Archive for April, 2006

Web hosting and the oil industry…

Friday, April 28th, 2006

Web hosting and the oil industry…

What does web hosting and the oil industry have in common? Nothing? Maybe, but let me try to articulate my thoughts into a coherent argument that binds the two together.

The hosting industry is an extremely competitive market with notoriously low margins. Those hosts that struggle and eventually sell out or die usually do so because of lack of profits. Companies that make oodles of money
don’t usually up and go out of business, right :) Before these companies go the way of the dodo their service suffers first, their product suffers, and their investment in the future of the company suffers. This is what happens
when a company that you do business with doesn’t make a healthy profit. You WANT companies you do business with to make money. This is what makes your long term relationship with a company mutually beneficial.

Oil companies are the same. Big oil companies average between a 6-9% margin on their oil. 6-9%?? That isn’t that great of a return for a company. Would I run bluehost for a 6% margin? Absolutely not. I work too hard
for my money to get a 6% return. Why are we begrudging oil companies the same thing that all businesses strive for? I don’t care if Exxon made 89 billion dollars or 89 trillion dollars, 9% is still only 9%.

Let me tell you EXACTLY what will happen if a windfall tax is passed against oil companies. The price of gas will temporarily go down (less than 6 months is my guess). Future investment in exploration and drilling will diminish as these are completely profit driven, and the inevitable will happen: MUCH higher gas prices.
In 1981 we had over 300 refineries in the US. Today we have 142. Restrictions forced upon the oil industry have stifled our ability to be self sufficient. It doesn’t help that environment concerns (which are totally valid) have gone off the deep end in many aspects. We have dug this hold that we have to live in.

I guess what I am saying is that profit drives innovation. Innovation drives technological advances. Technological advances drives the price down through efficiency and increased supply. Interrupt the profit and you WILL interrupt this cycle. I sure wish there were a few politicians in DC that had actually run a legit business, instead of just taxing them to death. Maybe they would have an idea of how things REALLY work from a valid
business perspective. Anyone want to vote for me for Senator?

If you totally disagree, remember that I actually AM a nice guy, and yes you
should renew your bluehost hosting account :)

Matt Heaton / President

Time with the family…

Sunday, April 23rd, 2006

Well, we just launched a new company last week. We have over 50 people at work. There are some issues with some of our raid controllers. We are looking for a bigger office. Blah Blah Blah…

I have all these issues to deal with at work, but you know what I did the last three days? I swam with my kids. I swam on Thursday (With wetsuits even, since the pool hadn’t heated yet) :) , then on Friday for a couple of hours, and then today for another two hours.

Work is extremely important to me, but my family is infinitely more important. I have tried to structure my life so that work can excel and still leave time for my family. I realize not everyone is lucky enough to have it that way.

When my 3 year old twins call me and say, “Daddy we want to swim, when are you coming home?” What can I say? I have to come home. They are only little once. I want to take advantage of every single chance I get, and you should too!

Next time your kids asks you the best way to make a lego spaceship I hope you can take the time to show them how important their interests are to you, I know I will. I don’t want to be the Dad that says, “Ok, just let me finish ____ first” and then never gets around to it.
Ok, enough preaching, my kids want me to watch survivor with them. I gotta run…


Matt Heaton /

Want a free account?

Thursday, April 20th, 2006

Ok, its like this. I am GREAT at table tennis (Thats pingpong to the lay person:)) I am so confident at pingpong that I want to give away free hosting for anyone that can beat me. If you are in the Orem, Utah area anytime soon stop by for your chance to have your picture on the blog and free hosting for 2 years IF you can win.

Others are good at basketball, baseball etc. I was cursed with talents at Pingpong, computers, and Warcraft II (Which the same offer goes to you if you beat me in Warcraft II as well!)

Now I can get back to writing normal blog entries. I just had to get this off my chest. I feel much better now.


Matt Heaton /

Loyalty for a hosting company?

Tuesday, April 18th, 2006

Sometimes I think I am crazy. The web hosting business is literally one of the most competitive industries in the world. If I knew how market conditions would be right now 3 years ago I may never have started Bluehost.

Let me give you a VERY typical example. Many hosting companies that charge the same price as we do (Basically $100 a year) will pay upwords of $150 or more to aquire a new customer. Seem crazy to you? Me too, but that is the business. How can you make it work if you charge $100 for something that costs you $150? Well, many hosts don’t make it work. Last I checked there were over 12,000 “hosting companies” in the world. There are 50 that make it into the “club” where you really sit at the top.

It is now common practice and belief in the hosting market that it is totally acceptable to make no money on a customer for the first 2 years, and in some cases even longer due to extremely agressive marketing strategies. We advertise with the best of them, but we have an advantage that many don’t have. LOYALTY! We lose money on MANY hosting accounts in the short term, and sometimes in the long term :( However, we know that if we exceed your expectations that you will stick it out with us. At least, we hope you will.

