Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode, I talked to Riley Chase, the founder of Hostify, a SaaS platform that helps IT providers to manage all their customers networks from a single server.
In early 2018, a listener of this show mentioned me in a tweet.
He told me how the podcast was such an inspiration for him and that he was about to start his own SaaS business.
He was a single founder bootstrapping the SaaS business for the first time, and he was learning to code as he went.
And over the next few months, he started sharing what he was doing.
I'd often see tweets or LinkedIn posts from him about what he had just tried, what had worked, what didn't work.
He was a completely open book and you couldn't help but root for him once he shipped his product.
He got a few early customers, but wasn't making a lot of money.
But it was interesting to watch him from the sidelines as he tried all kinds of things to grow.
And around December 2018, he tweeted that one of his goals for 2019 was to be a guest on the SaaS Podcast.
So I told him, get to an annual run rate of $100,000 and I'll invite you on the show.
So he told me that based on his current growth rate, he could probably get there in about two years time.
But I told him that based on what I'd seen, I was pretty sure that he'd get there sooner.
So that was the new year resolution he set on 1st January 2019.
But a week later, his life turned upside down.
He was fired from his job because his employer didn't like him moonlighting and he had some tough decisions to make.
Eventually, he decided to go all in with his SaaS business.
He even sold his house to give him a longer Runway.
Now his SaaS product wasn't just a side project anymore.
It was everything to him.
And it was amazing to see how getting fired from his job gave him even more motivation to succeed with his SaaS business.
And in eight months, he achieved the goal that we set together.
His business is currently doing over $10,000 in monthly recurring revenue.
And I'm delighted to have Riley join me on the show, so I hope you enjoy this interview.
Okay, Riley, welcome to the show.
Reilly Chase (02:41.940)
Hey Omar, thanks for having me.
Omer (02:43.620)
So I always like to ask my guests, what gets them out of bed every day?
What drives or motivates them?
Is there a favorite quote that you can share with us?
Reilly Chase (02:51.060)
So I was looking through some quotes and one that stood out to me was try not to become a man of success, but rather try to become a man of value.
And it's, I think it was Albert Einstein, but I think it was just the idea of you should be giving more value out there than you are expecting to receive.
Omer (03:09.140)
I like it.
All right, so for people who aren't familiar with this, tell us about hostify.
What does the product do, who's it for, and what's the main problem you're trying to solve?
Reilly Chase (03:23.720)
Hostify is a managed server hosting solution for Ubiquiti software.
Ubiquiti is a hardware company that makes wireless access points, routers, switches and network products like that.
And what's unique about it is is they give away the software that manages the devices for free.
So basically you connect all your devices up to one server and then you can see the statistics and configure the devices from that server.
The service that I started, it takes that free software, installs it on a server for you, and then I help you get started connecting your devices, do SSL installation, provide updates for the software and Linux and stuff like that so that the customer, they can just focus on working on their network and not have to have one more server to maintain.
And my primary customers are IT service providers.
So they install these wireless networks for their customers and they manage all their customers from one this one server.
And then my other primary customer is wireless Internet service providers.
So these are people who, they start a business where they're taking Internet connection and then bring it out to a rural area with point to point wireless links.
Omer (04:37.200)
Got it.
Okay.
And how did you come up with this idea?
Reilly Chase (04:40.560)
How I came up with the idea is it's kind of a problem that I ran into while working for my own IT service business.
So I was doing network equipment installations like wireless and routers and stuff, and I came across unifi solution and I found that it was tricky to get the server set up.
They have a hardware solution that they sell called a cloud key where you can connect all the devices to this one unit, but then you have to have a different cloud key for every customer.
So rather than doing that, I wanted to have all my customers connected up to one server cloud hosted on DigitalOcean or whatever.
So I went out and it took me a few days to figure out how to get IT installed, get the SSL installed, and then I had to keep updating it all the time.
So I kind of figured if I could do that for more people, it wouldn't be that much more work, but I could help some other people get started.
And actually before I started hostify, I'd already set up two other servers for friends that I was managing.
You know, I'd set it up and I'd installed the SSL cert and I was doing the updates for them already and stuff.
So it's kind of a business that was, I was already doing, but it wasn't automated.
Omer (05:48.030)
Okay, got it.
And so you mentioned DigitalOcean.
Is that, are you still using that, like is that of the host that this product is built on?
Reilly Chase (05:54.760)
So I started out using DigitalOcean and then for some reason I just started using Vultr when I was writing the code.
