Episode 96: Surfjacked

Erick and Rich discuss whether or not we’re in an AI bubble and how much MSPs should be worried if we are, before exploring strategies for increasing profitability and client retention by selling outcomes instead of tools. Then they’re joined by the co-founders of Titan, a venture capital-backed A.I. software company/MSP rollup that’s building something totally new in the history of managed services. And finally, one last thing: Beware the surf-jacking otter of Santa Cruz, Calif.

Discussed in this episode:

Are we in an AI bubble?

Move Over, Private Equity. Venture Capital is Investing in MSPs Too.

Shield Technology Partners Is Building Something Totally New in Managed Services

Surfboard-stealing otter attacks resume at California beach

Some guests on this podcast are clients of Channel Mastered. Compensation plays no part in their appearance or the content of the discussion unless the episode they appear on is a “bonus episode” explicitly labeled as sponsored.

Transcript:

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[00:01:00] Visit datto.com and request fast track pricing today. That’s datto.com and now. Onto the show and 3, 2, 1. Boes off. Ladies and gentlemen, welcome another episode of the MSP Chat podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need to make it big and manage services.

My name is Rich Freeman. I’m Chief analyst at Channel Master, the organization responsible for this show. I am joined this week as I am every week by our CEO and chief strategist at Channel Mastered. His name is Erick Simpson. Erick, how are you?

Erick: I’m doing very well, rich. Thank you. Because I am at home base here and not, dealing with travel and potential TSA issues and things like that, unlike yourself.

You are in Chi Town as we record this today.

Rich: Which is not a bad thing. I love Chicago and I even love travel at least as long as it goes relatively [00:02:00] smoothly. I am attending the Canals Forum event in Chicago right now. And this we’re pretty much at the conclusion of day one.

It’s been great. Lots of interesting stuff may even come up. A piece or two of it may even come up. Who knows? During the conversation we’re about to have here. Yeah. Yeah. Happy to be at the canal. Strike. You. We won’t talk about it. Erick, but you know what I’m not happy about is what we were discussing off the air.

I’m a Seattle guy. I, we were just right on the verge of a World Series appearance and gosh darn it didn’t work out.

Erick: Yep. Snatched. From, the opportunity to make your first visit to the World Series. The Seattle Mariners have never made it. I think they’re the only. Team that has never made it to a World Series appearance.

Rich: This is correct. They’re the only team in Major League baseball, never to have played an inning in the World Series. And they were one run away in a game seven appearance. I’ve been a season ticket holder or a partial season ticket holder for I, I don’t know, 25 more than that 30 [00:03:00] ish years. Erick, so darn close.

But wait till next year as they say, yeah, wait till next year.

Erick: Wait till next year. And the Seahawks, they’re in contention for the Super Bowl, so let’s see. Another.

Rich: I am a huge fan of that team too. Yeah let’s just a accentuate the positive.

Maybe this turns out to be a magical year for the Seahawks. In the meantime though, let’s dive into our story of the week and I’m gonna kick it off, Erick by asking the question that more and more people are asking, and you’ve, I’m sure, heard people ask it, and folks in our audience are hearing people ask it all the time.

And the question is. Are we in an AI bubble? And the short answer to that question is, yeah, actually we are. How big a bubble, how imminent imminently it will pop. It’s hard to say, but, just to take the obvious examples when even Sam Altman and Mark Zuckerberg are saying, we’re probably in a bubble, that’s a bad sign.

When you look at the deal just. To single out open ai, [00:04:00] right? They’ve signed this weird circular, a hundred billion dollar deal with Nvidia, they’ve committed to buying six gigawatts of GPUs from a MD and another 10 gigawatts from Broadcom, and I don’t even know the total co, like what it’s gonna ultimately cost OpenAI to purchase all those GPUs and then all of the data center capacity and the power.

I just, and. Projected revenue for open AI this year, approximately $13 billion. They have recently announced that they’re getting into erotica of some form or another over there, but that’s really gonna have to be a monster deal for them in order to get them from $13 billion a year to the kind of money they’re gonna need to make to even begin to pay.

These investments that they’re making. And it’s not just them. The entire industry is making a giant bet on artificial general intelligence and super intelligence. Okay, we’re in a bit of a bubble. It’s gonna pop, it’s gonna impact some people. How concerned should the people in our audience [00:05:00] be? And I’m gonna answer that basically by saying not very much and maybe a whole lot.

And let me explain what I mean, Erick. Not very much to begin with. Okay. Because. If this particular bubble that we’re talking about births or when it births, the companies that are gonna be most affected are gonna be the companies that I was just naming you. They’re gonna be companies that make processors, that make LLMs, that build and operate data centers, that do power infrastructure inside the data centers and to the data centers.

And they’re gonna be very significantly impacted. Those are not the companies, generally speaking, the folks in our audience do a lot of business with. Have a enormous dependency on the one exception to that rule is Microsoft. And Microsoft will be affected, but probably not in ways that have disruptive effects for MSPs.

