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Summary of Arvid And Tyler Catch Up Podcast Episode: Tyler Tringas of Calm fund with Reilly Chase of hostifi_net, a $6M revenue Ubiquiti services business

Podcast: Arvid And Tyler Catch Up
7 min. read

— Description —

Lachlan transitioned from tech support to starting Hostify, reaching $3 million in annual recurring revenue, exceeding goals Challenges included copycats, platform risk, and investor pressure Prioritizes health, fitness, and entrepreneur magnet phase

Hostify provides cloud hosting for Unify, UISP, and Omada servers Challenges with copycats, competitors, and COVID-19 impact Acquired a business with 400 customers

Negotiated strategic acquisitions and valued businesses Prioritizing vision over investor expectations Excited about developing a new app

Emphasizes health, fitness, and proactive steps Not interested in selling Hostify, focused on long-term growth and delegation.

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Tyler Tringas of Calm fund with Reilly Chase of hostifi_net, a $6M revenue Ubiquiti services business

Table of contents

Key Takeaways

Unveiling Hostify: Entrepreneurial Growth and Future Plans

Navigating Challenges and Transitions in Entrepreneurship: Insights and Inspiration

Navigating Challenges in the Software Business and Entrepreneurship

Strategies for Navigating Business Relationships, Acquisitions, and Uncertainty in the Tech Industry

Strategic Insights for Entrepreneurial Acquisitions and Valuation

Navigating Risks and Investor Expectations in Business Sales and Platform Growth

Prioritizing Health and Fitness in App Development: A Guide for Your Thirties and Beyond

Key Takeaways

  • Lachlan, the speaker, transitioned from working in tech support to starting Hostify, a cloud hosting service for Unify, UISP, and Omada servers.
  • Hostify reached $3 million in annual recurring revenue, exceeding the initial goal of $2,000 per month and the long-term goal of $500,000 in five years.
  • Challenges included dealing with copycats, platform risk, and pressure from investors, but the speaker emphasized customer obsession and staying focused on long-term growth.
  • The speaker prioritizes health and fitness, incorporating habits like yoga, mobility, and strength training, and engaging in enjoyable sports like rock climbing and basketball.

Unveiling Hostify: Entrepreneurial Growth and Future Plans

  • The speaker is transitioning into an entrepreneur magnet phase and focusing on building a business.
  • Hostify provides a cloud hosting service for Unify, UISP, and Omada servers, along with backups, updates, Linux maintenance, and customer support.
  • Hostify has reached around 3 million in annual recurring revenue, marking a significant milestone in its six-year entrepreneurial venture.
  • The speaker aimed to achieve a monthly revenue of $2,000 by the end of the first year, with the long-term goal of reaching $500,000 in recurring revenue within five years.
  • Wisdom exceeded his initial expectation of making 500k a year by achieving 3 million, a 6x increase.

Navigating Challenges and Transitions in Entrepreneurship: Insights and Inspiration

  • Calm Company Fund provides early stage capital, mentorship, and community support for calm companies like Hostify.
  • Lachlan's journey from working in tech support to starting his own IT services business and eventually transitioning to a software business is a fascinating evolution.
  • The founder of Hostify faced challenges in transitioning to developing web applications and handling payment systems, but determination led to the creation of Hostify within 30 days.
  • Despite initial setbacks, Hostify effectively solved customers' problems, drawing them to the website.
  • The speaker faced a conflict of interest at their IT service job, leading to their termination and a tough decision to go full time on Hostify, recognizing it as an important inflection point in their entrepreneurial journey.

Navigating Challenges in the Software Business and Entrepreneurship

  • After reaching $10,000 in monthly recurring revenue, the speaker faced unwanted attention from competitors who made beautiful copies of the speaker's website, leading to concern about potential loss of market share.
  • Dealing with copycats led to the realization of the impact of copycats in the software business, especially in a niche market that the speaker essentially created.
  • It's important to stay focused on customer obsession and prioritize the customer's needs, rather than getting distracted by competitors and their actions.
  • The speaker faced challenges such as having their work stolen, competitors contacting their customers, leaving fake bad reviews, and even friends starting a similar service without considering the impact on their relationship.
  • The challenges of dealing with copycats in business were a significant aspect of the early period of Hostify's development.