So now everything is on Vultr, but they're very similar.
And actually it's a good thing I did use Vultr because they have a lot of data center locations and I have a lot of customers in different areas.
So it's been good to have a lot of different locations to choose from.
Omer (06:16.280)
Okay, so you came up with this idea and you were like, okay, I'm kind of already going through this myself.
I've helped some other people set up these servers and wouldn't it be great if I could kind of do this in the cloud and kind of turn it into a product for other people?
Did you have a background as a developer?
Reilly Chase (06:35.240)
So I'd never worked as a software engineer before and throughout my career I worked in a few different roles, mainly as a network engineer or also as a VoIP engineer.
So installing phone systems and, and networks and stuff like that.
And I had just learned programming as a hobby.
It was something I was interested in.
So I knew how to like script things in Python, but I wasn't, I wouldn't consider myself a software developer.
I didn't really know object oriented programming.
I didn't know how to write test cases or in different things like that you would expect like a software engineer to know how to do.
Omer (07:06.130)
But you ended up building the whole product yourself.
Reilly Chase (07:08.690)
I built the whole product myself, all right.
And I didn't hire anyone to help me with it.
Yeah.
Omer (07:14.050)
So you've got this idea and you've got some thoughts around how you're going to build this product.
What kind of validation did you do?
Did you start going out and talking to some of these IT service providers and trying to just Figure out whether this was worth investing your time and money in.
Reilly Chase (07:31.630)
So I didn't do any validation.
I knew a little bit that I should be doing validation, but I just kind of chose not to because I knew that it was a problem that existed because I experienced the problem.
And then I also had really low expectations for this.
I didn't think people would be interested in it when I started it.
And one of the reasons why I went forward with it anyways was because it was just a learning challenge for me.
I knew I wanted to eventually start a software company, in particular software as a service business.
And for me, this was just a stepping stone for me to kind of learn the skills that would be required to eventually, in my mind, start something better, more complicated, more valuable.
Omer (08:10.500)
Okay.
It was kind of interesting how you.
You ended up, like, starting the product.
Like, I think the first time I heard about you was in the summer of 2018 on Twitter or maybe LinkedIn.
Initially it was just like, you know, hey, message.
Hey.
Like, you know, I. I'm a listener of the SaaS Podcast.
Love the show.
And then you started sharing what you were doing to build out this product.
And initially all of this started with a WordPress site, right?
Reilly Chase (08:45.040)
Yeah.
So the MVP, basically.
I'd gone through several iterations of it before launching and really struggled to get it off the ground.
I tried different frameworks because I already knew a little bit of Python.
I was trying to get into using Flask, but didn't find SAS Stack kind of to start with there.
So I started looking at Django, another Python web framework, and I did find there were some boilerplate code online on GitHub and stuff.
So I started downloading different boilerplates for starting a software as a service website in Django and Flask and stuff.
And I went through a few different iterations of not being able to get things to work, not being able to get stripe integration working, and just basic, like, user dashboard things working.
So I was really frustrated.
I actually gave up for a couple weeks where I was like, hey, I'm gonna have to, like, this is something I want to do, but I'm gonna have to put it off for a few.
I'm not good enough at programming yet.
And then some of my friends poked me and like, hey, you still working on that thing?
I was like, ah, I should probably get back to working on it.
So I ended up trying it, I tried it again, and at that point I was like, trying to just figure out any way to make it work.
And one way that I tried was, and this is how it ended up working.
WordPress with recurring plugins for Stripe integration and recurring payments.
So basically WordPress handles the user registration, the checkout process.
I bought a WordPress theme that is the front page, but in the back end it's all still powered by Python.
So Python sees that someone signed up, took their payment, Python runs, builds a server, installs UniFi, does an SSL installation, all this stuff, and then saves it back to the database where it's displayed in the user dashboard.
So I was able to put together a SaaS company without knowing a lot about how the programming side of it worked.
Omer (10:29.480)
That is really cool because, you know, anybody can set up a WordPress site and there are a ton of plugins out there that let you integrate things like Stripe or, you know, whatever you want to do.
I'm curious, I mean, we don't need to get like super technical on this, but how did you integrate the Python script with the WordPress site?
Were you like running some kind of cron job on a server and just looking to see if there was some changes in the database?
And that triggered some, some of these jobs?
Reilly Chase (11:00.630)
So that was the most complicated part at this point.
I was so frustrated because I had already written like all the code that does the actual work of creating a server, doing all that that was easy for me to write, but then trying to figure out how to integrate it into WordPress, I was trying to figure that out.
