 Right Tom here from Orange Systems and I am joined by Riley Chase of Hostify And when did we do that first video? I think it was July 2019 was the first time I was on Tom's channel. It's a millionaire now Okay, we maybe not quite a millionaire that there's that misconception of you're making a million dollars and recurring revenue That's true. Yeah, so we're gonna talk a little bit about the sass journey How he's just an overnight success and you can do it too You can be a unicorn and just you just have to scratch some itch and find a need and we can oversell Entrepreneurship or something, right? Well, you actually are very realistic like I am about this as a topic I I never say it in a way of gatekeeping I sometimes think entrepreneurship can be oversold, but but I only say oversold not that it shouldn't be sold not that shouldn't do it I don't think it's like that We should as entrepreneurs who've been successful roll that ladder success up and not help people But I always want to talk about it's real. You have to be very realistic It was not an overnight success you've put in You could you even count the hours you didn't work a 40 hour week to build this you to build the hostify company, right? That's this. Yeah, it's it's definitely been a lot of hours It's it's it's an idea an alignment and Having this whole If I don't know it's so hard to describe You know, isn't it cuz you give you your in shock when you hit the hit that mark, right? It's yeah Well, the thing is I never really imagined that it could ever be that big actually when I started it I was actually thinking this was just like a yeah I'm gonna this gonna be a test run to try starting a SaaS business and maybe if I get 10 customers I remember actually thinking this if I get 10 customers It'll pay for itself and that'll be a success for this project and I can move on to something more interesting or more complicated But as I got deeper and deeper into it and got more complicated more interesting and I found more customers than I ever thought so Yeah, so a few years ago to give you a little background. Well go we can go further back When did you start hostify exactly? May 2018's when I launched it and I started like trying to put it together in like February March 2018 yeah, and one of the things that made me interested in the whole project won't not just the fact that I use unify but because He publicly blogged step by step and by the way hostify wasn't the only thing you started you actually tried an MSP You tried what else did you have going? You had a couple other things. I have tremor what they all were Yeah, so for like four years before starting hostify. I had an MSP business called Lachlan Networks after I started hostify I thought well, this is cool. It's growing really slowly But it's it seems like like it's working out But I I thought well try making a couple other things just like this I think you got to like a thousand a month and I was like well Maybe if I could just like do ten more things to get to a thousand a month each then maybe that'll work So I I started like a VPN service called ghostify. It's the other one and I started a another service Called captify, which was like the wireless portals integration for unify servers But I've since shut all those down. I'll start an MSP community and I don't have time for that So I shut that down. I I think that's important to highlight that there it you're Even though you are someone who's diligent willing to put the work in not every idea flies That's just something I like to be as realistic as possible I sometimes see the oversold of hey, look, he's making a million you can do it too by my book And I'll tell you how like that's the playbook, right? Yeah step by step And there's not really a the career paths are gonna be very different The commonalities is what you want to look for is like yes. Yes. We all worked hard We all put a lot of things in there. We also failed at a lot of things. I don't own suburban computers anymore I don't have my electronics repair company anymore. I don't I don't have and I don't I there's several things Thomas failed at as Well, so I usually to be very honest about it But back to the hostify so if you're not here with a whole unified platform for those you maybe just came here talking About starting a SaaS business or you know follow whatever links led you here The one thing about it is you got to find something where there's a hole in the market Yeah, that sounds really obvious now unify has the controller software that they give away for free You can just download it and me I'm bad at sass because I said why wouldn't I just host it myself? So I hosted myself and why wouldn't other people host it herself? That's where I'm not thinking like Riley who says this seems like a little bit to set up to host I'm like, you know my mentality. Yeah, sure it is Here's my YouTube tutorial on how to build your unified hosting and Riley says no I think people want to pay for this as a service and so this free controller from unify that Manages the unified platform Riley built the platform that manages that that actually takes and Takes care of all the hosting for you takes care of all these Little intricacies of what it's like to set it up and I actually brought you all the way into you do some Qa testing I laugh because I think as big as unify is I mean, here's a company that's got a market cap of somewhere north of ten billion dollars, right? And people ask I get tagged in Twitter and Riley and there's a couple other people like I think Chris