136: The Power of Building the Best Product in Your Market with SiteGround’s Tenko Nikolov

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Hey guys. Welcome to another episode of the Foundr Podcast. My name is Nathan Chan and I am the host of this podcast and also the CEO of Foundr Magazine. Now, what’s been happening in my world, still the grind. Just batching podcast episodes. We’ve got so many good ones coming out with some incredible founders. And yeah, I’m just working through them as we speak. As I mentioned guys, if you are interested in starting an online business, you wanna start a business don’t know where to start, we do know, like I said a few episodes ago, that at least 30% of our audience unfortunately haven’t launched a business yet or they you know, are looking or trying to and we wanna help solve that problem. So we are working on an epic solution. If you wanna find out more on this project go to foundrmag.com F-O-U-N-D-R M-A-G.com/ecommerce and make sure you sign up to the wait list and you’ll be notified when this project goes live. Apart from that just hustling hard, getting ready for my trip to the States which is gonna be awesome. I’m gonna do some interviews, speaking at a conference, what else am I doing? And catching up with friends so networking. So it’s gonna great. All right.

Now, let’s talk about today’s episode with Tenko Nikolov. This guy is based out of Bulgaria, founder out of Bulgaria. And I love speaking of founders that aren’t in Australia, that aren’t in Canada, that aren’t in the U.S. or aren’t in the UK. It’s really interesting to hear just these you know, startup hubs, like this one in Bulgaria that Tenko talks about and he’s built a massive company. Now, he’s the founder of a company called SiteGround and they’re a really really cool hosting company. And they have over half a million customers which is absolutely incredible. And what’s even more incredible is they’re bootstrapped, they’re self-funded. They haven’t taken any investments and they are very very very big company. And Tenko talks about the challenges and also the strategies on how he’s grown a company this size and build a large company not in Silicon Valley. And you know, it can be done. That’s what’s refreshing to hear you know.

A lot of people say you know, with the stuff that I’m trying to do with Foundr and build a household brand you know, household entrepreneurial brand you know, when are you gonna move to the States, when are you gonna move to San Fran, Nathan. And I was like you know what, I think what I’m trying to build, building a household name brand you know, that impacts the lives of tens of millions of people on a monthly basis, I think that can be done out of Melbourne. Yes we are gonna set up an office in LA and do a lot of our interviews from there, and eventually unfortunately I won’t be able to do the interviews anymore. But you know, I think HQ and call business and everything that we’re doing you know, can be all strategy coming out of Melbourne. So no, it’s really refreshing to hear. But anyways, enough about what my thoughts are. Let’s jump into the show, you’re in for an absolute treat, ton of gold in this episode. All right. Now, let’s jump in.

The first question I ask every single person that comes on is, how did you get your job?

Tenko: That’s an interesting question. So I’ve been a computer guy since as long as I can basically remember. My granddad gave me my first computer at the age of seven which was around the time the communist regime here in Bulgaria fell and you could now actually buy stuff. So before that we weren’t able to buy anything. So that computer it was like back in the day, it was like a two color, green and black screen and it didn’t even have a hard-drive. But I was fascinated by it. So later on when I got my first i386 computer, at the age of 13 I guess, I installed the Linux operating system and started playing hacker you know, started hacking stuff, starting to discover network vulnerability and stuff and exploiting them.

And one day a friend of mine and I accidentally hacked into a large U.S. corporations network. We were able to compromise one of their servers and gained good access. And you know, it was fun. It was fun to play with it for a couple of days and to brag about it in front of our friends. And then one day we decided that we’ve had enough and that maybe it would be nice for a change to actually tell that company what we did and how we did it. And it took us maybe a week to get the courage to email them but after that we emailed the company and said, “Hey this is what we did, this is what we compromised, here is how we did it.” And I think it took more than a couple days for the company to respond.

Those were some very frightening days. We were really frightened that an FBI agent would show at our doorstep and we didn’t know. And surprisingly for us though a man from the company contacted us and he was not mad at all. In fact it turned out that that company took security really seriously and the man was really grateful that we contacted them and that we showed them that vulnerability. And he even asked us how much money do we want for the information we have provided. This was wow man, this was wow. Somebody had offered us money for hacking into their their servers. This was fun for us, it was unbelievable. And we didn’t want the money. We didn’t do it for the money.

All we wanted was in the first place was a server we can play with. A server that is you know, on the dedicated line and it’s online all the time. Because at that time all we used was modems like dialup and nothing was online all the time. And we told that guy that we wanted a server and to our great surprise he gave us our first dedicated server. Later we’d use that server to host all kinds of stuff. Like our first server where I hosted my first web page on it and 20 years later I’m still doing hosting on various stuff on servers. It’s really something that I’ve been doing for a long time. So this is how I got started and later on we started with SiteGround and this is how it all began.

