I remember when I’d be out celebrating if HostGator managed to get two signups in a week. Now, we’re seeing thousands of signups a week. Back in the day, my celebrating consisted of nothing more than dropping the Ramen noodles or the tuna can I had in my hands and grabbing some sushi for an hour before scrambling back to work. At the time, I was a poor college student who invested every penny I had back into the business I was building.

The HostGator.com domain was registered on October 10, 2002 and here are some statistics about how many active customers we’ve had at a few points since then.

• 2/1/2003: 112 active customers
• 2/1/2004: 1,031 active customers
• 2/1/2005: 6,892 active customers
• 2/1/2006: 21,434 active customers
• 2/1/2007: 50,213 active customers
• 2/1/2008: 92,752 active customers
• 2/1/2009: 157,432 active customers
• Today: 200,000+

How HostGator Came To Be:

I’ve been an entrepreneur since I was a kid. In sixth grade, I sold candy at school and had all the kids in my neighborhood working for me. When I was 14, my cousins and I had a business where we sold watermelons from a truck on the side of a road. The deal we offered was simple, but effective: “2 for $5.”

Ain't no Glory in Selling Watermelons

It wasn’t until I was a sophomore in high school that I got hooked on trying to make money on the Internet. What sucked me in was the paid to surf programs such as AllAdvantage, Bepaid.com, Cashfiesta, and the like. These companies claimed they would pay you to surf the Internet while looking at ads. I created my first website on a service much like GeoCities and was able to generate over 50,000 referrals between all the programs I was enrolled in. One by one, I learned that all of the programs were a scam. I made $65 when I was entitled to over a million.

After the paid to surf venture failed, I decided to create real web sites and sell my own advertising inventory. The network that I created was called The Freak Network and consisted of scfreak.com, dfreak.com, and wcfreak.com, all of which were named after best selling Blizzard Entertainment games (Starcraft, Diablo, and Warcraft, respectively).

My network was making me about $40 a day, which was impressive given that all of my pimple covered friends had to get real jobs and make less money. Everything was going great until the .com bubble bursted and my advertisers began to cheat me out of money. I was left with no choice but to find alternative sources of income and that’s when I had the epiphany to start selling web hosting on the side. My network of websites was receiving tens of thousands of page views per day and I already had the servers, so selling web hosting seemed like the perfect plan. Freakwebhosting.com was born. My plan was to use the traffic from my gaming websites to gain customers.

Freak Web Hosting

I built Freak Web Hosting to just shy of a hundred customers that consisted mostly of gaming sites. The problem was that I wasn’t a system administrator and that I wasn’t that technical. This resulted in poor security which lead to hackings, horrible uptime, and a never ending series of technical issues that kept me from running a successful business. I hated being a webhost at the time! I was able to get the business but no matter how hard I searched I couldn’t find someone to take care of the technical issues at a price I could afford.

I spent years trying to make my network a viable business and another year trying to get my web hosting venture running smoothly . The final straw was when the Data Center claimed that my server was “compromised and outgoing malicious traffic.” To alleviate this problem, they ordered OS reload after reload, which drove me to a point just short of insanity and a state in which I felt life was over. (In hindsight, I believe the datacenter lied to me about the malicious traffic in order to get me to leave due to the amount bandwidth my sites were using. The deal they gave me at the time was too good to be true and that’s exactly what it ended up being.)

I could have kept on fighting, but it would have been a futile effort. I was left with no choice but to scale down operations. I did the right thing by refunding everyone’s last month of hosting and even refunded those that prepaid for a year in advance. At the time there were three annual customers that I didn’t have enough money to repay, so I contacted them to let them know my intentions and eventually paid them back a few months later.

By the time The Freak Network and Freak Web Hosting failed, high school was coming to an end. I didn’t have much time before I would have to decide what to do with my life. I felt like a complete failure and had nothing to show for all my years of work.

I wanted to be a success and make some type of difference in the world and I felt as if I couldn’t accomplish this by going to college. I was very close to joining the army and even went to see a recruiter. I believed that if I joined the army, I’d have purpose in my life and be able to make some type of difference. Just days before enlisting, my dad talked me out of joining the army and helped me get into Florida Atlantic University in Boca Raton, Florida.