I was just checking our numbers today, and our long term customers (Those that have renewed at least once already) tend to stick with us. For accounts that are set to expire in April (This month) 91.67% of you have renewed, and there is still 12 days left this month to get the other 8.5% to do so. We can’t express our appreciation enough! Actually, we can. We will work harder to make the service even better. Also, expect package increases in the near future (Free of cost of course!).

In a business where you have to be in it for the long haul to make 2 wooden nickels, we really appreciate the loyalty of our customers. Thanks again for everything!

Matt Heaton / President

Are Macs Better?

Sunday, April 16th, 2006

Are Macs Better? The short answer is yes. About 3 months ago I ordered a Macbook Pro (Intel based Macintosh notebook computer). It was brand new, and still not shipping so I waited about a month to get it. I have never had a Mac computer before. I had always heard everyone that had a Mac say how much better they thought it was etc, but I was happy (As I could be) with my very fast dual opteron windows xp machine.

The main reason I ordered the Mac was to make sure everything on Bluehost worked flawlessly for our Mac users. We always want all our users experiences to be as good as it can be. To make a long story short, I now have my Macbook pro that I use here and there in the house, an Imac in my home office, and an Imac at my “real” office. To be fair, I have 3 windows notebooks, and 3 windows machines at home (I have 4 kids that are geeks like me and need computers of their own – Even my identical twins that are 3). I don’t hate windows, I just LOVE Macs. At first when I used my Mac I didn’t feel totally competent. It works differently than windows. I made the decision to use it exclusively for 2 weeks to make myself become somewhat proficient with OS X (The Mac operating system). When I started using windows again I quickly realized I had become spoiled. I use windows only when necessary now. The Mac design is just SMART. They THINK about how things should work.

The next time you are running some software uninstall program on your windows machine, think about how I simply drag an icon to the trash folder to uninstall a piece of software. I would be interested to see if there was ANYONE out there that had used OS X for any length of time that prefers windows.

The new intel-based Macs even run Windows XP flawlessly now, so when you are FORCED to use windows on your Mac you can. I have tried it out on all my Macs and it works great. Now there is no reason to NOT buy a Mac except that they are generally 50% more expensive than the equivalent windows machine. Some things are worth it :)

Matt Heaton / President of and a NEWLY CONFIRMED Mac user for life!

Persistence and patience…

Friday, April 14th, 2006

Nothing really worth doing is accomplished in a short amount of time. I’ve said this a million times before. It is the journey that is the reward, not the destination. Persistence is the fuel that gets you to your destination. Rarely do you succeed in life without true persistence.

Let me give a simple, trivial example of what I mean. Although the following example perhaps wasn’t the most worthwhile activity for a teenager, it was fun and showed a little of the quirkiness that makes me ME! When I was 15 years old I did what any self respecting teenage kid did all day long, I listened to the radio. Unlike other teens though, I thought, this is silly. If I am going to listen all day long I might as well get something out of it. I got out my trusty 2400 baud modem, turned on my terminal software and typed ATS11=33 and lowered the 33 figure down until my 2nd phone line dialed as fast as a well tuned Ferrari :) With my modem properly configured, and my other phone line in hand I proceeded to win 75 times on the radio.

Seriously, I am not joking. I won 75 times on the radio. My modem dialed and hung up as fast as possible when it encountered a busy signal. I dialed by hand on the other line. I won a trip to LA (Had to give it to my Bro since I wasn’t 18), I won many cds, concert tickets, show tickets, food, you name it! This was “way cool” for a teenager. I kept a little tape of all my time on the radio, and when I was older I would get a kick out of listening to it.

Persistence is what makes things happen. You can use it for things that are fun, but basically worthless (like winning 75 times on the radio), or you can use it to make your life better for yourself and others around you. The difference between those that succeed and those that sit on the sidelines is persistence and patience.


Matt Heaton / President

The good ole days…

Saturday, April 8th, 2006

Computers are great. Bluehost is in the top 1000 sites visited on the internet today. We have almost 60 wonderful people working with us at bluehost now. Some days we sign up over 350 people on our service! The internet is the greatest, and yet…

It still isn’t anywhere near as fun as running my own BBS (Bulletin board system) when I was 14. When I look back at the fun I had with my C64 (Commodore 64), my atari 800xl, my atari 1040st, current computing just doesn’t come close. What was it that was so magical about the “golden years” of 12-18 for me.

A big part of where bluehost came from was my BBS. You remember those right? You had a modem on your computer and you would dial in and connect to my local phone # and leave messages and download files. This was the best you could get before the internet came along. I would get about 40 callers a day to my BBS. Pretty good actually, considering only one person could be on at a time. My first BBS ran at 300 baud. Do you know how slow that is? You know how slow your modem is and you hate it because it only runs at 56,400 baud. Yep thats the one. It is 188 times slower than your modem is.

My BBS called “The Secret Service” didn’t even have a good way of transferring files. I had to write my own entire upload/download system for BBS Express ST including support for Z-Modem. I wrote something I called FMail, which is a way to leave a message for someone with a file attached. This was about 9 years before microsoft thought about Outlook email with attachments.