from crosstalks been tagged twos a couple times They'll ask us should I upgrade to the new version? Yeah, and we're like it's always the question It's always the question, but it's the doing things at scale Riley's really kind of niched into that become kind of like the Voice of unify that unify doesn't have if you're not fair also with the other side of unify is their support It's not great. They give away a product. They don't give away support They don't even have a paid option for support It's weird that didn't unify have a market doing this for a little long So for when I started so I we're actually directly competing with ubiquity. They had after I launched host five They had to actually just launched their own hosting product and their own support products So they had unify elite and cloud hosting that went along with that as well and so yeah, we're actually competing head-to-head, but We kind of beat them at it because they stopped offering it and now they don't do elite support You can't buy it anymore, and they don't do cloud hosting They still have customers that we've been migrating over to hostify They haven't done updates on their controllers in years So they actually have Controllers out there that are vulnerable with security vulnerabilities running two-year-old five dot eleven dot fifty I think it was or something that's crazy, and yeah, so we've pretty much taken all their customers though they no longer offer it and Yeah, it's just really weird. It's really weird to have a company you have that gap like that And so one cool thing though is near and dear to my heart is you're extremely public about all this or the blog post You've really done a great job of Doing regular updates to step all along the way of how you got to where you are to be very transparent about it That's a transparency is huge because I like to get share with the audience So to speak how we got where we are no hiding it, you know, no back-end. I didn't tell you by the way My cousin's the guy who owns unify and that's how I started in right now. It's not your cousin. So no I don't even think matter of fact at some point. I don't think they like your logo. Am I right about that? That's right There was a little bump in the road and things like that they they They care about their intellectual property to an extent So it's those those are some of the challenge for what's the so when we talked in 2018 and we did the video You would actually had a free tier that you offered and this is Common for your building a SAS model offer free tier get customers charge for it. Was that really your plan or was it just a kind of So Yeah, the free tier. Yeah has a lot of pros and cons, but it did it did really raise awareness for our product and so yeah, we had a lot of free plan users and Yeah, obviously the idea was hoping that they would convert into paid plan users But that that didn't really work out the way we thought it would we got a lot of home users who never converted And so ultimately it was too much for us to manage on a support level and Yeah, so we ended up stop offering the free plan, but at the time it was still a good idea and I don't regret doing it Yeah, I want to bring it up that way because a lot of people I know we're so I got some hate All right, because I'd recommended you and said the free tier the there's some angry people commenting on that video Probably still today time. You said they had a free tier and they don't offer a bait switch and things like that Oh, but it's there's here's the thing It's not like you had some intention to mislead people. It's the we don't know when we're building some of these products We don't know he's under it's hard to say until you do it and you're like, oh cool I think these people will convert and then when they don't you're like I have a business problem At some point if the free tier and you are not the first ass company run of this if the free tier gets too big And you can't sustain the cost of the servers on the back end Then you would end up actually toppling over as a company like oh, okay, cool I have a million users now that don't pay I'm paying more to vulture than I have coming in for the paid users. My service is non viable now Yeah, so to be like perfectly honest is actually right after Tom made the first video about us in July 2019 I was the only person at the company and you know now we're like a team of eight people But it was just me doing support marketing development everything and all of a sudden he made a video They got 11,000 views. That's the biggest thing that ever happened to the company at that point We had like 2,000 people sign up. Yeah within like two days and They all needed help, you know, how do I adopt how do I do this? And so it became actually a liability because If I didn't help all these people which I did for like literally days like all day and all night I was worried that it was gonna give us a bad reputation if we weren't helping the free users They start leaving us bad reviews and it's like they weren't even paying customers to begin with and they never would have been So it became a real problem, but it's something we might revisit in the future But as long as we can keep growing without free users, it's it's probably not something I'll Be doing again soon, but it was great at the time. Yeah, and it's this is one of things I just want to bring some of the honesty to this these are decisions. It's not like we don't want to I mean if I can give more things away for free, I would but I have a sustainability on