It’s Hard Doing Hard Things

It’s Hard Doing Hard Things

Tim Fitzpatrick
Welcome to the Rialto Marketing podcast. Today's episode is a Revenue Acceleration Series interview where we talk to seven-figure B2B business owners and their growth-focused executives who are actively trying to grow their business and get to the next level. We talk about the good, the bad, and the ugly so that you can learn from their experience. Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe marketing shouldn't be difficult and it definitely shouldn't be guess work. Thank you so much for taking the time to tune in. I am super excited to have Joe Macchiarella with me today from Intelitrex. Joe, welcome. And thanks for being here.

Joe Macchiarella
Thanks for having me, Tim. Appreciate the invite.

Tim Fitzpatrick
Yeah, of course. We got a lot to talk about. So I'm really excited to dig into this. Before we do that, I want to ask you just a few quick rapid fire questions if you're ready to jump in.

Joe Macchiarella
Let's do it.

Tim Fitzpatrick
Okay, man. So very quickly, what do you do? How long have you been doing it?

Joe Macchiarella
How long do we have? So what I do today is vastly different than what I've done earlier on in my career, of course. I've been doing a long time, 20 five plus years in general in the IT space, some level of IT. But currently what I'm doing is I'm leading a network monitoring software company called Intelitrex. It's where we monitor networks and we identify issues proactively. We empower these MSPs to manage service providers. We empower them to take quick action, reduce their repair times, et cetera. Just bring a lot of intelligence into their world. And that's the rapid fire response.

Tim Fitzpatrick
Cool. And what's the most important lesson you've learned in running your business? There's so many. Hard to choose.

Joe Macchiarella
Yeah, that's a really good question. So much could be answered there. If I had to pick one thing overall, it would be two things. They go together. The resiliency and the discipline that it takes to grow your business. It is really tough going from startup world or low-revenue world and to hit that growth model, hit that growth path. There's a lot of... Hey, there's winning. There's a lot of winning in that, and there's a lot of losing in that. But that's where the discipline and the resiliency comes into place because it's not a loss. You didn't lose. It's an attempt. It's an attempt, and you only lose if you stop trying. As long as you just hit that grind every day and you're doing the reps and you're doing the work, luck will find you.

Tim Fitzpatrick
If it was easy, everybody would do it, right?

Joe Macchiarella
That's right. Everyone thinks it's all glamor and gold. Oh, you run a business. It's great. You're the boss. You call the shots. You could do whatever you want. And there's truth to that, of course, but there could always be two truths in the same thing. And the other truth is it's a lot of work. It's a lot of hours. There are sleepless nights. There's worry, anxiety. And then there is glory when you start hitting strides on stuff. So it's an emotional roller coaster, but at the end of the day, it is fantastic. When you start seeing that success.

Tim Fitzpatrick
Do you have any mantra or something motivational you say to help yourself or share with your team when you do hit those roadblocks or hurdles?

Joe Macchiarella
Not a mantra, so to say, but it's more about perspective that I bring to them. It's hard doing hard things. Anything... And so many people are so risk averse, and it's really difficult for people to get out of their comfort zone. And I try to remind people to get comfortable with being uncomfortable. And anything... Yeah, there's risk here. Yeah, it's going to be hard. Yeah, it's going to suck. Embrace the suck. That's what you have to do. Embrace the suck and let it fuel you to figure it out and get it done. That's not so much a mantra, but really just perspective on anything that is worth doing has risk to it. And the bigger the risk, the bigger the reward. And it's just about calibrating them and bringing them perspective on what it takes. I got many stories around that, that my team has been able to rise above and prevail in many, many different situations and current and past experiences.

Tim Fitzpatrick
I read something that this reminds me of a few weeks ago, and the guy said, Do the things that have short term pain, but long term gain. So many of us do the things that have short term gain, but they don't really benefit us long term. It's just a good reminder, right?

Joe Macchiarella
Yeah. And people want to do the easy, right? Because it's just wired in your brain that when I get stuff done, I feel good about myself. And the more things I could get done, I feel better and better about myself. And a lot of people, it's very common to drift towards easy because I can go chop that tree down quick and get all this easy tasking done. And I feel great about myself at the end of the day. My perspective on everything is, and maybe I'm a weirdo and I'm just fired different, but do the thing that sucks. Do the thing you hate to do. It has to be done. You're not doing something that doesn't have to be done. To your point, for the short term gain, you have to do the things for short term gain. But do the thing that sucks the most and just do it with gusto. Do it pretend like you I love it. And you can rewire and trick your brain into doing these awful, what you perceive as being awful, hard, horrible things and actually enjoy doing it.

