The business behind hosting companies

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Today’s guest is an entrepreneur who had a hosting company. They had a challenge with hosting videos on their site and they thought, “Let’s create a product that solves it.”

And they did. And then it failed. But then they kept talking to their customers and understanding the real pain, understanding the bigger issue.

They now have a video hosting and monetization platform that is doing phenomenally well. I invited the founder, PJ Taei, to talk about how he launched Uscreen.tv. He’s made it into a business that just keeps growing revenue and I want to learn how this process works of understanding customers.

He told our producer he’s so freaking obsessed with talking to customers he spent two years doing it. I want to know how he gets them on the phone, how you can understand what your customers are going through and I want to know how we can build better businesses that actually address people’s needs, their deep, deep needs.

PJ Taei

PJ Taei

Uscreen

PJ Taei is the founder of Uscreen, a video hosting and monetization platform.

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Full Interview Transcript

Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.

You’ve heard me say it over and over again that the surest way to start a successful company to create a successful product based on my interviews is to find a pain, make sure that enough people have it and then start to address that pain and today’s guest did that. He’s an entrepreneur who had a company that was a hosting company. They had a challenge with hosting videos on their site and they thought, “This is it. Let’s create a product that solves it.”

And they did. And then it failed. But then they kept talking to their customers and understanding what the real pain was, understanding what the bigger issue was, addressing that and doing, they have video hosting and monetization platform that is doing phenomenally well. I invited the founder, PJ Taei, to come on here and talk about how he launched Uscreen.tv and how he’s made it into this business that just keeps growing revenue. And I want to learn how this process works of understanding customers.

He told our producer he’s so freaking obsessed with talking to customers he spent two years doing it. I want to know how he gets them on the phone, how you can understand what your customers are going through and I want to know how we can build better businesses that actually address people’s needs, their deep, deep needs.

This whole thing is sponsored by two great companies. The first will help you sell more, helps me sell more, helps so many people sell more. It’s called Pipedrive. The second will host your website right. It’s called HostGator. PJ, welcome, man.

PJ: Alright, Andrew. Happy to have you.

Andrew: Wait, happy to have you—you have a mic and you said happy to have you. That means you must have a podcast too.

PJ: No, I don’t have a podcast, but I’m on podcasts often and I speak to a lot of my customers so I tell them happy to have you on the call. So, that’s what that habit is from.

Andrew: I see. Okay. Alright. Talk to me about dollars and sense. I know that what people do is if they have video online, they want to sell their video, they come to Uscreen.tv, they upload their videos and you help them sell it as a one-off or a subscription service. I want to know revenue, dollars and cents, how much are you bringing in for your business.

PJ: Alright. Good stuff. That’s exactly what Uscreen does. So, Uscreen right now is doing about $100k MRR. So, we’re doing $1.2 million a year and the I will share my customers revenues with you. We have about 600 paying customers total. They’ve done about $5 million in subscriptions just in the last six months, not all of 2017, just in the last six months, about $2.2 million or so in fixed price offers.

On Uscreen, when you’re monetizing videos, you can either sell subscriptions, you can sell fixed price, write transactional and you can also do rentals. Subscriptions by far is the most popular. 80% of our customers do subscriptions. In fact, a lot of customers that start out start out thinking they’ve got to do fixed price offers because they’re going to make more money. They quickly launch a subscription channel. We try and convince them to do a subscription offering and then they’re very successful and I’ll name some of those customers for you as well later on.

Andrew: What’s the percentage of your revenue that comes from subscription versus flat one-off sales and rentals?

PJ: Well, we charge our customers in a subscription model. So, we’re a set platform, fee $99, $199, $499 a month.

Andrew: Regardless of how they sell, you charge them a monthly fee?

PJ: Correct. 100% of our revenue is platform fees, subscription fees.

Andrew: Okay. So, let’s talk about how you got this thing started. I do want to hear later on about some of the use cases, I’ve been going over them on your website. I want go back further than I initially expected because I was looking at your LinkedIn profile and it says that you used to do tech support at UUNET. You’ve got to tell people what UUNET was.

PJ: Yeah. UUNET, it’s funny you asked that. So, UUNET was originally one of the key backbone providers in North America and they got bought by MCI WorldCom and then now it’s Verizon. So, they had a huge facility in Ashburn, Virginia about an hour from my house. I grew up in Maryland. It’s still there. It’s Verizon. Ashburn at the time, it’s near Dulles Airport. It was pretty vacant, but now it’s fully of everyone that’s migrated there. They ultimately are a backbone provider. Your internet still to this day is riding on the backbone that UUNET originally put down the fiber.

Andrew: Okay. So, how did you end up in Washington DC?

PJ: So, I originally immigrated from Iran when I was seven. We moved to California for a year and then moved to Maryland, Gaithersburg, to be exact, and then I moved to the city itself where our office is in Dupont Circle about two years ago, but previous company, hosting company was also in Maryland as well.

Andrew: So, when I lived in DC and I did for about three years of running Mixergy, I freaking loved it. But I also discovered that there was a pretty big tech scene there and largely it’s because of the original government backing of the internet, the original companies that ended up over there and then that kind of sprouted other tech businesses. It seems like that’s what happened with you. So, you started a hosting company. You sold that hosting company, right?

PJ: Correct. I sold it to a Canadian corporation called EntirelyDigital. They’re based out of Toronto. They acquire smaller hosting companies. I got in hosting right after I was doing some contracting like at UUNET and other companies doing Microsoft and Cisco stuff and then I got into hosting because my brother was doing some freelance web design. So, he was like, “Come host some of my sites.” At the time, I was like, “What is web hosting?” This is in about 2003 and then I launched it by ’04, put a website and immediately started getting some hits, did some marketing.

Andrew: Did you resell someone else’s hosting?

PJ: Initially, we did resell, yeah. Initially what I did is I actually got a rack at a company in Houston called Rack Shack, EB-1 servers. They then were acquired by a larger hosting company.

Andrew: You actually got your own servers? You put them in a cold room somewhere?

PJ: Yeah, at the beginning, which was a mistake.

Andrew: Why?

PJ: We used something called cPanel. Now, cPanel is still around and it’s huge. But at the time, they used to joke and say it’s a panel. It was very basic. So, we put cPanel on a basic server, an Ensim server and it was very buggy. Then I jumped into another company based in Baltimore, Maryland called Alabanza. That was a full hosting solution. Their servers were very expensive. I remember it was $1,000 a month per server and they gave you the control panel, the hosting server and the billing system. I started reselling that.

Luckily, at the time, hosting was a lot more expensive, so I became profitable pretty quickly. I did eventually resell. Then I got my own servers in Ashburn in another data center called RagingWire. This is about six years after I started. Then we started hosting our own equipment because you get into broader hosting like dedicated servers and that’s where I got into video.

