Solopreneur launching a Managed WP Hosting Business

Adrien

I’m sharing this for small business owners and solo entrepreneurs like myself who are thinking of launching a managed WordPress hosting business in 2023.

I had a rough experience with a billing panel yesterday, which led me to reassess my plans for launching a Managed WordPress Hosting business in 2023.

After thoroughly evaluating the risks (read to the end), I’m considering realigning my project and making it secondary to my main offer. I plan to focus on fixing people’s WordPress websites and selling plans with WordPress design and maintenance.

I will also offer WordPress hosting as an add-on, but only to selected clients.

This way, I won’t have to worry about auto-provisioning and the heavy features of WHMCS. I’ll need my lightweight Enhance control panel, and I’ll be good to go. I will provision things manually and sell my products using Stripe.

Note that I’m still in the pre-launch phase. My business plan is almost complete, and this is probably the last piece of it. Yes, I’ve learned never to launch any business without a written plan and all its financials. This exercise helps measure the risks.

When assessing the risks, I have identified the following challenges:

A highly competitive industry with over 500K WP-managed hosting providers
If you launch web hosting, it will be all about price positioning. The cheaper, the better the chances of success.
Even though WP users know about cloud hosting and its performance, most aren’t ready to pay the price. You need to find agencies and businesses. The approach is entirely different. You’ll need a sales team to build the relationship and market aggressively. This will take time.
Finding a competitive advantage against companies like rocket.net, Kinsta, and Cloudways is extremely difficult.
CloudFlare Enterprise has become an imbalanced selling point. Small companies can’t afford it.
Complexity (billing panel, provisioning, fraud, customer service…)
Web hosting is becoming a high-risk business for payment processors. It will hurt small businesses if they repeat what they’ve done with CBD.
No matter your ideas, you’re always limited by your control panels
If you want to sell performance, you can’t afford it on the cloud. It has to be bare metal.
You will spend your life creating/answering tickets for providers and clients.
Goodbye creativity. You can’t innovate or create anything in this space unless you are a skilled coder/developer.
Forget about paid traffic to bring in customers. In the best scenario, you can afford retargeting campaigns.
You won’t be able to grow without quite an extensive support team for WordPress.
Imagine if tomorrow CloudFlare allows WordPress hosting on their instances with Load-balancer, built-in CDN, etc...

Changing my primary product offering is changing my entire energy. I'm also off with the costs of infrastructures (approx. 10K/year in my original plan with two DC and quite a few servers leveraging the potential of Enhance), off with my delusional dreams (building up a Lego like a 5yo kid), I don’t need WHMCS anymore, and I don’t need to stress out and depend on other people's will to upgrade or launch new features.

If I succeed in phase one, I can always re-adjust and scale the hosting side if I see some demand. By then, Enhance will have become a Ferrari.

I hope sharing a bit of my journey and business plan can help other solopreneurs.

Please feel free to comment and share your owner experience/adventure ;-) Best, Adrien

PS: Thank you, Adam, for your time in helping me use and learn Enhance. I've rarely come across anyone as supportive and professional as you. I would have probably dropped the web hosting service if Enhance wasn't there today.

MD6

Adrien Finding a competitive advantage against companies like rocket.net, Kinsta, and Cloudways is extremely difficult.

What is your market, who do you want to target? It's clear that if you want to target people who know and use the services you've named, the step is huge.

But there are millions of people who are hosted on the saturated Godaddy servers. Small businesses, non-profit organizations, young web designers who are starting up and need skilled people like you.

There is still room to do business. Right now everyone is doing pretty much the same thing...cPanel, Cloudlinux and making pseudo deals in the first year on price. However, if a customer asks for advice, good luck...! And that's where you can make your mark. Specialized WordPress hosting, specialized WordPress support.

I think it was you who wrote in another thread something about the support at Upmind. You asked for A and the support answered Z LOL. It's the same thing with your WordPress clients. If you answer A++++ to their little A question, you've just shined your brand and your name will go around.

I read that WHMCS doesn't interest you, that you feel it will limit you one day. Maybe, but by then your business will have grown, you will know more about your customers, your market and your needs and you will be able to make investments in your technology.

What do you need for your web hosting business?

kyzoeadmin

MD6 I agree with you, we are providing our services to people on saturated Go daddy servers, and this is a huge business if i may say so, also the small Hosters that are in business for a couple of years and then get hit by some server issues (we call it script kiddies) and call it a day.