The disruption that MSPs might feel is to the extent that the vendors they do a lot of business with right now are, incorporating a lot of AI functionality into their [00:06:00] product and their upstreams suppliers get hammered in a bubble. Like just as a, for example, to take a random example if, the, your.

Critical strategic vendors or all core weave partners and core weave goes belly up. That’ll be disruptive for everybody involved. Generally speaking though, that the kind of bubble that’s likely ist to happen won’t impact MSPs in a hard way. The kind of bubble that an Ms P would want to be concerned about is one where there’s over investment in and too much spending.

On ai by end user, by their customers, and there really isn’t a sign of that happening right now. I’ve seen some data for example recently that was showing basically if you look on a year by year basis since the introduction of chat, GPT, the percentage. Of AI solutions and services that companies were using at any portion in a given year that they are still using at the end of the year has been going up by significant margins year over year.

[00:07:00] Meaning that there isn’t a ton of churn in the AI solutions and products that people are buying as they’re finding the ones they like. They’re sticking with them. Average contract sizes, this comes from a company called ramp. Average contract value in AI for 2025 is $530,000. We project that average contract value will reach a million dollars in 2026.

So people are investing more in the AI services that they use on the end user side. And there is plenty of data out there that we’ve talked about on the show indicating that this is all true despite the fact. End users are still really trying to figure out how best to put these products to work.

They very much wanna do it. They’re investing more in these products. They need help to do that. That is help that MSPs can provide. Do MSPs need to be panicked about an AI bubble bursting? Not really in terms of the most direct impacts they might feel, however. Speaking now. [00:08:00] As somebody who’s not that many years away from retirement, sure they need to be at least a little bit concerned for the same reasons everybody in and outside of a it needs to be concerned.

According to some figures we’ve all probably seen, if you subtract. AI out of economic growth in 2025, it more or less disappears. We’re in a recession. If you look at the percentage of the s and p 500 represented by, or the nasdaq 100 represented by the Magnificent seven, it’s enormous.

If those companies are heavily invested in ai, if a bubble bursts, they get affected. Everyone’s 401k gets affected. People look at their 401k statement, feel a lot less wealthy than they did a month before. They stopped spending businesses closed down jobs. We could find ourselves in a serious recession that affects MSPs like it does everyone else.

Sure, we all should be concerned by the prospect of an AI bubble, but not, I would argue because of the IT industry [00:09:00] effect that will, it will have directly on you as an MSP.

Erick: I, in preparation for today’s discussion, I did a little bit of research on, on my own and found really interesting data myself from markets and markets.

They do a lot of, analysis. And yes, the there, the, according to markets and markets rich the compound annual growth rate, tagger for AI from 2025 to. I believe, let me find it here. It’s 2032 is 30.6%. That’s forecasted right now, which is huge, right? Compared to the other things that we normally track, in our day to day in technology and managed services and security.

It eclipses all of those from a CAGR perspective. And you’re right, I was gonna bring up that, without AI right now. Growth, we would be in a recession that this is what’s driving markets right now. All this investment, [00:10:00] all this speculation, all these deals. But being the risk averse, engineer that I am a little concerned with what you just mentioned.

It’s what kind of revenue and profit would these AI leaders have to generate in order to. Meet or beat these expectations and to justify this amazing amount of investment in a technology and a promise without, real actual, I would say significant revenue being generated yet.

Rich: Yeah, no, from their end of the equation it really doesn’t make sense at all unless we get to a GI or Super intelligence basically. And there be, there is this sort of explosion of demand for services. We can barely. Conceive of right now, and then you could begin to imagine this starting to pencil out.

Otherwise, it’s really hard to see how this, resolves successfully for a lot of [00:11:00] the companies that are as invested in this as they are right now.

Erick: Yeah, and as the small percentage of me that is optimistic, says the software and technology providers represent the number one.

Vertical market that’s really leading the charge here. We trust, that we’re smart individuals. Technology is driving the s and p 500 and the markets today. There it’s a big bet, but I am optimistic that AI is going to better our lives. 70 plus percent of businesses are using AI.

Now, whether that is through the guidance of an MSB or just using, chat bots and things like that themselves trying to get into this, we see a lot of development that is, questionable. Yes. About, the the news that was announced about, getting into weird CD areas of life with ai, it’s odd.

There’s a lot of. Legal questions around AI being [00:12:00] used and these models being trained, across works that may not be public and things like that. So there’s a lot of, headwinds here, but I think the promise that it can deliver is very attractive. However, the governance around this stuff is something that, I think about a lot.

It’s you know how, when things go wrong they typically go very wrong. So how do we manage this? How do we put some guardrails around it? How do we regulate it? And I hate the word regulation, I hate the term of that, I could see something that has so much power and capability, especially when it can be used, for the wrong things.

Like we’re talking about almost weekly on the show, the cyber terrorists. And bad actors using AI for nefarious purposes and preying on folks. There’s a lot going on here and it’s moving at the speed of life. Rich, how do we keep up with it?

Rich: I don’t wanna get into it here ’cause we’ve already [00:13:00] probably, we’ve exhausted the topic probably for now.

