, maybe longer. I knew I wanted to hit it before I was 30 and I wanted to hit $10 million before I was 40. And now I want to hit a billion before I’m 50. So we’ll see how that goes.
Robins: What were some things that held you back when you were trying to scale your MSP business to $1 million?
Melby: Two things: not having the confidence to price our services where they should have been, and simultaneously, not understanding what it means to hire your first employee. We would go to the tech schools to look for the smartest people. Then we realized that, especially with that first hire, it was not about having the smartest technical person; it was about having the person who knew how to be accountable to customers for the value that they were creating. We didn’t realize that until the fourth time we tried to hire our first person. That cost us a lot of time.
Robins: Early on, how did you start getting customers in the door?
Melby: We were and still are a very connection- and relationship-oriented business. I would say, in the early days, we weren’t executing a sales process. We were participating in a job interview with these potential customers. So we recognized that through that lens we couldn’t afford to just send a schmoozy salesperson into the mix. We loved competing against people who had a very traditional view of sales because they would just miss the mark on that trust building.
Now I was also the person that would make big, bold statements like, “We’re never hiring a salesperson.” That obviously didn’t age extremely well. But I always say, I don’t want to sell anybody on anything. I want to educate them on why they are best suited to go with us. The second thing is to have really strong executive-level relationships in your market and in your community. Once you have those two things then you can hire and bring people into an ecosystem that has some substance.
Robins: That said, should MSPs that are at $1 or $2 million trying to get to that $5 million mark continue to own sales, or should they hire a salesperson?
Melby: Where owners make great salespeople is that they know their services because they built them. They can speak intelligently about the value that it creates, and they feel the pressure, so they’re driven. They might not have the traditional sales skills but they’ve got the motivation, the knowledge, and the ability to connect the dots and communicate with confidence.
What I found is that I wasn’t particularly good at asking for the money. Because while I was confident about my services, I also knew all the problems, and so I would negotiate against myself and short myself at times, or I wouldn’t have that level of confidence. So, by bringing someone in to [do sales] I could do an introduction, set the tone, and assure [the prospect] they’d get everything they need, and so that executive relationship stayed. But there was someone in that seat who is frankly better at the mechanics of sales than me.
For smaller MSPs [that can’t hire a salesperson yet], use the people that you have. They’re already building trust with customers. I wouldn’t pull our technicians too far away from the service, but if there was a key potential client when we were still 8-10 people, I would bring my best tech to that meeting,
And I’m going to share an opinion that you may completely disagree with. What was effective for me at the beginning was to not individualize quotas and incentives, but to make it a team quota. It tore down those barriers [between roles] until we knew what we were doing in those individual lanes. But by doing that we created this really fun sales culture that was competitive, but not competitive with each other. And now we have a sales culture where there is some really positive, healthy competition even with each other across markets.
Robins: After you got to $1 million, what was the next big hurdle?
Melby: I’ll tell you what happened between $1 million and $10 million that was both devastating and game changing for us. And that was the idea of succeeding through good intentions expired between $1–$10 million, and especially when it came to the people aspect. When we had 5–10 people, I knew everybody, and they reported to me. I didn’t have to go far to understand what was going on in the business, and I could also build very personal trust. What I learned when we started building layers and scaling beyond that is that I couldn’t just rely on my relationship and that my good intentions for everybody, which I thought were obvious, were very quickly misunderstood. What I learned is that on a long enough timeline, every company culture succumbs to the laws of human nature.
I actually ended up with some pretty significant cultural toxicity issues and I was very betrayed by that, because that wasn’t who I was. It doesn’t matter how unfair that is when you’re the CEO. And it also doesn’t matter how good the intentions were if they don’t come across and they aren’t embedded in the values of the organization, and most importantly, how the organization operates.
That’s what $1 to $10 million became for us is—how do we reclaim our approach to being a people-first organization, but in a new way and make it programmatic and connected to how our people operate, not just how I wish they would. And learn what would motivate and influence people, not just what I thought should matter to them. It was the most painful part of the experience for me. But I also know that we wouldn’t be where we are now without going through it.
Honestly, I think those people challenges are why there’s such a ceiling in this industry in terms of scale.
Robin: So what specific tactics did you employ during that period that other MSPs can take away?
Melby: There’s four things that we dialed in on. The first one is definitely controversial. I think core values are overrated [and vague]. Instead, we have a citizenship statement. Ultimately they’re the ways that we agree that we are going to act in the organization. And that’s not something that we dictate as leadership. It’s something that we participate in as leadership.
Second was to cultivate psychological safety in the organization—the ability for employees to feel comfortable sharing their truth. We cultivate psychological safety by focusing on two things. Number one is self-reflection. What do they think they’re good at? What do they think they’re struggling with? As a leader, your number one job is to understand what they think about themselves and their performance, not what they’re projecting. Second, they need to understand where we stand. It really opens up different levels of conversation.
Third is what we call directed autonomy. Autonomy is something that everybody craves. But people want safety nets too. So we can give them very clear boundaries for the areas that they have autonomy in. Obviously the more senior the position, the fewer guardrails. But every position should have some level of critical thinking and owning outcomes. That’s how employees grow.
And fourth is what I call courageous empathy. Empathy is so important in a people-driven organization. The problem is empathy can also be a scapegoat for not dealing with an issue. Empathy has to be applied at scale. Sometimes empathy is moving on from somebody.
Robins: Are you bullish or bearish for the MSP industry? What should MSPs be preparing for over the next couple of years?
Melby: We’re seeing things open up a bit more, more activity. People are buying stuff. I do think that this will be a year with a bit more tailwind, but I think the tailwind is also then going to be followed up by a big change, and obviously AI and automation are changing our world very quickly. I predict in the very near future we will see a spectrum of commoditized services and very high-value specialized services. And the high-value services will go to organizations that are not just focused on fixing technology but changing how businesses operate. And that’s a much harder thing.