We offer low- and medium-priced hosting solutions together with WP support, and it turns out magnificent. I think there are possibilities enough.

I have to agree with Adrien , the support we get from enhance is out of this world !!

Ned

Adrien The cheaper, the better the chances of success.

This is a race to the bottom and how bad providers die, Don't do this.

Adrien CloudFlare Enterprise has become an imbalanced selling point. Small companies can’t afford it.

Heaps of options, I'm probably in a more unique situation where the underdog provider (Bunny) has more PoP's, Better routing and includes a ton of features for a very fair price that we can provide even more than Cloudflare at times, Find this for your audience.

Adrien If you want to sell performance, you can’t afford it on the cloud. It has to be bare metal.

Heaps of Ryzen based options, Cheaper than enterprise and single thread performance is great - not ideal but a great first step, Hetzner, BuyVM and many more are coming to the market, Here a dedicated core CPU even with virtualization will be better than a cheap VM.

With billing your options are a bit limited, Blesta would be my personal recommendation, easy to build on if you need to and is on par with WHMCS without the huge bill (Free with a BuyVM VPS, or a great yearly fee) and handles all your basiscs like accounts, provisioning and support.

Build a great kbase and provide a great customer experience, In this space if you've thought about it odds are others have, 10 could have failed and 10 could have done well - The main factor is determination, offering a genuinely good service with a good attitude.

There's people there flipping OVH and Hetzner server's and VPS's and still making sales, If you've come this far and put this much effort into it you can probably do well yourself, Don't let the small things limit and discourage you, if it's an issue with something at scale you will solve it when your business is big enough, until then leverage the great and cheap tech like the CDN's we have access to, The software like enhance, blesta and this community who puts in huge efforts to troubleshoot and share knowledge, you got it!

Adrien

MD6 I target the same clientele as WP Engine, SiteGround, Kinsta, and others, such as small businesses, especially those with complex WordPress sites, including Woo and MemberPress/LMS. Non-profit organizations are not a specific target. I don't know much about young web designers, since they seem happy with Cloudways.

Word of mouth is important to the success of every business, but getting customers at first can be hard. One study shows that the average customer acquisition cost (CAC) is over $100, and in some cases it's much more than that (https://firstpagesage.com/seo-blog/seo-roi/average-customer-acquisition-cost-cac-by-industry-b2b-edition-fc/). This makes me worry that the cost of acquisition could be higher than expected. After accounting for the affiliate program markup, costs, and other expenses, the margin may be smaller to afford the time spent managing support.

To address this, I've incorporated low-CAC channels in my marketing plan such as LinkedIn advertising, which has proven to be more valuable than Google Adwords/SEM, webinars produced frequently, inexpensive mass email marketing, free content marketing for organic traffic, social media, and referrals (although more challenging than other channels).

@kyzoeadmin Thanks a lot for sharing this encouraging news. Now you've been building a solid base for quite many years right? How long did it take you to reach where you are today?

Zoinkies

Just a heads up, Cloudflare Enterprise is not an advantage. Fastly, StackPath are both faster CDNs and both do image optimisation. You’re just paying for brand, Cloudflare doesn’t even win a lot of WAF awards. Whereas StackPath does, so does Fastly.

Cloudflare is pure marketing, without substance, I wouldn’t worry about it as much as many say, being the cheapest plan at 6k per month, and only getting very small features for that base plan it’s not worth it. They’ve had a monopoly for a long period of time which is now being questioned, and challenged by other providers successfully.

Zoinkies

Zoinkies Adding onto this, I still think the general market still prefers the classic monoliths like cPanel, Plesk over Enhance due to track record, name, branding etc. You may face a challenge providing Enhance over said alternatives, I know I did. People don’t like change from the normal, and those are the normal. I’ve definitely lost some interest after leaving cPanel behind, mainly due to WP Tools and CMS patching it provided.

Adrien

Zoinkies Yeah, this may certainly be the case, but how would you concretely implement this into Enhance? Again, this is another headache that requires some custom dev. Don't you think?

From what I've understood, Enhance will sync soon with CF DNS.

Adrien

What a coincidence. Right after my post, I received this email from WPengine launching a new plan at @15 USD/month.
Never seen before! This is going to hurt some.

