Quick Chat with Reilly Chase of HostiFi

Courtland Allen 0s

Reilly Chase, welcome to the Indie Hackers podcast.

Reilly Chase 2s

Hey, thanks for having me.

Courtland Allen 3s

Reilly, you are a software engineer living in Michigan. You are the founder of a company called Hostify, and you recently hit a pretty cool milestone with your business. You hit $100,000 in annual recurring revenue just last week. That’s a super healthy number. So, congratulations. How does it feel?

Reilly Chase 18s

Thanks. It definitely feels good. I’m very surprised that I’ve made it here in just a little over a year.

Courtland Allen 25s

One of your very first milestones that you posted to your product page on Indy Hackers is – I’m reading it now – June 1, 2018 – one paying customer, $5 in monthly recurring revenue.

So, that was the very beginning and under that you explain that Hostify’s first customer signed up from 4,000 miles away. So, you seem to know exactly who it was and where they lived. Tell me about getting to that point of earning your first dollar for Hostify?

Reilly Chase 47s

First of all, that customer – actually I didn’t know who they were and I knew that they signed up from the Netherlands because Stripe told me that. But I’ll always remember when I got that first customer, I remember where I was. I was in my truck driving to work and I saw a little notification pop up on my phone that Stripe had a $5 payment and it was an awesome feeling. You know, when you get your first customer. It was the first time I sold anything online really of my own like software product.

Courtland Allen 1m 11s

Very cool.

Reilly Chase 1m 10s

Yeah, so like getting to that point was several months of like struggling. I never worked as like a software engineer in a software role. I was mainly like a network engineer, like a phone system engineer kind of guy. So, I knew I had learned programming, like a little bit of Python and I had made little projects here and there for a couple of years. But I never built like a website really that had like authentication and billing and like all these things.

So, it actually took me several months to – that was the hardest part was like figuring out the check-out process and the user dashboard, like what the software actually does I was pretty confident with writing the Python code for that. But creating – putting the whole thing together took months.

Courtland Allen 1m 56s

That’s pretty crazy. You were learning how to code, learning how to be a web developer at the same time that you were learning to build your business. I’m curious what kind of expectations you had for yourself at that point because just learning web development on its own is a pretty ambitious undertaking let alone expecting to build something good enough for people to actually want to use it and pay you money for it.

Reilly Chase 2m 14s

Yeah, so my inspiration to start, in particular, a software as a service company, was from reading a book. It’s actually called, “The Millionaire Fast Lane” by M.J. DeMarco and it sounds like a really cheesy title but it was actually – what the book was about was about how to create a product instead of a service business.

It was actually written by the founder of Limos.com. He talked about a bunch of different ways about like why a product is easier to scale and it’s better than the service business and one of the things he said in this book was that one of the best things you can do is start a software company and that what’s even better than that is if you can start a software as a service company because it’s recurring revenue.

So, I mean that really got me thinking about software as a service and then I started looking up how to start a software as a service company and I came across a book called, “The Micro-SAS EBook” by Tyler Tringas. So, that was like my big inspiration of like what ideas to pick and like how to go about doing this software as a service bootstraps thing.

Courtland Allen 3m 13s

Sounds like you learned a lot from books and reading. When you go that route, you end up encountering some of the same advice over and over again, kind of cliché advice that people are tired of hearing and yet still don’t really follow for some reason.

One of those pieces of advice is to solve your own problem. So, I’m wondering if that’s what you did with Hostify. Were you solving your own problem or were you solving a problem for other people?

Reilly Chase 3m 32s

Exactly, yeah. It’s actually solving a problem that I had myself and one of my ideas that I thought was better was to solve a problem for someone else like a problem I didn’t have, one of my ideas was I had a couple of requests on Upward recently. Because I had like an Upward profile. I did freelance work and stuff and like a couple people asked me to build this like tool for them to keep track of phone calls for free PBX phone system.

So that was the idea that I was going to go with. It was a problem I hadn’t experienced before. The reason I chose the problem that I ended up solving with Hostify, was it was something I had experienced and it seemed easier to me as a first project, but I didn’t have high expectations for it because it was my first project and I was just going to be really happy if I could get a couple of customers and I was going to use this as my learning experience and I had plans to kind of get my foothold with figuring out to make software as a service company and then try again with something more “complicated”. It just seems like a really simple idea. Then it ended up being the one that worked the first try.