there It's like the reason we charge for the support that my company does is you know That's our business model and I've had people still angry me Oh, you don't have the time to tell me like a whole recommendation of products I'm like not really I did a video about it. I don't have one-on-one time It's not as yeah, I have to think about this as a business owner scalability and you do as well I mean we want to share as much as we can. Yeah, we enjoy sharing We don't expect we don't have just like you I mean you don't have an expectation But no everyone is going to pay you money and neither do I when I'm sharing It's honestly just to help people and then you know a percentage of them do become customers But that's not the expectation now What are some of the questions you get said one of them? I know that comes to me a lot But I've been it probably comes even harder to you when you've done some of these other Sass interviews and things like that about how you built the product is how do you hire people because you have a fully remote team and Having a floor remote team and how do you trust them like for me? I did vetting all the people even when they work remotely at some point in time physically worked on my office Yeah, different. I have contractors that never worked in the office. That's different But their contractors are not integrated as they are like you guys they're writing the code for you Yeah, so it's um, yeah, it's really an interesting topic and Taking a step further not only have I never met anyone I work with but none of them even live in the same country So I'm in the United States here in Michigan and I have employees and I've three employees in India a guy in the UK A guy in Germany a guy in Ireland. I've never met anyone before the guy. It's been working with me the longest so fun He's been working me for me for two years now and we have never met in person So it's yeah, people are really surprised by that But it's just really fun because we're able to like get people that are like really passionate and talented And instead of just searching for those people locally, which I wouldn't be able to find them. We're not To find that these people, you know, I have the whole world I can look for them And so yeah to answer your question. How did we build up the trust? My first hire was Safwan and he's in Mumbai, India. He used to work for ubiquity I met him a year before I hired him He I'd submitted a support ticket to ubiquity and he was actually riding me back that's cool and helping me with it I you know, I thought this guy's pretty smart He knows what he's talking about and then we actually became friends on Twitter so this is very early days and hostified because it was a year before I hired him and Yeah, he we just kind of became friends. We talked for a whole year He wanted to start a wisp in India and we talked about that and Yeah, we just kind of made a natural friendship and over time we gained more trust But even then it was still like wow, this is crazy I'm gonna hire a guy in India like if if you did something, you know I'm giving a lot of access to stuff and like, you know, you have to really trust somebody so it's It's a challenge for sure. I mean even Technically cuz you know the if you're thinking about fun things from a security standpoint the insider threat Wouldn't they just try to steal your employees like that? It doesn't happen as often as the risk is never zero But it doesn't happen as often as you think I've never I can't see never I've had it one employee that tried to steal some customers in my history But for the most part the people that work here the All of them I've had to turn over keys to the kingdom They have access to a lot of proprietary information They have access to customer passwords and things like that They have to to get their job done and you kind of have to trust them. They have to touch the code I mean, could he could he delete everything right now? He has access to a lot of stuff Yeah, but I mean there are there are you have mitigations in place Yeah, but he could be very disruptive you you can get it's you have I didn't give him access all at once either It actually took me a long time to give up that control and one of the first things I did was like implementing duo and some other things that made me feel more secure than now that it wasn't just me Working on stuff. I needed to have security more security in place. And so that's that's part of it, too Yeah it's a really tough thing when you're building a business you have to think a lot about is building a team that you can trust and Putting them in places because if you turn over to micromanaging and one they don't like it No one likes to be micromanaged. I don't some business owners really have a thing for doing it I've watched a lot of them and it can hurt your growth quite a bit. It can Hurt morale. It also will just make them ineffective. They throw their hands up I'm not doing anything because they micromanage me So you do have to have a little bit of let go if you plan to grow that's just as simple as it is and Now you've hired how many more people you said eight people having people yeah, so I ate with me Yeah, wow, so that's uh It's small incremental steps, but the other side of that That's what allows you to sit down here hanging out with me because you live about what two hours away. Yeah, yeah Try down two hours and company right now. Yeah, and you also you did a road trip Yeah, I did I took a whole entire month off and I didn't really go on the computer at all I