By
Mendy Green
June 9, 2021
•
20 min read
Business
The MSP Business Model Fallacy
In any business where you’re not billing Time and Materials, the amount of time you spend on a project directly correlates to how profitable you are. In an MSP, this applies even more. MSP Businesses were designed years ahead of their time, bringing into practice concepts such as recurring revenue, outsourcing, efficient resources, and more; before people even realized the value. It’s the reason that today the MSP Businesses are blowing up with everyone you meet starting their own. Unfortunately, there’s a complex side to the framework of an MSP that is very often overlooked, especially by those just starting out.
Let’s discuss how the MSP business model is built. MSPs pitch to their prospective clients that they can provide the same level (or often times better) IT Services to their organization than they themselves can find if they go with someone internally. They ask for less money, and offer a bigger team with greater experience. These same MSPs then have to turn around and hire the same people that would have been hired directly, and not just one, but two or three or more depending on the size of the MSP.
MSPs have to pay the same salary with a smaller budget. How can these numbers possibly work?
This is where efficient resources come in; an MSP needs to stack multiple clients reusing the same resources for each client so that together all the clients combined pay enough money for the MSP to pay the technicians salary and make a profit. The income also needs to cover all base expenses of the MSP which includes infrastructure such as an RMM, PSA, Email, Phones, over-night team for emergencies and so on.
With an internal IT resource, that resource would be solely focused on the business they were working for and getting paid a full salary of say $52k/year, now the same resource at an MSP is getting paid $52k/year and needs to stay on top of not one company IT needs, but actually 3 or 4 (or more depending on the contract size of each). This kind of expectation is unreasonable and when maintained results in high-stress work environments and eventual burn out for the technician. The saying “trial by fire” is very applicable to the technicians who work at an MSP. They are under constant barrage of tickets and stress, jumping from company to company each ticket wildly different from the next. This makes them unusually skilled and also rapidly exposes them to a wide range of experience they may not have received working for just one company. A good MSP technician of the lowest tier can easily go head to head in ability (if not knowledge) to a mid-tier internal IT resource.
Now keep in mind that when MSPs started we were a new phenomenon. There was no standard to follow, no existing business to copy, except for the existing internal IT department within a Company. We didn’t know what kind of pay structure was fair to offer a Tier 1 or Tier 2 technician because there was no “average pay” metric. The only thing we did know is that we are building a business with a stress on smaller dollar amounts per client, and more total clients. This means what we paid our technicians had to be less too, or that we keep the MSP as lean as possible with only the amount of technicians truly needed. Following the 80/20 rule we determined that 80% of the time with our clients running smoothly we would be fine and only 20% of the time when some kind “perfect storm” would occur we would need to motivate our technicians to put in more effort (or what was generally called “figure something out”).
What’s being described is not a sustainable long term plan. Simon Sinek likes to stress that business is an Infinite Game and that those who are not playing by those rules are doomed to failure eventually. The only way to stay in the game is by having resources, and the will to keep playing. We’ve already established that MSPs do not have the same pockets as a normal business, not without drastically imposing upon “will”, our employees, making them work in stressful environments and constantly being battered by the next broken issue.
The fix for this is easy, and its an iteration of what we already started. Efficient use of resources. Efficiency can help us spend less time per ticket, less time per client, and improve our technicians stress in the environment. There are two side to the efficient use of resources, one of which we already started (Sharing resources among companies) but the other is often overlooked “Work load management”. If we can make our work load efficient we can easily improve upon all the issues we just brought up. Here are some ideas that can be used to help facilitate the efficient workload.
Efficient resources is way more than just sharing resources. Making your workload efficient is just as important. Remember how profitable you are directly correlates to how efficient you can be
- Proactively addressing age of client equipment
- Proactively addressing ticket trends over time to help improve underlying issues
- End User technology training for better understanding of the tools they use
- Breaking Client’s business vertical into separate teams to allow for familiarity of Line of Business applications and setup
- Building an MSP supported technical standard as your “stack” to ensure familiarity with technical infrastructure
- Establishing formalized business processes for your MSP Teams so they know where to find information and how to proceed
- Building an Automation First environment allowing you to offload work from your team to your technology decreasing the amount of time spent on tickets.