Courtland Allen 4m 39s

Yeah, that’s pretty great and I love this approach of having low expectations from the beginning because if you go into your first business thinking hey, this is just a learning experience and it’s probably going to fail then you’re in a really good position. If things work out well, that’s a pleasant surprise and if things don’t work out, no big deal, that’s exactly what you expected.

In fact, you still accomplished your original goal of learning a lot and becoming more formidable as a founder for the next time around. And I think I would go even further and say that managing your psychology as a founder is pretty much half the battle. As long as you can sort of mentally frame things such that you won’t get dejected or overly frustrated, then you don’t quit and quitting is a reason why businesses fail.

Reilly Chase 5m 12s

Yeah, I totally agree. I think that was the biggest thing that got me through was just like knowing that this was just a learning process and not having the high expectation of – or I was never disappointed about not growing or this or that. I was just like you know, this is a learning process and I know that if I keep on doing this, I’ll learn the skills that I need to do something better next time.

Courtland Allen 5m 37s

Okay, you mentioned something here that I want to talk about which is that a software as a service business is one of the best types of businesses that you can start. You get monthly recurring revenue. It’s very scalable. You can reach millions of people with the same amount of code. Whereas a services business is the exact opposite. It doesn’t make money while you sleep. If you want to take on more customers you have to work more hours or hire, etc.

But there’s a flip side to all of this which is that a services business is very easy to get started with. I know people who opened web design shops or who do SEO consulting and they’re making five figures in their very first month. Whereas with SAS, you’ve got kind of a ramp-up period.

So, it took you a few months just to get your software built and find your first customer who only really paid you $5. How did you support yourself and how did you stay motivated during this early stage ramp-up period where everything was growing super slowly?

Reilly Chase 6m 21s

Yes, so the first question how did I support myself? I definitely didn’t like read that book and then quit my job right away and say I’m going to start a SAS business. I had realistic expectations because I had read Tyler Tringas’s story with – Storm Mapper was a big inspiration to me and his micro-SAS eBook was a big inspiration so I had realistic expectations.

Storm Mapper went on to become probably – it was a $400,000 a year I think when he sold it. So, a big business. But it took – that first year he only got it to $2,000 a month. So that was my expectation was if I can get this business to $2,000 MRR by the end of the year, this could be a really great business. So, I mean that was like my low expectation and here it is like a year later and I’ve got it past $8,000 a month but my expectation was $2,000 being the best-case scenario.

Courtland Allen 7m 10s

Right, you probably couldn’t quit your job and support yourself off of $2,000 a month. What about the second half of this question? What about the motivation? How did you keep yourself going early on when things were just progressing so slowly?

Reilly Chase 7m 21s

The motivation – that part was really hard because it was very unmotivating. I struggled a lot. So, I knew a little bit of Python but, like I said, I hadn’t built a full-blown website with authentication. I knew HTML and CSS and I built little PHP sites and stuff.

But the motivation to keep going was really hard because I actually tried several different Python frameworks like Django, Flask and I just had a hell of a time getting things to work. I actually couldn’t get it to work at all. I ended up doing something pretty unusual. For my stack – my software stack – I actually ended up getting Word Press with a bunch of plug-ins and then I wrote the Python code which I was comfortable with but I wasn’t comfortable with the user dashboard and the billing and all that stuff.

So, I had Word Press do all that and to this day, the site is the same. I’m working on re-writing it but it still works this was basically when the user signs up, it gets saved in the database in word press. Python reads that data base and then does stuff and then saves stuff back to the data base. So, it was kind of like a unique, weird technology stack and it was because I had such a hard time making my own framework and using Django and Flask and stuff.

Courtland Allen 8m 32s

One of the cooler patterns I’ve seen from talking to founders is that sometimes when you either can’t code or when you’re struggling to learn how to code, you end up building things a lot faster than others because you’re not overly ambitious. You’re not trying to build every feature under the sun. You’re just like hey, I’m trying to get this one feature working, and if that happens, then I’m good. I’m golden. That’s all I need.

I wonder if this applies to you. Do you think that’s why you’re able to build something just working nights and weekends on the side of your full-time job?

Reilly Chase 8m 55s

Yeah, I totally can relate to that and, like I said, I had more ambitious ideas but this was like the simplest idea. Basically, creating server install software on it, give the log-in to that server to the customer in the dashboard. It’s literally like – I think I posted it and it was like a thousand lines of code or something was like the total amount of code that I wrote.

