Since Cloudways (www.cloudways.com) was founded in 2011, it has grown to 50+ employees to tens of thousands of servers for thousands of customers within the Platform. This was all accomplished in six short years, with much of that growth in the last three years. There are a number of secrets to Cloudways' success which all types of businesses can learn from.
Cloudways co-founder Pere Hospital took the time to talk to us about just what it takes to build a company that is as successful as Cloudways. Hospital started a company in Spain called Secways. His background is in IT security and he was playing with Amazon EC2 in its early days.
“I thought that the cloud would really pick up one day, and figured that a migration from traditional hosting (plenty of companies with servers in a closet at that time) to cloud would eventually happen,” said Hospital.
He admits that at the time his vision was a little blurry, but when he bought the Secways domain, he went ahead and registered Cloudways with the idea that his vision might one day come into sharper focus.
The Early Days of Cloudways
Cloudways was actually founded by four co-founders (Pere Hospital, Aaqib Gadit, Umair Gadit and Uzair Gadit) who knew each other from previous projects.
Like many great ideas, it was born from brainstorming.
We met in Thailand for a week, collaborated and brainstormed on high level ideas and boom! Cloudways was born.
They started with a very minimal budget – just enough to start the company and not much extra. This should be good news to anyone starting a business on a shoestring and an example that a great idea and hard work can take you from zero to successful rather quickly.
As with most startups, Cloudways had some challenges in those early days. As Hospital put it:
Everything from getting customers, properly defining the service and how to deliver the Cloudways experience to users. Setting up processes and business structure was a whole different challenge.
He told WHSR that it was a pretty standard startup birth. The founders wore way too many hats, as is very common with most small businesses just starting out.
From Beginning to Successful Company
Anytime I talk to a business owner who has made his or her company a success, I like to dig a little deeper and find out exactly what led to that success so I can share it with WHSR readers. Hospital let me pick his brain a bit about the things that made Cloudways so successful in such a short time.
One thing that Cloudways' founders did was set themselves up for success from almost the beginning. “We defined annual strategy and then broke it into quarterly goals.” Hospital describes these as “stepping stones” to yearly targets. Another thing the founders did was to adopt a plan called the standup meeting. “We religiously follow Agile and have 15-day springs to reach the targets of each quarter. To this day, we follow a very fine-tuned version of this approach and it has helped us a lot in focusing our efforts.”
From the first day they opened their doors, Cloudways focused on organic growth. This has resulted in them having to do only minimal paid marketing, but they still have a steady growth.
Hospital shared that they took a unique approach to cloud hosting and simplified the deployment of managed servers and applications on top of the best infrastructure providers. In fact, Hospital attributes this decision to much of their early success.
We don't own any infrastructure, so we could focus completely on the core problem we try to solve for people – easy access to cloud services.
The founders chose DigitalOcean and Amazon as their first infrastructure partners. This was strategic in itself, because both companies were extremely well-known brands. This gave their own company a “strong initial thrust and exposure.” Hospital notes that they chose companies whose branding matched their own goals for easy cloud hosting. “This was especially true with DigitalOcean, as their core message of ‘easy cloud servers' merged very well with our message of ‘easy managed cloud apps.'”
Not owning their own infrastructure also paid off as they integrated new technologies, because they simply chose underlying services that offered the technology they wanted to offer.
His advice to new startups? Especially if you are bootstrapping your way, piggybacking on a stronger player with a reputed complementary service is not a bad idea for the early days.
A Learning Ground
The initial vision for Cloudways was to help SMBs (Small/Medium Businesses) move to the cloud. Hospital shares:
The initial vision was to “simplify cloud adoption for SMBs”. AWS was (and it still is) a complex beast and most small companies I spoke with were lost when it comes to moving workloads to a cloud environment. Our initial approach was to build a consultancy service. We would get a lead, The customer would explain the problem, we would quote a solution, the client would approve the solution and we would move on.
Hospital points to the one customer, one problem, one solution approach offering a learning ground for the company. They were able to get to know their clients on a personal level and understand the problems SMBs face.
The next step was to figure out how to solve those problems. However, he found that the approach didn't scale very well. “The issues were very clear: Too many specific solutions, difficult knowledge sharing, expensive troubleshoots. It was obvious that we needed to do something to move to the next stage.”
However, the advantage Cloudways gained as a business during those early times was that they created Standard Operating Procedures (SOPs) for everything.
Deployment of a new load balanced environment on AWS, Installation of a fully-optimized Magento store on DigitalOcean, all have SOPs, supported by the knowledge we acquired by working very closely with our customers about the problems they faced and the mistakes of our competitors. This put us in a perfect position to build something scalable, meaningful and competitive to disrupt the market. This was the birth of the Cloudways Cloud Hosting Platform.