Remember, in the MSP business time isn’t a loss of potential profit, its actual profit lost as your contracted rate is the same every month. Automation and bulk actions are extremely important as the less time you spend doing something the more your Per Hour amount goes up.
I'm passionate about IT, driven by a dual love for solving complex problems and a commitment to transforming the stereotype of technical support into a positive and enjoyable user experience. For over 13 years, I've been deeply involved in the MSPGeek community, lending my expertise to various Managed Service Providers (MSPs), while also serving as the CTO at IntelliComp Technologies.
My journey in the tech world is fueled by a passion for teaching others. I find great satisfaction in imparting problem-solving and critical thinking skills, and offering practical guidance during the troubleshooting process. It's this enthusiasm for mentorship and improvement that led me to my current venture.
Today, as the founder of Rising Tide, I'm focusing on the MSP industry, dedicating my time to coaching and assisting both individuals and businesses. At Rising Tide, we're not just about providing solutions; we're about nurturing growth, fostering innovation, and building a community where everyone can rise together. Whether it's through hands-on problem solving or strategic planning, my goal is to make the IT experience not just efficient, but also empowering and enjoyable
See some more of our most recent posts...
Rising Tide Book Club: Think Naked - Week 1
In Rising Tide’s Winter 2026 Book Club, we explore Think Naked by Marco Marsan and challenge the idea that creativity fades with age. Instead, we examine how risk, labels, and permission shape curiosity — and what it looks like to think more like a kid in modern technical work.
Read post
About this Series
This discussion guide is part of Rising Tide’s Winter 2026 book club, where we’re reading Think Naked by Marco Marsan.
If you’re just joining us, here are a few pages you’ll likely benefit from:
- Book Clubs, Conversations, and Curiosity for why we started a book club for a technical team here
Chapter Summary
In the introduction and first chapter, Marco Marsan proposes to the readers that creativity is not lost as we age — it is trained out of us. He cites research suggesting that young children test at very high “genius” or creative problem-solving levels, and that this capacity sharply declines by adulthood.
To return to this childlike, “genius” mindset, Marsan introduces five “rules” that mirror how children naturally engage with problems:
- Wear your cape (be fearless)
- Blockbuster (question defaults and conventions)
- Look at Your Neighbor’s Paper (learn by copying and remixing)
- Show-N-Tell (learn publicly and collaboratively)
- I’m the boss of me (take ownership and agency)
Discussion Questions
Use these open-ended prompts to guide reflection and conversation. Remember, there are no right answers!
- What did you agree with in these chapters?
- What did you disagree with in these chapters?
- Do you agree that creativity declines because of conditioning rather than capability? Why or why not?
- Who or what defines a genius?
- Do any of the five lessons intrigue you more than the others? Which of the five principles feels most uncomfortable to you right now?
- Where do you avoid experimentation because the cost of being wrong feels too high?
- Where in your work do you default to “this is how it’s always been done”?
- What would “thinking more like a kid” actually look like in one small, real decision this week?
Rising Tide Input for your Consideration
- What causes us to lose our creativity?
- The team proposed that people don’t lose creativity as they age, but rather they close off the permission rather than the capability because creativity becomes risky. As adults, mistakes have consequences: reputational, financial, professional. Most environments reward predictability over curiosity, so people adapt accordingly.
- Are children actually ‘geniuses’?
- Evidence that children become less creative over time (and how to fix it) - Idea to Value
- As a team, we felt that the label “genius,” isn’t particularly useful. It’s poorly defined, and even more poorly measured. What matters is not intelligence labels, but how people approach problems: curiosity, iteration, and willingness to engage with uncertainty.
- In fact, as a team we consistently seem to pushback on: Labels (“genius,” “best practice,” or “industry standard”), Claims without sources, and Metrics without definitions.