I’m sure we’ll be talking about it in different ways on future episodes. But I do think sometimes about all of the things that can go wrong with, you’re the AI advisor to your client. The AI you advise that’s used does something really bad. Customer blames you. I wonder sometimes is there going to be such a thing as AI liability insurance, that like the equivalent of cyber insurance for ai for AI advisor?

I don’t know. But it’s something to think about given some of what you were talking about there, but. Let’s go to, I was alluding to the fact that there are a lot of businesses out there very interested in ai, willing to spend money on it, but they still don’t quite know how to get value.

They need help with that. They need outcomes there not tools. They’re spending on tools. They need outcomes, which is a good bridge, your tip of the week.

Erick: We’ll leave it there, rich. We’ll leave it there. But I think you guys, I’m gonna say you heard it here first, like AI in liability insurance.

Let’s dive into that in a [00:14:00] future episode. But yes, this week’s tip of the week Rich is something that we have, talked about here and there on the show. It’s something that, that we feel is very important for the maturity of MSPs out there in order to add real value. To the perception of their services and the value they bring to their customers relationships and things like that.

I’ve used the term in the past, taking conversations from the server room to the boardroom. This is all about representing your organization and the things that it does for its clients from a value based perspective. So selling on value. Selling on business outcomes and business growth outcomes, keeping your clients out of trouble rather than selling the way we used to sell Rich.

When I had my MSP practice many moons ago on tech technical outcomes and technology outcomes and managing your infrastructure and things like that, nowadays that is a commodity. Managed [00:15:00] services are a commodity. There are so many MSPs out there vying for the same pool of prospects. The, it’s becoming very hard to distinguish and differentiate.

Differentiate yourself when we are buying our third party services and solutions and platforms and applications from the same vendors, and then delivering them to our clients. So we have to rise above that. That is table stakes, that is assumed. The conversations I like to hear MSPs have with prospects and clients are of course we manage your infrastructure.

Of course. We help your users, get the most productivity with our service desk. And of course, we keep your organization secure, but many MSPs say that, here’s why we’re different. We focus on helping you grow your business. So let’s have a conversation around what your plans for growth are. So how do we take that conversation, applying everything that we know rich about [00:16:00] technology and security and AI and all this other stuff.

Mold the conversation around topics that interest the business owner, the CFO. How do we eliminate roadblocks to growth and productivity? How do we help you scale your business? Technology to you should be an afterthought. We should be, not even seen and not even heard. Things should just operate and we should be having more strategic conversations about where you’re going with your business, what your plans are, what are your business obstacles, and how we can help smooth away for you.

So mapping your services to business outcomes, to growth and scalability outcomes. Delivering to your clients real ROI reporting about how your services positively impact their organization. We wanna be seen rich as a profit center rather than a cost center. And in, in, in another [00:17:00] lifetime. When I was in the enterprise internal, it was always a cost center.

It was always deemed as a cost center, how can we reduce our costs? You guys, you’re too heavy lose, we can’t afford this. The opposite should be happening with MSPs. We should be evolving our services and our focus to be irreplaceable in that client’s business growth strategy. Like we should be delivering so much value that the last thing they wanna do is to fire us, or have us let them know that unfortunately, you don’t fit our ideal, client profile anymore.

We’re going to assist you in migrating over to, your next vendor. So this is strategic. So creating the ability for you to have more time in the boardroom rather than in the server room is what this leads to. This means that yes, we’re gonna do some of the basic stuff, the blocking and tackling the technology, road roadmapping and things like that, but becoming more astute and more [00:18:00] effective.

At delivering business intelligence and data. So this is where AI comes into play. This is where business analytics comes into play Rich. This is where conversations around other solutions like ERP and CRM come into play where maybe we don’t deliver those service to ourselves, but we know who does. And we shepherd those conversations so that we are valuable from a bottom line perspective on that p and l for that customer’s business over time.

Rich: A few things come to mind and obviously yeah, to a great extent cut and dried IT services are already a commoditized offering and that’s reason enough to, to wanna be focused on outcomes. As a provider of of managed services, and this is only gonna be more and more of an issue as AI and agentic AI in particular, is doing more and more of that work.

The companies that are gonna continue to prosper and grow in that environment are gonna be the ones who are. Really [00:19:00] understand their customers enough to be of indispensable strategic value to them. The other thing I’ll say, just to maybe bring it back full circle a little bit, is if we are in a bub, an AI bubble, and if it does pop and if that does trigger a recession, that’s gonna be a really great time for you to be able to demonstrate to your client that you are, as you said, Erick, a profit center that basically.

Continuing to spend. Not only do you need to continue to spend with us because, you don’t have a business without the services that we provide you, and we’re your most strategic voice in the realm of technology. But we are one of the, the things that’s enabling you to actually.

Grow and profit and so on, and we’re not an expense that you cut as opposed to a lot of other vendors maybe that you’re doing with. So yeah, plenty of good reasons for folks in the the audience here to pay close to your advice.

Erick: Yeah, and especially if you’re offering com regulatory compliance services in a, from a cybersecurity perspective, like that’s the last thing a, a client [00:20:00] is going to.

