How a $4 App Pushed Me to Expand My Business

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People who are familiar with Nuts and Bolts Media are probably aware that we offer three main services: website design, web hosting, and WordPress consulting. However, you may not know that web hosting was never part of the original business plan, or that, thanks to my frustration over a $4 app for iPhone and iPad, hosting has become one of the largest parts of my business.

The Story of the $4 App

When I started my personal blog in early 2011, I signed up for shared hosting with HostGator. Out of all the big name hosting companies, HostGator is the only one I’ve ever recommended; their support was excellent, my sites loaded quickly, and I had little to no downtime. Over time, I added a few friends to my account so they wouldn’t have to pay for their own hosting.

One day I got an email stating that my “unlimited” account was using too many processes. Apparently you can have as many domains and use as much disk space and bandwidth as you want, as long as you can do it within fewer than 25 processes. (Doesn’t sound unlimited to me!) I called support, who advised me to sign up for a reseller account so that each site could have its own cPanel and its own set of process limits.

I switched to reseller, began charging each of my friends enough to cover the increased monthly cost (still cheaper for them than opening their own accounts), and all was well. However, giving each of my friends their own cPanels meant spending more time helping them with random issues and questions.

In the meantime, HostGator was acquired by Endurance International Group, the same huge conglomerate that now owns Bluehost, FatCow, A Small Orange, HostMonster, JustHost, and a large number of other hosting companies.

A few weeks after the switch, I came across Host Manager, an app for iPhone and iPad that would allow me to manage my reseller clients on the go. This is perfect! I thought. Now I can deal with all this stuff even when I’m not in front of my computer.

Except I needed to install a Perl module on the server for the app to work. And as a reseller, I didn’t have root access to the server. I opened a support ticket and expected the issue to be fixed within minutes.

HostGator Gets Greedy

Imagine my shock when HostGator refused to install the Perl module I needed to use my app. “Sorry,” they told me, “but we can’t install a module that might affect other users on the server. You’ll need to upgrade to a VPS if you want to use it.”

There were a few problems with that suggestion:

1. The Perl module in question wouldn’t have affected other users in any way unless they wanted to use the Host Manager app, too.
2. HostGator’s VPS hosting is ridiculously overpriced.
3. I’d read many negative experiences from people using HostGator for VPS and/or dedicated hosting.
4. I didn’t need a VPS - even with my friends onboard, we were perfectly fine using shared hosting at that point. There was no reason to upgrade and pay more money.

I tried pleading my case but HostGator’s new post-acquisition support wasn’t hearing it. I threatened to leave, and they continued pushing me to upgrade to a VPS despite my argument that I didn’t need it. It gave me flashbacks of dealing with Bluehost’s support on behalf of my design clients - HostGator no longer provided the awesome support I’d recommended so many times in the past.

Nuts and Bolts Media Expands

I spent a long time thinking about HostGator’s abrupt decline in customer service, as well as the $4 I’d wasted on an app that I desperately needed but couldn’t use. I thought about my clients, who had many complaints about Bluehost, Dreamhost, GoDaddy (shudder), and other big name companies. And I decided I could do better.

I sat down and made a list of the most common issues my clients had with their hosts, going back through emails and notes from consulting calls to look for exact quotes. This was the list I came up with:

• My site is loading slow and I don’t know why.
• Sometimes my sites go down for hours at a time.
• They treat me like a number.
• When I ask for help, support just sends me a link to an article that goes over my head.
• I have to upgrade my account and pay more money to make cPanel backups (Bluehost) or get decent load times (GoDaddy).
• My site has malware and GoDaddy won’t help me get rid of it unless I buy their “malware protection package.”

Looking at the list, I could feel my clients’ frustration on top of my own, and I knew it was time to act. I purchased server space in the same Dallas, TX server farm that is used by big companies like Google. I shook the rust off my brain and reacquainted myself with Linux, which I hadn’t used in over a decade. In September 2012, Nuts and Bolts Hosting opened for business alongside the design and consulting services we were already offering.

How Expansion Has Affected My Business

I try to be realistic above all else, and I have no plans to make millions of dollars from the hosting part of my business. Right now I earn enough to break even plus a *little* wiggle room to cover all the licenses (cPanel, Softaculous, WHMCS, etc.) I had to purchases to make things user friendly for my customers. Eventually I expect it to become profitable but that probably won’t happen for a number of years.

Running a hosting company, however small, takes a considerable amount of time and effort. I’m constantly tweaking the configuration of the servers to make sure sites load quickly. Customers email daily with questions, some of which aren’t exactly simple to fix. I spent Christmas Eve troubleshooting an email issue when I was supposed to be celebrating with my family.

All that said, I love providing superior hosting services to my clients. I love getting their feedback, receiving their testimonials, and reading awesome review posts (like this one). Every time a client expresses happiness with their decision to host with Nuts and Bolts, I remember why I did this in the first place.

If you’re considering expanding your business, whether it’s a solo freelance venture or a company, here are a few questions to ask yourself.

Is there a need for this? I started offering hosting because there was a clear need for something better. If you want to offer a new product or service, make sure it’s something you know will benefit your existing and/or future customers.

Can I make a profit from it? Money isn’t the most important thing, but it’s always a factor, especially if you’re a small business owner. Make sure that the new arm of your business will pay for itself within a reasonable timeframe and will eventually be worth your effort.

Do I have time for something else? Some additions to your business may not be very time consuming, while others could take up more time than everything else combined. Make sure you’re able to devote the time to a new project before you commit to it.

Does expanding make sense? Finally, make sure your plans for expanding your business fit into your overall business plan. For instance, it wouldn’t make much sense for a dentist to sell car parts in the front lobby! Anything that will divert time and energy from your existing offerings must be a good match to be worth it.

Have you ever been involved in a business expansion? How did it work out for you?