I spent a few months living on campus and attending classes without deviating too much from the life of a regular student. That’s when an old friend contacted me telling me that he started a server company. He knew that if we went into business together I’d have no problem getting the customers. He begged me for a week to get back into hosting and eventually convinced me to partner with him and try hosting again. After failing the first time around, I was against the idea and didn’t want to try again unless I was confident I had someone with technical abilities to keep the servers up and running.

The deal we came to orally was that I’d run my own business and I’d give him half the proceeds for keeping the servers secure and up and running. I quickly revived the old Freakwebhosting.com brand and reached out to all my old customers. I managed to convince a majority of them to sign up very quickly and within days, I was once again a web host and once again in the hosting industry.

It only took a couple of months for reality to set in . Servers began having multi-hour outages on a daily basis as a result of the datacenter going offline. I was bringing the business in while my partner was failing to uphold his end of the bargain. The servers weren’t up and running; they were failing.

I decided to break the partnership and venture off on my own. I ended up purchasing a few servers from Dedicatednow.com and managed to find a system administrator who would help me as I needed and bill me by the hour. The combination of the new Data Center and system administrator made Freak Web Hosting more stable than ever.

With things running so well and the old Freak Website Network being dead, I knew the company needed a new design and a new name. I searched for days and tried hundreds of domain name combinations before I narrowed it down to two names: HostGator and GatorHost. I was torn on which domain to choose. I didn’t know which one sounded better and couldn’t afford both domain names. HostGator may sound like a much better name now, but at the time and without all of our branding, they both sounded the same.

Original Web Site for HostGator

Business was booming and my freshman year of college was coming to an end. By this time, every second of my life was spent in class, doing homework, or taking chats and answering emails on the computer.

I was a 24/7 one-man operation. I was being woken up numerous times a night with phone calls and there wasn’t a single class I would make it through without having to leave at least a few times to take a business call. I knew I was on path to be making more than the average college graduate in about six months. I also knew it would have been impossible to finish another year of college while running HostGator, so I decided to drop out of school and follow my dream of growing HostGator into the world’s largest hosting company.

Understandably, my family and friends were all very much against my decision to dropout. I had many businesses that failed to pan out and the chances of HostGator succeeding were slim. In the end, everyone expressed their thoughts strongly, but supported me in my decision. To me, it was a no-brainer. If things didn’t work out, I’d just go back to school and be miserable. If they worked out, I’d be pursuing my dream.

Things continued to go well for the Gator at the expense of living life, having friends, and never being able to leave the computer. Within minutes of leaving the computer there would always be some type of emergency with a service going offline that would require a restart and I’d have to run back to my computer. More times than not, I’d make it half way to my wherever I was going before getting a phone call or an alert and being forced to turn back to resolve the issue. This was before the iPhone, smartphones, air cards, or any other type of mobile tool. What amazed me is the fact that I was not that technical, but was still able to help most of my customers by simply taking their question and applying common sense or finding a work around.

When HostGator had just started, I hated resellers because they required a large amount of relatively technical service. What’s ironic is that as we grew, I saw how easy it was to obtain reseller customers. Before long, obtaining reseller customers is where most of my focus and advertising money went. Ideal timing allowed us to fill the reseller niche while the competition focused primarily on shared hosting. Today, shared hosting is the source of most of our new business, but we continue to remain the worlds’ largest reseller hosting company.

If a major issue ever came up, I’d be helpless when it came to actually solving the problem. I was at the mercy of an hourly system administrator who usually had something more important to do than fix my servers. In the early days, HostGator was inadequately prepared for drives failures and similar large-scale issues. When one happened, there would usually be data loss and days of little to no sleep while I helped customers recover. I continued life in my apartment prison for another year before the company grew beyond what I could handle myself and I hired my first full time employee, Ben Welch.