Cut. If they’re a regulated organization, they need to make sure that they are complying or else, bad things happen, including severe fines and things like that. Steer your organization to adopt and deliver more of these irreplaceable services and then deliver those on the regular.

But again, focusing your conversations with your client about growth, about challenge, they’re having challenges. You know that you can be indispensable as a true strategic business advisor that also manages technology and cybersecurity.

Rich: So Erick, earlier today at the Canals Forum Jessica Davis, who not too very long ago, was a lowly journalist like yours, Tru.

She’s now part of the team at Canals. She was on stage with some of her peers from Canals. They were all making predictions for the future. Jessica’s was that by 2028, most of the meaningful AI innovation in the world of managed services will come [00:21:00] not from vendors, but from venture capital backed MSP roll-ups.

There are two venture capital backed MSP roll-ups in particular that are getting a fair amount of media attention. I’ve written about both of them. I can tell you, just looking at the traffic numbers, there’s a ton of curiosity about these companies out there right now. And you and I had an opportunity at the data con show just a couple of weeks ago.

To sit down with the co-founders of one of those companies. It’s called Titan. And you and I are gonna take a quick break here. When we come back on the other side, we will be joined in an interview recorded at Da Ocon by Sorin Patel and David Heffernan. They’re the co-founders of Titan. And we are gonna learn all about one of these companies that, according to the folks at Canals, is gonna be on the vanguard of AI innovation in managed services.

Stick around folks. We. We’ll be right back

and welcome back to part two [00:22:00] of this episode of the MSB Chat podcast, our spotlight interview segment where we are very pleased to be joined in person here at Ca DattoCon 2025 conference in Miami by the two co-founders, the two folks who run a, what I’ll call very buzzy. MSP roll up called Titan.

You’re gonna learn a lot about them and about Titan and about what makes it buzzy. I will just say as we were discussing off the air, I wrote about them in channel Hallock my blog a few weeks back. And the traffic numbers were above average. There were, there was a lot of chatter on the road.

People were very interested in this company, and so we wanted to introduce you to them. But first why don’t you guys introduce yourself to the audience. Sorry.

Erick: Lovely. Thanks for the high praise. We’re glad and excited that folks are starting to hear more. At Titan, we think we’re working on really interesting, exciting stuff in the MSP space, and glad to be sharing more folks the story of what Titan is.

So let’s start with a little bit of background Titan, and happy to give personal backgrounds on [00:23:00] ourselves. So what is actually tied Titan an AI enabled holding company? So really think about the MSP space in two ways that we all have been talking about it. AI is gonna significantly transform the way MSPs operate over the next five to 10 years.

What it means be to be an Ms. P today does not mean the same thing when you look forward into the industry for the next five years, but what’s the best way to actually go enable MSPs to enact this AI wave and enact this AI change? For us, our model is, we think the only way to really do that is combine both into one.

Combine a software company, combine an MSP under the same roof. We’re going out acquiring best in class MSPs that are in the market. And then our AI engineering team works hand in hand with all the MSPs that join our platform to help build up more tools, but then also integrate into the Titan Tech stack.

So how did we actually get here? So my background is actually folding the tech space have for chat companies like Twitter and Snapchat. As Snapchat. I led actually our Gen AI development. We came out with a product called My ai. It was Snap’s version of chat tributing. We hit number two in usage at a hundred [00:24:00] million plus daily active users on that product right behind Chat, GBT really saw how powerful these models were, what they were good at, what they’re not good at, and knew that startups and big tech would be at the forefront of going and adopting these technologies, but other industries would be slower to adopt.

And that’s what got me really excited. And David the other co-founder at Titan. My background also comes from the AI world. Started my career off with this company called Scale ai. They just sold a meta quite in the news a few months ago. But while I was there I worked on self-driving cars worked with customers like Waymo, neuro Zoos, apple, all those guys.

As scale continued to scale, we got about a hundred thousand labelers globally. You could imagine managing a workforce like that becomes quite a challenge, and we really only had Excel tools at the time. So I helped launch the marketplace team. We built all the product infrastructure to manage that workforce, whether it was running tasks at the right, taskers at the right time managing incentive plans to help motivate them to have high quality and high throughput.

And also on the like quality of control size, we wanted to build great tools, layer AI on top of it. So we were actually submitting good data to our [00:25:00] customers. Spent another time, it’s this company called High Touch. Joined when they were just a couple mill of revenue, helped launch a lot of new product lines and now they’re another unicorn.

But from my time at scale. I saw like how valuable it was to have the engineers and the operations on the same team. The feedback loops that you’re able to get when you’re building internally and have like such high buy-in where everyone’s vertically integrated from the customers, the management team to the operators, the engineers you can ship a lot faster and that just leads to like much faster feedback loops in the ai.

Rich: How did

Erick: you,

Rich: you both have elite level ai, Silicon Valley kind of experience. What gets you from that experience to the thought that we can take these skills, this knowledge that we have, and apply it to a. Service providers of some kind generally, and then maybe it managed service providers specifically, what gets you from your background to Titan?