But, like I said, I didn’t know programming that well. I didn’t use a lot of functions. I didn’t do any code tests. I didn’t write any code tests or – I don’t know – I just really tried to make it work.

Courtland Allen 9m 30s

How many hours would you estimate that you were working back then?

Reilly Chase 9m 33s

I definitely put a lot of hours into it during those first couple months. It would be hard to quantify how many. The reason I had a lot of time was my girlfriend then – she’s my fiancée now but – she was working night shift or like second shift so I’d come from work, she wouldn’t be there until there til like 11 o’clock so from after work til like – so, you know, five, six hours a day from 5-11:00 p.m. I’d work on it and try to get it to work.

So, I did that for a couple of months and there was – I think there was a few weeks in the middle of that where I gave up and I was like maybe I’ll try again in a few years – and then I got my motivation back and gave it another try.

Courtland Allen 10m 10s

So, we’re definitely going to get into a lot of the things that you tried that didn’t work that were perhaps demotivating. But let’s rewind for a second because we didn’t fully flush out how you came up with the idea for Hostify?

You said it was a problem that you had experienced yourself. How did you even experience that problem, for one, and number two, how did you know that other people would pay for it and be interested in a solution?

Reilly Chase 10m 28s

Oh, yeah, so I forgot to say it was a problem that I had and the reason I found that problem is because I tried to start my own service business for like four years before this where I did – I never went really full-time or a did for a few months here and there – but I had a serious business where it was like IT services for businesses and stuff.

So, one of my services that I did was installing network equipment, so like routers, switches, wireless access points. So, one solution I found that was really cool was this unified solution where you can connect all your network devices to one server and you can manage all your customers from one place.

And so, the software is free so the company I ended up started – Hostify – it provides managed hosting for that, so that’s where the idea came form was from my own – it look me like a week or something because I had to look on Github to find some scripts on how to install the SSL certificate and create a server on Vulture and do all these different things.

Then, whenever there’s an update that comes out you have to run some commands so I mean there were like – and then I had to figure out to do like backups to another provider.

So, there was a few problems I had to solve on my own which took me some time. It wasn’t a lot of time but it was something that was easy to automate for other people so they didn’t have to spend that initial couple hours learning how to get set up and everything, assuming that they had the knowledge I have of using Lennox and stuff. A lot of my customers they don’t know how to use Lennox as well or whatever, so it just makes it easier for them.

Courtland Allen 11m 54s

So I don’t know very much about the space that you’re in. I don’t know very much about networking software. I’ve never heard of Ubiquity which is the company that you’re sort of building your software for. How did you think about the size of your market and that kind of stuff when you first got started?

Reilly Chase 12m 5s

So it was extremely niche and that has been my biggest concern all along and why I’m even surprised that I got this far as I did with it -- $100,000 a year – revenue, yeah, it’s definitely super niche.

It’s like a niche within a niche within a niche. You know, Ubiquity is a billion-dollar company so they’re a pretty big company. They make network equipment. They give the software away for free and then anyone who buys their hardware is potentially my customer but I’ve kind of targeted one specific group of people who buy their hardware which is IT service providers. So, I target them specifically. So, like I said it’s a niche within a niche within a niche.

Courtland Allen 12m 41s

Yeah, so tell me about getting your first customer. Did you have some sort of lunch? Did you just sort of put your website online and cross your fingers? How did they find your website?

Reilly Chase 12m 49s

Well, what I did is like the first thing I did was I was targeting home users. I didn’t think – you know, this was before I found Product Market Fit and found out that my best customers are going to be the IT service providers – and so I was targeting home users and stuff.

The first things I did to launch the site was like – you know, the site’s online and then I went out and started spamming everywhere. I didn’t have any luck with that. I put a post on Reddit. It got deleted right away. I put a post on Ubiquity’s forums and Facebook pages and pretty much every official Ubiquity channel, I posted something about it and immediately was like reprimanded. So they took it down and everyone told me like don’t do that again. That’s spamming. We can’t do any self-promotion here blah, blah, blah.

So, yeah, I don’t even know how I got my first customer but one thing I did was I started reaching out to people on direct message on the forum. I sent – on Ubiquity forums – I sent 25 or 50 people a DM saying hey, I just started this thing. What do you think about it?