Selling a Distinct and Diverse Company

Tim Fitzpatrick
I want to break this down a little bit. Trexdell was the company that you owned before Intelitrex, right?

Joe Macchiarella
That's correct. Yeah. So we started out as a full-blown Integrator, MSP, total turnkey shop for hardware, managed services, and then the software component, the monitoring component.

Tim Fitzpatrick
Okay, cool. Thank you for that. That gives people some perspective. So there was a point where you decided to split Trexdell into three separate companies. Here's what I want to know. What were some of the biggest marketing and sales challenges you faced during that transition? And how did you tackle that? Give us some background there.

Joe Macchiarella
Yeah. So my partners in the business who are the original founders, we all decided, like you said, we got to the point where we decided that we were going to move forward and start divesting ourselves of the one-time type revenue, the installations and et cetera, the professional services, all at one time revenue and start focusing on 100% recurring revenue, which was the managed service of the software. It's like a Texas two-step, because then we got away from the managed services into just software. We've had a couple of challenge points. This is just from my perspective. They may have other inputs, but what I I've experienced in this journey is one of the hardest problems is going from an old business to a new business with the old way of doing things. Sometimes the old people, the old way of people, not old people. But the way you sell a full bundled service is way different than you sell a managed service, which is way different than you sell a software service. And how you manage these worlds customer experience-wise is way different, too, in a managed service world versus a software world. And the buying process, that is a challenge in itself as you make these leaps into your different personas now, your different company makeup, going from a full-blown to an MSP to a software. The buying process, how people buy has not changed. I mean, it's obvious you need decision makers and et cetera, right? How people buy has not changed. Why they buy has changed. And then why do they buy within your sliver that you're offering is different as well.

Tim Fitzpatrick
So was the main driving decision to split them because they were so distinct?

Joe Macchiarella
It was more of a business decision to focus on recurring revenue. And just like any business owner or most business, you do have lifestyle business owners out there that just want to run their company forever and ever and then hand it down to their children and et cetera. You do have those one offs, right? But most business owners out there, they're in it to raise valuation of their company and one day have a successful exit, right? Not have to work forever. That's your goal for a lot of people out there. And that was no different than our goal was to let's build the value of this thing as much as possible, because one day we don't know when, but one day we are going to have a successful exit on it. And the higher evaluation you get is on recurring revenue. And then even higher when it's when you're a software company, because now you're hitting just incredible financial targets. You're hitting what's called a rule of 40 plus. You do better than a rule of 40. And your valuations now turn from an MSP type company or a full-blown installation integrator MSP, all the above that we were. You go from, I don't know, anywhere from a 3-5X at best case scenario, and you go into a software world and you're north of 10X. And that's the thought process that was in play amongst a lot of other things as we went through that whole strategic process of where do we see ourselves 3, 5, 10 years from now, way back when we started the whole journey.

Tim Fitzpatrick
Do you still own those other two companies, or did you sell those?

Joe Macchiarella
We do not. We have sold them. We broke them out. We made... One big company, 150 plus people or whatever it was. Then we broke it out into an installation Pro Services type company, like an actual company. Then we ran the rest of it, the managed service and software under Trecstone. Then we went and sold the professional services installation company. That was in April of '22. Then in March of '24, we went and formed officially Intelitrex. That's the name of our software as well. So it's always been in Teletrex. It's just we formed the actual company in Teletrex two years later and then sold the managed service business and we focused on the software now.

Tim Fitzpatrick
So now it's 100% Intelitrex.

Joe Macchiarella
100% Intelitrex.

Tim Fitzpatrick
You know what's interesting? I mean, this is a big decision. This is not an easy decision to make. But as an outsider looking in and thinking about it from a marketing and sales perspective, You touched on this. It's really hard to market and sell a company that is doing things that are that distinct and diverse. The audiences are different, the messaging is different, the sales process, there are similarities, but there are differences there, right? And so that makes it really, really difficult to do that all under one umbrella. Did you find... When that was the case, did you find that? That was the challenge?