Andrew: Let me take a moment to just understand it. I get the appeal of web hosting. In fact, I remember I interviewed Neil Patel. He said one of his big losses was starting a hosting company. Still, I understood why he did it. He said when someone pays for a hosting company, they’re likely to keep paying month after month. It becomes this nice ongoing revenue stream. You don’t have to do that much to host it. I didn’t realize you didn’t have to do that much as a company to set it up for them. I’m wondering where you got your customers, though. We’re living in a world with tons of web hosting options. So, how did you get your customers?

PJ: Yeah. That’s a good point. So, when I started in ’04, initially my first two years, most of my customers I got I was doing reseller hosting, so I was enabling web designers to host websites just like my brother did. So, I went after resellers. I actually picked up almost 100 resellers my first two years and they were just adding a few sites a month, every other one was adding a few sites a month.

Andrew: You would call them up say, “Look, I know you’re creating websites. You don’t have a hosting company. You’re probably using some other service. Use ours instead.” How did you get them to use you instead of whatever hosting company they already had?

PJ: Initially, there wasn’t that much competition, they were so happy to be able to do white label hosting. They just jumped in.

Andrew: I see. So, you gave them the white label hosting. So, as if they’re not only creating it, but they’re also hosting it in their own company, got it. It gives them more credibility, it gives them something more to sell and it gives them ongoing revenue after the initial setup fee.

PJ: Correct. Then you know who came in? HostGator came in and the guy who started that is Brent Oxley. So, I’m still friends with him. He owns a big ranch in Texas now and lets people hunt on it and stuff like that. You can actually look it up, Brent Oxley farm or ranch. Anyway, he came out and he was just a beast and he came out and he cut everyone’s pricing and he was just operating at a different level and he took that business away from us growing it. Just like Neil Patel says, when you get a hosting account, they’re not going anywhere, it’s the stickiest business you’ve ever seen. But if you’re not growing, you’re dying. So, that’s why I got out.

At the end, my hosting was not growing. After reseller hosting, I got into ecommerce hosting. So, right now there’s Shopify. Back then, there was no Shopify. Magento was around. It was open source. It was very clunky. I partnered with a company in San Diego called Miva Merchant and I started to resell Miva Merchant. I became a partner. I used to buy their licenses for $50, but I used to sell them at $50 a month packaged with my hosting.

Andrew: I see.

PJ: We got 700, 800 hosting accounts for Miva Merchant. Customers, that’s when I got into dedicated because when people are selling, they’re willing to pay $300, $500, $800 a month to host their servers on dedicated servers. That’s when we went into our own data center. That’s when the business really started to move forward. From there, when that started to plateau because Shopify came out, Miva started doing hosting themselves, so they wanted to take our customers. When they happened, we jumped into video hosting and other types of hosting.

Andrew: All within WebNet Hosting did this?

PJ: Yeah, correct.

Andrew: Got it. You said, “What’s the next hosting thing? What’s the next thing to host?” And you just kept looking and looking and looking and jumping from one thing to the other. Then when the video hosting took off, you decided, “I’m going to sell the other stuff because it’s more commoditized.”

PJ: That’s exactly right. Remember, in hosting, you can acquire as well. So, I acquired smaller hosting companies and that allowed me to grow. You would acquire them around one time, so 12 months of revenue and I would pay them off within 12 months and then you’re sticking around at a really good rate. So, it becomes profitable after a year.

Andrew: Yeah. Unless hosting stinks, people tend to keep it around. Even blog hosting, if they’re not making money, they invested so much time in the site, why get rid of it? You just keep paying and you keep the site up. We’re talking about pretty inexpensive stuff. How big did you get the business revenue-wise? How much revenue a year?

PJ: So, WebNet Hosting, we got it to about $1.3 million, about 5,500 sites, so not that big considering your HostGator and stuff like that. We had to start cutting price at one point to start offering discounts because GoDaddy came and it was a dog eat dog world. It really changed. Hosting changed extremely quickly. One of the things that changed hosting was reseller because everyone and their little brother now could host, could host ecommerce, could host WordPress, could host PHP sites, everything anyone can host. So, everyone had become a web hosting company.

Andrew: What do you mean anyone could host it? What was the difference? It seemed like even before anyone could host it. You just got a server somewhere. You installed some software, you’re ready to go.

PJ: Yeah, but as a reseller, you no longer needed a server. You came to be, I gave you your own white label control panel and you became a web host.

Andrew: And that was—

PJ: Before that, that wasn’t as easy. It was harder to put together, but cPanel launched Webhost Manager, which became the reseller portal.

Andrew: So, whatever made it easier for you to keep growing also allowed anyone else to get in the space and suddenly you had a lot of competitors, even small competitors. So, it’s conceivable that back in the day, I could have said, “Hey, everyone. Mixergy will host your website. You know me, you like me, you’re going to get a hosting company anyway, you might as well host your site with me,” and it would have been easy for me to set that kind of thing up. People liked me doing that, it added more competition.

Then you had the aggressive players like HostGator come in, lower prices, capture market share and then it froze people like you out. The worst day in that situation, what was that like when you were starting to see how the competition was barreling down on you. I saw a look on your face. Go deep on that.

PJ: Yeah. The worst day, there’s a few worst days.

Andrew: Go ahead.

PJ: First of all, when you have a server down, that sucks. In SaaS, you could have a server down, but it really is different. Hosting, I don’t know, it’s just that if you’re not controlling your own servers or you are and you have to drive to [inaudible 00:13:19], it’s a pain in the butt. But there were a few worst days. First of all, the worst day was Miva, when they launched their own hosting and wanted to take over our hosting, that was the worst day because I had about 40% of my revenue coming from that shopping cart. So, when they got in the hosting game, that was scary.

Andrew: Was 40% automatically going over? No. It took a little bit of time.

PJ: No. Most of them didn’t go over, but they were trying to cut our prices and increase pricing, it was a battle. It was a long battle. Finally, we came to an agreement prior to sale and after sale, so everything worked out, but still me being young, I didn’t have the experience, I was panicking at times.

Andrew: What’s the agreement that you come up with when the supplier suddenly decides they’re going to go direct to customer, tell me about that agreement, I think there’s something we can learn from that for our startups.

PJ: Yeah. We signed an agreement that they’ll only raise pricing to a certain tier because they were trying to do a revenue share model and different things from our customers and they were limiting us in getting support. So, we finally came to them, signed an agreement and committed to a certain number of licenses. It was a long back and forth. It was a very complicated situation. But overall, I think what I learned from that is when you’re reselling, you’ve got to be really careful because they saw a lot of money in hosting and they didn’t just want to sell licenses. So, they got into hosting.