Courtland Allen 13m 54s

Yeah, I think the direct messaging route is kind of better because number one, you don’t get your post deleted. They’re not publicly visible and annoying everybody in the forum or group or wherever you’re posting.

But number two, it’s just more personal. So, people can actually engage with you in a conversation. They can tell you why they’ll buy or they can tell you why they won’t or what they need and you can just talk to them and have an actual conversation and be more persuasive. Because at that point you switched from sort of a mass marketing-based approach to a sales-based approach.

Reilly Chase 14m 19s

Yeah, actually I didn’t have any luck with it either though. I think I sent like 25 to 50 DMs, like I said, but maybe like three or four people wrote me back and I think the reason is I’ve learned a lot about marketing since then but back then, I had no business, marketing sense really.

So, I was like thinking people want the cheapest thing or like – so I sent a message like hey, we have the cheapest hosting for this thing and I didn’t really ask – I didn’t try to make relationships with people and say like hey, what do you think about this? I’m an indy software developer and I made this thing and looking for feedback.

That’s how I would say it today but back then I was just kind of spamming people and not getting any response and not really knowing why. So, I think I learned a lot from that. I learned a lot from realizing pricing and targeting people directly, how to get a conversation going instead of just spamming, you know.

Courtland Allen 15m 15s

Well you’ve learned a lot over the last year and I can kind of follow along on your timeline on your product page at Indy Hackers because you’ve added milestones for all sorts of things. So, June 1st of last year, you got your first paying customer. Then I can see on June 13th, June 28th, July 10th, you just kept releasing feature after feature, so you weren’t just spamming forums. You were also building your app and making it better.

Then on July 16th, you posted that you got to 25 paying customers and $300 in monthly recurring revenue. So, it kind of seems like you figured out how to get customers in a repeatable way. What happened there?

Reilly Chase 15m 47s

So I tried a lot of things. I tried to do some advertising, like Facebook, Twitter and it didn’t really work but one thing that did work was Google ads. So, I started bidding on search terms for unified hosting and I think I got a few customers from that.

But I think it wasn’t – I was trying a lot of different stuff. One thing that started working for me was Twitter was one of the first tools that started to work for me. What I did is I went on Twitter, created Hostify – like a Twitter account for my company – and then I went and started liking and following and replying to anyone who was talking about Ubiquity or unified equipment, the specific stuff that I do.

I started gaining a small following from that. I’m trying to think what else. That was a big one though because one of the differences between Facebook and Twitter and LinkedIn is with a Facebook and a LinkedIn page, you really don’t have that level of interaction. You can’t, as a business, follow a customer or follow someone who LinkedIn or Facebook. So, Twitter really allowed me to directly interact with people as a business.

Courtland Allen 16m 55s

Yeah, there’s a common theme among everything that you’re saying and it’s another start-up cliché. We already talked about solving your own problem but this particular cliché is to do things that don’t scale.

In the beginning of your business you don’t really have to be that clever, that smart or even that knowledgeable. You just have to be willing to put in the hours, put in the effort. Sort of bang your head against a wall. And it sounds like you definitely kept doing that. You kept messaging people one on one, for example, and you never really stopped.

Reilly Chase 17m 19s

Yeah, that was definitely a big one and one of the hardest things was I didn’t know anyone that needed this so it wasn’t like I could have some friends as my first customers or something because I really didn’t know anyone that needed what I was selling.

So, it was really trying to find people online and from reading Tyler’s book on Micro-SAS, looking for those places where your people congregate and so for me, that was hashtags or like searching on Twitter for different things that people were talking about, trying to find these places where people congregate that was like was like an open platform.

Because, honestly, they congregate on the Reddits, they congregate on the Ubiquity official pages and stuff but I don’t have access to those so I had to find other ways.

Courtland Allen 18m 0s

Let’s talk about your mindset during this phase because I think a lot of people would just quit. If you’re trying to reach out to anyone and everyone and all these different watering holes where your customers hang out, and that’s not working, and then you start reaching out to customers one on one, trying to sell them on what you’re doing and that’s not really working well either, then that sucks.

It’s pretty easy to think at that point, you know what? This isn’t a good idea. It’s too niche. I don’t know anybody in this space. So, you know what? I’m going to chalk it up to bad luck. I learned a lot but it’s time to move on to the next thing. Why didn’t you think that way and did you perhaps have some sort of date in mind? Like a quit date where you would move on if things didn’t work out by that time?