Strategies for Navigating Business Relationships, Acquisitions, and Uncertainty in the Tech Industry

  • The speaker emphasizes the strategy of focusing on the customer and not the competitor, while waiting for the domain to expire. They have observed a cycle where aggressive copycats eventually lose momentum and their domains expire, which the speaker then acquires and redirects to their own website.
  • The speaker mentions the importance of having empathy for competitors and acknowledges the possibility of acquiring or buying out competitors who have caused trouble in the past, citing a specific example of a successful acquisition.
  • Building a good relationship with the founder turned out to be beneficial after buying the company.
  • The speaker expressed the process of reaching out and acquiring a company in the tech industry, highlighting the initial step of cold emailing the founder to express interest in acquisition.
  • The impact of COVID-19 lockdowns on the business, with customers canceling and hotels and restaurants being affected, is a significant challenge.
  • The speaker reached out to competitors during uncertain times, offering to buy their businesses, and eventually successfully acquired a business with 400 customers of the same type.
  • The speaker sought help from Ryan Culp, who provided assistance in the deal, including legal and negotiation support, leveraging his experience in buying and selling companies and the course he made on the subject.

Strategic Insights for Entrepreneurial Acquisitions and Valuation

  • Negotiating strategic acquisitions involves considering different deal structures and terms, not just standard market rates.
  • Valuing a business based on profit multiple and the profit of the last 12 months is crucial in determining its actual value.
  • The concept of ARR arbitrage is significant, where a business can be worth more due to the buyer's larger company having a higher ARR multiple.
  • Valuing companies based on trailing 12 months profits discourages and penalizes growth and investing in growth, creating a disparity in valuation.
  • Private equity buyers typically prioritize quick returns and profits, making them the primary focus for 99% of sales.

Navigating Risks and Investor Expectations in Business Sales and Platform Growth

  • The speaker faced challenges when considering selling the business, as de-risking the business did not seem to add value and the idea of firing the whole team to increase the selling price was not feasible.
  • Nathan Lotka's list of private equity buyers for SaaS businesses between 1 million and 5 million ARR provided valuable leads for the speaker.
  • The speaker's concern about platform risk led to the realization of the need to diversify in case something happens to Ubiquity, the provider of the software Hostify hosts.
  • The speaker grappled with the challenge of platform risk when building on top of Ubiquity, realizing that selling the business wouldn't eliminate the risk as others would still be concerned about it.
  • Entrepreneurs often face pressure from investors to conform to their expectations and demands. It's important for entrepreneurs to prioritize their own vision and goals over the expectations of investors, whether it's about taking loans, seeking investments, or selling the company.
  • The business owner is the best person to assess and make decisions about risks, as they have the most insight into the business.

Prioritizing Health and Fitness in App Development: A Guide for Your Thirties and Beyond

  • The speaker is excited about developing a new app due to the technical challenge and fulfilling a long-time desire to build a mobile app.
  • Prioritizing health and fitness is emphasized, especially for individuals in sedentary professions like IT and software development, highlighting the negative impact of prolonged sitting on health and the importance of taking proactive steps to address it.
  • The speaker shares their personal journey of focusing on health and fitness, including building a home gym, hiring a personal trainer and nutrition coach, and using meal order services to support their fitness goals.
  • Establishing habits like yoga, mobility, and strength training in early thirties is crucial for long-term health and wellness.
  • Incorporating enjoyable sports and activities like rock climbing and basketball can be an effective way to stay active and maintain overall fitness.
  • The founder is not interested in selling Hostify and is focused on long-term growth and taking bigger risks, with the ability to delegate tasks and work on things they are passionate about leading to a fulfilling work life.

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