I Built A $1.8M/Year Email Hosting Service [100% Self-Funded]

$150K
revenue/mo
1
Founders
30
Employees
product
Thexyz
from Toronto, ON, Canada
started October 2007
$150,000
revenue/mo
1
Founders
30
Employees
609K
alexa rank
23
followers
1.92K
followers
market size
$7.5B
avg revenue (monthly)
$325K
starting costs
$20.8K
gross margin
83%
time to build
12 months
growth channels
SEO
business model
Advertising
best tools
Twitter, Dropbox, Gitlab
time investment
Full time
pros & cons
37 Pros & Cons
tips
3 Tips
Discover what tools Perry reccommends to grow your business!
Discover what books Perry reccommends to grow your business!
Start An Email Hosting Service

Hello! Who are you and what business did you start?

I am Perry and I run Thexyz which provides paid email hosting services, competing directly with the likes of Gmail and other free email services. We attract and retain customers by providing a service that delivers value to them. People are happy to pay for services that respect their time and maintain their privacy.

Our main product, Thexyz, is an easy-to-use email with built-in calendars and contacts. It works quickly, blocks spam is ad-free, and has all the modern email features you love like contacts, folders, group lists, undelete, rules and filters, calendar sharing, and more.

We also offer GroupList, which is for teams to share emails for better productivity from anywhere. GroupList keeps group conversations focused, well-documented, and easy to find.

GroupList is also an email forwarding service that gives you an email address that you keep for life.

People choose Thexyz for the speed and usability of our products, our uncomplicated approach to privacy (you pay an affordable fee for 100% of our efforts without advertisers in the mix), and our fantastic customer support (it's truly wonderful!).

I am a big fan of yoga and often find creative ways to use a computer. My latest contraption is a laydown setup where I suspend my screen over a bed, use a split keyboard and vertical mouse. Computers are not good for your body and I find laying down while using a computer a great idea.

Thexyz generates over $100k of recurring revenue each month. Due to my simple vegan life and being both vegan and minimalist, I can live modestly on $3k per month.

i-built-a-1-8m-year-email-hosting-service-100-self-funded

What's your backstory and how did you come up with the idea?

I used to be someone who hated computers, (and still do to a certain extent). I would usually always choose the more traditional method over a modern technique. This was the same with my original business, a French polishing shop that I set up in downtown Toronto to serve a dwindling number of antique shops in the city.

My French polishing shop was all about labor-intensive traditional techniques from the 1800s. Even though there was an easier way, I wasn't keen on it. Immigrating to Canada was a stark difference from the 5-star hotel and Crown estate landmarks that I had previously worked in. I was shocked by the quality of work in Canada, it seemed like the standards were low and I thought my French polishing idea was great. It would improve the aesthetic quality by bringing out the natural qualities of wood while reducing harmful emissions of modern wood finishing techniques.

Sure, my shop did well for a short while. Then came the summer and I quickly learned how much business in Toronto can slow down during the summer months. I enjoyed the summer, took long holidays, and decided to put work on hold until things picked up again in September. I had been forewarned about the summer slow down for running a business in Toronto. When things didn't immediately pick up in September, I decided I needed to take action. One of the things that I decided to do which would ultimately change the business was to design my own website.

It was around 2006 and this was long before the days of page builders and easy low-code options to build a website. Fortunately, I had some limited computer programming skills from some courses I took in the UK as I re-sat some exams. I purchased a new laptop and got to work. There was a bit of a learning curve for me, but something I was able to quickly do was troubleshoot and problem solve. Some skills I hold on to today and look for when hiring new staff.

I think you have to really be focused on keeping things simple. There are many services out there today offering integrations and apps to make things easier. In my experience, many of these services often create more work than is really required.

After some late nights at the computer screen, my new registered domain name: ptoone.com was finally active with a nice-looking website. I am now a web developer!

While the website didn't have the desired effect of finding me more French polishing clients, it did have one thing going for it. People were impressed by the site and began asking me to create websites for them. So I started doing that, while still holding onto my original idea of building my French polishing business. I was an artist at heart and I wanted to be creative and free from mindless computer work. I slowly started to warm up to web development and began creating quite a large portfolio of digital illustrations which can now be seen on my Dreamstime portfolio.

It didn't take long to realize the way the wind was blowing. People wanted me to build them on an online presence and not polish woodwork or buy art from me. I reluctantly closed my small French polishing shop and on October 7th, 2007, Thexyz was born.

