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From $3 a Day to Successful Entrepreneur: Tomas Gorny, CEO of Nextiva (Part 5)

Posted on Thursday, Jul 3rd 2014

Sramana Mitra: You had $6,000 in the bank and you used your American Express credit line and started a web hosting company. How did that work? Can you talk a bit more about the early journey of that company?

Tomas Gorny: I bought two servers. I was very technically oriented, so I installed them and had a technical guy help me a little bit. I had a vision. Let me take you back a little to explain it. When I first visited the United States, it was just for two months. I didn’t speak any English. It was the 4th of July and I saw from my hotel room this ‘two for one’ shoes. From a European mentality, that’s actually very awkward. I am now used to that, having been here in America. Coming from Europe, you didn’t see that. I don’t have money for two pairs of shoes. I understood the concept. They wanted to get rid of inventory. They want to incentivize so they’re doing it.

When I was starting the second company, that was always in my mind. I thought the hosting industry to be too complex. People sell all different things. If you want more space, you pay extra. Domain name was extra. I said, “Let’s just give people one simple package, then people don’t have to decide.” That had a positive effect because when they call support, my support guy wouldn’t have to think about which package the customer bought. It made my infrastructure so much simpler because I didn’t need to think about how to set you up. I had one package. It was $7.95. Domain name, web hosting, and marketing tools – all included.

It was an affiliate program. Every time I had a sale, I had to pay for the sale so that I can float the money a little bit. It started resonating with people beyond my belief. The biggest hosting companies back in the day were companies of 40,000 to 60,000 customers. Three months later, I was acquiring 10,000 customers a month. We started October 13, 2011. By October 11, 2013, we hit our 60,000th customer. We were acquiring, at that point, over 10,000 customers a month. Within a few years, we’ve had half a million customers in our platform.

It wasn’t all that simple. There were still barriers to entry in this industry. What we did was if you still needed web designers or web programmers to do all of this complex stuff, we offered that free through telephone support 24/7. You can call us anytime. At the beginning, it was me 24/7. But very soon, I said, “This is not what I want the business to be. I want the business to transform web hosting to something much bigger.”

When I was growing up and I had my PC business, it was during the transition from Windows 3.1 to Windows 95. I was amazed and inspired by Microsoft. Microsoft was my idol. I said, “Microsoft are the guys that I wanted to be like.” I came back to that thinking and said, “At the beginning, I had to type command lines. Then Windows 3.1 came and I could click on Windows.” I wanted this for web hosting. Why do we have to be scientists to use simple web hosting and build website?

We were the first to develop control panels for web hosting. We were also the first to develop an App Store. If I can send you a screenshot of some of the stuff that we’ve done, it would resemble some of the things that, seven years later, you would see from some of the greatest companies in the world. We did one-click install. Earlier, you had to install its script on the server. You had to go somewhere and download the script, hire a programmer, then configure. But when you come to us, you just click one button. That’s what we did within the first year.

 

This segment is part 5 in the series : From $3 a Day to Successful Entrepreneur: Tomas Gorny, CEO of Nextiva
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