Joe Macchiarella
Yeah, very much challenging. Marketing is very challenging. Sales, like you called out, it really is, especially when you're shifting focus. And what we what we discovered is what it's very similar to other models people have done out there is more of the flywheel effect. And it's old school when you think about it a certain way, land and expand. Everyone talks about, We're going to land and expand. We're going to land expand. Well, what does that mean? Typically, it's we're going to go land in a market and expand in that market. We're going to go a foot wide in a mile deep in a specific market. Well, our approach is not market-specific because we're software. We could offer service really anywhere. And we're not really focused on a market where we're focused on is who benefits the most from our software. So it really requires you to figure out what are your value props? And really what I found is very successful is not selling your product or service. What you're doing is you're selling a solution for their pain. You're selling a solution for whatever challenges they may be having. And it's a challenger type sales approach to where you're selling towards pain And, oh, by the way, we solved it with our product and service, and here's how it works. So you do it in a different fashion, but also flywheel effect. Instead of going after all these enterprises, Individual companies, that's very hard. And that's a very long pull in the sales process time. And we, as this new, even though we weren't startup, we were because we were starting a new company, a new brand, all that, knew everything. But we had to get volume and velocity to what we had to do. And that's very difficult hitting those individual brands. So we said, okay, who services these brands that need that service? Well, it's managed service providers. So again, a lot of strategy, a lot of think tanking goes into this stuff to figure out, where is my ideal customer profile? That's very key in it. Our ideal customer profile we identified is the managed service world and telecom expense management companies as well fall into that bucket. But it's predominantly managed service providers because they have all the logos behind them, and they have credibility with these companies. They have trust, and all the reasons why people will buy from you, they've already established that. So we go land and expand in an MSP. We go in, we show a proof of concept, we show them that our stuff does what it says it's going to do. And they see the benefits from it. It solves pain points. And and they just go and start unleashing it in their ecosystem. And that creates the flywheel effect. Try to create the phone ringing in versus all this cold outreach and all that.

Tim Fitzpatrick
So you guys have rather than focusing on the enterprise space, you're focused in 100 % at this point on the MSP channel, leveraging MSPs to then sell Intelitrex to their client base, right? Integrated as part of their tech stack.

Joe Macchiarella
That's right. Yeah, that's right.

Tim Fitzpatrick
Which to me makes a ton of sense. And what's interesting, too, is you owned an MSP, so you know exactly what they go through, right? I think it's a great move because you were an MSP. You know how to speak that language, right? You understand the space. Rather than going into a new market that you may not have a ton of experience with, you're leveraging past experience to drive things faster and more efficiently than they would be in the enterprise space.

Joe Macchiarella
That's right.

Tim Fitzpatrick
Which is... Yeah, it makes tons of sense why you did that.

Joe Macchiarella
Don't get me wrong, we've tried... It took figuring out to do this. We did market testing. We did a lot of interview calls. I mean, hundreds and hundreds and hundreds of calls and interviewed people. And we tried different approaches. We did do test campaigns around enterprise and MSP and all these different flavors. And that's where the whole failing comes into play. Don't worry about failing because you don't fail unless you quit attempting. And then we found what works.

Customers Resonate with Messaging Spoken in Their Language

Tim Fitzpatrick
Joe, you mentioned that you had a lot of conversations to validate product market fit for for Intelitrex, what insights from those calls most changed? What you were originally assuming about the market? What did you learn as going through that process?

Joe Macchiarella
Well, lots of things. Going to your earlier point, we were experts in the MSP space. And that could hurt you a little bit because it could cloud your judgment on why and what people will buy. And even though we're experts in that space and we know handle time is an issue for MSPs. And it sucks for their customers when handle times are bad and Average times respond and repair trouble tickets and all that. And we knew that was a pain point. And just going in with a message like that alone, not everyone's going to experience that. Some MSPs, they know that their handle times have increased, but they're still manageable. And so that message is not going to resonate. So you have to have different stuff in your arsenal to hit people with. And that's where, so to your point, what was out there that we started learning that had different value to it. One big thing we learned was as we did our research is, Hey, we're far more cost-effective than the other solutions out there. And we're not all the bells and whistles of these massive type of software, network software monitoring solutions. But we have the features that these MSPs need at, oh, by the way, the price point that they'll find extremely attractive. Because what we identified is in these calls and conversations and interviews that we were doing is 80 plus % of them out there were not leveraging all the features and functionality of the software that they currently had. And we had everything that they needed. So now when you could come in and start hitting people with a message of, if you make the switch to Intel, and it's obviously more buttoned up than this, but if If you make the switch to Intelitrex, you could instantly boost your profitability because here's what's going to happen. Now this is where the conversation could really take off. Hey, you're not going to change your price point to your customers. So your cost point has now went from, let's just say, nine bucks per endpoint monitor down to four bucks. You just instantly boosted your profitability. And now that starts raising some eyebrows, especially Especially in the economic world we've been in here for quite a few years of people trying to save as much money as possible. And now more than ever, people were trying to find ways to save money and boost their profitability. So that message started hitting. And there's other when you start talking about features and other functionalities that the platform has that aligns with pain points they're experiencing, you can start messaging towards that. So there's a lot of different things that really bubble up into that. It's not a one size fits all type messaging approach. You have to have-

