I’m not one of those folks who created a company with the intention of selling it, and so when I was courted on 6th Street in the midst of HostingCon to sell, I unexpectedly became defensive, like I was being attacked. I didn’t take it well.
It was a decent, and I have no doubt, sincere offer. I wasn’t expecting it. I think I laughed at the beginning because it started out, to me, as a joke. As the conversation went on, I realized that it wasn’t a joke, and I got defensive.
Yes, it’s a little company but damn it, it’s mine.
The party is still going on downtown, and I’m watching the tweets roll in, but I left soon after the offer. It rattled me more than I care to admit, more for what it represented – I’m so little that a hostile takeover would involve the company demanding I sell while pulling my cat’s tail in a threatening manner. Nothing I built was in any danger, not really. The only way it goes is if I sell it. Yet, it still rattled me.
As I made my way through “my industry”, for two days, the sheer throng of humanity crushing me on every side and playing havoc with my introverted need for quiet, solace, and space, I examined what my feelings were about my own company and what I do in contrast to other people’s feelings about what they do. I realized I bonded with very few people because very few people could get past talking about revenue, ROI, and numbers to principles, passions, and drives. In some, there didn’t even seem to be room for it.
When the offer came in, I was well familiar with those making it. The offer came in, the serious interest, before anyone looked at my books, or hard numbers. I knew the number of accounts offhand, they wanted to sweep those numbers into their behemoth, and I was big enough to be eaten. All the nights I sat up, the reputation I built, those meant nothing in the end. It was all about plumping someone’s numbers.
I realized, as they ticked off the others that they bought, that I was a quaint, old fashioned relic from an earlier time, before we became a commodity. Each name that I had heard of for years, knew vaguely, most equated myself with, disappearing into a homogenized sameness.
How many accounts?
2300 or so
How many servers?
6
Wow. That’s pretty good – I think we pack ‘em in a bit more than you do.
Yes, I know. That’s why we’re better than you.
The funny thing is we don’t have 2300 – that’s the DNS numbers with the add on domains and was the one I had in my head. They meant cPanel accounts. In that we’re at about 1800. So we’re even better than them than I initially thought. And I was proud of that.
And it still not something we can really explain or market or sell. In shared, unlimited sells, and they pack ‘em in to make the money. It’s kind of something I’ve come to accept. Maybe we can. I don’t know. Maybe it’s just 1 a.m. in the morning, and I’m being pessimistic. Good doesn’t really cut it. It’s a cut throat world out there, and I just don’t care to cut throats.
Tonight I came face to face with a few things I didn’t know about myself as a business owner in the course of the conversation (much of it, incidentally, has been left out here).
I went in feeling almost inadequate – I couldn’t figure out why the hell I got VIP to the cPanel party (which was a sweet gesture, though I didn’t drink at all so I was an awfully cheap date for everyone), or why this person wanted to meet me, or that person blah blah blah. By the end when the offer came I think it just slammed me down to the point I was defensive about my little corner of the world.
After the offer came, and Acquisitions was explaining their acquisitions and how they were maintaining so and so’s bought and paid for brand, they said the thing that suddenly made my head snap up.
They won’t even really notice they were bought.
My customers would notice.
The day that I could sell my little bitty micro company to a corporate behemoth, have them eat my brand and servers and clients, and no one would notice the difference is the day I’ll sell to you. The day it’s more about the money than the sense of achievement and satisfaction I get, the day I stop caring whether people’s sites could crash from a dig because it would eat into my bottom line and start “packing ‘em in” so I can drive a sports car instead of a minivan, I’ll sell out. The day I care more about numbers than clients, more about ROI then integrity and doing it right, the day I care more about monetary success than technological achievement, I’ll give you that call.
But I can tell you one thing, boys – that day isn’t today.
Bravo! Bravo! Encore!
It sure is hard for the “little people” to stand up to companies like that. With advertising budgets alone that total millions of dollars, and even more millions spent on their affiliate programs creating sales robots for them, its hard enough to get 1,000 clients.
Its funny, actually, last night around 2am I flipped on the TV and there was an infomercial on called “Internet Profits Fast”. I wasn't turning on the TV to watch anything, just schedule something on my DVR. But in that little upper corner, I watched this guy sell his product. As I set my DVR, I was listening to what he said, knowing he was most likely conning the elderly or something.
And then he explained how it works in his “3 step process”…. Webhosting. He says, “You have to do virtually NOTHING at all! You don't even need to spend a dime on advertising. You can actually PAY OTHER PEOPLE to generate sales for you! And you only pay them when an actual client signs up! All you really have to do is, You just set up an account, install some automation billing software, and watch the profits roll in. And once you start to get clients, my system teaches you how to navigate STEP 3: Selling your company for the big bucks.”
My face went red. I was annoyed that there was some “guru” on the infomercial channel selling a 3 step process to “Internet Riches” and the entire concept of it was to resell awful hosting to people so you can sell out and cash in.