And here was my pricing for the entry plan: the same! $15.

This illustrates the price bloodbath I was talking about in the upcoming challenges of my initial post.

Check also Gridpane through wpcloud offering high available and incredible resources for a price that is hard to beat:

https://gridpane.com/managed/

How do you beat this tech at $25/month?

Zoinkies

Adrien You can’t really, hosting is very overdone, anyone can get reseller hosting and rebrand it etc, to create original work you need to be a excellent developer, network engineer, basically full stack.

scottnailon

Adrien How do you beat this tech at $25/month?

Its not all that hard, but you need your own metal.
Proxmox cluster of virtual machines running on HDD in ZFS RAIDZ/Z2 with Cache and Log Drives set up using Enterprise NVMe drives. It gives you the ability to give more space whilst using the speed of the NVMe drives for read and write - it certainly helps a lot!

I hope that helps a bit 😃

Adrien

Zoinkies

you need to be an excellent developer, network engineer, basically full stack.

This is precisely the lesson I'm learning.

I thought I would hide behind Enhance but then crossed the path again of a billing systems monster, and that was it ;-)

Adam

One of the most effective ways to differentiate yourself as a smaller provider against the big industry names is with the level of support you offer your customers. If you can go the extra mile to make sure your customers succeed then they are likely to stay loyal to you as they grow. They're also likely to tell their friends, colleagues, etc.

Before founding Enhance, I sold web hosting from 2002 until 2017. Even in 2002 people told me the web hosting market was saturated and there was no way to compete with the incumbent providers. I don't think it's much different today, you can always carve your own niche in a market which is ever expanding.

Adrien

Adam I agree with your perspective. During my younger years, I too engaged in wild activities that I am less likely to do presently. 😉 Additionally, I apologize for hijacking Enhance community and introducing my business queries. I am genuinely enthusiastic about the work you are doing with Enhance and value the contributions of all the members who share insights about the industry.

wbknght

Adam < this.

And simply adding a different payment gateway or support in another language can mean fortune. I'm sure you guys already experienced it.

Zoinkies

Ned Forgot about Bunny, another great CF alternative. Honestly, CF Enterprise isn’t what it’s made up to be, marketing and a pricy entry fee make it “marketable” as an enterprise solution.

Adrien

Ned Thanks a lot for taking the time.

I've seen in the past 2 days many fellow members recommending Bunny, but no one mentioned Quic.cloud. Is it because you're using Nginx?

Ned With billing your options are a bit limited, Blesta would be my personal recommendation, easy to build on if you need to, on par with WHMCS without the huge bill (Free with a BuyVM VPS, or a great yearly fee) and handles all your basics like accounts, provisioning, and support.

I've tested Blesta after reading your message. I just can't.

Ned The software like enhance, blesta and this community who puts in huge efforts to troubleshoot and share knowledge, you got it!

Yes, I appreciate the Enhance community and value your sharing.
I'll keep you updated on my progress and try to implement some of your suggestions.

AdamM

Zoinkies bunny.net It seems to be the best alternative and the cheapest...
It would be nice to see Bunny dns integrated with enhance

fbaye

I think Bunny would be better all round tbh

Aliysa_Enhance

Bunny.net is proving fairly popular. If you're in favour of bunny.net, please upvote it over at https://community.enhance.com/d/222-integration-bunnynet-dns-and-vanity-nameservers

Ned

Adrien I've seen in the past 2 days many fellow members recommending Bunny, but no one mentioned Quic.cloud. Is it because you're using Nginx?

I have litespeed based servers too - For me NGINX is king but there's a time and place to leverage things like LiteSpeed too, Quic CDN overall just has better options with competiton though so it's never a go-to for me, Bunny, Cloudflare and 5CentCDN are great options, notable 5CentCDN's top tier is on the Akami network so don't let the name trick you, there's some great options out there.

Adrien I've tested Blesta after reading your message. I just can't.

I feel that, Truly do - Looking at setting up WHMCS for a new more niche project where onboarding and UI is a lot more important, but hard to beat blesta on value and features.

Adrien

Ned, 5CentCDN appears to be very competitive (CDN Enterprise at $15/month on Akamai with 1400 Pops).

A CDN integration built into Enhance CP would be insane. Whether it's Bunny, Fastly, CF, or 5CentCDN with no need to install an additional plugin on our client site (or if so, an auto install).