Tim Fitzpatrick
Did you get snippets of language that they shared with you where you were like, That's great. That's a snippet we need to leverage.

Joe Macchiarella
Yes. Things like talking to one of our prospects who turned customer and others, too. We started hearing it a little bit more was, man, I got this alert fatigue. Tell me more about that.

Tim Fitzpatrick
There you go.

Joe Macchiarella
What's alert fatigue? We're getting drowned in these alerts that we don't know which end is up, and we're wasting time on ghost tickets. Ghost tickets, that's another one. And now we start picking up, we hear common language being used amongst these prospects and customers. And now we start applying that into other outreach. And it's an immediate hit. Yeah, alert fatigue, that's a real thing. These guys know what they're talking about.

Tim Fitzpatrick
Yeah. And when your messaging can shift into their language, That's where it starts to really resonate, right? Because they're like, oh, my God. Yeah. Alert fatigue. I was just thinking about alert fatigue the other day, or we were talking about it the other day, right? They're like, oh, my God, Intelitrex gets us. And there's so much great information that can be gleaned from having conversations like this. And especially now, so many people overlook it. You record those calls. Now you can take those transcripts, pop them into AI, and AI can analyze hundreds of those calls and pull out all of this stuff so fast. And so accurately, you got take advantage of having that data and leverage that data to drive the decisions that you make.

Joe Macchiarella
That's one great thing that we did in this process was leveraging AI through one of the sales tools that we were using in our outreach and recording all the calls and all that and picking up on all these key indicators. And we were able to, as we went through the product market fit testing, we were able to get all this data and start to get those where you don't have to listen to every call now. You don't have to... You could put in there triggers for if we learned the phrase ghost ticket, okay, where else is it being said? Or Tell me the most repeated phrases or whatever. So we were getting a lot of good intel from the platform we were paying for, it was third party, but we were leveraging it, which had AI embedded into it, which was giving us all this information.

Tim Fitzpatrick
Yeah, so much good stuff there. Well, you won't necessarily know because you did the interviews up front, but I am sure that that helped save you time and help you get to where you are right now faster than you would have otherwise.

Joe Macchiarella
Absolutely. We failed fast, and we just kept pivoting and pivoting and pivoting, refining. We didn't stray from our strategy, but we just kept refining it, refining it, refining it until we wound up walking into that flywheel effect. And that gets back to the earlier point, when we kicked off here is, do the work, stay true to the grind, do it with gusto, and luck will find you. I mean, everyone who's been successful in business has walked into luck at some point, which has got them to where they be. Some people walk into huge luck like a Warren Buffet, right? And gets there. And then there are the people that make a great living and a great life for themselves by walking into small luck. But you still walk into luck and it works out really successful for you.

Outsourcing Marketing is Efficient

Tim Fitzpatrick
Yeah. Looking back on your journey and taking Trex down, splitting it up and selling two parts off and just going all in on Intelitrex, what's one marketing or growth decision that you would say, Man, I would definitely do that same thing over again? And one that maybe you'd be like, I'd do that differently. What sticks out?

