12 years ago, my talented wife and I had an idea for something known today as “Managed WordPress Hosting.”
Yes, I’m half of the inventor of managed WordPress hosting, which is now a multi-billion dollar hosting channel, and you’ve likely never heard of me.
That’s because Pagely, the managed WordPress company I co-founded isn’t venture funded, and it’s not on Fortune’s list of billion-dollar unicorns. We were then, and still are very much today - Indie Hackers.
While the lack of fame and community back-pats can get under my skin, it has far from deterred me, because Pagely is very much an anomaly, in the sense that the business employs dozens of highly skilled and engaged employees and spins off ample cash -- from real paying customers.
My wife and I own 85% of the company and the other 15% is optioned to our employees. We’re also debt free, and we’re proud to say revenue has grown year-over-year (YoY) since launch.
So if you’re looking for a post about growth hacking your way to TechCrunch (closest we ever got to TC was a 1 sentence mention in a competitor’s featured PR gush piece) or securing millions in outside funding, just stop reading right now, because that is not this post.
Instead, this post is here to share a few lessons I’ve learned along the way, and maybe inspire you to revenue-fund (bootstrap) your business.
1. Exponential growth isn’t everything.
We hire as revenue grows, which it fortunately has over the years. This equates to slower growth, but the trade-off is that our growth rates is sustainable, we can remain focused on our core values and mission, and we’re better prepared to ride out turbulence.
We’re OK with slower growth if it means happier customers and team members.
Adding investors to the equation changes the focus of a company and the expected outcomes.
Values, customers, and employees tend to take a back seat in growth-at-all-costs ventures that care more about getting their next round than anything.
According to research, this makes complete sense.
In 2002, California State University Finance Professor Cyrus Ramezani reviewed more than 2,000 public companies, examining the link between shareholder value and business growth.
He discovered that the companies with the fastest revenue growth (average annual sales growth of 167 percent over a decade) performed worse in terms of share price than their slower-growing counterparts, whose growth averaged 26 percent.
And if you think this is just an outdated study, a more recent one confirms that the faster you grow, the more likely you are to fail.
The Kauffman Foundation and Inc. Magazine conducted a follow-up study of businesses five to eight years after they made it onto Inc.'s 5,000 fastest-growing companies list.
The findings? About two-thirds of companies that made the list had either shrunk in size, been disadvantageously sold or gone out of business entirely.
The reason? They failed to make it through to the final stage of enterprise maturity, where a company finally becomes a self-sustaining entity.
With VC-backed startups, there will always be that incentive to keep scaling. It never goes away, but your investors will. When they aren’t seeing a return on their investment, you and your company are typically left to die on the vine.
Fun fact: The No. 1 reason funded startups fail is because they run out of cash.
Bonus - No. 2 according to me - is founders fail to invest in employees and cherish customers.
Or in the case of WeWork it can lead you to misunderstand your finances.
Debt is a wonderful tool, when used appropriately. And no, your office foosball table and onsite chef aren't considered appropriate uses of debt.
Starting small and nimble allows you, even forces you, to find and act on any advantage that you can. Surviving the lean times ultimately makes your product/company stronger, and you stay in control, answering only to your team, your customers and yourself.
Which brings me to my next point...
2. You can’t hack your reputation.
Your brand “isn’t what you say it is – it’s what they say it is.” -- The Brand Gap
A stellar reputation and continued innovation is how companies survive long-term.
Wordstream Founder Larry Kim’s SEM research backs that statement.
He found that the biggest driver of high-performing campaigns versus poor-performing ones was brand and reputation.
Searchers are much more likely to click on a result because they recognized and held affinity for the brand, not because of a clever headline, CTA or incentive.
Intercom editor Sara Yin puts it perfectly:
As the internet gets noisier and filled with companies jostling for your attention and money, it’s the authentic, personal brands that form real consumer loyalty. If you’re successful, other companies will probably copy your homepage design, steal your code, rip off your product interface, steal your logo, and much worse, but they can never copy your mission, your values, your drive, and everything that trickles down from that.