drove from here to California and back with my fiance and yeah, literally for a month I took a vacation and I didn't work on the company Yeah, that was in May of this year just responded to general things and like yeah stayed in communication with the team But you weren't actively the one doing it right and I've kind of done the same I you know I have a video where I did where I said do I sell my company or option B Which is kind of link bait for those who didn't watch it. I hired someone essentially that works here full-time Titles VP, but technically they run it. I should just call the president of the company and move my name to founder But where's only a few of us here? So I don't really need to be so technical I want to make videos and play with technology So I now have built myself an automation team that does that you build more of a functional automation software to do it But the concept is the same of where you want to go What are some of the biggest challenges you ran into it? I we talked off camera about this I don't know if you want to talk on camera about missteps on Projects started that didn't go that were sunken costs and yeah, I recovered. I mean there's been a lot of Different challenges and scaling the business beyond just myself So I mean the first biggest challenge was hiring my support employee my first support employee Safon And you know luckily he had a ton of experience with ubiquity and stuff But I still had to create a lot of systems and processes for you know how we do things and billing and all this different stuff and So reading the book that the emith revisited really helped me think about like that's a good I could remove myself and that's that's really where it started for me was reading that book because I one of the things in the book was the org chart and it was like write down an org chart and Write your name next to every role and so it really forces you to think about instead of you doing everything It's like okay. I'm currently doing all these different roles But there's separate roles eventually someone's gonna fill these roles and so yeah for me writing down support development sales marketing Design and so like writing all this stuff down and now once I got to a million. I actually million dollars in revenue I could afford to hire a person for every role and so that's where we're at now We have three support people on our team. We have a full-time developer designer Next can be a content person. So it's it's starting to become No, it's why so long it takes a while It's but it starts with the foundation if you decide that you want to be an entrepreneur And I said this a few times on a few for me say this go I hate my job is not a business plan and the business plan isn't like necessarily something you need to pitch to investors It's it's talking about the structure and you creating that structure and then like you said putting something on the box and emith Revisited that's a good book. I'm trying to remember which other ones if I have some other ones I'll leave them linked down below that I've read. I know I've got a list of them They didn't have them ready But there's a lot they all kind of preach in a different way the same thing though is starting to build structure in systems processes processes and even when you're a Single individual starting a business whether that be an IT company or something in a tech space like I work in or you Want to start a SaaS company like Riley the writing down a process, especially when you're by yourself You're like, I know how to do the process. Why should I document it? I still have documents that only I follow because at some point someone I will hand them off to this is the process for this And when you start from that mindset Eventually I can have your work instructions from years ago when I started yeah are still maybe been modified and tuned up to be Modern, but I still always started with each of these processes Then a person can be assigned to that process on that name on the org chart These are the steps the person has to be able to follow that helps you one higher for that position and eventually see the lights in The tunnel at one day. I won't be the one doing this. Yeah, I won't be crimping cables anywhere I haven't crept cables though in about 15 18 years at all I did it when I very first started my company and I realized one I'm not good at it to it's way better done by people who do it all day So now we always have contractors, but it's still a process. So many since all these cables I need to get this infrastructure done. That's a position that position happened to be in my category filled by contractor External same with accountant right now. We still use external accounting and But it's a process. This is what has to be submitted to the accountant But at some point I can draw a circle around that go we want a person internal as I've become big enough I've actually thrown it over to Brett's side of the house now. He'll decide when we're big enough for it When you whenever we have to replace that but it's a still each one's the same concept when you're doing this to build to where you want to be Let me think what was the I Guess we can't talk as much about some of the Hardship of hiring some of the places and things like that. Can we know I can talk about that stuff Um, I want to be real that there was some money lost here in there It wasn't you just didn't slowly build this and there's no losses Yeah, it's it's tough topic, but What can we do to turn this into a learning lesson? Yeah someone