I looked at Zapier, but the zaps.
So Zapier is like I could get a plugin where as soon as a customer registered, it would go to Zapier and then Zapier could trigger something else to happen.
So I tried to integrate it that way, but I found that it was too slow.
Like the zaps would run every five minutes or something like that.
So I didn't want the customer to have to wait.
And so after hacking around with it for a long time, I finally just came up with a way of doing it where, yeah, basically Python runs on a cron job.
Every one minute it checks the database to see if there is a subscription row that exists.
And if there's not a server row that exists that matches that subscription, it will build that server.
And then there's a whole bunch of other stuff about how to delete it.
And then there's other scripts that do backups.
But yeah, it just started pretty much that simple.
Omer (12:03.750)
See, I love that because that's not.
It's not the ideal way to probably build this.
And I know you're thinking about at some point replacing all the WordPress infrastructure and writing this kind of from the ground up yourself now, now that you kind of feel more confident programming.
But what you did there, I think what I really love about that is that a lot of people say I can't do this because I can't code, or I don't have a technical co founder or something like that.
Well, anyone could set up a WordPress site and do what you describe.
And even if they can't do the Python integration that you talked about, if you're super clear about what you're trying to do, you could probably find somebody on Upwork or somewhere who could probably get some of this stuff done for you, right?
Reilly Chase (12:53.510)
Definitely.
And I think there's a big movement right now called like no Code, where there's more and more things that you're able to do with platforms like Zapier and you can integrate different things.
There's a friend of mine has Ben, he has MakerPad and it's all about how to start subscription businesses basically, and different types of websites without any code.
Omer (13:15.480)
Okay, so how long did it take you from the point where you said, okay, I'm going to start to build this to going through with the different iterations with Flask and Django and then eventually coming with WordPress.
How long was that process to the point where you were like, okay, I'm ready to bring on my first customer.
Reilly Chase (13:32.680)
So it was like February or March when I first started iterating through different Python stacks and stuff.
And then by the time I got onto WordPress, it was like a one month period between figuring out that I could use WordPress and then launching in the middle of May.
Yeah, it was a few months.
Omer (13:49.680)
Okay, so let's talk about how you went about getting your first 10 customers.
First of all, tell me about some of the things that you did that didn't work.
Reilly Chase (14:02.880)
I just launched the website with basically a tweet on my Twitter account, which I didn't have very many followers.
I'd never start a company or like I didn't have a following or anything like that.
Really had a few hundred followers on Twitter and I tagged you Omer Khan in it.
And also some other people that inspired me, like Tyler Tringas.
So yeah, that was pretty much it.
Like I did the launch tweet, but then I knew I wasn't done.
Like I'd learned enough from listening to the show and reading that I can't just sit back and wait for people to come because they won't So I went out to.
The first thing I did is I went to, like, the Ubiquity forums and I. I made a post that I launched this service and then pretty much immediately the moderators saw it removed.
It warned me not to do that again.
At the same time, I kind of did that across a bunch of different channels and had the same result.
So I tried posting on Reddit, ubiquiti group or MSP group that had like 30,000 subscribers.
And I was like, oh, this is going to be great.
People are going to love this.
I posted there immediately.
It was removed.
I posted about hostify on Ubiquiti's, like, official Facebook page there.
You know, all these different places that I was just getting just removed and no one was seeing it.
And so, yeah, I was really kind of stumped, like, what to do.
I tried reaching out to people directly through direct messaging on the Ubiquiti forums.
I think I did, like, 25 or 30 people just, hey, I just launched HostFi.
What do you think about it?
I didn't get really any replies.
Maybe one or two people said, oh, that's cool, but I don't need that.
So it was pretty discouraging.
But I knew I wasn't gonna, like, give up.
I was just still, in my mind, I was still just practicing for what it's like to start a SaaS company.
Yeah.
Omer (15:44.910)
And I think that's important because you had very low expectations.
Like, you wanted to build this thing out.
This was almost like you said, it was a practice for you.
And that's very different to somebody who is so invested in their idea and sort of starts out by thinking, okay, I've kind of spent time and money building this, and now I need to get to my first million dollars as quickly as possible.
When you have that sort of expectation and you haven't validated the idea, and then suddenly you start contacting people and you're getting shut down and other people are telling you, thanks, but I don't need it.
That can be really disheartening, like, oh, crap, have I just wasted all of this time on an idea that nobody wants?