- Children also don’t ask if they’re allowed to participate, they assume they are. Adults often operate transactionally, constantly checking for permission. That hesitation suppresses experimentation and ownership.
- How does technology factor into creativity loss?
- Convenience is a trade. Offloading is good if the saved energy is reinvested into higher-order problem-solving. As a result, technology can either dull skills or enable deeper thinking depending on how we use it as a tool.
- Automation is welcomed after understanding exists. Technology should support people who know why, not replace them.
About Rising Tide and our Book Club
Rising Tide helps MSPs and service-focused teams build better systems: the kind that align people with purpose.
Every Friday at 9:30 AM ET, we host Rising Tide Fridays as an open conversation for MSP owners, consultants, and service professionals who want to grow both professionally, technically, and emotionally. In Winter/Spring 2026, we’re walking through Think Naked.
If that sounds like your kind of crowd, reach out to partners@risingtidegroup.net for the Teams link. Bring your coffee and curiosity…no prep required.
Chapter-by-Chapter Discussion Questions for The Go-Giver by Bob Burg: Chapter Fourteen: The Go-Giver
Chapter 14 ties The Go-Giver up neatly, and our team's conversation unpacked whether or not Joe’s ending was a success, and if it was relatable to anyone else.
Read post
About this Series
This discussion guide is part of Rising Tide’s Fall 2025 book club, where we’re reading The Go-Giver by Bob Burg and John David Mann.
If you’re just joining us, here are a few pages you’ll likely benefit from:
- Chapter One – The Go-Getter for an introduction on how to use these Discussion Questions
- Book Clubs, Conversations, and Curiosity for why we started a book club for a technical team here
Chapter Summary
In the final chapter of The Go-Giver, we meet Claire, who is on her way to meet the partners behind an amazingly (even stratospherically) successful new business: Rachel’s Famous Coffee. Chapter 14 ties up the story of The Go-Giver in a neat little bow, showcasing the stratospheric success possible, and encouraging us to share the secret with others along the way.
Discussion Questions
Use these open-ended prompts to guide reflection and conversation. Remember, there are no right answers!
- Joe ends the book in a completely different role than he started. Did that feel like success to you?
- How has your own definition of success changed over time?
- How do you tell the difference between quitting, failing, and evolving? Would this ending feel different if Joe were less financially secure?
- What did you learn from this book? What do you think your key takeaway will be?
Rising Tide Input for your Consideration
- Joe didn’t land the sale, he completely changed his trajectory. What does that mean for you? Sometimes success isn’t what we imagine or set out to accomplish, sometimes it’s adjacent.
- Joe isn’t keeping the secret or the process to himself, he’s actively sharing it with others and using the same framework Pindar gave him.
- As a team, we didn’t really like this book and wouldn’t recommend it to peers who already have practical experience in business or leadership.
- The parable format wasn’t great for our team. It was a good basic overview, but it didn’t go as deep as we felt some of these concepts deserved. While we get that it’s a book with a story that needed to be simplified to get the author’s key ideas across, seven days isn’t enough time for meaningful personal or professional change, and we felt the timeline and simplicity undercut the book’s credibility. Many felt the book oversold its lesson without adequately showing how it applies in complex, real-world situations, added to the fact that since Joe doesn’t apply the lessons over time and he’s rewarded through proximity to power, it made the ending feel uncomfortably like access solves everything.
- The main character wasn’t relatable or aspirational. The team generally struggled with Joe! He started unlikable and never quite crossed into someone the team wanted to root for or become, in fact, as a result, the story ended up feeling like it was more about “who you know.” and being in the right place at the right time. While generosity mattered, only once the right people were involved, which ignores how uneven access to networks really is.
- There are possibly better books out there that communicate similar ideas more effectively. Here are a few of our favorites:
- We hope you’ll join us in 2026 for our next book: Think Naked: Childlike Brilliance in the Rough Adult World by Peter Lloyd Marco Marsan | Goodreads. Get a copy of the book and mark your calendar for January 09, 2026 to talk through the cover and reading plan.