Nathan: Yeah, wow. That’s really crazy. This is really interesting. So how did you, like, what triggered starting SiteGround, is this your first venture, what was your first venture? Tell us more, I’m really curious.

Tenko: So when we were starting out this was in the year of 2003 so 14 years ago I guess. At that time there were already many hosting companies. Back in 2003 I think there were around 33,000 of us and all of us offered almost exactly the same product, like the same features for very similar price points and no real differentiator whatsoever. So because I had some experience and my partners had some experience we thought hosting is extremely easy to do. You get the servers, you slice into pieces, you sell it to individual clients, then you get another server and you slice it to pieces and you sell it again. That was exactly what everybody else was doing. Like it wasn’t anything innovative, like it was exactly what everybody else was doing. So this is where we saw a niche, we wanted more. We wanted to achieve a lot more than just slicing servers. And at the time we thought reliability, performance, security and affordability at the same time were a must. And to be honest none of our competitors at that time and I dare say say even now, could offer such a complex combination of features, quality and price at the same time. There were like reliable ones, like there were really good ones that would offer great support and great up-time but they would cost, I don’t know, a super big amount of money, crazy amount of money. And there were the cheap ones, the affordable ones but they would usually give you like super crappy service and they would have like tons of downtime and will likely lose your backup when you need it if they have a backup at all.

So we thought we should change that. We should do something that customers will praise us for. At that time starting a company, an IT company from Bulgaria, where I am, an Eastern European country, was a very very good thing. There were tons of like self-taught people, much like myself, eager to create new things and believing that they could actually make a difference and change the world. So we decided to build this very good hosting product all by ourselves, from scratch. Like not using any third party or very little third party technologies and I think we managed to do that. We were soon beginning to be recognized by our clients. I think just three years in we were recognized by our clients as superior to anything they’ve tried. And to this day whenever we find that we’re missing something, a tool, a service, a feature or something, we’re doing it ourselves. We’re rolling up our sleeves and doing it ourselves. This is our thing. We do very complex technology and we do it, we do it all in-house.

Nathan: When you got given a server what happened? Because I’m curious, it doesn’t sound like you…you sound like is like a program, why did you change into a visionary?

Tenko: What happened to me was that I realized that I can actually be paid for the thing that I love to do most. And this kind of changed my mind that I can actually instead of just doing stupid hacking tricks, I could actually use my knowledge to do something different, something good and to create a product that would actually be outstanding.

Nathan: Yeah, wow. That’s amazing. So talk to me about you know, 13 years later. Can you give us some numbers around traction and where SiteGround’s at because you guys are very big now.

Tenko: In terms of numbers it’s pretty impressive. We have more than 500,000 domain names under management and we have servers in four data centers on three continents. And we’re probably one of the very few large privately funded companies remaining in the hosting industry. The hosting industry itself has seen a tremendous consolidation in the past five years I guess, and because large players are buying the smaller players, that means fierce competition and we’ve been staying on top of that. In terms of employees we started out with a little less than 10 people working out from a small apartment here in Sofia, Bulgaria and currently we are more than 400 people. We have site grounders all over the world, we have team members I think from 15 different countries now and our team speaks 30 different languages. We have 5 offices and we are I think the number is we’ve had 160 people last year alone. And we’re still really growing with high double digit numbers year-over-year. Which I think for a 13 year old company is still impressive.

Nathan: Yeah. That is extremely impressive. So I’m really curious, where is your HQ? Like your head office is still in Bulgaria?

Tenko: Yeah. Our head office is still in Sofia, Bulgaria. But lately we’ve been hiring more and more people remotely because in Bulgaria, like many other places around the world, the good talented tech people they’re all hired now. So we have to find talent wherever and that’s the thing right now.

Nathan: Interesting. So you have not taken any VC money?

Tenko: No, it’s all bootstrapped. We actually have a couple of other ventures that we bootstrapped as well and invested in several other companies. We have not taken a single dollar.

Nathan: And is that?