The other thing that happened after that was consolidation. You were saying that HostGator got into the game, cut prices, GoDaddy, yes, that’s very true, but exactly like you gave the example of Mixergy being able to hosting websites, that’s exactly what was happening eight years ago and plus, six, seven, eight years ago. What happened is consolidation happened. Bigger companies started to buy little companies.

So, the little guys—there’s a conference that the last year that it happened was 2016. It’s called HostingCon. It had been happening since 2002, that’s where I met Brent and stuff like that. That conference was maybe 1,200, 1,500 people and it now it was half the size because of consolidation, everyone was buying all the little guys out. It’s like telecom, right? Bluehost, Web.com, Hostway got acquired. Everyone started getting acquired and buying everyone else. The growth was really starting to flatten out. That’s when I started looking at different options of hosting.

Andrew: That’s called a roll up, right? Someone says, “I’m going to take all the players in this one space, roll them up into one company, get economies of scale for marketing, for service, for everything else and I then capture a big part of the market,” right?

PJ: Exactly.

Andrew: It’s like—

PJ: Multiple companies were doing that. Yeah.

Andrew: Even in 2012, Brent ended up selling his company to Endurance International Group.

PJ: That’s right. Endurance is the guys that own Bluehost, IPOWERWEB, PowWeb, all the hosting companies that became massive very quickly, they bought out. That’s right.

Andrew: Sometimes I end up talking to people who say, “I don’t like HostGator. I like Bluehost. Bluehost is even better.” I go, “Do you understand it’s the same freaking company?” We’re not talking about Coke and Pepsi where you can have a shade of taste difference and you can say, “I get the difference,” or McDonalds and Burger King. It’s the same freaking thing. It’s the exact same company. More and more, it’s shaping up to be the exact same company.

Part of it is also frankly hosting is a solved problem. When you’re talking about standard web hosting, WordPress is where the innovation is happening. The other installables are where innovation is happening. The hosting, at this point, doesn’t need to do much. Their big challenge is it’s solved, keeping the website up, doing customer support, their next big challenge is dealing with Squarespace, dealing with Shopify, right?

PJ: That’s right. All that changed the game. Look at ecommerce, right? I was hosting the website and then I was tacking Miva Merchant on top of it. Shopify came in and it was no longer about hosting. It was the software. That’s where SaaS came in and totally changed the way we do business. Look at Wix, look at Weebly, look at Squarespace. These site builders no longer even say we host your website. It’s a given.

Andrew: The hosting part is invisible. They’re calling themselves website builders. The hosting part is in invisible, they just make it easy for you to build a site. The next competition then for guys like HostGator is WordPress. WordPress is going to want to say hosting is a solved problem, come to us, we’ll host your site.

The challenge for that is many people are going to go these builders, but the people who want to build it themselves, who want to add custom plugins like we do. We have this custom plugin, the guy who created it is a freaking maniac. He doesn’t want anyone to see the source code as a freaking plugin. He’ll give it to us. But because he doesn’t show it to anyone unless they specifically ask for it, you can’t host it on WordPress.com.

So, you’ll end up with people who are—tell me if I’m wrong—you’ll end up with people who just want a website, don’t want to think about it, will go to Squarespace and WordPress will more like Squarespace and people who want to get under the hood, who want this new plugin, who want to go find some dude in India who’s going to create a plugin for them that does some crazy thing they had a vision of in the shower yesterday, those guy will need standard hosting and EnduranceGroup or HostGator is going to end up capturing that market.

PJ: That’s exactly right. You’re right on track.

Andrew: Why didn’t you decide, “I’m going to go up?” Why didn’t you say to yourself—I guess you did, but you couldn’t compete with Squarespace. Got it. Let me take a moment to talk about my sponsor. What the hell? Let’s talk about HostGator since we just gave out all their competitors right now. I’ll tell everyone about HostGator, which is my sponsor and then we’re going to come back and figure out how you knew what your next hosting business was.

One of the things, by the way, I already learned from you, PJ, I always think about in terms of SaaS or service. That’s the two online businesses we can come up with. But the truth is, there’s another one you just brought up, which is hosting. I don’t think about hosting. But hosting is a phenomenal business. Just when you think all the hosting that’s possible is done, I come across you and you say, “Well, how about posting video? That’s what we do.” So, I want to examine through your eyes how hosting works for videos, how hosting as a business approach works.

But first, guys, if you don’t have a website right now, you need to create one, I urge you to check out HostGator. As I said, it’s a solvable problem, these guys basically capture the market. You can go up and have a site like Squarespace. I’m going to mention their competitors even though they’d rather I don’t. And Squarespace will give you like a Lego block situation where you can build within their Lego blocks environment.

Or you could say I want to host whatever I want and have it do whatever I want and if I see Andrew do something and I could find some dude on Upwork to go set it up for me for $50, I’m going to go find that dude and I want to install the freaking plugin or I want Andrew to give it to me. Whatever the plugin, you can host it on HostGator and they have one-click WordPress install. If you’re the kind of person who wants the flexibility to do whatever you want, you need a hosting plan that’s going to allow you to do it. HostGator will do it.

I’m going to ask you one question within this ad because I think you’ve seen so much, PJ. That is this—of all the different types of businesses that you’ve seen hosted on a company like HostGator and yours, what’s one that our audience should think about if they’re thinking about a site. If they’re thinking, “I’m going to sign up for HostGator, I don’t know what to put on. What’s one idea that you’ve seen succeed?”

PJ: Yeah, probably one of the easiest ones that anyone can succeed in, kind of like pull your thoughts on it and just have some fun with it would be a blog, right? Anyone can launch a blog.

Andrew: Is there even money in a blog anymore?

PJ: Yeah. That’s a good point. If you’re trying to make money, that’s another option. The blog is not the best way to become profitable. If you start writing well and start getting traffic, you can get some sponsors, you can get a lot of traffic coming to your site, you can put ads on it. I say you could make money with a blog. You can also get people that will pay to have links on your website. That’s another way to make money if you have content in the blog.

The next step would be to launch an ecommerce site and HostGator will give you a bunch of tools that will allow you to sell merchandise online. That’s another easy way. They also have a site builder. That’s another option. If you have another service business, launching a website is always valuable. Remember, when you’re saying making money, HostGator is hosting $5 a month, which is very cheap to launch your own site. They give you all the tools. So, you could also just put it for branding and awareness and kind of pass your business card around. So, that’s always not a bad thing.

Andrew: Yeah. The $5 a month plan, people should check this site that I’m about to give them to get details. It gives you unlimited domains. It gives you a space to try a lot of different things. Your service business doesn’t have a website? Just create one. You have an idea for a blog because you’re fascinated by something, create a site for it.