About Rising Tide and our Book Club
Rising Tide helps MSPs and service-focused teams build better systems: the kind that align people with purpose.
Every Friday at 9:30 AM ET, we host Rising Tide Fridays as an open conversation for MSP owners, consultants, and service professionals who want to grow both professionally, technically, and emotionally. Our book for 2026 Quarter 1 is Think Naked: Childlike Brilliance in the Rough Adult World by Marco Marsan.
If that sounds like your kind of crowd, reach out to partners@risingtidegroup.net for the Teams link.
Bring your coffee and curiosity…no prep required.
Chapter-by-Chapter Discussion Questions for The Go-Giver by Bob Burg: Chapter Ten - The Law of Authenticity
What if the real value you bring to your work, clients, and relationships isn’t your pitch, your process, or your polish—but you? This post walks through The Go-Giver’s Law of Authenticity, major blows to self-esteem, and why relationships aren’t 50/50. Learn how to add value simply by showing up as your honest, imperfect self.
Read post
About this Series
This discussion guide is part of Rising Tide’s Fall 2025 book club, where we’re reading The Go-Giver by Bob Burg and John David Mann.
If you’re just joining us, here are a few pages you’ll likely benefit from:
- Chapter One – The Go-Getter for an introduction on how to use these Discussion Questions
- Book Clubs, Conversations, and Curiosity for why we started a book club for a technical team here
Chapter Summary
In Chapter 10, Joe learns the Fourth Law of Stratospheric Success — “The Law of Authenticity” — from a now-successful saleswoman who found this truth when she was at her lowest.
Discussion Questions
Use these open-ended prompts to guide reflection and conversation. Remember, there are no right answers!
- “These lessons don’t apply only to business…the true bottom line is whether it improves your life’s balance sheet.” What are things that improve your own balance sheet of life? Family? Hobbies? Travel?
- Have you ever had a major blow to your self-esteem like Debra’s husband leaving her? Have you ever looked at is as a gift? What if you did?
- “Add value. I had nothing to add but myself”. Have you ever considered that you, as you are, brings value to a relationship? Yes, your perspective, your experiences, but more than that, your presence is valuable in a relationship!!
- What do you consider to be people skills? To be a person?
Rising Tide Input for your Consideration
- How does privilege (financial cushion, partner support, social safety nets) affect whether we’re able to call adversity a “gift”? As leaders or teammates, what responsibility do we have to build safety nets for our people (policies, culture, financial practices) so they don’t fall off a cliff when life hits?
- John & Julie Gottman – Fighting Right & Repair. The Gottmans’ work shows that what predicts relationship health is not whether you fight, but whether you repair effectively afterward, mirroring what we discussed about client relationships and authenticity.
- Julie and John Gottman: Relationship advice from 50+ years of marriage | TED Talk
- “Happily ever after simply means that both partners are known, valued, accepted for who they are and who they are becoming.” - John M. Gottman
- Julie and John Gottman: Relationship advice from 50+ years of marriage | TED Talk
- Brené Brown – “Marriage is Never 50/50” - Short clip where Brown explains why healthy relationships aren’t equal splits but ebb and flow based on capacity, reinforcing the idea that we bring our best available self, not a fixed quota.sometimes they're 30-70...and sometimes they're 30-30...you should only be expected to bring your best. Because we are rarely able to be 100% consistently!
- The Framemaking Sale - by Brent Adamson and Karl Schmidt; so often relationships aren’t just about US or what we perceive we need to be, but rather how we can make the other person feel confident and comfortable in their own decisions.
About Rising Tide and our Book Club
Rising Tide helps MSPs and service-focused teams build better systems: the kind that align people with purpose.
Every Friday at 9:30 AM ET, we host Rising Tide Fridays as an open conversation for MSP owners, consultants, and service professionals who want to grow both professionally, technically, and emotionally. In Fall/Winter 2025, we’re walking through The Go-Giver, chapter by chapter.
If that sounds like your kind of crowd, reach out to partners@risingtidegroup.net for the Teams link.
Bring your coffee and curiosity…no prep required.