BuycPanel: The Lifecycle of a Hosting Company

(Special cPanel Edition) – The first hosting order from my snazzy-new webhosting business and website did not come from Orange County as I would have expected (especially with the business name Orange County Hosting), it didn’t come from inside California, and it didn’t even originate from within the United States.   Lithuania?  Where is that located?  People are awake at 4AM to place a website hosting and domain name order?  Good thing they don’t expect me to setup their order for another four hours… then again that was pretty fast! 
 
Ring-Ring.. uh oh, a phone call at 5AM, wake-up!  I better clear my throat and practice saying “hello, hello, thank you for calling…” a few times.  That way they won’t know I’ve been sleeping, and they won’t realize I don’t have that 24/7 staffed call-center from the picture (stock imagery) on my website.  You know, the one with the smiling customer service representatives all with headsets, eagerly looking to professionally answer your phone call?  Well, I wasn’t smiling at 5AM, didn’t have a headset yet, bought my business phone on eBay, and had Internet service through a cable modem the size of my 14-inch computer monitor but… I was the 24/7 customer service call-center!
 
When I started my computer service and website hosting business in 1995, I didn’t have a clue about business.   At 14-years-old, running a business, let-alone growing-up was quite a task.  I remember when I went to meet my first business customer.   I wore a polo shirt and a nice pair of slacks (which I had to borrow from a next-door neighbor).   When I walked in the door with my briefcase and computer toolkit, I was met with a very surprised look.  I could tell the client was thinking “Where’s your daddy kid?”, as I shook my customer’s hand, introduced myself, and told them I was there to help.  The most interesting thing was that almost every client I met for the first time had this very same reaction, until I sat down at their computer system and fixed issue after issue – building their confidence in the young nerd sitting in front of their i486, running Windows ’95, and fixing their favorite addictive games they couldn’t live without (Snake and FreeCell).   Despite the initial disadvantage of my age, starting in business early presented one of the greatest business opportunities and life lessons I could ever wish for.  Those who succeed in business at a young age can succeed in life. 
 
I learned that young entrepreneurs face more obstacles than normal businesses.  We are not considered to be great thinkers due to perceived inexperience in our young age.  The hardships were an uphill battle, which made me desire success even more.  I scouted the market to see how and where I would offer services.  I picked a business name and obtained a business license.  I made business cards and flyers. I started telling family, friends, and my contacts in the community about my business. I placed an ad in the yellow page section of the community phone book.  I designed my first website on the back of a graded homework assignment in my middle school science class. My business expanded rapidly.
 
I gradually shifted my business focus from computer repair to designing websites.  My computer repair clients had started to ask me to do more than just repair work. They wanted me to design and manage the hosting for their websites. As I designed more and more websites, I saw a problem in the industry.   There were no inexpensive, reliable website hosting providers. I thought, “I could fill this spot”. My technical knowledge and desire to build my own business by doing most of the work myself allowed me to charge less than some of the big competitors in the industry. 
 
The doors of Orange County Hosting opened in April, 2001.  It was funded with money I had saved from all my previous jobs.  At first, I only operated with two web-serving computers and about 50 clients.  My aim was to serve local clients.   I was amazed when the first order I received was international!   I quickly decided to change the company name from Orange County Hosting to OC Hosting, to portray the image of a large company.  I was still running the business from my bedroom. 
As clients started to pour in from around the globe I needed help, and a better office.  I set out to find employees, an office, and a bank account.   If you are under eighteen, most banks will make your parent co-sign when you open a bank account.   This means that your parents become responsible for your assets and liabilities.   I decided I didn’t want the person who did my laundry each week, and fed me, to be in any legal trouble.  As a beginning entrepreneur, I did not have a lawyer.  But after the first court case against a client who would not pay his bill, I decided to protect myself legally.  I found a lawyer who charged me $1000 to incorporate OC Hosting.  This means OC Hosting, Inc. became its own “person” or entity in California.  It had its own bank accounts, taxes that must pay, tax-id (like your social security number), and its own group of officers who run and manage the company without being fearful of always getting sued personally.
 