I think virtual reality is the next thing—it’s always the next thing, it feels like—but in the next three to five years, if you’re someone who’s interested in virtual reality and you keep writing about it, you become the go-to source for it, you become the source who captures the email addresses of people interested in virtual reality. You become, as the space evolves, the go to resource, the go to person on it.

You can do that kind of thing on Medium and other platforms like Facebook, but there’s nothing like doing it on your own site because when you do it on your own site and you find this plugin that allows you to capture email addresses using content upgrades, you install it, you’re ready to go. You do it on your own site and you have this idea for maybe as people leave the site, you add an exit intent popup to capture their email address as you do it. You want to have a little thing pop up and have people subscribe to your virtual reality chat bot, you can do it.

That’s the kind of flexibility you get when you host your own site and HostGator will let you do it right. Go to HostGator.com/Mixergy, where you can find that $4.98 offer per month for hosting, unlimited domains, you’re get unmetered disk space, unmetered bandwidth, unlimited email addresses. You’ll get tech support, which frankly, used to be phenomenal, like in a second you could get someone on the phone, today it’s going to take you a while. I’m going to be open with that. But if you’re listening to me, chances are you’re not going to need heavy tech support.

What you’re going to want is someone to be there when you need it but then to disappear when you don’t, so you can do whatever you want and have someone tell you, “Don’t install that plugin. Don’t do this.” You can do whatever you want. Go to HostGator.com/Mixergy and get that deal.

Alright. Of all the different things, you decided video. You told our producers because you had your own problem. Tell me about that problem. I don’t understand it.

PJ: Absolutely. So, when hosting started to flatline, I really saw that in 2011, 2012 or so. I saw that over time, I’m not growing anymore, acquisition, it’s harder to buy smaller companies. I started looking at different flavors of hosting, different products in hosting. I could do WordPress hosting. I can do video hosting. I can do Magento hosting, different types of hosting. So, I started looking into that and I started launching services around that. I found a service a software called Wowza. Wowza was one of the original media servers launched in early 2000s, maybe late 90s, which allows you to host live and video on demand.

So, I started spinning servers and launching Wowza servers and offering lots of bandwidth and then I saw that for the video on demand side, it was extremely cumbersome, very technical and I started looking for very—because there was a lot of solutions for live, right? Live was always around. I started not seeing a lot of options for video on demand. How can you sell your videos online and do subscriptions? I didn’t see many options out there.

Andrew: You were trying to just offer your audience, your customers a way to host live video, kind of like what Facebook Live does today. That didn’t work?

PJ: Yeah. I was empowering them to be able to do live and on demand using the Wowza server. But I wasn’t giving them the software to do that. Wowza is just an engine. They really have to set it up and it requires a lot of coding. So, I had customers that were like, “Hey, man, this is too technical. How can I upload videos to a software and build a site and sell videos myself?” Wowza set up automatically.

So, I looked around and found Vimeo on demand, which takes 10% rev share, is not white label, pretty piece of crap software. There was a lot of junk content on there. I saw that was there. I didn’t see much else. So, I went around and I started doing an investigation. I started asking people if they’re willing to pay for videos because you know what I thought, Andrew, initially? I was like maybe there’s not a lot of competition. Maybe they’re not willing to pay for content because there’s free stuff on YouTube. I did research and people are like, “Yeah, I would buy good videos. I would do something like that.”

Andrew: Who would you ask and get real responses that they would say they would buy videos?

PJ: Yeah. I would ask anybody. You’re just talking around to—you weren’t even being methodical about it. Anyone who you saw you’d sit down with and say if you could buy good videos online, would you pay for them? Would you buy videos? Would you pay for videos? Some people were like no, they’re free on YouTube. Other people were like, “Yeah, I pay for Netflix?”

Andrew: Okay.

PJ: So, I started looking for other options and I didn’t see much. There was something called Cleeng out there. They’re very expensive. They charge you per user. You have to piece multiple things together. So, I saw a few options. I saw Gumroad. Gumroad is a very basic widget that you put on your page, but I didn’t see a lot of good stuff around subscription, so I knew there was opportunity there.

Andrew: You first weren’t thinking subscription. You were thinking, “My people want to do something live. I’m going to try to give this to them. It’s not easy so I’m going to find a simpler solution to give them the ability to just broadcast themselves live.” It wasn’t until you talked to them until you realized, “This thing I have in mind is not what they want. They don’t want this live thing.” Am I right?

PJ: You’re on the right track. I initially launched the app as a way for you to sell one-time videos and rentals. And you can do subscriptions, but I didn’t think it would be as popular as it is today. So, I never went after my customers for live video. I went after video on demand, very different.

Andrew: You thought anyone who has a DVD would probably want to put their DVD online and let someone sell it. That’s the original thing that you created. And then when you talked to people, how did that work out?

PJ: You’re exactly right. My original idea was my first sales tactic was I hired a salesperson and I started having—so, I built the software. I built a very proof of concept software for you to allow you to sell videos and then I started having my salesperson go out to DVD companies that still have physical disks telling them, “Hey, would you sell this via on demand?” And a lot of them did come on board but they didn’t have a lot of volume.

My approach was wrong because DVDs were already out the door and I was reaching to them to try and get them to sell content. But what happened was I got one of my first few customers, which was a swimming company called Total Immersion. They’ve been around for 20 years. Terry Lockland is the main coach. They had about 60 hours of content and they were like, “Hey, PJ, we’re already using Wistia.” They’re a video host, video player. They don’t give you the billing engine, the website themes. They don’t give you any of that.

They’re like, “We’re using Wistia and we’re slapping it on our page and doing all the credit processing and it’s really broken and we’re selling one-time videos. I think it would be awesome if we launched a subscription service, sort of like Netflix for teaching you how to swim. A light bulb went off and I was like, “That’s the future. Subscriptions are the future.” I thought about Hulu, HBO Now just launched. There was Netflix.

Andrew: This is 2015. We’re talking about two, three years ago.

PJ: 2014-2015, exactly. I saw that there’s a lot of opportunity in subscriptions. So, I completely trashed the old app and I launched a new one. It was a heartbreaking day because I had put a lot of investment in the first version of the app.

Andrew: I’m looking at the website that you had for the first version of the app. There’s one link that’s prominent today that I didn’t see back then, which is the prices. The big button was request a demo. My sense was you were trying to understand why people used your software. But tell me if I’m wrong. Maybe I’m superimposing my belief on you.

PJ: 100% right. Initially, I never had auto signup via the website. I did it by demo. That’s the way a lot of people should launch. Remember, they want to build—look, in development, it’s a huge grey area. You can build as much as you want initially, including what I’m talking about as the auto signup process, which takes a month to build. I didn’t waste my time on that.