Take us through the process of designing your initial product

The early days of Thexyz were quite straightforward. It was clear to me that we had a good product, and at the time there was quite a bit of demand for custom domain email. It was originally more focused on file storage and email really came to be our main product offering just by helping people with their requests.

People would have had so many issues with email back in the early days without anyone to contact. I think that one of the main reasons Thexyz became successful is because people now had someone to contact for assistance with email. For example, many people have likely received a bounce back undeliverable message, well now they would have someone to contact.

i-built-a-1-8m-year-email-hosting-service-100-self-funded

Describe the process of launching the business.

The launch was nothing spectacular. Thexyz is a small company focused on slow and steady growth. The company is 100% self-funded, debt-free, and does not have any venture capital funding.

As Google Workspace (formally G Suite) and Microsoft Office 365 were not around yet, it was quite an easy time to be selling email. We were also yet to experience issues from Google algorithm updates, where they throw small tech solutions under the bus in favor of bumping up their own results in search.

Since launch, what has worked to attract and retain customers?

Word of mouth growth was very important at the beginning. We also offer an in-house affiliate program that is quite popular. Our affiliate program rewards people for referring them to Thexyz.

How are you doing today and what does the future look like?

100% of our sales are through our own online store. We do not rely on Apple or Google for in-app purchases as we have found both companies to be quite oppressive to small, independent companies like ours. We cannot rely on services that could block all our sales for many months while they work through internal administrative issues.

In 2021, Thexyz secured an export grant from the federal government of Canada to promote international expansion. We are continuing to work on translations and offer our products in local markets.

We are a 100% remote company. Our staff work from home in Canada, USA, UK, Peru, Ukraine, Philippines, Bulgaria, and Poland.

Through starting the business, have you learned anything particularly helpful or advantageous?

Many business owners often report that their business "rides the waves of the economy". For example, if the economy is going well, then the business is going well. If you keep an eye on global trends and test things out, you can gain important insights that I believe would give you an advantage over most.

I think you have to really be focused on keeping things simple. There are many services out there today offering integrations and apps to make things easier. In my experience, many of these services often create more work than is really required.

What platform/tools do you use for your business?

We use WordPress for our blog. Stripe and Square for credit card payments, BitPay for bitcoin payments and GoCardless for bank transfer payments.

Our website is plain and simple PHP. No CMS or third-party system is running. We also removed Google Analytics a few years ago for privacy and performance reasons.

We still get the same data from other tools, have a faster page load speed, and don't sacrifice the privacy of our users.

What have been the most influential books, podcasts, or other resources?

I have not come across a book that has a more profound impact on me than Finnegans Wake by James Joyce.

For business, I like the CorpDev Ninja podcastby Andreas Penna.

Advice for other entrepreneurs who want to get started or are just starting?

I think 2021 is a great year to start a business. In fact, I even posted a blog article on my thoughts here.

As I mentioned in the post, I talk to a lot of entrepreneurs for my work and I for sure get a feel for what types of businesses are successful. Whether at conferences, on phone conversations, or just a random meeting, I get to hear about all kinds of new business ideas.

I tried to convey some of these ideas in my blog post, with a focus on niche ideas. I think another important and emerging trend is regarding the privacy and security of user data. For example, many companies cannot use Google tools or services once their internal legal team has reviewed the privacy policy or terms of service. This leads many people to look for alternative services to Google and other big tech providers. For me, I think it is unprofessional for businesses to use Gmail or Outlook for business email. These services are ad-based and once you send an email to them, you are profiled for marketing and targeting purposes.

If I am given choices, I always avoid businesses that use Google as I know they are likely not concerned about protecting people's private information.

Thexyz also offers a decent free website hosting service through our hosted Weebly service. It is hosted with Thexyz but uses the website builder of Weebly. It is free and includes an unlimited number of pages, a free SSL certificate, and eCommerce. This is a great place to start as comparable services like Shopify are much more expensive.

Are you looking to hire for certain positions right now?

Yes. We are looking for support agents with a preference for bilingual applications. All our positions are remote and offer flexible part-time hours.

Where can we go to learn more?

You can follow us on Twitter @thexyz or Facebook. We publish articles on our blog and can subscribe for email updates.

If you have any questions or comments, drop a comment below!

-  
Perry Toone,   Founder of Thexyz
Pat Walls,  Founder of Starter Story

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