What You’ll Learn About Building a Profitable MSP and Technology Business Strategy
Former SolarWinds MSP leader Dave Sobel shares battle-tested strategies for entrepreneurs struggling with technology implementation and business growth. Whether you’re starting an MSP or scaling a tech business, achieve sustainable profitability through financial literacy, team management, and data-driven decision making. This episode delivers practical frameworks for:
- Converting technical expertise into repeatable, profitable service offerings
- Implementing cybersecurity and data protection that clients actually value
- Building systems that scale without founder burnout
- Creating premium pricing strategies based on business outcomes
- Developing team communication skills that drive client retention
Meet Dave Sobel: MSP Expert and Business of Tech Host
Dave Sobel brings over 20 years of managed services provider experience, having built and sold multiple technology companies including a Microsoft Partner of the Year finalist MSP. Now hosting The Business of Tech podcast, Dave translates complex IT concepts into actionable business strategies.
The Hidden Value of Boring Technology: Why Services Generate 8X More Revenue Than Products (02:30)
“For every dollar of Microsoft revenue, there’s $8 of partners revenue” – Dave Sobel
This fundamental economic reality reshapes how entrepreneurs should view technology opportunities. The implementation, integration, and ongoing management of technology solutions generates far more economic value than the products themselves. Most entrepreneurs chase flashy product ideas while overlooking the massive services market that supports every technology platform.
Rather than competing with billion-dollar software companies, successful tech entrepreneurs focus on the complex, boring problems that require ongoing expertise – contract negotiations, system integrations, compliance management, and operational support.
Why Every Business is Actually a Technology Business in 2025 (10:30)
“I think every business is a technology business. We live in 2025. If you’re not on the internet, if you’re not delivering with an e-commerce component, you have data that has to be moved around” – Dave Sobel
This mindset shift transforms how business owners approach technology investments. Rather than viewing IT as an expense to minimize, forward-thinking entrepreneurs recognize technology as the primary lever for revenue growth, operational efficiency, and competitive differentiation.
The strategic approach involves measuring technology investments against specific business outcomes – more patients served, faster data processing, improved membership growth, better inventory management. Every technology decision should tie directly to top-line revenue or bottom-line cost reduction with measurable metrics.
The Data Protection Philosophy: Treating Customer Information Like Dragon’s Gold (13:00)
“I’m deathly afraid of losing that data because that’s what’s important to my business. I’m really shocked at the level of lack of paranoia a lot of business owners have” – Dave Sobel
The practical implementation of data protection extends beyond basic cloud storage. Successful businesses follow the 3-2-1 backup rule: three copies of data, two different storage types, one off-site location. This systematic approach ensures business continuity when – not if – technology failures occur.
Regular testing of disaster recovery procedures transforms theoretical protection into practical preparedness. Just as fire drills ensure everyone knows evacuation routes, data recovery drills verify that backup systems function and team members understand their roles during crises.
Building an MSP Business: Why Process Beats Technical Skills (03:10)
“The best managed services providers are the ones that really focus on repeatable process and can do it again and again and again in a very reliable kind of way” – Dave Sobel
This operational philosophy separates profitable MSPs from struggling technical consultants. The ability to deliver consistent results through documented procedures creates the foundation for scalability. Rather than relying on individual technical heroics, successful MSPs build systems where any trained team member can execute standard processes with predictable outcomes.
The communication component proves equally critical – translating technical solutions into business value propositions that non-technical buyers understand. MSPs that excel at explaining how technology investments drive measurable business outcomes command premium pricing and higher client retention rates.
From Operator to Market Analyst: Strategic Career Pivots in Technology (04:20)
“I kept learning and learning. I haven’t managed a $4 million budget. I haven’t managed teams globally. Like I kept learning and learning” – Dave Sobel
This strategic approach to career development prioritizes skill acquisition over immediate financial gains. Each business experience builds complementary capabilities that compound over time. The willingness to take positions specifically to learn new skills demonstrates how successful entrepreneurs think about long-term value creation.
“I think I can do YouTube. I think I can do podcasts. I think I can do electronic versions of this that will be way smarter, way easier from a delivery perspective and reach more people” – Dave Sobel
The transition from in-person training to digital content creation illustrates how entrepreneurs identify scalability opportunities in their existing expertise.
Digital Identity Protection: The Conversation Couples Aren’t Having (27:10)
“My wife doesn’t have access to any of my passwords. We don’t share a single password. Because I want to know that she logged into that system or I logged into that system” – Dave Sobel
This security architecture extends beyond business applications to personal life protection. The discipline of maintaining separate password ecosystems with emergency access procedures creates accountability while ensuring business continuity. The addition of voice verification code words protects against increasingly sophisticated social engineering attacks and AI voice cloning.