Reilly Chase (16:34.770)
I definitely was worried that no one would want it.
But like I said, I had really low expectations.
I was, you know, my investment was low.
It was a couple months of my time, which is a bummer, but I had put about $500 into.
Primarily the cost was the WordPress plugins.
So, I mean, very low investment.
And, yeah, I remember having an expectation that if I could get to 10 customers, that would be pretty cool, because 10 customers, for me, you know, that's like, break even, where it's like, yeah, that was kind of worth my time.
Or it was not too bad.
Omer (17:05.120)
Yeah.
And I think it's Jason Lemkin who says that, you know, if you get your first 10 unaffiliated customers, like, it's not your mom and your friends and stuff like that, then you're probably onto something there.
So what eventually worked?
How did you eventually get those first 10 customers?
Reilly Chase (17:22.490)
So I started looking at, like, social media, Facebook, LinkedIn, Twitter, Instagram, and the first place I got traction was on Twitter.
I had a really hard time on Facebook and LinkedIn because I learned I'd never done, like, a Facebook page or a LinkedIn page, company page before, really.
So I started learning that, like, the differences between the platforms, like, Facebook as a company, you can't friend someone, you can't like their stats, and you can't comment on other people's stuff.
So there's differences between the platforms and what was different about Twitter and the reason why it started working.
And it's the same for Instagram, but I didn't really get into Instagram as much.
But basically, on Twitter, your account is just like a normal person.
As a company, you're just another person.
And what that means is you can interact with people, you can like their stats, you can comment, you can follow them.
And so what I started doing is, I don't remember when I integrated tweetdeck, but early on, I was just searching for hashtag ubiquity, hashtag unify, basically all these different related search terms in Twitter to pull up conversations that were going on about the niche that I was in.
And so I started liking what people were saying, commenting, following other people.
And then obviously I had my profile set up with the company logo, a description of what we do, and I'll link to our website.
And so I think that's where I started to first gain a following and also get some traffic on the website.
So, yeah, that started to work pretty well.
Omer (18:46.390)
And do you remember when you got your first paying customer?
Reilly Chase (18:48.790)
Yeah, I do.
I can't remember what day it was, but, yeah, it was a couple weeks after.
So I think it was two or three weeks after I had launched.
And during that time, I had been doing all these things, posting on forums and Twitter and different stuff, and I finally got my first customer.
I always remember I. I was driving in my truck on the way to work, and I looked down, my phone buzzed, and I got a customer.
So Somebody signed up for $5 a month and he was on the other side of the world in like the Netherlands or something.
So it was really cool.
Omer (19:19.390)
Nice.
And yeah, I mean you were going to work cause you were only working on this business evenings and weekends, Right.
So you didn't have a huge amount of time to work on it.
Reilly Chase (19:28.350)
I had a full time job and I also was in college full time, remotely like online school, working on a degree in IT security.
So yeah, I didn't have a lot, but when I would work on it would be I would get home from work at like 5, 6 o'.
Clock.
And then my girlfriend, now my fiance Emily, she was working second shift so she wouldn't get home from work till like 10 or 11.
And so I would work every day from like 5 to 10 on Hostify.
Omer (19:52.810)
Wow.
And how much time are you spending studying as well in the week?
Reilly Chase (19:56.330)
I just do it like when she was home we would just like study together because she was in college too, getting a degree in accounting.
So we would just kind of like my school is like really laid back, so it's go, go at your own pace.
So I would just kind of set a goal like I want to get this class done like this month or whatever.
And I just kind of fit it in when I had time on the weekends and study, when she was studying and stuff.
Omer (20:14.820)
Okay.
So eventually you get to your first 10 customers and do you know like how much revenue you were generating like around the end of 2018, like just
Reilly Chase (20:33.150)
roughly so like December.
Yeah, so December 31st I was at $2275 monthly recurring revenue, so about 2K.
Omer (20:46.350)
So during that time you'd built out Hostify, you're generating a couple of thousand dollars in mrr and most of that was coming through Twitter or was there
Reilly Chase (20:58.300)
anything else at that point?
And it was like right around December, January, where one other method I had found that was working was I wanted to get to the front page of Google results for certain search terms like unifi, cloud hosting.
And because my domain wasn't ranking there yet, one kind of workaround I found was I searched for unified cloud hosting.
I saw, and I think I got this from one of your podcasts too.
I saw that one of the sites that was coming up on the top of the results was a forum.
It was Ubiquiti's forum.
So I went in there and commented on that post.