There is some magic amount of money you can pay a “crisis” PR firm to smooth over bad press.
While you can pay your way onto Forbes and TC, you can't pay people to love you (OH, wait -- I forgot about affiliate programs :sad-face:).
IRL, there are no shortcuts, quick wins or "growth hacks."
It's a lot more boring than that... Day in and day out, at every touch point, a successful company delivers an obscene amount of value to every customer, in turn delighting them and not having to ask for anything in return. That's what we call +1 at Pagely.
I feel the best way to accomplish that is to invest heavily in your team (Hint: it’s more than money), so they invest in your customer’s success.
3. Fewer users can actually mean more money.
It didn’t happen overnight, but as the larger accounts organically gravitated toward our services with the evolution of WordPress utilization at the enterprise level, we realized that the margins are healthier when we service a smaller pool of clients at a higher price point.
It works both ways: Larger clients are accustomed to spending more, and the higher profit margins on these accounts allow our team to serve these customers to the fullest, without concern of maintaining an arbitrary level of profitability. We are simply able to do more to serve this class of customers which yields them additional value.
Many of the players that have come into the Managed WordPress Hosting space have targeted the lower end of the market, wrongly competing on price, focusing on individuals and small businesses.
As this was occurring, we decided to go in the opposite direction, refining and expanding our service offerings to focus more on the business needs of enterprises, universities, and major media brands.
At Pagely, we need far fewer customers since our deal sizes are typically much larger than our competitors, so we’re much more targeted in who we approach and the message we use to attract our customers. High volume-low margin businesses do work, it’s just not the business I want to be in.
4. Being a first-mover isn’t as newsworthy as securing another round of funding.
Pagely’s 2009 launch was not our first attempt at Managed WordPress Hosting.
We tried 3 years earlier to launch a similar service, and the timing just wasn’t right.
When we decided to restructure and launch Pagely in 2009, we thought it was the right time and thankfully the market did too.
And while we did pioneer Managed WordPress Hosting, it’s really a catch 22 situation.
The fact that we’re anti-VC has allowed us to keep the focus on our customers and our culture, thus enabling us to sustain long-term growth, and keep true to our “business is personal” philosophy.
But because we don’t have investors, we’re not considered newsworthy by the big tech publications and never really get the credit we’ve earned. :sad panda:
Admittedly our space is not disruptive or game-changing, however Rand Fishkin seems to have read my biography as he recently tweeted:
So we‘ve had to work much harder to spread the word about ourselves, which ain't easy, with much smaller pockets, at least in the beginning.
And when I say work harder, I mean we’ve had to earn our our reputation every step of the way, carefully and methodically serving our customers and taking care of our employees.
We can’t just bury bad press or angry customer reviews with shiny marketing pitches and free-giveaways and ridiculous affiliate programs. The inability to pour money into fixing problems forces us to focus on mastering the fundamentals.
If we were to do it again, I’d still opt to be a first mover, even with the extra obstacles that go with it for one simple reason: Never having to say “Us too.”
When your company is the first-mover, you never get caught in the situation where you are forced to duplicate a feature or product to stay relevant
5. Focus is everything.
Focus is key. Chasing too many tasks will inevitably slow you down. Trim the fat; set short-term goals; and find small wins as often as you can.
Your side-hustle to your side-hustle is just diverting you from your main goal.
Often, early stage founders quit too early, they don’t give an idea the time it needs to marinate and grow. Too quickly moving onto this next-big-thing they think will work.
Years go by, and all they have is a half dozen projects in various states of failure.
Drill in on the core problem you are trying to solve, and keep iterating on your primary solution. And your value proposition until you unlock the product-market fit.
6. You have to put in the hours.
Bootstrapped businesses especially have to put in an obscene amount of hours at first.
For many, many years, I had no work-life balance.
I worked 12 to 16-hour days, year after year, it seemed. This negatively affected my health and relationships.
The work needed to be done, and I was the only one to do it for some time. In hindsight, I know now I could have managed it better.
Fortunately, as the team grew (and fatherhood commenced), I became directly responsible for less and less. I was able to step back from working IN the business to focus more ON the business.