Erick: That’s a, it’s a great question. I think like high level, we have a broad thesis that AI is gonna transform all of services and for us [00:26:00] there’s like some sectors that are better in some that are worse. And so we really started to look for. In sectors where there’s high overlap between what agent capabilities are good at today and then what the actual workforce is doing on a day-to-day basis.

So you think about it services, two of the biggest things they’re actually doing is around customer support. We’ve seen great companies come outta that and the AI side of the house and then co-generation, those like technical type use cases. So really started from that workflow work with technicians, got really great data from their tickets and timecards, and were able to see what agents were able to do to drive margin impact and productivity impact there.

Sorin and David you were here yesterday, the pre-day Autotask Community Alive has an m and a symposium. They’ve done it for several years now. We see more traditional type of presentations and traditional type of folks that are, looking to roll up MSPs. You’re doing something really unique and different, so you know, I’ll try and keep up.

Yeah. Can you give us the 32nd elevator pitch to and potential MSP at this [00:27:00] conference that sat through the m and a symposium? About Titan and why they should be, be interested. Yeah, definitely. So there’s a bunch of great platforms out there are trying to build larger and larger MSPs. What the Titan vision is really to go build the leading MSP provider in the market.

We think we can be the number one player and many orders of magnitude larger than the top players in the market today. So I think for owners who are really excited about the technology, about AI and being. In an ecosystem that is around innovation is a really interesting value prop of whether they’re thinking about whether they wanna be involved with the business, not involved with the business.

What is the story that they’re drawing on to and what do the next couple of years look like for them? I think a period of rapid growth and innovation is actually much more interesting next couple years to spend and actually be a part of transforming the industry.

Rich: I think one of the reasons why there’s been a lot of interest in you guys and what you’re doing it, there’s been plenty of involvement by private equity in the [00:28:00] managed services space, both in terms of acquiring MSPs and investing in vendors that.

Sell to and through MSPs. You got you. You’ve got some pretty serious funding and a pretty serious funder you’re working with in, in general. Catalyst tell folks who don’t know who is General Catalyst why are they maybe different from private equity and what is it they see in what you’re doing here?

The value proposition that got them on board.

Erick: Yeah, general Catalyst has been amazing partners to go out and work with. For the folks who aren’t aware, they’re a 30 5-year-old venture capital fund with almost 40 billion in assets now. And their whole history has actually been in pure play tech investing and tr traditional venture capital investing.

So they’ve invested in backed teams like Stripe Ramp Livongo, or Airbnb. So these generational companies that really have defined the tech space for the last 10, 20 years. And what we saw partnering up with them is they really saw the opportunity in the services market similar to how we saw it.

Traditionally, software has been thought of software and services [00:29:00] is a kind of a separate sector that a lot of these VC firms have not been as interested as excited about. ’cause there hasn’t been a great lever of how do you transform an impact a service like business. The key part of a service business has always been.

People first, and the scale is linearly. You grow revenue, you have to grow people. Venture is very much interested in how can you create 10 x, a hundred x type of outcomes. And that’s now possible in the services market with ai. So they’re actually doing this type of play, this AI enabled roll up as they call it, in a handful of different verticals.

So in accounting call centers and homer’s associations and a couple of other bets. And we’ve partnered up with them and been lucky enough to be pretty vision aligned on how do you go tackle the MSP space together. So your thesis is all around leveraging AI in a very potentially unique and different way.

So how is Titan applying AI uniquely and differently than what MSPs at this conference can get from other vendors in the expo hall? Yeah, I think there’s a [00:30:00] bit of a misconception that you can buy the shiniest tool off the shelf and it’s gonna just start automating things from day one.

Wish it worked like that. Life would be a lot easier, but we also wouldn’t be here. In reality, it’s actually like redesigning the delivery model from the ground up and other like astronomies and you actually need to partner very closely with the asset versus just drop something in. So if you think about what the actual capabilities are that what agents can do, they actually can like mirror, like augment or completely replace a lot of the workflows that technicians are doing on a day-to-day basis.

So on the like easier side of requests, it’s around like license management, password resets basic security alerts. Everything from assigning groups. But what the agents were actually able to do is go into the end platform, look up information dynamically generate these like playbooks around, like how to resolve those type of issues.

And then what’s very interesting is as you like, use the tool more and more we’re actually collecting feedback from the technicians and getting data about how to resolve those types of issues in the future. We’re actually seeing agents outperform technicians in various use cases. We had this ticket last week.

There was like two users from the [00:31:00] same company that filed that SharePoint was running pretty slow in the evening. As that a ticket came in, the agent was able to look through all the past tickets where the company looked through documentation. They realized that a backup job had been turned on at the same time.

And so when I was able to correlate that, it actually like basically filed a complete triage report, handed it off to a real technician and they were able to solve that type of issue in a matter of 15 minutes. Yeah, so to get to the point around how does this differ from a software only type of model and being outside in, you’re always tailoring your product to not just one customer to a bunch of different customers.

There’s a bit of generalization that you need to do versus getting deep, but if you need to make process changes, you don’t have that power to actually. Work with MSB to be like, Hey, here’s a completely different way that your technician should be working. Here’s maybe a different pod structure that your team should be focusing.