Reilly Chase 18m 34s

I definitely didn’t have a quit date in mind and for me, this was – this was just entirely a learning experiment. I didn’t have expectations at all for it to be a success and for me, when I was doing all these things, it was like hey, I’m learning about how to do marketing and doing thing I’ve never done before so for me it was just like I’m learning how to create a SAS business.

I’m learning how to find customers and I was never really concerned about the fact that I was spending tons and tons of hours on something and not getting a return on it. I think that’s the biggest mindset problem. When you try to relate SAS to your hourly and you’re thinking wow, I’m making $5 a month right now and I’ve spent 100 hours on this project. So, you definitely want to get out of that mindset of I spent 100 hours and I made $5, you know because that’s what it’s like.

Courtland Allen 19m 27s

Let’s talk about some of the things that you weren’t doing because in order to build this business as a one-person shop, you have to say no to a lot of things that you want to do. You have to say no to a lot of things that you’re tempted to do. You can’t just go out and wait a waste a whole week getting a professional design, for example, because it’s just not that important. Are there any decisions that you explicitly remember not making with Hostify in the early days?

Reilly Chase 19m 46s

Oh, yeah, definitely, the logo one is the first one that comes to mind actually. I’d already learned my lesson from having a service business and being obsessed about when I launch my serious business five years ago or whatever, the first thing I was like I need a great logo and I went to a design firm and I paid them $2,500 or something to make me a logo.

Courtland Allen 20m 4s

Wow.

Reilly Chase 20m 5s

A few years later I was like why did I do that? I don’t even like this logo. Went out and I got a cheaper logo for like $300 I liked better. I had like a crowd source design, like 99 Designs do it or something. So, this time, I was like I’m not even going to pay for a logo so I fired up Gimp [ph] the free – I didn’t even pay for Photoshop. I got the free version of Photoshop, open source version and I just picked a font off Google that I liked and changed the colors and that’s – that was one of the things that – there’s a lot of things that I didn’t spent money on. I didn’t hire anyone to help. I didn’t hire anyone to do marketing for me.

I think that’s something that if you’re going to do this, you need to learn how to do all of it yourself and that way if it does scale or when it does scale, you know what to teach other people, too. Because if you hire someone else to do it for you, then you’re not going to know how to do it yourself.

Courtland Allen 20m 59s

Yeah, and I think one of the things you mentioned earlier that I want to bring back up is that you weren’t really writing unit tests for your code. You weren’t trying to be an enterprise-grade professional software engineer level programmer. You were just like hey, I’m going to make this work and if I have to use Word Press or whatever, and that’s good enough, then fine, it works.

And this is something I think a lot of people get tripped up on, being perfectionists about just one part of their business, zooming in too far. If you’re a founder, you can’t do that. You’ve got to wear a lot of hats. You can’t just go deep on any one part in isolation.

And related to that, I think your point about not hiring and just learning to do everything yourself is huge. Not only do you save the time it would take to find and train somebody and not only do you get to learn these valuable skills for yourself but also you just save a lot of money. Hiring is super expensive. I know you’re still a solo founder today, one year later, what do your expenses look like?

Reilly Chase 21m 48s

Oh yeah, you know, it’s profitable and the expenses for me, for my business, they scale linearly with the amount of customers I have. So, for each customer, unlike a traditional software as a service, it’s not like 100% profit for me or 99% profit or whatever. Each customer gets their own server which, you know, costs big money.

So, I’m making $8,300 a month or whatever and my expenses are like $2,500, $3,000 a month for servers and different advertising and things that I’m doing these days.

Courtland Allen 22m 20s

Yeah, that’s still not bad at all. It’s still way better than a typical services business because you’re still at a point where every customer pays for themselves and even though it’s a little bit expensive, it’s still scalable. You’re writing code, you’re not doing a whole bunch of work when you take on a new customer.

Reilly Chase 22m 32s

Exactly, yeah.

Courtland Allen 22m 35s

Okay, so let’s skip ahead a lot on your timeline. March 25, 2019 you posted a milestone that says 200 paying customers, $4,249 in monthly recurring revenue. What are some of the things you had to learn to get to that point?