And so that started to refer traffic.
Omer (21:31.050)
Because you had a link in the signature back to your site.
Reilly Chase (21:35.210)
Yeah, I had a link in my signature, I think I was even just saying the post was about how Ubiquiti had made a price change and their cloud hosting was really expensive.
So I kind of made a post just like, yeah, I started this one.
It's a lot cheaper or something like that.
And for some reason I didn't get like banned for that.
But yeah, so that was referring traffic that was helping a lot in addition to Twitter.
So it was probably like 50, 50 between that and Twitter and stuff like that.
But then it was right around December, January, where I did actually get first page Google ranking for some search terms.
And so that really changed the growth.
Omer (22:09.290)
Okay, and then you started off charging five bucks a month.
And now when I look at the pricing plan, you've got the starting, but there's a free plan and then 19 bucks a month, 29amonth, 49amonth.
With those, like, recent changes, or did you start raising your price in 2018 as you started seeing customers coming in?
Reilly Chase (22:34.050)
So I actually changed prices.
I think it was in October and it was when I got to a hundred customers.
And I had been doing some reading and stuff about how, like, if you're making less than $10 a month on your SaaS, because I have expenses for.
So I have to pay for the server, which is $5 a month.
The stripe transaction fee is almost a dollar sometimes.
And then I also do backups for people, so that cost is kind of spread across all the servers.
But yeah, so it's only like 60% profit on the subscriptions.
And so I've been doing some reading that if you're below $10 a month, you're probably not going to survive it.
Once you get to scale, it'll be too much support work and everything.
So I tried to make some changes and I did change the minimum to $19.
But I also.
That's when I kind of.
I found product market fit, too.
It was a little before I got to 100 customers, but, yeah, I kind of figured out who my customer was.
And the people who were paying $5 a month were churning a lot as well.
So I got rid of the $5 and $10 plans, and I started the first payment plan at $19 instead.
Omer (23:35.610)
Okay, so Hostify is starting to do well.
You've got customers, you've got about 2k now.
A lot of people would have said, okay, double down on that and really kind of continue to focus on growing that business.
You did something a little different because then you built two more products.
One was called Ghostify, the other one was Captify.
Tell me about, like, when did you build those and why you decided to add those products into the mix?
Reilly Chase (24:10.990)
So I think it was in November is when I started working on Ghostify.
And the inspiration for that really came from reading Makebook IO by Peter Levels.
He's this guy that did 12 startups in 12 months and he's a big advocate of launching stuff all the time, seeing what works and then growing and building multiple businesses at the same time, stuff like that.
I was kind of inspired that I could do more at that point.
Hostify was small enough that support was pretty low.
I didn't really feel like I had a lot of product improvements that I needed to make right away.
And so I was like, almost kind of bored, like I wanted to do more stuff.
And so, yeah, I started working on ghostfi, which is like a VPN service.
And I had plans to like just keep starting things.
And, you know, I was going to keep on working on hostify, but just in case it doesn't work out, I'll have like some other streams of income.
Omer (25:01.150)
Got it.
Okay, so you've now got three products, you've now got three times as much different things to think about.
At what point did you realize that this probably wasn't the right thing for you to be doing?
Reilly Chase (25:14.220)
So I think I realized, I think it was in May of this year.
A few months ago, I had launched Ghostify, the VPN service, Captify, a WI fi marketing software, as a service tool.
And then I also launched MSP Story, which is an online community for IT service business owners.
And then that's kind of when I began to realize, wow, like I've got all these things going, they all need work and I don't have time to.
It was particularly, I think, when I launched the IT service community that I realized that a community takes a lot of time.
Like you have to be there answering questions, writing articles and like doing all these things.
And at the same time, I had captive, I had just launched and IT needed marketing.
The program worked really well, but like, I wasn't marketing it very well.
I didn't have very many customers.
And then Ghostify had launched and it was doing good, it was doing all right, had like 25, 30 customers.
But the product, it needed a lot of work for the onboarding process, new features, and people were asking me, when are you going to get these features done?
And every time someone signed up, it was like a drag because I hadn't really perfected the onboarding process or at all really.
It was like a Note that I had written that I'd send people and then they need help setting up this device and that device and their router.
And so all on top of that, I had these three things.
Ghostify, Captify, and MSP Story.
And they were just, like, not making very much money.
You know, between the three of them, you know, the community wasn't making any money.
So between the two other SaaS businesses, it was like less than, like, $500 a month.