I decided to go out and market with a basic proof of concept and let people contact me to do demos. I said, “Let me build other things rather than building an auto sign up.” Once I was able to validate my audience, I then launched the auto signup process. Until I got customers and I figured out the funnel, then I launched it. Initially, I spoke to all the customers.

Andrew: Was it you doing it? Was it you doing the demos?

PJ: Yeah. I initially did the demos.

Andrew: Why not the salesperson who you hired?

PJ: I actually made a mistake and had the salesperson even do the sales call. Initially, when you launch a business and you’re trying to figure out your product market fit, you want to be the one to get out of the building. That’s the term everyone uses, get out of the building. It comes from Steve Blank, that very bright guy who has multiple books and courses you’ve got to check out.

Andrew: I know you’re a big fan of his book. He didn’t even write the book, “Four Steps to the Epiphany,” right? Or was it “The Startup Owner’s Manual?”

PJ: Yeah, “Startup Owner’s Manual,” that’s his book.

Andrew: By the way, when I say he didn’t write the book, it’s clear one of his students wrote it.

PJ: Get out of the building.

Andrew: He says get out of the building, go talk to customers. You also liked the Udacity course that he did, How to Build a Startup with Steve Blank.

PJ: That’s right. That’s one of the main courses everyone should watch. It teaches you the framework of building a startup. It’s critical that you watch that upon building your proof of concept. So, his whole idea is this—build, test or test and build. Literally, I think I had it backwards, test and then build. I actually made a mistake. I got excited and I built too fast. I did initially test, I will admit that.

Andrew: What was your initial test?

PJ: I asked them, “Would you buy videos?”

Andrew: I see. Then you went to—was it a Polish company?

PJ: That’s right.

Andrew: How did you find the Polish company?

PJ: Initially, I was like, “Should I build in PHP or should I build in Rails?” I looked at Rails and I saw that it’s more broad. It’s being adopted really well. It’s a cleaner framework. I decided I want to build on Ruby on Rails. I started looking for Ruby on Rails developers and there’s a lot of them in Poland, for some reason.

There’s hundreds of companies. I started interviewing them. I used Trello to organize. I found one that was a good rate and I hired initially an agency, which is not a bad idea because you can actually figure out—they help you figure out how you want to build your software, take my non-technical—I am somewhat technical, but I’ve never built a software before. So, they took my idea and put it in technical terms for their developers.

Andrew: Okay. So, you got the first version. You’re talking to customers. It seems good, but the more you understand their real need, the more you realize, “Actually, I was off base here.” I understand it. I’ve got a service where we’re basically doing membership on video. I use Wistia. I love Wistia.

But the challenge for someone who doesn’t have our kind of infrastructure is we have a plugin on WordPress that lets someone subscribe and pay us on a monthly basis. Once they do, the payment happens through Stripe, the website plugin gives you access to the website on WordPress, the videos are served by Wistia and it’s all these different pieces we had to spend time putting together.

You said and your clients said, “That’s not us. That’s not in the space where we want to connect all these different pieces. Give us one solution.” That’s when you decided you were going to go into subscription. Why didn’t you cancel the one-offs at that point? Why didn’t you say, “We’re going to be in the subscription space? If we can get our customers subscriptions, they’re going to have ongoing revenue and they’re going to want to pay a subscription?”

PJ: That’s a good point. We still struggle with that, to be honest with you. We have about 10% to 20% of our customers that still do one-time, very little due rentals. So, it doesn’t hurt our platform to have one-time. It’s not a big deal. Transactional, you can still do. You know we have branded apps, OTT apps. You can get your own app on Roku, Apple TV, iOS and Android, those only support in app purchases with subscriptions.

Andrew: So, if anyone wants to do a subscription on Roku, like if I wanted to for Mixergy, for example, and say, “Hey, guys, there’s going to be a new Mixergy app on Roku. You pay for a subscription. You get access to it.” And you’re saying that only works if there’s a subscription. Roku will not allow you to sell one-off.

PJ: That’s right. The apps are huge. They’re really popular because it’s now so easy to get your own app on these major devices. So, it works out really well.

Andrew: And if someone buys a subscription on your client’s website, it still will work on all these other platforms.

PJ: That’s right.

Andrew: Alright. You did a bunch of phone calls. You said first year, it was about two dozen customers. How many of those two dozen customers did you specifically sell?

PJ: That’s a good point. I initially sold out of the 20 calls or so I did. I touched a good 20, 30 people that gave me feedback. I made hundreds of calls. But the 20-30 that gave me feedback, actually about a half a dozen fully signed up. They never made money, most of them, but to this day, I have a few of them. So, a few did sign up. At that time, this is what I’m trying to say is at that time, I didn’t actually have a problem.

When I initially started calling with the sales guy, I didn’t have the product yet. I think I had started building it, but it was so early on that I didn’t have a working product. We were pretty much selling air to those people. By the end of the year, we could have a product that does this and we got people interested and kind of like buzzing in their ear.

Andrew: But you weren’t closing sales. You weren’t collecting money. You were just moving the process along and moving the relationship along. You told our producer one of the things we struggled internally is that there are LMSs. What’s an LMS?

PJ: Learning management system.

Andrew: That is what schools use when they want to publish courses for themselves. There are tons of those. Why wasn’t that a threat for you? Why didn’t you say all these different people who we’re talking to just don’t know there’s an LMS out there? They can go find one. I’m looking at Capterra right now. They have top 20 LMS software for 2017. They’re good at SEO. There are tons of different places like Capterra where you can find lots of options. Why wasn’t that a threat?

PJ: Yeah. The reason that wasn’t threat was primarily, a lot of those are enterprise-type softwares. They’re a lot more expensive. They’re very complex even if they’re low price, they’re more complex. There wasn’t easy to use software and they don’t go to apps. Right now, you have simple LMSs. You have Teachable. Teachable is your low-end, basic setup of a teaching online course. If you have a single course, that works well. You come to me when you want to do subscriptions, number one, and you want apps.

That’s where we fully differentiate. If you want to have apps on those devices, your primarily all video. I basically help you build your own Skillshare-type site. You want to have a catalogue of content. You don’t have to have a lot of content, but you can do short-form content, like micro learning, you want to get your own apps and you want to expand beyond one course, that’s where—

Andrew: That’s today. You didn’t have the apps when you made this decision. When you looked around at the world and saw all these LMSs, you didn’t have apps. Were you still thinking there was a differentiator back then before the apps?

PJ: Actually, I did have an iOS and an Android app. I absolutely launched that with a proof of concept.

Andrew: For anyone who signed up, they would get their own iOS or Android app?

PJ: Well, you have to pay additional for the apps.

Andrew: But it wasn’t your app, it was their app. Your clients get an app.