I dislike the hosting industry. There are days I regret being part of it. The “honest” aspect is almost totally gone. Its filled with fly-by-night hosts, and giant companies that get a terrible reputation, so they re-brand and do it all again. (cough justhost cough)
It kills me. Its a dishonest industry. It built its core principals on dishonesty. Customers are treated as a number and not people. Companies dont even bother to care when something upsets me – I'm just another 7$/Month customer. Doesn't even make a dent.
What happened to the good hosts?
I felt a little bad because I got kind of rude about saying no – I was really defensive. REALLY defensive. I've been through this once before, where everyone got sold out. And it bothered me that it was tempting. And it came with a likely job.
But as we talked, I did realize I was better than them from a quality standpoint, and the longer we talked the more it was clear. I may miss my big payout, and the train may pass me by and I'll miss the chance to cash out when the acquisition frenzy is over, but I still hold on to the belief that quality actually may mean something. Even if that's just to me.
I also feel like those of us smaller players that focus on quality may have numbered days ticking by, though.
And as to your question about the good hosts, I know a few of them just got bought from the conversation last night.
>> I also feel like those of us smaller players that focus on quality may have numbered days ticking by, though.
I've always hoped that one day, customers will get fed up with the terrible quality and insane “rules” of all the giant webhosting companies. We shall see…
I have two words for ya: Wal-Mart.
More like 99 cent store.
Ok, I tried not to name them, but I guess it's kind of obvious. They're on a buying spree, and there aren't too many people that could make a serious offer while standing on 6th street and have me take it seriously where I knew they had the money to back the offer.
Yeah, the ASmallOrange sale just blindsided me. I think that was what started this cascading thing in my head where I just saw everything I believed in just being bought up. And yet as defensive and freaked out as I was, I went and read their transition forum thread to see how it was handled this morning.
It's like a poker hand. Acquisition frenzy generally comes in waves – do I cash out? If I don't now because I think I could grow the company, will I miss the payoff? When I'm ready to move on, will I kick myself for saying no and saying it so loud that I tried to keep them from talking and tempting me?
I made the decision last year to “go for it”. Kid's old enough, let's see what we can do. This year has been about preparing and planning for an attempt at expansion in 2011. This came up and I am grateful that they did push the offer (though I doubt that's what they took away, because what I probably seemed was hyper-defensive and pissed). But it's definitely made me re-examine everything.
Still pretty sure I'm not for sale, though. At least not now. At the moment, I can't conceive of wanting my life any different than it is now.
Hello,
I must chime in here about one thing you said. The “big companies” that care more about money then their customers might be true to some, however one of our companies main goal is customer support / service. If you take the time to read reviews about HostGator then you will see that we are succeeding in this and will continue to make this our top priority.
I think that being offered to have your company purchased is a complement. It's also very easy to say “no thanks, I want to buy YOU guys in a few years.” I was told that at the convention myself when speaking to a CEO of another webhosting company.
In the long run, everyone has a price, that is a proven fact. I do appreciate your loyalty to your company and your customers however as they say, business is business.
Josh Loe
HostGator.com
Yeah, my price was 10x Rev, which your guys got a pretty big kick out of.
It could have anyone making the offer in the way it was made, and I think I would have been defensive. I actually don't hate your company, nor do I have a particular problem with the service ya'll provide. Any issues I do have are related to the tipping point effect the unlimited switch had on the industry. To Brent's credit, he came out with the “you know it's BS, we know it's BS” blog post, and explaining it was simply about survival and money, but as honest as he was, it didn't change the effect it had on the wider industry, an effect that isn't positive for anyone holding on to less trickery.
I'm not an idiot, though. The moment cPanel incorporates inode limiting widely, the downhill slide will slam towards the bottom at a record rate. The writing is already on the wal and IMO, the tipping point long past, and HG was part of that tipping point.
Our companies just have a different way of doing things, and the idea of selling out probably wouldn't have been so upsetting if it was the principle of the way I did things that would have been killed as part of the deal. I really love the principles behind what I do – free speech, anyone having a platform to speak. I still have stars in my eyes about it. A conversation that hinted at my viewpoint becoming irrelevant, and in fact no one even noticing it was upsetting less from an ego perspective and more from a “give us a few years and these principles will be gone because everyone who has them will have been bought” perspective.
Obviously, HostGator is a decent company – and I have personally dealt with Brent before on an issue that put the two of us at odds with one another, and was highly impressed by how he dealt with things, and I'm not saying that HG has no morals or standards or ethics. I came out of what was a conflict with a very healthy respect for him and I have no doubt that extends to the company he helped found.
But we are different in our philosophies, and seeing mine potentially being absorbed was a bit scary, and shocking.
I would miss you greatly were you no longer hosting me.
Aw… thanks.