Today, I work from home or a nearby small private office, an average of five-to-seven-hour days, stopping at around 5 p.m. no matter what, as that is when the kids expect "Dad.”
Thankfully this balance permeates Pagely today.
We actively encourage and promote a healthy work-life balance.
And we’re proud to say we pay folks well above market, provide a full benefits package, and encourage regular breaks throughout the day for exercise, coffee, whatever.
We also have a minimum required two-week vacation policy with no cap on total PTO.
We’re fully remote - so our team can work from home, from a different city, or in the case of our Director of Sales, dozens of cities across 5 continents over the course of year.
I’ve found the trick is to focus and measure the important things like mission progress and mission outcomes vs. specific hours worked or number of code lines committed. We all are more productive and create better outcomes when we are rested, and in a relaxed mental state.
There is this theory called the “Four Burners’ Theory.”
Pretend your life is like a stove with four burners -- each one representing one major quadrant of your life.
- The first burner represents your family.
- The second burner is your friends.
- The third burner is your health.
- The fourth burner is your work.
According to the theory, “in order to be successful you have to cut off one of your burners. And in order to be really successful you have to cut off two.”
We fall into this trap too easily - thinking we must totally sacrifice one or more these aspects of our life to succeed.
I did it early on, and you may be doing it right it now.
I admit, there are times when I turn down a burner or two, but I always make sure it’s temporary.
The idea is to live a full life. Work is part of a full life, but it should not dominate it forever.
Put the work in early; set your foundation; and re-calibrate often.
“The only thing that I see that is distinctly different about me is I'm not afraid to die on a treadmill. I will not be outworked, period. You might have more talent than me. You might be smarter than me. You might be sexier than me. You might be all of those things. You got it on me in nine categories. But if we get on the treadmill together, there's two things: You're getting off first, or I'm going to die. It's really that simple, right?” -- Will Smith
So many times I could have quit. So many times it seemed the the world was telling me to quit.
I could have quit when it was hard, or a new competitor launched to fanfare, or when I did not know how I was going to make payroll.
Being naive enough to think I could succeed eventually willed Pagely into existence. Do not underestimate the power of not knowing any better.
People can out-compete you with money, talent and connections, but you can always work harder, with more heart, and craft a better story.
I kept at it, I fought for it. I brought the problem and our solution into clearer focus with each iteration. We re-invested the gains to build a more solid foundation to hold us up as we reached for the next win. You simply have to put in the work.
8. Protect the culture at all costs.
Learning when to let go of an employee whose bad attitude eventually sucks the life out of your company culture is another hard lesson I learned, but it was an important one.
“Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” -- Jim Collins (Good to Great)
Hiring great people who add value should be the goal of every founder.
As important, or even more so, is making sure you passionately protect the culture you’ve built by parting ways with employees who are not a good fit.
Sometimes a good hire can turn south, or your company has evolved past a long-term employee, who is unable to adapt to the new context. What happens is the employee begins to spoil the culture, morale, and energy of the team and the organization.
Sometimes it’s overt, sometimes subtle, but always real damage is done.
I’ve made this mistake a few times, and each time I swear it will be the last.
It creeps up on me, slowly, and before I know it I am back in the same spot - debating with myself if I should let someone go.
The correct answer in hindsight (always) was to cut them loose months earlier.
We found that if we (as leaders) are discussing a particular employee to the point where we ask ourselves, “why are we talking about so-and-so again” it’s already past the point.
Do everyone a favor, and say goodbye, and move on.
No amount of production, or sales quotas are worth poisoning the company culture.
9. Mind your tone.
Being a passionate, opinionated company is a good thing, but learn to pick your battles -- where and when, and watch your tone. You don’t want to end up with a target on your back.
When we launched Pagely, we actually got hate mail, like real hate mail from WP community types who were “shocked” we would dare charge for what they saw as “installing WordPress” which is Open Source.