But then at the same time, I've got Hostify that in that month did $6,000 a monthly recurring revenue.
So it just became kind of obvious to me that I needed to focus on HostFi, and that was what was working.
And I had a lot to do with hostify that I didn't know back in November when I started GhostFi, that there's a lot of things that I still need to do to hostify, like getting the onboarding better, doing a lot of things to make the product better that I wasn't even aware of at a smaller scale.
Omer (27:16.729)
So I think it was around the end of 2018 when I think it was either a tweet or you posted something on LinkedIn and you said, One of my goals for 2019 is to be a guest on the SaaS Podcast with Omer.
And I saw that.
What did I tell you from that?
Reilly Chase (27:39.600)
I think it was going back a few months before that.
I had written a blog post about what I was up to with hostify and stuff, and I think he had commented and said, great job.
When you get to $100,000 a year annual recurring revenue, let's have you on the show.
And so I was so excited.
I was like, that's the coolest thing, because I've listened to almost every episode except for some of the most recent ones of the show, and they were a big inspiration to me when I was building hostify.
So, yeah, I was super honored to be on the show.
And also, I hadn't never really thought about, like, this could get to 100,000 or when will it get to 100,000?
And so I was like, you know, I kind of looked at the numbers, looked at the growth, and I was like, I think in 2019, I can get this to 100,000.
And so everyone was talking about their New Year's resolutions.
It was January 1, 2019, this year.
And so I was like, my goal for this year is I want to be on this show because I want to get to 100,000 revenue.
Omer (28:31.600)
Yeah, that was awesome.
I think that was a Great way to start the year and have something just to kind of focus on.
It was kind of.
It was kind of like a shared goal that we'd sort of created.
And then I think it was about six days after that something happened.
Right.
Not so good.
Reilly Chase (28:50.000)
So that I think.
I'm pretty sure that was January 1st, and then I think it was January 7th.
I got fired from my job.
And, yeah, so that was.
That was a surprise.
Omer (28:59.920)
And, like, you got fired because they thought that what you were doing there was.
There was either some kind of conflict or whatever.
Right.
There was some issues there as they saw you kind of talking more publicly about what you were doing on the side.
Reilly Chase (29:16.050)
Yeah.
So, like, it goes back a while back, I had started a IT service business.
I mean, I've had an IT service business on the side for the last four or five years.
And then the company that I worked for, they're also an IT service business, even though they're totally different.
Like, they do government enterprise, that it's small business.
But anyways, they said, like, we found out about your website, Lachlan Networks.
We want you to close down your websites.
And so that was in, like, March or something.
And at that time I was like, sure, whatever.
Because I was like, I'm already working on the SaaS thing.
I didn't tell them that, but I was like, I don't really care about the IT service business.
I'm trying to focus on, like, product and SaaS is what I'm into these days.
So I was like, all right, I'll close it down.
So I closed it down.
And then, like, out of nowhere, on January 7th, they, like, fired me because they said that I had continued working on it, even though it's something else.
They felt that I had still had a conflict of interest by working on something outside of work.
Omer (30:05.530)
So, yeah, and that was not the best way to start the year.
But I love how determined it made you to succeed with Hostify.
So tell me about, like, once you'd had time to process what had just happened and you decided that I was, you know, you were going to go all in with this SaaS business, what kind of changes did you make to put yourself in the best position to succeed?
Reilly Chase (30:37.030)
So it was a big surprise.
I didn't see it coming, and I wasn't super prepared.
I just bought a house six months ago.
I had planned on working at that company for a long time.
I liked my job there.
And I had always kind of thought about this as being a side thing, that maybe someday if Hostify gets to where it's making much more money than my day job, then I will make a smooth transition over.
I had really not planned out quitting or I had no plans or intentions of doing that at this time.
And at the time the revenue that Hostify was making was smaller than my mortgage payment.
So it was like not survivable for me and my current expenses and my situation.
But I was, like you said, I was very determined.
I was a little bit pissed off.
Like I didn't want to have to work for someone else.
I didn't want to be, you know, treated like that or like, you know, whatever.
So I wanted more control of like my financial situation where someone can't just like take it away from you.
And I just decided like, no matter what, like I'm not going to apply to another job.
And I didn't.
And I think that was a big important thing because in the past I had another six month stint of going full time on my IT service business.
And at the same time, towards the end of that six month stint, I was starting to like, not like it.
I started applying to jobs and I got a great job offer and so I was back at it with the job and everything.