Reilly Chase 22m 50s

See getting to 200 customers certain things changed and – a lot of things changed – but one of the things that changed growth-wise is – I think it was about six months in. So, towards November, December is when I started ranking in Google first page and pretty quickly the site went from mid-level first page to top of – top result for search terms related to unified cloud hosting.

And that’s been the biggest growth to this day. And I think – I’m trying to think of what helped that. I don’t know. Sometimes you just don’t know why things work but I think when you have a brand new domain name it takes a while for it to just get old enough – like the domain had only been registered in May and so, I think Google doesn’t really rank newly-registered domains very well until they’ve been around for a while and they start to get some traffic. Yeah, I think that’s one of the biggest growth drivers, for sure.

Courtland Allen 23m 54s

That makes sense because you said early on that you were testing out Google ad words and that seemed to work. So, the fact that search would still be a good channel today makes a lot of sense to me. It seems to be the primary way that people find you.

Reilly Chase 24m 3s

Yeah, and early on before I had a Google ranking, like how I got to 25 customers or something like that is a combination of, like I said, Twitter and stuff. I’m not sure how much that actually worked but I know that was helping.

But one of the things I did was I searched for a unified cloud hosting and I saw what the top results were. Some of them I – you know, you can’t change other people’s websites – but some of the top results were forum posts of people asking about unified cloud hosting and I had access to posts as a user, so I put in my signature about my business – unified cloud hosting – and I kind of engaged in the conversation on those threads which were getting a lot of views from people who were searching for the thing that I do.

So, it was kind of like a hack to get on the front page before I was on the front page. So that was a slow trickle there. Then once I got on the front page, I only have one or two other – it’s such a niche thing, there’s only one or two other people that even do this at all. They weren’t doing it as seriously as I am as far as how their website looks and stuff. So, it was pretty quick that I was able to pass them up from just getting that traffic and focusing, continuing to focus every day on this.

Courtland Allen 25m 17s

Yeah, that’s like the textbook benefit of choosing a niche. It’s that you don’t have a lot of competition. There aren’t a ton of other businesses trying to fight with you and compete with you on the Google rankings. So even if you’re a tiny, one person, Indy Hacker business, you can kind of figure things out and just make a name for yourself. You’re not worried about all your potential customers choosing some massive company over you because they have 100 times more feature. It’s really just you.

So, it’s cool to see this play out in your case. And your strategy of also going to these online forums and making posts reminds me a lot of the Zapier founders who did the same thing. So, their software helps people connect one service to another and there’d be all these people asking questions about how they can do this in other product support forums and the Zapier founders would come in and help them out. It’s drudge work, it’s a lot of comments you have to post and if you don’t do it right, you’re just spamming people and you’ll get banned but it kind of works if you’re actually helping people solve their problems one at a time.

Reilly Chase 26m 7s

Yeah, and I got that idea, too, from the Micro-SAS ebook. I pretty much got all my ideas – I took that as the blueprint for how to do this and I just really followed everything he said. So, that was another – I think he said was to post on forums with your signature and all that stuff.

Courtland Allen 26m 24s

Let’s talk about Tyler Tringas for a second, the author of the Micro-SAS ebook, and also an investor in your company. So, you’ve raised money from Earnest Capital. They’re one of a new breed of investors that are funding these Indy Hacker businesses who aren’t trying to become billion-dollar unicorns. They really want to be profitable and self-sustaining from day number one. When did you decide to raise money from Earnest and what was that process like?

Reilly Chase 26m 45s

Well just leading up to it was so exciting because I think my first tweet that I ever wrote about launching Hostify, I tagged Tyler Tringas in it. I wanted him to know that he inspired me from his book and everything.

So, I kept following him on Twitter and stuff and I was watching what he was up to and it wasn’t until I think November that I started to hear about – you know, I launched in May and then it was later in November of that year – last year – that I started to hear that he was going to start Earnest Capital. I was so excited about that because that was exactly made for what I was doing and everything. So, I was following along and I think he did like a video – like a live video – about, you know, talking about it and I was in there. I just happened to see that and I jumped in and asked questions.

So, I mean that was in like November where I think he first like saw my name and stuff asking questions about Earnest Capital and then why I took the investment? In January, it was kind of – it was all interesting timing – so in January I got actually fired from my job as a security analyst because my employer thought – they found about Hostify as my side business. They didn’t like it. They had already asked me to close – stop doing side work and stuff like that. And I like basically ignored it. So, they fired me.