Remember, at the time in 2009, it was a novel idea that the famous WordPress “5-minute install” was still too long and complicated for the average person, so much of the community gave us crap, saying that managed WordPress was a commercial ploy to corrupt the goodness of open-source.
So we essentially launched into a negative community sentiment.
To add fuel to the fire early on, I did not help our cause.
I didn’t try to cull the favor of these same WordPress influencers who were unreceptive to our message, and I may have spoken my mind a little too often, in venues that perhaps were not suited to challenging someone’s beliefs.
I’m also protective to a fault.
Even if there is something good or better about our competitors, I still see them as unoriginal knockoffs of our original concept.
The second and now sixteenth entry into the market, in my eyes, is always inferior, and my attitude and sometimes tweets reflected that. I welcomed all new players with a polite “Fuck you, copycat.”
So not only did we mock every newcomer to the market channel and failed to win over community influencers, we kicked in the door to their private party with a 10 piece polka band in-tow, whilst simultaneously drinking all their beer and telling everyone in the room they were doing it wrong.
Not the best start, to say the least. First mover advantage became first mover mistakes.
Our soon to be competitors witnessed these mistakes and basically saw what not to do and outplayed us.
They were at every WordCamp handing out free sites and cool tees by the thousands, kissing babies and shaking hands. They knew how to make everyone feel important and awesome.
With maturity and time behind me - it’s pretty clear where and how I messed up.
In my heart of hearts though, I know we have the best product, the best team and the best ethos of anyone else in the space, which is why we’re still here and growing, debt-free and profitable, 9 years later, without any outside funding.
Fortunately, my gaffes were not fatal, even though they did hurt us early on.
10. Use your marketing budget wisely.
VC backed competitors have a size-able budget to promote their products, and add to that the fact that we don’t believe in affiliate marketing, we’ve had to be smart + nimble with our marketing efforts.
Here is a fun story from our early days: SXSW 2010 - Pagely was just barely on its feet, maybe earning around $10k/month. Our Co-Founder Sally had the idea to advertise on the pedicabs (the bicycle taxi's) around downtown Austin, TX during SXSW. The official SXSW sponsorship price was $50k and, of course, we simply did not have that kind of cheddar. She called around - going direct to a few pedicab outfits and found one that was independent and did not have a deal with the SXSW conference.
We ended up booking them for $10k + print costs to advertise on their fleet of pedicabs for the entire month of March. Even $10k was a stretch for us - so we reached out to a friend in the SF startup scene and asked if they would like to go halves with us. He connected us with a friend of his that jumped at the opportunity to use the pedicabs for further testing and development of a ride hailing app they were working on that was called Uber-Taxi at the time. We split the ad-buy and away we went.
Was fun to get feedback and Twitter mentions from some early clients that saw those adverts, citing that Pagely was “Big Time” now.
Over the years, as the internet has evolved, digital marketing has continually grown in scope. Now, there are more marketing activities than most small marketing teams can possibly execute due, mostly, to time limitations. Our marketing team has had to be ruthlessly protective of their resources and intentionally seek clarity on what is (and isn't) important enough to execute.
This often means letting some (oftentimes, quite valuable) marketing go undone so that we can focus in on what will have the most impact. This is never an easy thing to do, and it's often a trial and error process, but the upside of our ruthless prioritization is that it allows us to invest more into the few truly vital marketing activities that will propel us upwards.
We have to be okay with leaving some stuff undone so we can make sure we're getting the truly critical marketing done really well.
TLDR: Stick it out. Longevity = Mastery.
Sometimes a business concept or strategy just needs a little time to simmer on the stove for the ingredients to blend and the flavors to meld.
We often get impatient and wonder why our business is not working as well or taking off as soon as we thought it should. So we become restless wondering if we should scrap it, and change direction or tact.
And then that magic moment happens: the sauce thickens and it all comes together.
My 15 years as an entrepreneur has proven to me that it does not come easily - but the success of making it through the grind, learning from the mistakes, and independently building something sustainable and of real value that our entire team can be proud of - is perhaps the most rewarding thing, outside of my family, I have ever been a part of creating.
(Work + Time) * Luck^2 = Success