else who is going to face this exact one What's a good vetting for hiring someone to be the coder to do some of this? That's I feel like I'd be more comfortable talking about once we've like actually Accomplished, okay, just set out to do like we're still in the struggle phase on that one But I'll talk about like just a little bit about it. Yeah, so You know, I watch a Minimal viable product MVP for host fire on WordPress coded it myself and everything and I'm not the best developer And so we've struggled with that as we've scaled We want to add new features like be able to reboot your server like from the host fire dashboard or like Do a lot of stuff that we do manually for our customers like adding SSL certificates and stuff like that So back in I think it was May 2019 So over two years ago I started rewriting the website on to Laravel where we'd have more control over the framework and we'd be able to add more features and customize it But I got in over my head because I'm like I said I'm not that great of a developer and as much as I tried to learn quickly I was also dealing with other sides of the business like Marketing and onboarding and support and and so I got in over my head a little bit and I realized I need to hire someone so I did hire an Agency and they worked on the project for over a year and There was a lot of cost involved with that Developers are very expensive particularly when you hire an agency instead of your own team And so the the hourly range on that was like 150 to 250 an hour spread over a year part-time and It adds up. It was probably $80,000 or so before I Realized that I hadn't really been involved in the project as much So I'm I'm definitely accepting the blame for that as well because I've you know I had other areas of the business I was managing but I was looking at the end result And it wasn't exactly what I was hoping for and so I decided you know I need to get more serious about this hired my own developer part-time in Germany great guy and So he started working for me part-time and he looked at the code They wrote and he said well we need to throw this out We need to throw it out entirely and I was like no we need to just like you know make it better But he gave me all the reasons why we need to start over and technologies have changed even in the short span That's crazy thing. It's how fast stuff changes even in that short time span things have changed so much So he was like we can do this a lot better if we use this framework And so yeah, so then that was in January this year and he said this will take me like three months This website super simple. That's what I heard from the last team to yeah, I thought myself when I started working on it and Yeah, and so now it's been nine months. We're getting ready to launch the new website Hopefully in the next couple of weeks. So yeah It is September of 2021 so depending on when you're watching this We will launch date is still up an area. It's a great intense But you're always watching the video in past so you may be watching this a little while It may be launched already, but these are once again back to the transparency One you blog a lot about this to it's not all sunshine and roses. You didn't just overnight you see some of the success now and I want to make sure people are very clear. It was a rough path There was a money that we will cry over and sometimes I think back and I replay it You know you go to sleep you replay go. What would I do with that? You had that money? I spent on that thing that didn't go anywhere. Oh, yeah, okay No won't dwell on it, but let's get back to the future to wrap this up I seen you posted you're building a new office. Yes. Yeah, so let's talk about where you're at now What you're doing is I seen I seen that article about I You know they call you a micro sass as I think that was what the term was that articles I'll leave it linked down below. Oh, yeah, I see that post today. I think you got tagged in Twitter in it Oh, I don't know. You know, it's one where you're writing an ATV. Oh, yeah Yeah, I made a post about me. Yes, I made a post about you And I seen you're building a new garage new office and I think that's pretty cool Still keeping things small not going down your means. I know that was I read the article I thought that was actually probably a good point You don't let it go to your head because you want to keep focused actually Riley's been here a couple hours We were supposed to record a while ago He's got this whole tangent conversation about business and things like that all day. Yeah, we can just talk all day We said at some point we should probably record some of this But I'll leave a link to that article but right now you're you're building so you have a dedicated office because by the way, you got all the way here and you Other than living at a very low cost in Northern area of Michigan or mid area of Michigan where the cost of living is lower. You're not paying those LA type California I'll think right. It's really inexpensive to live here in Michigan. If you didn't know yeah, Google us look up some map I think how I mean you you own like a couple acres 10 acres He was 10 acres now. You can't go by 10 acres in California Well, you could but you would you would not have you'd have to have a much larger You can't have a micro saspis Or something But anyways, you're building an office now and what's kind of the future plans where we're going from here? Yeah, so yeah, I'm building an office. That's that's kind of more for me than the business. Yeah But