Every company on the face of the planet has challenges they have to overcome if they want to find success.
I asked Pere Hospital about the challenges Cloudways had to overcome to simplify their hosting process and become the powerhouse they are today.
As with most hosting companies, growing pains were inevitable, but the founders were aware they would come and were prepared for them. “Being a managed cloud service, maintaining service quality while growing is the main challenge we've faced,” Hospital said. Cloudways attacked this problem from multiple angles.
Automation of what can be automated (CloudwaysBot)
A proper internal training structure supported by Q&A and knowledge sharing
Plenty of hard metrics measuring quality (NPS, first response time, resolution time) and adding targets related to these metrics to the quarterly goals.
Knowing where they are going is one of the key elements to overcoming these challenges. Hospital added:
“As we grow, we see a change in the customers. We are getting bigger customers with more complex requirements that need specialized solutions. These customers co-exist with the original (small) ones we began with. Getting the right tools for these new/bigger customers, while not neglecting the large long tail of smaller ones, requires a lot of good judgement and understanding of market dynamics.”
The Shift from Startup to Success Story
For every company, there is that pivotal moment when they shift from a struggling startup to a seemingly overnight success – although the work put in to get to that success is far from overnight. The same was true for Cloudways. They were moving forward with the one customer approach mentioned above, but then things shifted and they moved to the Platform concept. This allowed them to obtain several orders that changed the course of their business forever.
From 2012 to early 2014 they got a few hundred new customers for which they were managing a few hundred servers (using the first model they had in place), but from April 2014 up to present day, Cloudways has grown to tens of thousands of servers for thousands of customers on the new Platform system.
This tremendous growth from 100s to 10s of thousands occurred in a three year span of time. “We have sustained growth of well over 100% yearly on all main metrics (revenue, customers, servers).”
Tips from Pere Hospital to Help Your Company Succeed
Hospital had a few additional things to share that you can directly apply to your own success as a company. He admits that bootstrapping Cloudways to the point it is today has been a challenge, but that in the age of quick money, he believes the virtues of bootstrapping are underestimated. He points out that they fully own the company and are in complete control of what happens with it, which is a big plus for the vision they have as the founders. He adds, “I am really sad when I see founders breaking their necks growing a business of which they already own a minority stake, before reaching the first few million in revenue.”
He also points out that discipline is a big key to success. “When you are bootstrapping, you don’t have second chances. You can’t burn money. You need to think things through. I have seen plenty of funded companies happily burning money waiting for the next round, that didn’t come.”
He points out that for a company such as Cloudways, where it is based on automation but also a human component (support), it is important to scale in a sustainable way. “You can’t expect to add 100 engineers in one go and retain/enhance the standards of service. Bootstrapping has controlled the growth to a strong but viable level.”
Be disciplined. Understand where you want to be in a certain amount of time, and map your journey to the destination. Break the journey into stages and go one stage at a time while always adjusting your compass to keep the destination in focus. This should be an unrelentingly practice.
Hospital also advises figuring out ways to measure your success and progress. He suggests attaching hard metrics to each stage of the journey (users, revenue, items sold, subscriptions) and to share the numbers every single day with the entire team. This gives purpose and quantifies the process.
With such a focused attitude about how to grow a company, it isn't any surprise that Cloudways has found such success. Forming a core team, and keeping them on board throughout the entire process helped them achieve their vision and grow beyond anything they originally imagined. A special thank you to Cloudways for sharing their insight into how to grow a successful company from the ground up and simplify the process used to reach new customers.
What I Learned
I am so glad that Pere Hospital took the time to chat with me about his successes and the things he learned along the way. I even learned a few strategies to apply to my own writing business, but that would help anyone running any type of business, such as:
You can successfully bootstrap a business, and this in fact might keep you on target with spending, in control of your company, and give you more focused goals.
Communicate with your team and don't give up on your goals. Chart a course and stick with it. You may need to make some minor adjustments, of course, but the goals should be ones everyone is working toward.
Discipline is key. You should consistently work toward your goals.
Short meetings keep everyone on the same page. Stand-up meetings are typically 15 minutes at the most and allow everyone on the team to share hard numbers and gain insight on progress.
Look for solutions for problems. When Cloudways found the most success was when they started to really pay attention to the common problems their customers had and find automated solutions to those problems. Their growth then exploded.
About Lori Soard
Lori Soard has been working as a freelance writer and editor since 1996. She has a bachelor's in English Education and a PhD in Journalism. Her articles have appeared in newspapers, magazines, online and she's had several books published. Since 1997, she has worked as a web designer and promoter for authors and small businesses. She even worked for a short time ranking websites for a popular search engine and studying in-depth SEO tactics for a number of clients. She enjoys hearing from her readers.