Elston Baretto
Web hosting is a service that allows people to put their websites on the internet. It's a very competitive business, with many large companies offering similar services. However, Elston Baretto – the founder of Tiny Host, has been able to grow his small web hosting business from 0 to a $20,000 monthly recurring revenue (MRR).
Despite all the competition, Elston has managed to build a successful company. He did this by focusing on making web hosting easier for people who aren't tech experts. Tiny Host stands out because it's simpler to use than many other hosting services.
Elston's journey with Tiny Host wasn't always easy. It took about a year before the company started making significant money. During this time, Elston had to work hard and make many decisions about how to build and market his product.
Let’s see what we can learn from his story.
How Elston started Tiny Host
Elston Baretto's journey with Tiny Host began with a simple observation. He noticed that many people found web hosting complicated and hard to use. Web hosting is a service that lets people put their websites on the internet. Elston thought he could make this process easier, especially for people who weren't tech experts.
He decided to create a hosting service that was simpler and more user-friendly. Instead of offering lots of complicated features, Elston focused on making Tiny Host easy to understand and use. He wanted people to be able to get their websites online without needing to know a lot about technology.
Starting Tiny Host wasn't easy. For about a year, the company didn't make much money. This is a common challenge for new businesses. During this time, Elston kept working on improving Tiny Host. He listened to what his users said and made changes based on their feedback.
Even though Tiny Host wasn't making much money at first, Elston didn't give up. What kept him going was the positive feedback from his users. People who used Tiny Host, even those using the free plan, often told Elston how much they liked the service. This told Elston that he was on the right track, even if the money wasn't coming in yet.
Elston's experience with starting Tiny Host taught him an important lesson: don't wait for your product to be perfect before launching it. He got Tiny Host out there early and kept improving it based on real user experiences. This approach helped him build a product that people really wanted to use.
Finding product ideas
Elston has two main strategies for finding ideas for new products. These strategies can help anyone who wants to start a business but isn't sure what to create.
The first strategy is to improve an existing product. This is what Elston did with Tiny Host. Web hosting already existed, but Elston found a way to make it better for a specific group of people. He looked at existing hosting services and thought about how he could make them simpler for non-technical users. This strategy can work in many industries. You don't always need to invent something completely new. Sometimes, making an existing product better or easier to use is enough to create a successful business.
The second strategy is to build products that people are already searching for. This involves using tools that show what people are typing into search engines. These tools can tell you what problems people are trying to solve or what kinds of products they're looking for. If many people are searching for something, it might be a good idea for a product. The advantage of this approach is that you know there's already demand for what you're building. Also, if you can create content that matches these searches, it can be easier to get people to find your product online.
Elston believes that both of these strategies lead to "validated ideas". This means ideas that have a good chance of success because they're based on what people actually want or need. By using these strategies, Elston reduces the risk of building something that nobody wants to use.
Making products stand out
In a crowded market like web hosting, it's important to make your product stand out. Elston has a couple of key strategies for doing this.
The first strategy is to look at negative reviews of competitor products. When people leave bad reviews, they're telling you what's wrong with existing products. This is valuable information. Elston suggests taking these complaints seriously and thinking about how you can fix these problems in your own product. For example, if people complain that a competitor's product is too expensive, you might consider offering a cheaper option. If they say it's missing important features, you could focus on adding those features to your product. By addressing these issues, you create a product that solves real problems for users.
The second strategy is called "market positioning". This means choosing a specific group of people to focus on, rather than trying to appeal to everyone. Elston calls this "niching down". For example, instead of making a general social media management app, you might make one specifically for restaurants. By focusing on a specific group, you can create a product that really fits their needs. People appreciate when a product feels like it was made just for them. This can help your product stand out, even in a crowded market.
Elston emphasizes that there are many niche communities out there. These are groups of people with specific interests or needs. By finding one of these communities and building a product just for them, you can create something unique and valuable.