PJ: Yes, the clients get an app for an additional fee branded for them.

Andrew: I did sell the app. You know why? When we initially called a lot of these customers, they wanted specifically the app. Nobody cared if there was no app.

PJ: If there was no app, they didn’t care about you. If there was an app. . .

Andrew: I got it.

PJ: To this day, if you can get to the point where you’re generating a little bit of income and profitable, which most of our customers become within the first six months, the apps are really a huge upsell and selling point to your customers because they’re awesome. You could be a small mom and pop shop and you have an Apple TV app. How amazing is that? You turn on the Apple TV, you go to apps, add your own app, search it, it’s done.

Andrew: I’ve got one of your customers up on my screen. It’s DiveGUE.tv, beautiful videos of people diving. I’m guessing what they do is they teach you how these dives work and how to dive. On the very bottom, they say enjoy a free trial with unlimited access, watch on your preferred device and then of course cancel anytime. Preferred device means we have an app once you subscribe, pay $24.99 a month, you get the app.

PJ: Exactly right.

Andrew: Okay. Let me talk about my second sponsor because it kind of plays into what we’re talking about here and then we’re going to into once you figured this out, what did you do to make this work and how did you get customers?

Alright. The second sponsor is a company called Pipedrive. Imagine if I could go back in time, PJ, and I could tell you about Pipedrive back when you were starting this business. Let me tell you how good your life would be. Number one, your whole process of talking to customers would be structured. Column number one in Pipedrive works like Trello with a series of columns, but it’s a CRM, meaning it’s for keeping track of customers, it’s built specifically for that. Where did you find all these potential customers? What was your source? Was it list of DVD owners, list of online educators, what did you do?

PJ: How did I find—

Andrew: The initial people who you were calling because you were sending out contacts.

PJ: Very easy. The first thing I did is I literally went to Google and searched for fitness DVD, educational DVD, wrestling DVD, tennis DVD, swimming DVD.

Andrew: Got it. If you had Pipedrive, they would tell you create column number one is find potential customers. So, you’d have column number one. What you would do back then is find a virtual assistant and say, “I want you to find fitness DVD and everyone in there, I want you to get me their name in a field, their phone number in a field, a sample of their DVD linked up in the field.”

So, a virtual assistant would be able to do this fitness DVD, workout DVD, you just set them over a weekend to do it. You come in on Monday morning and you have 60 different people with their full contact information waiting for you in column one. Each one has their own card. What was step number two at that point?

PJ: So, once we do step number two, we have the contacts, we basically have outreach. We organize the sheet. There is a second step that we do. We filter out. We want to see who they are, what they’re doing. We start visiting site, understanding what they’re doing and then we start calling out and just making notes, kind of using a CRM system to track.

Andrew: Okay. So, what you do is column number two, you want someone other than virtual assistant to use a little bit of intelligence and a little bit of gut feeling to say who the right person is. So, you only move someone to column two until you or maybe you have someone who you trust on the team goes though and evaluates and says, “Hey, you know what? We’re never going to get Jack LaLanne to go and do this thing,” or this other person over here is kind of dead. I don’t know who’s selling the DVDs, but the site is done. They just have SEO carried over from the old days. That would be column number two.

Column number three is if you decide you’re going to reach out by phone, you have their phone number and you only earn the right to move a person’s contact to column number three after you made the phone call. Chances are, they’re not going to pick up your phone call. So, you have column number four, which is follow up with a second phone call. You only get to move them along, each one of these columns based on the work that you do.

Here’s the cool thing about Pipedrive. Imagine you get two virtual assistants. One of them floods column number one with 30 fantastic looking people and the other only adds another seven. It seems like the person adding lots of people is your best virtual assistant. That’s the best source of contacts, but that’s not the way you want to look at things. You want to go into the stats of Pipedrive and see of all the people we closed, where did we get them? So, maybe this person who only sent you seven ended up leading to four closed sales and the person who sent you 30 ended up leading to one. So, the person who’s sending you a lot is actually not productive. That’s not the winner.

So, Pipedrive will organize your system, give you stats, if I could go back in time and give it to you, I would make your life so much better. Look at what we’re talking about here. An individual can run this on their own, but you can start bringing new people into the system and adding more and more team members and have the whole thing managed right there in Pipedrive.

I keep calling them the CRM. I think that’s the bad way to call it. It’s sales management software. CRM is just an address book. Sales management software will organize your team like a disciplinarian and aim it at one goal, which is closing more sales. If you’re with me on this and you guys want to try this out, I want you to go to Pipedrive.com/Mixergy.

Selfishly, I’ll be honest, that’s how I get credit for having sent you over, but I’ll tell you that the reward for you for going over is 14 days free plus 25% off their price for three months. Frankly, that’s just a nice thing you’re doing for me, but in reality, what you’re going to get is way more valuable than whatever their low price is per month. So, go check them out, you’ll change your business by going to Pipedrive.com/Mixergy.

Alright. So, now you got your product. You got the vision. It’s time to grow it and get more customers. The next step was doing what? Was it hiring a salesperson? Was it beefing up marketing? What was it?

PJ: Next up was definitely improving the product because just the initial beta was very buggy. We were learning a lot from our users. We actually redid the product multiple times. We’re launching—

Andrew: From scratch?

PJ: Yeah.

Andrew: That means that your customers had to redo whatever their embeds were, their apps, the whole thing?

PJ: No. We migrated them, but it wasn’t easy for them. We redid it three times to have the current version just because we learned so much and we were improving it. But what happened was after we got our product going, during the period of time, we started doing a lot of content marketing. That was one of the key ways. We started doing a lot of content marketing. So, I hired a writer. I used a lot of Upwork, a lot of contractors initially. You want to keep your costs down. So, hiring FTEs full-time is very expensive.

Andrew: You could get good writers that way? Writers are tough.

PJ: Writers are tough. You know how we do it? We test. That’s the way to find good people is just test, literally, just test a lot of people, but yes, there’s a lot of junk on Upwork in general.

Andrew: And it’s you testing them, you coming up with tests to write them, you screening them out or do you have someone to do that?

PJ: Yeah. What happens is I know a little bit about a lot of stuff. So, I do a lot of the work myself initially to find good people. Now we have a really good writer and multiple writers underneath her, so she does all the managing. But yeah, I initially do a lot of the tests. You can filter a lot on Upwork instantly, right? 90% percent reviews, 95% reviews, make sure they have a lot of job hours and stuff like that.

Andrew: Now they let you write custom screening questions. It helps tremendously, right? You don’t end up with people just flooding everyone with a proposal because it’s easy. Now they have to actually have to answer questions and you could tell based on their answers whether they take it seriously or not.