And it’s not just about dropping in ai, it’s making those operational changes at the same time such that the technicians in AI are able to actually effectively work together. And that we think of. The best way to go do that is put both under the same house. And [00:32:00] another tactical example, technicians and our engineers talk every single day.

Sometimes they request feature changes and our engineers have them in production live two hours later. And I think that sort of feedback loop is really only possible when you’re like tightly coupled on the same team.

Rich: It’s really interesting and we’ve spoken before, but this is the first time that I’ve really begun to wrap my brain around the idea that you are both a software company.

The services company. And and it’s funny because that’s why when I’m interviewing you sometimes, because I know how to interview a software company and I know how to interview a services company, it gets confusing with you guys ’cause you’re both from the software company kind of point of view. First of all this is not off the shelf software you built.

The software that you have and you’re continuing to do. If I remember right you’re really focused on the service desk right now. Can you paint a picture for us of where you’re going with your software stack as it grows, evolves, et cetera?

Erick: Yeah, it’s really good question.

I think like beyond, just like the service desk, we’re actually very focused [00:33:00] on how do we improve the end customer experience and I think today. Other customers are pretty frustrated with their MSPs. They seem to like skate by doing not enough to like really make their customers extremely excited. And so all the touch points you have with them is really what we’re focused on optimizing as well, whether it’s like fast response tires, more personalized answers.

The absolute worst thing that you can do at an MSP is be talking to your customer and ask them a basic question or they ask you a basic question or you ask them the basic question and that’s information you should already know. So we’re looking at all the different touch points that they have, whether it’s like with the account management team, with the procurement team, with the service desk team, really thinking from the ground up.

Like how do we design a really, like product driven and like white glove experience for those end users. So what that kind of translates to in terms of our product roadmap we’re focused on pretty much like all functions on the delivery side from like account management to procurement. No soc. The other big half of this is actually sure, you we’re driving all this efficiency on the delivery side, but how do you en enable the growth with this?

And so there’s a ton of great technology that we’re deploying across the [00:34:00] sales team, the go to market motions, content generation, outbound, all that type of stuff. Talk to us a little bit about the integrations that you’re, that are on the roadmap or you’re already creating with your platform and all the tools that MSPs use.

And kind of the second part of that question is, why should MSPs be more attracted to this? They specifically around what they’re hearing from other groups that are saying we’re in building our own AI stack and things like that. So it’s more of a piggyback question and asking you to differentiate. The value proposition from maybe differently than what we’ve heard so far in the interview?

Yeah. I think a big difference between private equity investors and venture capital investors is really just this focus on long-term growth, innovation, and sustainability. Like private equity investors generally have. The time horizon that they’re looking to exit their businesses. And now saying we don’t have similar considerations or constraints.

[00:35:00] But I think putting a larger upfront investment into tech, build out engineering, build out is something that our venture capital backing actually enables us to go do without there being concern of oh, why are you spending all this cost? Like profitability is only supposed to go in one direction.

All the companies that join our law firm like see profitability gain, but at the Titan HoldCo level, like we are spending significant resources on the centering build out and this team build out, and that’s only enabled by our venture capital backing.

Rich: And just in terms of your thinking about exits, ’cause it does, with private equity and a closed end kind of fund, it’s like a few years and they’re probably looking to get out.

When we spoke, you described a very ambitious goal for where you want to get and said flat out, we’re not getting there in three to five years. So there will be a, an exit event of some kind, but a long ways off in the, so I maybe talk just a little bit about that.

Erick: Yeah, I think we wanna separate also these two things around the overall tight-end story and vision, like arm loan, the company versus like liquidity for partners who join us on [00:36:00] that mission.

So our long-term vision and plan is to go be a hundred billion dollar company. We can, you can be that vertically integrated software plus services solution MSP market in the us. Loan is over 120 billion in revenues globally, 300 billion in revenues. There’s a lot of market share out there to go out and try to capture now that is the vision.

It’ll take some more time to actually get there. But I think in earlier points thinking about potential IPO options continue to build the company in public markets is a really interesting, fascinating point. Some of these, the top end of the MSP market in terms of size of some of these players, you’re now starting to break into maybe the point at which IPO or these other liquidity options start to look interesting.

But I think for us in that five plus or minus type of time year timeline, looking towards those type of liquidity events for partners who join onto the tight in platform. We understand they don’t have a 10 year time rise, and even if we have a time rise out of that time length. There’s a little bit of fear, uncertainty, and doubt about private equity coming into the MSP market. [00:37:00] We’ve heard it in different ways. Some folks are very positive about it. I heard a lot of positivity yesterday, but I also hear from other folks that, Hey, you know what it’s, it eroding.

Kind of what the promise of the MSP is base, breaking it down into profitability efficiency rather than that service component. That relationship component with their customers. How in your mind is a VC funded rollup, like Titan, different than private equity? You touched a little bit on, but I wanna get into this kind of, folks are on the fence I’m not sure if I like it.

No, I’m all in. How do you see it? Yeah, I think is, I’m very glad that you asked that. I think there’s all of the things that traditional world wide world makes sense. Synergies between different companies. Private equity firms are going after multiple arbitrage. Sure, there’s all of that, but they really don’t have this focus on value creation in the way that.