it's really just like a four-car garage the second floor It's got two-story four-car garage the second floor is gonna have Two bedrooms where one of them is gonna be my office Separate from the house be nice and quiet. I can do yeah, hopefully do some Tom stuff I'll get the YouTube studio someday. That'd be awesome. But yeah, the you was checking out the suit We ended up being a big conversation piece of yeah, you know, I built a lot of this I'm not someone who's I geek out a little bit about film stuff and things like that But honestly I do it to make anything I can do to make content easier Riley was kind of impressed when I clicked a button and automatically turned on all the lights. Yeah, right? It's It's awesome. I'm sure he's gonna take some notes for release here of all the stuff I bought so you can exactly yeah, I'll have a new space for me to work in and I'm really looking forward to it because Yeah, it's the journey has been kind of crazy like I moved in with my Francis parents for a year before we were able to buy our house and Now we're finally have enough money that we can build a my own office and everything and it's really exciting and then for the business We have a really great team now and things are moving so fast It's so crazy how much you can get done as a team and not just by yourself and so I'm really excited for The next phase of the business It's actually a lot more fun now than it was a year ago or two years ago when it was just me especially And things just moving really fast. So yeah, we got a new website coming out. We have a lot of good stuff going on So yeah, and I seen you know, you've been posting things about Spending more time thinking about the business and this is it takes a while to get there But this is that whole you can kind of start taking these larger views and go alright What I can see all the team members working and because I'm not the one Functionally having to answer every support you can kind of then start shaping the vision and keeping everyone together, which is awesome No, I mean, that's the ultimately I I always think about it from a happiness standpoint That's one of my biggest drivers myself for starting a business wasn't to get rich Don't if you want to just make a lot of money go work in finance. It turns out to pay really well You can make a lot of money you go work on Wall Street as a lawyer There's plenty of jobs that pay money But happiness and freedom is kind of if those are better goals and cool We do want to make money and it's still the goal of business But it's it is a longer journey a harder path and one that is Like you said, you had several things that we talked beginning that kind of flopped before we got there So that's still gonna be the reality of before you get to build your four-car garage But I will leave links below the previous interview and I haven't watched it I should have rewatched that one because boy, what a difference two years makes in years make Oh, it was it was almost actually it's got to be close to three years. Is it 2018 or 2019 2019 July 2019 2019 Wow, so yeah, it's just just a little over three years then But we're you know a whole pandemic away. Yeah, it feels like a decade ago Feels like a decade. Everything feels like it was just forever in the before times before times But I'll leave links all this other links so far I'll leave links to that to his blog where you can follow the journey because you still have all that up, right? Yeah, I haven't posted a blog post a long time But it still starts with that earliest stuff and I think it's so cool You break down a lot of your thoughts a lot of your details on there You even have the cool little thing you I got that you got that graph that shows how much revenue you make annually Yeah, that's so our chase calm. Yeah, if you click on hardcore year From 2019 I set a goal to get to a hundred thousand a year and every month I posted updates about what it was like and and the progress I made and I ended up getting there Thanks Tom a little early, so Well, and I regret myself like I started my business all the way in 2003 I wish I would have been someone I don't I didn't create content back in 2003 and I didn't journal my life So there is a gap where I can it's kind of a blur from 2003. Yeah, I started becoming a content creator around 2016 or 17. I don't know I did a lot of things. I kind of know what I did like there's it's hard in that phase to document it Because you're so busy to I Yeah, I bounced around from so many different things. I don't really have a journal of my life I may have a bunch of photos and memories of my life But not not like he's got just giving me something you're gonna look back on because you're so young right now I mean you're a 28. Yeah. Yeah, you're so young right now You're like remember what it was like remember was like cuz I mean I was I was like 26 or 20 some 45 now I started 18 years ago So I mean my 20s when I started the business, but because I didn't document it I was like I'm not being really hard. I Don't know how much we did I I mean I can look it up in my tax records But it's not really the same as like what you did. So I think that's really cool So check all that out all the links will be down below Thank you for joining me on this one. Maybe we'll make one more video before you leave I don't want to think about it. So cool. Thank you. I'm the Tesla Absolutely, so we're gonna we're gonna go do some fun stuff. Take care all the links will be down below. 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