Tenko: We believe that having a good product is a must and we also believe…we’re very keen on the idea of having very you know, what if marketing. So for example, we were the ones that kind of invented the hosting keywords. Like back in 2004 everybody was competing on the terms web-hosting and that was too generic. So we decided to try something more specific like Mumble hosting. Mumble was a big thing back then. It was the most popular and praised CMS at the time, content management system. And much like WordPress is now. And surprisingly people searched as much for it if not more than web-hosting. So we took that strategy and started building specific web pages for all the software that we were able to accommodate in our servers and nobody else at the time was doing that. We got tons of organic signups when all of our competitors were paying premium to get theirs. And couple of years later our competitors figured out what we were doing and started copying us. Like started creating those pages and targeting those terms that we were targeting, but we were ready for that. We knew that was coming and we started with our other strategy. We started creating a lot of free content. We started creating our free content long before content marketing was even a thing. Like, a lot of people got to know our brand, to our detail tutorials and templates. That was like, more than eight years ago, probably nine years ago.

We got so many clients finding us through our free content pages that I don’t think even our competitors paying were getting that many clients. And nowadays this approach is very well known and a lot of people are doing content marketing but back then we were one of the very first in our industry and it paid off really well. Like to this day I meet people around the world who tell me, “Oh wait, I know you guys, I’ve read so many of your tutorials.” And we created a lot of free content, a lot of free themes. And lately we’ve been involved in a lot of open source communities. Like for example, we visit and sponsor many WordPress events. WordPress is probably the most popular CMS out there nowadays. We sponsor and visit probably more than 50 WordPress events throughout the year around the world. And we attend most of them we try to socialize with our clients and speak. And when we first started getting into those communities five years ago, nobody knew us. Basically they knew…they’d read our tutorials but they didn’t know anything about SiteGrounds. We were in an unknown company from Eastern Europe in an extremely competitive market. And nowadays we are not only competing with WordPress specific hosts, like the WordPress only hosts but we’re also dictating what the space, the hosting space should do. It’s extremely complicated to support such a multi-variant infrastructure like WordPress and other CMS software’s at the same time but we do it.

And today I think we’re one of the only four companies worldwide that is recommended by wordpress.org, the official WordPress page. And it’s a recognition we worked very long and hard for. So basically we’re trying to do a lot of like clever marketing things and that at the same time we try to create like a lot of technologies. Throughout the years we invested a lot in creating our own technology stack. We were pioneers and things that I think were considered hardly possible at the time, such as isolating hosting the grounds from one another which was a big thing I think 10 years ago. Nowadays we’re on our own lengths container stack which is one of the largest container deployments in the world. And we also try to support other cool technologists like for example, I don’t know if you’ve heard about Let’s Encrypt. It’s an SSL for everybody project.

Nathan: No, I haven’t.

Tenko: It’s a project that basically get SSL source, like security certificates for the web. And it’s a project that basically gives the once expensive SSL certificates for free for everybody.

Nathan: Gotcha.

Tenko: Yeah. So we back this a couple of years ago and now Let’s Encrypt this probably the largest security authority out there with millions of certificates issued.

Nathan: Yeah, wow. Interesting. So, you’ve got innovative marketing strategies. I’m sure many companies have tried to acquire you, how come you have not exited or sold the company yet?

Tenko: To be honest because we still think that there is so much to do, so much we can do. If we thought that we were done we would probably have sold by now but we still have tons of ideas. And 2017 won’t be enough for making all of those happen.

Nathan: Yeah. Well, interesting. And when it comes to I guess, you said that you guys are investing in the companies. So I guess that kind of helps with other endeavors and starting other companies. What are the companies that you’re investing? Are you guys acquiring other companies as well?

Tenko: We have not made like an acquisition, like buying 100%. But for example we have invested in a technology company for distributed storage. And it’s a very innovative company out to Bulgaria, that creates a very strong software defined product for storage. And it’s trusted by a lot of big brands nowadays. So these are the type of investment that we do, things that we feel that there is a need of and somebody with you know, with a solution to that need.

Nathan: Gotcha. And before I hit record you said, it’s late at night for you so you’ll relax later. I’m curious, have you found that the larger your company gets, you know, now it’s 400 people, the easier things are for you?

Tenko: A lot. All of my friends and people around me they basically think that when you’ve reached our level all I do is like go to occasions and wonder what to do with my all day free time. And to be honest the truth is I’m busier than ever. No matter how far you go and how much success you achieve nothing comes easy and it is the result of very hard teamwork. It’s not just me, it’s teamwork. And if I didn’t show up for my team every single day I doubt we will be where we are right now.

Nathan: I see. So when you say we, you have co-founder, how many?

Tenko: So we were four people at the beginning, it’s two of us now.

Nathan: And what happened?

Tenko: Unfortunately one of the founders died of cancer.

Nathan: Oh, no. I’m so sorry to hear that. That’s terrible.

