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The 80/20 Rule: What’s in Our Name

The 80/20 Rule: What’s in Our Name

We are The 20! When you tell someone that, they tend to look around for the other nineteen. But the truth is, our name doesn’t refer to our number.

We have more than twenty employees. We have more than twenty MSPs in our membership-based growth platform and peer group, The 20 MSP Group (at the time of this writing, more than 150). These MSPs serve A LOT more than twenty clients, and let’s not even get into the number of endpoints our national network looks after!

So, what does our name mean? Why twenty? The answer might surprise you…

The 80/20 Rule

Consider the following statements. What do they have in common?

  • 80% of health problems stem from 20% of lifestyle choices
  • 80% of the time people wear only 20% of their wardrobe
  • 80% of traffic accidents are caused by 20% of drivers

Besides all being plausible (even if the exact percentages are a little off), these statements are all illustrations of the Pareto principle or “80/20 rule.”

Over a century ago, Italian economist Vilfredo Pareto observed that 20% of his garden’s pea pods produced 80% of the peas, and that 20% of Italy’s population owned 80% of the land. Later, in the 1940s, Joseph Juran applied Pareto’s ideas to quality control, finding that roughly 80% of defects stem from a 20% of production factors.

Others followed Juran’s lead, and it wasn’t long before the “80/20 rule” was recognized as a powerful principle across various fields. OK, but what does any of this have to do with us – or the managed services industry more generally?

The Vital Few

The most obvious and important application of the 80/20 rule to the MSP world pertains to the distribution of market share.

We don’t have the data to say that exactly 20% of MSPs – the top 20% – control 80% of the MSP market. But there is plenty of data pointing to a marked disparity between top-tier MSPs and everyone else – between ‘the best’ and ‘the rest.’ We’re talking about less of a smooth and linear gradation from the bottom to the top, and more of a sharp divide.

One study of IT providers’ performance in Q1 of 2023 found that best-in-class MSPs averaged 23% profit, while an alarming 31% of MSPs lost money. Another study from Service Leadership something similar: 28% of MSPs aren’t profitable.

Putting exact figures aside, this much is obvious to anyone with eyes on our industry: The MSP space is dominated by a relatively small portion of MSPs. Borrowing a term from Juran, we’ll these top-performing MSPs: the vital few.

Why are we called The 20? Because we want to help your MSP get to the top! We believe there’s at least one well-defined path toward industry dominance, and we’ve built a business model around it to help MSPs join the vital few.

Our way might not be the only way to launch an MSP into the highest echelon – but it is one way, and we have a full stable of thriving MSP members as a testament to our model’s effectiveness. Now, for the really fun part: the how.

How The 20 Powers MSP Growth

How does The 20 help your MSP grow? Let us count the ways – well, some of the ways; we’d need a whole book to go over every single thing we do to help our MSP community get ahead!

Systematicity

Is that a real word? Doesn’t matter. What matters is that The 20 helps small and medium-sized MSPs become systematic. This is one of the biggest adjustments our newer members have to make: trading in a trial-and-error, seat-of-the-pants approach for a process-driven approach enshrined in impeccable documentation. The difference this makes for an MSP struggling to break $1M in ARR can be enormous.

Scalability

An MSP can grow and grow until…things start to break. Your breaking point is largely determined by the scalability of your processes, or more simply, how well they adjust to changes in workload. Scaling up is taking on more work, and scaling down is dealing with less. A truly elite MSP can scale up without breaking, and scale down without incurring unnecessary costs.

We help our MSP members become masters of scale through our acclaimed 24/7, US-based support desk and suite of battle-tested business processes.

Great Operations

Your MSP’s operations might be good, but are they great? Do you have a brilliant COO dedicated to relentlessly improving your service delivery model? Does that COO draw on Japanese business philosophy to make things as lean and mean as possible? Is your support desk 24/7? Even on Christmas? Does your support model reflect the ongoing efforts of hundreds of MSPs, all collaborating and working towards one goal: raising the bar for MSP excellence?

Here at The 20, our answer to each of these questions is a resounding yes! Operational excellence is often what separates a great MSP from a merely good one, and we wouldn’t be called The 20 if our goal wasn’t to help you achieve greatness. Your business is built on your client relationships, and our operations are designed to make sure that we don’t just keep your clients happy, but blow them away with our excellent service.

Time to Shine

Most MSPs owners are bogged down by busy work. This is a sad state of affairs, since there are intelligent ways to delegate tasks and carve our more time to work on your business instead of just in it. Becoming a member of The 20 is one such way. We can take on up to 90% of your MSP’s tickets, allowing both you and your technical team to focus on higher-value projects.

Another way we give you more time is by streamlining your processes, bringing us back to the first benefit listed – greater systematicity. When tasks are standardized and repeatable, you can spend less time on keeping day-to-day operations on track, and more time on corporate strategy, sales & marketing, and other high-impact, profit-driving activities.

Stronger Together

Finally, we want to shine a light on the community aspect of being a member of The 20 because, make no mistake, our member MSPs are exactly that – a bona fide community. They hang out in person. They reach out to each other out of the blue. They trade jokes on Teams. They celebrate each other’s wins. They share knowledge, resources, even labor. We might not be the only MSP peer group around, but we challenge you to find another with our level of camaraderie.

So, in an industry as fast-paced as ours, what’s it like being able to plug into the collective knowledge of hundreds of MSPs to solve any problem you encounter? We’ll let one of our current members tell you…

“We’ve been a 20 partner for about six years now, and have grown with the organization significantly. We think that the community here is really remarkable – there’s something magic about that collaboration and strength in numbers…I think what really sets The 20 apart versus others is the authenticity and the transparency and that dedication to collaboration…Everybody is real approachable, real down-to-earth, and dedicated to that growth and improvement.” – Seana Fippin, Red Box Business Solutions

Authenticity and transparency – that right there tells you what you need to know about how we do business.

Final Thought

This industry is tough. Most MSPs don’t make it to the top, and some simply don’t make it. There’s a temptation to keep grinding – to keep doing things the same way, the way you’re used to. But the truth is, the path to the top isn’t linear. MSPs that grow into elite companies have to make big changes to overcome the major barriers to growth. They have to reimagine their operations, realign their priorities, restructure their teams.

Change is scary – but it doesn’t have to be chaotic. If you want a trusted partner to help your MSP make the jump from good to great, from surviving to thriving, schedule a call to find out if your MSP business meets our requirements for membership.