“We’re the only western nation with no federal privacy law of any kind. You don’t have a right to data privacy” – Dave Sobel
This legal reality forces entrepreneurs to implement private-sector solutions for data protection rather than relying on regulatory frameworks.
Hiring for Communication Over Technical Skills: The Costly Lesson (33:00)
“I overvalued technical skills for a long time. Technical skills can be taught. Communication skills are much more important” – Dave Sobel
This hiring revelation transforms recruitment strategies for technology businesses. The most valuable team members translate complex technical solutions into business outcomes that clients understand. While coding abilities and system administration knowledge can be developed through training, the capacity to communicate technical concepts clearly proves harder to teach and more valuable to business growth.
Premium Pricing Strategy: Competing on Value Instead of Cost (34:30)
“If I can work with them and they can spend a dollar and make a buck 50, everyone’s happy. If you ever design a machine that put a dollar in and a buck 50 comes out, you’ll put all your money into it” – Dave Sobel
This pricing framework shifts conversations from cost minimization to investment return. When service providers demonstrate clear financial returns on technology spending, price resistance disappears.
“Most business owners lose sight of the fact that it is about the amount of money you keep, not about the money you make” – Dave Sobel
This financial discipline counters the growth-at-all-costs mentality. Sustainable businesses prioritize margin preservation and cash management over revenue growth metrics.
The Niche Versus Diversification Debate: Why It’s the Wrong Question (37:30)
“I actually think it’s an and. Everyone is looking for the answer. They assume that there is a single way of doing things that will be the best, and I smile and go, no, there’s a million ways to do this” – Dave Sobel
This strategic flexibility recognizes that business model choices depend on individual goals, market conditions, and personal preferences rather than universal best practices. The capacity to pivot between approaches as circumstances change proves more valuable than rigid adherence to any single strategy.
Linear Growth Philosophy: Planning for Steady Progress While Preparing for Acceleration (41:30)
“I am a believer in planning for linear growth and being ready for exponential. There’s real honor in a business that makes money and has linear growth” – Dave Sobel
This growth perspective counters the startup mythology that celebrates only exponential scaling. Most sustainable businesses grow steadily over time, creating consistent value for owners, employees, and clients without the volatility of hypergrowth trajectories.
Continuous Improvement Over Scheduled Reviews: The Daily Upgrade Habit (42:40)
“My basic philosophy on this is are we better today than we were yesterday? And are we going to be better tomorrow than we are today?” – Dave Sobel
This operational mindset replaces rigid review schedules with ongoing optimization thinking. Rather than waiting for quarterly assessments to improve processes, successful entrepreneurs constantly evaluate whether each day’s work represents an upgrade from the previous day.
The Counterintuitive Advice: Slow Down to Play Big Faster (44:30)
“Going slower to move faster actually is the right answer. You make less mistakes. There are very few actual crises. We spend a lot of our time feeling like everything is panic. Most things aren’t” – Dave Sobel
This measured approach transforms how entrepreneurs respond to daily challenges. The discipline of distinguishing genuine crises from routine problems eliminates unnecessary stress while improving decision quality. The measure-twice-cut-once philosophy reduces costly errors and enables sustained progress without burnout.
Key Takeaways: Building Sustainable Technology Businesses
This conversation with MSP expert Dave Sobel covered essential strategies for building profitable technology services businesses:
- Services Economics: Technology implementation and management services generate 8X more revenue than products, creating massive opportunities in “boring” but profitable business problems
- Universal Technology Dependence: Every modern business operates as a technology business regardless of industry, requiring strategic IT investments tied to measurable business outcomes
- Data Protection Discipline: Paranoid backup strategies (3-2-1 rule with regular testing) and documented disaster recovery plans protect the business’s most valuable asset
- Process Over Technical Skills: Repeatable procedures and communication abilities drive MSP success more than technical expertise alone
- Value-Based Pricing: Competing on measurable ROI rather than cost enables premium pricing and higher profitability with fewer clients
- Continuous Improvement: Daily incremental upgrades compound more effectively than rigid review schedules
- Deliberate Pace: Slowing down to measure twice and cut once produces faster long-term progress with fewer costly mistakes
Connect With Dave Sobel
The Business of Tech Podcast
Visit businessof.tech for daily technology business analysis, available on all podcast platforms and YouTube
Connect with Dave Sobel on LinkedIn for ongoing technology business insights and MSP strategy discussions
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