PJ: That’s right. Absolutely. We always pay them and do a small test with the final candidates. The other thing we did is once we built a proof of concept, we started getting a little bit of revenue, I highly recommend this—we started building our own development team in house. So, that’s the next step to really gaining control.

If you have software experience—this is how I want to put this—if you have a little bit of software experience and you built software before you even managed, you’re not technical, you’ve done this in the company and have the basic idea of how it works to have a development team, then I would recommend you don’t go with an agency, initially, and you build your own team. I had never done it and I went with an agency and I don’t regret that because the building of the software itself is a whole other animal. It’s a can of worms. You want to get that—it really is complicated.

So, building your own SaaS software, it’s one thing to sell it, but it’s one thing to build it. We built it wrong, three times we had to redo it. The primary reason for that was we didn’t understand our product market fit. That’s the key thing I want to say. If someone is starting out a business, figure out your product market fit very early on. Don’t be everything to everybody. That complicates your product.

Very simple things—imagine this, like in Uscreen, you can have a course track or not. So, we appeal to the entertainment audience and we appeal to the learning audience too. Initially, that actually complicates our software. So, the next update that we’re doing, we’re allowing you to have video and then attach assets to that video, like supporting documents. So, you can still do e-learning, but the setup is much easier. So, everything you want to do for two different types of industries, you’re complicating your platform. The more you complicate it, the setup process is harder, people do not like complex things.

Andrew: Would you have rather picked one group of people to go after and just stick with them?

PJ: Absolutely. I think initially, we were trying to go after the LMS and the entertainment. Now, a lot of our customers are definitely teaching, they’re doing tutorials, fitness, anything, lots of entertainment as well, but they’re teaching something.

Andrew: It does seem like it’s—someone who has fun videos, the kind of things you enjoy watching, and they’re teaching. I’m thinking of the dance company that I saw. There’s some dude who’s a fun—

PJ: Tim Milgram, that’s right.

Andrew: I saw him. He’s one of your clients and he’s teaching people how to dance. That seems like your sweet spot. They need PDFs and stuff like that included with your courses?

PJ: No. They usually don’t do PDFs, but there will be a nutrition guide within someone’s training guide.

Andrew: And now you need to make sure that it’s easy for them to include it in the video.

PJ: Yes. And like Tim Milgram, TMilly TV, he’s teaching choreography, awesome stuff. Customers love him. He’s making some money on subscriptions, $9.99 a month. So, he has apps. That makes a big difference.

Andrew: So, what about the sites? These guys have beautiful looking sites. You’re not building their websites, are you?

PJ: The software is building the sites, absolutely.

Andrew: So, if I go to TMilly.tv, that’s your website?

PJ: Yes. That’s our powered by Uscreen. So, basically, the software works like this. You sign up. You use a theme editor to build that site, you put your own colors in and everything, you upload the videos, you slap a price on it, you’re good to go. If you want, you order your apps. That theme, that website is powered by us.

Andrew: The reason that I just didn’t see your URL in there. Now I kind of see it. I always do a view source to get a sense of what people build their stuff on, now I see it. It’s Uscreen.io is in there. Even that’s not—that’s only one random link.

PJ: So, I want to tell you a little secret about that. We, initially upon launching and to this day, which we’re fixing this by spring, we didn’t slap our company name anywhere on the site. Can you believe that?

Andrew: It almost looks like you hide it because how would it not show up at least in the source code.

PJ: Yeah. So, we do. The reason for that is we make it 100% white label, now in the lower packages, we’re going to at least slap our name in the source code and put powered by Uscreen at the bottom.

Andrew: That doesn’t take much from it. You know what I noticed? Leadpages does something really cool on their landing pages. If you right click, they use ASC to add the Leadpages logo. They’re basically saying if you’re smart enough to look at our source code, you’re probably trying to figure out how this person built, here’s the company that did it. That doesn’t take away at all from the look of the site.

PJ: Yeah, good way to do it.

Andrew: Alright. So, content started to do well for you. I’m wondering with your content—how long did it take you to get clear on who you’re targeting? I see some articles that are targeted towards showing off your customer, others that are more about how to sell videos online, then it seems like you’ve got it now but it’s still—it took a while.

PJ: A lot of the content you’re seeing is old content, absolutely. We’re launching actually a new university to teach our customers how to monetize videos. So, a lot of our new content is being written. You’re not seeing it on the site. We launch a new website in February. That’s going to have a lot of the new content. We try and build content, write content that’s very high quality that helps our customers succeed. We’re getting away from that. That was the old way we were doing it and we’re definitely updating that.

Andrew: Here’s one that’s really popular. Uscreen versus Gumroad—I know that people look for it because I did that search to get a sense of who you were. You know what else I did? I’m noticing that there are some companies that are really good at this. I did a standard Google search. It leads to a Quora question about you guys that is then answered by your competitors who say, “They’re a good company, but here’s what we do that they don’t do.” So, people are asking specifically about Uscreen and your competitors going in and saying, “Yeah, they’re a good company but let me tell you about how we’re good.”

PJ: That happens all the time. We do the same to others too.

Andrew: You do? Who does that internally? Who’s the person in charge of going into Quora and updating it?

PJ: Well, we have a community manager, Maria. So, she goes out and she’s looking for forum posts, blog posts and stuff like that. So, she’s answering a lot of stuff like that. She’s just active, looking for mentions.

Andrew: Full-time person?

PJ: Full-time, right.

Andrew: Her whole job is to go into the community, see what people are doing.

PJ: Exactly.

Andrew: Hey, you know what? I’ve been very good about not saying Ustream and saying Uscreen here. Ustream I remember is like one of the first companies that courted me a little bit to turn these interviews into live videos and post it. You happened to bring them up to me before we started the interview. I went to their site. That’s gone.

PJ: Yeah. Absolutely. That’s an interesting one, right? Initially upon picking the name, I wanted a short name that was related to video. I never imagined people mixing the name with Ustream. They seemed like two different words. But it’s not natural for you to say Uscreen. So, we still struggle with the name a little bit. We might rebrand. We’re not sure yet. But Ustream was often mistaken when trying to say Uscreen. But interestingly enough, Ustream has gone away. It’s now IBM Business Cloud. So, Ustream is no longer around. They removed that name. They just did it recently, so some of their implications are still around. But yeah, it’s interesting how they actually remove their name.

Andrew: Help me analyze that business. Here’s what I think happened with them, not just them but their competitors. They weren’t focused enough. They were for hosting any type of video anywhere, right?

PJ: Yeah. They did everything. You had celebrities who had their own Ustream channels. They got rid of that. They used their massive infrastructure to now to enterprise videos. They don’t do any of that consumer stuff.