Joe Macchiarella
The partnerships, the whole flywheel land and expand, do it over and over again. And there's other ways to slice that up, too. There's way more than just landing with a partner that doesn't cost you anything, but getting contracted, etc. But there are other partnerships that you can get into that actually require financial contribution, but they could be very lucrative if you know what you're doing within that channel. So learning how to sell within a channel and then expanding into what would be perceived as a more riskier channel. But for you, it's not risk because you've already proven you could do it in other channels. It's just a matter of getting in there and rinse and repeat. So the marketing component, I would have to say, and this is just personal, personal perception is I would absolutely outsource marketing just because it just gives you a lot of flexibility. And not only that, the cost effectiveness of it as well and not having to go hire your own massive marketing machine internally, which is going to be outrageously expensive. It could work, and it has worked for many people before, don't get me wrong. But in today's day and age, with technology and everything at our fingertips and all the AI stuff out there. Outsourcing your marketing makes a lot of sense. That's something that I would absolutely encourage folks to do in our old world and previous worlds, even before I was with Trextel. Sunk a lot of money in the marketing internally, and that was a challenge in itself. And wishing you had those avenues you have now back then could have saved a lot of money. And got you more traction. Got you more traction, too.

Tim Fitzpatrick
It's interesting that you bring that up. I mean, selfishly, I'm like, Hey, Joe, thanks for saying that. But it's one of the... Because outsourcing can be very efficient, one of the biggest pitfalls I see a lot of people make when they outsource is they'll outsource to an agency thinking like, I'm going to get everything in one place, right? And the reality most people find is that agencies are great at implementing the work and doing the day to day tactics. But you still need to manage them, and you still need strategy. You need strategy in somebody leading your efforts. Agencies are not going to do that. If you don't have that internally, that's something that you need to outsource as well, because they really do need to be separate. Because there's plenty of people I talk to who are like, I just hired an agency. I'm good. I'm absolved of all marketing responsibility, and that never turns out well. It can be efficient, but you got to make sure that you've got all your bases covered because typically you're not going to get it from one place.

Joe Macchiarella
That's right. You will have different arms in the marketing outsourcing. To your point, there's a strategy piece, and then you have your website content and et cetera. The website so to say. But then you have your marketing outreach, and then you have who's going to manage your LinkedIn, who's going to manage your Twitter and this and that or X now or whatever it is that your footprint out there. You may have two, three, four different marketing legs out there managing your stuff.

Conclusion

Tim Fitzpatrick
Yeah. I love it. Joe, thank you for taking the time, man. Before we wrap up, I want to ask you one last question, which is knowing what you know now, is Is there anything you would do differently?

Joe Macchiarella
What would I do differently? I would say the biggest thing that I would do different is I would make... I'll give you two perspectives here. So one, anyone that's going through the same journey that we have went through, transitioning from an old world into a new world and doing something different, I would definitely make the decisions faster on identifying the people and the things that you need to be successful because you will burn a lot of time, a lot of money. It will slow... It will keep you from getting momentum quickly if you're trying to save people or if you're trying to save the old way of doing business, so to say, you got to be all in it. You got to be willing to change. And if people are willing to change and make that quick change, that's a different story. But when you're making a big shift, you got to be able to move quickly and make quick decisions. And we made many quick decisions in many other ways. And we really got the best momentum is when we just said, here is how we're going to march forward, and here is the personas that we need in order to start moving the needle. So yeah, that. And then I would say for anyone that's just starting a business or trying to grow a business, they haven't gone through this whole transformational shift that has to happen. I would say the biggest thing there is invest the most into generating qualified leads. Everything else is secondary. Of course, everyone wants to be profitable, and you don't run yourself to the risk of going out of business, of course. But sacrifice profit for investment on qualified leads. True qualified leads. And there's a whole podcast, probably, in discussion we can do around qualified leads. Leads, but those qualified leads. I love it.

Tim Fitzpatrick
Where can people connect with you, Joe?

Joe Macchiarella
They could connect with me at intelitrex.com That's with one L. My email is joemack@intelitrex.com. You can reach out to me directly. My LinkedIn, it's very long, so you guys will see it here and it'll be available to you. But you can also reach out to me on LinkedIn.

Tim Fitzpatrick
Yeah, we'll pop that in the show notes as well. But Joe, I really appreciate you taking the time and sharing your experience and learning lessons along the way. Those of you that are watching, listening, appreciate you as well. If you want to connect with us, you can do it at rialtomarketing.com. That's rialtomarketing.com. We help clients build their marketing engine, right? Escape that marketing maze that they're stuck in by building an engine that helps them stop guessing and actually start growing. If you want to know the health of your engine, you can do that over at marketingenginescorecard.com. Takes less than two minutes. Head over there, you'll get a customized report. Super helpful. And appreciate you. Until next time. Take care.