That is very core to our company. Like we talk about AI all the time, point A of ai. Sure you can get more efficient, [00:38:00] but the end customers are actually getting a much better end customer experience. They’re getting faster response times, fewer IT issues in the first place. So switching from a Titan platform MSP to another MSP should actually result in a higher ticket load, slower response times.

We think that competitive differentiation for where the end customer is actually like a very strong staying power. Transforming and acting upon what MSB owners were actually thinking about in the first place, like they started their businesses because they wanted to provide high quality IT services.

It also frees up a lot of time from the technicians to actually be consultative for their customers versus just reactive to their tickets. I think like the most value that a technician can actually provide today is like roadmap and direction for the company versus just like helping to resolve the requests.

The other thing that differentiates as well is on the growth side, like rather than cutting in, coming in and trying to cut as much cost like. Leveraging that AI to enable much more growth as well. So we’re really excited about a lot of the initiatives we’re doing there as well.

Rich: How many acquisitions have you made to date?

And then when you are [00:39:00] evaluating future acquisitions, ’cause this was an interesting thing we talked about before, it’s like what, what is appealing to you in a potential acquisition?

Erick: Totally. So we’ve done one acquisition to date announced that, in the past month or two looking at a bunch of other targets as you guys would expect.

But in terms of targets that we’re looking towards the, there’s all the basic financial analysis that you have to do. You have to cross your cross your t’s, dot, your i’s of course find. High quality businesses with high retention rates, ideally, organically growing. But on the flip side of it, the really big important piece for us and why we actually partner with RFA as our first acquisition is cultural alignment across the team.

How excited are they to go adopt AI solutions themselves? Work with our team hand in hand. It’s been amazing in these two months, working with all the technicians at RFA. They’re really excited about pushing the industry forward and reimagining what it looks like to do MSP services. And I think especially for the first handful of acquisitions that we do, it needs to be that same mentality and that same [00:40:00] level of excitement for us to really get on board.

Rich: And RFA is that yeah.

Erick: RFA is our first stack acquisition. I am sizable MSP based in New York City, serving primarily financial services customers. We got a follow on question. Is there, in your ideal acquisition profile does it matter what platforms they’re currently using today? Or do you have a, an ideal kind of a platform that they come with that you’re gonna integrate everybody with that way?

Yeah. One of the advantages of having in-house tech is we’re actually like pretty agnostic to what tools they’re using. I think the like core agent like workflow and engine is pretty similar. I would all these requests like look the same. The only thing that might differ is like the tools or like endpoints you’re actually using.

We’ve also separated and have our own data layer, so as long as you can ingest that data, our engineering team can split up a new integration in a day or two. So it’s really not a concern what platform they’re on today rather than we can just build around that. I would assume that opens up, your target market quite a bit.

Yeah, exactly. Yeah. We didn’t want to lose anyone, so [00:41:00] we were pretty like had the foresight to make sure we built our platform pretty agnostically.

Rich: No, it’s a really interesting point ’cause it from an MSP standpoint, what it means is I can take advantage of these advanced AI technologies without ripping and replacing everything that I’m doing today.

Erick: Yeah. We know that’s a ton of words to go ripping and replacing entire stack, but I do think the end workflow starts to look pretty different. And RFA already technicians are spending a large portion of their time in the Titan platform. I think the goal is very much to get to the point where technicians are actually doing all of their work in the tight end platform.

You’re integrating with all these systems that they have in the backend, if for like re ConnectWise, the Kaseya different RM systems with Microsoft Stack, all of those. But that really just turning, rather than going to 30, 40 different tools to do your work, a single pane of glass where you can actually do all of their work because it’s natively built in to have all of these integrations.

You’re just using all these different platforms to ingest the data into the lake and then tighten platform then does what it needs to do. Not just the data aspect [00:42:00] to the other aspect is actually the ability for technicians and the AI agents to take actions into all these end platforms. That’s like a very large unlock of truly saving time and truly making folks more productive.

It’s not just a context question of half the problem is finding the right information to present the technician, but the other half is trying to actually go do the work.

Rich: Like I said before, super interesting story. I appreciate you guys taking some time out to to share it with us on the show.

For folks in our audience here who wanna learn more about Titan, maybe get in touch with you, where would you plan?

Erick: Yeah feel free to our website’s, Titan msb.ai. You can reach me at [email protected], David at Titan MSB ai. And yeah, we’d love to save some time to chat.

Rich: Fantastic. Thank you again guys.

Good to meet face to face. Likewise. Thanks for having us. Great. And folks, we are going to take a quick break here when we come back on the other side. Erick and I will share some final thoughts about this very interesting conversation with the folks from Titan. Have a little fun wrap up the show.

Stick around. We will be right back.[00:43:00]

And welcome back to part three of this episode of the MSP Chat podcast. And once again, we thank Sarn Patel and David Heffernan of Titan for joining us in that interview. During the conference there, they and the company they are building is an object of intense curiosity in the IT industry right now.