Ben would arrive at my house while I was sleeping and immediately get to work taking calls, chats, and tickets. When I woke up, I’d head over to bedroom and get to work with him. At approximately the same time, I hired an Indian outsourced support company. The support volume was more than Ben and me could handle alone and it was impossible for us to man all of the stations all of the time.

I don’t believe in outsourcing, but at that point, outsourcing was the only way I could have 24/7 coverage of email and chat support that I could afford.

In hindsight, outsourcing was a big mistake. Choosing to outsource our supported resulted in the loss of customers, a damaged reputation, and low caliber support. As soon as we could afford an office, we rented a 1,600 square foot office in Boca Raton, Florida and began replacing our outsourced employees with in-house employees. We learned our lesson with outsourcing and have had 100% in-house support for several years now. There’s absolutely no chance of us switching to outsourced support in the future – it just isn’t worth whatever we’d save in the short run.

When we first moved into our first office, I thought that it was overkill and I wasn’t sure how (or if) we’d ever fill it. In no time, sales and growth caught fire. We had people working in closets, hallways, and I had to share my office with another employee. The office wasn’t that bad of a place, but there was one major problem. We had a single stall co-ed restroom for over 24 employees to share and nobody to clean it. If you had to go, you’d usually end up holding it or driving home.

I continued to wake up numerous times a night to take support calls and contribute to our service and support as much as possible. This took a toll on me, though. At the ripe old age of 22, I began to develop a very serious case of carpel tunnel syndrome. It slowly progressed until I was at the point where tapping any finger on either hand would feel like needles piercing me to the bone. I ended up trying a few alternatives to typing, including holding pencils in the palms of my fists and hiring someone to type and move the mouse for me. Typing with pencils only helped so much and hiring someone to communicate what to do ended up being a nightmare.

Eventually, the pain worsened to the point where it affected everything I did. If I went to a movie, all I could think about was my hands hurting. If I drove home, the pain would be so intolerable that I would have to alternate sitting on my hands so they would fall sleep to allow the pain to temporarily go away. Technology began to improve and I soon learned of Dragon Naturally Speaking speech recognition software. This was a lifesaver for me and while it wasn’t perfect, it did allow me to continue to perform my duties, just less effectively. I ended up using Dragon for a few years before my hands recovered to a point where I’m no longer in pain and I’m able to type without any discomfort. I’m sure if my old lack of sleep and constant typing routine came back, my problems would as well.

Eventually, we ran out of closets in our Boca Raton office and had to find a new location. We were also severely understaffed and couldn’t find the people we needed to keep up with our rapid growth. Boca Raton is where people go to retire not find a job. It’s so bad that the locals would always joke that Boca was “Heaven’s waiting room.”

We initially searched for office space in South Florida, but found the prices to be astronomical for the size we needed to maintain growth. We began looking in Dallas, Texas for a new office and somehow ended up looking in Houston. Soon after, we found and purchased the 30,000 square feet office building that we’re currently located in. The office was perfect for us since 16,000 square feet was available for use and the rest was leased out. We currently occupy around 18,000 square feet of the building and I anticipate that we’ll be filling the rest in a little over a year .

When we first moved into the new building, me and a few other employees took up residency throughout the building. There was very few employees at first and nothing but empty space. Many people that I met had no idea what web hosting was and were convinced that I was a drug dealer. They believed this because I was so young, successful, and living in an empty building with a bunch of young adults in what resembled a frat house. It also didn’t help at the time I had just gotten back from Brazil to open HostGator Brazil.

The Future of HostGator:

I still haven’t reached my goal of HostGator becoming the world’s largest hosting company, but as one of the world’s largest and with how well things have been going, I can definitely see it happening within the next eight years. In order to achieve this, we’ll need to go more mainstream. This includes launching a brand to compete with GoDaddy, more billboards, starting TV commercials, and hiring many, many more high quality employees to continue supporting our customers.

HostGator has been a real blessing in my life and I couldn’t have gotten us to where we are today alone. I owe much of HostGator’s success to our customers as well as to each and every employee who has put their heart and sweat into this company. If it weren’t for all of you, I would most likely have to return to college. Ahhhhhhhhhhhhhh!

Thank you!