Bank account in hand, I started looking for an office.   Almost any office space you apply for will run a credit check.  Since I was young and didn’t have any credit, I was denied at four different offices.  I finally found a privately owned office building.   This means that a property management company doesn’t hold the lock and key to your business, instead you deal with the building owner.   I met the owner and brought personal, financial, and other reference information.  I showed him newspaper articles about me, my business, and a letter from my bank.  I went in with the attitude that I had to “sell myself” to the owner.   Apparently I did pretty well and our company was leased the office a day later!
 
With an office leased I needed to have some employees. I have always lived by the notion that teammates make the best employees.  You already know that you can tolerate your teammates, so it shouldn’t be much harder to tolerate him or her as an employee in your company team.  I approached several friends from high school and asked if they would like to work with me in furthering my ideas and adding their own.   I have learned that if I work for my employees, they will work for me.   They are my bosses:  their actions dictate how I handle situations and conflicts. I ended up hiring a football teammate who played alongside me in high school. The other employee?  My mom, Ranae, someone needed to feed my employees and I when we forgot to eat!  They were excited to be part of a beginning web hosting business.  One inaugural employee, Tim Hollis, eventually became a vice president at the company.
 
OC Hosting, Inc., at its largest size operated with twelve full time employees, over 2,000 clients, a 1400sq ft Network Operations Center, and over $1million in revenue per year.  We offered a full range of services including Dial-up Internet connections (does anyone remember these?), high-speed Wireless Internet, domain name registration, and of course website hosting.  We even provided services to high profile websites such as Billyidol.com, the Official Billy Idol Website, and the California State University system.  OC Hosting’s customer-first approach and ability to adapt to industry changes quickly kept the business profitable and a major industry competitor.  The business was acquired in 2006 through a stock and cash purchase by a large datacenter in Los Angeles.
 
As young entrepreneurs we are given the gift of time, unlimited education, an extensive potential client base, and the ability to pursue boundless ideas into profitable businesses.  In high school, I played sports, ran a business, and spent time with friends.  
 
I had the privilege of meeting a few other young entrepreneurs who started their business while in school servicing their classmates.   For example: Phil Dade raised $500,000 from investors while in high school and created a website for students interested in practicing for College Advanced Placement tests.   Tolga Tarhan sold the website design business he started in high school for $1 million.   Robert Maynard started an internet service provider, Ojai.Net while a freshman in high school. He began to provide internet access to his friends and neighbors.   There are unlimited amounts of potential businesses you can start while being young and in school.    You can start a gardening service, pet care business, class note-taking service, resell products with a resale license, or turn your hobby into a business!  Just remember:  happy customers are the best advertisements!
 
About the Authors:
Dr. Larson received his Master of Science degree (Interdisciplinary Studies – Homeland Security) from San Diego State University. He was awarded his Ph.D. in Applied Management and Decision Science with a focus on Information System Management in 2009 from Walden University. Continually striving for self-improvement, he is certified as a CompTIA Inet+ Subject Matter Expert and holds many other certifications related to homeland security and information technology. Dr. Larson was a 2001 NACE (GSEA) entrepreneur award finalist in Washington, D.C.  Additionally, Dr. Larson has volunteered as a Reserve Police Officer for a law enforcement agency in Orange County, CA since 2001. In such capacity he assists a team of law enforcement experts in fighting Internet crime—specifically those against children. Among his many awards and distinctions are medals of lifesaving, merit, and valor during his tenure with the police department.

Mr. Hollis completed the Cisco Certified Network Administrator Academy in 2004 while working full-time as the Vice President of OC Hosting.  He went on to assist in managing the information technology department for San Diego, CA specialty sunglass maker Spy Optic for one year in 2006 before starting his first successful computer software business which was valued at nearly $1 million when sold this past year.  He has volunteered his time as the Chief Financial Officer of Public Safety Assistance Foundation, a non-profit corporation protecting public officials from identity theft.  Mr. Hollis is currently the co-founder of BuycPanel.com —the largest external cPanel license and add-on software provider.   BuycPanel.com provides cPanel licenses and cPanel addons including server administration, WHMCS, Softaculous, and RVskins licenses.

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