Why am I writing about all this you might ask yourself? The reason is that I wanted to show you that Bluehost didn’t just pop up out of no where. It was there all along. The seeds were sown on the first day my BBS went live. It started with my first GFA (A form of BASIC programming language) program to do “online” transfers. It was there when I got my first dedicated phone line (16 years old) to invite others around the US and Canada to log on to my computer and join my community.

Thanks everyone for joining OUR community at bluehost!

Matt Heaton / President

Cool, cool, and cool!

Thursday, April 6th, 2006

I am a gadget guy. I love all type of gadgets, and am usually the first to pick up something when it comes out. I would like to write a quick note about a combination of gadgets that I think are way cool!

First, I have a tivo (4 of them actually) with a slingbox hooked up to the one in my bedroom. A slingbox is a device that sends your TV picture (Or in my case tivo) over the internet to any internet enabled computer that has the software installed (Free software to download). The software is available for pocket pc, windows, and soon Mac. I just got my new verizon vx6700 phone. Verizon has high-speed internet over my cell phone here in Utah.

To make a long story short, and I can now actually watch my tivo that is hooked up in my bedroom on my cell phone anywhere I get service. I can use my phone to change the channel and even record shows etc. Some of you may wonder whats the big deal, but I think technology is amazing. The fact that I can watch a show on my boring drive to Vegas (5 hours) on my phone is great! I love technology!


Matt Heaton /

Market leader???

Sunday, April 2nd, 2006

Is bluehost a market leader now? I think the answer has to be yes. When Bluehost received it’s first signup on December 4th 2003 our goal was to get to 15,000 domains at some point in the future. Well here is is 2.5 years later and we just got our 115,000th domain signed up.

How did we do it? We did it by offering a superior plan, and not nickel and diming our users to death like so many other hosts out there do. When we first started it was obvious the other hosts didn’t really care that our plan was better because we were a small fry and didn’t affect their bottom line at all. We were the new guy on the block and relatively unproven in the industry.

Then something happened… Our affiliates started commenting that our conversion rates for traffic sent to our site were somewhere in the range of 30-50% higher than the next closest competitor. All of sudden we started getting a LOT of signups. Everyone wanted to promote us because they made the most money, and they received glowing reviews from the customers that they sent. Everyone was happy (Except our competitors). Within a year we dominated the hosting review sites and signups were growing extremely fast.

It quickly became apparent that we were now noticed. We started seeing copycat sites all over the place. Our wording and site layout started showing up on many different hosting sites, and most important was that other companies started offering better (Much better) packages than they used to. Now, we know this would happen with or without us, but certain things we felt that we did change for the good of consumers. Before we came along almost no one offered addon domains (We offer 5 free of charge). Now all our main competitors offer it. They couldn’t NOT offer it and compete with us.

It has gotten to the point that one of our main competitors actually lists bluehost on the mainpage and points out how they think they are better (Too bad they misrepresent our data!!). That is actually good for us! They are effectively saying, bluehost is the best, but look how we think we are even better!

We have shaken up the industry and we will continue to do so! We are here to provide you the BEST hosting environment that we can! Stick with us on the journey!!!


Matt Heaton / CEO


Sunday, April 2nd, 2006

The hosting industry is one of the most competitive I’ve ever seen. Any shared hosting plan over $10 a month is considered way too high, and the packages that come with most hosting companies (Including Bluehost) are ridiculously generous for the price paid. What is a company to do?!!?

Bluehost has only been around since December of 2004 (About 2.5 years). Although I have been involved in other successful hosting ventures it wasn’t until we started Bluehost that I really “got it”. In an ultra competive market like web hosting you have to find a way to stand out. For mosts hosts it is all about price. It is for us as well, but there is WAY more than that too.

The way I see it, you have three things that a web hosting company needs to be highly successful. Notice I said “highly” successful. I am not about mediocrity!! If you are going to do it, then DO IT RIGHT! 1 – You have to have the right price point. In this market, that means under $10. 2 – You have to bring something technically superior to the table than what your competitors have. I believe we have done this with things like PAGE WIZARD, our domain manager, our java FTP applet, SSH (Shell access), etc. Most hosts don’t offer these, or offer something inferior (Especially when it comes to site builders). 3- You MUST have incredible support. This is excruciating to do right. The fun is building the company, not helping someone to change their name servers. That is why so many hosting companies blow it. We honestly believe we have the best support out there BAR NONE. Our average hold time is less than a minute!! When is the last time you called your cell phone company and got someone on the phone in less than a minute! I am not even done listening to their stupid menu at 1 minute!

This market is SOOO competitive and price oriented that I worry that the ultimate loser will be the consumer. To be so worried about aquiring the customer instead of keeping the customer is the mistake that many are making. Bluehost makes “enough” $$$ to take a trip here and there with the family and still give good support, and I will PROMISE to keep things that way!

Matt Heaton /