Because support is key in the Web-hosting business, the company never outsources support and keeps technical support staff available 24/7, with an average wait time of one minute for inbound calls. It also provides developed templates and specialized software licensing to clients for free to enhance the company’s service offering.

I agree with the analysis, but I’d also like to share a few other points to explain why HostGator is not only floating but thriving.

It’s an accomplishment and something that we’re all proud of, because every employee at HG helped to make this happen. In three years time we’ve grown over 5,000%, let us know what it will take to make the most of the next three.

Processor: Intel Xeon Conroe 3060 server @ 2.4Ghz

Memory: 4GB DDR2

Hard Disk: 4 x 500GB SATA under RAID-10 configuration.

Monthly Bandwidth: 2,500GB @ 10mbps

IP Addresses: 10

OS: CentOS 4.6

Control Panel: cPanel/WHM 11 with Fantastico included.

Pricing: $350 per Month.

This is a great solution for those needing a high performance server with large data storage with redundancy. Under the RAID-10 configuration, risk of data loss would be minimized as the information is mirrored throughout all 4 hard drives. In case a hard drive fails, copies of your data should be stored on the remaining 3 hard drives. At the price of $350 per month, this server definitely provides the most bang for your buck.

This was a very popular dedicated solution when it debuted as our Pro Dedicated package, and we are very excited to be able to offer these servers to you once again. Please keep in mind that stock is limited and once we sell out, this offer will not be available for quite some time.

If you are interested in this offer, please email us at sales@hostgator.com and put it in attention to our Dedicated Sales Department.

Do you need a server fast? Your Windows server will be provisioned, secured and delivered within 24 hours of purchase, and we will provide you with monthly server management at no additional cost.

So I have given you the scoop, and now I am offering the first 5 people that purchase a Windows dedicated server from reading this blog a $100 dollar discount on your first month purchase. In order to receive this dicount you must email me at jgarcia(at)hostgator.com.

This is a first come first serve deal and this discount may NOT be combined with other offers, so if you want to get your first month at a reduced price you better act quick before its over. I will give anyone who emails me for this deal a 24 hour window to complete the purchase, then I will offer it to the next person in line.

Late, on a recent Saturday evening, the Toronto Technical Staff were shutting down their computers and preparing to call it a night when they received an urgent message from one of the Chat Techs at the Houston office. It seems that one of our client’s dedicated servers had taken a turn for the worse and crashed due to a mysterious software misconfiguration. The Chat Tech looked high and low for an available administrator to help our frantic client, but no admins were free to assist with the immediate issue. The Toronto Technical Staff gladly dropped what they were doing, canceled their plans for the evening and continued to burn the proverbial “Midnight Oil” until they had resolved the issue and restored the server to its original state.

“Every minute my site is off line… “, the client told us, “I lose, potentially, hundreds of prospective customers, and that just won’t do!”

The Toronto Team understands the needs of high availability websites and were glad to do everything they can to get this customers site back online in a timely fashion.

As a reward for their efforts, the client purchased tickets to a Toronto Raptors game on January 9, 2008 for the entire staff.

When asked what they thought of the tickets, the Toronto Staff said they were very grateful for the gift, but they had done nothing heroic and, in fact, what they had done was “all in a day’s work”.

Below is a snapshot of our staff in Toronto, and we’ll be sure to follow up with pictures of the game!

Pictured from left to right: Adrian P, Dave C, James N, Michael Y

Processor: Intel Pentium D 3.40GHz
RAM: 2 GB
Hard Disk: 250 GB
Bandwidth: 1,500 GB (10mbps)
OS: CentOS 4.5 (linux)
Control Panel: cPanel/WHM with Fantastico

We’ll be selling these for just $174/mth with basic management. If you have a look at our dedicated server page, you’ll see that our normal $174/mth server is the Basic Dedicated server. For the same price you’ll get all the same features, plus better hardware. Basically this means 2x the RAM, and 3x the Hard Disk space with a much faster processor.

This is a blog only special. The stock is available on a first come, first serve basis. Offer valid for new and existing clients that do not already have a dedicated server with HostGator. After these are sold, we won’t be able to get this server again at this price.