But this time I think what was different was I was just committed I was not going to apply to jobs and I decided I was going to sell my house and do whatever it takes.
Omer (32:04.540)
Yeah, I mean, that was amazing.
And at that time you also started thinking about raising some seed money to help you grow a little faster.
And at that time I had suggested, hey, why don't you check out Hustle Fund and talk to Elizabeth Yin over there.
And you were kind of looking at different options, but ultimately you ended up raising some money at Earnest Capital, right, with our friend Tyler.
Reilly Chase (32:35.740)
Yeah, that's right.
And the funny thing is I'd started this business reading about the Bootstrapper mindset.
Never raised venture capital and I was committed to not raising any money.
But it just so happens that 2019 was the perfect year to do something like this because all these kind of bootstrapper focused funds popped up where they're focusing on really small software businesses and in particular Earnest Capital really appealed to me because I was a big fan of Tyler and I had read his book micro SaaS ebook and that was really big inspiration for me to start Hostify to begin with.
I'd already been following him on Twitter, I knew what he was up to and I was following his updates about how he was starting Earnest Capital.
And so that was definitely my number One pick.
But I also applied to Hustle Fun because you gave me the introduction there.
And then there's also Rob Walling started Tiny Seed.
So I applied to those three different funds.
Omer (33:31.050)
And how did you end up using the money that you raised?
Reilly Chase (33:34.010)
So far I haven't used any of the money that I raised, but it was a great safety net for me.
It was primarily a safety net.
I couldn't see the future.
I didn't know that I was going to be able to pull this off financially, this transition.
And it just so happens that my house sold at the right time, I reduced my expenses, MRR grew and so I never really bottomed out.
Exactly.
But I still would have done the deal every time because of the value of the mentorship, which is really the primary reason I did it was the mentorship and the connections and help that I've had from being a part of Earnest Capital.
Omer (34:10.420)
Yeah, I think that's awesome.
Recently you started an affiliate program as well.
And how did that help to grow the business?
Reilly Chase (34:19.700)
Yeah, that was last month actually.
And that's been the biggest like single driver of growth that I've had so far.
So actually was kind of someone asked me if I had an affiliate program.
I said no, but let me find out because I knew who this person was.
Tom Lawrence.
He's a really well known guy in this space of he teaches IT service, business owners, all kinds of stuff and he makes a ton of videos about Unified Ubiquiti, how to set up these network devices and stuff.
He's got a huge following on YouTube.
And so when he asked me, he said, so people have been telling me about your business.
I really like what you're doing.
I'd like to make a review of it, but you know, I'll still make the review, but if you had an affiliate link that I could put in there, that'd be cool.
So I was like, of course, let me go figure that out.
So I went and I went to the Earnest Capital Group, we have a Slack channel.
And I was like, hey guys, what are you guys using for affiliate stuff?
So someone recommended to me get rewardful.
And I went and it's like this affiliate thing that's built specifically for SaaS companies and integrates with Stripe.
And it was like perfect.
So it took me only like a couple days to figure it out.
Now remember I'm using WordPress so I had to dig into plugin code that I hadn't written and change some stuff around but ended up working out just fine.
Tom made the review of Hostify and it got 8,000 views on YouTube and a ton of people came over and ton of new customers and it was the biggest month.
I think it was like $16,000 gross revenue last month.
Omer (35:46.500)
That is awesome.
So the year started out by you saying, okay, I got this one big goal.
I want to be a guest on the SaaS Podcast.
Less than a week later, you get fired from your job.
In hindsight, that was probably a good thing because it allowed you.
It opened up new opportunities, it allowed you to get a lot more focused.
You decided you weren't going to continue with multiple products.
You were going to double down and focus on Hostify.
You were able to raise some money through Earnest Capital with Tyler.
And then the affiliate program also turned out to be an opportunity that you weren't planning to work on, but you responded to when.
When somebody asked you about that.
And it was a few weeks ago that, that I got a message from you saying, I did it.
And it was like, yeah, you've.
You.
We'd basically been saying, okay, when you start doing about.
What was it, like $8333 mrr, which get you to on track for 100k, let's get you on the show.
And you exceeded that.
And that wasn't just like a spike in your numbers.
You've been doing pretty well over the last few months anyway, right?
Reilly Chase (37:00.440)
Yeah, it's just been a slow, consistent growth, like 10, 20%.
It's not like super slow, but I mean, it feels really slow when you're in it, that's for sure.