And so obviously it’s really. A great opportunity for us and our audience to hear directly from them what it is that that they’re building. And Erick I I’ve been talking to these companies, both Titan and Shield Technology Partners, the other very similar conceptually company out there backed by Venture Cap.

I’ve been talking to these guys, I’ve been writing about these guys for a while. But it really wasn’t until this conversation that we did at DattoCon that it clicked for me exactly. What’s different about these guys and how unbelievably different it is. ‘Cause I tended to think of Titan as an [00:44:00] MSP rollup and there are plenty of those out there with this sort of, especially sophisticated in-house AI lab.

A Silicon Valley. Caliber AI lab and and that would be different and that would be interesting. But there are other MSP roll-ups out there that have their own in-house AI dev teams and new charters we’ve said before. They went out last year and they bought an AI company so that they would have their own in-house AI lab.

That’s not really what’s new and different here. Here’s what’s crazy new and different, Erick. The way to think about Titan is not as an MSP rollout with an in-house AI development team, but as an AI software company with an in-house MSP unit. Or really the better way to think about it is this is, as far as I’m aware, this is the first time in the industry that you have had a vendor.

That does software that’s relevant to MSPs and doesn’t partner with MSPs, it [00:45:00] buys them. And is, building them into and building a business with them. It is fusing both the software business and the services business under one roof, which is exactly what David said during that interview there.

Their theory is the way to win in AI is you’ve got to have both the software company and the services company under one roof, and we could talk a little bit about why that would be. But in, I, you tell me, in the entire history of managed services, I can’t think of a company like a ConnectWise or a Kaseya or Enable or anyone else who bought MSPs and that was their sort of model for competing as opposed to sold to and through them it’s a very different thing and a pros and cons.

It’s just gonna be fascinating to see how it plays out for them.

Erick: You’re right, rich. That I felt the same exact way. I thought wait a minute. This is the opposite of what we typically see, right? So this is very unique and different, and I would say is probably one of [00:46:00] the compelling reasons why they’re getting so much attention and buzz and the interest of investors and things like that.

Because it is leveraging the AI first message and then bundling into it the, the crazy m and a buzz that’s already happening around the MSP. Market right now together stronger together. It’s very interesting what they’re doing. And I’ve gotta say they are well positioned to pull this off.

Rich: Yeah, no. Yeah, I, they very I, and I’m sure folks in the audience agree just based on having met with and listened to to those co-founders for a while. Yeah, fascinating story. And it’ll be one obviously that we and many other people are are watching going forward. But for now Erick, we have time for just one last thing and I a little note to Ri Simpson who does the editing of this show and does a wonderful job at it too, is that I think at this point it, it would be great if he was to work [00:47:00] in a wipe out the song Wipe out in the background, and you’ll understand why in a moment Erick, ’cause our one last thing this week concerns what a news article I’m reading calls a surf.

Ford stealing Otter just not too far from where you are in Southern California in Santa Cruz, a little bit further north s to a California beach. You’re saying there is a particularly aggressive otter out there in Santa Cruz and he’s not just, aggressive of people and upset at people.

He’s going out to people on surfboards. He’s bit them. Although fortunately, not enough to break the skin, but just enough to get them off that surfboard so that he can get off this otter. Erick really likes to surf, doesn’t own a surfboard, and this is the only way that he can figure out how to, and he will stay on that board.

Apparently I’m looking for it for quite about 20 minutes at a stretch. So really into surfing and a very creative otter. And I’m glad no skin is being broken here. But [00:48:00] if you’re a surfer in Santa Cruz be on the lookout.

Erick: So his nickname must be Little Puppet, and he’s doing swim bys, then in the hood, rich, taking people’s rides.

Rich: Yeah.

Alright. Folks, thank you so much for joining us. That’s all we’ve got for you this week. We’re gonna be back in a week’s time with another episode for you. Until then, I will remind you that this is both a video and an audio podcast, which means that if you’re listening to us right now, but you’d like to check us out on video, you can go to YouTube, look up MSP chat, you’ll find us there.

If you are watching us on YouTube, but you’re into audio podcasts, go to Spotify, Google, apple, wherever it is. You get your Apple Pod, your audio podcast, excuse me. You’re gonna find us there too and wherever it is that you find us please. Subscribe, rate review, it’s gonna help other people find and enjoy the show just like you do.

The show is produced by the great Russ Johns. It is, as I said before, edited by the great Riley Simpson. They’re part of the team with us here at Channel Mastered. They are ready and able [00:49:00] to do a podcast for you, in fact, if you’d like. But we do way, way more than that for our clients at Channel Mastered.

We are here to help our vendor clients. Build, grow, optimize, perfect MSP channels. And if you wanna learn more about working with us on that front, go to www.channel mastered.com channel. Mastered has a sister organization, it is called MSP Mastered. That’s Erick working directly one-to-one with MSPs to help ’em grow and optimize their business.

You can learn more about that at www.mspmaster.com. So once again, we thank you for joining us. We’ll see you in a week. Until then, folks, please remember, as we so often ask you to. You can’t spell. Without [00:50:00] MSP.