Who manages the managers?
Increasingly, companies are outsourcing information technology (IT) management to the cloud rather than running their own departments. Moving to the cloud typically means more regular, operational expenses rather than occasional large capital expenses, using software as a service (SaaS) rather than buying software, more flexibility, and not needing to hire staff or stock a computer room. Instead, IT functionality is performed by managed service providers (MSPs).
But who helps the MSPs manage their own networks?
That’s what Zest MSP is doing.
“It’s a SaaS company helping MSPs succeed,” said Chadd Mazac, CTO of the Meridian-based company. “We help MSPs manage their business, and help them take care of their customers.”
Helping MSPs grow
Zest MSP isn’t aimed at the Accentures and the Capgeminis of the world, but at the MSPs that are themselves small to medium businesses. “A lot of them stall out at three or four employees, and then again at 10 to 15 employees,” Mazac said. “We identify anything preventing their growth. It’s specifically to give them a tool to help them grow, and it’s built around letting them see what their roadblocks are.”
“About 90% of MSPs stay under $1 million in annual gross revenue,” agreed CEO Bobby Lind. “What that means is, they’re stalling out. A small business needs to be $1 million-plus to be healthy. From there it’s, where do they want to go? A lot of them struggle with that.”
Bobby Lind, CEO of Zest.
Chadd Mazac, CTO of Zest.
MSPs also price their services differently from the way they used to, Lind said. “The MSP industry started as ‘break and fix,’” he said. “If it took you five hours, you’d send them an invoice for five hours. The break-fix model is a terrible model and never served customers well, and the industry is going away from it. MSPs that are still doing it are not benefiting their customers. Customers want their site free of issues. They don’t want to spend time on it – they want to spend time on their work.”
Break-fix also doesn’t give MSPs an incentive to improve, Lind said. “If the environment isn’t smooth, that’s okay, because they’re being paid by the hour,” he said. “Where’s our motivation to make sure it’s smooth? A lot of the software was built around that.”
Andrea Lind, VP of Marketing.
Technically, Zest MSP is considered “professional service automation” software, or PSA, Mazac said. “We manage all the tickets and communication with all their customers, track the time they spend servicing customers, track performance, track service level agreements, track billable and nonbillable time, track roadmaps for each customer and employee performance in the number of tickets closed and the time to close, and report to the MSP how profitable each customer is in leveraging the MSP’s service.”
But Zest MSP handles more than just trouble ticketing. “Our competitors focus on ticketing, which is a small part of what an MSP does,” Lind said. “Time entry is a big deal. A lot of engineers love technology, but they don’t like to do the paperwork. We want to make it easy for them.”
“One customer may be paying the same, but using twice as many hours,” Mazac said. “They can use it to make changes to the business agreements with their customers.”
In other words, if one customer uses 30 hours and another uses 100 hours, then the MSP has to figure out what’s wrong. “The key to that is proper timekeeping,” Lind said. “You have to make sure it’s easy so the technicians and engineers will do it. Across the board, timekeeping is atrocious. That’s what’s going to give us an advantage.”
How the company was formed
Lind and Mazac are both 20-year veterans in the space, and realized that there was a hole in the market when they created their own MSP, Limetree Labs, which quickly became a multimillion-dollar business.
“Through that process, and also by being in the industry for a long time, we got very tired of the terrible products in our industry,” Lind said.
Surprisingly, Lind said there’s only two major competitors in the field, and a few smaller, newer ones. “The design is terrible,” he said. “None of them were built by an MSP. We got tired of it, and said, ‘We’re going to create this product.’”
That was in 2022.
It took them about a year, and the Zest MSP software has been available for about two months. “We’ve gotten a big reaction in signups and demonstrations, and big validation from the community and the industry,” Lind said.
The company’s development team is in Armenia, and there are also several employees in the U.S., including Andrea Lind, vice president of marketing, who is also married to Bobby, and who has experience in branding and design.
The software is sold on a subscription model, per user. “If an MSP has five employees, that’s five subscriptions,” Lind said.
Thus far, Zest MSP has just a handful of customers, but is doing a lot of demos and is building new customers every day, Lind said. Moreover, customers are coming from around the world, Mazac said. “I thought we’d be dealing with just the United States,” but the company has also demonstrated the software for companies in Australia, Canada, New Zealand, and the United Kingdom, he said.
Financing
For the first year or so, Zest MSP was self-funded, but it recently received about $250,000 in seed funding from Capital Eleven. “We realized that in the SaaS ecosystem, you really needed partners,” Lind said. “This is a big product, and we need a big push each step along the way.”
In addition to providing funding, Capital Eleven is also helping with managing the business and making contacts, as well as on sales and marketing because of Zest MSP’s two major competitors. “That’s where most of the money goes, so we’re able to take on these two giants,” Lind said. “We’ve had MSPs call us ‘the giant slayer,’ because we’re taking on these two behemoths nobody likes.”
The company hasn’t yet determined an exit strategy. “We want to build Zest into a market leader for MSPs so they’re able to grow their business better than they ever have,” Mazac said. “We’re definitely hoping to partner with other products in the industry and someday offer a full product stack, with backup and so on, to offer MSPs.”
Sharon Fisher is a digital nomad who writes about entrepreneurship.