Tenko: Yeah, it’s terrible. It was a pretty bad thing. And the other one he just decided that he wants to pursue something else in his life and we’re still friends. It’s not that something bad happened there, it’s just he had decided to take a different route.

Nathan: Yeah, wow. So you know, you guys are quite strong at creating innovative products. You seem to see ahead of time in terms of marketing. I’m curious, what else is fueling growth, how did you learn to build and grow a fast company man? Because it sounds like you don’t have the background, Bulgaria, like where are you learning?

Tenko: We’re constantly trying to think of different things to do and things to differentiate with and those ideas that we have, we’re not learning them from anywhere. It all comes from our desire to change, to create something different, to create something better and at the same time to do it by a way that nobody else is doing it. So it’s a trial and error. It’s not like a formula I can give you and it will work. It’s a lot of late night thinking and during the day implementation and error and repeating that same exercise all over again.

Nathan: And can you tell us about some of your, I guess, greatest business lessons that you could share with our audience?

Tenko: Do you want it to be like a big lesson or like just a few words?

Nathan: No. Let’s go for some big lessons.

Tenko: I think people have to dream big and I think they have to be stubborn and pursue whatever their goal is and never to believe that they have done everything possible because there is always time to do something better. Especially in the product world where I work, there’s always a better product. The world is ever changing, technology is ever changing, so there is always something better. So you need to stay on the verge of what’s possible and with team efforts people will like you.

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How do you stay on the cutting edge? I know that you said you’re always, like you said you guys have so much more to do but how do you stay on the cutting edge?

Tenko: For us it’s always trying to do something that we clearly see the need for but it’s never been done before. I can give you an example of what we’re doing now. We’re currently doing an artificial intelligence spot that will be helping our clients with their ever growing hosting inquiries. And hopefully that bot we’re doing would be the first chat bot in the hosting industry and at the same time would be able to solve very complex problems by itself.

Nathan: Yeah, wow.

Tenko: So this is something that five years ago I thought we weren’t ready for but I think we are today. You should never like, give up your dreams, you should never give up your ideas. If it’s not the right time then just wait for the right time and then do it.

Nathan: That’s crazy. So this AI bot, this will replace some of your support staff?

Tenko: I’m more thinking about it as a complimentary rather than replacing humans. So it would be able to resolve a lot of the simpler things and troubleshoot much, much faster than a human would be able to. But when it comes to more complex stuff this will still be work for the humans, at least for the next 10 to 15 years.

Nathan: Wow, that’s crazy. So, yeah. Look, I just find it really really fascinating Tenko that you know, you guys have a very large company, you’re based out of Bulgaria, you’re 100% bootstrapped. It sounds like you guys doing a lot of cool stuff on the cutting edge, really fast growing company still to this day, what is causing it apart from you know, great team, you and your co-founder, like what else is causing this to happen? Because you guys you know, you’re not based out of Silicon Valley, you don’t have you know, experts around you that you can go to. I asked you who do you learn from and you guys you said to me you learn from trial and error. So can you give me I guess, a little more to understand because I do a lot of interviews but this is quite a rare and unique one with these circumstances.

Tenko: Well, to be honest Bulgaria is really a good place for running and IT company. It is actually considered to be the Silicon Valley of Europe. We have so many talented people. It’s not so many in terms of a big number but it’s a big number in terms of percentage of the population of Bulgaria. Because Bulgaria is more country, it’s like a six million people country. And it used to be really easy to start an IT business from here. Back in 2003 the salaries were really really low here in Bulgaria. So we were able to hire the best people for only a fraction of the cost of what would have cost us if they were in San Francisco or even in Western Europe. So we started surrounding ourselves with people that were much smarter than us, people that were eager to do things differently, eager to create. And those people that we hired back in the day they brought other like minded people. So right now we have a great team that a lot of other companies would envy us for. And that all started from a small country with just people that were curious to create something new.

Nathan: Yeah, okay. Interesting, I see. And do you have a CEO in place or you’re CEO still?

Tenko: I’m still CEO. I think that that might be changing in the upcoming years but we’ll see.

Nathan: I see. And you guys definitely give stock options and things like that?

Tenko: To our employees yes.

Nathan: Yes. Got you. Okay, I see. And you said you have offices was in 13 countries?

Tenko: We have five offices. So five offices. We have employees in 15 different countries and we have our employees speak 30 different languages, 29 different languages.

Nathan: Wow. So we have to work towards wrapping up but I’m really curious how do you coordinate with stuff like that going on man?