Andrew: That didn’t work out because they were dealing with too many groups of people, monetization was too hard. They weren’t great to anyone. I interviewed the founder of Twitch. They said they essentially went down that path and then they realized it was a mistake. It was fool’s gold because Twitch just got tons of traffic, tons of people watching live video and it seemed like they had a figured out, but all those people had poor experiences and then they said, “Let’s find one group of people we’re going to be excellent for,” and they people who were broadcasting themselves playing video games.

Alright. Why don’t I close it out with this final question? If someone out there is looking to sell video online, what’s one thing they can keep in mind? Actually, I’ve got one other question after that. What’s one way to sell video well based on your experience having seen so many people do it?

PJ: One thing to keep in mind is you don’t need that much content. A lot of our customers don’t have that much video. They literally start with one, two hours of video.

Andrew: Even though they’re selling subscriptions?

PJ: Yes. There’s a secret behind that. Guess what? Take 60 minutes of video and chop it into five-minute pieces. Guess what? It’s called micro learning. You don’t have to call it micro learning. It could be small little entertainment, teaching you choreography, it could be anything. So, you take that. You create a video or a program per five minutes and now you have a catalogue of content. You have 30 different pieces.

So, you don’t need that much content. That’s the first myth. You need a lot of content to work and build a subscription service. The other myth is I need to update it all the time. You don’t. How often does Netflix update their content? Considering it’s such a massive catalogue, the recently added adds a few things a week not that often. There’s enough on there. It’s the same thing. You take them into little short pieces and you build a nice subscription catalogue and it works well.

Andrew: I’m looking at Rachel Reinert. She uses you guys and it looks like she has nine modules, plus bonus videos at the end.

PJ: There you go.

Andrew: That’s what we’re talking about. She sells it for $47 for subscription or I guess you could buy each one individually for about $300.

PJ: Yeah. So, she sells a one-time course as well.

Andrew: Alright. The final thing is I kind of feel like this whole hosting thing is an interesting thing to explore that I didn’t explored. Do you think that hosting is done? Should I be looking for new hosting interviewees or is it now all SaaS? You guys are more SaaS than hosting.

PJ: Yeah. We’re 100% SaaS. I wouldn’t say we’re a video host. Hosting is so silent in the back end. You go within the software and you click upload and you upload your video. You don’t worry about delivery. You don’t worry about storage. You don’t worry about encoding a multi-bitrate. I do that. So, hosting doesn’t exist technically in even the way we market. We’re like your Wix and stuff like that. It’s given.

So, to answer your question, would I say hosting is dead? To be honest, I got out because it was dead. To me, I won’t shut anyone’s business out. You can absolutely probably find people that are doing some type of innovation and hosting, but I would say 98% of hosting is absolutely commoditized and it’s your basic web hosting GoDaddy service. No one is innovating, most are not innovating.

Andrew: And that extends for everything? Like the only thing that I can think of that we pay for that’s hosting is hosting files and even that now is becoming kind of silent with Google Drive.

PJ: Yeah. The world of hosting is so big that people are still hosting websites, right? Now, look, you have AWS and you have Digital Ocean and stuff like that and that’s your cloud providers. Yes, I would say generally speaking, hosting is pretty dead unless you find the one, two percent that I’m talking about that’s somewhat innovating, most are not doing any kind of innovation and hosting and it’s raw, basic hosting.

The only way you can survive in hosting, Andrew, is if you came to the table with a few hundred thousand to a few million dollars of money and you went after companies like mine, my prior company, and other hosting companies that are getting out that want to sell. Now, I told you that most of the small ones are already gone. So, you need at least a few million dollars to start acquiring smaller companies that are $1 million, $2 million, $5 million a year in revenue. You buy one hosting for a year of revenue of $1 million, it takes a year to pay off. After that, 90% of the accounts are around.

Andrew: You’re still saying roll ups. Even then, I feel the opportunity rolling up these companies is kind of gone because they’ve been rolled up unless they’re kind of weak or insistent on not selling out.

PJ: Yeah. You’re going to buy roll up companies that are absolutely broken within specific niches. They can have servers in eight different data centers. They could be doing IP hosting. They could be doing random shopping cart hosting. They could be a web development company selling to the hosting sector.

There’s headache with that because they’re really clingy with the web development company and that’s going away, so now you’re keeping the customers have a lot of customization. There’s a lot of stuff you need to look at. To buy a clean hosting company that you’re just buying the acquisition for the accounts is definitely a tough one. Generally speaking, I’d say hosting is pretty dead.

Andrew: It seems like it. I was thinking at the beginning of this interview, maybe there are other things you can host like video, but you’re right. It becomes SaaS. You have to offer much more than just hosting. Once you offer more than just hosting, you become a differentiated player and at that point, you’re basically SaaS.

PJ: Yeah. You’re basically SaaS. SaaS was definitely the future. I don’t believe in just doing raw data hosting. If you’re just hosting video, people go to AWS for that. They go to various different locations to do hosting. Vimeo even does basic raw hosting. So, that’s a tough one.

Andrew: Alright. For anyone who’s interested, the website is Uscreen.tv and I like the example sites. That’s my favorite part of the—usually my assistant will go and pull out one link that she thinks I need to look at on the site and it’s almost always the about. I find for your site, it’s the examples that helped me get a sense of who you were in preparation for this interview more than anything else. Your designer is phenomenal. I’ve seen it over the years your designs have been good.

PJ: Yeah, definitely. They have good looking sites. Awesome. That’s one other thing that sets us apart. We have a really good looking sites, themes and customers and they do extremely well. It’s a working platform. We have awesome analytics on the subscription side. I invite you to check it out. The other thing I’ll tell you is we’re launching a brand new website in about 60 days. It’s going to be awesome. It’s clean. It’s easy to understand. It’s got good customers. It really promotes and shows off our apps. Our apps work really well and our customers do extremely well on the apps. So, lots of cool stuff coming in 2018.

Andrew: Alright. Uscreen.tv and the two companies we talked about—remember, if you’re just looking for plain old hosting, stop looking around, just go with the company that works and then focus on your site if your hosting company stinks, switch over to this company—HostGator.com/Mixergy. If you hate your hosting company, go to them. If you don’t have something hosted, go to them. Start simple. Focus on your site, not on your hosting—HostGator.com/Mixergy.

Finally, if you’re looking to close more sales, talk to more people, get organized about it, whether you’re a one-person operation or starting to grow and build beyond it, you need a sales management software, I highly recommend Pipedrive. Check them out at Pipedrive.com/Mixergy.

I’m going to close this out by saying my team keeps wanting to improve the audio quality. We’ve been working to do it and we’ll keep doing more of that in 2018. So, keep sending us your feedback at Contact@Mixergy.com. That will go to the team and we’re all looking at it and trying to improve the quality, Contact@Mixergy.com. Alright, PJ, thank you so much.


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