Measuring success beyond revenue
When you're starting a new business, it's easy to focus only on how much money you're making. But Elston suggests that there are other important ways to measure success, especially in the early days.
For Tiny Host, one of the most important early signs of success was user feedback. Even though the company wasn't making much money for the first year, the people who were using it really liked it. They would often tell Elston how helpful Tiny Host was and how much they enjoyed using it. This positive feedback was crucial. It told Elston that he was creating something valuable, even if it wasn't profitable yet.
Elston also looks at user engagement. This means paying attention to how often people use your product and how they interact with it. If people are using your product regularly and engaging with different features, that's a good sign. It means they find it useful and are integrating it into their routines.
Another important measure is how many people keep using your product over time. If people try your product once and never come back, that's a problem. But if they keep using it month after month, that's a strong sign that you're providing real value.
Elston emphasizes that success rarely happens overnight. Instead of expecting immediate results, he suggests focusing on continuously improving your product based on user feedback. This means regularly asking users what they like and don't like, and then making changes based on what they say.
By paying attention to these non-financial measures of success, Elston was able to stay motivated during the challenging early days of Tiny Host. It also helped him make the right decisions about how to improve the product. Over time, as Tiny Host became more useful to more people, the financial success followed.
Effective marketing strategies
Elston has found several marketing strategies that work well for Tiny Host. His favorite is SEO, which stands for Search Engine Optimization. This means making your website show up when people search for certain words on Google or other search engines.
Elston believes SEO is one of the most powerful ways for small businesses to get noticed. However, it takes time and patience. You need to spend months working on it. Here's what Elston suggests:
- Figure out what words people are searching for related to your business.
- Write content that uses those words naturally.
- Try to get other websites to link to yours.
- Be patient - it can take months to see results.
If you do this well, your website can show up when people search for things related to your business. This can bring you lots of potential customers without having to pay for advertising.
To speed up the process, Elston uses two clever tricks:
1. Making YouTube videos: These videos can show up in search results just like websites can. You don't even need to be in the video yourself - you can just record your computer screen and explain things.
2. Creating small, related projects: These are separate from your main business but connected to it in some way. For example, if your main business is a tool for writers, you might create a small website that gives writing tips.
Elston emphasizes that SEO isn't complicated, but it does take work. The earlier you start, the better off you'll be in the long run.
Marketing on Reddit
Reddit is a popular website where people discuss all kinds of topics. Elston finds it's a great place to connect with potential users, especially when you're just starting out. However, you have to be careful how you use it.
On Reddit, people don't like it when you obviously try to advertise your product. If you post about your business the same way you might on Facebook or Twitter, you could get banned from the site. Instead, Elston suggests being very honest about what you're doing.
The best approach is to find the right communities (called "subreddits") for your product. Then, create a post explaining that you've built this product and why you built it. Ask for feedback rather than trying to make sales. If there's a weekly thread for people to share their projects, that's often a good place to post.
Elston also recommends trying to give something back to the Reddit community. Treat the users there like friends. You wouldn't just go up to a friend and tell them to download your app, would you? When Elston launched an app on Reddit years ago, he included a special discount code as a thank you to Reddit users. People really appreciated this gesture.
By being honest, asking for feedback, and offering something in return, you can use Reddit to connect with your first users and get valuable input on your product.
The role of free plans
Tiny Host offers a free plan, which might seem strange for a business. After all, don't you need people to pay to make money? Elston explains that free plans can be very useful, but they're not right for every product.
For Tiny Host, the free plan serves several purposes:
1. Word-of-mouth marketing: Every website hosted on the free plan is like a little advertisement for Tiny Host.
2. Risk-free trial: It lets people try out Tiny Host without any commitment. If they like it, they might decide to upgrade to a paid plan later.
3. Building trust: It shows that Tiny Host is confident in their service quality.
Elston notes that free plans can be a problem if they lead to lots of customer support requests. Fortunately, Tiny Host doesn't get many support requests from free users, so this isn't a big issue for them.