And I kind of knew I had some expectations about, I can't remember what, what Tyler called it, but like the SaaS ramp of death, where it's like just slowly growing each month, you know, and you're just waiting, like you just, you know, someday it's going to get there.
Omer (37:19.590)
But yeah, yeah, no, that is awesome and I think it's a great story and, you know, I'm so happy for you to see sort of where you started out and, you know, some of these challenges, especially on the job front that you had along the way and how you've sort of turned this around.
Because I remember initially when we talked and I threw out the 100k number, you were super conservative and you'd sort of said, okay, based on how I'm growing now, I think I should be there in about two and a half years or something like that.
And I'd kind of like jokingly said, well, I'm pretty sure based on what you've been doing.
You're going to get there a lot sooner, but to sort of get there within sort of after the first half of 2019, I think is awesome.
And congratulations for everything you've done here and how you've continued to stay focused and resilient through those tough times.
I think that's been really incredible.
I think it's a great story.
Thanks.
Reilly Chase (38:19.870)
I appreciate it.
And it meant a lot to me when you said that.
Because when you said that, it really made me think, well, he would know, so maybe I can get there faster.
Omer (38:28.550)
Yeah, and you did.
I could take total credit, but I think we should wrap up.
Let's get on to the lightning round.
I'm going to ask you seven quick fire questions.
Are you ready?
Reilly Chase (38:45.360)
Yeah.
Let's do it.
Omer (38:46.800)
Okay.
What's the best piece of business advice you ever received?
So I want to share.
Reilly Chase (38:51.800)
This blog article that I read that always stuck with me.
I read it around the time I was starting Hostify was that people with too many interests are more likely to be successful.
And it said, according to research and it was an article about how traditional advice is that you should just have one trade.
But actually as a business owner, if you have a lot of different interests, it really comes in handy.
My advice would be to take three different interests that you have.
For me, it was Linux, Python programming, and Ubiquiti Networks and think about how you can combine three unique interests that you have in a way that you can start a business that very few people would start.
Omer (39:31.720)
Love that.
That's really, really cool.
What book would you recommend to our audience and why?
Reilly Chase (39:36.280)
The book that really changed my mind from starting a service business to creating a product or a software business is a book called the Millionaire Fast Lane by MJ DeMarco.
And yeah, he's the founder of limos.com and he just wrote a book that really helped me think more about products and software instead of services.
Omer (39:54.120)
Cool.
What's one attribute or characteristic in your mind of a successful founder?
Reilly Chase (39:58.510)
I think one of the most common answers on the show I'd have to agree with is grit.
Just not giving up.
Omer (40:03.150)
Yeah.
What's your favorite personal productivity tool or habit?
Reilly Chase (40:07.470)
Lately I switched from just doing like email support like in my inbox to using Intercom and that's been amazing.
Omer (40:14.670)
What's a new or crazy business idea you'd love to pursue if you had the time?
Reilly Chase (40:19.310)
Business I was kind of really passionate about was Ghostify.
And what was really interesting is I started like this VPN service and, and I made it for myself.
But then what was really interesting was, like, people from all over the world actually signed up.
And one thing I realized was a lot of these people are fighting against, like, Internet censorship.
So in China and in the Middle East, a lot of people don't have free access to the Internet.
They're being filtered about what they're looking at, and they can't get to certain websites, and so they have to use VPNs.
And I want to help them to bypass and get, you know, free access to information that can help them.
Omer (40:48.470)
What's an interesting or fun fact about you that most people don't know outside
Reilly Chase (40:53.130)
of starting SaaS businesses?
I really enjoy security and bug bounties, hacking.
Omer (40:58.410)
And finally, what's one of your most important passions outside of your work?
Reilly Chase (41:01.450)
Getting out in nature, like spending time with my fiance.
We like to go camping and hiking and just, like, get away from technology sometimes.
Omer (41:09.130)
Awesome.
All right, so if people want to check out Hostify, they can go to hostify.net and we'll include the link in the show notes to that.
And if people want to get in touch with you, what's the best way for them to do that?
Reilly Chase (41:24.980)
As far as social media, I'm most active on Twitter Chase, and you can always send me an email to rchasechase.com awesome, Ronnie, congratulations.
Omer (41:38.900)
Great job on getting to that, that 100k ARR goal.
I'm really looking forward to seeing what you do over the next year.
And, yeah, I'm just really happy.
I think this is a great story and I'm just delighted with what you've been able to achieve.
Reilly Chase (41:58.430)
Thanks so much.
I really appreciate it.
Omer (42:00.110)
Cheers.
