The web hosting industry is a viciously competitive one. We had a good look at it recently when we interviewed Cody McLain, who had some big successes and failures in that industry.
Here’s another amazing success story from someone in the web hosting industry – Jason Cohen from WPEngine. In an industry where most businesses compete on price, Jason has focused primarily on quality. In doing so, he’s found and mastered a niche in the WordPress space (i.e. providing hosting for sites that run WordPress).
In this interview, Jason discusses how WPEngine began, how they’ve positioned themselves to stand out in their industry, and how he took a very basic idea and grew it into a wildly successful, 8-figure business. What I found especially valuable in this interview were Jason’s tips about the things he wishes he knew when he first started out as an entrepreneur.
Check it out, and enjoy. 🙂
Jason, it looks like you’ve built a great business with WPEngine. Although I can’t say I’ve used it before (that may change as my hosting needs change), I know people who do use it and love it, and it really seems to be a great overall solution for WordPress users. Tell us a bit about your background and journey. How was WPEngine created? Did this start as a “one-man operation” or did you partner with others right off the bat?
The kernel of WP Engine came from the typical place — a problem I had myself. However, like a grain of sand in an oyster, such revelations are just the start, not necessarily a business. But after speaking with about 50 potential customers, it was clear this was a pain shared by many, without a satisfactory and obvious existing solution. Once we had a few hundred customers, it was easy to continue asking about their lives and figuring out new things we could build to increase the value of the service.
This is how I vetted it, compared with the previous idea: http://blog.asmartbear.com/vetting-startup-ideas.html
What do you consider to be your greatest success (or successes) so far with WPEngine?
Our growth has been phenomenal, yes, putting us in the top percentile of companies, even in tech. We’re in 8-figure annualized revenue and still expect to triple in size this year.
However, that’s not what I’m most proud of. I’m proud that the 140 jobs that we’ve created — and the 200+ jobs we will have created by the end of this year — are great jobs. Jobs worth having. Where even if you don’t have a college education you can be paid properly, with full employee benefits, with a chef and coffee, with a window, alongside people who have your back, where others care about your career and what you want to do next, and though you have to earn your way there, we make those movements possible inside the company.
Every success we have on the top-line means we’re truly making the world better, not because we’re “making a dent in the universe” or hoping that a billion people stick their nose in our app, but because every customer is more in control of their online presence than they otherwise would, and getting the service they deserve from people who care about them, and every new job is another good job.
That’s valuable at any scale, and we’re fortunate to be able to do it at increasingly larger scale.
Building and growing a business this large and popular probably comes with its share of challenges. What’s the biggest challenge you’ve had to overcome, and what did you learn from it?
Keeping ahead of that scale I just mentioned! We’re constantly hiring, which means finding people who match our culture and aptitude expectations, interviewing, hiring, training, integrating, all difficult. That brings new human structures inside the company, constantly changing which is difficult for anyone to live in or to manage. A similar challenge occurs on the technology side as we manage 2000 servers and more every single day. Even something that happens “one in a billion times” happens 20 times per day. Finding, fixing, or managing very rare things is inherently hard.
There’s more, but the theme is always the same — fast growth is hard for any company, and we’re no exception.
I know web hosting is a very competitive market, and you’ve clearly carved out a successful niche within that market. A large part of that is due to having a quality product, no doubt. Early on, however, not everyone knew the quality that WPEngine offered. What were some of the strategies that enabled you to compete early on and ultimately win over customers, when their “hosting dollars” were probably being sought after by dozens of other hosting companies?
Being more expensive already sets expectations that “this must be better.” Of course we have to follow through on that, along multiple dimensions, depending on what “better” means for different customers. For one it might mean that we found and fixed a security hack in the site they brought over to us, proactively doing that for them as normal tech support. For another it might be access to a phone number 24/7 where before they didn’t have that, or that the human on the other end of that phone is helpful and understands WordPress. For another it might be that their site loads 4x faster than before. For another it could be that we kept the site up under a big load of traffic.
However, we’ve always operated with the challenge that we should be “more expensive but 10x better.” That’s a more interesting challenge, in my opinion. The converse is to see how low you can make prices and still have a viable business, but that’s a business where the main goal is reducing costs, which means seeing how little you can get away with in customer service, and how many customers you can cram on a single piece of hardware. That’s challenging, of course, but not a challenge I enjoy.
I would rather ask: “How can we continue to justify being more expensive?” Which means: How can we make sites even faster? Even more scalable? Add even more features? Make it even more pleasant to create sites with us? Make our customer service even better? To be sure, these are difficult challenges too — maybe harder than those of cost-savings! — but these are worthy and interesting.
Almost all hosting providers run towards price-competition instead of quality-competition. Thus they commoditize themselves. We have chosen a more difficult but more rewarding path.
Many of our readers are entrepreneurs at the ground level of their businesses, and some just have an idea with no actual business running yet. What are 2-3 things you wish someone would have told you when you first started out in your own business?
1. Charge more than you think you should, then behave like you deserve it.
2. Focus on getting enough customers to be profitable or raise that first round, rather than on a grand vision which you cannot execute on today, and which doesn’t pay the bills, and which is likely to be different in a year.
3. The journey is the purpose. Don’t do it for the potential of big bucks or of a big sale or your name in lights. Because that’s unlikely to happen, and even if it does, that means years of toil for minutes of “happiness.” Love the journey, the challenge, the process, and you’ll love the next 10 years. Otherwise you’ll hate it in pursuit of something else you think will make you happy, but as the old adage goes, that won’t make you happy either.
Do you have a favorite inspirational saying or quote that has guided you on your path to success?
Go forward. Faith will follow. — d’Alembert, telling his students to trust that Calculus is valid. [Click here to tweet this]
What are your favorite WordPress resources online?
Finally, where can people find you online?
I blog at http://blog.asmartbear.com about small startups, and sometimes Tweet at @asmartbear.
Of course come join us at http://wpengine.com for your WordPress hosting and see whether we walk the walk stated above.
Thanks Jason – I really appreciate you taking the time to tell us about your story and the success of WPEngine.
What did you think about this interview with Jason? Leave a comment below!
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