If you’ve been interested in upgrading to a dedicated server, please email me chad (@) hostgator.com.

As many of you may already know, we have updated our shared hosting and reseller hosting plans yesterday. The plans went from crazy to just downright insane in terms of us adding HUGE amounts of disk space and bandwidth without increasing the price. I’m going to do my best to explain the whole situation and assure you that the new plans aren’t going to put HostGator out of business.

We have many customers who are going hysterical from being so happy about the plan increases. These are the same customers with whom the majority were using less then 1% of the old plan. It’s like going into an all you can eat buffet and being told you can eat more. I really don’t understand why everyone gets so excited because all we really did was go from unlimited to more unlimited.
Yes I said unlimited! The forbidden word we use to worn potential hosting customers to stay away from, and now HostGator has officially sold out and joined the competition with offering scam plans (we actually did this the last time when we increased our plans, but shhhh).

What exactly is unlimited? Well, I just got done going to the top 5 largest web hosting companies I could think of and the lowest plan I could find was for a few 100 gigs of disk space with thousands of gigs of bandwidth for less then $10 a month. These are all scam plans because like most hosts we have something called a Terms of Service that mentions CPU and memory limits. It is close to impossible to use what we are all selling you without being suspended for going over CPU and memory.

Of course many of you reading this will be shocked and rush off to one of our competitors to ask them if you can really use all the disk space and bandwidth without being suspended, and I’m positive they’ll tell you yes. In fact, my employees would have told you the same thing if they didn’t read this blog post.

Just ask yourself one thing…

How do all us shared web hosting companies sell more disk space and bandwidth for ten bucks then the dedicated server providers sell for hundreds?

It’s an easy concept really. Every web host has a terms of service with CPU and memory limits. If your website consumed too much of its share of CPU or memory then most web hosts will require you to upgrade. When you purchase a dedicated server you can’t get shut down for CPU or memory abuse so they have to sell you a plan based on what your site could use with less restrictions. At HostGator, we pretty much get an unlimited amount of bandwidth from our provider thanks to having thousands of servers. We also have 10,000’s of gigs disk space not being used. Giving away unlimited disk space and bandwidth doesn’t really cost us anything. It’s the CPU and memory that has a real value. A server will usually become extremely overloaded way before you ever get close to using the amount of disk quota and bandwidth it comes with.

If you plan on reading a hosting companies TOS to find out if they have CPU and memory limits it’s usually going to be a waste of time. We are all going to put some CPU and memory limit in there that can’t truly be tracked. However all us hosts have to provide a mystical usage number in order to answer a customers question which is… “how much CPU and memory can I use.” It really is as simple as if you crash a server or slow it down you will be suspended. At HostGator we put 200′ish customers per box and if the server load increases, it can generally be attributed to just one person on that server causing 90% of the problem. Sure, we have ways to track but in the end boils down to not wanting to sacrifice every other users’ experience on that same sever for just one or two websites using all the resources.

The number ends up being less then half a percent of customers per box that get suspended. I know this sounds terrible but if we didn’t suspend the .5% of customers that are a problem the other 99.5% would have many outages and slow load times. The .5% we suspend usually are the ones that even if they were on the server by them self they would still be crashing it. They are the ones that truly need dedicated servers.

Yeah I know how screwed up everything I just said is, but unfortunately this is the cut-throat marketplace that Hostgator is playing in. Take a look at our old hosting tips page written many years ago. Things have definitely changed since then. We’ve held out longer then any of the other larger hosts with offering these scam plans that I can think of, but in the end trying to educate potential customers has failed. It was either follow the trend to stay competitive or start shrinking as a company.

This is my plan for becoming so scummy…

Anyone we find crashing a server will be moved onto a server with only twenty accounts on it for the same monthly hosting price, instead of being suspended. Twenty customers will be paying us just shy of $200 a month on a server which at our cost has a $1,200 setup and about $250 a month leasing fee. You heard me… We are going to be giving abusers hosting below our cost. I’m not even factoring in merchant fees, support costs, or server administration time! If this isn’t good enough for the less then .5% of customers that crash our servers then there just isn’t any pleasing them.