Finally, Elston made sure there's enough of a reason for people to upgrade to paid plans. If everyone just used the free plan and never upgraded, it wouldn't be worth offering. But for Tiny Host, enough people do upgrade to make the free plan worthwhile as a marketing tool.
Pricing strategy
Deciding how much to charge for your product can be tricky. Elston's approach with Tiny Host has evolved over time.
When Tiny Host first launched, the prices were similar to what they are now. However, Elston found that at first, not many people were buying. So he lowered the prices, bit by bit, until people started to buy. Then, as he added more features and improved the service, he slowly raised the prices back up to where they are now.
Elston suggests that if you're launching a new product, it's often good to start with prices a bit lower than what's normal for your industry. This can help you attract your first customers. Then, as you improve your product, you can gradually increase your prices.
However, Elston warns against setting your prices too low. If your price is much lower than similar products, people might think your product isn't very good. There's a balance to strike between being affordable and being seen as valuable.
Interestingly, Elston believes that if no one is complaining about your prices, you might not be charging enough. He suggests that it's okay if some people think your product is too expensive - that often means you're charging a fair amount for the value you're providing.
The importance of coding skills
Many people wonder if they need to learn how to code (write computer programs) to start an online business. Elston's view is that it depends on what you want to do.
These days, there are many tools that let you build websites and apps without knowing how to code. These are often called "no-code" tools. There's also artificial intelligence (AI) that can help with some tasks. Elston points out that if you have a good idea, a solid plan, and know how to reach customers, you can build a successful business without being an expert coder.
However, coding skills can still be very valuable. If you want to create something truly unique or solve a complex problem, knowing how to code can give you more flexibility and control. You won't be limited by what existing tools can do.
Elston's advice is to think about your goals. If you want to start a straightforward online business, you might not need to learn coding. But if you dream of creating innovative tech products, learning to code could be very helpful.
Remember, though, that coding is just one skill among many that can help in building a business. Things like understanding your customers, marketing your product, and managing your finances are also crucial skills for any business owner.
Final advice
Elston offers several pieces of advice for people who want to start their own online businesses. Let's break down each piece of advice:
1. Focus more on marketing than coding: Elston believes many new business owners spend too much time perfecting their product and not enough time telling people about it. He suggests spending more effort on marketing your product, even while you're still building it.
2. Don't overwork yourself: It's easy to work long hours when you're excited about your business. But Elston warns against this. He points out that Tiny Host still doesn't have some features that might seem basic, like a password login system. This shows that you don't need to have everything perfect to start.
3. Find a mentor: Elston recommends looking for someone who's a bit ahead of you in their business journey. This person can give you advice based on their recent experiences. As you grow, your mentor can grow with you, continuing to provide relevant advice.
4. Engage with the indie hacker community: Indie hackers are people who start small, independent online businesses. Elston credits much of his success to the support and knowledge he's gained from this community. There are online forums and groups where you can connect with other indie hackers.
5. Be open to feedback: Elston mentions that he's always happy to answer questions on Twitter (now called X). This openness to communication has helped him build relationships and get valuable feedback on his ideas.
6. Keep learning: The world of online business changes quickly. Elston suggests staying curious and always being ready to learn new things. This could mean learning about new marketing techniques, technology trends, or business strategies.
7. Start small and iterate: Elston's success with Tiny Host didn't happen overnight. He started small, got feedback from users, and kept improving his product over time. This approach can help you build something that truly meets your users' needs.
Conclusion
The growth of Tiny Host to $20,000 in monthly recurring revenue shows the effectiveness of Elston's strategies. His approach of offering a free plan, adapting pricing over time, and focusing heavily on marketing proved successful. Particularly noteworthy is Elston's emphasis on marketing alongside product development, rather than waiting for a perfect product before promoting it.