Tenko: Everything is online man. Like most of the offices…we only have management in one office, the other five offices that we have we don’t have management in.

Nathan: Wow. So how do people know what they have to do?

Tenko: It’s a combination of processes and well written responsibilities and at the same time good communication. Lately we’ve been using Slack and Slack has been extremely helpful in communicating between the teams. So it has helped us tremendously in improving communication between teams. But everything is distributed now and we can manage it all from Bulgaria or from anywhere else. So for example I can come to Australia and spend two months there and we’ll be able to work with my team from there. We’re actually trying to make everybody go to try to learn to work remotely. We bought MacBooks for everybody just to be able to afford to go anywhere and work from there. So we just want to be able to have this type of company where everybody’s everywhere.

Nathan: Like base camp?

Tenko: Yes.

Nathan: I see, interesting. Because a company at that scale how do you, even on Slack I just find it hard to comprehend how you manage communications. Like it must be so difficult, right?

Tenko: Maybe one day it was but it isn’t right now. Everybody knows what they have to do and they know whenever they have to ask something they know where to go to ask, they know who can answer their questions and people are really responsive about that. It’s all about how the team handles it. It’s not something that we just do a policy and it works, it’s about getting everybody on the same page and wanting to help each other.

Nathan: And how do you manage people and make sure that people, you have the right people on the bus doing the right things?

Tenko: This is an extremely difficult question to be honest. Well,10 years ago we used to, me and my partner we used to be involved in every single day-to-day operation. Five years ago we were still involved in every single day-to-day operation. And one day we decided that this should change because the company was getting so big that it was unmanageable. So we started creating like good middle management in place. And I think for a five years time that we’ve been doing that we have that already and we have some wonderful people in our team on the management positions that they’re simply taking care of everything, they’re on-boarding people, they’re training them, they’re showing them the right ways to communicate to clients. And that in combination with the good practices we have, so for example, our clients contact us most when they have downtime. If we fix the downtime problem, like if we don’t get downtime we’ll get less contacted.

So we fix a lot of things like that so that people would just have a seamless experience, clients will have a seamless experience, everything will just work. So a good team, a very well trained team and working product equals to a happy client. And it’s really easier to manage than if always falling apart and nothing is working and we constantly have problems. And a lot of our competitors are facing this. Like nowadays there are a lot of threats online, like there are constant DDoS attacks and spam and credit card fraud and everything and it’s hard to cope with all of it if you don’t have a good product. But I think we’ve managed to stay on top of it and I think we’ll continue to do so in the years to come.

Nathan: Yeah, really interesting. Okay. Well look, final questions before we wrap man. I’m still really curious because we have a team of, you’re gonna laugh, we have a team of around you know, couple of handfuls and sometimes and we have people remotely and sometimes I feel that it is a struggle to manage. I know you  this guy, well, and what tools are you using?You said Slack, can you give us just a really good process of how you know, how it works with people who work autonomously? Is the strategy just coming out of your head office in Bulgaria and then the remote is not really strategy?

Tenko: Right now the remote is more of a support kind of thing. Like every single remote employee is in either technical support or customer service departments but that is about to change. We want to hire marketing and exec people in the U.S. So it’s about to change. But still like our customers service teams are probably the largest teams in our company. They’re probably 80% of our employees. So it’s still hard to like get everybody on the same page but we’ve managed to do it so far and I think we’re getting better and better at this.

Nathan: Yeah. And how like big are the Skype calls you guys do Skype, you do Zoom, what kind of call software are you using to get everyone on?

Tenko: Usually we would just chat if it’s something that we can resolve in like a few lines and if not, we would do Google Hangouts.

Nathan: I see. And what other tools are you using?

Tenko: We use Jira to like to do project management stuff and track bugs and stuff. And most of Jira tools that we’re using are internal, like in-house written.

Nathan: Yeah. Got you. I see. Awesome. All right man, well look, last question. I guess, just final parting words to finish off this interview, best pieces of advice, best practices, greatest lessons, you shared one. If you have anything else that you’d like to share on what it takes to build a fast growth company that’s sustainable that will be great and then finish off on a lastly as well on where the best places people can find out more about SiteGround.

Tenko: So I just have to say that hard work never hurt anyone and you have to dream big and just do it. And you never take yourself too seriously along the way. And that’s a recipe that worked for us and I’m sure it can work for a lot of your audience too. And people can learn more about SiteGround on our website, it’s siteground.com and that’s it.

Nathan: Awesome. Awesome. Well, look, thank you so much for your time man, I really appreciate it.

Tenko: Thanks man and have a great day.

Nathan: You too.