I guarantee if HostGator starts sucking it’s not going to have anything to do with the crazy plans we are offering. Our new offering is no different then the last due to the TOS limiting the CPU and memory which is what truly affects performance. The reason most hosting companies start going downhill after a plan increase is a result from sales skyrocketing and the lack of man power to keep up with growth. If HostGator starts having this problem I’ll switch the site back to the old plans in a heartbeat. There’s no way I’m going to risk everything we built in exchange for a few more sales.

I could have lied as most hosting company blogs and CEO’s do by saying something along the lines of… “We are very excited that our growth has allowed us to negotiate better pricing which we are passing on to our customers in the form of larger plans.” HostGator is one of biggest hosting companies in the world so I know a statement like this is BS. I’m sure many of you will be upset with me writing this as the truth hurts, and I’m sure some of you would even prefer I lie to you, but really in the end honesty is the best way to go.

Is everyone ready for another Wordpress Plugin Competition? I know I am, especially with all the cool stuff going on around Wordpress development, this would be a good time to get the ball rolling again. This time I have some help (thanks Ajay), more readers, maybe some more sponsors, more prizes and we hope to see lots of good code, fun projects, meet lots of nice people and help the Wordpress community along the way… read more

Well, I love plugins. Whether they are for Wordpress, vBulletin, or Joomla, I hook up my scripts with plugins until they can barely function. I also know that we at HostGator are new to the blogging world, and this wouldn’t be a bad way for us to get our name out there. So after contacting Mark Ghosh, who runs Weblog Tools Collection, we decided to sponsor a few prizes for the Plugin Competition. He was thrilled to get more sponsors, and we were happy to be listed on such a big and influential Wordpress community.

To First Place: A Basic Dedicated Server for 6 months (Valued at $1,059) Pentium 4 2.8Ghz, CentOS, 1024mb Memory, 80gb SATA Hard Drive, 1500 Gigs of Bandwith per month, Cpanel/WHM Included, One free domain name for one year

To Second Place: A Swamp Hosting Plan for 1 year (Valued at $194.40), 200gb of Space, 2000gb of Bandwith, Unlimited Domains, Email, FTP Cpanel/WHM, MySQL, PHP4&5, Ruby on Rails, One free domain name for one year

To Third Place: A Baby Hosting Plan for 1 year (Valued at $134.40), 100gb of Space, 1000gb of Bandwith, Unlimited Domains, Email, FTP, Cpanel/WHM, MySQL, PHP4&5, Ruby on Rails, One free domain name for one year

Anyone who can develop a Wordpress plugin is eligible to win one of these prizes, even existing customers of HostGator. If you have something you would like to contribute, just head over to the Plugin Competition Blog.

Good luck! We can’t wait to see what kind of plugins and addons come out of this!

As seen on http://www.hostgator.com/dedicated.shtml there are a few changes!

First, starting today any new BASIC server will receive two free months of service on top of the first month of payment. That is three months of service, for the price of one!

That means if you sign up for a BASIC dedicated server today, you would not have to pay again until August 4th of 2007. That is three months of service, for the price of one. If you can find any other host in the industry that would offer something like this please let me know.

* Note that this is applicable to new servers only. Existing customers must sign up for a new server for this offer to apply. This offer does not apply to upgrades. This offer expires on 5/10/07. This offer has expired!

Second, our PRO server now comes with a choice of two configurations at signup. This will apply to all new servers, or servers that have not yet been set up and turned online. Your two options are;

At signup you can choose which setup you want in the server details. If you specify neither, you will be given 4 gigs of RAM and 4×500GIG Hard Drives by default.

This is a really great chance for any of you who are on the edge about getting a Dedicated Server, and should give you plenty of time to get things running smooth and bring in enough income to cover the cost. If you already have a Dedicated Server with us, you may want to look into moving to one of our powerhouse PRO’s. They’ll likely last you a very long time!

Hope you all enjoy the new setups, feel free to comment here or see our discussion at… the HostGator Forums.