The CEO of Ntiva started with residential referrals and today uses his focus on “growing people” to drive growth for his employees, customers, community, and investors.
Note: This article is taken from a live interview and has been edited for clarity and length.
Steven Freidkin founded Ntiva in 2004. As CEO, he has led the company through two successful private equity partnerships, and more than a dozen acquisitions. Today, Ntiva generates over $100 million in revenue with 450 employees who serve 1,300-plus SMB clients across four major regions of the United States: the Washington, D.C., metro area; Chicagoland; the New York metro area; and the Colorado Springs area, with the goal of expanding into other regions via acquisition.
From his business to his philanthropic endeavors to his family, Steven is focused on “growing people.” In this interview, Robin Robins, founder of MSP Success and Big Red Media, talks with Steven about his “why” for doing business and how that fuels his drive for growth, and how other MSPs can find their own “why” to achieve success.
Robin Robins, Founder, MSP Success and Big Red Media: Your career as an IT consultant started when you were a 13-year-old browsing in CompUSA, a popular big box store in the ’90s. Tell us about that.
Steven Freidkin, CEO of Ntiva: I was born a geek. In middle school I would sneak out of class and go across the street to a CompUSA, where the employees wore red polo shirts. One day when I was wearing a red shirt I was mistaken for an employee. After I explained that I wasn’t, I ended up helping that customer purchase a computer. The next thing you know, I was taking the bus to this gentleman’s house and spent two hours setting up his computer. He paid me $75. By the time I got home, there were already two messages on the answering machine from people he had referred to me.
Later, that gentleman invited me to intern in his IT department, and I ended up working on the executive computers. It hit me like a lightbulb: Why not do this for other companies? That started my shift from residential to commercial clients, focusing on the mortgage industry in the late ’90s.
By the time I started my freshman year in college at the University of Maryland, I already had about 40 recurring revenue clients. By my sophomore year, the business had grown to a point where it really needed more attention, so I went full time. In December 2004, we rebranded from Custom Computer Creators to Ntiva.
Robin: How much were you able to grow Ntiva organically? And then what made you decide to seek a private equity partner?
Steven: We bootstrapped from that first day in CompUSA until October 2016. We grew year-over-year by doing good work, setting up recurring revenue models, and having our clients be our biggest cheerleaders. They stuck with us, and our employees stuck with us. Almost all our business came from word of mouth or referral. By 2015, we had reached $18 million in revenue with about 80 employees.
But when we got to that size my hair was on fire. I was dealing with more problems than I ever had before. I had more stress than I ever had before, and I wasn’t necessarily making more money. At that point I created a leadership team because I couldn’t keep my finger on the pulse of everything. We had amazing people, but I noticed a material difference in energy. Before we had all these managers in place, people were running through walls, either because they were following me and I ran first, or I asked them to run. I asked myself, “Do I want to shrink the company and just support customers in a three-block radius, or do I want to keep growing this business?” I took money off the table and just considered, “What makes me happy?”
It came down to two things: hearing from clients that Ntiva was helping them grow their business and hearing from employees that they were growing in their jobs. That became my “why.” That meant that I had to grow the company to maximize the positive impact that we would have in the growth of the people that we touch—our employees, our clients, our vendors, our communities, and today our investors.
With our team, I came up with three pillars of focus: organic sales and marketing, automation, and acquisition. Now everybody ran through walls again because we had this clear plan.
Fast-forward to January 21, 2016. I had come home from my fifth business trip of the year and my wife looked me square in the eye and said, “If something doesn’t change, you need to sell this business.”
After more self-reflection, I looked for a partner who had more experience in areas that weren’t my strength: organic sales and marketing and doing acquisitions the right way, using outside capital and getting help with the legal side. And, of course, at the same time, that enabled me to take some chips off the table for myself to separate my personal financial situation from the business enough to feel like no matter what happens with the business, I’d be able to put food on the table and we’d have a home.
After interviewing 24 private equity firms and doing more due diligence on the four I had narrowed it down to, I partnered with Southfield Capital in October 2016. We implemented organic sales and marketing. We built out a fantastic leadership team. We built strategies around our growth. They were awesome partners.
In January 2022, I partnered with PSP Capital to take us to the next level. It gives us this incredible amount of capital we could put to work to bring in the right folks and continue this growth trajectory while still being focused on that purpose of growing each other.
Robin: What advice would you give to an MSP who is struggling to grow beyond $2 million?
Steven: Understanding your goals and your intention is super critical. Joy on the journey is also critical. Do you have that growth mindset or not? If you do, it’ll work because you’re going to challenge yourself. And the way you’ll grow the most is getting comfortable being uncomfortable. At some point, you do it enough and you get comfortable, and hopefully you’re surrounding yourself with people who can help you where you are deficient.
Next is accountability. Get out there, make yourself seen, and then hold yourself accountable either inside of your company or with peer groups.
If you’re on the smaller side, asking your existing customers for referrals is huge. Early on, we were so lucky to make our clients our biggest cheerleaders. We were more than just their IT support. We were their friends. We had their back; we always answered their calls. We knew their kids’ names. When there was a little league baseball game, we’d sponsor the drinks at the end of it or whatever it might be. That was part of our ethos, and those things gave us those big referral sources early on.
Another tip: When Ntiva was a few million dollars of revenue I joined Vistage and built relationships with other business owners. We picked up $2 million of annual recurring revenue in the six or seven years I was in the program.
That said, this is a hard freaking business. It’s a business where if things are working every month, clients wonder why they pay us, and if something goes wrong, they wonder why they pay us. If you’re an incredible technologist and want to work technology and you want to bring generative AI to small businesses in a way that’s never been done before, come find a company like Ntiva and be part of them, where they have enough size to allow you to focus on that, where other people are doing the blocking and tackling on all the other things that come with business ownership.
Robin: What mistakes do you see MSPs make that throttles their growth and their ability to have a great company?
Steven: Companies that I wouldn’t be interested in acquiring consistently fail at culture. It is unclear in the organization why people are doing what they’re doing, and the owner is the center of absolutely everything. So, you really want to see a clear culture, where owners are ingrained in their community and can work on their business, not in their business every day. Once you have all the right resources functioning and you’re taking care of the clients, you can start thinking about more creative ways to bring in more clients and you have a model that can scale. The biggest failures I’ve seen are the ones that don’t really have the operational delivery model.
Robin: What’s next for Ntiva?
Steven: We’re very focused on our acquisition goals. Today Ntiva is in four primary regions and our goal in those markets is to have a majority market share. In those markets, we are looking for MSPs almost of any size that are going to have a good culture fit. The founder could stay; the founder could exit. We can make whatever their situation is work if the culture of the people aligns with what we’re trying to create, and it’ll support the growth. We are also actively working to enter new markets where we’ll look for MSPs of around $10 million in revenue or so. We not only need the culture fit, but we also need the leadership to want to stay, because they’re going to ultimately lead that regional footprint that can support organic growth as well as other smaller tuck-ins.
For more information on Ntiva, visit www.ntiva.com