So, that was in January and that was actually right when Earnest Capital applications opened. I just applied to it. I kind of needed the money because like, you know, obviously it would make it easier for me now that I had been fired and I was planning going full-time. But, you know, if I hadn’t of gotten the money, I would have still done everything exactly the way I’ve done it. Like mainly, I applied for the mentorship. Like I was definitely super excited to be a part of a what they’re doing.

Courtland Allen 28m 31s

Can you share any details about your deal with Earnest? Like how much money you raised and what the terms were? Stuff like that.

Reilly Chase 28m 36s

Yeah. I don’t think – they don’t like us to talk about the terms so they can – so they can’t compare it to other people’s terms. However, you can see they’re very transparent about what the agreement looks like, how it works on their website and stuff.

So, you can expect low six figures, like $100,00 to $250,000 and the amount of money is used for like – it’s to be used by you to make that transition and they’re looking for someone who’s at around $2,500 to $5,000 MRR and they are in a spot where they’re – it’s a side project that’s starting to consume more of their time and if they had the money to go full-time, they could accelerate growth. So, I mean that’s what they’re looking for. I was just barely in there. I was a little bit below $2,500 MRR. It was just perfect timing.

Courtland Allen 29m 26s

Well today things look very different. You just passed $100,000 in annual recurring revenue. You’re comfortably profitable. You’ve got some breathing room, I think to just make some new decisions and go in whatever direction you really want to. What does the future look like for Hostify?

Reilly Chase 29m 38s

I hope it keeps getting bigger. Like I’ve said I’ve been surprised that it’s gotten as far as it did. I’m narrowing my focus to just do a really good job at this one specific thing whereas before, I was worried that it was too niche so I had begun starting other projects.

I had a bunch of – I actually launched two other SAS businesses and an online community, but now that I’ve seen Hostify just continue to grow, I’m putting all my attention on Hostify for the last few months. I’m working on a whole new website with a bunch of automation and more knowledge-based articles. I just integrated Intercom and just making the onboarding process really great for the customers and just smoothing things out all around.

Courtland Allen 30m 24s

What about on a more personal level? Do you think you’ll keep the company small and just one-person or do you think you’ll hire more people? And also, are there any revenue goals that you want to hit for yourself?

Reilly Chase 30m 34s

I’ve been thinking about where I want to go next with it and I think, you know, taking on investment like it did make me a little bit more ambitious where I do want to get a million dollars MRR next and I do see having a small team. I need some support help and I’m hoping that I can get enough money from customers to just by hiring a few support people to help out. But yeah, I think just like a really small lean team and getting to like a million dollars a year would be awesome.

Courtland Allen 31m 6s

Sounds awesome. Well, anyway, thank you so much, Reilly, for coming on the show and telling us about how you got to $100,000 in annual recurring revenue. Hopefully I can have you back on here at some point in the future to tell us how you got to a million.

Can you let listeners know where they can go to learn more about what you’re up to personally and what’s going on with Hostify?

Reilly Chase 31m 20s

Awesome. Thanks for having me. Yes, to learn more about following my journey as an Indy Hacker, you know, obviously the Indy Hackers page and then I also post updates at rchase.com and each month this year I’ve been posting updates about what I worked on this month. Then my website for my business is hostify.net.

Courtland Allen 31m 42s

Alright, thanks, Reilly.

Reilly Chase 31m 42s

Thanks.

Courtland Allen 31m 44s

Quick note for listeners. If you’re interested in coming onto the podcast like Reilly, to have a quick chat with me, go to indyhackers.com/milestones and post a milestone about what you’re working on.

It can be pretty much anything. People have posted about launching or finding their first customer. They’ve posted about growing their mailing list or hitting 1,000 followers on Twitter. They’ve posted about getting to $100 or $1,000 or even $100,000 a month in revenue. The sky’s really the limit here.

So, whatever you’re proud of, come celebrate it on indyhackers.com/milestones. Other Indy Hackers will help you celebrate. We love supporting each other. We love encouraging each other when we hit these milestones and what I will do is at the end of every week, I will look at the top milestones posted and reach out to people to invite them to come onto the podcast for a quick chat. 
So, once again, that’s indyhackers.com/milestones. I’m looking forward to seeing what you post.