The techpartner.news podcast, episode 1: Why OxygenIT dropped 80 percent of its customers

Introducing the techpartner.news podcast – a new series where we go behind the scenes with leaders across the Australian tech partner ecosystem. Each episode dives into the real-world strategies, challenges and turning points that are shaping the future of tech partnerships. 

Three years ago, 20-year-old managed services provider OxygenIT dropped 80 percent of its customer base so it could start really making money.

During the depths of the COVID lockdowns, founder Timothy Clarkson faced an existential crisis after acquiring another business.

On the latest episode of the techpartner.news podcast, Clarkson explains how he found himself considering hitting the big red button and shutting OxygenIT down for good.

Despite reaching NZ$4 million in revenue with 19 staff, the New Zealand-based company just wasn’t turning a profit.

“After that acquisition, when we came out of lockdown, I was in a Sydney hotel room looking at my insurance policy and went, is it better to get myself out of this hole by looking at my insurance policy?”

Instead of chopping down the whole tree, Clarkson figured there was a good business somewhere amongst the twigs – and so he got to pruning,

“We got rid of 120 customers out of our 150 customers.”

Clarkson downsized his business and decided to focus on customers that would recognise the value he and his team had to offer.

“ Not all customers are created equal," he told the podcast.

"Some will see value and you'll go into them saying, you need to do this for security and you need to do this, and here's how we work, and they'll go 'fantastic. I just wanna get on and grow my business'.

"Others will go 'but I can do that myself...'. The minute a customer’s speaking like that, we are not aligned.”

This trimming was part of a broader strategy that stemmed from Clarkson changing his mindset about business completely.

“ I was engineer-driven. I thought if I did a great job, I would get the customers. And it turns out that's not the case," he explained.

“Engineers are the people who keep the boat afloat, but sales is that mast you hoist up to drive the business forward.”

Clarkson began to educate himself on sales and marketing, pushing back against what he said was an engineer’s view that sales is a dirty word.

“ I was spending four hours a day watching sales and marketing training videos … In the car, which my wife absolutely hated, was 1.5 speed Americans talking about sales and marketing," he said.

“For about two years I just lived sales and marketing to the point where I now love it. I love engineering, I love fixing the problems, but I like the idea that I can take our solution that fixes a whole business to a business owner.”

With the success of this revamped approach, Clarkson has found one of the most helpful things he has done since is find time to talk to his peers.

“ I joined a few peer groups to sit amongst other MSPs are doing the same thing," he said.

"One of the best things that an IT provider can do is join a peer group to get those people around you,  because they're the only people who understand what you're going through.”